Section 10(j)(10) of the Federal Home Loan Bank Act (Bank Act) authorizes the Banks to establish CICA Programs to support community investment. See 12 U.S.C. 1430(j)(10). In order to facilitate and encourage targeted community lending under section 10(j)(10), in 1998, the Finance Board adopted a final regulation providing the Banks with parameters for the establishment of CICA Programs. See 63 FR 65536, Nov. 27, 1998; 12 CFR part 952 (formerly 12 CFR part 970).

In the course of implementing CICA Programs under the new CICA Regulation, the Banks and Finance Board staff have identified several technical issues, the resolution of which would clarify CICA Program requirements and improve the effectiveness of CICA Programs. Accordingly, on July 13, 2001, the Finance Board published a proposed rule requesting comment on proposed amendments to the CICA Regulation. See 66 FR 36715, July 13, 2001. The proposed rule provided for a 30-day comment period, which closed on August 13, 2001.

The Finance Board received five comment letters on the proposed rule. Commenters included: three Banks; one trade association; and one lender. The comments are discussed in the Analysis of Final Rule section below.

As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, a number of Banks have asked whether the CICA Regulation does or could authorize the Banks to provide grants, in addition to advances, to members under certain CICA Programs. The current CICA Regulation defines an “RDA program or Rural Development Advance program” and a “UDA program or Urban Development Advance program” as a program offered by a Bank for community lending in rural or urban areas, respectively. See 12 CFR 952.3. Even though these programs are styled as “advance” programs in the CICA Regulation, the definitions do not specify the types of financing, such as advances or grants, that a Bank may offer under such programs nor do they limit financing to advances. Accordingly, the Finance Board has interpreted these definition provisions to mean programs under which a Bank offers advances or grants to members. See Finance Board Regulatory Interpretation 2000-RI-2 (April 10, 2000).

The proposed rule would amend the definitional provisions and terminology in § 950.1 of the Finance Board's Advances Regulation and §§ 952.2, 952.3, 952.5 and 952.7 of the CICA Regulation to incorporate the Finance Board's interpretation, thereby specifying and clarifying the grant authority in the rule.1 Specifically, references to the authority to provide grants under RDA and UDA Programs would be added, and the word “funding,” which incorporates the concept of grants, would be substituted for the word “advance,” where applicable. Thus, the “RDA program or Rural Development Advance program” would be renamed the “RDF program or Rural Development Funding program,” and the “UDA program or Urban Development Advance program” would be renamed the “UDF program or Urban Development Funding program.” The definitions of “RDA or Rural Development Advance” and “UDA or Urban Development Advance” would be deleted as redundant. Certain other technical amendments would be made to provide greater clarity to the language.

Under the current CICA Regulation, members receiving grants from a Bank must use the proceeds of such grants to “provide financing” to targeted beneficiaries, which is defined to include certain types of financing, including making loans to targeted beneficiaries. See 12 CFR 952.3. If a Bank chooses to provide grants under its RDF or UDF Programs, the Bank may establish requirements with which members must comply in order to obtain and use the grants.

Commenters generally supported the proposed clarification of grant authority. Accordingly, the final rule adopts without change the proposed amendments clarifying the Bank's grant authority in §§ 950.1, 952.2, 952.3, 952.5, and 952.7.

Under the current CICA Regulation, economic development projects and manufactured housing parks are eligible for CICA funding if they are located in areas or neighborhoods with a median income at or below the targeted income level of the specific CICA Program (e.g., 80% for CIP, 100% for UDA Programs, 115% for RDA Programs). See id. § 952.3. Section 952.3 defines “median income for the area” generally as one or more of the following, as determined by the Bank: (1) The median income for the area, as published annually by the Department of Housing and Urban Development (HUD); (2) the applicable median family income, as determined under 26 U.S.C. 143(f) and published by a state mortgage revenue bond program; (3) the median income for the area, as published by the U.S. Department of Agriculture; or (4) the median income for any definable geographic area, as published by a Federal, state or local government entity for purposes of that entity's housing and economic development programs, and approved by the Finance Board, at the request of a Bank. See id. § 952.3. These are the same median income data sources as those adopted by the Finance Board in the revised Affordable Housing Program (AHP) Regulation in 1997. See id. § 951.1 (formerly 12 CFR 960.1). However, the AHP Regulation does not incorporate the concept of “neighborhood” in its median income standards. A “neighborhood” is defined in the CICA Regulation as a small geographic area, i.e., a census tract, block numbering area (BNA), unit of local government with a population of 25,000 or less, rural county, or other geographic location designated in comprehensive plans, ordinances, or other local documents as a neighborhood, village, or similar geographic designation that is within, but smaller than, a unit of general local government. Id. § 952.3.

As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, the Finance Board has determined that the median income data provided by the above sources for determining the median income for an area are not sufficient for the Banks to determine the median income for a neighborhood, as defined in the CICA Regulation. The sources provide current median income data on an annual basis for areas, such as counties, Metropolitan Statistical Areas (MSAs), non-metropolitan areas and states, but not for smaller geographical areas defined as “neighborhoods” in the CICA Regulation. HUD does publish annually the 1990 Census information for median income for census tracts, but this data is not updated from the 1990 figures. The Finance Board believes that up-to-date income data will enhance the Banks' capacity to implement effectively the “neighborhood” provisions of the CICA Regulation, an important tool in meeting local economic development needs. Consequently, the proposed rule would add a definition of “median income for the neighborhood” to the CICA Regulation to enable the Banks to obtain median income data for neighborhoods from: (1) The Federal Financial Institutions Examination Council (FFIEC); or (2) other public or private sources with the approval of the Finance Board. The proposed rule specified FFIEC because it is a Federal government source that publishes updated median income data for neighborhoods and other areas, based on existing HUD median income data. The proposed rule did not specify any of the possible private sources, but allowed the Banks to obtain Finance Board approval for the use of a source other than FFIEC if one can be identified.

The proposed rule would allow the use of these additional sources of median income data only for economic development projects and manufactured housing parks located in neighborhoods, as defined in the CICA Regulation, and only when current median income data for the applicable neighborhood is unavailable from the sources prescribed in the definition of “median income for the area” in the CICA Regulation.

Commenters generally supported allowing the Banks to use FFIEC and other sources of median income data for economic development projects and manufactured housing parks located in neighborhoods. One commenter recommended allowing FFIEC to be used as a primary source of median income data, even if current median income data for the applicable neighborhood is available from the sources already prescribed in the regulation. The commenter stated that the FFIEC data is readily available, objective information, and that the Banks should not have to verify for each project that median income data is not otherwise available from the sources listed in the regulation. The Finance Board believes that these points have merit, and, therefore, the final rule allows FFIEC to be used as a primary source for median income data for economic development projects and manufactured housing parks located in neighborhoods, regardless of the availability of other median income data sources.

In addition, because the updated FFIEC median income data is derived from existing HUD data, which is a permissible source of area median income data for housing projects under the current CICA Regulation, the Finance Board believes that the Banks should be able to use such FFIEC data not only for economic development projects and manufactured housing parks, but also for housing projects. Therefore, instead of adding a separate definition of “Median income for the neighborhood,” the final rule adds new paragraphs (1)(ii) and (2)(ii) to the existing definition of “Median income for the area” in § 952.3 to include FFIEC as a primary data source, and renumbers the remaining paragraphs accordingly.

As noted above, under the current CICA regulation, a Bank may use median income data published by a government entity for purposes of that entity's own housing and economic development programs, subject to Finance Board approval. See id. § 952.3 (definition of “Median income for the area” (paragraphs (1)(iv), (2)(ii))). The proposed rule would expand this authority by allowing the Banks to use other public or private median income data sources for economic development projects and manufactured housing parks located in neighborhoods, subject to Finance Board approval, without the requirement that such data be published for purposes of the entity's own housing and economic development programs. Since these alternative public or private sources may also calculate area median income data for areas other than neighborhoods, the Finance Board believes that the Banks should be able to use such data not only for economic development projects and manufactured housing parks located in neighborhoods, but also for housing projects. Accordingly, the final rule replaces existing paragraphs (1)(iv) and (2)(ii) of the definition of “Median income for the area” with this new broader authority in renumbered paragraphs (1)(v) and (2)(iii).

A commenter suggested that the requirement for Finance Board approval of alternative sources of median income data be removed, on the basis that the Banks are in the best position to determine whether such a source of median income data is acceptable, subject to Finance Board review and examination. The Finance Board believes that Finance Board approval of alternative sources of median income data continues to be important for consistency and reliability in implementing CICA programs. Therefore, the commenter's suggestion is not adopted in the final rule.

Another commenter stated that Finance Board approval should not be required for a Bank if an alternative median income data source has been previously approved by the Finance Board for another Bank. The language of the proposed rule, which is adopted without change in the final rule, does not require additional Finance Board approval under such circumstances.

Section 952.3 of the current CICA Regulation defines “Housing projects” as projects or activities that involve the purchase, construction or rehabilitation of, or predevelopment financing for, certain types of housing. See id. § 952.3. Section 952.5(c) of the current CICA Regulation states that CICA funding other than AHP funding also may be used to refinance economic development projects and housing projects under certain conditions. See id. § 952.5(c). As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, the proposed rule would add refinancing (subject to the conditions in § 952.5(c)) to the definition of “Housing projects” in § 952.3 to clarify, consistent with § 952.5(c), that housing projects involving refinancing also are eligible projects for CICA funding. Commenters generally supported the proposed clarification.

Accordingly, the final rule adopts the proposed amendment to § 952.3 without change.

A “Geographically defined beneficiary” is defined in the current CICA Regulation to include a “project [that] is located in a state declared disaster area, or qualifies for assistance under another Federal or state targeted economic development program, approved by the Finance Board.” Id. § 952.3 (definition of “Targeted beneficiaries” (par. (1)(ix))). As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, the proposed rule would insert the words “other area that” before the word “qualifies” in this sentence to clarify that, to be a geographically defined beneficiary, it is not the project itself, but rather the area in which the project is located, that must qualify for such targeted economic development assistance. Commenters generally supported the proposed clarification.

Accordingly, the final rule adopts the proposed amendment to § 952.3 (par. (1)(ix)) without change.

The final rule applies only to the Banks, which do not come within the meaning of “small entities,” as defined in the Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore, in accordance with section 605(b) of the RFA, see id. section 605(b), the Finance Board hereby certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

The final rule does not contain any collections of information pursuant to the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et seq. Therefore, the Finance Board has not submitted any information to the Office of Management and Budget for review.

Section 10(j)(1) of the Federal Home Loan Bank Act (Bank Act) requires each Bank to establish a program to subsidize the interest rate on advances to members of the Bank System engaged in lending for long-term, low- and moderate-income, owner-occupied and affordable rental housing at subsidized interest rates. See 12 U.S.C. 1430(j)(1). The Finance Board is required to promulgate regulations governing the AHP. See id. The Finance Board's existing regulation governing the operation of the AHP, which made comprehensive revisions to the AHP, was adopted in August 1997 and became effective January 1, 1998. See 62 FR 41812 (Aug. 4, 1997) (now codified at 12 CFR part 951).

Various amendments have been made to the AHP regulation since 1998 in order to clarify AHP requirements and improve the operation and effectiveness of the AHP. Over the course of implementation of the AHP, the Banks and Finance Board staff have identified additional amendments that could improve the operation and effectiveness of the AHP. Accordingly, on May 10, 2001, the Finance Board published a proposed rule requesting comment on these proposed amendments to the AHP regulation. See 66 FR 23864 (May 10, 2001). The proposed rule provided for a 30-day comment period, which closed on June 11, 2001.

The Finance Board received 23 comment letters on the proposed rule. Commenters included: 5 Banks; 3 Bank Advisory Councils; 6 trade associations; and 9 nonprofit housing developers. Comments that raised issues beyond the scope of the proposed rule are not addressed in this final rule, but will be considered by the Finance Board in any future rulemaking under the AHP. The provisions of the proposed rule on which significant comments were received are discussed below.

Section 951.3(a)(1) of the existing AHP regulation provides that each Bank, after consultation with its Advisory Council, may set aside annually, in the aggregate, up to the greater of $1.5 million or 15 percent of its annual required AHP contribution to provide funds to members participating in the Bank's homeownership set-aside programs. 12 CFR 951.3(a)(1). In cases where the amount of homeownership set-aside funds applied for by members in a given year exceeds the amount available for that year, a Bank may allocate up to the greater of $1.5 million or 15 percent of its annual required AHP contribution for the subsequent year to the current year's homeownership set-aside programs. Id. Section 951.3(a)(1) of the proposed rule would increase the maximum allowable annual homeownership set-aside amount to the greater of $3.0 million or 25 percent of a Bank's annual required AHP contribution. In addition, in cases where the amount of homeownership set-aside funds applied for by members in a given year exceeds the amount available for that year, the proposed rule would allow a Bank to allocate up to the greater of $3.0 million or 25 percent of its annual required AHP contribution for the subsequent year to the current year's homeownership set-aside programs.

As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, AHP homeownership set-aside programs have proven to be an efficient and effective means for the Banks and their members to provide homeownership opportunities for low- and moderate-income households, consistent with the goals of the Bank System and the AHP. Ten Banks currently offer homeownership set-aside programs, eight of which set aside the maximum amount allowable under the current AHP regulation.

Experience with the homeownership set-aside programs over the past two years has shown that the demand for homeownership set-aside funds for low- and moderate-income families is such that an increase in the maximum allowable annual homeownership set-aside amount is warranted. The Banks have demonstrated that there is market demand and member demand for financing for low- and moderate-income homeownership, with most homeownership set-aside programs being oversubscribed within the first three to seven months of the year. In 2000, the Finance Board approved a waiver request from one Bank to increase its maximum allowable homeownership set-aside amount to 25 percent of its total annual AHP contribution. A similar waiver for 2001 was approved for all Banks to implement at their discretion.

The homeownership set-aside programs also are consistent with the cooperative structure of the Bank System, by involving members in financing the mortgages of low- and moderate-income households receiving downpayment assistance with homeownership set-aside funds. The homeownership set-aside programs can provide an important Bank service for members by enabling a greater number of members to become involved in the AHP, by helping members to establish banking relationships with new customers, and by exposing more members to opportunities to help meet low- and moderate-income housing needs in their markets.

The homeownership set-aside programs also are consistent with the goals of the Bank System and the AHP to help finance affordable housing in underserved areas and for underserved households. Homeownership set-aside funds often are the only way to effectively meet scattered-site, affordable housing needs in rural areas or tribal areas, which have difficulty scoring well under the competitive AHP application program and where rental projects are not feasible. In addition, homeownership set-aside funds often are the only way to meet the need for homeownership opportunities for very low-income families, which require larger per-unit subsidies and, therefore, may not score well under the competitive AHP application program. Homeownership set-aside programs also allow a member to use AHP funds to finance housing for individual eligible households on an as-needed basis, even if it is only for one household in the member's market area. These are households that the competitive AHP application program might not otherwise reach.

Most commenters supported the proposed increase in the maximum allowable annual homeownership set-aside amount. Commenters cited: the increasing demand for homeownership funds that, in some cases, has exhausted the Banks' annual set-aside allocation within months; the efficient and effective delivery of subsidy under the set-aside program; greater member achievement of Community Reinvestment Act (CRA) goals; and the positive impacts of homeownership on communities.

One commenter suggested that an increase in homeownership set-aside funds above 15 percent should require written approval of a majority of the Advisory Council membership and not just consultation with the Advisory Council. The Finance Board supports Advisory Council input into the Banks' implementation of the AHP. The Banks' boards of directors, however, have ultimate responsibility for the AHP and, therefore, should make the ultimate decisions on how much AHP funds to allocate to homeownership set-aside programs.

Several commenters opposed the proposed increase in the maximum allowable annual homeownership set-aside amount on the basis that the need for affordable rental housing is rising, especially in certain Bank districts, and an increase in the annual allocation of AHP funds to homeownership set-aside funds could result in less funding of rental housing under the competitive application program. The decision whether or not to establish homeownership set-aside programs is within the discretion of each Bank. Thus, a Bank, in consultation with its Advisory Council, may decide not to establish homeownership set-aside programs if it determines that such programs are inappropriate for its district, or, if a Bank decides to establish such programs, it need not allocate to the programs the maximum amount allowable under the regulation.

Another commenter recommended that, as a way to balance the goals of homeownership and rental funding, the Banks be allowed to increase their homeownership set-aside allocation provided they agree to hold the allocations to their AHP competitive application program to at least the funding levels of 2001. Historically, approximately two-thirds of affordable housing units funded under the AHP competitive application program have been rental units. The commenter's proposal would not ensure that AHP funding for rental projects under the competitive application program would remain at 2001 levels. In addition, the comment presumes that annual AHP contributions will always increase each year, which has not always been the case.

A number of commenters suggested that the regulation include a priority for homeownership projects that remain affordable in perpetuity for future buyers without additional future subsidies, such as projects involving land trusts. The AHP regulation requires a fixed retention period of five years for homeownership projects, which does not allow for a scoring priority for projects with retention periods longer than five years. See id. §§ 951.1, 951.5(b)(7)(i), 951.13(c)(4), 951.13(d)(1). A Bank, under its second district scoring priority, could choose to adopt a scoring priority for homeownership projects that use land trusts, but the retention period would still have to be five years. See id. § 951.6(b)(4)(iv)(G).

Accordingly, for the reasons discussed above, the final rule adopts without change the proposed amendment to § 951.3(a)(1) increasing the maximum allowable annual homeownership set-aside amount.

Section 951.3(a)(1) of the proposed rule also provided that, beginning in 2002 and for subsequent years, the maximum homeownership set-aside dollar limits would be adjusted annually by the Finance Board to reflect any percentage increase in the preceding year's Consumer Price Index (CPI) for all urban consumers, as published by the Department of Labor. Each year, as soon as practicable after the publication of the previous year's CPI, the Finance Board would be required to publish notice by Federal Register, distribution of a memorandum, or otherwise, of the CPI-adjusted limits on the maximum set-aside dollar amount.

A number of commenters supported the proposed CPI adjustment provision, with one commenter stating that indexing the dollar limit increase to the rate of inflation will help cause the supply of available funds to more closely match the needs of Bank members and customers.

Accordingly, the final rule adopts the proposed CPI adjustment amendment to § 951.3(a)(1) without change.

Section 951.5(a)(7) of the existing AHP regulation provides that homeownership set-aside funds may be used to pay for counseling costs only where:

(i) Such costs are incurred in connection with counseling of homebuyers who actually purchase an AHP-assisted unit;

(ii) the cost of the counseling has not been covered by another funding source, including the member; and

(iii) the homeownership set-aside funds are used to pay only for the amount of such reasonable and customary costs that exceeds the highest amount the member has spent annually on homebuyer counseling costs within the preceding three years. Id. § 951.5(a)(7).

By contrast, § 951.5(b)(5) of the existing AHP regulation requires satisfaction of only the first two of the above three criteria in authorizing the use of AHP subsidies to pay for counseling costs under the competitive application program. Id. § 951.5(b)(5). As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, the criterion in paragraph (a)(7)(iii) was intended to prevent homeownership set-aside funds from being used to pay for counseling costs that, in the absence of such funds, customarily would be funded by members participating in a homeownership set-aside program. In this way, AHP funds would be used to expand the pool of resources available to pay for counseling costs, rather than simply replace existing sources of funding for counseling costs.

The Banks have suggested that the criterion in paragraph (a)(7)(iii) be removed, so that the criteria applicable to the use of AHP funds for counseling costs would be the same under both the homeownership set-aside and competitive application programs. Because the competitive application program does not have a comparable counseling costs criterion, it is possible that AHP subsidies are already being used under that program to pay for counseling costs that the member, project sponsor or another funding source otherwise would have funded. Further, contrary to the intent of the criterion, the criterion may actually be inducing members not to pay for homebuyer counseling costs in order to be eligible for AHP funding of the counseling costs. In addition, the Banks have maintained that it can be difficult to determine the amount that members have spent over a three-year period on counseling costs, especially where the costs are indirect or combined with the costs of other services also provided to the homebuyer. The potential to be cited for noncompliance with the AHP regulation if the accounting for the costs is not accurate could discourage members from paying any counseling costs themselves. Requiring that the Banks monitor these costs, which generally are small in amount, arguably is not an efficient use of the Banks' resources. Homebuyer counseling is vital to ensuring that AHP subsidies are used successfully to provide homeownership opportunities to low- and moderate-income households. The Finance Board believes that the assurance that homebuyers will get such counseling, regardless of how it is funded, outweighs any concerns that AHP subsidies may be funding counseling costs that otherwise would be paid for by the member. For all of these reasons, the proposed rule would remove the homeownership set-aside counseling criterion in § 951.5(a)(7)(iii).

A number of commenters supported the proposed amendment, citing various reasons discussed above. One commenter opposed the proposed change, arguing that it would result in AHP funds being used as a substitute for other funds that were being used in the past for counseling costs, and urged instead that the counseling costs criterion be added to the competitive application program. As discussed above, the Finance Board believes that assuring homebuyers will get such counseling, regardless of how it is funded, outweighs the commenter's concern. Accordingly, the final rule adopts without change the proposed amendment removing § 951.5(a)(7)(iii).

Section 951.4(f) of the existing AHP regulation uses two terms—“community investment” and “community development”—in describing the role of the Advisory Councils in this area. See id. § 951.4(f). Specifically, § 951.4(f)(1) provides that representatives of the board of directors of each Bank shall meet with the Advisory Council at least quarterly to obtain the Advisory Council's advice on ways in which the Bank can better carry out its housing finance and community investment mission, including advice on the low- and moderate-income housing and community investment programs and needs in the Bank's district. Id. § 951.4(f)(1). Section 951.4(f)(3) provides that each Advisory Council shall submit to the Finance Board annually by March 1 its analysis of the low- and moderate-income housing and community development activity of the Bank by which it is appointed. Id. § 951.4(f)(3).

