This rule is issued under Marketing Agreement No. 89 and Order No. 927, both as amended (7 CFR part 927), regulating the handling of winter pears grown in Oregon and Washington, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the order now in effect, Oregon and Washington winter pear handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the supplemental rate of assessment as issued herein will be applicable to all assessable d'Anjou pears, excluding organically produced pears, beginning on July 1, 2001, and will continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

This rule establishes a supplemental rate of assessment of $0.03 per standard box of d'Anjou pears handled, excluding organically produced pears, for the 2001-2002 and subsequent fiscal periods. The $0.03 supplemental rate of assessment on conventionally produced and handled d'Anjou pears is in addition to the continuing rate of assessment of $0.49 per standard box established at 63 FR 39037 for the 1998-1999 and subsequent fiscal periods, which pertains to all pears handled under the order. This rule also establishes a definition for organically produced pears. The Committee unanimously recommended this rule at its meeting held on June 1, 2001.

Section 927.41 of the order provides authority for USDA, upon a recommendation of the Committee, to fix the rate of assessment that handlers shall pay on all pears handled during each fiscal period, and may also fix supplemental rates of assessment on individual varieties or subvarieties to secure sufficient funds to provide for projects authorized under § 927.47. Section 927.47 provides authority for the establishment of production research, or marketing research and development projects designed to assist, improve, or promote the marketing, distribution, and consumption of pears.

Authority for the Committee to recommend the establishment of a definition for organically produced pears is provided in § 927.4, which defines “pears” for purposes of this order, and in § 927.31(b), which provides the Committee with the power to recommend administrative rules and regulations to effectuate the terms and provisions of the order.

The winter pear order provides authority for the Committee, with USDA's approval, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers and handlers of Oregon and Washington winter pears. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The rate of assessment, both basic and supplemental, is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

The Committee met on June 1, 2001, and unanimously recommended 2001-2002 expenditures of $8,127,777. The Committee also recommended continuation of the rate of assessment of $0.49 per standard box of winter pears established for the 1998-1999 and subsequent fiscal periods. In addition to this continuing, basic rate of assessment, the Committee unanimously recommended the establishment of a supplemental rate of assessment of $0.03 per standard box of d'Anjou pears handled, excluding organically produced pears. Both the basic rate of $0.49 per standard box of winter pears and the supplemental rate of $0.03 per standard box of conventionally produced and handled d'Anjou pears will continue in effect indefinitely unless modified, suspended, or terminated by the Secretary upon recommendation and information submitted by the Committee or other available information.

Under authority of this final rule, conventionally produced and handled d'Anjou pears (pears that are not organically produced) will be assessed at a total rate of $0.52 per standard box, while all other varieties of winter pears, including organically produced and handled d'Anjou pears, will be assessed at the currently established rate of $0.49 per standard box. The Committee estimates that of the 15.8 million boxes of winter pears projected for utilization during the 2001-2002 fiscal period, 12.4 million boxes will be conventionally produced pears of the d'Anjou variety. While the income derived from the basic rate of assessment will continue to fund the Committee's administrative and promotional activities, income derived from the supplemental rate of assessment will be used exclusively to fund the collection of data on Ethoxyquin residue on stored d'Anjou pears. Ethoxyquin is an antioxidant that is registered for use on pears in the control of superficial scald, a physiological disease affecting the appearance of certain varieties of stored pears. The supplemental rate will not be applicable to d'Anjou pears that are organically produced, as Ethoxyquin is not used in their handling and storage.

Since the d'Anjou variety of pear is of major importance to the Oregon and Washington winter pear industry, the Committee has embarked on a research project that will fund the collection of data pertaining to Ethoxyquin residue to satisfy requirements of the Environmental Protection Agency pertaining to U.S. pesticide tolerance and registration. In addition, the data collection will be used in conjunction with the Codex Alimentarius system that establishes maximum residue limits used as tolerances in many nations receiving shipments of Oregon and Washington d'Anjou pears.

The major expenditures recommended by the Committee for the 2001-2002 year include $6,952,000 for market development projects including paid advertising, $688,000 for research including $372,000 for Ethoxyquin data research (funded by the supplemental rate of assessment), and operational expenses of $474,000, including $241,401 for salaries and employee benefits. Budgeted expenses for these items in 2000-2001 were $7,342,500, $330,000, and $412,500 (including $269,658 for salaries and benefits), respectively. Collection of data on the use of Ethoxyquin was not a funded research project during the 2000-2001 fiscal period.

Assessment income for the 2001-2002 fiscal period is expected to total $8,114,000 based on estimated shipments of 15,800,000 standard boxes at the current rate of $0.49 per standard box. This includes 12,400,000 standard boxes of conventionally produced d'Anjou pears at the proposed supplemental rate of $0.03 per standard box. Income from the additional $0.03 rate of assessment is estimated at $372,000. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve, will be adequate to cover budgeted expenses. Funds in the reserve (currently $304,181) will be kept within the maximum permitted by the order of approximately one fiscal period's expenses (§ 927.42).

Although both the basic rate of assessment and the supplemental rate of assessment will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of both. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. The USDA will evaluate Committee recommendations and other available information to determine whether modification of either rate of assessment is needed. Further rulemaking will be undertaken as necessary. The Committee's 2001-2002 budget has been reviewed and approved by USDA. Those for subsequent fiscal periods will also be reviewed, and as appropriate, approved.

This final rule includes the establishment of a definition for organically produced pears. The establishment of this definition facilitates the implementation of the organically produced pear exclusion from the supplemental rate of assessment. The Committee recommended that the definition be established as follows: “ Organically produced pears means pears that have been certified by an organic certification organization currently registered with the Oregon or Washington State Departments of Agriculture, or such certifying organization accredited under the National Organic Program.” Although the Committee recommended that this definition be established primarily so that it could properly administer the proposed supplemental rate of assessment, the definition could prove useful to both the Committee and the Department in a variety of ways in the administration of the order. With the increasing interest and emphasis being put on organic food production in the United States, this definition for organically produced pears provides the northwest pear industry with an important tool.

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

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

There are approximately 70 handlers of winter pears who are subject to regulation under the marketing order and approximately 1,700 winter pear producers in the production area. Small agricultural service firms are defined by the Small Business Administration (SBA)(13 CFR 121.201) as those having annual receipts less than $5,000,000, and small agricultural producers are defined as those whose annual receipts are less than $750,000.

The Committee estimates, based upon handler shipment totals and an average F.O.B price of $14 per standard box, that about 93 percent of winter pear handlers could be considered small businesses under SBA's definition. In addition, based on acreage, production, and producer prices reported by the National Agricultural Statistics Service, and the total number of winter pear producers, the average annual producer receipts are approximately $69,635. In view of the foregoing, it can be concluded that the majority of producers of winter pears may be classified as small entities.

This rule establishes a supplemental rate of assessment of $0.03 per standard box of d'Anjou pears handled, excluding organically produced pears, for the 2001-2002 and subsequent fiscal periods. The $0.03 supplemental rate of assessment on conventionally produced and handled d'Anjou pears is in addition to the continuing rate of assessment of $0.49 per standard box of pears handled established at 63 FR 39037 for the 1998-1999 and subsequent fiscal periods. This rule also establishes a definition for organically produced pears. The Committee unanimously recommended this action at its meeting held on June 1, 2001.

The major expenditures recommended by the Committee for the 2001-2002 year include $6,952,000 for market development including paid advertising, $688,000 for research including $372,000 for Ethoxyquin data collection, and operational expenses of $474,000, including $241,401 for salaries and employee benefits. Budgeted expenses for these items in 2000-2001 were $7,342,500, $330,000, and $412,500 ($269,658 for salaries and benefits), respectively. Ethoxyquin data research was not a budgeted item during the 2000-2001 fiscal period.

Assessment income for the 2001-2002 fiscal period may total $8,114,000 based on estimated winter pear shipments of 15,800,000 standard boxes at the current rate of $0.49 per standard box, and 12,400,000 standard boxes of conventionally produced d'Anjou pears at the supplemental rate of $0.03 per standard box. The supplemental assessment income, estimated at $372,000, will be used to fund Ethoxyquin data research. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve, should be adequate to cover budgeted expenses. The operating reserve is within the maximum permitted by the order of approximately one fiscal period's expenses.

The Committee reviewed and unanimously recommended 2001-2002 expenditures of $8,127,777. This compares to last year's approved budget of $8,199,694. Prior to arriving at this budget, alternative expenditure and assessment levels were discussed by the Committee. Based upon the relative value of the Ethoxyquin research to the industry, a supplemental rate of assessment was recommended on d'Anjou pears. Ethoxyquin is not used in the handling and storage of organically produced d'Anjou pears, thus they were excluded from the Committee's supplemental assessment recommendation. This fact, however, is the main reason the Committee recommended the establishment of a definition for organically produced pears in the order's rules and regulations.

A review of historical information, as well as preliminary information pertaining to the upcoming fiscal period, indicates that the producer price for the 2001-2002 season could range between $5.87 and $10.34 per standard box of winter pears. Therefore, the estimated assessment revenue for the 2001-2002 fiscal period, inclusive of revenue from both the basic $0.49 rate and the $0.03 supplemental rate of assessment, as a percentage of total grower revenue could range between 5 and 9 percent.

This action increases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the additional costs may be passed on to producers. However, these costs are generally offset by the benefits derived by the operation of the order. The Committee's meeting was widely publicized throughout the winter pear industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the June 1, 2001, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Furthermore, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses.

This rule imposes no additional reporting or recordkeeping requirements on either small or large winter pear handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

The USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

A proposed rule concerning this action was published in the Federal Register on September 21, 2001 (66 FR 48623). A copy of the proposed ruled was provided to the Committee office which in turn made copies available to producers and handlers. Furthermore, the Office of the Federal Register and USDA made a copy available on the Internet. A 30-day comment period ending October 22, 2001, was provided for interested persons to respond to the proposal. No comments were received.

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

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

Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because: (1) Handlers are already receiving 2001-2002 fiscal period pears from producers; (2) the 2001-2002 fiscal period began on July 1, 2001, and the supplemental rate of assessment should apply to all assessable, non-organic, d'Anjou pears handled during such fiscal period; and (3) handlers are aware of this action which was unanimously recommended by the Committee at a public meeting. Furthermore, a 30-day comment period was provided for in the proposed rule and no comments were received.

This rule is issued under Marketing Agreement No. 148 and Order No. 932, both as amended (7 CFR part 932), regulating the handling of olives grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, California olive handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable olives beginning January 1, 2002, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

This rule decreases the assessment rate established for the Committee for the 2002 and subsequent fiscal years from $27.90 per ton to $10.09 per ton of olives.

The California olive marketing order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers and handlers of California olives. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2001 and subsequent fiscal years, the Committee recommended, and USDA approved, an assessment rate that would continue in effect from fiscal year to fiscal year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.

The Committee met on December 11, 2001, and unanimously recommended fiscal year 2002 expenditures of $1,428,585 and an assessment rate of $10.09 per ton of olives. In comparison, last year's budgeted expenditures were $1,348,242 and the assessment rate was $27.90. The assessment rate of $10.09 is $17.81 lower than the rate currently in effect.

Expenditures recommended by the Committee for the 2002 fiscal year include $811,935 for marketing development, $339,650 for administration, $250,000 for research, and $27,000 for capital expenditures. Budgeted expenses for these items in 2001 were $596,415, $343,490, $408,337, and $0, respectively.

Last year's assessable tonnage was 46,374 tons, and this year's assessable tonnage is 123,439 tons. Although the Committee increased 2002 marketing development and capital expenditures, the significant increase in assessable tonnage makes possible the lower assessment rate.

Funds budgeted for research activities are reduced due to completion of the mechanical harvester project. The reduced research expenditures will fund scientific studies to develop chemical and scientific defenses to counteract a potential threat from the olive fruit fly in the California production area. Market development expenditures are significantly higher as the Committee's website will be redesigned and outreach programs will be implemented for students and teachers. Capital expenditures are higher as the Committee will purchase a vehicle for Committee staff.

The assessment rate recommended by the Committee was derived by considering anticipated expenses, actual tonnage, and additional pertinent factors. As mentioned earlier olive shipments for the year are estimated at 123,439 for fiscal year 2002. This compares to an assessable tonnage of 46,374 for fiscal year 2001. The significant tonnage increase in fiscal year 2002, due in part to the alternate-bearing nature of olives, has made it possible for the Committee to decrease the assessment rate from $27.90 to $10.09 per ton. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve, will be adequate to cover budgeted expenses. Funds in the reserve will be kept within the maximum permitted by the order—approximately one fiscal periods' expenses, or $1,428,585 (§ 932.40).

The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.

Although this assessment rate is effective for an indefinite period, the Committee will continue to meet prior to or during each fiscal year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2002 budget and those for subsequent fiscal years will be reviewed and, as appropriate, approved by USDA.

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

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

There are approximately 1,200 producers of olives in the production area and approximately 3 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $5,000,000.

The majority of olive producers may be classified as small entities. One of the handlers may be classified as a small entity. Thus, the majority of handlers may be classified as large entities.

This rule decreases the assessment rate established for the Committee and collected from handlers for the 2002 and subsequent fiscal years from $27.90 to $10.09 per ton of olives. The Committee unanimously recommended 2002 expenditures of $1,428,585 and an assessment rate of $10.09 per ton. The assessment rate of $10.09 is $17.81 lower than the 2001 rate. The quantity of assessable olives for the 2002 fiscal year is estimated at 123,439 tons. Thus, the $10.09 rate should provide $1,245,500 in assessment income and should be adequate, when combined with funds from the authorized reserve and interest income to meet this year's expenses.

The expenditures recommended by the Committee for the 2002 fiscal year include $811,935 for marketing development, $339,650 for administration, $250,000 for research, and $27,000 for capital expenditures. Budgeted expenses for these items in 2001 were $596,415, $343,490, $408,337, and $0, respectively.

Last year's assessable tonnage was 46,374 tons, and this year's assessable tonnage is 123,439 tons. Although the Committee increased 2002 marketing development and capital expenditures, the significant increase in tonnage makes the lower assessment rate possible.

Funds budgeted for research activities are reduced due to completion of the mechanical harvester project. The reduced research expenditures will fund scientific studies to develop chemical and scientific defenses to counteract a potential threat from the olive fruit fly in the California production area. Market development expenditures are significantly higher as the Committee's website will be redesigned and outreach programs will be implemented for students and teachers. Capital expenditures are higher as the Committee will purchase a vehicle for Committee staff.

Prior to arriving at this budget, the Committee considered information from various sources, such as the Committee's Executive Subcommittee, and Market Development Subcommittee. Alternative expenditure levels were discussed by these groups, based upon the relative value of various research and marketing projects to the olive industry. The assessment rate of $10.09 per ton of assessable olives was derived by considering anticipated expenses, the Committee's estimate of assessable olives, and additional pertinent factors.

A review of historical information and preliminary information pertaining to the upcoming fiscal year indicates that the grower price for the 2002 season is estimated to be approximately $502.27 per ton of olives. Therefore, the estimated assessment revenue for the 2002 fiscal year as a percentage of total grower revenue will be approximately 2 percent.

This action decreases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, decreasing the assessment rate reduces the burden on handlers, and may reduce the burden on producers. In addition, the Committee's meeting was widely publicized throughout the California olive industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the December 11, 2001, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.

This action imposes no additional reporting or recordkeeping requirements on either small or large California olive handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

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

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

Pursuant to 5 U.S.C. 553, it is also found and determined upon good cause that it is impracticable, unnecessary, and contrary to the public interest to give preliminary notice prior to putting this rule into effect, and that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because: (1) The 2002 fiscal year began on January 1, 2002, and the marketing order requires that the rate of assessment for each fiscal year apply to all assessable olives handled during such fiscal year; (2) the action decreases the assessment rate for assessable olives beginning with the 2002 fiscal year; (3) handlers are aware of this action which was unanimously recommended by the Committee at a public meeting and is similar to other assessment rate actions issued in past years; and (4) this interim final rule provides a 60-day comment period, and all comments timely received will be considered prior to finalization of this rule.

This rule is issued under Marketing Agreement No. 97 and Marketing Order No. 948, both as amended (7 CFR part 948), regulating the handling of Irish potatoes grown in Colorado, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The USDA is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the order now in effect, Colorado potato handlers are subject to assessments. Funds to administer the order are derived from such assessments. For the 1999-00 fiscal period, an assessment rate of $0.02 per hundredweight of potatoes handled was fixed by USDA to continue in effect indefinitely unless modified, suspended, or terminated. This action continues to suspend the assessment rate for the 2001-02 fiscal period, which began on July 1, 2001, and will continue in effect until reinstated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

This rule continues to suspend § 948.215 of the order's rules and regulations. Section 948.215 established an assessment rate of $0.02 per hundredweight of potatoes handled for 1999-00 and subsequent fiscal periods. Continuous assessment rates remain in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA. This rule continues to suspend the $0.02 assessment rate for 2001-02, and will continue to suspend such assessment rate during subsequent fiscal periods until reinstated by USDA upon recommendation of the Committee.