The proposed rule would replace the terms “community investment” and “community development,” wherever they appear in § 951.4, with the term “community lending,” which encompasses both terms and is the term used in the Finance Board's recently adopted mission statement for the Banks. See id. § 940.2.1 “Community lending” is defined in part 900 of the Finance Board's existing regulations as “providing financing for economic development projects for targeted beneficiaries, and, for community financial institutions, purchasing or funding small business loans, small farm loans or small agri-business loans, as defined in § 950.1 of this chapter.” Id. § 900.1. “Providing financing” is defined to include various lending activities and purchases of eligible assets. Id. § 952.3.

In addition, because the Advisory Councils are required to give advice on community lending, as well as housing finance, matters, the proposed rule would revise § 951.4(a) to provide that members shall be drawn from community and not-for-profit organizations actively involved in providing or promoting low- and moderate-income housing, and community and not-for-profit organizations actively involved in providing or promoting community lending, in the Bank's district. The proposed rule also would revise § 951.4(b) to provide that, in appointing Advisory Council members, a Bank shall give consideration to the diversity of low- and moderate-income housing, as well as community lending, needs and activities within the Bank's district.

A number of commenters supported the proposed changes, on the basis that they would add expertise in community lending to the Advisory Council, thereby enabling the Advisory Council to address broader community needs, consistent with the Bank's housing finance and community lending mission.

One commenter opposed the proposed changes, stating that they would dilute the role of affordable housing practitioners and advocates on the Advisory Councils and potentially diminish the Advisory Councils' focus on housing. Because the regulation requires that the Advisory Council membership include persons drawn from a diverse range of organizations with no undue proportionate membership for any one group, and that the Advisory Council provide advice on both housing finance and community lending, this concern appears to be unwarranted. See id. § 951.4(c), (f)(1).

Another commenter interpreted the term “community lending” as narrower than the terms “community investment” and “community development,” limiting the Advisory Council's role to advice on lending. In fact, the definition of “community lending” encompasses a wide range of economic development activities beyond just lending. See id. §§ 900.1, 952.3.

One commenter recommended that the final rule clarify that private, for-profit providers of affordable housing are eligible to serve on the Advisory Councils. Under the existing AHP regulation, such housing providers are eligible to serve on the Advisory Councils, and the Finance Board has previously provided this clarification to the Banks. Accordingly, the final rule adopts the proposed amendments to § 951.4 without change.

Section 951.8(c)(3)(ii) of the existing AHP regulation provides that if a Bank reduces the amount of AHP subsidy approved for a project, the amount of such reduction shall be returned to the Bank's AHP fund. Id. § 951.8(c)(3)(ii). If a Bank increases the amount of AHP subsidy approved for a project, the amount of such increase shall be drawn first from any currently uncommitted or repaid AHP subsidies, and then from the Bank's required AHP contribution for the next year. Id. This section is included under the overall heading for paragraph (c)(3), which addresses changes in the approved AHP subsidy amount where a direct subsidy is used to write down prior to closing the principal amount or interest rate on a loan. Therefore, the requirements in paragraph (c)(3)(ii) would appear to apply only in cases where a direct subsidy is used to write down prior to closing the principal amount or interest rate on a loan. As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, in practice, the Banks have returned to the AHP fund the amount of any reduction in AHP subsidy approved for a project under the competitive application program, regardless of the reason for the reduction, such as a project modification. The question arose whether the provision in paragraph (c)(3)(ii) regarding the funding of a subsidy increase should apply to an increase in approved AHP subsidy for a project modification that does not involve a direct subsidy writedown of principal or interest. A Bank has indicated that, in its district, demand for increases in approved AHP subsidies for project modifications not involving direct subsidy writedowns is now exceeding the amount of repaid or uncommitted AHP subsidies available to fund such modifications. Therefore, the Bank would like to be able to fund such subsidy increases from the Bank's required AHP contribution for the next year. Accordingly, the proposed rule would make § 951.8(c)(3)(ii) applicable to any reduction or increase in the amount of AHP subsidy approved for a project, regardless of whether a direct subsidy writedown is involved, by taking the paragraph out from under the paragraph (c)(3) heading and redesignating it as § 951.8(c)(4). The Banks, therefore, would be able to fund subsidy increases for project modifications using subsidies drawn first from any currently uncommitted or repaid AHP subsidies, and then from the Bank's required AHP contribution for the next year.

As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, if a Bank is permitted to use uncommitted AHP funds from the following year, before such funds are made available under the competitive application program for that year, there will be fewer AHP funds available for new projects to be approved under the competitive application program for that year. The overall effect on the amount of AHP funds available for the following year, however, is not likely to be significant. Moreover, funding a new project in the next year, as opposed to funding a modification of an existing project from a prior year, would not necessarily result in producing more affordable housing. It would be beneficial to have AHP funding available for modifications of existing projects that are meeting the goals of the AHP. The existing AHP regulation already allows the Banks to commit AHP funds from the following year's homeownership set-aside allocation to fund current year needs under the Banks' homeownership set-aside programs, and the Banks arguably should have similar flexibility in funding subsidy increases for project modifications approved under the competitive application program. Finally, the decision whether to approve an increase in AHP subsidy for a project modification is within the discretion of each Bank. See id. § 951.7. If a Bank does not want to fund project modifications with subsidies from the next year's AHP allocation, it can choose to approve the project modifications only if additional repaid or uncommitted funds become available.

A number of commenters supported the proposed change because of the additional flexibility it would provide the Banks to fund subsidy increases for project modifications. One commenter stated that the proposed change should not be made until the Finance Board has studied past trends in uncommitted funds and past success rates of new projects and makes projections as to the impact of the proposed change based on those figures. Because the conditions applicable to each project differ significantly, the Finance Board believes that the Banks are the best judges of whether or not to approve subsidy increases for project modifications from the required AHP contribution for the next year.

Several commenters also expressed concern that the proposed change would enable project sponsors to game the scoring system by seeking modifications to their low-income targeting commitments after approval. Because the AHP regulation provides that approved projects seeking additional AHP subsidy must, as modified, continue to score successfully in the funding period in which they were originally approved, gaming of the scoring system should not be a problem. See id.

Accordingly, for the reasons discussed above, the final rule adopts the proposed amendment making newly redesignated § 951.8(c)(4) applicable to any reduction or increase in the amount of AHP subsidy approved for a project, regardless of whether a direct subsidy writedown is involved. In addition, in order to more accurately reflect the nature of the adjustments addressed in § 951.8(c)(4), the final rule removes the paragraph heading “Reconciliation of AHP fund” and adds, in its place, the revised heading “AHP outlay adjustment”.

Section 951.10(a)(1)(ii) of the existing AHP regulation provides that where AHP subsidies are used to finance the purchase of owner-occupied units, the project sponsor must certify annually to the member and the Bank, until all approved AHP subsidies are provided to eligible households in the project, that those households receiving AHP subsidies during the year were eligible households, and such certifications shall be supported by household income verification documentation maintained by the project sponsor and available for review by the member or the Bank. Id. § 951.10(a)(1)(ii).

As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, the Banks maintain that this project sponsor certification requirement is not necessary because the certification merely reiterates more extensive documentation of income eligibility previously provided by the project sponsor to the Bank and member at the time of each request for disbursement of AHP funds from the Bank. Under the existing AHP regulation, a Bank is required to verify prior to each disbursement of AHP subsidies for an approved project that the project meets the eligibility requirements of § 951.5(b) and all obligations committed to in the approved AHP application. See id. §§ 951.5(b), 951.8(c)(2). Because the project sponsor's annual certification is based on the information provided to the Bank at the time of disbursement requests, the certification requirement in § 951.10(a)(1)(ii) does not add any new information or independent verification to the monitoring process. For these reasons, the proposed rule would remove the requirement for annual owner-occupied project sponsor certifications from § 951.10(a)(1)(ii). A number of commenters supported the proposed change on the basis that it would remove redundant monitoring requirements. The proposed rule would retain the requirement in § 951.10(a)(1)(ii) that the project sponsor maintain household income verification documentation available for review by the member or the Bank. A number of commenters supported retention of this requirement.

Accordingly, the final rule adopts without change the proposed amendment to § 951.10(a)(1)(ii) removing the requirement for annual owner-occupied project sponsor certifications.

Section 951.10(a)(2)(ii) of the existing AHP regulation provides that within the first year after completion of an AHP-assisted rental project, the project owner must make a certification to the member and the Bank on services and activities commitments, tenant income targeting and rent commitments, and project habitability. See Id. § 951.10(a)(2)(ii). Section 951.10(b)(2)(ii) of the existing AHP regulation provides that within the first year after completion of an AHP-assisted rental project, the member must review the project documentation and make a certification to the Bank on tenant income targeting and rent commitments, and project habitability. See Id. § 951.10(b)(2)(ii). The Banks maintain that this member certification requirement is essentially redundant with the requirement in § 951.10(a)(2)(ii) that the project owners make a certification to the member and the Bank on the same items. See Id. § 951.10(a)(2)(ii).

Because the member is essentially duplicating the certification already made by the project owner to the member and the Bank, it seems reasonable to eliminate the requirements for project owner certification to the member and member certification to the Bank, and simply retain the requirement for project owner certification directly to the Bank. Accordingly, the proposed rule would remove the requirements for project owner certification to the member and member certification to the Bank in §§ 951.10(a)(2)(ii) and 951.10(b)(2)(ii), respectively. A number of commenters supported the proposed changes on the basis that they would remove redundant monitoring requirements.

Accordingly, the final rule adopts the proposed amendments to §§ 951.10(a)(2)(ii) and 951.10(b)(2)(ii) without change.

As discussed in the SUPPLEMENTARY INFORMATION section of the proposed rule, a higher allowable annual homeownership set-aside amount increases the possibility that demand for such funds may not exhaust the available funds by the end of the year. Under section 10(j)(7) of the Bank Act, 90 percent of such uncommitted or unused AHP funds generally would be required to be deposited by the Bank in an Affordable Housing Reserve Fund established and administered by the Finance Board. See 12 U.S.C. 1430(j)(7); 12 CFR 951.15(a)(2). No such Reserve Fund has been established to date. In order to minimize the possibility of having to create such a Reserve Fund, the proposed rule would have amended § 951.3(a)(1) to clarify that any homeownership set-aside funds that are not committed or used by the end of the year in which they were set aside shall be committed or used by the end of such year to fund project modifications or the next highest scoring AHP applications in the Bank's final funding period of the year for its competitive application program. A number of commenters generally supported the proposed amendment. Several commenters recommended allowing uncommitted or unused homeownership set-aside funds to be carried over for use in the Bank's homeownership set-aside programs during the following year.

Because § 951.15(a)(2) of the existing AHP regulation already addresses the treatment of uncommitted or unused AHP funds in general, the final rule amends that section instead of § 951.3(a)(1). See 12 CFR 951.15(a)(2). Section 951.15(a)(2) currently provides that any homeownership set-aside or competitive application funds that remain uncommitted or unused at year-end are deemed to be used or committed if, in combination with AHP subsidies that have been returned to the Bank or de-committed from canceled projects, they are insufficient to fund: (i) the next highest scoring AHP applications in the Bank's final funding period of the year for its competitive application program; or (ii) pending applications for funds under the Bank's homeownership set-aside programs. See Id. The insufficient amounts shall be carried over for use or commitment during the following year. See Id. Because there also may be uncommitted or unused funds remaining at year-end under the competitive application program, it is reasonable to amend the regulation to provide that approved competitive application projects seeking modifications shall be eligible for such remaining competitive application funds, in addition to being eligible for any remaining homeownership set-aside funds. The final rule adopts this amendment in § 951.15(a)(2)(iii). In addition, while the current regulation does not restrict the carried over amounts to commitment or use in specific AHP programs, the final rule amends the last paragraph of § 951.15(a)(2) to clarify that such carried over amounts may be committed or used in either the Bank's competitive application program or homeownership set-aside programs during the following year.

As part of the proposed rulemaking, the Finance Board published a request for comments concerning the proposed revisions to the collection of information in §§ 951.3(a)(1), 951.10(a)(1)(ii), and 951.10(b)(2)(ii) of the proposed rule. See 66 FR 23864, 23867. The Finance Board submitted the proposed revisions to the information collection, and accompanying analysis, to the Office of Management and Budget (OMB) for review in accordance with section 3507(d) of the Paperwork Reduction Act of 1995. See 44 U.S.C. 3507(d). The Finance Board received no comments on the proposed revisions to the information collection. OMB has approved the proposed revisions to the information collection without conditions and assigned control number 3069-0006 with an expiration date of June 30, 2004.

Likely respondents and/or record keepers are Banks, Bank members, project sponsors, and project owners. The Banks will use the information collection to determine whether respondents satisfy statutory and regulatory requirements under the AHP. Responses are mandatory and are required to obtain or retain a benefit. The final rule does not substantively or materially modify the approved information collection. Potential respondents are not required to respond to the collection of information unless the regulation collecting the information displays a currently valid control number assigned by OMB. See Id. section 3512(a). The final rule revises the statements in the AHP regulation displaying the OMB control number to reflect the new expiration date. The title, description of need and use, and a description of the information collection requirements in the final rule are discussed in parts I and II of the SUPPLEMENTARY INFORMATION section of the final rule.

The following is the estimated annual reporting and recordkeeping hour burden as approved by OMB:

a. Number of respondents: 7,720.

b. Total annual responses: 10,749. Percentage of these responses collected electronically: 0.

c. Total annual hours requested: 65,461.

d. Current OMB inventory: 64,274.

3. Difference: 1,187.

The following is the estimated annual reporting and recordkeeping cost burden as approved by OMB:

a. Total annualized capital/startup costs: 0.

b. Total annual costs (O&M): 0.

c. Total annualized cost requested: $2,169,795.

d. Current OMB inventory: $2,118,170.

e. Difference: $51,625.

Comments regarding the collection of information may be submitted in writing to the Federal Housing Finance Board at 1777 F Street, NW., Washington, DC 20006, and to the Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for Federal Housing Finance Board, Washington, DC 20503.

The final rule applies only to the Banks, which do not come within the meaning of “small entities,” as defined in the Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Thus, in accordance with section 605(b) of the RFA, id. section 605(b), the Finance Board hereby certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

The FAA has determined that good cause exists for making these special conditions effective December 1, 2001; however, the FAA invites interested parties to submit comments on the special conditions. Comments should identify the Rules Docket and special conditions number and be submitted in duplicate to the address specified above. The FAA will consider all comments received by the closing date. These special conditions may be changed in light of the comments received. All comments submitted will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this proposal will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must include a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. NE124.” The postcard will be date-stamped and returned to the commenter.

On May 3, 2000, Hartzell Propeller Incorporated applied for an amendment to type certificate (TC) number P20NE to add a new model HC-E5A-2/E8991 propeller. The HC-E5A-2/E8991 propeller, which is a derivative of the HC-E5 propeller currently approved under TC P20NE, has blades constructed of composite material. These special conditions address the following airworthiness issues for the Hartzell Propeller Incorporated model HC-E5A-2/E8991 propeller:

A proposal to amend 14 CFR part 39 to include an AD for BHTC Model 206L-4 helicopters was published in the Federal Register on June 25, 2001 (66 FR 33649). That action proposed to require installing an indicator, P/N 206-011-752-101, within 100 hours time-in-service. Requiring a preflight visual check for damage to the indicator was also proposed.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on the proposal or the FAA's determination of the cost to the public. The FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

The FAA estimates that 16 helicopters of U.S. registry will be affected by this AD, that it will take approximately 0.5 work hour per helicopter to accomplish the required actions, and that the average labor rate is $60 per work hour. Required parts will cost approximately $1,753. Based on these figures, the total cost impact of this AD on U.S. operators is estimated to be $28,528.

The regulations adopted herein will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

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

A proposal to amend 14 CFR part 39 to include an AD for Agusta Model A109E helicopters was published in the Federal Register on June 25, 2001 (66 FR 33651). That action proposed to require modifying the doors installed on Agusta S.p.A. Model A109E helicopters up to and including serial number 11099 by installing door-locking mechanism kits, part number 109-0823-03-101 and -102, within 90 days.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on the proposal or the FAA's determination of the cost to the public. The FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

The FAA estimates that 11 helicopters of U.S. registry will be affected by this AD and that it will take approximately 8 work hours per helicopter to modify the doors. The average labor rate is $60 per work hour. The manufacturer states in its alert service bulletin that it will reimburse 8 work hours at $40 per work hour and will supply the parts to modify the locking mechanism on the doors. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $1760.

The regulations adopted herein will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

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

A proposal to amend 14 CFR part 39 by revising AD 2000-10-08, Amendment 39-11732 (65 FR 31256, May 17, 2000), for ECF Model SA-365N1, AS-365N2, and SA-366G1 helicopters, was published in the Federal Register on June 11, 2001 (66 FR 31189). The action proposed to revise AD 2000-10-08 to allow a “visual” check of each tail rotor blade for a crack, wrinkling, or a blister, within 10 hours time-in-service (TIS) and thereafter before the first flight of each day. Also proposed was allowing some debonding in blades, part number 365A12-0020-02 and 365A12-0020-03.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on the proposal or the FAA's determination of the cost to the public. The FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

The FAA estimates that 136 helicopters of U.S. registry will be affected by this AD. If a tapping inspection is required, it will take approximately 1 work hour per helicopter to conduct, and the average labor rate is $60 per work hour. If necessary, replacing a blade would take approximately 4 hours and required parts would cost approximately $1,000 per helicopter. Based on these figures, the total cost impact of this AD on U.S. operators is estimated to be $176,800, assuming a blade must be replaced on each affected helicopter.

The regulations adopted herein will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the FAA, Office of the Regional Counsel, Southwest Region, 2601 Meacham Blvd., Room 663, Fort Worth, Texas.

On July 2, 2001, Airspace Docket No. 99-ANM-15 (66 FR 34808) was published in the Federal Register establishing R-3204A Juniper Buttes, ID. The legal description of R-3204A contained an inadvertent error in a coordinate. This action corrects that error.

This document describes revisions by the National Labor Relations Board of its regulations under the Freedom of Information Act which include new provisions to implement the Electronic Freedom of Information Act Amendments of 1996 (Pub. L. 104-231). New provisions implementing the amendments are found at § 102.117 (a)(2) (electronic reading rooms), 102.117(c)(2)(i) and (ii) (timing of responses and expedited processing), 102.117(c)(2)(iii) (deletion marking and volume estimation), and 102.117(c)(2)(vi) (unusual circumstances). For specific sections and subsections of the regulations implementing the Electronic Freedom of Information Act Amendments of 1996, the following dates apply:

The National Labor Relations Board, in accordance with the Regulatory Flexibility Act (5 U.S.C. 606(b)), has reviewed these regulations and by approving them certifies that they will not have a significant economic impact on a substantial number of small entities. Under the Freedom of Information Act, agencies may recover only the direct costs of searching for, reviewing, and duplicating the records processed for requesters. Thus, fees assessed by the Agency are nominal. Further, the “small entities” that make FOIA requests, as compared with individual requesters and other requesters, are relatively few in number.

The regulatory review provisions of Executive Order 12866 do not apply to independent regulatory agencies. However, because the Office of Management and Budget has determined that this rule is a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review, we consulted with that Office prior to issuing this rule.

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States based companies to compete with foreign-based companies in domestic and export markets.

This part does not impose any reporting or recordkeeping requirements under the Paperwork Reduction Act of 1995.

A Notice of Proposed Rule Making (NPRM) was not published for this regulation. In keeping with 5 U.S.C. 553 (b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. In keeping with the requirements of 5 U.S.C. 553 (d)(3), the Coast Guard also finds good cause exists for making this regulation effective less than 30 days after publication in the Federal Register. Publishing a NPRM and delaying its effective date would be contrary to the public interest, since action is needed to protect mariners against potential hazards associated with the dredging operations in the Marcus Hook Range Ship Channel and to modify the anchorage regulations to facilitate vessel traffic. In addition, notifications will be made via Notice to Mariners.

The U.S. Army Corps of Engineers (ACOE) notified the Coast Guard that it needed to conduct dredging operations on the Delaware River, in the vicinity of the Marcus Hook Range Ship Channel. The dredging is needed to maintain the project depth of the channel. Dredging begins September 18, 2001 and is anticipated to end on November 19, 2001.

To reduce the hazards associated with dredging the channel, vessel traffic that would normally transit through the Marcus Hook Range Ship Channel will be diverted through part of Anchorage 7 off Marcus Hook (Anchorage 7) during the dredging operations. This necessitates additional requirements/restrictions on the use of Anchorage 7. For the protection of mariners transiting in the vicinity of dredging operations, the Coast Guard is also establishing a safety zone around the dredging vessel ESSEX. The safety zone will ensure mariners remain a safe distance from the potentially dangerous dredging equipment.

Section 110.157(b)(2) allows vessels to anchor for up to 48 hours in the anchorage grounds listed in § 110.157(a), which includes Anchorage 7. However, because of the limited space available in Anchorage 7, the Coast Guard is adding a temporary paragraph in 33 CFR 110.157(b)(11) to provide additional requirements and restrictions on vessels utilizing Anchorage 7. During the effective period, vessels desiring to use Anchorage 7 must obtain permission from the Captain of the Port Philadelphia at least 24 hours in advance. The Captain of the Port will permit only one vessel at a time to anchor in Anchorage 7 and will grant permission on a “first come, first serve” basis. A vessel will be directed to a location within Anchorage 7 where it may anchor, and will not be permitted to remain in the Anchorage 7 for more than 12 hours.