Sections 948.75 through 948.77 of the Colorado potato order provide authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and to collect assessments from handlers to administer the program. In addition, § 948.78 of the order authorizes the use of monetary reserve funds to cover program expenses. The members of the Committee are producers and handlers of Colorado Area III potatoes. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. Recommendations concerning the budget and assessment rate are formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

The Committee met on May 10, 2001, to discuss the proposed 2001-02 budget and assessment rate and to take appropriate action. However, with only three out of nine voting members in attendance at the meeting, the quorum necessary for the Committee to take action was not present. To ensure that the Committee would have a recommendation for the 2001-02 fiscal period budget, the Committee's manager subsequently polled all Committee members by U.S. mail, as provided for in § 948.61 of the order. The resultant unanimous recommendation by all nine members favored the establishment of a budget with expenditures of $18,200 and an assessment rate of $0.005 ( 1/2 cent) per hundredweight of potatoes handled during the 2001-02 fiscal period.

However, § 948.78(a)(2) of the order specifies that the Committee, with USDA's approval, may carry over excess funds into subsequent fiscal periods as a reserve, provided that funds already in the reserve are less than approximately two fiscal periods' expenses. After reviewing the Committee's initial recommendation for a $0.005 rate of assessment, USDA requested that the Committee consider suspension of the assessment rate until the reserve is lowered to a level consistent with the order. Consequently, at its meeting of July 19, 2001, the Committee unanimously recommended suspension of the continuing assessment rate of $0.02 for the 2001-02 and subsequent fiscal periods. The Committee concluded that an assessment rate will not be necessary for operation during the 2001-02 fiscal period as funds in the reserve, combined with interest and rental income, are adequate to meet expenses.

As of July 1, 2001, the Committee had $59,579 in its reserve fund. With the 2001-02 budget set at $18,200, the current maximum reserve permitted by the order is approximately $36,400 (approximately two fiscal periods' expenses). To meet its 2001-02 expenses the Committee plans on drawing approximately $14,700 from its reserve, and may additionally earn approximately $3,500 from interest and other income. Thus, with a suspended assessment rate, the Committee's reserve at the end of the 2001-02 fiscal period could be reduced to approximately $44,879. Projecting a similar level of expenses in 2002-03 and continuation of the assessment rate suspension, the Committee's reserve on July 1, 2003, could be about $30,179. This amount would be consistent with the order's requirements.

The major expenditures recommended by the Committee for the 2001-02 fiscal period include $7,000 for salary, $6,300 for office expense (which includes equipment, telephone, and utilities), and $3,000 for rent. Minor expenses total $1,900. Budgeted expenses for these items in the 2000-01 fiscal period were $4,250, $6,800, and $3,000, respectively. Minor expenses totaled $3,600 that year.

The Committee foresees a need for the assessment rate suspension to continue in effect for approximately two fiscal periods. The assessment rate will remain suspended, however, until reinstated by USDA upon recommendation and information submitted by the Committee or other available information.

Since the suspension of the assessment rate will continue for such subsequent fiscal periods as necessary to ensure that the monetary reserve is lowered to a level consistent with the order, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for reinstatement of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. The USDA will evaluate Committee recommendations and other available information such as the level of the budget and the monetary reserve to determine whether assessment rate reinstatement is needed, and at what level. Further rulemaking will be undertaken as necessary. The Committee's 2001-02 budget has been reviewed and approved by USDA and budgets for subsequent fiscal periods will also be reviewed and, as appropriate, approved by USDA.

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

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

There are approximately 26 producers of Colorado Area III potatoes in the production area and approximately 11 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $5,000,000.

Information for the most recent season in which statistics are available, as reported by the National Agricultural Statistics Service, was considered in determining the number of large and small producers by acreage, production, and producer prices. According to the information provided, the average yield per acre was 340 hundredweight, the average farm size was 53 acres, and the season average producer price was $5.95 per hundredweight. This equates to average gross receipts to producers of approximately $107,200. Furthermore, based upon information provided by the Committee, all handlers of Area III potatoes have shipped under $5,000,000 worth of potatoes during the most recent season for which numbers are available. Based on the foregoing, it can be concluded that a majority of producers and handlers of Area III potatoes may be classified as small entities.

This rule continues to suspend § 948.215 of the order's rules and regulations, which established an assessment rate of $0.02 per hundredweight of potatoes handled beginning with the 1999-00 fiscal period. This assessment rate suspension is effective for the 2001-02 fiscal period and subsequent fiscal periods until reinstated.

Without assessment income to offset its 2001-02 budget of $18,200, the Committee plans on drawing approximately $14,700 from its reserve, and may additionally earn approximately $3,500 from interest and other income.

The major expenditures recommended by the Committee in the 2001-02 fiscal period budget include $7,000 for salary, $6,300 for office expenses, and $3,000 for rent. Minor expenses total $1,900. In comparison, the Committee's 2000-01 fiscal period budget of $17,650 included major expenses of $4,250, $6,800, and $3,000, respectively. Minor expenses totaled $3,600.

The Committee recommended that assessment collection be suspended until such time as the monetary reserve reaches a level consistent with the order requirement of less than approximately two fiscal periods' expenses. The Committee believes that by suspending the assessment rate for at least the next two fiscal periods, the operating reserve should be lowered to an amount consistent with the program. Based on Committee projections, the current reserve of $59,579 will be reduced to about $44,879 by the end of the 2001-02 fiscal period, and to about $30,179 by the end of the 2002-03 fiscal period.

Prior to recommending the suspension of the continuing assessment rate, the Committee discussed alternatives, including its earlier recommended assessment rate of $0.005 per hundredweight. However, the Committee concurred with USD's position that a suspension of the assessment rate is viable since it could rely on its reserve and other income to meet budgeted expenses, and that such a suspension would expedite the reduction of the reserve. Another alternative considered by the Committee was to refund the portion of the reserve that is over that permitted by the order directly to handlers of record. However, because many of the handlers assessed in prior years are no longer in business, the Committee concluded this would not be equitable.

This action will reduce handler costs by almost $9,000 (448,750 hundredweight of assessable potatoes × the current rate of assessment of $0.02) during the 2001-02 fiscal period, as no assessment will be collected. Suspension of the assessment rate reduces the burden on handlers, and may reduce the burden on producers. In addition, the Committee's meetings were widely publicized throughout the Colorado Area III potato industry and all interested persons were invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the May 10 and July 19, 2001, meetings were open to the public and all entities, both large and small, were able to express views on this issue. Finally, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses.

This action imposes no additional reporting or recordkeeping requirements on either small or large Colorado Area III potato handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

The USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

An interim final rule regarding this action was published in the Federal Register on September 25, 2001 (66 FR 48951). A copy of that rule was sent to the Committee's manager, who in turn provided copies to Committee members, handlers, and other interested persons. The interim final rule was also made available through the Internet by the Office of the Federal Register and USDA. A 60-day comment period was provided for interested persons to respond to the interim final rule. The comment period ended on November 26, 2001. No comments were received.

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

After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that finalizing the interim final rule, without change, as published in the Federal Register (66 FR 48951, September 25, 2001) will tend to effectuate the declared policy of the Act.

This final rule is issued under Marketing Agreement No. 115 and Order No. 982 both as amended (7 CFR part 982), regulating the handling of hazelnuts grown in Oregon and Washington, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

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

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

This final rule establishes reporting requirements for hazelnuts imported by handlers of hazelnuts grown in Oregon and Washington. The rule requires handlers to report the receipt and disposition of hazelnuts grown outside of the United States. Requiring handlers to report the receipt and disposition of imported hazelnuts will provide the Board with more accurate information on the total supply of hazelnuts being handled in Oregon and Washington.

At its November 14, 2000, meeting, the Board passed a general recommendation to require handlers to report imported hazelnuts. After developing procedures and a form necessary for implementation, the Board submitted its recommendation to the Department in May 2001.

Sections 982.64 through 982.67 of the order authorize the Board to require certain specific reports from handlers, including creditable promotion and advertising reports, carryover reports, shipment reports, and reports on the disposition of restricted hazelnuts. Section 982.68 of the order provides additional authority for the Board, with the approval of USDA, to require such other reports as the Board may require to perform its duties under the order.

The Board believes that more accurate information on the total supply of hazelnuts moving in and out of Oregon and Washington—both foreign and domestic product—will facilitate the administration of the order. The Board will use this information to more efficiently track the receipt and disposition of hazelnuts by handlers in Oregon and Washington. Furthermore, the Board will use this information in its marketing policy deliberations each fall when it reviews the crop estimate, handler carryover, and other factors to determine whether volume regulation would be appropriate. In addition, the Board is concerned that imported hazelnuts might be included in handler inventory reports of Oregon and Washington hazelnuts.

In addition to the domestic crop, of which 100 percent is produced in Oregon and Washington, hazelnuts are imported into the United States from Canada and Turkey, and occasionally from Italy. Hazelnuts produced in Oregon and Washington generally represent from 3 to 5 percent of the world crop. According to USDA statistics, the majority of hazelnuts imported into the United States are in kernel form, of which about 96 percent are from Turkey. A small percentage of imports are inshell hazelnuts and generally are from British Columbia, Canada, and enter the U.S. through Washington State. Although information pertaining to the quantity of imported hazelnuts has long been available, information specific to the receipt and disposition by Oregon and Washington hazelnut handlers prior to this final rule was lacking.

A major concern of the Board has been the inshell hazelnuts imported from Canada by Oregon and Washington handlers. As production in Canada has increased, there has been an increase in Canadian hazelnuts imported into Oregon and Washington. These hazelnuts are generally the same variety (Barcelona) as are produced in Oregon and Washington. If these hazelnuts are placed in the domestic inshell market without its knowledge, the Board's marketing policy calculations could be inaccurate. This rule will enable the Board to collect import hazelnut data to see how much is being imported and disposed of by domestic handlers.

According to the National Agricultural Statistics Service, the 10-year average annual production of hazelnuts grown in Oregon and Washington is 29,800 inshell tons. Of that total, an average of 4,253 tons was sold in the domestic market. Furthermore, according to the Foreign Agricultural Service, imports during the same 10-year period averaged 316 tons. The five-year average for imports is 534 tons, however, indicating that the increase may well be significant enough to impact the inshell domestic market.

The report, F/H Form 1f, will be submitted to the Board monthly when imported hazelnuts are received and shipped by the handler to a buyer in the United States or exported inshell or shelled. The Board estimates that these reports will be submitted about five times per year by each importing handler. The report will include the quantity of such hazelnuts received, country of origin, inspection certificate number, whether such hazelnuts were inshell or kernels, the disposition outlet (domestic, export, inshell, or shelled, etc.), and the shipment date of such hazelnuts.

The Board also recommended that, with each report, the handler submit a copy of the inspection certificate issued by the Federal-State Inspection Service (FSIS) for compliance purposes. The inspection certificate will indicate the name of the person from whom the hazelnuts were received, the date the hazelnuts were received by the handler, the number of tons and U.S. Custom Service entry number, whether the product is inshell or shelled, the quantity of hazelnuts, country of origin, the name of the FSIS inspector who issued the certificate, and the date such certificate was issued. The Board believes inspection certificates are necessary to verify handler receipt and disposition reports for imported hazelnuts.

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

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

There are approximately 800 growers of hazelnuts in the production area and approximately 19 handlers subject to regulation under the order. Small agricultural growers are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $5,000,000.

Based on the SBA definition, the Board estimates that the majority of the handlers and all of the growers are small entities. Board records show that in the 1999-2000 marketing year approximately 9 percent of the handlers shipped over 7,692,308 pounds of hazelnuts, and 91 percent of the handlers shipped under 7,692,308 pounds of hazelnuts. Thus, based on an average price of $0.65 per pound at the point of first sale, it can be concluded that the majority of hazelnut handlers may be classified as small entities.

Board meetings are widely publicized in advance of the meetings and are held in a location central to the production area. The meetings are open to all industry members and other interested persons who are encouraged to participate in the deliberations and voice their opinions on topics under discussion. Thus, Board recommendations can be considered to represent the interests of small business entities in the industry.

This rule adds a new § 982.467 to the order's administrative rules and regulations which requires handlers to report to the Board the receipt and disposition of hazelnuts grown outside of the United States. This report will provide the Board with more accurate information on the total available supply of hazelnuts—foreign and domestic product—and will help facilitate program administration. Authority for requiring handlers to submit this information to the Board is provided in § 982.68 of the order.

Regarding the impact of the action on affected entities, this rule should impose minimal additional costs. The Board estimates that about five handlers have imported hazelnuts over the past few years. Such handlers will be required to submit an additional monthly report to the Board when imported hazelnuts are received and shipped, along with inspection certificates or other information required by the Board for verification purposes. The Board estimates that each affected handler will submit about five of these reports annually.

An alternative to this action would have been to continue the practice of not collecting information from handlers on the receipt and disposition of imported hazelnuts. However, as previously mentioned, the Board believes it will be able to better administer the order by obtaining more accurate information on the total available supply of hazelnuts being received and disposed of by Oregon and Washington handlers, including foreign and domestic product. The only way this information can be obtained by the Board is to directly collect it from handlers. This information will facilitate program administration by improving the Board's base of information from which to make decisions.

Another alternative the Board considered was whether it would be useful to collect information on hazelnuts grown outside of Oregon and Washington, but within the United States. However, Board members agreed that the quantity of domestic hazelnuts grown outside the production area and handled by regulated handlers is insignificant commercially, and, therefore, not needed.

This action imposes some additional reporting and recordkeeping burden on handlers that receive hazelnuts from outside of the United States. As stated earlier, the Board has estimated that five handlers may import hazelnuts during the marketing year. Such handlers will be required to submit a receipt and disposition report ( F/H Form 1f ) to the Board monthly when imported hazelnuts are received and shipped. The Board estimates that these reports will be submitted about five times per year per handler, and will require that each handler spend about five minutes to complete each report. Thus, the annual burden associated with this information collection should total no more than two hours for the industry. The information will be collected on F/H Form 1f. The form has been approved by the Office of Management and Budget (OMB) under OMB Control No. 0581-0178 in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. The USDA has identified one relevant Federal rule regarding requirements for hazelnuts grown outside of the United States. Under section 608e of the Act, whenever certain specified commodities are regulated under a Federal marketing order, imports of that commodity must meet the same or comparable grade, size, quality, and maturity requirements as those in effect for the domestic commodity. Hazelnuts are included under section 608e of the Act. Thus, importers of hazelnuts are required to have such hazelnuts inspected by the Federal-State inspection service. Importers whose hazelnuts meet section 608e requirements do not have to submit any paperwork to USDA. However, importers whose hazelnuts fail section 608e requirements, or whose hazelnuts are being sent to designated outlets (animal feed, processing, or charity) have to submit paperwork to USDA. Only a small amount of information required by USDA in these instances or by the Board through this rule will be duplicative.

In addition, the Board's meeting was widely publicized throughout the hazelnut industry and all interested persons were invited to attend the meeting and participate in Board deliberations on all issues. Like all Board meetings, the November 14, 2000, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

A proposed rule concerning this action was published in the Federal Register on August 22, 2001 (66 FR 44086). Copies of the rule were mailed to all Board members. The rule was also made available through the Internet by the Office of the Federal Register and USDA. A 60-day comment period ending October 22, 2001, was provided to allow interested persons to respond to the proposal. No comments were received.

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

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

It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C. 553) because: (1) Handlers are already shipping hazelnuts from the 2001-2002 crop; (2) the Board would like to begin receiving this report as soon as possible to have better information on the total supply of hazelnuts within Oregon and Washington; (3) handlers are aware of this rule which was recommended at a public meeting; and (4) a 60-day comment period was provided in the proposed rule; no comments were received.

For the reasons set forth in the preamble, 7 CFR part 982 is amended as follows:

Contributions and expenditures made for the purpose of influencing Federal elections are subject to various prohibitions and limitations under the Federal Election Campaign Act, 2 U.S.C. 431 et seq. , as amended [“FECA” or “the Act”]. These prohibitions and limitations apply to a contribution or expenditure by a “person,” as defined by 2 U.S.C. 431(11) and 11 CFR 100.10. 1 The statutory definition of the term “person” expressly excludes the Federal Government and any authority thereof. 2

Commission regulations at 11 CFR 106.3 require candidates for Federal office, other than Presidential and Vice-Presidential candidates who receive federal funds pursuant to 11 CFR part 9005 or 9036, to report expenditures for campaign-related travel. Specifically, section 106.3(b) states that “(1) Travel expenses paid for by a candidate from personal funds, or from a source other than a political committee, shall constitute reportable expenditures if the travel is campaign-related. (2) Where a candidate's trip involves both campaign-related and non-campaign-related stops, the expenditures allocable for campaign purposes are reportable and are calculated on the actual cost-per-mile of the means of transportation actually used, starting at the point of origin of the trip, via every campaign -related stop and ending at the point of origin. (3) Where a candidate conducts any campaign-related activity in a stop, the stop is a campaign-related stop and travel expenditures made are reportable. Campaign-related activity shall not include any incidental contacts.”

Questions have arisen as to whether the allocation and reporting requirements in 11 CFR 106.3(b) are applicable to travel expenses paid for with funds authorized and appropriated by the Federal Government. Thus, the Commission is announcing its interpretation of the scope of 11 CFR 106.3(b) in that circumstance.

Because 2 U.S.C. 431(11) specifically excludes the Federal Government from its definition of a “person,” the Commission acknowledges that a candidate's travel expenses that are paid for using funds authorized and appropriated by the Federal Government are not paid for by a “person” for the purposes of the Act. Therefore, the Commission believes that the allocation and reporting requirements of 11 CFR 106.3(b) are not applicable to the extent that a candidate pays for travel expenses using funds authorized and appropriated by the Federal Government. The Commission notes that this interpretation of 11 CFR 106.3(b) is in harmony with 11 CFR 106.3(d), which states that a candidate need not report “travel between Washington, DC and the state or district in which he or she is a candidate * * * unless the costs are paid by a candidate's authorized committee(s), or by any other political committee(s).”

Please note that this announcement represents the Commission's interpretation of an existing regulation and is not intended to create or remove any rights or duties, nor is it intended to affect any other aspect of 11 CFR 106.3, the Act, or the Commission's regulations. Furthermore, this interpretation does not apply to presidential or vice presidential campaigns that are covered by the Presidential Election Campaign Fund Act, 26 U.S.C. 9001 et seq. (general elections) or the Presidential Primary Matching Payment Account Act, 26 U.S.C. 9031 et seq. 3 Finally, the Commission notes that the use of Federal funds is governed by general appropriations law and is subject to Congressional oversight. 4

MQSA (Public Law 102-539) was enacted on October 27, 1992. The purpose of the legislation was to establish minimum national quality standards for mammography. To provide mammography services legally after October 1, 1994, MQSA requires all mammography facilities, except facilities of the Department of Veterans Affairs, to be accredited by an approved accreditation body and certified by the Secretary of Health and Human Services (the Secretary). The authority to approve accreditation bodies and to certify facilities was delegated by the Secretary to FDA. MQSA replaced a patchwork of Federal, State, and private standards with uniform minimum Federal standards designed to ensure that all women nationwide receive adequate quality mammography services. On October 9, 1998, the Mammography Quality Standards Reauthorization Act (MQSRA) (Public Law 105-248) was enacted to extend MQSA through fiscal year (FY) 2002.

In order to receive and maintain FDA certification, facilities must meet key requirements of MQSA, which include:

1. Compliance with quality standards for personnel, equipment, quality assurance programs, and reporting and recordkeeping procedures.

2. Accreditation by private, nonprofit organizations or State agencies that have been approved by FDA as meeting MQSA standards for accreditation bodies and that continue to pass annual FDA performance evaluations of their activities. As part of the accreditation process, the accreditation body must evaluate actual clinical mammograms from each unit in the facility for quality. The accreditation body determines whether or not the facility quality standards have been met.

3. Demonstration of continued compliance with the facility quality standards through annual inspections performed by FDA-certified Federal or State inspectors.

Interim facility quality standards were published in the Federal Register of December 21, 1993 (58 FR 67558), and used as the basis for the initial certification of mammography facilities under MQSA beginning October 1, 1994. By that date, mammography facilities had to have a FDA certificate in order to continue to lawfully provide mammography services. In the Federal Register of October 28, 1997 (62 FR 55852), more comprehensive facility quality standards and accreditation body requirements were published and became effective on April 28, 1999. FDA has approved five accreditation bodies: American College of Radiology (ACR) and the States of Arkansas, California, Iowa, and Texas. The number of certified mammography facilities varies with time but typically is about 10,000. FDA has trained and certified Federal and State inspectors to conduct MQSA inspections, and the sixth year of inspections is underway.

State agencies have played a very important role in the development and implementation of the MQSA program. As already noted, four of the five accreditation bodies are States, thus providing an alternative to the ACR for accreditation of facilities within those four States. Most of the FDA-certified inspectors are State personnel who, under contract with FDA, have conducted the great majority of MQSA inspections. FDA currently has contracts for the performance of inspections with 47 States, the District of Columbia, Puerto Rico, and New York City. Mammography facilities in States without inspection contracts and all Federal facilities are generally inspected by FDA.

MQSA also provides for an even more significant State role in the MQSA program. Section 354(q) of the Public Health Service Act (the PHS Act) (42 U.S.C. 263b(q)) permits FDA to authorize qualified States to: (1) Issue, renew, suspend, and revoke certificates; (2) conduct annual facility inspections and followup inspections; and (3) implement and enforce the MQSA quality standards for mammography facilities operating within the qualified State. This rule puts into effect 42 U.S.C. 263b(q) by establishing the requirements that must be met by the States acting as certification agencies (commonly known as SACs) and the procedures for the application, approval, evaluation, and withdrawal of approval of SACs.

To be approved as a certification agency, a State must: (1) Have enacted laws and issued regulations at least as stringent as the MQSA standards and regulations, (2) have the legal authority and qualified personnel to enforce those laws and regulations, (3) devote adequate funds to the administration and enforcement of those laws and regulations, and (4) provide FDA with information and reports, as required.

By statute, FDA and SAC States each have authority in the areas of compliance and the suspension or revocation of certificates. Should there ever be a need, FDA is able to take administrative, judicial, or other actions against facilities within an approved State, regardless of whether a State takes such action. FDA retains exclusive responsibility for: (1) Establishing quality standards, (2) approving and withdrawing approval of accreditation bodies, (3) approving and withdrawing approval of State certification agencies, and (4) maintaining oversight of State certification programs.

In the Federal Register of March 30, 2000 (65 FR 16847), FDA published a proposed rule for the implementation of the SAC provisions of MQSA and sought public comment. FDA’s National Mammography Quality Assurance Advisory Committee (NMQAAC) and a SAC working group aided in the development of the proposed rule.

NMQAAC is a committee of health professionals and representatives of consumer groups and State agencies with responsibility for advising FDA on regulatory requirements implemented under MQSA. NMQAAC provided advice about the direction of the SAC program and the content of the proposed rule at meetings held in September 1994 and July 1996.

FDA’s partnership with the States will be an essential key to the future success of the SAC program. To begin building that partnership, FDA formed a working group in accordance with 21 CFR 20.88(e). Working group participants have included regional and headquarters FDA staff, representatives of the States of Arkansas, California, Florida, Illinois, Iowa, Massachusetts, Nevada, New Hampshire, New Jersey, and Texas, and the American College of Radiology. FDA chose the State participants with the goal of obtaining input from all regions of the country and from States that are MQSA accreditation bodies. Since its first meeting in June 1996, the working group has contributed greatly to the development of the proposed rules.

The agency has also utilized knowledge gained from its experience in working with the accreditation bodies over the past several years and from a SAC Demonstration Project. Experience with the accreditation bodies has greatly influenced the proposed rule because of the similarity to the: (1) Objectives targeted, (2) problems to be solved, and (3) agency oversight needed.

The SAC Demonstration Project, established by FDA in August 1998, gave certification authority to approved States for a 1-year trial period that was later extended for a second and third year. The States of Illinois and Iowa applied for and received approval from FDA to participate in the SAC Demonstration Project. The experience proved valuable in the development of the national regulatory SAC program.

The proposed rule’s 90-day comment period ended on June 28, 2000. FDA analyzed the comments received and responds to them in sections III, V, and VI of this document. As noted, FDA made some changes to the proposed rule in response to those comments.

FDA is adding subpart C, entitled “States as Certifiers,” to part 900 (21 CFR part 900—Mammography). This subpart contains sections defining: (1) The requirements for a State to apply to become a certification agency, (2) the requirements to be met by and the responsibilities of the States that receive certification authority, (3) the processes to be used by FDA in evaluating the performance of each certification agency, (4) the criteria for and the process to be followed to withdraw approval of a certification agency, and (5) the opportunities for hearings and appeals related to adverse actions taken by FDA with respect to certification agencies. FDA is also amending § 16.1(b)(2) (21 CFR 16.1(b)(2)), which addresses hearing procedures, and § 900.2 (Definitions) to bring the regulations into conformance with subpart C.

The intent of MQSA, which is to assure high quality mammography services for all women in the United States, led FDA to add subpart C. FDA believes that these amendments will provide women, in States with certification authority, with the same assurance of high quality mammography as women in States for which FDA retains that authority. There are also potential cost savings to the facilities and the public through a reduction in the facility inspection fees in SAC States. This will occur in SAC States whose inspection costs are lower than the national average that is used to calculate the present national inspection fee.

Section 900.20 describes the scope of subpart C. The new subpart establishes procedures for a State to apply to become a FDA-approved certification agency for mammography facilities. It further defines the responsibilities to be met by certification agencies and the oversight procedures that FDA will use to ensure that these responsibilities are met.

Section 900.21 summarizes the information to be provided by the State to enable FDA to make an informed decision about the State’s ability to adequately carry out certification responsibilities. The application must include a detailed description of the mammography quality standards the applicant will require facilities to meet. If these standards are different from FDA's quality standards, the application must include information to show that they are at least as stringent as FDA standards. The application also must include information about the applicant's decisionmaking process for issuing, suspending, and revoking a facility's certificate as well as its procedures for notifying facilities of inspection deficiencies and the monitoring of the correction of those deficiencies. Finally, the State must provide information about the resources it can devote to the program, including the: (1) Qualifications of the State's professional staff; (2) adequacy of the State's staffing, finances, and other resources; (3) ability of the State to provide data and reports in an electronic format compatible with FDA data systems; and (4) adequacy of the State's enforcement authority and compliance mechanisms.

Section 900.21(c) provides a general description of the process that FDA will follow to decide whether or not to accept a State as a certification agency. Section 900.21(d) notes that FDA may limit the types of facilities for which FDA is granting certification authority; for example, FDA does not expect to grant certification authority to States for Federal facilities. It should be noted also that 42 U.S.C. 263b(q) does not permit FDA to grant a State authority to certify facilities outside of the State's borders.

Section 900.22 establishes the requirements and responsibilities to be met by States that have been approved as certification agencies.

Section 900.22(a) requires the certification agency to have FDA-approved measures to reduce the possibility of conflict of interest or facility bias on the part of individuals acting on the agency's behalf.

Section 900.22(b) requires that the statutory and regulatory requirements used by the certification agencies for the certification and inspection of mammography facilities be those established by FDA in part 900 or other appropriate, but at least as stringent, requirements.

Section 900.22(c) requires that the scope, timeliness, disposition, and technical accuracy of completed inspections and related enforcement activities conducted by the certification agencies be adequate to ensure compliance with the MQSA quality standards.

Section 900.22(d) requires that the certification agencies have appropriate criteria and processes for the suspension and revocation of certificates and that the certification agencies promptly investigate and take regulatory action against facilities that operate without a certificate.

Section 900.22(e) requires that there be means by which facilities can appeal adverse certification decisions made by a certification agency.

Section 900.22(f) requires that approved certification agencies have processes for requesting additional mammography review from accreditation bodies for issues related to mammography image quality and clinical practice.

Section 900.22(g) requires that the certification agencies have procedures for patient and physician notification in situations where the certification agency has determined that mammography quality has been compromised to the extent that there may be a serious risk to human health.

Section 900.22(h) requires that certification agencies have processes to ensure the timeliness and accuracy of electronic transmission of inspection data and facility certification information in a format and timeframe determined by FDA.

Section 900.22(i) requires FDA authorization for any changes a certification agency proposes to make in any standards that FDA previously accepted under § 900.21 or § 900.22. FDA believes that this process is necessary to assure that standards for certification agencies remain at least as stringent as the FDA standards.

Section 900.23 establishes standards for the annual performance evaluation of each certification agency. The evaluation will be based on indicators related to the adequacy of the certification agency's performance in the areas of certification, inspection, and compliance.

During the evaluation, FDA will consider the timeliness and effectiveness with which the certification agencies meet their various responsibilities. The evaluation also will include a review of any changes in the standards or procedures that the certification agency has made in the areas listed in §§ 900.21(b) and 900.22. The evaluation will include a determination of whether there are major deficiencies in the certification agency's performance that, if not corrected, would warrant FDA withdrawal of the State agency's approval. The evaluation will also include identification of any minor deficiencies that require corrective action.

Section 900.24 provides for the actions to be taken if evaluations carried out under § 900.23, or other information, leads FDA to determine that a State certification agency is not adequately carrying out its responsibilities. If FDA determines that there are major deficiencies in the certification agency's performance, FDA may withdraw its approval. Examples of major deficiencies include: (1) Commission of fraud, (2) willful disregard for the public health, (3) failure to provide adequate resources for the program, (4) performing or failing to perform a delegated function in a manner that may cause serious risk to the public health, or (5) the submission of material false statements to FDA.

For minor or less serious deficiencies, FDA will establish a definite time period for the certification agency to take corrective measures as directed by FDA or to submit the State's own plan of corrective action for FDA approval. FDA may place the certification agency on probationary status while the agency is addressing the minor deficiencies. The agency would utilize probationary status in situations where the certification agency is not implementing the corrective action satisfactorily or within the established schedule. FDA also may withdraw approval from the certification agency if: (1) Corrective action is not taken or (2) the identified minor deficiencies have not been eliminated within the established timeframe.

While a certification agency is developing and carrying out its corrective action plan, even if on probationary status, it will retain its certification authority. If a certification agency loses its approval, it must notify all facilities certified or seeking certification by it. In addition, the certification agency must notify the appropriate accreditation bodies with jurisdiction in the State of its change in status. These requirements, however, would not preclude FDA notification. A certification agency that has lost its approval must also transfer facility records and other information required by FDA to a location and according to a schedule approved by FDA.

Under § 900.25, FDA provides an opportunity for a certification agency to challenge in an informal hearing an adverse action taken by FDA with respect to approval or withdrawal of approval. The agency provides the opportunity for a hearing in accordance with part 16 (21 CFR part 16). Certification agencies also are required to provide facilities that have been denied certification with the opportunity to appeal that decision. Each certification agency shall specify in writing its appeals process for approval by FDA in accordance with § 900.21.

A conforming amendment to § 16.1 adds § 900.25 to the list of provisions under which regulatory hearings are available.

Conforming amendments to § 900.2 state that the definitions in that section apply to subpart C, as well as to subparts A and B of part 900. Three definitions, “§ 900.2 (zz) Certification agency,” “(aaa) Performance indicator,” and “(bbb) Authorization” are added to the definition list. In adding these definitions, FDA departs from its earlier practice of placing the definitions in alphabetical order to add the new definitions to the end of the list. This placement was done to avoid the necessity of making numerous changes in the citations of the definitions in subparts A and B and to avoid the potential for confusion and error. A change has also been made in the definition of “Certification” to recognize the role of States as certification agencies. A similar conforming amendment was made to § 900.11(a).

FDA received eight responses to the request for comments on the proposed regulations for State certification of mammography facilities. They were from representatives of a mammography facility, the ACR, the Conference of Radiation Control Program Directors, Inc. (CRCPD), and five representatives of individual State radiation control programs. Each response contained a number of individual comments. A large number of these comments were related to the cost analysis and will be addressed in section V of this document (Analysis of Impacts). A few of the comments dealt with paperwork issues and will be discussed in section VIII of this document (Paperwork Reduction Act of 1995). The remaining comments addressed: (1) The general concept of SAC, (2) individual provisions of the proposed regulations, and (3) possible additions to the regulations. FDA responds to these comments as follows.

General comments were those that raised issues or concerns that were broader in scope than any specific provisions.

(Comment 1) One comment reminded FDA that “MQSA was established to create and maintain a minimum national quality standard in mammography.” The authors went on to laud the “strict requirements” and the procedures of the agency for their effectiveness in achieving this goal. However, they expressed concerns about continuing to meet the intent of MQSA in a consistent fashion without undue burdens on facilities if certification authority was given to a number of agencies (States). Although the authors did not appear to be opposed in principle to the concept of certification authority being given to the States, they made it clear that their support was contingent on the resolution of these concerns. Another comment expressed confidence that States could manage certification responsibilities efficiently and effectively.

The agency agrees that the basic intent of MQSA is to ensure that the performance of mammography meets uniform minimum national standards of quality. FDA believes that the proposed regulations and the associated agency oversight actions provide adequate assurance that this intent will continue to be met after certification authority is given to individual States. In response to the first comment, however, the agency has made changes in the regulations to further strengthen this assurance.

FDA made five changes in §§ 900.21 and 900.22 to make it easier for FDA to determine if an applicant’s standards of quality meet or exceed the uniform minimum national standards. The first, in § 900.21(a), replaced the words “substantially equivalent to” with “at least as stringent as.” The second, in § 900.21(b)(3)(ii), replaced the words “their equivalence to” with “that they are at least as stringent as.” The third, in § 900.21(c), replaced the words “substantially equivalent” with “at least as stringent as.” A similar change in § 900.22(b) replaced the words “equivalent to” with “at least as stringent as.” These four changes were intended to clarify the nature of the information that the agency is seeking. The fifth change adds a new § 900.21(b)(3)(iii)(O) to ensure that the SAC State will make it clear to FDA and to the affected facility when an action taken against a facility is based upon more stringent State standards. This addition was made to clarify that a State may only impose the more stringent requirements under State law.

In addition, two changes were made to emphasize that after approval as a certification agency, a State must continue to ensure that the intent of MQSA is met. The words “regulations or” have been inserted in § 900.23 to emphasize that the annual evaluation of certification agencies will include a review of the certification agency’s regulations to ensure that they remain adequate for MQSA purposes. Also, the words “has failed to achieve the MQSA goals of quality mammography and access” were added to § 900.24(a) to make it clear that FDA can withdraw approval of a certification agency should a SAC State fail to achieve the MQSA goals.

FDA will cover the oversight actions, which FDA believes help ensure that uniform national minimum standards of quality will be met, in more detail with the discussion of the comments on specific provisions of the regulations. In addition, comment 14 of this document discusses a change made in § 900.24(b) in order to minimize a potential burden on facilities.