The Coast Guard expects that vessels normally permitted to anchor in Anchorage 7 will use Anchorage 6 off Deepwater Point (Anchorage 6) or Anchorage 9 near entrance to Mantua Creek (Anchorage 9), because they are the closest anchorage grounds to Anchorage 7. To control access to Anchorage 7, the Coast Guard is requiring a vessel desiring to anchor in Anchorage 7 obtain advance permission from the Captain of the Port. To control access to Anchorages 6 and 9, the Coast Guard is requiring any vessel 700 feet or greater in length to obtain advance permission from the Captain of the Port before anchoring. The Coast Guard is also concerned that the holding ground in Anchorages 6 and 9 is not as good as in Anchorage 7. Therefore, a vessel 700 to 750 feet in length is required to have one tug standing alongside while at anchor, and a vessel of over 750 feet in length must have two tugs standing alongside. The tug(s) must have sufficient horsepower to prevent the vessel they are attending from swinging into the channel.

The Coast Guard is also establishing a safety zone within a 150-yard radius of the dredging operations being conducted in the Marcus Hook Range Ship Channel in the vicinity of Anchorage 7 by the dredge vessel ESSEX. The safety zone will protect mariners transiting the area from the potential hazards associated with dredging operations. Vessels transiting the Marcus Hook Range Ship Channel will have to divert from the main ship channel through Anchorage 7, and must operate at the minimum safe speed necessary to maintain steerage and reduce wake. No vessel may enter the safety zone unless it receives permission from the Captain of the Port.

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 exempted it from review 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. Although this regulation requires certain vessels to have one or two tugs alongside while at anchor, the requirement only applies to vessels 700 feet or greater in length, that choose to anchor in Anchorages 6 and 9. Alternate anchorage grounds such as Anchorage A off the entrance to the Mispillion River (“Anchorage A,” described in § 110.157(a)(1)) or Anchorage 1 off Bombay Hook Point (“Anchorage 1,” described in § 110.157(a)(2)) in Delaware Bay, are also reasonably close and generally available. Vessels anchoring in Anchorages A and 1 are not required to have tugs alongside, except when specifically directed to do so by the Captain of the Port because of a specific hazardous condition. Furthermore, few vessels 700 feet or greater are expected to enter the port during the effective period. The majority of vessels expected are less than 700 feet and thus will not be required to have tugs alongside.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This regulation's greatest impact is on vessels 700 feet and greater in length which choose to anchor in Anchorages 6 and 9 and will have virtually no impact on any small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

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

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

A rule has implications 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.

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 relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this 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.

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

The Board is an administrative body within VA that decides appeals from denials of claims for veterans' benefits.

An appeal to the Board is initiated by filing a “notice of disagreement” with the “agency of original jurisdiction” (AOJ), usually one of VA's 58 regional offices. 38 U.S.C. 7105(a), (b); 38 CFR 20.200 and 20.201. In response, the AOJ provides the claimant with a “statement of the case,” that sets forth the reasons for the decision. 38 U.S.C. 7105(d)(1); 38 CFR 19.26 and 19.29. The claimant must file a substantive appeal within 60 days from the date of the mailing of the statement of the case, or within the remainder of the one-year period from the date VA mailed the original decision to the claimant, whichever is later. 38 U.S.C. 7105(d)(3); 38 CFR 20.302(b).

If, however, a claimant submits additional pertinent evidence after the AOJ issues the statement of the case, the AOJ must issue a “supplemental statement of the case” (SSOC). 38 CFR 19.31 and 19.37(a). VA's regulations give the claimant 60 days to respond to the SSOC. 38 CFR 20.302(c). However, the previous version of 38 CFR 20.304 provided that filing additional evidence after receipt of notice of an adverse determination did not extend the time limit for completing an appeal from that determination. Accordingly, if a claimant submitted (1) pertinent additional evidence within one year of the AOJ's determination and (2) a substantive appeal within 60 days of the issuance of the SSOC, but more than one year after the date of the AOJ's adverse determination, then the appeal would have been untimely under the prior version of 38 CFR 20.304.

In a precedent opinion, however, the General Counsel held that VA must provide the claimant with a 60-day period of time in which to file a substantive appeal following issuance of an SSOC even if the one-year appeal period will expire before the 60-day period ends. VAOPGCPREC 9-97; 62 FR 15565, 15567 (Apr. 1, 1997). The Board is bound in its decisions by the precedent opinions of the General Counsel. 38 U.S.C. 7104(c).

Accordingly, we are amending 38 CFR 20.302 and 20.304 to conform to that General Counsel opinion. As amended, these rules clarify that, where a claimant submits additional pertinent evidence within one year of the challenged AOJ decision, and that evidence requires the preparation of an SSOC, the time to file a substantive appeal shall end not sooner than 60 days after the AOJ mails that SSOC.

Because this is a rule of agency practice, this rule would be published as a final rule. 5 U.S.C. 553(b)(3)(A). In addition, because this amendment constitutes a liberalizing change relieving a restriction and is an interpretative rule, this amendment is not required to be published 30 days prior to its effective date. 5 U.S.C. 553(d). In this case, since the Board is bound by the precedent opinions of the General Counsel, 38 U.S.C. 7104(c), the amendment would be retroactively effective to February 11, 1997, the effective date of the precedent opinion upon which it is based.

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

The Unfunded Mandates Reform Act requires (in section 202) that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more in any given year. This rule would have no consequential effect on State, local, or tribal governments.

The Secretary hereby certifies that this rule does not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This rule would affect only the processing of claims by VA and would not affect small businesses. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analyses requirements of sections 603 and 604.

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

Table 1 lists the rules we are approving with the dates that they were adopted by the local air agencies and submitted by the California Air Resources Board (CARB).

On the following dates, EPA found these rule submittals met the completeness criteria in 40 CFR part 51, appendix V: October 6, 2000, ICAPCD Rule 427; and, July 20, 2001, MBUAPCD Rules 434 and 429. These criteria must be met before formal EPA review may begin.

There is no previous version of ICAPCD 427 in the SIP. We approved versions of MBUAPCD Rules 429 and 434 into the SIP on March 22, 2000 and August 18, 1999, respectively. CARB has not made an intervening submittal of these rules.

ICAPCD Rule 427, Automotive Refinishing Operations, is a rule designed to reduce volatile organic compound (VOC) emissions at industrial sites engaged in the auto coating operations. As a new SIP rule, Rule 427 includes the following provisions:

—a description of rule purpose and applicability;

—definitions under the rule;

—rule standards and limits covering application, transfer efficiency, surface preparation and clean-up;

—exemptions from the rule;

—administrative requirements;

—source monitoring and recordkeeping requirements; and,

—test methods for determining compliance with the standards and limits of the rule.

MBUAPCD Rule 429, Applications of Nonarchitectural Coatings, is a rule designed to regulate industrial sites engaged in spraying nonarchitectural coatings. VOCs are emitted during the spray application process used to apply the coating. Rule 429 requires the use of a spray booth or enclosure while applying the coatings. The recent amendments to Rule 429 include new definitions for high transfer efficiency methods and a new test method for determining the control efficiency of particulate matter control devices.

MBUAPCD Rule 434, Coating of Metal Parts and Products, is a rule designed to reduce volatile organic compound (VOC) emissions at industrial sites engaged in metal coating operations. The recent amendments to Rule 434 include a definition of aerosol container, an exemption for aerosol container use, and added test methods for determining the VOC content of water-based coatings.

The TSD has more information about these rules and their specific changes.

Generally, SIP rules must be enforceable (see section 110(a) of the Act), must require Reasonably Available Control Technology (RACT) for major sources in nonattainment areas (see section 182(a)(2)(A)), and must not relax existing requirements (see sections 110(l) and 193). ICAPCD regulates an ozone nonattainment area (see 40 CFR part 81), so its Rules must fulfill RACT. MBUAPCD regulates an ozone attainment and maintenance area. Consequently, MBUAPCD VOC RACT rules that maintain the ozone standard are subject to the anti-backsliding provisions of the CAA.

Guidance and policy documents that we used to define specific enforceability and RACT requirements include the following:

1. Portions of the proposed post-1987 ozone and carbon monoxide policy that concern RACT, 52 FR 45044, November 24, 1987.

2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations; Clarification to Appendix D of November 24, 1987 Federal Register Document,” (Blue Book), notice of availability published in the May 25, 1988 Federal Register.

3. “National Volatile Organic Compound Emission Standards for Automobile Refinish Coatings,” at 40 CFR (Code of Federal Regulations) part 59, subpart B.

These standards apply to the manufacture of auto refinishing coatings and not to their application. Consequently, these Subpart B standards are not binding on body shops and auto painters. So, EPA is using these standards, California statewide guidance and other auto refinishing rules adopted in California to advise our review of ICAPCD Rule 427.

4. “Control of Volatile Organic Emissions from Existing Stationary Sources Volume VI: Surface Coating of Miscellaneous Metal Parts and Products,” USEPA, June 1978, EPA-450/2-78-015.

We believe ICAPCD Rule 427 and MBUAPCD Rules 429 and 434 are consistent with the relevant policy and guidance regarding enforceability, RACT, and SIP relaxations. The respective TSD for each rule has more information on our evaluation.

The TSD describes additional rule revisions that do not affect EPA's current action but are recommended for the next time the local agency modifies the rules.

As authorized in section 110(k)(3) of the Act, EPA is fully approving the submitted rules because we believe they fulfill all relevant requirements. We do not think anyone will object to this approval, so we are finalizing it without proposing it in advance. However, in the Proposed Rules section of this Federal Register, we are simultaneously proposing approval of the same submitted rules. If we receive adverse comments by November 2, 2001, we will publish a timely withdrawal in the Federal Register to notify the public that the direct final approval will not take effect and we will address the comments in a subsequent final action based on the proposal. If we do not receive timely adverse comments, the direct final approval will be effective without further notice on December 3, 2001. This will incorporate these rules into the federally enforceable SIP.

VOCs help produce ground-level ozone and smog, which harm human health and the environment. Section 110(a) of the CAA requires states to submit regulations that control VOC emissions. Table 2 lists some of the national milestones leading to the submittal of these local agency VOC rules.

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 32111, “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 (Pub. L. 104-4). This rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 3, 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).)

On November 14, 2000 and November 20, 2000, the State of Delaware submitted amendments to its State operating permit program. These amendments are the subject of this document and this section provides additional information on the amendments by addressing the following questions:

The Clean Air Act Amendments of 1990 required all States to develop operating permit programs that meet certain federal criteria. When implementing the operating permit programs, the States require certain sources of air pollution to obtain permits that contain all of their applicable requirements under the Clean Air Act (CAA). The focus of the operating permit program is to improve enforcement by issuing each source a permit that consolidates all of its applicable CAA requirements into a federally-enforceable document. By consolidating all of the applicable requirements for a given air pollution source into an operating permit, the source, the public, and the State environmental agency can more easily understand what CAA requirements apply and how compliance with those requirements is determined.

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain operating permits. Examples of “major” sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides, or particulate matter (PM10); those that emit 10 tons per year of any single hazardous air pollutant (HAP) specifically listed under the CAA; or those that emit 25 tons per year or more of a combination of HAPs. In areas that are not meeting the national ambient air quality standards (NAAQS) for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification.

The minimum program elements for an approvable operating permit program are those mandated by title V of the Clean Air Act Amendments of 1990 and established by EPA's implementing regulations at title 40, part 70—“State Operating Permit Programs” in the Code of Federal Regulations (40 CFR part 70). Title V required state and local air pollution control agencies to develop operating permit programs and submit them to EPA for approval by November 15, 1993. Under title V, State and local air pollution control agencies that implement operating permit programs are called “permitting authorities”.

Where an operating permit program substantially, but not fully, met the program approval criteria outlined at 40 CFR part 70, EPA granted interim approval contingent on the permit authority revising its program to correct those programmatic deficiencies that prevented full approval. Delaware's original operating permit program substantially, but not fully, met the requirements of 40 CFR part 70. Therefore, EPA granted final interim approval of the program in a rulemaking published on December 4, 1995. [See 60 FR 62032.] The interim approval notice identified five outstanding deficiencies that had to be corrected in order for Delaware's program to receive full approval. On November 14, 2000 and November 20, 2000, the State of Delaware submitted amendments to its operating permit program to EPA to address its outstanding program deficiencies.

Delaware's November 14, 2000 and November 20, 2000 submittals satisfy the State's requirement to submit program amendments to EPA by June 1, 2001. This deadline was established by EPA in order to allow for time for EPA review and action on program amendments such that operating permit programs with interim approval status could be considered for full approval by December 1, 2001. After December 1, 2001, those jurisdictions lacking fully-approved operating permit programs will, by operation of law, be subject to a federal operating permit program implemented by EPA under 40 CFR part 71. [See 65 FR 32035.]

On November 14, 2000 and November 20, 2000, Delaware submitted amendments to its currently EPA-approved title V operating permit program. In general, Delaware amended its operating permit program regulations to address deficiencies identified by EPA when it granted final interim approval of Delaware's program in 1995.

On December 11, 2000, EPA announced a 90-day comment period for members of the public to identify deficiencies they perceive exist in State and local agency operating permits programs. [See 65 FR 77376.] The public was able to comment on all currently-approved operating permit programs, regardless of whether they have been granted full or interim approval. The December 11, 2000 notice instructed the public to not include in their comments any program deficiencies that were previously identified by EPA when the subject program was granted interim approval. Since those program deficiencies have already been identified and permitting authorities have been working to correct them, EPA will solicit comments when taking action on those corrective measures.

The EPA stated that it will consider information received from the public pursuant to the December 11, 2000 notice and determine whether it agrees or disagrees with the purported deficiencies. Where EPA agrees there is a deficiency, it will publish a notice of deficiency consistent with 40 CFR 70.4(i) and 40 CFR 70.10(b). The Agency will at the same time publish a notice identifying any alleged problems that we do not agree are deficiencies. For programs that have not yet received full approval, such as Delaware's program, EPA will publish these notices by December 1, 2001.

The EPA received numerous comments in response to the December 11, 2000 notice announcing the start of the 90-day public comment period. As part of those comments, EPA Region III received comments germane to Delaware's currently-approved operating permit program. The Agency will respond to those comments in a separate notice(s) by December 1, 2001 as required by the December 11, 2000 notice.

The EPA is not addressing any comments received pursuant to the December 11, 2000 notice in this document. As mentioned above, comments provided in accordance with the December 11, 2000 notice were to address shortcomings that had not previously been identified by EPA as deficiencies necessitating interim, rather than full, approval of a state's operating permit program. This action granting full approval of Delaware's operating permit program only addresses program deficiencies identified when EPA granted interim approval to Delaware's program in 1995. Therefore, any persons wishing to comment on this action should do so at this time.

The EPA has reviewed Delaware's November 14, 2000 and November 20, 2000 program amendments in conjunction with the portion of Delaware's program that was earlier approved on an interim basis. Based on this review, EPA is granting full approval of Delaware's amended operating permit program. The EPA has determined that the amendments to Delaware's operating permit program adequately address the five deficiencies identified by EPA in its December 4, 1995 rulemaking granting interim approval. Delaware's operating permit program, including the amendments submitted on November 14, 2000 and November 20, 2000, fully meets the minimum requirements of 40 CFR part 70.

The extent of Delaware's permit shield was originally too broad and allowed the permit shield to apply to any air contaminant specifically identified in the permit application as well as to any requirement of a State regulation, the Delaware Water and Air Resources Act, rather than any applicable requirement of the final permit as required by 40 CFR 70(f)(1). Delaware revised Regulation 30, Section 6(f) to delete applicability of the permit shield to the permit application and the Delaware Water and Air Resources Act. In lieu thereof, Delaware included a provision for the permit shield to apply to any applicable requirement specifically identified in the permit as of the day of permit issuance. With this amendment, Delaware's program is consistent with 40 CFR 70.6(f)(1) with regard to the permit shield.

Delaware's Regulation 30, Section 7(d)(1)(v) allowed the requirements from preconstruction review permits to be incorporated into the title V permit as an administrative permit amendment, when such permits were issued meeting only the public participation requirements of Regulation 30. It did not require that a preconstruction permit meet the other procedural requirements set forth in 40 CFR 70.7(d)(5) in order to be incorporated as an administrative amendment. In addition to public participation requirements, 40 CFR 70.7(d) requires procedures substantially equivalent to those in 40 CFR 70.7 and 70.8 which would apply if the preconstruction review permit were subject to review as a permit modification, and compliance requirements substantially equivalent to those in 40 CFR 70.6. Delaware revised Regulation 30 Section 7(d)(1)(v) to require that preconstruction review permits meet Sections 11.2(j), 11.5, 12.4, 12.5, and 12.6 of Regulation No. 2, Delaware's program for minor new source review. Regulation 2 was previously revised and updated on June 1, 1997. Regulation 2, Sections 11.2(j), and 11.5 set forth the requirements for a permit which is desired by an applicant to have its terms or conditions transferred into a Regulation 30 permit. These requirements for compliance certifications, information to be provided in a permit application, and information regarding the compliance status and compliance schedule for all applicable requirements, allow the permit to substantially meet the compliance requirements of 40 CFR 70.6. Sections 12.4, 12.5, and 12.6 set forth the procedural requirements for public participation and EPA and affected state review, which are substantially equivalent to the procedural requirements of 40 CFR 70.7 and 70.8.

Regulation 30, Section 7(f)(4) originally required reopening for cause upon new applicable requirements for affected sources only under the acid rain program. It has been revised to apply to all major sources having a remaining permit term of more than three years. With this amendment, Delaware's program is consistent with 40 CFR 70.7(f).

Regulation 30, Section 7(j)(4) has been revised to require that a public hearing will be held no earlier than the 31st day following publication of a public notice for that hearing. This amendment make Delaware's program consistent with 40 CFR 70.7(h)(4) with regard to public notification.

The Delaware Water and Air Resources Act, 7 Del. C., section 6013(b), Criminal Penalties, did not include the requirement that each day of violation also be considered a separate violation. Effective July 3, 1997, Delaware amended 7 Del. C., section 6013(b) to include that each day of violation shall constitute a separate offense. The slight variance in language, that is, the term “offense” in lieu of “violation”, does not change its meaning, and requires that each day of violation be considered separately. This amendment to Delaware's statute is consistent with the penalty requirements of 40 CFR 70.11.

The State of Delaware has satisfactorily addressed the program deficiencies identified when EPA granted final interim approval of its operating permit program on December 4, 1995. The operating permit program amendments that are the subject of this document considered together with that portion of Delaware's operating permit program that was earlier approved on an interim basis fully satisfy the minimum requirements of 40 CFR part 70 and the Clean Air Act. Therefore, EPA is taking direct final action to fully approve the Delaware title V operating permit program in accordance with 40 CFR 70.4(e).

The EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's Federal Register, EPA is publishing a separate document that will serve as the proposal to approve the operating permit program approval if adverse comments are filed relevant to the issues discussed in this action. This rule will be effective on November 19, 2001 without further notice unless EPA receives adverse comment by November 2, 2001. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. The EPA will address all public comments in a subsequent final rule based on the proposed rule. The EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

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 a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a State rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing State operating permit program 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 an operating permit program for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews an operating permit program submission, to use VCS in place of an operating permit program submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. The EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 3, 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 fully approving Delaware's title V operating permit program may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

On June 1, 2001, the State of West Virginia submitted amendments to its State operating permit program. These amendments are the subject of this document and this section provides additional information on the amendments by addressing the following questions:

The Clean Air Act Amendments of 1990 required all States to develop operating permit programs that meet certain federal criteria. When implementing the operating permit programs, the States require certain sources of air pollution to obtain permits that contain all of their applicable requirements under the Clean Air Act (CAA). The focus of the operating permit program is to improve enforcement by issuing each source a permit that consolidates all of its applicable CAA requirements into a federally-enforceable document. By consolidating all of the applicable requirements for a given air pollution source into an operating permit, the source, the public, and the State environmental agency can more easily understand what CAA requirements apply and how compliance with those requirements is determined.

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain operating permits. Examples of “major” sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides, or particulate matter (PM10); those that emit 10 tons per year of any single hazardous air pollutant (HAP) specifically listed under the CAA; or those that emit 25 tons per year or more of a combination of HAPs. In areas that are not meeting the national ambient air quality standards (NAAQS) for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification.

The minimum program elements for an approvable operating permit program are those mandated by title V of the Clean Air Act Amendments of 1990 and established by EPA's implementing regulations at title 40, part 70—“State Operating Permit Programs” in the Code of Federal Regulations (40 CFR part 70). Title V required state and local air pollution control agencies to develop operating permit programs and submit them to EPA for approval by November 15, 1993. Under title V, State and local air pollution control agencies that implement operating permit programs are called “permitting authorities”.

Where an operating permit program substantially, but not fully, met the program approval criteria outlined at 40 CFR part 70, EPA granted interim approval contingent on the permit authority revising its program to correct those programmatic deficiencies that prevented full approval. West Virginia's original operating permit program substantially, but not fully, met the requirements of 40 CFR part 70. Therefore, EPA granted final interim approval of the program in a rulemaking published on November 15, 1995. (See 60 FR 57352.) The interim approval notice identified 11 outstanding deficiencies that had to be corrected in order for West Virginia's program to receive full approval. On June 1, 2001, the State of West Virginia submitted amendments to its operating permit program to EPA to address its outstanding program deficiencies.

West Virginia's June 1, 2001 submittal satisfies the State's requirement to submit program amendments to EPA by June 1, 2001. This deadline was established by EPA in order to allow for time for EPA review and action on program amendments such that operating permit programs with interim approval status could be considered for full approval by December 1, 2001. After December 1, 2001, those jurisdictions lacking fully-approved operating permit programs will, by operation of law, be subject to a federal operating permit program implemented by EPA under 40 CFR part 71. (See 65 FR 32035.)