(Comment 2) One person noted that his present understanding of FDA’s intent regarding data transmission between accreditation bodies and State certifying agencies is that the accreditation bodies would provide data to FDA and FDA would then pass it on to the State certifying agencies. The comment approved of this planned flow and urged that it be specified in the regulations.

The comment does correctly describe FDA’s intent with respect to electronic transmission of data. The agency believes that this pathway is much more efficient and cost effective than if multiple pathways had to be developed between accreditation bodies and certifying States. It is also the most effective way of maintaining the national database required for MQSA activities. However, FDA does not believe that it is necessary to specify this intent in the regulations and so rejects this comment.

(Comment 3) One comment noted that there are very minimal differences between the content of the proposed regulations for State certification of mammography facilities and the existing requirements met by accreditation bodies.

This similarity was intentional on the agency’s part. FDA recognized that the information needed to determine if FDA could approve a State as a certification agency was similar in many respects to that required to determine if FDA could approve an accreditation body. Furthermore, the responsibilities of, the procedures to be followed by, and the resources needed by SAC States and accreditation bodies show many similarities. It seems most efficient for both FDA and the States, especially States that might wish to be both an accreditation body and a certification agency, to pattern the requirements for certification agencies on those for accreditation bodies. In addition, patterning the proposed SAC requirements on those for accreditation bodies permitted the SAC effort to benefit from the experience gained from the agency’s work with the accreditation bodies. The accreditation body requirements have been able to ensure uniform accreditation standards, even though five accreditation bodies are presently involved. Similar certification requirements will help achieve continued assurance that all mammography facilities will meet a uniform minimum national standard of quality with multiple certification agencies.

(Comment 4) One comment noted that State radiation control agencies have requested implementation of MQSA (42 U.S.C. 263b(q)) which provides for certification authority to be given to the States, almost since the implementation of MQSA in 1994. It went on to say, “We feel it is important to note the fact that the proposed regulations are neither complex nor sufficiently voluminous to require more than five years to achieve publication in the Federal Register .”

FDA has been aware since the early days of the program that some States have been very interested in seeing 42 U.S.C. 263b(q) implemented. At a Dallas, TX meeting convened by FDA and the CRCPD in January 1994 to obtain comments from the State radiation control programs on the agency’s plans to implement MQSA, representatives of some States urged FDA to make the implementation of 42 U.S.C. 263b(q) its highest priority.

In establishing its priorities for the implementation of MQSA, the agency had to first focus on those actions required by law. These actions included: (1) Developing quality standards, (2) approving accreditation bodies, (3) certifying facilities, and (4) establishing an inspection program. Other permitted actions, including the transfer of certification authority to interested States, had to be given a lower priority in order to accomplish these mandates. Had FDA focused its attention on implementing 42 U.S.C. 263b(q) rather than on its mandates, access to mammography could have been seriously compromised.

After October 1, 1994, FDA had other legislative mandates to meet that would have a more immediate impact in ensuring quality mammography and were viewed by Congress to be of greater urgency than implementing 42 U.S.C. 263b(q). One of the mandates included the establishment of the annual inspection program, which involved developing criteria and training and equipping a corps of 250 inspectors. Also, in granting FDA special authority for interim regulations, Congress sent a clear message as to the importance it attached to quickly replacing the interim regulations with more comprehensive final regulations. Again, FDA focused its resources toward meeting these mandated requirements. In August 1998, with the final regulations published, FDA increased its efforts to implement 42 U.S.C. 263b(q) by establishing a SAC Demonstration Project based upon valuable information provided by a SAC working group of State, Federal, and professional personnel assembled in June 1996.

The agency believes that its order of priorities was also advantageous for future SAC certification agencies. If the agency had first implemented 42 U.S.C. 263b(q) and then developed its inspection program and the final regulations, State certification agencies would have had to constantly adjust their programs as the FDA efforts unfolded. The agency also believes that the information gained from preliminary activities in the Demonstration Project will, in the long run, save both time and effort for the SAC States and the facilities under the regulatory program. In addition, FDA believes that its implementation priorities will help ensure that the SAC program will be immediately effective in maintaining uniform minimum national standards of quality for mammography.

Section 900.21 defines State eligibility for becoming a certification agency, outlines the required content of the application, and provides details on the general framework for the processing of the application. Some of the comments received on this section were related to the paperwork burden and FDA will discuss them under section VIII of this document. FDA’s response to the other comments follows.

(Comment 5) One respondent suggested that § 900.21(a) be reworded to indicate that States must have the authority to enter into an agreement with FDA, as this implied more than simply saying that the State is capable of entering into an agreement. A second comment stated that FDA should clarify this section.

FDA agrees that clarification is needed. However, the agency believes that the rewording suggested by the first respondent is too limited in that it focuses only on the State having the authority to enter into a legal agreement. The phrase “capable of meeting the requirements” was also intended to mean that the State must have the resources needed to carry out the agreement. Therefore, FDA has revised this provision to read: “(a) Eligibility . State agencies may apply for approval as a certification agency if they have standards at least as stringent as those of § 900.12 of subpart B of this part, qualified personnel, adequate resources to carry out the States as Certifiers' responsibilities, and the authority to enter into a legal agreement with FDA to accept these responsibilities.”

(Comment 6) One comment noted that § 900.21(b)(3)(iii)(F) requires an applicant to submit to FDA information on the qualifications of the applicant’s professional and supervisory staff but does not specify the minimum criteria for these qualifications. The author asked how applicants would know if members of their staff were qualified.

FDA agrees that an interested State might need more information on qualification criteria. However, the agency believes it would be preferable to provide this information through guidance and direct consultation instead of codifying a set of minimum criteria in the regulations. Position categories differ greatly from State to State in their requirements and descriptions. Also, individuals with a variety of backgrounds can perform some of the tasks required of a certification agency. In light of these differences, FDA believes that it needs flexibility in handling the issue of personnel qualifications that would not be available if minimum criteria were established by regulation.

To improve clarity, FDA also made minor editorial changes in some of the provisions of § 900.21.

Section 900.22 outlines the responsibilities of the SAC States and requires them to implement FDA-approved measures to ensure that there will be no conflict of interest or facility bias in carrying out these responsibilities.

(Comment 7) Two comments urged FDA to delete or modify § 900.22(c) so that the certifying agency would not have the responsibility of ensuring that facilities are in compliance with the quality standards. One author went further and made the conflicting statement that “Given that Section 900.23 will ensure that a certifying State meets its responsibilities, subsection (c) is unnecessary.” It was not explained how § 900.23 would ensure that the SAC State would carry out its compliance responsibilities if the author’s previous suggestion were followed that such responsibilities should not be given.

FDA was surprised to receive these comments from representatives of State radiation control programs. Compliance with the quality standards by the facilities is the key factor in achieving the MQSA goal of quality mammography nationwide. Ensuring that the facilities they certify are in compliance with the quality standards is by far the most significant of the activities that the agency is proposing to give to the SAC States. If FDA does not give this authority, it would have to remove not only § 900.22(c) but also § 900.22(d), (e), (f), and (g), which are activities to ensure compliance with the quality standards. This would limit the new responsibilities given to the SAC States to the point that there would be little incentive for States to join the program. From the information supplied by the working group and informal contacts with State personnel, FDA believes that most of the States interested in becoming certification agencies want the responsibility for ensuring that the facilities they certify are in compliance with the quality standards. The agency also notes that 42 U.S.C. 263b(q) specifically references the compliance activities as one of the responsibilities that may be given to States. FDA believes that compliance activities by SAC States are appropriate and therefore did not accept these comments.

(Comment 8) One comment expressed concern about how appeals of any adverse accreditation decisions based on failure of clinical images would be handled by certifying States. The authors recommended that § 900.22(e) should in some way ensure that such appeals do not result in less qualified personnel in a SAC State overruling the “highly qualified” ACR personnel who made the original decision.

FDA agrees that interpreting physicians participating in the appeals process or in decisions about additional mammography review or patient notification should be adequately qualified for those duties. However, FDA believes that it is more appropriate for the agency to ensure that the SAC State has adequately qualified review interpreting physicians through FDA’s application review and oversight functions rather than through regulations.

(Comment 9) One comment expressed concern about the criteria being used to initiate additional mammography review (AMR). The authors stated that they believed that requests for AMR were increasing. They recommend that, as stated in the current MQSA regulations, such reviews should be limited to cases where “mammography quality at a facility has been compromised and may present a serious risk to human health * * *.”

FDA agrees that the above statement is the criterion in § 900.12(j) for the initiation of an AMR. The agency believes that, in accordance with the goal of ensuring uniform minimum standards for quality mammography nationwide, this criterion should continue to apply within the SAC States as well as in the non-SAC States. To ensure that there is no misunderstanding on this point, FDA is modifying § 900.22(f) to the following:

(Comment 10) One comment stated that § 900.22(g) should require patient notification to take place whenever an uncertified facility is found to be operating, regardless of the clinical image review determination of pass or fail. A second comment went further in arguing that if a facility has performed mammography without certification, “additional clinical image review is irrelevant.” The author of that comment urged that the “underlying assumption should be that if a facility has not complied with the fundamental legal requirement of obtaining a certificate prior to performing mammography, there is no assurance that the facility has met any of the applicable standards for certification.” The author went on to say “if standards were not met in obtaining images, additional image review is not going to rectify the problem. Delaying notification of affected patients until additional clinical image review is conducted unnecessarily puts those patients at risk.”

FDA believes that the “underlying assumption” of the author of the second comment is not necessarily correct, especially when a facility has been previously certified, passed its inspections, and the time of operation without a certificate was short. On the other hand, the agency understands the concern about possible risk to patient health if notification is delayed in cases where the facility not only operated without a certificate, but also failed to meet other quality standards, thus resulting in poor quality mammography. This concern, however, must be balanced against the unnecessary stress and alarm that could be caused if patients are notified of the lack of certification when an AMR would have shown that the quality of mammography was acceptable. Furthermore, if this alarm caused patients to undergo unnecessary repeat examinations, additional radiation exposure and expense would result.

Because of the need to balance these two concerns, FDA and the State certification agencies need to have the flexibility to deal with such situations on a case-by-case basis. For this reason, the agency has rejected the suggestion for mandatory patient notification in every case where a facility has operated without a certificate.

(Comment 11) One comment suggested a change in § 900.22(i), which requires certification agencies to obtain FDA authorization “for any changes it proposes to make in any standards that FDA has previously accepted under § 900.21 of this section.” The comment urged that the words “obtain FDA authorization” be changed to “coordinate with FDA to ensure comparability with MQSA requirements.” The reason given was that they did not feel that FDA could “authorize” a State to make changes in its regulations. A second comment expressed a similar concern. The author noted that it would be prudent for a certification agency to discuss contemplated changes in State standards with FDA. FDA then had the right to make it known to the certification agency if it found the changes inconsistent with MQSA. The author also acknowledged that if the certification agency did not cooperate in removing the inconsistency, “FDA can take appropriate action.” The comment concluded with the statement that it would be “inappropriate and unacceptable” for FDA to require formal authorization for changes a State agency may want to make in its standards.

FDA notes that 42 U.S.C. 263b(q) gives the agency the authority to “authorize” a State to “implement the standards” established by FDA. The agency believes that to ensure that these minimum standards are implemented uniformly nationwide, in both SAC States and non-SAC States, the SAC States must have standards in their regulations that are at least as stringent as the MQSA quality standards. This stringency level must exist at the time the State receives certification authority. Therefore, as part of its application, prospective certification agencies must submit their facility mammography standards for review. The State standards must also remain as stringent as the MQSA quality standards for as long as the State is a certification agency. However, this cannot be guaranteed if the State is free to change its standards after only “discussion” or “consultation” with FDA. Therefore, the agency believes that it is not only appropriate, but also required under 42 U.S.C.263b(q), that FDA authorize changes in State standards before they are put into use by the State in its activities as a certification agency.

At the same time, the agency recognizes that the term “authorize,” used in the statute and repeated in the regulations, may be contributing to the concerns of those making the comments because they may be interpreting it as meaning more than is intended. FDA does not intend to say that a State needs “authorization” from the agency to make changes in its regulations. The agency does intend to say, for the reason just discussed, that a SAC State needs FDA approval of its changed regulations before it can use them in the exercise of its SAC authority. To clarify this point, FDA has added a definition of “authorization” as a new § 900.2(bbb).

As further clarification of what was intended with this requirement, the words “before requiring facilities to comply with the changes” have been added at the end of § 900.22(i). This further clarification was prompted by the second comment, which seems to suggest that FDA take action to correct inappropriate State regulation changes, which would affect a State’s SAC role, after they are put into effect, instead of requiring agency authorization before they are put into effect. FDA does recognize that, as suggested by the comment, there are actions available to it, including withdraw the certification agency’s authority to certify, if “discussion” and “coordination” are not effective in maintaining consistency between the State’s standards and the MQSA standards. However, to take such action after the State standards are put into use would be very disruptive to the facilities certified within the State. In most States, it would require some time for the State regulations to be amended to remove the inconsistencies so that the State could become a SAC State again. FDA believes it would be preferable to prevent such problems from occurring rather than to correct them afterward. The most effective way of doing this is to require States to obtain FDA “authorization,” to use the terminology in MQSA, for changes in State standards before using them in their certification activities.

(Comment 12) Two comments urged that inspector training be delegated to the SAC States as a cost saving measure. Although these comments are outside the scope of the regulations, FDA has provided the following answer. As previously stated, the goal of the MQSA program is to ensure that all mammography facilities nationwide meet uniform minimum quality standards. A key factor in achieving this assurance is the uniform application of the MQSA quality standards during inspections. To achieve this uniform application, it is crucial that all inspectors have a uniform training experience. FDA doubts that uniformity of training can be achieved if multiple independent training centers are used in the place of a single center.

The agency also questions whether States can provide training of the same quality and quantity as the FDA training at less cost. FDA provides 6 weeks of specialized training for prospective inspectors. By the completion of their training, the inspectors have benefitted from contact with over a dozen instructors and received about the same number of hours of instruction as given in a typical year of graduate school. In addition, they are required to complete mentored inspections in the field before FDA certifies them as MQSA inspectors. Because the States are already providing the field training, there would be no increase or decrease in cost for that component if the SAC States were given full responsibility for training their inspectors. Any possibility of cost savings by the States would have to come in providing the basic classroom training.

Now that FDA has completed the initial buildup of approximately 250 inspectors, a single series of classes per year, graduating approximately 20 inspectors, is generally sufficient for replacement purposes. Individual States rarely find it necessary to have more than one inspector trained a year. It is unlikely that State training programs would be able to provide comparable training to that described above at a per inspector cost less than that of FDA, because such programs would lose the benefit of economy of scale.

Neither of the comments advocating training of inspectors by States provided any details on the nature of the training they envisioned. Only one provided a cost figure but it contained no details on how it was estimated. The two comments failed to provide a basis for concluding either that State training of inspectors would be less costly than the FDA training or that training at multiple independent centers can be conducted in such a way as to ensure uniform training of inspectors. Therefore, FDA concludes that, for the present, the agency should retain responsibility for training as well as certifying inspectors. However, FDA will re-evaluate this position after the SAC program expands and additional experience is gained.

(Comment 13) One comment noted that in the list of the authorities to be delegated to the States in the preamble to the proposed regulations, the authority for certification is included but a short while later it is stated that “FDA retains authority to suspend or revoke the certificate of facilities within an approved State.” The authors believed that this was in conflict with the law and noted that no reason was given for this decision. The comment asked “What if a State has been given that authority by State law?”

The MQSA statute has provisions for both States and the agency to suspend or revoke certificates in SAC States. States may be approved to carry out the certification program requirements under 42 U.S.C. 263b(q)(1)(A), which includes the suspension and revocation of certificates. As a condition for becoming a State certification agency, an agency must have authority under State statute to accept and carry out the SAC responsibilities. However, 42 U.S.C. 263b(q)(3)(B) specifically states that, in a State given certification authority, FDA may take action under 42 U.S.C. 263b(i), which is the part of 42 U.S.C. 263b giving authority to suspend and revoke certificates. Consequently, there is no conflict with the law.

FDA has written and spoken about dual authority in many public forums. The agency has always asserted that it does not intend to exercise its certification authority in SAC States except in rare circumstances. Thus far, the agency has not used this authority during the SAC Demonstration Project. FDA would also like to make it clear that should it suspend or revoke a certificate in a SAC State on its own authority, the implications of that action are limited to the facility losing its certificate. FDA’s action should not be construed as meaning that it is “taking back” the general authority of the SAC State to suspend or revoke certificates of facilities within its borders. Such a general resumption of authority would occur only if the agency withdraws its approval of the SAC State as a certification agency.

To improve clarity, FDA also made minor editorial changes in some of the provisions of § 900.22.

Section 900.23 of the proposed regulations provides for annual evaluation of the certification agencies by FDA and describes some of the details of the evaluation.

(Comment 14) One comment warned that, to ensure consistency, continuity, and the quality of mammography, FDA would have to impose an extensive and active review of the State certification authorities. The authors believed that the extent of this evaluation was not made clear in the regulations and asked questions about: (1) Whether FDA would conduct followup inspections to validate the certification agency inspections, (2) how frequent the followup inspections would be, and (3) how discrepancies between the State inspections and followup inspections would be handled. The comment also included an expression of concern about the possibility that the cost of an adequate evaluation program might be unreasonable.