On June 1, 2001, West Virginia submitted amendments to its currently EPA-approved title V operating permit program. In general, West Virginia amended its operating permit program regulations to address deficiencies identified by EPA when it granted final interim approval of West Virginia's program in 1995. In the June 1, 2001 submittal, West Virginia also provided revisions to its existing program that make minor regulatory corrections. These additional revisions are the subject of a separate rulemaking action as more fully discussed below.

As part of its June 1, 2001 submittal, West Virginia also submitted additional revisions to its currently EPA-approved title V operating permit program which are unrelated to the interim approval deficiencies. These program revisions are comprised of technical and administrative corrections which do not bear on the program's ability to fully meet the substantive requirements of 40 CFR part 70. These revisions were submitted pursuant to 40 CFR 70.4(i) which authorizes States with approved programs to initiate program revisions. Since these revisions do not directly affect the approval status of West Virginia's program according to 40 CFR 70.4(d) and 40 CFR 70.4(e), they will be considered in a separate rulemaking action.

On December 11, 2000, EPA announced a 90-day comment period for members of the public to identify deficiencies they perceive exist in State and local agency operating permits programs. (See 65 FR 77376.) The public was able to comment on all currently-approved operating permit programs, regardless of whether they have been granted full or interim approval. The EPA Region III did not receive comments germane to West Virginia's currently-approved operating permit program.

The EPA has reviewed West Virginia's June 1, 2001 program amendments in conjunction with the portion of West Virginia's program that was earlier approved on an interim basis. Based on this review, EPA is granting full approval of West Virginia's amended operating permit program. The EPA has determined that the amendments to West Virginia's operating permit program adequately address the 11 deficiencies identified by EPA in its November 15, 1995 rulemaking granting interim approval. West Virginia's operating permit program, including the amendments submitted on June 1, 2001, fully meets the minimum requirements of 40 CFR part 70.

The following describes the changes made to West Virginia's operating permit program. Please note, West Virginia revised the numbering scheme of 45CSR30 subsequent to EPA's November 15, 1995 rulemaking action. For purposes of the following discussion, rule references are made using the original numbering scheme followed by brackets containing the corresponding current references, where different.

West Virginia's original 45CSR30, section 2.18 definition of “Emissions unit” did not specifically include activities or parts of activities which emit or potentially emit pollutants listed under section 112(b) of the Clean Air Act. West Virginia revised the definition of “Emissions unit” in section 2.8 to specifically include activities or parts of activities which emit or potentially emit pollutants listed under section 112(b) of the Clean Air Act. With this revised definition, West Virginia's 45CSR30 fully meets the requirements of 40 CFR 70.2 for definitions.

West Virginia must also ensure that the insignificant activities list approved as part of the State's program will not be modified without prior EPA approval. Moreover, West Virginia must clarify that potential emissions from all insignificant activities or emissions units, whether included in section 3.2.d. or determined by the Chief on an application-by-application basis, will be included in determining whether a source is a major source.

West Virginia's original 45CSR30, section 3.2.d list of “insignificant activities” included several units and activities which were not “intrinsically insignificant” in that they could potentially be subject to applicable requirements depending on characteristics excluded in permit applications. While 40 CFR 70.5(c) allows insignificant activities to be excluded from permit applications or identified if based on size or production rates, the permit application may not omit information necessary for the permitting authority to determine the applicability of, or to impose applicable requirements, or to determine fees. West Virginia revised section 3.2.d [section 3.2(e)] to clarify that units subject to applicable requirements shall not be deemed to be “insignificant activities”, and that permit applications must include sufficient information to verify that the unit or activity is insignificant.

West Virginia's original 45CSR30, section 3.2.d provided the Director with unbounded discretion to approve additional sources and activities as part of the program's insignificant activity list. West Virginia revised section 3.2.d [section 3.2(e)] to clarify that units subject to applicable requirements shall not be deemed to be “insignificant activities”, and that the program's insignificant activity list shall not be expanded without EPA approval.

West Virginia's original 45CSR30, section 3.2.d did not clearly indicate that potential emissions from all insignificant activities, including emissions from new activities determined by the Director and approved by EPA, must be included in determining whether a source is a major source. West Virginia's revised section 3.2.d [section 3.2(e)] to clarify that potential emissions from all such activities shall not be excluded in the determination of major source status under 45CSR30 . With these revisions, West Virginia's 45CSR30 fully meets the requirements of 40 CFR 70.5 for permit applications.

West Virginia's original 45CSR30, section 3.3.a appeared to allow title V operating permits issued to major sources to exclude applicable requirements for insignificant activities. This exclusion was in conflict with 40 CFR 70.3(c)(1) and with other provisions of 45CSR30 which require permits to include all applicable requirements. West Virginia revised section 3.3.a [section 3.3(a)] to no longer include a reference to insignificant activities. As a result, it is clear that major source permits must include all applicable requirements. With this revision, West Virginia's revised 45CSR30 is internally consistent and fully meets the corresponding requirements of 40 CFR 70 for permit content.

West Virginia's original 45CSR30, section 5.1.j.D. mistakenly provided for Director-approved emissions trades involving substitutions of categories of VOCs in production processes. West Virginia removed section 5.1.j.D. [section 5.1.j.4]. With this revision, 40CSR30 fully meets the corresponding requirements of 40 CFR 70 for emissions trading.

West Virginia's original 45CSR30, section 5.3.e.A required each permit to specify the frequency of submitting compliance certifications, but did not specifically require the frequency to be at least annually or more frequently if required by underlying applicable requirements. West Virginia revised section 5.3.e.A [section 5.3.e.1] to clarify that permits must include provisions requiring compliance certifications to be submitted at least annually or more frequently if required by underlying applicable requirements or by the Director. With this clarification, West Virginia's 45CSR30 fully meets the requirements of 40 CFR 70.6(c)(5) for compliance certifications.

West Virginia's original 45CSR30, section 5.5 did not specifically require permits issued to temporary sources to include a requirement that owners or operators notify the Chief at least 10 days in advance of each change of location. Although the 10-day notification requirement was not specifically required, section 5.5 requires temporary sources to comply with preconstruction review requirements of 45CSR13, 45CSR14, and 45CSR19. For the most part, these preconstruction review requirements inherently satisfy the part 70 10-day advance notification requirement. West Virginia revised section 5.5 to further clarify that owners or operators with temporary operating permits must notify the Director at least 10 days in advance of each such change. With this clarification, West Virginia's 45CSR30 fully meets the corresponding requirements of 40 CFR 70.6(e) for temporary permits.

West Virginia's original 45CSR30, section 4.1 did not specifically require sources which become subject to the permitting program after the effective date of the permit program to submit permit applications within 12 months. West Virginia revised section 4.1.a.B [section 4.1a.2] to clarify that sources which become subject to the permitting program after the effective date shall file a complete application within 12 months after becoming subject to the program. As revised, West Virginia's 45CSR30 meets the requirements of 40 CFR 70.5(a) for submittal of timely applications.

West Virginia's original 45CSR30, section 6.5.a.A(c) provided “de minimis” levels for source changes below which no permit revision would be required. West Virginia revised 45CSR30 by removing section 6.5.a.A(c) [6.5.a.1.C]. With this revision, 45CSR30 is consistent with 40 CFR part 70.

West Virginia's original 45CSR30, section 6.8.a.A(a)(B) indicated that public notice would be provided for hearings requested by interested persons. The regulation did not specifically require that public notice be provided for public hearings to be held for reasons other than at the request of interested parties. West Virginia revised section 6.8.a.A(a)(B) [6.8.a.1.A.2] to clarify that public notice be provided for any hearing held pursuant to 45CSR30. With this clarification, West Virginia's 45CSR30 fully meets the corresponding requirements of 40 CFR 70.7 for public participation.

West Virginia's original 45CSR30, section 6.8.a.C. indicated that permit issuance would not be delayed or denied if proper notice was not provided to any person. West Virginia revised section 6.8.a.C [6.8.a.3] to remove the exception that permit modifications could proceed without proper notice. Consistent with 40 CFR part 70, proper public notice is required for all permit modification proceedings other than minor permit modifications or fast-track modifications under the Acid Rain Program. With this correction, West Virginia's 45CSR30 fully meets the corresponding requirements of 40 CFR 70 for public participation for permit modifications.

West Virginia's original W. Va. Code section 22-5-6(b)(1) indicated that the maximum criminal fine for violations shall not be more than twenty-five thousand dollars. West Virginia amended the statute to clearly state that if the violation occurs on separate days or is continuing in nature, the fine shall not exceed twenty-five thousand dollars for each day of such violation. The revision to West Virginia's statute clearly meets the requirements of 40 CFR 70.11.

The State of West Virginia has satisfactorily addressed the program deficiencies identified when EPA granted final interim approval of its operating permit program on November 15, 1995. The operating permit program amendments that are the subject of this document considered together with that portion of West Virginia's operating permit program that was earlier approved on an interim basis fully satisfy the minimum requirements of 40 CFR part 70 and the Clean Air Act. Therefore, EPA is taking direct final action to fully approve the West Virginia title V operating permit program in accordance with 40 CFR 70.4(e).

The EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's Federal Register, EPA is publishing a separate document that will serve as the proposal to approve the operating permits program approval if adverse comments are filed relevant to the issues discussed in this action. This rule will be effective on November 19, 2001 without further notice unless EPA receives adverse comment by November 2, 2001. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. The EPA will address all public comments in a subsequent final rule based on the proposed rule. The EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

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 F.R. 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 a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a State rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing State operating permit program 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 an operating permit program submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews an operating permit program submission, to use VCS in place of an operating permit program submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. The EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings' issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 3, 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 fully approving West Virginia's title V operating permit program 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 the Federal Register listings at http://www.epa.gov/fedrgstr/. A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html, a beta site currently under development.

2. In person. The Agency has established an official record for this action under docket control number OPP-301181. 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.

EPA issued a final rule, published in the Federal Register of December 18, 1998 (63 FR 70030) (FRL-6049-4), which announced that on its own initiative under 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) it was establishing a time-limited tolerance for the residues of the insecticide tebufenozide on sweet potatoes at 0.25 ppm, with an expiration date of December 31, 2000. EPA established this tolerance because section 408(l)(6) of the FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Such tolerances can be established without providing notice or a period for public comment.

EPA received a request to extend the use of tebufenozide on sweet potatoes for this year's growing season due to the continuing emergency situation with armyworms on this crop. After having reviewed the submission, EPA concurs that emergency conditions exist. EPA has authorized under FIFRA section 18 the use of tebufenozide on sweet potatoes in Louisiana for control of armyworms.

EPA assessed the potential risks presented by residues of tebufenozide in or on sweet potatoes. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and decided that the necessary tolerance under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. The data and other relevant material have been evaluated and discussed in the final rule of December 18, 1998 (63 FR 70030). Based on that data and information considered, the Agency reaffirms that re-establishment of the time-limited tolerance will continue to meet the requirements of section 408(l)(6). Therefore, the time-limited tolerances are re-established for an additional 2-year period. EPA will publish a document in the Federal Register to remove the revoked tolerance from the Code of Federal Regulations (CFR). Although these tolerances will expire and are revoked on December 31, 2002, under FFDCA section 408(l)(5), residues of the pesticide not in excess of the amounts specified in the tolerance remaining in or on sweet potatoes after that date will not be unlawful, provided the pesticide is applied in a manner that was lawful under FIFRA and the application occurred prior to the revocation of the tolerance. EPA will take action to revoke this tolerance earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.

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-301181 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 December 3, 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 III.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-301181, 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 re-establishes a time-limited tolerance under FFDCA section 408. 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 other 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).

On May 16, 2001, EPA published a final rule, Hazardous Waste Identification Rule (HWIR): Revisions to the Mixture and Derived-From Rules (66 FR 27266). In that rulemaking, EPA revised 40 CFR 261.3 by removing paragraph (a)(2)(iii), revising the introductory language to paragraph (a)(2)(iv) and adding new paragraphs (g) and (h). New paragraph (g) contains a revised version of the exemption formerly in (a)(2)(iii). In making theses change, EPA inadvertently deleted a reference in 40 CFR 261.3(a)(2)(iii) to the eligibility for this exemption of mixtures of wastes excluded from 40 CFR 261.4(b)(7) (commonly referred to as the Bevill exclusion), and also inadvertently deleted subparagraphs A-G of 40 CFR 261.3(a)(2)(iv), which refer to several other exemptions to the mixture rule.

In making these revisions to the mixture and derived-from rules, EPA did not intend to remove the “Bevill mixtures” or other mixtures referenced in the exemptions from eligibility for exemption under the revised mixture rule. To clarify this point, EPA is reinstating the deleted subparagraphs to 40 CFR 261.3(a)(2)(iv) and is revising 40 CFR 261.3(g), explicitly stating that the Bevill mixtures are eligible for the revised exemption if the waste no longer exhibits the characteristic for which the listed hazardous waste portion of the mixture was listed. The purpose of this revision is to prevent possible future regulatory confusion on the status of these “Bevill mixtures” and will not change their current regulatory status under the mixture rule.

EPA is publishing this rule without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comment. However, in the “Proposed Rules” section of today's Federal Register publication, we are publishing a separate document that will serve as the proposal to revise the mixture and derived-from rules if adverse comments are filed. This rule will be effective on December 3, 2001, without further notice unless we receive adverse comment by November 2, 2001. If EPA receives adverse comment, we will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. We will address all public comments in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. Because the purpose of today's action is to make a clarification that will not change the current regulatory status quo, it has no economic impact and is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule also does not have tribal implications, as specified by Executive Order 13175 (65 FR 67249, November 6, 2000). This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

This action does not involve technical standards; thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). 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, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). 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.). 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.

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 action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule is effective on December 3, 2001, unless EPA receives adverse comment by November 2, 2001. If we receive such comment, we will publish a timely withdrawal in the Federal Register informing the public that this rule will not take effect.

Entities potentially regulated by this action are governmental entities responsible for implementation of the National Pretreatment Program and POTWs subject to Pretreatment Standards and requirements that have completed the Project eXcellence and Leadership (Project XL) selection process, including Final Project Agreement (FPA) development, to modify their approved local pretreatment programs. Regulated categories and entities include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. If you have questions regarding the applicability of this action to a particular entity, consult the person in the preceding FOR FURTHER INFORMATION CONTACT section.

On October 6, 2000, the Environmental Protection Agency proposed a rule (65 FR 59791) that set forth the mechanism through which POTWs that complete the Project XL process can seek modification of their programs following the procedures in 40 CFR 403.18, and implement the new local programs as described in their FPAs. Today's final rule promulgates regulations that are identical to the proposed rule.

This regulation is being promulgated under the authority of sections 307, 402 and 501 of the CWA.

Project XL, which stands for “eXcellence and Leadership,” is a national pilot program that tests innovative ways of achieving better and more cost-effective public health and environmental protection through site-specific agreements with project sponsors. Project XL was announced on March 16, 1995, as a central part of EPA's effort to reinvent environmental protection. See 60 FR 27282 (May 23, 1995) and 60 FR 55569 (November 1, 1995). The intent of Project XL is to allow EPA and regulated entities to experiment with pragmatic, potentially promising regulatory approaches, both to assess whether they provide superior environmental performance and other benefits at the specific facility affected, and whether they should be considered for wider application. Such pilot projects are intended to allow EPA to collect more data on a more focused basis prior to national rulemaking. Today's regulation would enable implementation of five specific XL projects as well as future projects that successfully complete the Project XL process. These efforts are crucial to EPA's ability to test new strategies that reduce the regulatory burden and promote economic growth while achieving better environmental and public health protection. EPA intends to evaluate the results of this and other XL projects to determine which specific elements of the project(s), if any, should be more broadly applied to other regulated entities for the benefit of both the economy and the environment.

In the June 23, 1998, Federal Register (63 FR 34170), EPA requested proposals for XL projects from 15 POTWs based on environmental performance measures for the pretreatment program. The process for reviewing and choosing acceptable pilot program candidates included input from POTWs, State and EPA Regional Pretreatment Coordinators, as well as opportunity for public participation. As discussed in more detail below, five POTWs have advanced to the final steps of the Project XL process. In today's rule, EPA announces revisions to the national pretreatment regulations at 40 CFR part 403 that will allow the current and future selected Local Pilot Pretreatment Programs to be implemented. The flexibility provided by this rule revision is limited to 15 POTWs that meet the Project XL criteria. POTWs must submit revised pretreatment programs for approval and obtain modified permits to authorize the POTW to implement its pilot program instead of its currently Approved POTW Pretreatment Program. However, please note that the affected States may first need to revise their own regulations or statutes to authorize the pilot programs for pretreatment XL project sponsors before this rule can be implemented in their jurisdictions.

EPA believes stakeholder involvement in developing Local Pilot Pretreatment Programs is crucial to the success of the programs; therefore, as part of the Project XL proposal, a POTW must clearly explain its process for involving stakeholders in the design of the pilot program. This process should be based upon the guidance entitled, Regulatory Reinvention (XL) Pilot Projects, set out in the April 23, 1997, Federal Register notice (62 FR 19872). The support of parties that have a stake in the program is very important. Once EPA has accepted a candidate based on its detailed proposal, the POTW, EPA, the State and local stakeholders typically develop a Final Project Agreement (FPA). The FPA is a non-binding agreement that describes the intentions and commitments of the implementing parties. Stakeholders may include communities near the project, local or State governments, businesses, environmental and other public interest groups, or other similar entities. Stakeholders will also have formal opportunities to comment on provisions of the FPA that are incorporated in the POTW's revised pretreatment program under the procedures established at 40 CFR 403.18 and this rule.

EPA proposed this regulation on October 6, 2000 (65 FR 59791). The preamble to the proposed rule explains the changes in the regulations. The public comment period was open for a period of 30 days and closed on November 6, 2000.

EPA received a total of three comments regarding this rule. The commenters included two States and a trade group that represents municipalities. Two of the commenters fully support the revised regulation which will allow the Project XL process to move forward and provide a means to test new ways to streamline the pretreatment program and provide greater environmental benefits. The other commenter believes that both major and minor modifications to expired NPDES permits are prohibited and requests that 40 CFR 403.20 be clarified to allow approved Pretreatment Program Modifications that may be processed as minor NPDES Permit modifications in accordance with 40 CFR 122.63(g), to be also processed in cases when the associated NPDES Permits are expired. In response to this comment, EPA agrees that the Federal NPDES regulations do not contemplate modifications to expired NPDES permits and EPA understands that many States have permitting backlogs. However, EPA does not believe that an exception to the NPDES permitting regulations is appropriate in this narrowly tailored rulemaking amending the pretreatment regulations. Rather, EPA believes that States with NPDES permit backlogs would make POTWs that qualify under this rule a high priority and reissue those permits promptly so that those facilities can implement the changes to their permits allowed under this rule.

The National Pretreatment Program is part of the Clean Water Act's (CWA's) water pollution control program. The program is a joint regulatory effort by local, State, and Federal authorities that requires the control of industrial and commercial sources of pollutants discharged to municipal wastewater plants (called “publicly owned treatment works” or “POTWs”). Control of pollutants prior to discharge of wastewater to the municipal sewer system minimizes the possibility of pollutants interfering with the operation of the POTW and reduces the levels of toxic pollutants in wastewater discharges from the POTW and in the sludge resulting from municipal wastewater treatment.

The minimum requirements for an approved POTW Pretreatment Program currently are published at 40 CFR 403.8(f). POTWs with approved Pretreatment Programs must maintain adequate legal authority, identify industrial users, designate which industrial users (IUs) are “Significant Industrial Users” (SIUs) (under 40 CFR 403.3(t)) and perform required monitoring, permitting and enforcement. Other sections of part 403 require POTWs with Approved Pretreatment Programs to sample and apply nationally applicable pretreatment standards to the industrial users discharging pollutants to the POTW collection system. POTWs are also required to develop local limits in accordance with 40 CFR 403.5. As announced today, EPA will allow Approval Authorities to require a POTW to meet requirements in an environmental performance-based pilot program instead of certain administrative programmatic requirements currently required in a POTW's Approved Pretreatment Program under 40 CFR part 403.

As described in 40 CFR 403.2, the general pretreatment regulations promote three objectives:

(a) To prevent the introduction of pollutants into POTWs which will interfere with the operation of POTWs, including interference with the use or disposal of municipal sludge;

(b) To prevent the introduction of pollutants into POTWs which will pass through the treatment works or otherwise be incompatible with such works; and

(c) To improve opportunities to recycle and reclaim municipal and industrial wastewaters and sludges.

These objectives require local programs to be designed so they are preventative in nature, and therefore, any pilot program also would need to maintain this preventative approach. The specific requirements for an Approved POTW Pretreatment Program are intended to achieve these objectives. Individual pretreatment programs, however, are not routinely required to report on the achievement of environmental measures.

The 1991 National Pretreatment Program Report to Congress provides extensive data related to the sources and amounts of pollutants discharged to POTWs, the removal of pollutants by secondary treatment technology, and the general effectiveness of the pretreatment program. The 1991 Report did, however, point to a serious lack of comprehensive environmental data with which to fully assess the effectiveness of both the national and local pretreatment programs. These Project XL pilots will help to provide data for this purpose.