FDA notes that FDA auditors accompany State inspectors on selected inspections to observe and, if necessary, correct their performance. In this way, the agency increases the probability that the quality standards are enforced correctly and uniformly throughout the country. Currently one audit inspection is conducted for each State inspector annually. FDA may do additional reviews of specific inspections if there are questions about an inspector’s performance. These audit inspections have been conducted in the SAC States as well as the non-SAC States. Because such inspections are already being performed, there will be no new costs for their performance in SAC States.

The agency also expects to evaluate the performance of the certification agencies through mechanisms similar to those currently used for accreditation bodies. These include reviews of annual reports and other documents provided by the certification agencies. An FDA evaluation team will conduct periodic site visits to the certification agency. At present, quarterly performance reports are required from the SAC States participating in the Demonstration Project. If FDA determines that performance of the certification agency is unsatisfactory, § 900.24 provides the agency with the authority to take appropriate action.

(Comment 15) One comment urged that “The mentioned performance indicators should be delineated in the rule or developed as guidance and available for review and comment and not developed at a further date. Guidance on complying with these indicators could be developed at a later date, but the indicators themselves should be contained within the rule.”

FDA notes that performance indicators were developed for use in the SAC Demonstration Project with the aid of review and comments from the SAC working group. As FDA gained experience from that project, the indicators were modified to make them more appropriate. Further modification may be necessary as the program grows. Consequently, FDA believes that it is premature to codify the performance indicators in regulation. Greater flexibility is available through the guidance process to make adjustments to the indicators more rapidly, should that be necessary.

To improve clarity, FDA also made minor editorial changes in some of the provisions of §  900.23.

Section 900.24 makes a range of actions available to FDA for use when a certification agency is not in substantial compliance with the regulations.

The words “after providing notice and opportunity for corrective action” have been added in the first sentence of § 900.24(a) in order to incorporate a requirement from the statute itself. This requirement was mistakenly left out of the proposed regulation.

(Comment 16) One comment supported implementation of the SAC program providing that it can be carried out “without incurring an undue financial, compliance, or legal burden on the mammography facilities or public.” Under § 900.24(a), FDA may withdraw approval of a certification agency if it fails to correct major deficiencies. Under § 900.24(b), FDA may place a certification agency on probation while it corrects minor deficiencies in the performance of its responsibilities. If a certification agency fails to correct these deficiencies while under probation, FDA may withdraw its approval of the agency. If FDA withdraws approval of a certification agency under either of these circumstances, the facilities certified by the agency would again have to become certified by FDA. There would be some burden on the facilities in making such transfers. FDA will develop administrative procedures for the transfer to minimize the burden to the extent possible. In addition, FDA believes that giving the facilities advanced notice that such a transfer may be necessary, so that the facility may be prepared for the possibility will further minimize the burden. Therefore, a sentence has been added to § 900.24(a) requiring a certification agency that has been ordered to carry out corrective actions for major deficiencies to notify all facilities certified or seeking certification by it of this order. Similarly, a new paragraph (b)(1) has been added to § 900.24 requiring a certification agency to notify all facilities certified or seeking certification by it during the probation period if the agency is placed on probation.

(Comment 17) The introduction to this section states that if “a certification agency is not in substantial compliance with this subpart, FDA may initiate the following action * * *.” One comment urged that the agency define “substantial compliance” or delete the word “substantial.”

FDA believes that to make either of these changes would remove the flexibility that it needs to respond appropriately to a wide variety of conditions. Deleting the word “substantial” would mean that any deviation from the requirements, no matter how minor, would require action against the certification agency. On the other hand, because it would be impossible to foresee all possible situations in which action might have to be considered, any definition of “substantial compliance” would inevitably be incomplete. In order to retain the flexibility to evaluate each individual situation and to arrive at the course of action most appropriate for it, FDA rejects this comment.

(Comment 18) One comment urged FDA to address the use of “interim notices” in the regulations instead of in guidance, as it is at present. The authors noted that their State planned on promulgating regulations to include criteria and processes for issuing interim notices and stated the opinion that most State administrative procedure statutes would require similar regulations for their certification agencies. They urged FDA to include the interim notice process in its own rules to serve as a model for the State rules. A second comment suggested clarifying the term “interim notice” by terming it “interim notice of certification.” A third comment urged FDA to differentiate between the issuance of interim notices to new facilities under a provisional status and existing facilities that receive interim notices due to delays or failure in the accreditation process.

Interim notices are issued by FDA or a certification agency to a facility in a variety of situations, including accreditation delays, nonreceipt of a certificate, and to bridge the gap of time between certificate issuance and facility receipt of a certificate. The notice permits a facility to perform mammography while waiting for the certificate to arrive by mail. FDA devised this process as a way to handle the immense task of completing the accreditation and certification of thousands of facilities in a relatively short period of time during the early days of the MQSA program. FDA retained the process after those early years as the accreditation bodies continued to make adjustments to their fluctuating workload. Situations sometimes arose where without such a mechanism, a facility would have to cease operating for a period of time, even though its staff had carried out their responsibilities properly and promptly.

FDA notes that it is reconsidering the future use of interim notices separately from the development of the SAC regulations. Therefore, it is premature to respond to this issue. However, in its examination of the interim notice issue, FDA will consider the specific comments made.

The agency also notes that interim notices are not presently mentioned in the SAC regulations. The interim notice process could not be added to the regulations without giving the public the opportunity to comment. If such regulations were incorporated into the SAC regulations, they would have to be reproposed. Thus, the publication of the final SAC regulations would be delayed for at least 6 months to 1 year, which many States would find unacceptable. If FDA determines that there is a need to add regulations on interim notices, the agency will publish a proposal and give the public an opportunity to comment. With respect to the plans of one State to issue regulations of its own with respect to interim notices, the agency notes that the mammography regulations of a State acting as a certification agency must continue to be at least as stringent than those of FDA. If a State proceeds with its own interim notice regulations, it may have to amend those regulations after FDA makes its decision on the future of interim notices or may find that its regulations do not satisfy MQSA’s SAC requirements because they are less stringent than the MQSA regulations. With these considerations in mind, States interested in such regulations may wish to wait until FDA makes a final decision on this issue.

The agency has determined under 21 CFR 25.30(g) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA has examined the impacts of the final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612 (as amended by subtitle D of the Small Business Regulatory Fairness Act of 1996 (Public Law 104-121)), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). FDA published an impact analysis in association with the proposed regulations. After a thorough analysis of the comments received on the impact analysis as described below, FDA concluded that none of the comments made a convincing case for changing either the methods used in the cost analysis or the conclusions drawn from it. Therefore, FDA has concluded that this final rule is consistent with the regulatory philosophy and principles identified in the Executive order. In addition, the final rule is not a significant regulatory action as defined by the Executive order and so is not subject to review under the Executive order. A full discussion of the comments FDA received on the analysis follows.

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. The final rule will have no significant economic impact on a substantial number of small entities because it applies only to States wishing to become certification agencies. However, as part of its Regulatory Impact Study, FDA did analyze the potential for changes in costs to facilities. As will be discussed later in the worst case revealed by the analysis, some mammography facilities may experience a small increase in cost. However, because States are not likely to enter the program unless their entry will be of benefit to the facilities within their borders, a cost savings to the public as a whole and to mammography facilities is more likely to occur. Therefore, the agency certifies that the final rule will not have a significant

FDA realized that the cost impact of these regulations would be heavily dependent upon the number and characteristics of the States that choose to participate in the SAC program. However, because participation is entirely voluntary on the part of the States, FDA could not determine in advance which States would decide to become SAC States. The first assumptions made, therefore, were related to which States might become SAC States. FDA used three scenarios to establish the possible range of the impact of these regulations.

Scenario 1—FDA assumed only the States of Iowa and Illinois, the current participants in the SAC Demonstration Project, would choose to participate in the program.

Scenario 2—FDA assumed that six additional States, which have in the past indicated significant interest in becoming SAC States, would join Iowa and Illinois in the SAC program.

Scenario 3—FDA assumed that seven additional States would join the eight States included in the scenario 2 analysis. These additional States have indicated some interest in becoming SAC States when the program is fully implemented.

The selection of the States for these scenarios does not indicate either a commitment by the States to participate or a commitment by FDA to accept their participation in a future SAC program. Both the six States added in scenario 2 and the seven added in scenario 3 have a wide geographic distribution and the number of mammography facilities within their borders ranges from relatively large to relatively small. Although the basis of selection was FDA’s perception of States' interest, the resulting groups are representative of the country as a whole.

Funding to support the MQSA activities pre-SAC comes from two sources: Inspection fees and federally appropriated funds. By statute, FDA must pay for all inspection costs by collecting fees from the mammography facilities. The present inspection fee is $1,549 per facility plus an additional $204 per mammography unit for each unit beyond the first at the facility. Appropriated funds support all activities other than those that are covered by this fee. In addition, an amount equal to the inspection fee for each governmental entity is allotted from appropriated funds to support the inspection program for those facilities. These sources of funding will continue to be relied upon for support of MQSA activities in States that choose notto enter the SAC program.

If a State becomes a SAC State, the nongovernmental facilities within that State will pay an inspection support fee to FDA to reimburse the agency, as required by statute, for the inspection support services that the agency will continue to provide. This inspection support fee has been initially set at $509 per facility, regardless of the number of mammography units in the facility. As with the inspection fees in non-SAC States, this fee will be collected in a given year only from those facilities in SAC States that were actually inspected during that year. The same amount will also be provided from appropriated funds for each governmental entity inspection within the SAC States.

The SAC State will determine how the responsibilities that it has assumed will be funded. For example, the funding could come from State appropriations, a certification fee charged by a SAC State, registration fees, or a combination of sources.

FDA carried out the cost impact analysis in several phases. In phase 1, the costs or savings from the SAC program to the public as a whole were estimated by comparing FDA’s pre-SAC costs (for performing various functions that would be given to the States) with the post-SAC costs for FDA and SAC States in each of the three scenarios. In this initial analysis, the agency assumed that the inspection fee would remain unchanged from the present value. The results of this phase are shown in tables 1 through 3 of this document.

The second phase of the analysis looked at the impact that would result on the costs or savings to the public as a whole if inspection fees had to be changed. As States enter the SAC program, their facilities will be paying FDA the lower inspection support fee instead of the inspection fee. The funds available for the FDA inspection program thus will decrease as more States become SAC States. On the other hand, the cost of the FDA inspection program will also decrease because it will no longer include the cost of contracting with the States for inspecting facilities in the SAC States. The relative amounts of the decreases in funds available and inspection costs will be highly dependent upon which States enter the SAC program. If a State with a low inspection cost per facility becomes a SAC State, the decrease of funds available to FDA will be more than the decrease in program costs. As a result, the inspection fee in the non-SAC States will have to increase in order to provide sufficient funds to FDA to fulfill its MQSA inspection responsibilities. If a State with a high inspection cost per facility enters the SAC program, the reverse will be true. Table 4 of this document shows the estimated change in the funds needed from inspection fees in each of the three scenarios, and the impact this would have on the savings or cost to the public as a whole.

In the third phase of the analysis, attention turned from the economic impact of the SAC regulations on the public as a whole to the impact on that portion of the public represented by small entities, as required by the Regulatory Flexibility Act. The agency considered all of the approximately 10,000 mammography facilities in the country to be small entities for the purposes of the analysis. In the case of facilities in the non-SAC States, this impact would manifest itself as an increase or decrease in the inspection fee, depending upon whether the second phase of the analysis showed that more or less money was needed to support the FDA inspection program.

In the case of facilities in the SAC States, the analysis first involved determining the difference between the savings to facilities from no longer having to pay the FDA MQSA inspection fee to the costs to the facilities for the inspection support fee and the State costs. The difference was then divided by the number of SAC State facilities. Table 5 of this document shows the savings or costs to the small facilities in the non-SAC and SAC States under each of the three scenarios.

The third phase of the analysis estimated the average impact on the SAC State facilities. The fourth phase showed that depending upon the State in which it was located, the actual impact upon an individual facility could vary widely. The amount of this impact was again highly dependent upon the cost of inspections within each State. The range of the impact was determined by comparing the situations for the lowest and highest inspection cost States among the 15 States included in scenario 3.

The fifth phase of the analysis recognized the fact that although all mammography facilities are assumed to be small entities, they actually vary greatly in size. To further evaluate the impact on the smallest of the mammography facilities, the increase or decrease in per facility costs under the SAC program were compared to the facility revenues derived from mammography for a low volume mammography facility. For this comparison, a model developed by the Eastern Research Group was used. This model estimated that the lowest volume mammography facility (performing less than 300 mammograms annually) would have approximately $24,000 in annual revenues from mammography.

The projected reporting and recordkeeping for SAC States is discussed in detail in the Paperwork Reduction Act (the PRA) of 1995 section. The rule imposes no new reporting and recordkeeping requirements on mammography facilities, and, thus, no additional professional skills are necessary.

Tables 1 through 3 of this document give the results from the first phase of the analysis. These results support the initial statement that the potential net savings or cost to the public from the SAC program is heavily dependent upon the number and characteristics of the States that choose to become SAC States. All three of the scenarios show that there is the potential for savings to the public from the SAC program. However, the estimated amount of the savings is not proportional to either the number of States in the program or the number of facilities.

Whether the SAC program will save (or cost) the public more money than the pre-SAC program depends upon whether SAC States can carry out their SAC functions more or less economically than these functions were carried out within their borders pre-SAC. The biggest component of the cost to the public pre-SAC is the inspection fee. This fee is a national average fee that is the same for all facilities no matter where they are located. On the other hand, the actual cost of performing the inspection varies widely from State to State. If a State whose inspection cost is significantly lower than the national average becomes a SAC State, there is an increased probability that the total cost per facility for inspections, the other State functions, and the inspection support fee will be less than the inspection fee that the facility paid pre-SAC. If so, there will be net savings to the public from that State becoming a SAC State. On the other hand, in States with high inspection costs, the combined cost per facility of the inspections, the other functions, and the inspection support fee may exceed the inspection fee, in which case there will be a net cost to the public arising from that State being in the SAC program.

The bulk of the SAC facilities in scenario 1 are in a State with an inspection cost below the national average. It is not surprising then to find net savings in scenario 1. The inspection costs in the States added in scenario 2 range from slightly lower than to a little higher than the average. Again, it is not surprising to find that there is a net savings and, because the number of facilities in SAC States is greatly increased, it is also not surprising to find that the total net savings is significantly increased over scenario 1. On the other hand, in scenario 3, three of the States added have per facility inspection costs that are well above the national average. Thus, there is an increase in cost to the public arising from these States being in the program. The impact of their participation is magnified because these three States include over two thirds of the facilities added in scenario 3. As a result, there are lower net savings in scenario 3 than in scenario 2.

The agency based the savings estimated in the first phase of the analysis upon the assumption that the inspection fee would not increase with the implementation of the SAC program. In the second phase of the analysis, however, FDA estimated additional amounts of $127,593, $563,710, and $605,208, in scenarios 1, 2, and 3, respectively, would have to be raised by increasing fees in order to provide sufficient funds for the FDA inspection program. Table 4 of this document shows the effect of applying these corrections to the previously estimated savings to the public as a whole. The savings to the public in scenario 1 are reduced but still significant, those in scenario 2 virtually disappear, and in scenario 3 there would be an increase in cost.

Beginning with phase 3 of this analysis, the agency turned its attention from the economic impact on the public as a whole to the impact on that portion of the public represented by the mammography facilities. Table 5 of this document shows the estimated per facility savings or increased costs for facilities in both SAC and non-SAC States under the three scenarios.

Agri Laboratories, Ltd., P.O. Box 3103, St. Joseph, MO 64503, filed a supplement to ANADA 200-066 that provides for use of AGRIMYCIN 343 (oxytetracycline HCl) Soluble Powder for making medicated drinking water for the treatment of various bacterial diseases of livestock. The supplemental ANADA provides for a zero-day withdrawal time after the use of the product in the drinking water of turkeys and swine. The supplemental application is approved as of October 4, 2001, and the regulations are amended in 21 CFR 520.1660d to reflect the approval.

Section 520.1660d is also being amended to reflect approval of a 5-pound pail size, which was approved under ANADA 200-066 on June 15, 1994.

In accordance with the freedom of information provisions of 21 CFR part 20 and 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

The agency has determined under 21 CFR 25.33(a)(1) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

1. The authority citation for 21 CFR part 520 continues to read as follows:

AMDUCA (Public Law 103-396) was signed into law on October 22, 1994. It amended the Federal Food, Drug, and Cosmetic Act (the act) to permit licensed veterinarians to prescribe extralabel uses of approved animal and human drugs in animals. However, section 512(a)(4)(D) of the act (21 U.S.C. 360b(a)(4)(D)) gives us authority to prohibit an extralabel drug use in animals if, after affording an opportunity for public comment, we find that such use presents a risk to the public health.

We published the implementing regulations (codified at part 530 (21 CFR part 530)) for AMDUCA in the Federal Register of November 7, 1996 (61 FR 57732). The sections regarding prohibition of extralabel use of drugs in food-producing animals are found at §§ 530.21 and 530.25. These sections describe the basis for issuing an order prohibiting an extralabel drug use in food-producing animals and the procedure to be followed in issuing an order of prohibition. We may issue a prohibition order if we find that extralabel use in animals presents a risk to the public health. Under § 530.3(e), this means that we have evidence that demonstrates that the use of the drug has caused or likely will cause an adverse event.