Some POTWs have mastered the administrative aspects of the pretreatment program (identifying industrial users, permitting, monitoring, etc.) and want to move into more environmental performance-based processes. These POTWs have expressed an interest in focusing their resources on activities that they believe would provide greater environmental benefit than is achieved by complying with the current requirements. Some POTWs want to be able to make decisions on allocating resources based on the risk associated with the industrial contributions they receive or other factors. Others want to be able to focus more resources on ambient monitoring in their receiving waters and/or to integrate their pretreatment programs with their storm water monitoring programs. In general, these POTWs want the opportunity to redirect limited resources away from currently required activities that they do not believe are benefitting the environment and toward activities that may achieve measurable improvements in the environment.

EPA developed the Project XL program to provide regulated entities the flexibility to conduct innovative pilot projects. Today's rule represents an attempt to spur innovation in the pretreatment program, to increase environmental benefits and, in conjunction with the streamlining proposal (see 64 FR 39564), to determine, if further streamlining of the program is needed, how streamlining can achieve environmental improvements and in what direction those future streamlining efforts should be directed.

In order to implement the pretreatment XL projects, EPA is promulgating this rule to provide regulatory flexibility under the Clean Water Act. Currently, five (5) POTWs have requested flexibility through the Project XL FPA approval process. The POTWs are: The Narragansett Bay Commission (NBC) in Rhode Island; the Jeffersontown Wastewater Treatment Plant (WWTP), owned and operated by the Louisville and Jefferson County Metropolitan Sewer District (MSD) in Kentucky; the Metropolitan Water Reclamation District of Greater Chicago (Chicago) in Illinois; the City of Albuquerque (Albuquerque), New Mexico; and the City of Denton (Denton), Texas. The FPA for NBC lays out the following flexibilities: (1) Reduced self-monitoring requirements for ten (10) categorical industrial users (CIUs) for tier 1 facilities, (2) reduced inspection frequency for ten (10) CIUs tier 1 facilities from once every year to once every two years, and (3) allow participating CIUs tier 1 facilities to not sample for pollutants not expected to be present. Under the FPA for MSD, the POTW is requesting flexibility to (1) use an alternative definition for significant industrial user (SIU), (2) allow participating CIUs to not sample for pollutants not expected to be present and (3) use an alternative definition of significant noncompliance (SNC). The Chicago FPA describes flexibility that includes (1) use of an alternative definition for de minimis categorical industrial user (CIU), and (2) reduced self-monitoring and self-reporting requirements for participating CIUs and (3) use of alternative monitoring methods. The Albuquerque FPA lays out flexibility to (1) use an alternative definition of SIU, (2) use an alternative definition of SNC, (3) reduce permitting requirements for participating IUs, (4) use alternative monitoring methods and (5) reduce reporting requirements for participating IUs. The Denton FPA lays out flexibility to (1) reduce its monitoring of participating IUs and (2) reduce its inspection of participating IUs. In exchange for these flexibilities, each individual POTW has committed to produce certain proportional amounts of superior environment performance as laid out in the FPA and maintain all legal and preventative environmental health and safety standards. Complete project site-specific descriptions can be found on the web at: http://www.epa.gov/projectxl/.

These XL projects are expected to achieve superior environmental performance beyond that which is achieved under the current CWA regulatory system by allowing POTWs the ability to identify environmental goals and allocate the necessary resources on a site specific basis. Specifically, these projects are expected to produce additional benefits by (i) reducing pollutant loadings to the environment or some other environmental benefit beyond that currently achieved through the existing pretreatment program (including collecting environmental performance data and data related to environmental impacts in order to measure the environmental benefit), (ii) reducing or optimizing costs related to implementation of the pretreatment program with the savings used to attain environmental benefits elsewhere in the watershed in any media, and (iii) providing EPA with information on how the pretreatment program might be better oriented towards the achievement of measures of environmental performance.

EPA's intent is to allow Local Pilot Pretreatment Programs to be administered by those POTWs that best further those objectives. Each pilot program's method of achieving the environmental benefit should be transferable so that other POTWs may be able to implement the method and also achieve increased environmental benefits.

Under Project XL, local Pilot Pretreatment Programs may be approved to operate for the term expressed in the FPA. Prior to the end of the FPA approval period (at least 180 days), the POTW may apply for a renewal or extension of the project period in accordance with the terms of the FPA. If a POTW is not able to meet the performance goals of its Local Pilot Pretreatment Program, the Pretreatment Approval Authority (either EPA or the authorized State) could allow the performance measures to be adjusted if the primary objectives of the Local Pilot Pretreatment Program would be met. The revised Local Pilot Pretreatment Program would need to be approved in accordance with the FPA and the procedures in 40 CFR 403.18.

If the primary objectives of the proposal are not being met, the Approval Authority would direct the POTW to discontinue implementing the Local Pilot Pretreatment Program and resume implementation of its previously approved pretreatment program. The Pretreatment Approval Authority would need to ensure that the POTW's NPDES permit includes a “reopener” clause to implement this procedure.

The results of the pilots, including recommendations in POTW reports, may be used to determine the direction of future Pretreatment Program streamlining and/or reinvention.

Either the Approval Authority or the POTW may terminate a project earlier than the final project agreement's (FPA) anticipated end date. Parties will follow procedures for termination set out in the FPA. The implementing permits will also reflect the possibility of early termination. When the NPDES permitting agency modifies the POTW's NPDES permit to incorporate the flexibility allowed by today's rule, it must include a “reopener” provision that requires the POTW to return to compliance with previously approved pretreatment program requirements at the expiration or termination of the FPA, including an interim compliance period, if needed. Additional details are available in the site-specific FPAs.

Today's rule modifies 40 CFR part 403 to allow Pretreatment Approval Authorities (EPA or State) to grant regulatory flexibility to Project XL POTWs with approved FPAs. The regulatory flexibility would allow such POTWs to implement Pretreatment Programs that include legal authorities and requirements that are different than the administrative requirements in 40 CFR part 403. The POTW would need to submit any such alternative requirements as a substantial program modification in accordance with the procedures outlined in 40 CFR 403.18. The approved modified program would need to be incorporated as an enforceable part of the POTW's NPDES permit. The Approval Authority would approve or disapprove the pilot program using the procedures in 40 CFR 403.18.

For example, the POTW would work through the Project XL process as described above. The POTW either would or has already developed the necessary FPA with stakeholder participation (local interest groups, State representatives, EPA, any other interested parties). The POTW would use the FPA as the blueprint when developing a revision of the POTW's approved local pretreatment program. The POTW would submit the revised program to its Approval Authority (State or EPA region) requesting a substantial program modification using the procedures outlined in 40 CFR 403.18. The Approval Authority would review the program modification request to determine that it contains the provisions of the blue-print FPA and make a determination to approve or deny the request. The proposal for modification would be publicly noticed following the procedures in 40 CFR 403.11 and 40 CFR 403.18. After the close of the public comment period, the Approval Authority would consider and respond to public comments and revise the POTW's pretreatment program accordingly. Then the POTWs NPDES permit would be modified by adding the modified pretreatment program as an enforceable part of the permit.

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

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

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

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

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

It has been determined that this rule is not a “significant regulatory action” under the terms of Executive Order 12866, and is therefore not subject to OMB review.

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. This rule reduces the regulatory costs to POTWs of complying with the pretreatment requirements and affects only a small number of POTWs. It only affects those POTWs that elect to participate in the voluntary Project XL Program. Therefore, I certify that this action will not have a significant economic impact on a substantial number of small entities.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. § 804(2). This rule will be effective on October 3, 2001.

This rule does not impose any new information collection burden. This rule merely changes the National Pretreatment Program regulations to provide flexibility to allow POTWs that have completed the Project XL selection process, including FPA development, to modify their approved local Pretreatment Programs. The POTW must submit any such alternative requirements as a substantial program modification in accordance with the procedures outlined in 40 CFR 403.18. The Office of Management and Budget (OMB) has previously approved the information collection requirements for 40 CFR 403.18 under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control numbers 2040-0009 (EPA ICR No. 0002.09) and 2040-0170 (EPA ICR No. 1680.02). In addition, OMB has approved the ICR entitled “Regulatory Reinvention Pilot Projects Under Project XL: Pre-treatment Program,” and assigned OMB control number 2010-0026 (EPA ICR No. 1755.05).

Copies of the ICR document(s) may be obtained from Sandy Farmer, by mail at the Office of Environmental Information Collection Strategies Division; U.S. Environmental Protection Agency (2822); 1200 Pennsylvania Ave., NW., Washington, DC 20460, by email at farmer.sandy@epa.gov, or by calling (202) 260-2740. A copy may also be downloaded off the internet at http://www.epa.gov/icr. Include the ICR and/or OMB control number in any correspondence.

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

An Agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

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

Today's rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, or tribal governments or the private sector. The rule imposes no enforceable duty on any State, local or tribal governments or the private sector. Further, UMRA generally excludes from the definition of “Federal intergovernmental mandate” duties that arise from participation in a voluntary Federal program. The Project XL Program is a voluntary Federal program. Thus, today's rule is not subject to the requirements of sections 202 and 205 of the UMRA. For the same reasons, EPA has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments. Thus, today's rule is not subject to UMRA section 203.

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

This rule is not subject to Executive Order 13045 because it is not an economically significant rule, as defined by Executive Order 12866, and because it does not concern an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

This final rule does not have federalism implications. It 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 because it provides flexibility to participate in a voluntary program designed to reduce administrative requirements for facilities that have negotiated agreements with, among other parties, their State and local governments. Thus, Executive Order 13132 does not apply to this rule.

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

This final rule does not have tribal implications. It will not have substantial direct effects on tribal governments, or 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. This rule provided flexibility to participate in a voluntary program designed to reduce administrative requirements and provide superior environmental performance for facilities that have negotiated agreements with, among other parties, their State and local governments. Thus Executive order 13175 does not apply to this rule.

As noted in the proposed rule, section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standard. This rulemaking does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards. EPA requested comment on this aspect of the rulemaking, but did not receive any such comments.

Section 553 of the Administrative Procedure Act, 5 U.S.C. 553, generally requires that an Agency publish a rule at least 30 days prior to its effective date. However, this requirement does not apply to rules which grant an exemption from existing requirements or rules for which the Agency finds “good cause” to make the rule effective within 30 days of publication. Because today's rule essentially provides a variance procedure from existing administrative requirements for certain POTWs, today's rule grants an exemption and is not subject to the requirement to publish 30 days prior to the effective date of the rule. EPA also believes that it is important to make this rule effective as soon as possible so that the affected POTWs and their State and local governments can begin to make the changes to permits and undertake other necessary measures to allow the FPAs to be implemented. As a result, this rule is effective on the date of publication.

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.

The Ohlone tiger beetle (Cicindela ohlone) is a member of the Coleopteran family Cicindelidae (tiger beetles), which includes over 2,000 species worldwide and over 100 species in the United States (Pearson and Cassola 1992). Tiger beetles are day-active, predatory insects that prey on small arthropods. Because many tiger beetles often feed on insect species that are injurious to man and crops, they are regarded as beneficial (Pearson and Cassola 1992; Nagano 1982). Adult tiger beetles are medium-sized, elongate beetles that can have a brilliant metallic green, blue, red, and yellow coloration highlighted by stripes and spots. Alternatively, they can be brown, black or dull colored (Knisley and Shultz 1997). Adults are ferocious, swift, and agile predators that seize small prey with powerful sickle-shaped jaws.

Tiger beetle larvae are also predatory. They live in small vertical or slanting burrows from which they lunge at and seize passing invertebrate prey (Essig 1926; Essig 1942; Pearson 1988). The larva grasps the prey with its strong mandibles (mouthparts) and pulls it into the burrow; once inside the burrow, the larva will feed on the captured prey (Essig 1942; Pearson 1988). Tiger beetles share similar larval body forms throughout the world (Pearson and Cassola 1992). The larvae, either white, yellowish, or dusky in coloration, are grub-like and fossorial (subterranean), with a hook-like appendage on the fifth abdominal segment that anchors the larvae inside their burrows.

Tiger beetle larvae undergo three instars (larval development stages). This period can take 1 to 4 years, but a 2-year period is the most common (Pearson 1988). After mating, the tiger beetle female excavates a hole in the soil and oviposits (lays) a single egg (Pearson 1988; Kaulbars and Freitag 1993; Grey Hayes, pers. comm. 1998). Females of many species of Cicindela are extremely specific in choice of soil type for oviposition (egg laying) (Pearson 1988). It is not known at this time how many eggs the Ohlone tiger beetle female lays, but other species of Cicindela are known to lay between 1 and 126 eggs per female (C. Barry Knisley, Randolph-Macon College, in litt. 2000). After the larva emerges from the egg and becomes hardened, it enlarges the chamber that contained the egg into a tunnel (Pearson 1988). Before pupation (transformation process from larva to adult), the third instar larva will plug the burrow entrance and dig a chamber. After pupation in this chamber, the adult tiger beetle will dig out of the soil and emerge. Reproduction may either begin soon after emergence or be delayed (Pearson 1988).

Tiger beetles are a well-studied taxonomic group with a large body of scientific literature; the journal Cicindela is devoted exclusively to tiger beetles. Scientists have studied the diversity and ecological specialization of tiger beetles, and amateur collectors have long been attracted by their bright coloration and swift movements. Tiger beetle species occur in many different habitats, including riparian habitats, beaches, dunes, woodlands, grasslands, and other open areas (Pearson 1988; Knisley and Hill 1992). A common habitat component appears to be open sunny areas for hunting and thermoregulation (an adaptive behavior to use sunlight or shade to regulate body temperature) (Knisley et al. 1990; Knisley and Hill 1992). Individual species of tiger beetle are generally highly habitat-specific because of oviposition and larval sensitivity to soil moisture, composition, and temperature (Pearson 1988; Pearson and Cassola 1992; Kaulbars and Freitag 1993).

The Ohlone tiger beetle is endemic to Santa Cruz County, California, where it is known only from coastal terraces supporting remnant patches of native grassland habitat. Specimens of this species were first collected northwest of the City of Santa Cruz, California, in 1987, and were first described in 1993 (Freitag et al. 1993). Both male and female specimens have been collected.

The adult Ohlone tiger beetle is a relatively small beetle measuring 9.5 to 12.5 millimeters (mm) (0.37 to 0.49 inches (in)) long. The adults have large, prominent eyes and metallic green elytra (leathery forewings) with small light spots (Freitag et al. 1993). Their legs are long, slender, and coppery-green. Freitag et al. (1993) describe features that distinguish this species from closely related species of Cicindela purpurea and other purpurea group taxa.

Two principal distinguishing features of the Ohlone tiger beetle are its early seasonal adult activity period and its disjunct distribution. While other tiger beetle species, such as Cicindela purpurea, are active during spring, summer, or early fall (Nagano 1982; Freitag et al. 1993), the Ohlone tiger beetle is active from late January to early April (Freitag et al. 1993). The Ohlone tiger beetle is the southernmost of purpurea group species in the Pacific Coast region; its distribution is allopatric (geographically separated) to those of similar species (Freitag et al. 1993).

Ohlone tiger beetle larvae are currently undescribed. However, tiger beetle burrows, measuring 4 to 6 mm in diameter (0.16 to 0.23 in), were found in the same habitat areas where adult Ohlone tiger beetles were collected (David Kavanaugh, California Academy of Sciences, pers. comm. 1997; Vince Cheap, in litt. 1997). The surface openings of these burrows are circular and flat with no dirt piles or mounds surrounding the circumference (Kim Touneh, Service, pers. obs. 1997). These burrows are similar to larval burrows belonging to other tiger beetle species. Larvae and inactive adults have been excavated from these burrows, and the inactive adults collected from these burrows were fully mature and easily identified as Ohlone tiger beetles (D. Kavanaugh, pers. comm. 1997; V. Cheap, in litt. 1997). Based on these collections, Kavanaugh (pers. comm. 1997) concluded that the larvae found in these burrows were Ohlone tiger beetle larvae. Further investigations of these recently collected larvae are being conducted to scientifically characterize and document the morphology of the Ohlone tiger beetle larvae (D. Kavanaugh, pers. comm. 1997).

Ohlone tiger beetles are found in association with coastal terrace prairies, which are often characterized by the presence of California oatgrass (Danthonia californica) and purple needlegrass (Stipa pulchra). The substrate is shallow, pale, poorly drained clay or sandy clay soil that bakes to a hard crust by summer, after winter and spring rains cease (Freitag et al. 1993). Ohlone tiger beetle habitat is associated with either Watsonville loam or Bonnydoon soil types in Santa Cruz County. Soil core analyses were conducted for three of the sites known to be occupied by the Ohlone tiger beetle; the soil types for these three sites were determined to be either Watsonville loam or Bonnydoon (Richard Casale and Ken Oster, Natural Resources Conservation Service, pers. comm. 1997).

Adult Ohlone tiger beetles are found more often on level or nearly level slopes along trails (e.g., foot paths, dirt roads, and bicycle paths) that are adjacent to or near remnant patches of native grassland on coastal terraces. Adults will also utilize barren areas among low or sparse vegetation within the grassland. Ohlone tiger beetles require these open areas for construction of larval burrows, thermoregulation, and foraging (C.B. Knisley, in litt. 2000; Colleen Sculley, Service, pers. obs. 2000). The density of larval burrows decreases with increasing vegetation cover (G. Hayes, in litt. 1997). When disturbed, adults will fly to more densely vegetated areas (Freitag et al. 1993; Richard Arnold, consultant, pers. comm. 1995). Oviposition by females and subsequent larval development also occur in this coastal prairie habitat (i.e., open areas among native vegetation) (D. Kavanaugh, pers. comm. 1997; V. Cheap, in litt. 1997).

The historic range of the Ohlone tiger beetle cannot be precisely assessed because the species was only recently discovered, and no historic specimens or records are available. The earliest specimen recorded was collected from a site northwest of the City of Santa Cruz in 1987 (Freitag et al. 1993). Based on available information on topography, substrates, soils, and vegetation, it is likely that suitable habitat for the Ohlone tiger beetle was more extensive and continuous prior to the increase in urban development and agriculture. Historically, potentially suitable habitat may have extended from southwestern San Mateo County to northwestern Monterey County, California (Freitag et al. 1993). However, we have no evidence or data indicating that this species occurred beyond the present known occupied areas of Santa Cruz County. Currently, the extent of potentially suitable habitat for the Ohlone tiger beetle is estimated at 81 to 121 hectares (ha) (200 to 300 acres (ac)) in Santa Cruz County, California (Freitag et al. 1993).

The available data indicate a restricted range and limited distribution of the Ohlone tiger beetle. This finding is supported by the following considerations. First, many tiger beetle species are known to be restricted to specific habitats (Pearson 1988; Knisley and Hill 1992; Pearson and Cassola 1992), such as the open native grassland occupied by the Ohlone tiger beetle. Second, tiger beetles are widely collected and well-studied, yet no historic specimens were found in the extensive collections of the California Academy of Sciences, the University of California, Berkeley or the University of California, Davis (Freitag et al. 1993; D. Kavanaugh, pers. comm. 2000). The Ohlone tiger beetle's specialized habitat and restricted range may account for the absence of collection records prior to 1987. Because Cicindela is a very popular insect genus to collect (Chris Nagano, Service, pers. comm. 1993), and because entomologists commonly collect out of season and out of known ranges in order to find temporally and spatially outlying specimens, we expect more specimens would have been collected if the Ohlone tiger beetle were more widespread and common.

Three researchers conducted surveys that assess the current distribution and status of the Ohlone tiger beetle. Between 1990 and 1994, a researcher surveyed 14 sites with native grassland habitat from southwestern San Mateo County to southern Santa Cruz County for Ohlone tiger beetles. Six additional locations supporting nonnative grasslands, but which appeared otherwise suitable, were also surveyed. Surveys were conducted from February to April, when Ohlone tiger beetles are active. This work documented the presence of the Ohlone tiger beetle from sites located northwest of the City of Soquel, within the City of Scotts Valley, west of the City of Santa Cruz, and northwest of the City of Santa Cruz (Randall Morgan, in litt. 1994).

A second researcher surveyed for populations of Ohlone tiger beetles in coastal grasslands from southern San Mateo County to northern Monterey County during the adult activity period in 1995. Researchers visited sites repeatedly through the Ohlone tiger beetle's season of activity. Results of these surveys confirmed the presence of Ohlone tiger beetles in the 4 geographic areas identified previously and identified a new site northwest of the City of Santa Cruz that was occupied by the Ohlone tiger beetle (G. Hayes, in litt. 1997).

A local consultant conducted additional surveys for the Ohlone tiger beetle between 1994 and 2000 in approximately 22 locations on private lands that were not surveyed during 1990 to 1995. These surveys all occurred within the County of Santa Cruz in the vicinity of the communities of Scotts Valley, Santa Cruz, Davenport, Soquel, Capitola, and Aptos (R. Arnold, pers. comm. 2000). In 2000, the surveyor found one new site occupied by adults of the Ohlone tiger beetle and a second site with potential larval burrows. Both sites are located west of the City of Santa Cruz in close proximity to other sites known to be occupied by the Ohlone tiger beetle.

In total, we are aware of 60 sites that have been surveyed for the Ohlone tiger beetle in Santa Cruz, San Mateo, and Monterey counties. Based on the results of these survey efforts and the above considerations, we conclude that the Ohlone tiger beetle is restricted to remnant patches of native grassland on coastal terraces in the mid-county portion of coastal Santa Cruz County, California.

The proposed rule described five locations inhabited by the Ohlone tiger beetle. At the time of the proposed rule, the available data indicated that Ohlone tiger beetles were isolated geographically in each of these locations, and thus they were considered distinct populations. Since the publication of the proposed rule, we have received new information about additional areas occupied by the Ohlone tiger beetle. Furthermore, we have conducted a more extensive review of potential habitat linking these populations. Based on this new information, we believe there is evidence indicating that genetic exchange may occur between several known locations of Ohlone tiger beetles defined in the proposed rule as distinct populations. Until data on the dispersal capability and genetic relatedness among Ohlone tiger beetles from varying locations are available, we cannot conclusively delineate populations of the Ohlone tiger beetle. Therefore, we will refer to Ohlone tiger beetles from the geographic areas where they occur and not as distinct populations.