Section 530.25 provides for a public comment period of not less than 60 days. It also provides that the order of prohibition will become effective 90 days after the date of publication, unless we revoke the order, modify it, or extend the period of public comment. The list of drugs prohibited from extralabel use is found in § 530.41. The current list of drugs prohibited from extralabel use in food-producing animals includes furazolidone and nitrofurazone, but it contains the parenthetical statement “(except for approved topical use)”.

In 1991, and after a full evidentiary hearing, we withdrew the approvals for furazolidone and nitrofuranzone labeled for antiprotozoal use in a wide variety of conditions in poultry and swine. (See the Federal Register of August 23, 1991 (56 FR 41902).) These withdrawals were based on our determination that use of the drugs resulted in residues in edible tissues for human food and that residues of these drugs were not shown to be safe, in part because both drugs are carcinogenic. We did not, however, withdraw the approvals of these products for use in nonfood animals or for topical use in food-producing animals. Moreover, while our current regulations in § 530.41 prohibit extralabel use of approved furazolidone and nitrofurazone products in food-producing animals, this prohibition does not extend to topical use in food-producing animals. These topical uses in food-producing animals were allowed because there was no evidence that such use of furazolidone and nitrofuranzone resulted in residues in edible tissues.

However, a recent carbon-14 (C-14) radio-label residue depletion study that we conducted showed that detectable levels of nitrofuran derivatives are present in edible tissues (milk, meat, kidney, liver) of cattle treated by the ocular (eye) route (Ref. 1). This study, coupled with our findings in our prior withdrawal action, means that residues, which are carcinogenic and have not been shown to be safe, will likely be present at slaughter as a result of topical uses of nitrofurans, including furazolidone and nitrofurazone, in food-producing animals.

We advised all manufacturers of nitrofuran drugs that were approved for ocular use in food-producing animals of the evidence and the manufacturers revised their labels to remove those indications. (See, for example, 65 FR 41587 (July 6, 2000).) Some lot numbers of these drugs may remain in commercial distribution channels with the former labels that contain indications for food-producing animals. These products, however, are not approved for use in food-producing animals and, therefore, are adulterated and misbranded. Some topical and ophthalmic nitrofuran products are still approved for certain uses in nonfood animals. Under the current regulations governing extralabel use, these remaining approved topical and ophthalmic products are not prohibited from extralabel topical use in food-producing animals. However, as stated previously, there is evidence that these uses will result in residues in edible tissues. Because of the likelihood of this adverse event, by this order of prohibition, we are prohibiting all extralabel uses, including extralabel topical use, in food-producing animals of nitrofuran products that are approved for use in nonfood animals or humans. Therefore, no nitrofuran product may be legally used in food-producing animals.

We are providing 60 days from the date of this publication for you to comment. The order will become effective May 7, 2002, unless we revoke or modify the order or extend the comment period. You may submit written or electronic comments to the Dockets Management Branch (address above) by April 8, 2002. Please identify your comments with the docket number found in brackets in the heading of this document. You may read any comments that we receive at our Dockets Management Branch reading room (address above). The reading room is open from 9 a.m. to 4 p.m., Monday through Friday, except for Federal holidays.

Therefore, I hereby issue the following order under section 512(a)(4)(D) of the act and 21 CFR 530.21 and 530.25. We find that extralabel use of nitrofurans in food- producing animals likely will cause an adverse event, which constitutes a finding under section 512(a)(4)(D) of the act that extralabel use of these drugs in food-producing animals presents a risk to the public health. Therefore, we are prohibiting all extralabel uses of these drugs in food-producing animals.

The following information has been placed on display in the Dockets Management Branch (address above). You may view it between 9 a.m. and 4 p.m., Monday through Friday.

2. Section 530.41 Drugs prohibited for extralabel use in animals is amended in paragraphs (a)(7) and (a)(8) by removing the parenthetical phrase “(except for approved topical use)”.

Subchapter C of chapter 33 of the Internal Revenue Code (Code) imposes tax on the amount paid for: taxable transportation by air of any person (section 4261(a)); each domestic segment of taxable transportation (section 4261(b)); use of international air travel facilities (section 4261(c)); and taxable transportation of property by air (section 4271(a)) (air transportation excise taxes). Section 6071 generally provides that return filing dates are prescribed by regulation. Under § 40.6071(a)-2, a return of air transportation taxes was due by the last day of the second month following the quarter for which it was made. On August 8, 2001, the regulations were amended to remove this provision but the provision remained in effect for the third calendar quarter of 2001. Thus, the return of air transportation taxes for that quarter was due on November 30, 2001.

Under section 6151, generally, tax must be paid at the time the return is required to be filed. In general, under section 6601, interest must be paid on any amount of tax not paid by the last day for payment. Accordingly, if the return due date prescribed in § 40.6071(a)-2 remains in effect for the third calendar quarter of 2001, interest would be imposed on third-quarter air transportation excise taxes not paid by November 30, 2001.

Section 301(a) of the Air Transportation Safety and System Stabilization Act (the Act), Public Law 107-42 (115 Stat. 236) provides relief to eligible air carriers with respect to the semimonthly deposits required for air transportation excise taxes. The relief contained in the Act applies to deposits only and does not extend the return filing and associated payment date. By extending the filing date for eligible air carriers, these final regulations will provide return filing, payment, and interest relief consistent with the deposit relief provided for air transportation excise taxes by section 301(a) of the Act. Notice 2001-77 (2001-50 I.R.B. 576) provided that regulations would change the third calendar quarter 2001 filing date.

These final regulations change the date by which eligible air carriers reporting tax that includes the air transportation excise taxes imposed by subchapter C of chapter 33 must file excise tax returns for the third quarter of 2001. The due date for these returns is postponed from November 30, 2001, to January 15, 2002. For these taxpayers, payment of their third-quarter excise tax liability may also be delayed until January 15, 2002.

This Treasury decision is necessary to provide immediate relief to the eligible air carriers affected by the events of September 11, 2001. This Treasury decision provides additional time for eligible air carriers to file the third calendar quarter 2001 Form 720 and to pay certain taxes due with the return. Therefore, it has been determined that notice and public comment are unnecessary and contrary to the public interest and a delayed effective date under section 553(d) of the Administrative Procedure Act (5 U.S.C. chapter 5) is not required. Also, it has been determined that section 553(b) of the Administrative Procedure Act does not apply to these regulations and, because these regulations do not impose on small entities a collection of information requirement, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. It also has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. Pursuant to section 7805(f) of the Code, these final regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

The principal author of these regulations is Susan Athy, Office of Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development.

This document is available as an electronic file on The Federal Bulletin Board the day of publication in the Federal Register . By modem, dial 202/512-1387 and type “/GO FAC,” or call 202/512-1530 for disk or paper copies. This file is available for downloading without charge in ASCII and Adobe Acrobat7 readable (*.PDF) formats. For Internet access, the address for use with the World Wide Web (Home Page), Telnet, or FTP protocol is: fedbbs.access.gpo.gov. This document and additional information concerning the programs of the Office of Foreign Assets Control are available for downloading from the Office's Internet Home Page: http://www.treas.gov/ofac, or in fax form through the Office's 24-hour fax-on-demand service: call 202/622-0077 using a fax machine, fax modem, or (within the United States) a touch-tone telephone.

On January 18, 2001, the President issued Executive Order 13194 (66 FR 7389, Jan. 23, 2001), taking into account United Nations Security Council Resolution 1306 of July 5, 2000. This order declared a national emergency in response to the actions of the insurgent Revolutionary United Front in Sierra Leone (“RUF”) and prohibits the importation into the United States of rough diamonds from Sierra Leone that have not been controlled by the Government of Sierra Leone through its Certificate of Origin regime. The stated purpose of the order is to ensure that the direct or indirect importation into the United States of rough diamonds from Sierra Leone will not contribute financial support to the RUF, whose illicit trade in rough diamonds fuels the civil war in Sierra Leone by funding the rebels' aggressive actions and procurement of weapons, while at the same time seeking to avoid undermining the legitimate diamond trade or diminishing confidence in the integrity of the legitimate diamond industry.

On May 22, 2001, the President issued Executive Order 13213 (66 FR 28829, May 24, 2001), taking into account United Nations Security Council Resolution 1343 of March 7, 2001. This order expanded the scope of the national emergency declared in Executive Order 13194 to respond to, among other things, the Government of Liberia's complicity in the RUF's illicit trade in rough diamonds through Liberia. Executive Order 13213 prohibits the direct or indirect importation into the United States of all rough diamonds from Liberia, whether or not such diamonds originated in Liberia.

Both Executive orders authorize the Secretary of the Treasury, in consultation with the Secretary of State, to promulgate rules and regulations as may be necessary to carry out the purposes of the orders. To implement the orders, the Treasury Department's Office of Foreign Assets Control, acting under authority delegated by the Secretary of the Treasury, is promulgating the Rough Diamonds (Sierra Leone & Liberia) Sanctions Regulations (the “Regulations”).

Section 591.201 of subpart B of the Regulations implements section 1 of Executive Order 13194 and section 1 of Executive Order 13213 by prohibiting (1) subject to limited exceptions, the direct or indirect importation into the United States of all rough diamonds from Sierra Leone on or after January 19, 2001, and (2) the direct or indirect importation into the United States of all rough diamonds from Liberia on or after May 23, 2001. Section 591.202 implements section 2 of Executive Order 13194 by excepting from the import prohibition those importations of rough diamonds from Sierra Leone that are controlled through the Certificate of Origin regime of the Government of Sierra Leone, provided that the diamonds have not physically entered the territory of Liberia.

Section 591.203 implements section 3 of Executive Order 13194 and section 2 of Executive Order 13213 by prohibiting any transaction by a United States person or within the United States that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the order. The regulation also prohibits any conspiracy formed to violate any of the prohibitions of the Executive orders.

Subpart C of part 591 provides definitions of terms used in the Regulations. Subpart D sets forth interpretive guidance for the Regulations. For example, § 591.403 makes clear that any transaction that is ordinarily incident to a licensed transaction and necessary to give effect to the licensed transaction is also authorized.

Subpart E relates to licenses, authorizations, and statements of licensing policy. Section 591.501 refers the reader to subpart D of part 501 of 31 CFR chapter V for procedures relating to general licenses and the issuance of specific licenses to authorize transactions otherwise prohibited under part 591 but found to be consistent with U.S. policy. Subpart F refers the reader to subpart C of part 501 of 31 CFR chapter V for provisions relating to required records and reports. Penalties for violations of the Regulations are described in subpart G of the Regulations.

Because the promulgation of the Regulations pursuant to Executive Orders 13194 and 13213 involves a foreign affairs function, the provisions of Executive Order 12866, and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date, are inapplicable. However, because of the importance of the issues raised by the Regulations, this rule is issued in interim form and comments will be considered in the development of final regulations. Accordingly, the Department encourages interested persons who wish to comment to do so at the earliest possible time to permit the fullest consideration of their views. Comments may address the impact of the Regulations on the submitter's activities, whether of a commercial, non-commercial, or humanitarian nature, as well as changes that would improve the clarity and organization of the Regulations.

The period for submission of comments will close April 8, 2002. The Department will consider all comments received before the close of the comment period in developing final regulations. Comments received after the end of the comment period will be considered if possible, but their consideration cannot be assured. The Department will not accept public comments accompanied by a request that a part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. The Department will return such comments and materials when submitted by regular mail to the person submitting the comments and will not consider them in the development of final regulations. In the interest of accuracy and completeness, the Department requires comments in written form.

All public comments on these regulations will be a matter of public record. Copies of public record concerning these regulations will be made available not sooner than May 7, 2002, and will be obtainable from OFAC's website ( http://www.treas.gov/ofac ). If that service is unavailable, written requests for copies may be sent to: Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Ave. NW., Washington, DC 20220, Attn: Chief, Records Division.

Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

The collections of information related to the Regulations are contained in 31 CFR part 501 (the “Reporting and Procedures Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been previously approved by the Office of Management and Budget under control number 1505-0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

On October 30, 2000, the Floyd D. Spence National Defense Authorization Act for Fiscal Year 20012 (NDAA) (Public Law 106-398) was signed into law. This interim final rule implements section 722(b) of this Act, which amended section 1079 of Title 10, United States Code, by adding subsection (p). It requires a TRICARE Prime-like benefit for active duty family members residing with their active duty Uniformed Services sponsor eligible for TRICARE Prime Remote, as defined by section 1074(c)(3) of Title 10, United States Code.

A member of the uniformed services who is on active duty is entitled to medical and dental care in any facility of any Uniformed Service u8nder 10 U.S.C. 1074(a). Although members on active duty have this entitlement, members of the Uniformed Services who qualify for TRICARE Prime Remote may not be required to receive routine primary medical care at a military treatment facility. TRICARE Prime Remote (TPR) was established under 10 U.S.C. 1074(c) to provide a TRICARE Prime-like benefit. As defined by 10 U.S.C. 1074(c)(3), the benefit is for active duty service members (ADSM) assigned to remote locations, who pursuant to that assignment, work and reside at a location more than 50 miles, or approximately one hour of driving time, from the nearest military treatment facility. ADSM who are TPR-eligible are required to enroll in TPR unless another enrollment site designated by the services is available.

The TPR ADSM is required to use the network providers, including network Veteran's Affairs facilities, provided the network providers have capacity and meet the TRICARE drive time standards of 30 minutes for primary care and one hour for specialty care.

In order to be eligible for TRICARE Prime Remote for Active Duty Family Members (TPRADFM), active duty family members (ADFM) must reside with a TPR-eligible and enrolled ADSM. For purposes of TPRADFM, ADFM include the spouse and children of an active duty member and certain unmarried dependents placed in the legal custody of the active duty member as a result of a court order for a period of at least 12 months. ADFM must enroll in TPRADFM to receive the TPRADFM benefit. ADFM who elect not to enroll, or whose sponsor has not enrolled in TPR, may use the TRICARE Standard benefit, or enroll in TRICARE Prime where available. Under section 722(c) of the Floyd D. Spense National Defense Authorization Act for Fiscal Year 2001 (NDAA), the waiver of TRICARE Standard cost-shares and deductibles that apply during the interim period between the enactment of the NDAA and implementation of TPRADFM will expire upon implementation of this rule. TPRADFM eligible beneficiaries may elect not to enroll in TPRADFM, and instead receive benefits under the Standard program, but will be required to pay the associated TRICARE Standard cost-shares and deductibles.

Section 1079(p) of Title 10, subject to such exceptions as the Secretary considers necessary, requires coverage for medical care under this section for dependents and standards with respect to timely access to such care to be comparable to coverage and standards under the managed care option of the TRICARE program known as TRICARE Prime. Therefore, the requirements and benefits of TPRADFM shall be similar to TRICARE Prime under Section 199.17 to the maximum extent practicable.

For primary care, family members enrolled in TPRADFM will be assigned or be allowed to select a primary care manager when available through the TRICARE civilian provider network. The primary care manager may be an individual physician, a group practice, a clinic, a treatment site or other designation. If a network provider is not available to serve as their primary care provider, the TPRADFM enrollee will be able to utilize any local TRICARE authorized provider for primary care services.

Family members enrolled in TPRADFM will have the same cost-shares and deductibles as those enrolled in TRICARE Prime. If a TRICARE network primary care provider is available to serve as their primary care manager (PCM); TPRADFM enrollees must select or be assigned to the PCM. Enrollment with the network PCM and compliance with the program requirements will result in the TPRADFM enrollee having no cost-shares or deductibles for the care provided. A TPRADFM enrollee who does not enroll with a network provider when one is available to serve as their primary care manager is subject to higher point-of-service deductible and cost sharing requirements under Section 199.17. Similarly, when a TPRADFM is enrolled with a TRICARE network PCM and receives health care services for a provider other than their PCM, he/she will be responsible for the point-of-service cost-shares and deductibles under Section 199.17. If a network provider is not available to serve as their primary care manager, a TPRADFM enrollee may use any local TRICARE authorized provider for their primary care, and will have no cost-shares or deductibles for the care provided.

TPRADFM enrolled members will be able to access their primary care provider without pre-authorization. Referrals to specialists will require a pre-authorization by the regional managed care support contractor for medical appropriateness and necessity. To the greatest extent possible, contractors will assist in finding a TRICARE network or authorized provider within the TRICARE Prime drive time access standards of one hour for specialty care. Contractors will not be required to establish new network relationships for TPRADFM enrollees, except where contractually required or deemed economically feasible. TPRADFM members are required to use TRICARE network providers for specialty-care where available within TRICARE access standards or pay the point-of-service deductible and cost-shares under Section 199.17. They may use any TRICARE authorized provider to obtain specialty-care where a network provider is not available with access standards, once they have received authorization and assistance in finding a provider by the contractor.

Executive Order 12866 requires that a comprehensive regulatory impact analysis be performed on any economically significant regulatory action, defined as one that would result in an annual effect on the economy of $100 million or more, or have other substantial impacts. This rule is not an economically significant regulatory action and it will not significantly affect a substantial number of small entities. The Regulatory Flexibility Act (RFA) requires that each Federal agency prepare, and make available for public comment, a regulatory flexibility analysis when the agency issues a regulation which would have a significant impact on a substantial number of entities.

This rule imposes no burden as defined by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3511).

This rule is being implemented as an interim final rule, with comment period, as an exception to our normal practice of soliciting public comment prior to issuance. The Acting Assistant Secretary of Defense (Health Affairs) has determined that following the standard practice in this case would be impracticable, unnecessary, and contrary to the public interest. This rule implements statutory requirements that became effective October 30, 2000, for a program Congress intended to become operational one year later. This rule implements the new statutory program without significant embellishment of the legislative requirements. Public comments are welcome and will be considered for possible revisions in the rule.

This rule has been designated as significant and has been reviewed by the Office Management and Budget as required under the provisions of Executive Order 12866.

As authorized by 5 U.S.C. 553, we did not publish a notice of proposed rulemaking (NPRM) for this regulation. In keeping with the requirements of 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM, and that under 5 U.S.C. 553 (d)(3), good cause exists for making this regulation effective less than 30 days after publication in the Federal Register .

On September 11, 2001, two commercial aircraft were hijacked from Logan Airport in Boston, Massachusetts and flown into the World Trade Center in New York, New York inflicting catastrophic human casualties and property damage. A similar attack was conducted on the Pentagon in Arlington, Virginia on the same day. National security officials warn that future terrorist attacks against civilian targets may be anticipated. A heightened level of security has been established concerning all vessels operating in the waters adjacent to the San Onofre Nuclear Generating Station area. This security zone is needed to protect the United States and more specifically the personnel and property of the San Onofre Nuclear Generating Station.

The delay inherent in the NPRM process, and any delay in the effective date of this rule, is contrary to the public interest insofar as it may render individuals and facilities within and adjacent to the San Onofre Nuclear Generating Station vulnerable to subversive activity, sabotage or terrorist attack. The measures contemplated by the rule are intended to prevent future terrorist attacks against individuals and facilities within or adjacent to the San Onofre Nuclear Generating Station facility. Immediate action is required to accomplish this objective. Any delay in the effective date of this rule is impracticable and contrary to the public interest.

On September 11, 2001, terrorists launched attacks on civilian and military targets within the United States killing large numbers of people and damaging properties of national significance. Vessels operating near the San Onofre Nuclear Generating Station present possible platforms from which individuals may gain unauthorized access to this installation, or launch terrorist attacks upon the waterfront structures and adjacent population centers.

As part of the Diplomatic Security and Antiterrorism Act of 1986 (Pub. L. 99-399), Congress amended The Ports and Waterways Safety Act (PWSA) to allow the Coast Guard to take actions, including the establishment of security and safety zones, to prevent or respond to acts of terrorism against individuals, vessels, or public or commercial structures. 33 U.S.C. 1226. The terrorist acts against the United States on September 11, 2001, have increased the need for safety and security measures on U.S. ports and waterways. In response to these terrorist acts, and in order to prevent similar occurrences, the Coast Guard is establishing a temporary security zone in the navigable waters of the United States adjacent to the San Onofre Nuclear Generating Station.

This temporary security zone is necessary to provide for the safety and security of the United States of America and the people, ports, waterways and properties within the San Onofre Nuclear Generating Station area. This temporary security zone, which prohibits all vessel traffic from entering, transiting or anchoring within a one nautical mile radius of San Onofre Nuclear Generating Station, is necessary for the security and protection of the San Onofre Nuclear Generating Station. This zone will be enforced by the official patrol (Coast Guard commissioned, warrant or petty officers) onboard Coast Guard vessels and patrol craft. The official patrol may also be onboard patrol craft and resources of any government agency that has agreed to assist the Coast Guard in the performance of its duties.

Persons and vessels are prohibited from entering into this security zone unless authorized by the Captain of the Port or his designated representative. Each person and vessel in a security zone must obey any direction or order of the COTP. The COTP may remove any person, vessel, article, or thing from a security zone. No person may board, or take or place any article or thing on board any vessel in a security zone without the permission of the COTP.

Pursuant to 33 U.S.C. 1232, any violation of the security zone described herein, is punishable by civil penalties (not to exceed $27,500 per violation, where each day of a continuing violation is a separate violation), criminal penalties (imprisonment for not more than 6 years and a fine of not more than $250,000), in rem liability against the offending vessel, and license sanctions. Any person who violates this regulation, using a dangerous weapon, or who engages in conduct that causes bodily injury or fear of imminent bodily injury to any officer authorized to enforce this regulation, also faces imprisonment up to 12 years (class C felony).

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

Due to the recent terrorist actions against the United States the implementation of this security zone is necessary for the protection of the United States and its people. Because these security zones are established in an area near the San Onofre Nuclear Generating Station that is seldom used, the Coast Guard expects the economic impact of this rule to be so minimal that full regulatory evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary.

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

This security zone will not have a significant impact on a substantial number of small entities because the portion of the security zone that affects the San Onofre Nuclear Generating Station area is infrequently transited. Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this temporary final rule will not have a significant economic impact on a substantial number of small entities.

In accordance with § 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard offers to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process. If your small business or organization is affected by this rule and you have questions concerning its provisions or options for compliance, please contact Petty Officer Chris Farrington, Marine Safety Office San Diego, at (619) 683-6495.

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. 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 and have determined that this rule does not have implications for federalism.

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

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

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

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

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 have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph (34), of Commandant Instruction M16475.1D, this rule, which establishes a security zone, is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES.

On September 21, 2001, we issued a similar temporary final rule under docket COTP San Francisco Bay 01-009, and published this rule in the Federal Register (66 FR 54663, Oct. 30, 2001). Upon further reflection, and after discussion with airport officials and members of the public, we have decided to withdraw the temporary section created by that rule (33 CFR 165.T11-095) and issue a new temporary section in title 33 of the Code of Federal Regulations.

As authorized by 5 U.S.C. 553, we did not publish a notice of proposed rulemaking (NPRM) for this regulation. In keeping with the requirements of 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM, and that under 5 U.S.C. 553 (d)(3), good cause exists for making this regulation effective less than 30 days after publication in the Federal Register .

On September 11, 2001, two commercial aircraft were hijacked from Logan Airport in Boston, Massachusetts and flown into the World Trade Center in New York, New York inflicting catastrophic human casualties and property damage. On the same day, a similar attack was conducted on the Pentagon in Arlington, Virginia. Also, on the same date, a fourth commercial passenger airplane was hijacked, this one from Newark, New Jersey, and later crashed in Pennsylvania. National security officials warn that future terrorist attacks against civilian targets may be anticipated. A heightened level of security has been established concerning all vessels transiting in the San Francisco Bay, and particularly in waters adjacent to San Francisco International Airport and Oakland International Airport. These security zones are needed to protect the United States and more specifically the people, ports, waterways, and properties of the San Francisco Bay area.

The delay inherent in the NPRM process, and any delay in the effective date of this rule, is contrary to the public interest insofar as it may render individuals and facilities within and adjacent to the San Francisco and Oakland airports vulnerable to subversive activity, sabotage or terrorist attack. The measures contemplated by this rule are intended to prevent future terrorist attacks against individuals and facilities within or adjacent to these west coast airports. Immediate action is required to accomplish these objectives. Any delay in the effective date of this rule is impracticable and contrary to the public interest.

Although the Coast Guard has good cause in implementing this regulation, we want to afford the maritime community the opportunity to participate in this rulemaking by submitting comments and related material regarding the size and boundaries of these security zones in order to minimize unnecessary burdens. If you do so, please include your name and address, identify the docket number for this rulemaking, COTP San Francisco Bay 01-011, indicate the specific section of this document to which each comment applies, and give the reason for each comment.

Please submit all comments and related material in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this temporary final rule in view of them.

We do not plan to hold a public meeting. However, you may submit a request for a meeting by writing to the person identified in the FOR FURTHER INFORMATION CONTACT section, or to the address under ADDRESSES explaining why a public meeting would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register .

On September 11, 2001, terrorists launched attacks on civilian and military targets within the United States killing large numbers of people and damaging properties of national significance. Vessels operating near the airports adjacent to the San Francisco Bay present possible platforms from which individuals may gain unauthorized access to the airports.

As part of the Diplomatic Security and Antiterrorism Act of 1986 (Pub. L. 99-399), Congress amended the Ports and Waterways Safety Act (PWSA) to allow the Coast Guard to take actions, including the establishment of security and safety zones, to prevent or respond to acts of terrorism against individuals, vessels, or public or commercial structures. 33 U.S.C. 1226. The terrorist acts against the United States on September 11, 2001 have increased the need for safety and security measures on U.S. ports and waterways. In response to these terrorist acts, and in order to prevent similar occurrences, the Coast Guard is establishing two temporary security zones in the navigable waters of the United States surrounding San Francisco International Airport and Oakland International Airport.

As mentioned in the Regulatory Information section, we opened docket COTP San Francisco Bay 01-009 on September 21, 2001. We have since determined that the sizes of the zones created by that rule may be reduced. As a result, we are withdrawing that rule and are establishing new, smaller zones in this rule.

The security zones will extend 1000 yards seaward from the shorelines of the San Francisco International Airport and the Oakland International Airport. This distance from the shoreline is estimated to be an adequate zone size to provide increased security for each airport. The two security zones are designed to provide increased security for the airports, while minimizing the impact to vessel traffic on the San Francisco Bay.

These temporary security zones are necessary to provide for the safety and security of the United States of America and the people, ports, waterways and properties within the San Francisco Bay area. These zones will be enforced by the official patrol (Coast Guard commissioned, warrant or petty officers) onboard Coast Guard vessels and patrol craft. The official patrol may also be onboard the patrol craft and resources of any government agency that has agreed to assist the Coast Guard in the performance of its duties.

Persons and vessels are prohibited from entering into or remaining in these security zones without permission of the Captain of the Port, or his designated representative. Each person and vessel in a security zone must obey any direction or order of the COTP. The COTP may remove any person, vessel, article, or thing from a security zone. No person may board, or take or place any article or thing on board, any vessel in a security zone without the permission of the COTP.

Pursuant to 33 U.S.C. 1232, any violation of the security zone described herein, is punishable by civil penalties (not to exceed $27,500 per violation, where each day of a continuing violation is a separate violation), criminal penalties (imprisonment for not more than 6 years and a fine of not more than $250,000), in rem liability against the offending vessel, and license sanctions. Any person who violates this regulation, using a dangerous weapon, or who engages in conduct that causes bodily injury or fear of imminent bodily injury to any officer authorized to enforce this regulation, also faces imprisonment up to 12 years (class C felony).

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

Due to the recent terrorist actions against the United States the implementation of these security zones are necessary for the protection of the United States and its people. Because these security zones are established in an area of the San Francisco Bay that is seldom used, the Coast Guard expects the economic impact of this rule to be so minimal that full regulatory evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary.

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

These security zones will not have a significant impact on a substantial number of small entities because these security zones will not occupy an area of the San Francisco Bay that is frequently transited. Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this temporary final rule will not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard offers to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. If your small business or organization is affected by this rule and you have questions concerning its provisions or options for compliance, please contact Lieutenant Andrew B. Cheney, U.S. Coast Guard Marine Office San Francisco Bay at (510) 437-3073.

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 and have determined that this rule does not have implications for federalism.

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

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

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

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

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 have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph (34)(g), of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation, because we are establishing security zones. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES.

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

In this document we are partially approving and partially disapproving revisions to the SIP submitted by the designee of the Governor of Wyoming on August 9, 2000; August 7, 2001; and August 13, 2001. Specifically, we are approving the following sections of the renumbered WAQSR from the State's submittals into the SIP: Chapter 1 Common Provisions, Sections 2-6, Chapter 2 Ambient Standards, Sections 2, 6, 8 and 10, Chapter 3 General Emission Standards, Sections 5 and 6, Chapter 4 State Performance Standards for Existing Sources, Section 3, Chapter 6 Permitting Requirements, Sections 2 and 4, Chapter 7 Monitoring Regulations, Section 2, Chapter 8 Non-attainment Area Regulations, Sections 2-3, Chapter 9 Visibility Impairment/PM Fine Control, Section 2, Chapter 10 Smoke Management, Sections 2-3, Chapter 12 Emergency Controls, Section 2 and Chapter 13 Mobile Sources, Section 2. We are partially approving and partially disapproving the following sections of the renumbered WAQSR: Chapter 2 Ambient Standards, Sections 3-5; Chapter 3 General Emission Standards, Sections 2-4; and Chapter 4 State Performance Standards for Specific Existing Sources, Section 2. We are not acting on Chapter 8 Non-attainment Area Regulations, Section 4 Transportation Conformity (part of the August 9, 2000 submittal) or on the PM 2.5 revisions in Chapter 1 and Chapter 2 of the State's August 13, 2001 submittal.

Section 110(k) of the Act addresses our actions on submissions of SIP revisions. The Act also requires States to observe certain procedures in developing SIP revisions. Section 110(a)(2) of the Act requires that each SIP revision be adopted after reasonable notice and public hearing. We have evaluated the State's submission and determined that the necessary procedures were followed. We also must determine whether a submittal is complete and therefore warrants further review and action (see section 110(k)(1) of the Act). Our completeness criteria for SIP submittals can be found in 40 CFR part 51, appendix V. We attempt to determine completeness within 60 days of receiving a submission. However, the law considers a submittal complete if we do not determine completeness within six months after we receive it. The State's August 9, 2000 submission became complete by operation of law on February 9, 2001, in accordance with section 110(k)(1)(B) of the Act. We reviewed the State's August 7, 2001 and August 13, 2001 submissions against our completeness criteria in 40 CFR Part 51, Appendix V. We determined these submissions were complete and notified the State in a letter dated August 24, 2001.

The State restructured the entire WAQSR from a single chapter into thirteen separate chapters. This was done, according to the State, to create a more organized set of rules that will be more accessible to the public and the regulated community and will allow for more organized expansion and revision, when necessary.

Several of the sections submitted to us for approval into the SIP continue to provide for the use of an equivalent or alternative test method to be approved by the Administrator of the WAQD. In an August 19, 1998 letter to the WAQD and in our December 21, 2000 partial approval and partial disapproval of earlier revisions to the WAQSR (65 FR 80329), we raised concerns about provisions in the WAQSR where the WAQD has the discretion to approve the use of alternative or equivalent test methods in place of those required in the SIP. Such discretionary authority for the State to change test methods that are included in the SIP, without obtaining prior EPA approval is not consistent with section 110 of the Act. These “director's discretion” provisions essentially allow for a variance from SIP requirements, which is not allowed under section 110(i) of the Act and the requirement that SIP provisions may only be modified by SIP revisions approved by EPA. In our August 19, 1998 letter, we identified the sections in the WAQSR that contain these “director's discretion” provisions, and informed the State that the provisions needed to be revised to require EPA approval of any alternative or equivalent test methods. In a September 9, 1998 letter responding to our comments, the WAQD committed to address our concerns through revisions to these rules in the future. However, until these provisions are revised, we believe it is necessary to continue to disapprove the various “director's discretion” provisions, to ensure that any alternatives to the test methods required in the SIP are approved by EPA. Therefore, we are partially disapproving these provisions in Chapter 2 Ambient Standards, Sections 3-5, Chapter 3 General Emission Standards, Sections 2-4 and Chapter 4 State Performance Standards for Specific Existing Sources, Section 2.

The State revised Chapter 3, Section 6 (previously Chapter 1, Section 9) of the WAQSR to adopt the July 1, 1998 definition of volatile organic compound (VOC) in 40 CFR 51.100(s). In the State's August 7, 2001 submittal Chapter 3, Section 6 was again revised to adopt the July 1, 1999 definition of VOC in 40 CFR 51.100(s). We are approving this more recent update to the incorporation by reference into the SIP, which will supercede the revisions submitted to us on August 7, 2000.

The State made two substantive changes to its PSD permitting regulations. The first revision is a modification to the definition of “Minor source baseline date” to remove the specific trigger date of January 1, 2001 from the definition. With this revision, the minor source baseline date is triggered only by the date on which a major stationary source or major modification submits a complete permit application as opposed to the date on which a major stationary source or major modification submits a complete permit application or January 1, 2001, whichever occurs first. The revised definition is consistent with our definition in 40 CFR 51.166(b)(14)(ii). The minor source baseline date has been triggered for SO 2 , PM 10 and NO 2 in all attainment and unclassifiable areas in the State. Most recently, a permit application from ENCOAL Corporation to construct a Liquids from Coal facility and an associated 240 megawatt coal-fired power plant in the Powder River Basin of Campbell County, Wyoming, was deemed complete on March 6, 1997; this triggered the minor source baseline date for the entire Powder River Basin PM 10 unclassifiable area. We are approving the State's revision to delete the January 1, 2001 date since the minor source baseline date was already triggered, prior to January 1, 2001, for all attainment and unclassifiable areas in the State.

The second revision establishes a significance level for non-methane hydrocarbons from municipal solid waste landfills. Since the state-adopted significance level of 50 tons per year is the same as the significance level for non-methane hydrocarbons from municipal solid waste landfills in 40 CFR 51.166(b)(23)(i) and 40 CFR 52.21(b)(23)(i), we are approving this revision into the SIP.

The addition of Section 6 Credible Evidence was made in response to a SIP call issued by EPA on October 20, 1999. EPA promulgated Credible Evidence Revisions (see 62 FR 8314) which became effective December 30, 1997 and which changed certain regulations to clarify that EPA can use, and has always been able to use, any credible evidence to prove violations of applicable requirements. In the Credible Evidence Revisions, EPA amended 40 CFR 51.212 to require SIPs to allow for the use of credible evidence for the purposes of submitting compliance certifications and for establishing whether or not a person has violated a standard in a SIP. Wyoming submitted a provision in Chapter 1, Section 6 that meets the requirements of 40 CFR 51.212; we are approving this provision into the SIP.