The Ohlone tiger beetle is known from 4 narrow geographic areas within the County of Santa Cruz: northwest of the City of Soquel, within the City of Scotts Valley, west of the City of Santa Cruz, and northwest of the City of Santa Cruz. The Ohlone tiger beetle is known from 11 properties within these 4 areas. The abundance of individuals in each of these areas is unknown. However, the Ohlone tiger beetle is known to occur on less than 2 ha (5 ac) of land in each of these 4 areas (G. Hayes, pers. comm. 1995; C. Sculley pers. obs. 1999, 2000). All of these known locations of the Ohlone tiger are on coastal terraces that support remnant stands of native grassland. These 4 areas are described below:

The Ohlone tiger beetle occupies one parcel of private property northwest of the City of Soquel at 60 to 90 meters (m) (200 to 295 feet (ft)) elevation.

The beetle is known from one parcel of private property within the City of Scotts Valley at 210 m (690 ft) elevation. Potential burrows of the Ohlone tiger beetle were detected on a second parcel in the City of Scotts Valley in 1997 (Biotic Resources Group 1999), but adults were not detected at this site during surveys in 2000 (Dana Bland, pers. comm. 2000). The presence of the species at this second site is uncertain.

The Ohlone tiger beetle is known from five parcels located west of the City of Santa Cruz at 110 m (360 ft) elevation. One parcel is owned by the City of Santa Cruz, and the University of California, Santa Cruz (University) owns a second parcel. The third and fourth parcels are under private ownership. Potential burrows of the Ohlone tiger beetle have been found on a fifth property that is under private ownership; surveys for adults necessary to confirm the presence of the Ohlone tiger beetle have not been conducted at this site. All five of these properties are contiguous. Potential habitat for the Ohlone tiger beetle may link some of these areas occupied currently by the Ohlone tiger beetle (C. Sculley, pers. obs. 2000). We are uncertain if there is gene flow between these different parcels.

Ohlone tiger beetles are located northwest of the City of Santa Cruz between 110 m (360 ft) and 340 m (1,115 ft) elevation on properties owned by the University, the California Department of Parks and Recreation (CDPR), and the City of Santa Cruz (Freitag et al. 1993; R. Morgan, in litt. 1994; G. Hayes, in litt. 1997). These properties are contiguous as well, although Ohlone tiger beetles may be isolated on each property because habitat for the beetle is not continuous between parcels. Adult Ohlone tiger beetles were detected on the parcel owned by CDPR in 1997 (G. Hayes, in litt. 1999); however, no adults were detected in surveys conducted in 2000 (George Gray, CDPR, pers. comm. 2000). The status of the species on this parcel is uncertain.

On February 18, 1993, we received a petition from Randall Morgan of Soquel, California, requesting that we add the Ohlone tiger beetle to the list of threatened and endangered species pursuant to the Act. The petition contained information indicating that the Ohlone tiger beetle has a limited distribution and specialized habitat requirements and was threatened by proposed development projects and recreational activities. Our 90-day petition finding, published in the Federal Register on January 27, 1994 (59 FR 3330), determined that substantial information was presented in the petition indicating that listing may be warranted. Our 12-month petition finding, published on March 1, 1996, in the Federal Register (61 FR 8014), concluded that listing was not warranted due to the lack of life history information and survey data to conclusively determine that the beetle is restricted to the described habitat.

On April 30, 1997, we received a second petition from Grey Hayes of Santa Cruz, California, to emergency-list the Ohlone tiger beetle as an endangered species under the Act. The petition specified endangered status because of the beetle's limited distribution and threats from proposed development projects, invasion of nonnative plants, and recreational activities. Based on the information provided by the petitioner, and additional information gathered since the first petition in 1993, we determined that emergency-listing the Ohlone tiger beetle was not required but that listing of this species as endangered is warranted. Therefore, in our most recent Notice of Review, published on October 25, 1999 (64 FR 57534), we included the Ohlone tiger beetle as a candidate species. Candidate species are those species for which listing is warranted but precluded by other pending listing actions, in accordance with section 4(b)(3)(B)(iii) of the Act. On February 11, 2000, we published a proposed rule in the Federal Register (65 FR 6952) to list the Ohlone tiger beetle as endangered. We have updated this final rule to reflect new information concerning changes in distribution, status, and threats since publication of the proposed rule.

In the February 11, 2000, proposed rule, we requested interested parties to submit factual reports or information that might contribute to the development of a final listing decision. We contacted appropriate Federal agencies, State agencies, county and city governments, scientists, and other interested parties to request information and comments. We solicited independent review of the proposed rule by three peer reviewers. We published newspaper notices in the Santa Cruz Sentinel and San Jose Mercury News on February 17, 2000, and March 4, 2000, respectively. The comment period closed on April 11, 2000. We did not receive any requests for a public hearing during the comment period.

During the comment period, we received 19 comment letters, including 3 letters from peer reviewers. Fifteen commenters supported the proposal, one provided neutral comments, and three were opposed to the proposal. Several commenters provided additional information that, with other clarifications, has been incorporated into the sections titled “Background” and “Summary of Factors” of this final rule.

Comments of a similar nature or point regarding the proposed rule have been grouped into issues and are discussed below.

Issue 1: One commenter questioned whether the Ohlone tiger beetle is actually a distinct species of tiger beetle rather than an already-identified subspecies of tiger beetle. The commenter further suggested that the authors of the scientific paper that described this species (Freitag et al. 1993) raised this possibility as well. Finally, the commenter expressed concern that a “taxonomic differentiation” of the Ohlone tiger beetle has not been conducted using “currently available testing methods.”

Our Response: In general, we recognize taxonomic determinations that are published in peer-reviewed journals and are accepted by the scientific community. The description of the Ohlone tiger beetle was published in the Coleopterists' Bulletin, a peer-reviewed scientific journal (Freitag et al. 1993). The authors of this publication noted that at first they thought the specimens from Santa Cruz County might have represented an unusual form of a species of tiger beetle described previously. After careful examination, the authors detected differences between the external form and structure and the genitalia of males and females of adult Ohlone tiger beetles and other closely related species of tiger beetles. They determined that these differences “were at least as great” as typically found between closely related, but distinct species. They described the species based on distinguishing morphological characteristics, geographical and habitat distribution, life history, and phylogenetic relationships. Thus, the authors determined that the Ohlone tiger beetle is a new and distinct species of tiger beetle.

None of the peer reviewers, all of whom specialize in the study of tiger beetles, questioned the validity of this finding. We received no comments from other tiger beetle experts expressing concern or uncertainty about the validity of the Ohlone tiger beetle being a distinct species.

We are uncertain what the commenter considers to be “currently available testing methods.” Therefore, we cannot comment on whether these methods have been conducted. However, we have concluded that the analyses conducted by Freitag et al. (1993) are adequate to conclude that the Ohlone tiger beetle is a distinct species, based on comparative morphological evidence, and that this analysis has been validly published (published in a peer-reviewed scientific journal), and accepted by the scientific community.

Issue 2: Several commenters questioned the level of survey effort that was conducted to determine the range, distribution, and frequency of occurrence of the Ohlone tiger beetle. One commenter asked whether surveys have been conducted on all sites with suitable habitat and whether the surveys were conducted at the appropriate time of year. Another commenter requested that independent studies be conducted to determine if the habitat is as restricted as proclaimed.

Our Response: The final rule describes the extent of surveys that have been conducted for the Ohlone tiger beetle at the present time. All of these surveys, unless otherwise noted, were conducted by qualified field biologists during the proper time of year and time of day (i.e., on warm, sunny days during the months of February to April) when adult Ohlone tiger beetles could reasonably be expected to be active, evident, and identifiable. Surveys were conducted using systematic field techniques and were well documented.

Survey locations included grasslands in San Mateo, Santa Cruz, and Monterey counties. At least 60 sites have been surveyed, and Ohlone tiger beetles have been found on 11 properties in 4 narrow geographic areas in Santa Cruz County. Many of the sites surveyed by Randall Morgan between 1990 and 1994, and Grey Hayes in 1995, were lands under public ownership. Most of the sites surveyed by Dr. Richard Arnold between 1994 and 2000 were under private ownership.

As a result of private landowners restricting access and volunteer surveyors having time limitations, not all sites that may provide potential habitat for the Ohlone tiger beetle have been surveyed. We acknowledge that undiscovered sites occupied by the Ohlone tiger beetle may exist, most likely on private land. We also recognize that there is a high potential that these sites are subject to the same threats that face other privately owned parcels that support the Ohlone tiger beetle. Given the extremely limited distribution of the species at the present time, discovery of several additional locations of the Ohlone tiger beetle would not likely alter the endangered status of the species overall. All of the peer reviewers acknowledged the extreme rarity of the Ohlone tiger beetle and supported listing this species as endangered.

Issue 3: One commenter questioned why the Ohlone tiger beetles found in a preserve owned and managed by the City of Santa Cruz were not found during surveys conducted between 1990 and 1994, but were located during surveys in 1995.

Our Response: We asked this question of Randall Morgan, who conducted the surveys during 1990 to 1994. Mr. Morgan re-examined his collections and determined that he did in fact collect a single Ohlone tiger beetle from the preserve in 1994. Mr. Morgan collected this Ohlone tiger beetle in the same vicinity where Ohlone tiger beetles were discovered in 1995 (R. Morgan, pers. comm. 2000).

Issue 4: One commenter questioned what additional information on the Ohlone tiger beetle we received after the publication of the 12-month finding in 1996 (61 FR 8014), in which we determined that listing of the Ohlone tiger beetle was not warranted because data were inadequate for us to determine that the Ohlone tiger beetle was restricted to the described habitat. Specifically, the commenter noted that the proposed rule to list the species (65 FR 6952) cited only the survey work that had been conducted between 1990 and 1995, which preceded the publication of this 12-month finding.

Our Response: On January 23, 1997, we received a letter from Grey Hayes that described the results of his surveys for Ohlone tiger beetles that had been conducted in 1995. We were not aware that these surveys had been conducted until we received Mr. Hayes' letter 9 months after the publication of the 12-month finding. Mr. Hayes surveyed 21 sites that represented a variety of grassland and oak woodland habitats in Monterey, Santa Cruz, and San Mateo counties. The results of these surveys indicated that the Ohlone tiger beetle was found only in association with soil types specific to the central coast of California. Furthermore, the surveys showed that Ohlone tiger beetles are found only in or adjacent to coastal terrace prairie, a type of grassland that exists on less than 809 ha (2,000 ac).

Furthermore, we reviewed the scientific literature on tiger beetles and determined that tiger beetle species are commonly restricted to very specific habitat types (Pearson 1988; Knisley and Hill 1992; Pearson and Cassola 1992). Based on this information, we concluded that adequate information existed to determine conclusively that the Ohlone tiger beetle is restricted to a narrow habitat type within Santa Cruz County.

Issue 5: One commenter questioned whether we can logically infer from two relatively limited surveys that the Ohlone tiger beetle is “restricted to remnant patches of native grasslands on coastal terrace prairie in the mid-county portion of coastal Santa Cruz County.” The commenter further stated that there was insufficient information to support the Service's conclusion that the Ohlone tiger beetle is in danger of extinction throughout a significant portion of its range.

Our Response: This final rule is based on the best available information and science and clearly describes how we determined the current range and habitat requirements of the Ohlone tiger beetle, and how we concluded that the species is in danger of extinction throughout a significant portion of its range. Please refer to the “Background” and “Summary of Factors Affecting the Species” sections.

Issue 6: One commenter questioned how many, and which, insect collections had been searched for specimens of the Ohlone tiger beetle. The commenter noted that he or she had spoken with a tiger beetle expert in Texas who had specimens of the Ohlone tiger beetle collected from 29 years ago, and that the expert knew of additional specimens of the species collected in the early 1930s and 1940s.

Our Response: While preparing the manuscript to describe the Ohlone tiger beetle, Dr. David Kavanaugh of the California Academy of Sciences searched the entomological collections of the California Academy of Science, the University of California, Davis, and the University of California, Berkeley. These three institutions were searched because they held the largest collections of tiger beetles within the vicinity of Santa Cruz County, and were the most likely depositories of Ohlone tiger beetles collected from that area. Furthermore, the California Academy of Sciences holds the collection of Norman C. Rumpp, which includes one of the largest collections of tiger beetles in the world. Ohlone tiger beetles were not found in these collections.

As an expert on the genus Cicindela, Dr. Kavanaugh has reviewed collections of this genus located throughout the United States. He has never encountered the Ohlone tiger beetle (D. Kavanaugh, pers. comm. 2000). Cicindela is a very popular genus of insects to collect. No specimens were found in the three largest collections located in the closest proximity to Santa Cruz County, and Dr. Kavanaugh has never seen or heard of additional specimens of the Ohlone tiger beetle in other collections. Therefore, he concluded that it was unlikely that specimens would be found in additional private or public collections. We concurred with this conclusion.

We contacted Mr. William D. Sumlin, the tiger beetle specialist from Texas referred to by the commenter, and asked him about historic collections of the Ohlone tiger beetle. Mr. Sumlin stated that he had specimens of a male and female of the Ohlone tiger beetle that were collected in March 1994. This specimen was collected from a known occurrence of the Ohlone tiger beetle.

Mr. Sumlin also stated that he was not aware of any Ohlone tiger beetles collected during the 1930s and 1940s. Rather, he recalled having a conversation with another tiger beetle expert who mentioned that specimens of Ohlone tiger beetles may be located in a collection in California. The specimens were thought to be misidentified and located in a tray of specimens of another species of tiger beetle. Unfortunately, Mr. Sumlin did not recall the identity of the person who had told him this information, whose collection the specimens were in, or where the collection was located (W.D. Sumlin, in litt. 2000).

With so little information, we cannot verify the existence of the specimens in question. We acknowledge that other collectors may have specimens of the Ohlone tiger beetle; however, we assume that most of these collections were made after the species was described in 1993 and are from sites known to be occupied by the beetle.

Issue 7: One commenter questioned whether the absence of Ohlone tiger beetles from collections could be explained by reasons other than the species is extremely rare.

Our Response: We cannot offer any alternative hypotheses as to why the species is absent from collections. Because Cicindela is a very popular genus of insects to collect, and because entomologists commonly collect out of season and out of known ranges in order to find temporally and spatially outlying specimens, we would expect more specimens to have been collected if the Ohlone tiger beetle were more abundant and distributed more widely.

Issue 8: One commenter states that “the Service seems to suggest that additional field surveys are not warranted because the Ohlone tiger beetle has not been found in any of the collections of local hobbyists, and that it was only first sited in 1997.” The commenter noted that the Act allows the Service 1 year from the date on which a proposed rule is noticed before a decision to list or not list is made, with the option to extend this period for up to 6 months for purposes of soliciting additional data. The commenter suggested that we should use the full 18 months to conduct additional surveys for the Ohlone tiger beetle throughout all potential habitat.

Our Response: Ohlone tiger beetles were first collected in 1987, not 1997, as stated by the commenter. The proposed rule did not state that additional field surveys for the Ohlone tiger beetle are not warranted. We advocate conducting more surveys to expand our knowledge of the range, distribution, life history, and habitat requirements of the Ohlone tiger beetle. However, we have carefully assessed the best scientific and commercial information available regarding such knowledge and the past, present, and future threats faced by the Ohlone tiger beetle. Based on this information, we conclude that the Ohlone tiger beetle is in danger of extinction throughout all or a significant portion of its range (section 3(6) of the Act) and, therefore, meets the Act's definition of endangered.

Issue 9: One commenter questioned why we have chosen to list the Ohlone tiger beetle, when there are 2,000 different subspecies of tiger beetles, many with restricted populations, that we have “rightfully shown no inclination to list.”

Our Response: The determination to list a species as federally endangered or threatened is based upon the evaluation of current and future threats to the species from the five factors listed in section 4(a) of the Act. Based on our analyses of threats facing the Ohlone tiger beetle, we believe that the Ohlone tiger beetle is in danger of extinction throughout all or a significant portion of its range (section 3(6) of the Act) and, therefore, meets the Act's definition of endangered. We have listed other species of tiger beetles in the past, and we will continue to list species that meet the criteria for threatened or endangered as defined in the Act.

Issue 10: Several commenters suggested that the listing of the Ohlone tiger beetle was occurring in order to restrict the use of private property, and questioned why the Ohlone tiger beetle has only been located in sites that are “politically sensitive.”

Our Response: The Act requires us to base our listing decisions on the best scientific and commercial information available, without regard to the effects, including political or economic, of listing. Surveys for the Ohlone tiger beetle have occurred at sites that were nearly equally divided between private and public ownership throughout Monterey, Santa Cruz and San Mateo counties. Locations of surveys conducted by Morgan and Hayes between 1990 and 1995 were reportedly chosen based on the habitat characteristics present at each site; no emphasis was known to be given to sites that were considered “politically sensitive” to the community. Arnold's surveys between 1994 and 2000 were conducted largely on private lands at the request of the landowners.

Issue 11: One commenter expressed concern about the effects of road construction on habitat for the Ohlone tiger beetle. The commenter provided numerous citations for scientific papers that document and quantify the effects of roads on environmentally sensitive areas.

Our Response: We appreciate the information provided by the commenter. We consider construction of roads to be an aspect of urban development that can fragment and degrade habitat for the Ohlone tiger beetle.

Issue 12: One commenter questioned why the proposed rule does not mention population size based on counts of adults or larval burrows of the Ohlone tiger beetle.

Our Response: At the present time, surveys to estimate sizes of populations of the Ohlone tiger beetle have not been conducted. We recognize that population estimates may provide insight into the status of the species. However, abundance of insect species can fluctuate substantially from year to year. Furthermore, some insect species may be abundant in localized populations yet susceptible to extirpation by a single event. For these reasons, estimates of abundance are not adequate in determining whether a species is endangered or threatened. Rather, we based our determination to list the Ohlone tiger beetle as federally endangered upon the evaluation of the current and future threats to the species from the five factors listed in section 4(a) of the Act.

In accordance with our policy published on July 1, 1994 (59 FR 34270), we solicited the expert opinions of three independent specialists regarding the biological and ecological information about the Ohlone tiger beetle contained in the proposed rule. The purpose of such review is to ensure that listing decisions are based on scientifically sound data, assumptions, and analysis, including input from appropriate experts and specialists. Two of the reviewers supported the listing of the species, but provided no substantive comments that require addressing. The third reviewer both supported the listing of the species and provided technical corrections on material contained in the sections titled “Background” and “Summary of Factors Affecting the Species.”

After a thorough review and consideration of all information available, we determine that the Ohlone tiger beetle should be classified as an endangered species. We followed procedures found at section 4(a)(1) of the Act and regulations (50 CFR part 424) implementing the listing provisions of the Act. A species may be determined to be endangered or threatened due to one or more of the five factors described in section 4(a)(1). These factors, and their application to the Ohlone tiger beetle, are as follows:

A. The present or threatened destruction, modification, or curtailment of its habitat or range. Loss of habitat is the principal threat to insect species worldwide because of their close associations with, and dependence on, specific habitats (Pyle et al. 1981). The effects of habitat destruction and modification on tiger beetle species have been documented by Knisley and Hill (1992) and Nagano (1982). The Ohlone tiger beetle is restricted to remnant patches of native grassland on coastal terraces where low and sparse vegetation provide space for foraging, reproduction, and thermoregulation, and support a prey base of other invertebrate species. The poorly drained clay or sandy clay substrate of the coastal terraces provides the soil moisture, composition, and temperature conditions necessary for oviposition and larval development (Pearson 1988; Kaulbars and Freitag 1993).

The habitat of the Ohlone tiger beetle is threatened with destruction resulting from urban development or with modification by invasive nonnative vegetation on all of the sites on which it occurs. Disturbance of the substrate, and removal or elimination of vegetation by urban development, kills or injures individuals and precludes others from feeding, sheltering, or reproducing. Historically, potentially suitable habitat is believed to have extended from southwestern San Mateo County to northwestern Monterey County, California (Freitag et al. 1993). Most of this habitat has been modified or destroyed by human actions such as urbanization and agriculture (Freitag et al. 1993).

About 6,060 to 8,080 ha (15,000 to 20,000 ac) of native grassland remain in Santa Cruz County, but not more than 81 to 121 ha (200 to 300 ac) contain the proper combination of substrate, slope, and exposure (bare areas between patches of grasses) to be considered suitable habitat for the Ohlone tiger beetle (Freitag et al. 1993). Nearly all of this suitable habitat is located within or adjacent to urbanized areas in the coastal mid-county area of Santa Cruz. Much of the City of Santa Cruz and its adjacent towns were built on these marine terrace grassland habitats (Freitag et al. 1993). Within suitable habitat, the beetle occupies only sparsely vegetated areas and bare areas, which are artifacts of trails, grazing, or other disturbance activities.

The property occupied by the Ohlone tiger beetle located northwest of the City of Soquel is threatened by a proposed 21-lot residential development. The preferred alternative of the proposed project would completely extirpate the Ohlone tiger beetle population by eliminating all of the known occupied habitat and most of the extant grassland habitat found on this site. One alternative in the final environmental impact report for the project proposes that the majority of suitable habitat for the Ohlone tiger beetle be set-aside and managed to reduce nonnative vegetation and enhance habitat quality. Since the publication of the proposed rule, the owner of this parcel has submitted design changes to the County of Santa Cruz. We are not certain how these design changes will impact the habitat for the Ohlone tiger beetle on the site. The County is currently preparing an expanded initial study to incorporate these changes. Once completed, the initial study will be available to the public for review and comment (Kim Tschantz, County of Santa Cruz, pers. comm. 1999, 2000).

The site occupied by the Ohlone tiger beetle located in the City of Scotts Valley was proposed for development of 233 residential homes and an open park containing two ballfields (Impact Sciences 1998). This proposed development was voted down in a public referendum in 1999, halting the development of this property for the present time. The landowner is now considering alternative development plans. The most recent proposal by the developer includes donating the area inhabited by the Ohlone tiger beetle to the City of Scotts Valley for use as a park. The City has expressed interest in developing this area into baseball fields (Laura Kuhn, City of Scotts Valley, pers. comm. 2000). The future of this site is undetermined at this time.

Even if the occupied habitat for the Ohlone tiger beetle was avoided in the development of houses and ballfields, activities occurring on adjacent lands could lead to potential disturbance, such as pesticide drift, soil erosion, and vegetation alteration. In addition, the increased isolation would make the population more vulnerable to random extinction (see Factor E of this section).

Adult Ohlone tiger beetles have been observed on 4 properties, and potential burrows have been observed on a fifth property, west of the City of Santa Cruz (C. Sculley, pers. obs. 2000; R. Arnold, pers. comm. 2000). All of the properties are contiguous. The potential for destruction threatens the habitat of the Ohlone tiger beetle on 4 of these properties.

The current landowners of one of these 4 parcels plan to build a single-family dwelling on the site. Although building plans are still being developed, the driveway will most likely be sited in, or directly adjacent to, occupied habitat for the Ohlone tiger beetle (C. Sculley, pers. obs. 2000).

In September 1998, property owners of a second parcel west of the City of Santa Cruz tilled up a large percentage of an area occupied by the Ohlone tiger beetle in preparation for converting use of the land from livestock grazing to a vineyard (G. Hayes, pers. comm. 1998). The effects of this action on the Ohlone tiger beetle are not known, although potential burrows of the Ohlone tiger beetle were detected on the property in July 2000 (C. Sculley, pers. obs. 2000).

Potential burrows of the Ohlone tiger beetle were found in the spring of 2000 on a third parcel west of the City of Santa Cruz (R. Arnold, pers. comm. 2000). The owner of this parcel plans to build a single-family home on the site. The County of Santa Cruz has not yet reviewed the potential effects of the project on the Ohlone tiger beetle (Paia Levine, County of Santa Cruz, pers. comm. 2000).

The fourth parcel is owned by the University and is presently undeveloped, and no development is currently planned for the parcel. However, portions of the parcel, including areas occupied by the Ohlone tiger beetle, could be developed in the future as the University expands its existing campus (University of California 1992).

The fifth parcel is protected from urban development. In the spring of 1999, the City of Santa Cruz purchased this property, and it will be managed as open space by the City. The State of California will hold a conservation easement on the land. A management plan will be developed by the City of Santa Cruz, and the Ohlone tiger beetle will be considered in the plan. At the present time, the site is closed to public use except for officially escorted hikes (Susan Harris, City of Santa Cruz, pers. comm. 1999).

The habitat occupied by the Ohlone tiger beetle northwest of the City of Santa Cruz occurs on three parcels under ownership of CDPR, the University, and the City of Santa Cruz. The CDPR wants to construct an entrance road and parking area for vehicles and open existing trails to recreationists. The entrance road would be developed over a portion of habitat that was occupied by Ohlone tiger beetles in 1995 (G. Hayes, in litt. 1999). The vehicle parking area would be constructed adjacent to this habitat. In the public works plan for this site, CDPR established a policy that road maintenance or other activities will be scheduled to minimize impacts on burrows, larval habitat, foraging activities, or other aspects of the population (CDPR 1997). CDPR conducted additional surveys in 2000 to determine the current distribution of the Ohlone tiger beetle on the parcel that it owns. No adult Ohlone tiger beetles or larval burrows were detected during these surveys (G. Gray, CDPR pers. comm. 2000). Additional surveys need to be conducted to determine if Ohlone tiger beetles have been extirpated from this site.

Property adjacent to the CDPR land is managed by the University. A two-lane road bisects the lands that are owned by CDPR and the University that are occupied by the Ohlone tiger beetle. Although some development is possible within the University lands, no development projects are anticipated at this time (Graham Bice, University of California, pers. comm. 1995; G. Hayes, pers. comm. 1997). The Ohlone tiger beetle also is found in a preserve owned and managed by the City of Santa Cruz. At this time, no plans are in place that would destroy or alter the Ohlone tiger beetle habitat within this preserve (S. Harris, pers. comm. 1999).

Areas that may once have been suitable for Ohlone tiger beetles have been converted to nonnative grasslands, or have been developed because the firm, level substrate of the coastal terraces afforded good building sites with scenic views of the Pacific Ocean. For the same reasons that other terraces have already been developed, remaining areas of suitable habitat are under high development pressure.

In addition to the development threats to the Ohlone tiger beetle, the invasion of nonnative vegetation threatens the already reduced extent of suitable habitat for this species. The Ohlone tiger beetle is threatened by habitat degradation due to the invasion of nonnative plant species into the coastal prairie in every location where it occurs, including areas that are protected from development. Nonnative vegetation (e.g., French broom (Cytisus monspessulanus), velvet grass (Holcus spp.), filaree (Erodium spp.), and Eucalyptus spp.) and forest vegetation are encroaching into grassland habitats and out-competing native grassland vegetation (R. Morgan, in litt. 1992; G. Hayes, in litt. 1997; C. Sculley, pers. obs. 1999, 2000). These nonnative plants are aggressive invaders that convert sunny grasslands required by Ohlone tiger beetles to habitat dominated by a shady overstory. Without these sunny areas, the Ohlone tiger beetle cannot forage, and oviposit. In addition to shading these areas used by the beetle, the nonnative vegetation fills in the open spaces among the low or sparse vegetation creating an unsuitable densely vegetated habitat.

Nonnative vegetation may also affect the numbers and diversity of the beetle's prey, predators, and parasites (see Factor C of this section). Increased vegetation encroachment is the primary factor attributed to the extirpation of several populations of other Cicindela species (e.g., C. abdominalis and C. debilis) (Knisley and Hill 1992). Without management efforts to reduce and control vegetation encroachment by nonnative species, the Ohlone tiger beetle will likely decline and may become extirpated in all of the locations where the species is known presently.

Several agencies are attempting to slow the rate of vegetation encroachment into habitat for the Ohlone tiger beetle. At one location northwest of the City of Santa Cruz, the City is attempting to maintain the species' habitat by mowing parts of it to provide bare ground, and closing trails occupied by the Ohlone tiger beetle to bicycles (S. Harris, pers. comm. 1999).

The University conducts controlled burns in habitat for the Ohlone tiger beetle on its property northwest of the City of Santa Cruz. These burns are conducted for fire-training exercises and to restore native vegetation to this grassland (California Department of Forestry and Fire Protection, in litt. 2000). Grazing occurs on several parcels of land located west of the City of Santa Cruz which are occupied by the Ohlone tiger beetle. Grazing regimes, when conducted with the appropriate timing, frequency, and intensity, can effectively maintain native species of grasses and herbs in grasslands (G. Hayes, pers. comm. 2000). Monitoring to determine the effects of these actions on the Ohlone tiger beetle has not occurred. Therefore, we are unable to determine if the Ohlone tiger beetle has benefited from these actions.

B. Overutilization for commercial, recreational, scientific, or educational purposes. Unrestricted collecting is considered a threat to the species. Tiger beetle specimens are highly sought by amateur collectors (C. Nagano, pers. comm. 1993), and members of the genus Cicindela may be the subject of more intense collecting and study than any other single insect genus. In light of the recent discovery of the Ohlone tiger beetle, and concerns regarding its continued existence, the desirability of this species to private collectors may increase, leading to increased collection of specimens. The original petitioner for the Ohlone tiger beetle has been contacted by several people from such places as France, Wisconsin, and California, looking for Ohlone tiger beetle specimens they can add to their private collections, as well as those asking where the colonies are located and indicating they want to collect the species at those locations (R. Morgan, pers. comm. 1998). We are aware of at least one individual who collected specimens of the Ohlone tiger beetle from the type locality after the species was described in a scientific journal (W.D. Sumlin, in litt. 2000). Listing this species as endangered will likely increase its attractiveness to private collectors. Removal of even a few females from a small population could reduce the persistence of the population over time (C. Knisley, in litt. 2000).

The Ohlone tiger beetle is not likely to be used as a model organism for general research projects because it is a rare and limited species. It may be the subject of studies intended to improve understanding of the species' ecology and to improve management strategies for its conservation. Although such studies would directly benefit the recovery of the Ohlone tiger beetle, they may contribute cumulatively to other threats to the species.

C. Disease or Predation. No diseases are known to threaten the Ohlone tiger beetle. However, the Ohlone tiger beetle may be affected by any of several predators and parasites known to prey upon, and afflict, other tiger beetle species. In general, parasites are considered to be more detrimental than predators to populations of tiger beetles (Nagano 1982; Pearson 1988). Known tiger beetle parasites include ant-like wasps of the family Typhiidae, especially the genera Mathoca, Karlissa, and Pterombrus, and the Bombyliid flies of the genus Anthrax (Nagano 1982; Pearson 1988). These insect parasites are distributed worldwide and specialize on tiger beetle larvae. Some species of tiger beetles from Arizona sustain larval parasitism rates of 20 to 60 percent (C. Knisley in litt. 2000).

Known tiger beetle predators include birds, shrews (Soricidae), raccoons (Procyon lotor), lizards (Lacertilia), toads (Bufonidae), ants (Formicidae), robber flies (Asilidae), and dragonflies (Anisoptera) (Lavigne 1972; Nagano 1982; Pearson 1988).

Predators and parasites play important roles in the natural dynamics of populations and ecosystems. The effects of predation and parasitism may pose substantial threats to Ohlone tiger beetle populations already affected by other factors, especially limited distribution and small, isolated populations. At this time, the magnitude of predation and parasitism on the Ohlone tiger beetle is not known.

D. The inadequacy of existing regulatory mechanisms. Regulatory mechanisms currently in effect do not provide adequate protection for the Ohlone tiger beetle and its habitat. Federal agencies are not legally required to consider and manage for species of concern.

At the State and local levels, regulatory mechanisms are also inadequate. The California Endangered Species Act does not allow for the listing of invertebrate species. State and local agencies may consider the Ohlone tiger beetle when evaluating certain activities for compliance with the California Environmental Quality Act (CEQA) and local zoning regulations. If an activity is identified as having a significant impact on this species, mitigation measures may be required by State and local regulatory agencies to offset these impacts. However, CEQA and local regulations do not provide specific protection measures to ensure the continued existence of the Ohlone tiger beetle. In addition, CEQA provisions for “Statements of Overriding Considerations” can allow projects to proceed despite unmitigated adverse impacts.

Ohlone tiger beetle habitat occurs on properties owned by the University, the CDPR, and the City of Santa Cruz. The University does not have a management plan that specifically protects the Ohlone tiger beetle or its habitat (G. Hayes, pers. comm. 1997). The CDPR has an existing Public Works Plan that calls for surveys to verify the occupied habitat boundary of the Ohlone tiger beetle and proposes to minimize the impacts of disturbance to the Ohlone tiger beetle during road maintenance and other scheduled activities in the plan (G. Gray, CDPR, pers. comm. 1997). However, a local citizen has expressed concern that surveys and minimization measures are not being adequately carried out (G. Hayes, in litt. 1999). For the site northwest of Santa Cruz, the City of Santa Cruz Parks and Recreation Department's Proposed Master Plan for the preserve proposes increased usage of existing trails, but identifies the Ohlone tiger beetle and its habitat as sensitive resources. The proposed master plan includes a management program for Ohlone tiger beetle habitat; however, implementation of any management actions will depend on future funding (S. Harris, pers. comm. 1999). For the site west of the City of Santa Cruz and owned by the City, a management plan will be developed since this property has been purchased as open space. The property is officially closed to public use except for officially escorted hikes. However, this area is not regularly patrolled, and enforcement may not be adequate to protect the species.

Because the Ohlone tiger beetle is not listed at the State or Federal levels, no regulations or regulatory mechanisms exist that prohibit importing, exporting, sale, or trade of the species.

E. Other natural or manmade factors affecting its continued existence. The populations of the Ohlone tiger beetle are isolated and restricted to relatively small patches of habitat. A direct correlation exists between increased extinction rates with the reduction of available habitat area and increased distances between small populations (Gilpin 1987). This conservation biology model suggests that the isolated populations of the Ohlone tiger beetle may be more vulnerable to local extinction from random genetic and demographic events or environmental catastrophes. Effects of small habitat patches and isolated populations on other species of tiger beetles have been documented. In the eastern United States, several populations of Cicindela dorsalis that numbered less than 200 individuals became extinct at sites where no obvious change in habitat occurred. These extinctions were presumably due to factors related to small population sizes (C. Knisely, in litt. 2000).

Although some species of tiger beetles are known to disperse over sizable distances (Pearson 1988), species from the purpurea group of the genus Cicindela typically do not disperse widely, usually 12 to 18 m (40 to 60 ft) (David Pearson, Arizona State University, pers. comm. 1997). The dispersal capabilities of Ohlone tiger beetles are unknown; however, because the Ohlone tiger beetle belongs to the purpurea group, its dispersal distance is most likely short. Assuming individuals to be capable of dispersing distances comparable to those between populations, the likelihood of successful emigration or colonization is greatly reduced by the small size of suitable habitat patches and the unavailability of even marginal habitat among the extensive urban development in the region.

Some recreational uses of Ohlone tiger beetle habitat (i.e., off-highway vehicular use or mountain biking) may pose a threat to the Ohlone tiger beetles. The beetles require open ground to maneuver, take prey, and lay eggs. They use the hard-packed bicycle trails for foraging, thermoregulation, and laying their eggs (R. Morgan, pers. comm. 1998). Bicycle traffic on a trail through the University site has been observed to result in the crushing of several individual beetles (R. Morgan, in litt. 1993). Similar mortality has been observed in the species' habitat west of the City of Santa Cruz (R. Morgan, in litt. 1993) and may occur in other Ohlone tiger beetle populations. Also, bicycle and foot traffic could potentially collapse larval tunnels and crush the larvae. The significance of such mortality for population viability is not known at this time, but is considered a potential threat to the Ohlone tiger beetle, particularly if bicycle traffic through the habitat increases. Heavy vehicular traffic in areas with extensive use of public trails, such as on lands owned by the University, the City of Santa Cruz, and CDPR, may also create soil compaction and rutting, damaging potential oviposition sites. Populations of another tiger beetle species found in the northeastern United States, Cicindela dorsalis dorsalis, were extirpated in several localities that were subjected to heavy recreational use (i.e., heavy pedestrian foot traffic and vehicular use) but survived at other sites that had received little or no recreational disturbance (Knisley and Hill 1992).

Pesticides could pose a threat to the Ohlone tiger beetle. The effects of insecticides on other tiger beetle species are referenced by Nagano (1982). Local land owners may use pesticides to control targeted invertebrate species around their homes and gardens. These pesticides may drift aerially or be transported by water runoff into Ohlone tiger beetle habitat where they may kill nontargeted organisms including the Ohlone tiger beetle or its prey species. As urban development increases near or in Ohlone tiger beetle habitat, negative impacts from pesticides may become more frequent. The significance of pesticide effects is not known at this time, but they are recognized as a substantial potential threat to the species.

We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats faced by the Ohlone tiger beetle in developing this final rule. Threats to the Ohlone tiger beetle, including habitat fragmentation and destruction due to urban development, habitat degradation due to invasion of nonnative vegetation, vulnerability to random local extirpations, and potential threats due to collection, pesticides, and recreational use of habitat, imperil the continued existence of this species. Much of the habitat of this species is suitable for development and is unprotected from these threats. The Ohlone tiger beetle is known from only 11 properties in 4 narrow geographic areas of Santa Cruz County. This species is in danger of extinction “throughout all or a significant portion of its range” (section 3(6) of the Act) and, therefore, meets the Act's definition of endangered. Because of the high potential for these threats, if realized, to result in the extinction of the Ohlone tiger beetle, the preferred action is to list this species as endangered.

Critical habitat is defined in section 3 of the Act as-(i) the specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features (I) essential to the conservation of the species, and (II) that may require special management considerations or protection; and (ii) specific areas outside the geographic area occupied by the species at the time it is listed in accordance with the provisions of section 4 of the Act, upon a determination that such areas are essential for the conservation of the species. “Conservation” means the use of all methods and procedures necessary to bring an endangered or threatened species to the point at which listing under the Act is no longer necessary.

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

Due to the small number of populations of the Ohlone tiger beetle, and the popularity of tiger beetle collecting, this species is vulnerable to unrestricted collection, vandalism, or other disturbance. However, there is no evidence that designation of critical habitat is likely to increase this threat. In the case of this species, designation of critical habitat may provide some benefits. The record shows that certain physical and biological features where the Ohlone tiger beetle is located are essential to the conservation of the species. The primary regulatory effect of critical habitat is the section 7 requirement that Federal agencies refrain from taking any action that destroys or adversely modifies critical habitat. While a critical habitat designation for habitat currently occupied by this species would not be likely to change the section 7 consultation outcome because an action that destroys or adversely modifies such critical habitat would also be likely to result in jeopardy to the species, in certain instances, section 7 consultation might be triggered only if critical habitat is designated. Examples could include unoccupied habitat or occupied habitat that may become unoccupied in the future. Designating critical habitat may also provide some educational or informational benefits. Therefore, we find that designation of critical habitat is prudent for the Ohlone tiger beetle.

However, our budget for listing activities is currently insufficient to allow us to immediately complete all of the listing actions required by the Act. Listing the Ohlone tiger beetle without designation of critical habitat will allow us to concentrate our limited resources on other listing actions that must be addressed, while allowing us to invoke protections needed for the conservation of this species without further delay. This is consistent with section 4(b)(6)(C)(i) of the Act, which states that final listing decisions may be issued without critical habitat designations when it is essential that such determinations be promptly published. We will prepare a critical habitat designation in the future at such time when our available resources and priorities allow.

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

Section 7(a) of the Act, as amended, requires Federal agencies to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened, and with respect to its critical habitat, if any is being designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) of the Act requires Federal agencies to confer with us on any action that is likely to jeopardize the continued existence of a species proposed for listing or result in destruction or adverse modification of proposed critical habitat. If a species is listed subsequently, section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of the species or destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into formal consultation with us.

We are not aware of any specific federal actions within the habitat of the Ohlone tiger beetle. If any Federal agency were to fund or issue permits for a project that may affect the Ohlone tiger beetle, that agency would be required to consult with us. Possible nexuses include the Department of Housing and Urban Development and the Department of Commerce's Small Business Administration for funding, and the U.S. Army Corps of Engineers for permits authorized under section 404 of the Clean Water Act.

Listing the Ohlone tiger beetle as endangered will provide for the development of a recovery plan. Such a plan will bring together Federal, State, and local efforts for the beetle's conservation. The plan will establish a framework for agencies to coordinate activities and cooperate with each other in conservation efforts. The plan will set recovery priorities, assign responsibilities, and estimate costs of various tasks necessary to achieve conservation and survival of this species. Additionally, pursuant to section 6 of the Act, we will be able to grant funds to affected States for management actions promoting the protection and recovery of this species.

The Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to all endangered wildlife. These prohibitions, in part, make it illegal for any person subject to the jurisdiction of the United States to take (includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect; or to attempt any of these), import or export, ship in interstate commerce in the course of commercial activity, or sell or offer for sale in interstate or foreign commerce any endangered wildlife species. It is also illegal to possess, sell, deliver, carry, transport, or ship any such wildlife that has been taken illegally. Certain exceptions apply to our agents and State conservation agencies.

Permits may be issued to carry out otherwise prohibited activities involving endangered wildlife under certain circumstances. Regulations governing permits are codified at 50 CFR 17.22 and 17.23. For endangered species, such permits are available for scientific purposes, to enhance the propagation or survival of the species, and for incidental take in connection with otherwise lawful activities.

Our policy, published in the Federal Register on July 1, 1994 (59 FR 34272), is to identify, to the maximum extent practicable, those activities that would or would not constitute a violation of section 9 of the Act at the time of listing. The intent of this policy is to increase public awareness of the effect of this listing on proposed and ongoing activities within the species' range.

We believe that, based on the best available information, the following actions are not likely to result in a violation of section 9, provided these activities are carried out in accordance with existing regulations and permit requirements:

(1) Possession, delivery, or movement, including interstate transport and import into or export from the United States, involving no commercial activity, of dead specimens of this taxon that were collected prior to the date of publication in the Federal Register of a final regulation adding this taxon to the list of endangered species; and

(2) Activities conducted in accordance with reasonable and prudent measures identified by us in a biological opinion issued pursuant to section 7 of the Act, and activities authorized under section 10 of the Act.

We believe that the following actions could result in a violation of section 9; however, possible violations are not limited to these actions alone:

(1) Collection of specimens of this taxon for private possession or deposition in an institutional collection;

(2) Sale or purchase of specimens of this taxon, except for properly documented antique specimens of this taxon at least 100 years old, as defined by section 10(h)(1) of the Act;

(3) Release of biological control agents that attack any life stage of this taxon;

(4) Destruction or alteration of occupied habitat of the Ohlone tiger beetle (e.g., excavating, compacting, grading, discing, or removing soil);

(5) Recreational use of occupied habitat of the Ohlone tiger beetle (e.g., off-highway vehicular use, horse riding, mountain biking, or hiking); and

(6) Management of vegetation (e.g., burning, grazing, or mowing).

Questions regarding whether specific activities risk violating section 9 should be directed to our Ventura Fish and Wildlife Office (see ADDRESSES section). Requests for copies of the regulations on listed plants and animals, and general inquiries regarding prohibitions and permits, may be addressed to the U.S. Fish and Wildlife Service, Ecological Services, Endangered Species Permits, 911 N.E. 11th Avenue, Portland, Oregon, 97232-4181 (telephone 503/231-2063; facsimile 503/231-6243).

We have determined that Environmental Assessments and Environmental Impact Statements, as defined under the authority of the National Environmental Policy Act of 1969, need not be prepared in connection with regulations adopted pursuant to section 4(a) of the Act. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244).

This rule does not contain any new collections of information other than those already approved under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and assigned Office of Management and Budget clearance number 1018-0094. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless it displays a currently valid control number. For additional information concerning permits and associated requirements for endangered wildlife species, see 50 CFR 17.22.

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

The primary author of this final rule is Colleen Sculley, Ventura Fish and Wildlife Office (see ADDRESSES section) (telephone 805/644-1766).

All sea turtles that occur in U.S. waters are listed as either endangered or threatened under the Endangered Species Act of 1973 (ESA). The Kemp's ridley (Lepidochelys kempii), leatherback (Dermochelys coriacea), and hawksbill (Eretmochelys imbricata) are listed as endangered. Loggerhead (Caretta caretta) and green (Chelonia mydas) turtles are listed as threatened, except for populations of green turtles in Florida and on the Pacific coast of Mexico, which are listed as endangered.

Under the ESA and its implementing regulations, taking sea turtles—even incidentally—is prohibited, with exceptions for threatened species identified in 50 C.F.R. 223.206. The incidental take of endangered species may only legally be authorized by an incidental take statement provided or an incidental take permit issued pursuant to section 7 or 10 of the ESA.

In early November 1999, significant increases were noted in inshore sea turtle strandings in the southeastern portion of Pamlico Sound. During November and December, a total of 97 strandings occurred in the area. Kemp's ridley turtles accounted for 46 of the strandings; 31 of the strandings were loggerhead turtles; 19 of the strandings were green turtles; and the species of one of the turtles was not identified. Onboard sea turtle monitoring was conducted by the NCDMF in southeastern Pamlico Sound during November 22-24, 1999. Eleven observer trips were conducted, consisting of five trips aboard deep-water flounder gillnet (5 inch (12.7 cm) and larger stretched mesh) vessels and six trips aboard spotted seatrout gillnet (3 to 4 inch (7.6 to 10.2 cm) stretched mesh, or “small-mesh gillnet”) vessels. Gear characteristics, set locations and soak times were recorded for each set. Two Kemp's ridley turtles were observed captured in deep-water flounder gillnets in five observer trips. No sea turtles were captured in the observed trips aboard the small mesh gillnet vessels. While limited data had been available previously concerning gillnet takes of sea turtles, the deep-water, large-mesh gillnet fishery for flounder in southeastern Pamlico Sound was suspected of being responsible for a significant portion of the sea turtle strandings. The NCDMF Marine Patrol and NOAA Fisheries Enforcement personnel conducted joint surveillance of the Pamlico Sound shrimp and gillnet fisheries during November 1999. No shrimp trawl TED violations were detected in the area. Enforcement personnel reported significant large-mesh gillnet activity in the vicinity of the strandings. An untended large-mesh gillnet was checked by enforcement personnel, and a dead Kemp's ridley turtle was found entangled in the net.

On December 10, 1999, NMFS issued an emergency rule closing southeastern Pamlico Sound to the use of gillnets larger than 5 inch (12.7 cm) mesh to protect endangered and threatened sea turtles (64 FR 70196). Strandings decreased after implementation of the closure; however, many fishermen had stopped fishing for flounder prior to the closure. The decrease in fishing effort may have resulted in the decrease in strandings. The closure remained in effect through January 9, 2000.

NMFS officials met with some of the affected fishermen and the NCDMF Director on January 6, 2000, in Engelhard, N.C., to discuss the emergency closure. Many fishermen insisted that there was insufficient evidence to show that their fishery was primarily responsible for the sea turtle mortality. Some indicated that other factors, primarily the after-effects of Hurricanes Dennis and Floyd that had hit eastern North Carolina in August and September 1999, may have contributed to the turtle deaths. The fishermen acknowledged that they had fished large amounts of gear that season, up to 10,000 yards (9,140 m) and more typically 5,000 yards (4,570 m) each, but that the large amounts of gear were necessary to compete in the mostly unregulated fishery. The fishermen agreed that more observer information from the large-mesh gillnet fishery was necessary to describe the fishery's turtle bycatch. The NMFS officials explained the ESA prohibitions against takes of endangered species like the Kemp's ridley turtle. Without the incidental take authorization provided by a section 10(a)(1)(B) permit, additional illegal takes would likely result in the closure of the fishery again. The NCDMF Director told the fishermen that NCDMF would likely pursue a section 10 permit and would institute gear restrictions and an observer program for the 2000 season.

NCDMF submitted an application to NMFS on June 21, 2000, for a section 10(a)(1)(B) permit to authorize the incidental take of sea turtles in the fall, large-mesh gillnet fishery in southeastern Pamlico Sound. NCDMF called this area the Pamlico Sound Gillnet Restricted Area (PSGNRA). NMFS announced the receipt of the permit application in the Federal Register on August 3, 2000 (65 FR 47715), and requested public comments through September 5, 2000. In response to comments from the public and NMFS, NCDMF provided additional details on their application and made some changes to their proposed management of the fishery under the permit. On October 5, 2000, NMFS issued permit 1259 to NCDMF, valid through December 15, 2000.

The goal of the conservation plan, required to be submitted by applicants for ESA section 10(a)(1)(B) permits, for permit 1259 was for NCDMF to monitor sea turtle interactions in the fall large-mesh gillnet fishery in the PSGNRA and to implement management measures to reduce sea turtle mortality by 50 percent from September 15 through December 15, compared to the levels seen in the strandings of 1999. Permit 1259 set corresponding limits on the allowed levels of observed takes of sea turtles—both live and lethal takes—and documented strandings.

NCDMF implemented registration and reporting requirements and yardage limitations (no more than 3,000 yards (2,743 m) of gillnet per fishing operation) for the large-mesh gillnet fishery in southeastern Pamlico Sound. NCDMF also placed observers aboard a portion of the large-mesh gillnet boats to be able to estimate the actual turtle take levels against the limits in the permit. During the fifth week of the season (October 14 to 20, 2000), the number of lethal captures of green sea turtles, based on the observer coverage, had exceeded the level allowed by Permit 1259. Stranding levels had not yet reached the maximum level allowed by Permit 1259. The NCDMF Director issued a fisheries proclamation closing the PSGNRA to gillnetting with mesh size of 5 inch (12.7 cm) or greater, effective October 27, 2000.

From October 28 to December 15, 2000, 59 sea turtles (excluding live, cold-stunned animals) stranded within the PSGNRA. Although the PSGNRA was closed to gillnet fishing with nets with 5 inch (12.7 cm) or larger mesh, some fishermen re-equipped their nets with a 47/8 inch (12.4 cm) mesh size to circumvent the closure and continued fishing and targeting flounder. Fishermen using 3 to 4 inch (7.6 to 10.2 cm) mesh gear to target seatrout or mackerel were also unaffected by the closure and continued to fish within the PSGNRA. Other fishermen simply moved their large-mesh gear slightly to the north or west of the boundaries of the PSGNRA and continued fishing immediately outside the closed area. The PSGNRA included the preferred fishing grounds for flounder, and the flounder catch rates for those fishermen who moved out of the PSGNRA were reportedly low. Since none of this fishing activity was authorized by the permit, NCDMF did not place observers aboard gillnet vessels in Pamlico Sound after the closure of the PSGNRA. Because of the demonstrated capture and mortality of sea turtles in large-mesh gillnets before the closure, NMFS believes that the continued, unmonitored gillnet fishing in and around the PSGNRA after the closure contributed to many of the subsequent sea turtle strandings.

The Pamlico Sound large-mesh gillnet fishery can be divided into two components—shallow-water and deep-water, which are distinguished by their fishing areas, seasons, tactics, participants, and vessel characteristics.

The deep-water fishery operates from September through December with fishermen setting nets along a slope adjacent to the main basin of Pamlico Sound. Fishing depths in this area range from 10 to 20 feet (3.0 to 6.1 m). Vessels are typical ocean sink gillnet boats ranging from 25 to 45 feet (7.6 to 13.7 m) in length. Each vessel is operated by a two-man crew. Each vessel sets between 2,000 yards (1,828 m) and 10,000 yards (9,140 m) of large-mesh (most often 5.5 to 6.5 inch (14.0 to 16.5 cm)) gillnet, which are soaked for up to 3 days and retrieved with the aid of net reels. Net depths range from 8 to 12 feet (2.4 m to 3.7 m) with tie-downs 2 to 4 feet (.61 to 1.2 m) long attached to the float and lead lines at 50 foot (15.2 m) intervals along the net. Tie-downs are used in this fishery to produce a bag or pocket of webbing, which is believed to increase the catch efficiency for bottom-dwelling flounder. There were 25 active participants in this fishery during the 2000 fishing season with most trips originating from Engelhard or Swan Quarter, N.C., and a small portion leaving from Hatteras, N.C. This fishery has developed within the past 10 years from what was initially only a few fishermen setting a few thousand yards of gillnet. Effort has steadily increased with more participants fishing more gear each year. During the past several years, gillnets have surpassed pound nets as the dominant gear for flounder in North Carolina's estuarine waters. Pound nets had long been the traditional means for harvesting flounder in North Carolina waters.

Monitoring of the deep-water fishery during the 2000 fishing season consisted of 13.1 percent observer coverage within the PSGNRA with 35 trips observed. Fourteen sea turtle interactions were observed involving four Kemp's ridleys, two greens, and eight loggerheads. Eight of these turtles were released alive; six were dead.

The shallow-water fishery operates from April through December in areas next to the barrier islands in Pamlico Sound, extending both north and southwest of the PSGNRA along the Outer Banks. Most fishing in these areas occurs in depths of less than 3 feet (0.9 m). Vessels are usually open skiffs ranging from 15 to 25 feet (4.6 to 7.6 m) in length with one or two-man crews. Each fisherman typically sets 500 to 2000 yards (457 to 1,828 m) of large-mesh (5.5 to 7.0 inch (14.0 to 17.8 cm)) gillnet. The nets are soaked overnight and retrieved by hand. Tie-downs are not used in this fishery, but net depths range from 6 to 11 feet (1.8 to 3.4 m) with sets occurring in depths less than 3 feet (0.9 m). This combination of water depth and net depth provides the same bag effect as the tie-down in the deep-water fishery. There were 68 active participants that fished within the PSGNRA during the 2000 fishing season. The shallow-water gillnet fishery is considered to be more traditional than the deep-water gillnet fishery.

Monitoring during the 2000 fishing season consisted of 4.3 percent observer coverage of the shallow-water, large-mesh fishery within the PSGNRA with 37 trips observed. Four sea turtle interactions were observed. All were green turtles. Three were released alive; one was dead.

Permit 1259 was issued for the 2000 fall fishing season only and its authorization for incidental take expired when the authorized level was exceeded in October 2000. Although section 10(a)(1)(B) permits are generally issued for multi-year periods of time, NMFS and NCDMF believed that the newness of the fishery, the apparent high levels of turtle interaction, and the paucity of observer data for management decisions justified a single-year permit in 2000 to allow NCDMF to gather important information about bycatch issues in the fishery. NMFS, in issuing permit 1259, had to consider the effects of the permit on listed species, pursuant to sections 7(a)(2) and 7(b) of the ESA. The resulting biological opinion concluded that, as a one-year only event, the issuance of Permit 1259 and the fishery were not likely to jeopardize the continued existence of any listed species of sea turtle. The opinion did acknowledge, however, that additional, future permits might be sought by NCDMF for large-mesh gillnetting in Pamlico Sound, perhaps modified based on the outcome of the 2000 permit. NMFS would then have to consider the effects of the resulting take on a much longer-term basis prior to issuing any such permits.

NMFS received an application for another ESA section 10(a)(1)(B) permit from NCDMF on August 9, 2001 that would allow NCDMF to manage both large-mesh and small-mesh gillnet fisheries and incidental sea turtle takings in Pamlico Sound in the 2001 season as an exemption to the ESA's prohibition on takes and as an exemption the closure instituted by this interim final rule. NMFS published a notice of receipt of NCDMF's application in the Federal Register on August 15, 2001. NMFS requested public comments on the application for the required 30-day period, through September 14, 2001. NCDMF's proposed management period for the permitted activity is September 15 through December 15, 2001. Although NMFS will expedite the decision on issuance of the permit, the permit could not be issued prior to the proposed September 15 start date because of public notice and comments requirements of the ESA.

The conservation plan in NCDMF's permit application includes the creation of three specified Shallow Water Gillnet Restricted Areas (SGNRAs) around the inside of the Outer Banks in Pamlico Sound and two inlet corridors at Hatteras and Ocracoke Inlets. Large- and small-mesh gillnet fishing operations in the SGNRAs will require a special permit from NCDMF, will be required to accept observers, and will be required to file weekly reports of fishing catch and effort to NCDMF. Large- and small-mesh gillnet fishing operations will be limited to a maximum of 2,000 yards (1,835 m) of net. From September 15 through October 31, small-mesh gillnet fishing operations will be required to attend their nets. Large-mesh gillnetting will be prohibited by NCDMF in the inlet corridors from September 15 through December 15, 2001. On August 22, 2001, the NCDMF Director issued a state fisheries Proclamation that implemented these management measures, effective September 15, 2001.

NMFS has determined that NCDMF's permit application meets the issuance criteria. NMFS intends to issue the permit, simultaneously with the effective date of this interim final rule.

Through this interim final rule, NMFS is closing the waters of Pamlico Sound, North Carolina, to fishing with gillnets with a mesh size larger than 41/4 inches (10.8 cm) stretched mesh, from September 15 through December 15. The closed area includes all inshore waters of Pamlico Sound south of 35°46.3′ N. lat. (the south side of Oregon Inlet), north of 35°00′ N. lat. (the south end of Portsmouth Island), and east of 76°30′ W. long. (a line of longitude which crosses the mouths of the Neuse River, Bay River, and Pamlico River). The Outer Banks and the COLREGS line form the seaward boundary of the closed area. The closed area includes all contiguous tidal waters to Pamlico Sound, within the stated boundaries. The large-mesh gillnet fishery in Pamlico Sound has been shown to take, including to capture and kill, numerous endangered and threatened sea turtles during their fall migration. NMFS is taking this action to prevent further takes of listed species in this fishery.

Issuance of the section 10(a)(1)(B) permit to NCDMF would create an exemption to this closure for large-mesh gear fished in shallow water, pursuant to 50 CFR 223.206(a)(2), as long as permit conditions and the conservation plan are followed. The deep-water fishery, which has fewer participants yet catches and kills more sea turtles (based on NCDMF's 2000 observer data), was not included in NCDMF's permit application, nor in their Proclamation, issued on August 22, 2001. Therefore, this closure is necessary to ensure the effective implementation of NCDMF's conservation plan by preventing large-mesh gillnet fishing in Pamlico Sound outside of the management of fishery by NCDMF under the conservation plan of the permit. In particular, this closure will prevent large-mesh gillnetting in deep-water areas, and it will prevent vessels from moving outside of the SGNRAs to avoid monitoring by NCDMF, as happened last year. This closure will also prevent illegal takings after the permit expires or the permit's incidental take limit is met or exceeded. NCDMF distributed a press release on August 22, 2001, that covered their Proclamation and gillnet restrictions and stated: “It is anticipated NMFS will close the majority of deep-water areas of the Pamlico Sound to large-mesh gill nets later this fall.”

NMFS is considering issuance of a final rule establishing this seasonal closure each year as a permanent sea turtle conservation measure. Written public comments on this interim final rule must be postmarked or transmitted by facsimile by 5 p.m., Eastern Standard Time, on January 2, 2002 (see ADDRESSES). Comments are particularly sought on the area and season covered in this interim final rule and whether they should be changed or expanded. The NCDMF application specified a September 15 to December 15 season for the fall gillnet fishery in Pamlico Sound, and this interim final rule applies only to that season and area for consistency with the state's action. NMFS is aware, however, that large-mesh gillnet fishing for flounder occurs in Pamlico Sound in the summer as well, when sea turtles would be expected to occur in the Sound in relatively high numbers. Adjacent Core Sound also has large-mesh gillnetting for flounder and contains important sea turtle habitat but is not included in the closed area in this interim final rule. Information and data on sea turtle-gillnet interactions in North Carolina inshore waters, including Core Sound, are specifically requested, as are suggested alternative approaches to minimizing the extent and effects of those interactions.

Comments will be considered by NMFS in determining whether to adopt permanently, modify, or withdraw this interim final rule. NMFS intends to take final action on this issue early in 2002, to provide greater certainty and advance notice to the public before the 2002 fishing season. If significant changes to the interim final rule are needed, NMFS will first publish a proposed rule and seek additional public comment. If NMFS determines to adopt this interim final rule permanently, a final rule will be published in the Federal Register.

NMFS prepared an Environmental Assessment (EA) for this interim final rule and the issuance of the ESA Section 10(a)(1)(B) permit to NCDMF and concluded that these regulations and issuance of the permit would pose no significant adverse environmental impact.

The actions implemented by this interim final rule are expected to impact approximately 25 large-mesh, deep-water gillnet vessel owners and operators. Four alternatives were evaluated in the EA prepared for this interim final rule, including a status quo or “no action” alternative. For a description and analysis of the alternatives, readers should refer to the EA prepared for this interim final rule. The total cost to the fisheries for the primary target species—southern flounder—is expected to be zero. The primary effect of this interim final rule will be a redistribution of catch from deep-water gillnet fishermen to shallow-water and small-mesh gillnet fishermen and pound net fishermen, and the overall fishing effort targeting southern flounder in Pamlico Sound is very high and capable of fully exploiting the resource. In 2000, gillnet landings exceeded the previous year's levels in spite of NCDMF's closure of the primary fishing grounds to gillnetting with gear greater than 5 inch (12.7 cm) mesh halfway through the season. Using worst-case assumptions, though, the 25 primarily affected vessels may be faced with a loss of potential revenue of around $10,000 to $20,000 per year each, depending on fish prices. The affected vessels, however, are the largest in the fishery and have the greatest number of alternative fisheries, as they are essentially ocean-gillnet vessels. They are also the most recent entrants into the fishery. The vessels who would continue to fish under the provisions of the permit, on the other hand, are considered more traditional to the fishery, are generally smaller, and many of them cannot safely work outside the sheltered waters of the Sound.

This interim final rule does not contain collection-of-information requirements subject to the Paperwork Reduction Act.

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

A biological opinion (BO) on the issuance of the ESA Section 10(a)(1)(B) permit to NCDMF was finalized in September 2001. That BO concludes that issuance of the permit for the 2001 fishing season, with the conditions and limitations on total authorized levels of sea turtle capture and mortality, was not likely to jeopardize the continued existence of any species of sea turtle. This interim final rule implements measures that ensure that the proposed action takes place as considered in the BO. That is, the conclusion of the BO is based on the assumption that impacts to sea turtles in the fall 2001 Pamlico Sound gillnet fisheries will be limited to legally authorized takes, in accordance with the permit's conservation plan. This interim final rule is necessary to ensure that unauthorized takes do not occur in gillnet fisheries outside of NCDMF's conservation plan. The effects of the interim final rule itself on listed species are strictly beneficial, by preventing further takings.

Given the status of the species to be protected and the fact that unauthorized takings of listed species of sea turtles are continuing to occur, the Assistant Administrator (AA), for good cause, under 5 U.S.C. 553(b)(3)(B) finds that delaying this action to allow for prior notice and an opportunity for public comment would be impracticable and contrary to the public interest because providing public notice and opportunity for comment would prevent the agency from implementing this action in a timely manner to protect the listed sea turtles. This decision is based on the fact that large-mesh gillnet fishing is presently allowed without restriction throughout Pamlico Sound. On September 15, NCDMF issued a gillnet Proclamation which applies to the SGNRAs and inlet corridors along the southern and eastern edges of Pamlico Sound, but not to the remaining majority of Sound waters, especially the deep-water areas where sea turtle take and mortality have been demonstrated to be high. Large-mesh gillnet fishing effort is currently increasing as changing water temperatures cause flounder to move through the Sound. Sea turtles apparently respond similarly to the fall weather in Pamlico Sound, increasing their vulnerability to being captured and killed as the fishing effort also peaks. In 2000, strandings in North Carolina's coastal waters reached a new record level of 838 turtles. The continuation of sea turtle mortality along the North Carolina coast at such high levels would seriously threaten sea turtle populations, and this interim final rule is intended to address a major source of fishing-related sea turtle mortality. For the same reasons, the AA finds good cause also under 5 U.S.C. 553(d)(3) not to delay the effective date of this rule for 30 days. As prior notice and opportunity for public comment are not required to be provided for this interim final rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are inapplicable.

In keeping with the intent of Executive Order 13132 to provide continuing and meaningful dialogue on issues of mutual State and Federal interest, NMFS has conferred with the State of North Carolina regarding the development of NCDMF's endangered and threatened species incidental take permit application and the need for NMFS to implement a complementary closure to ensure the effectiveness of the State's conservation plan. NMFS has coordinated the timing of the publication of this interim final rule with the issuance of the ESA Section 10(a)(1)(B) permit to NCDMF, which creates an exemption to the closure in this action. NMFS intends to continue to consult with the State of North Carolina during the implementation of this rule and NCDMF's management of sea turtle interaction in state water fisheries.