Chapter 3, Section 6 was revised to adopt the July 1, 1999 definition of VOC in 40 CFR 51.100(s). We are approving this update to the incorporation by reference into the SIP.

Chapter 1, Common Provisions was revised to add definitions for “fugitive emissions,” “PM 2.5 ” and “PM 2.5 emissions”. We are approving the definition of “fugitive emissions” into the SIP, but we are not taking action on the other definitions for PM 2.5 . Currently, we are not approving provisions in any SIPs related to the implementation of a PM 2.5 standard because there is no PM 2.5 National Ambient Air Quality Standard (NAAQS) at this time. On May 18, 1999, the United States Court of Appeals for the D.C. Circuit in American Trucking Associations, Inc. et al., v. United States Environmental Protection Agency, 175 F.3d 1027 (D.C. Cir. 1999), vacated the 1997 PM 10 standard, determined that we were attempting to double-regulate the fine particulate fraction with the promulgation of the 1997 PM 10 and PM 2.5 standards, and asked for further information from EPA regarding health effects of PM 2.5 . Although the Court eventually agreed that there was a clear, health-based need for a PM 2.5 standard, we did not proceed with the PM 2.5 implementation schedule. Since the Court had determined that EPA would be double-regulating the fine particle fraction of this pollutant if we were to implement the new PM 10 and PM 2.5 NAAQS, EPA decided not to proceed with implementation of the 1997 PM 2.5 NAAQS, but to wait for the outcome of the next required review of the PM standards for any further implementation of a new standard. On review of the Court of Appeals' decision, the U.S. Supreme Court reversed in part, upholding the new and revised NAAQS, but affirmed the lower court decision on the issue of EPA's implementation policy for the revised NAAQS, holding the policy unlawful. See Whitman v. American Trucking Associations, Inc., 531 U.S. 457, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001). Accordingly, we are enforcing only the 1987 PM 10 NAAQS at this time.

In addition to the new definitions, the State made changes to correct “director's discretion” provisions in the definitions of “particulate matter emissions” and “PM 10 emissions.” In our December 21, 2000 action partially approving and partially disapproving revisions to Wyoming's air pollution regulations (see 65 FR 80330), we partially disapproved this particular section of the State's rules, because it allowed the Wyoming Air Quality Director discretion to approve the use of alternative or equivalent test methods in place of those required in the SIP. The State has eliminated this discretion by revising these definitions to read, “* * * or an equivalent or alternative method approved by the EPA Administrator.” This will ensure that any alternatives to the test methods required in the SIP are approved by EPA. We are now fully approving the revisions to Chapter 1, Section 3 of the WAQSR that were partially disapproved in our December 21, 2000 action.

Chapter 2, Section 2 was revised to incorporate the 1997 PM 2.5 NAAQS and to remove the ambient air standard for total suspended particulate (TSP). Since EPA is currently not implementing a PM 2.5 standard, we are not taking action at this time on the new PM 2.5 standard adopted by the State. Since EPA repealed the national ambient air quality standard for TSP over ten years ago, we are approving this deletion of the State's ambient air standard for TSP. We raised a concern to the State during the public comment period for these revisions about whether the State plans to relax any permitted emission limits as part of this rule change; relaxations of any limits on particulate matter could potentially impact the PM 10 National Ambient Air Quality Standards (NAAQS). We also wanted to be sure that this change to delete the TSP ambient air quality standard would not impact the State's particulate matter monitoring network that has been established in the Powder River Basin. The State made clear, in a February 16, 2000 letter from Dan Olson, Administrator, Wyoming Air Quality Division, to Richard Long, Director, EPA Region VIII Air and Radiation Program, that relaxing existing permit emission limits as a result of deleting the TSP standard would be contrary to the State's basic philosophy of minimizing impact to air resources and that the State has no plans to do so. The State further indicated that the TSP monitors in the Powder River Basin that are used to measure compliance with the NAAQS are required to continue operation under existing air quality permits. Any changes in monitoring, which could only occur through a permit modification, would need to consider the effect of the monitor on the comprehensive particulate matter monitoring network in the Powder River Basin, which the State is committed to maintaining. We are relying on these clarifications in approving the deletion of the State's TSP ambient air standard and are archiving the above-referenced letter as Additional Materials in 40 CFR 52.2620(c)(30)(ii).

Chapter 3, Section 2 was revised to incorporate revised fugitive dust provisions. The revisions to this section are not any less stringent than the existing fugitive dust provisions in the SIP, and therefore are approvable. The proposed agricultural provisions do contain an apparent change in stringency, because the SIP currently states that all agricultural activities must be conducted, “* * * in such a manner as to prevent dust from becoming airborne''; the revision to that provision states that these operations should “minimize” fugitive dust emissions. However, because it is unrealistic to expect that agricultural activities such as tilling will not produce any fugitive dust and because there is no enforceable limit or work practice requirement associated with this SIP provision, the proposed revision to the SIP should not result in an increase in fugitive dust from agricultural activities.

In addition, the State added a provision in Chapter 3, Section 2 to clarify that the particulate matter limitations established through the process weight rate tables (Chapter 3, Section 2 Tables I and II) are based on the maximum design production rate unless otherwise restricted by enforceable limits on potential to emit. This additional language in Chapter 3, Section 2(g)(i) is meant to clarify which limit is intended to apply to permitted sources. Finally, Section 2(e) has been modified to explain that more stringent limits, such as new source performance standards, established elsewhere in the regulations may apply. We are approving all of these revisions to Chapter 3, Section 2 into the SIP.

Chapter 6, Section 2 was revised to remove the significance level for TSP. This change was made in conjunction with the removal of the ambient air standard for TSP in Chapter 2, Section 2 (see discussion in part 2, above). Without a referenced ambient air standard, the TSP significance level is not needed. This change is consistent with 40 CFR 51.166, and we are approving the change into the SIP.

In this action, we are granting partial approval and partial disapproval of revisions to the WAQSR submitted as a SIP revision by the designee of the Governor of Wyoming on August 9, 2000; August 7, 2001; and August 13, 2001. The portions of the restructured regulations and revisions that we are approving replace the prior SIP approved regulations. Specifically, we are granting approval of the following sections of the renumbered WAQSR into the SIP: Chapter 1 Common Provisions, Sections 2-6; Chapter 2 Ambient Standards, Sections 2, 6, 8 and 10; Chapter 3 General Emission Standards, Sections 5 and 6; Chapter 4 State Performance Standards for Existing Sources, Section 3; Chapter 6 Permitting Requirements, Sections 2 and 4; Chapter 7 Monitoring Regulations, Section 2; Chapter 8 Non-attainment Area Regulations, Sections 2 and 3; Chapter 9 Visibility Impairment/PM Fine Control, Section 2; Chapter 10 Smoke Management, Sections 2 and 3; Chapter 12 Emergency Controls, Section 2; and Chapter 13 Mobile Sources, Section 2. We are granting partial approval and partial disapproval of the following sections of the renumbered WAQSR: Chapter 2 Ambient Standards, Sections 3-5; Chapter 3 General Emission Standards, Sections 2-4; and Chapter 4 State Performance Standards for Specific Existing Sources, Section 2. We are not acting on Chapter 8 Non-attainment Area Regulations, Section 4 Transportation Conformity (part of the August 9, 2000 submittal) or on the PM 2.5 revisions in Chapter 1 and Chapter 2 of the State's August 13, 2001 submittal.

We are 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 publication, EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective April 8, 2002, without further notice unless the Agency receives adverse comments by March 8, 2002. If the EPA receives adverse comments, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. 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.

The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

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 does not involve decisions intended to mitigate environmental health or safety risks.

Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). 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.” Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

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, 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. Thus, the requirements of section 6 of the Executive Order do 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, 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 action does not involve or impose any requirements that affect Indian Tribes. Thus, Executive Order 13175 does not apply to this rule.

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 Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements 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 not-for-profit enterprises, and small governmental jurisdictions.

This final partial approval rule will not have a significant impact on a substantial number of small entities because SIP approvals under section 110 and subchapter I, part D of the Clean Air Act do not create any new requirements but simply approve requirements that the State is already imposing. Therefore, because the Federal SIP approval does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities. Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of flexibility analysis would constitute Federal inquiry into the economic reasonableness of state action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

This final partial disapproval rule will not have a significant impact on a substantial number of small entities because this partial disapproval only offsets the State's ability to grant variances from SIP testing requirements. As explained in this notice, the provisions of the SIP revision related to director's discretion do not meet the requirements of the Clean Air Act and EPA cannot approve the State's request to approve these provisions into the SIP. Therefore, I certify that this action will not have a significant economic impact on a substantial number of small entities.

The partial approval and partial disapproval will not affect existing state requirements applicable to small entities. Federal disapproval of a state submittal does not affect its state-enforceability.

Under sections 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to State, local, or tribal governments in the aggregate; or to the private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that the partial approval action promulgated does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action partially approves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

The Congressional Review Act, 5 U.S.C. section 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. section 804(2). This rule will be effective April 8, 2002, unless EPA receives adverse written comments by March 8, 2002.

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

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 April 8, 2002. 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) of the Clean Air Act.)

Title V of the Act as amended in 1990 (42 U.S.C. 7661 et seq.) directs States to develop, administer, and enforce operating permits programs that comply with the requirements of title V (section 502(d)(l)). Section 502(b) of the Act requires that EPA promulgate regulations setting forth provisions under which States develop operating permits programs and submit them to EPA for approval. Pursuant to this section, EPA promulgated 40 CFR part 70 on July 21, 1992 (57 FR 32250) which specifies the minimum elements of approvable State operating permits programs.

Sections 502(d)(3) and 502(i)(4) of the Act require EPA to promulgate a Federal operating permits program when a State does not obtain approval of its program within the timeframe set by title V or when a State fails to adequately administer and enforce its approved program. The part 71 rule published on July 1, 1996 establishes a national template for a Federal operating permits program that EPA will administer and enforce in those situations. Part 71 also establishes the procedures for issuing Federal permits to sources for which States do not have jurisdiction ( e.g. , Outer Continental Shelf sources outside of State jurisdictions and sources located in Indian Country over which EPA and Indian Tribes have jurisdiction). Finally, part 71 provides for delegation of certain duties that may provide for a smoother program transition when part 70 programs are approved.

This notice makes frequent use of the term “State.” This term includes a State or a local air pollution control agency that would be the permitting authority for a part 70 permit program. The term “permitting authority” can refer to State, local, or Tribal agencies and may also apply to EPA where the Agency is the permitting authority of record.

The EPA is, by this notice, providing a list of State and local jurisdictions where EPA assumed responsibility to issue permits, effective as of December 1, 2001. The EPA received submittals of part 70 operating permits programs from all 52 State and territorial agencies and all 60 local programs. The EPA has granted full approvals to all of the operating permits programs except Connecticut and Maryland. As a result, EPA expects that the impact of the Federal operating permits program rule will be minimal. The EPA is working with the affected States in an effort to fully approve a State program before significant resources must be expended.

Yes. Section 71.5(a)(1) of part 71 provides that a timely application is one that is submitted within 12 months or an earlier date after a source that does not have an operating permit issued by a State under the State's part 70 program becomes subject to the part 71 program. Because part 71 for these two State jurisdictions was effective on December 1, 2001, such sources are required to submit part 71 permit applications no later than December 1, 2002. Sources required to submit applications earlier than 12 months will be notified in advance by the permitting authority (whether it is EPA or a State in the case of a delegated part 71 program) and given a reasonable time to submit their applications. In general, this notice shall not be given less than 180 days in advance of the deadline for submittal of the application.

Connecticut: The EPA's Region I proposed full approval of the State's program on August 13, 2001. See 66 FR 42496. However, EPA is unable to take final action on this proposal because Connecticut's interim approval expired on December 1, 2001, and the necessary corrections to the State's program will not become effective until early 2002. Until Connecticut's program receives final full approval, part 71 is effective in the State.

Maryland: Maryland acknowledged that it would not have in place by December 1, 2001 law to unambiguously provide standing for judicial review of the permits consistent with the Act and 40 CFR part 70. Therefore, on December 1, 2001, Maryland lost its interim approval status of its part 70 permitting program. See 66 FR 63236 (December 5, 2001) for further details.

The Office of Management and Budget has exempted this action informing the public of a Federal air quality permitting program, as outlined above, from Executive Order 12688 review. This notice is issued under the authority of sections 101, 110, 112 and 301 of the Act as amended (42 U.S.C. 7401, 7410, 7412, 7601).

This is a summary of the Federal Communications Commission's Report and Order ( R&O ), FCC 01-364, in GN Docket No. 01-74, adopted on December 12, 2001 and released on January 18, 2002. The full text of this R&O is available for inspection and copying during normal business hours in the FCC Reference Information Center, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The complete text may be purchased from the Commission's duplicating contractor, Qualex International, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, (202) 863-2893. The complete text may also be downloaded at: www.fcc.gov.

In the R&O , the Commission: (1) Reallocates the entire 48 megahertz of spectrum in the Lower 700 MHz Band to the fixed and mobile services while retaining the existing broadcast allocation; (2) establishes technical criteria designed to protect television (TV) operations during the digital television (DTV) transition period; (3) allows low power television (LPTV) and TV translator stations to retain secondary status and operate in the band after the transition; (4) sets forth a mechanism by which pending broadcast applications may be amended to provide analog or digital service in the core television spectrum or to provide digital service on TV Channels 52-58; (5) divides the 48 megahertz of reallocated spectrum into three 12-megahertz blocks, with each block consisting of a pair of 6-megahertz segments, and two 6-megahertz blocks of contiguous, unpaired spectrum; (6) licenses the two six-megahertz blocks of contiguous unpaired spectrum and two of the three 12-megahertz blocks of paired spectrum over six Economic Area Groupings (EAGs) and the remaining 12-megahertz block of paired spectrum over 734 Metropolitan Statistical Areas (MSAs) and Rural Service Areas (RSAs); (7) provides for a 50 kW effective radiated power (ERP) power limit for the Lower 700 MHz Band to permit both wireless services and certain new broadcast operations; and (8) establishes competitive bidding procedures and voluntary band-clearing mechanisms for the Lower 700 MHz Band.

1. In the Notice of Proposed Rulemaking ( NPRM ) (66 FR 19106, April 13, 2001) in this proceeding, the Commission proposed to reallocate and adopt service rules for the Lower 700 MHz Band as part of the ongoing conversion to DTV broadcasting. Because DTV technology is more spectrally efficient than the current analog standard, the same amount of television service can operate in a reduced allocation. 47 U.S.C. 309(j)(14) requires the Commission to assign spectrum recovered from broadcast television using competitive bidding, and envisions that the Commission will conduct an auction of this spectrum by September 30, 2002. The statute further requires analog broadcasters to cease operation in the recovered spectrum by the end of 2006 unless the Commission extends the end of the transition. As provided in the statute, the Commission is required to extend the end of the transition at the request of individual broadcast licensees on a market-by-market basis if one or more of the four largest network stations or affiliates are not broadcasting in digital, digital-to-analog converter technology is not generally available, or 15 percent or more television households are not receiving a digital signal. While the end of the DTV transition is targeted for the end of 2006, the statute anticipates that the Commission will reclaim excess television spectrum by September 30, 2002. Therefore, the auction for this spectrum will occur a number of years in advance of the end of the digital transition.

2. The Commission previously determined that television operations can be relocated to a core spectrum (TV Channels 2-51), which will make existing broadcast spectrum on TV Channels 52-69 available for reallocation. The Commission previously reallocated TV Channels 60-69 (Upper 700 MHz Band). In this R&O , the Commission adopts a flexible allocation for the Lower 700 MHz Band that will allow service providers to select the technology they wish to use to provide new services that the market may demand. At the same time, it takes steps to protect incumbent broadcasters during the technically complex transition to digital broadcasting during which there will be significant interference protection issues for new licensees seeking to initiate service in the Lower 700 MHz Band.

3. Domestically, the Lower 700 MHz Band is currently allocated on a primary basis to non-government broadcasting. TV Channels 52-59 (each channel represents 6 megahertz of spectrum) occupy the band. TV broadcast services may also use TV subcarrier frequencies, and, more generally, their TV channels, on a secondary basis for other purposes, including datacasting. The band is further allocated to the fixed service for subscription television operations in accordance with part 73 of the Commission's rules. Internationally, the band is allocated worldwide on a primary basis to broadcasting services. The band is also allocated to fixed and mobile services in Region 2 (which includes the United States) on a secondary basis and in Region 3 on a co-primary basis. A footnote to the International Table of Frequency Allocations elevates the allocation to fixed and mobile services to primary status in the United States, Mexico, and several other Region 2 countries, but this primary allocation has yet to be implemented domestically.

4. In recent years, there has been tremendous growth in new wireless services and demand for spectrum. In previous proceedings, the Commission has noted that the propagation characteristics of the Lower 700 MHz Band are ideal for two-way mobile communications. Further, a resolution adopted at World Radiocommunication Conference-2000 (WRC-2000) recognized that some administrations may use the Lower 700 MHz Band for 3G services. At WRC-2000, the United States proposed that the Lower 700 MHz Band be identified as one of several candidate bands for the terrestrial component of new advanced communication applications. However, significant investment and planning is required by broadcasters to build new digital facilities and relocate operations. The Commission has anticipated that the band will remain principally a television band until the end of the digital transition and early recovery of additional spectrum beyond the Upper 700 MHz Band was not contemplated in the DTV transition plan. Because of the statutory requirement to auction this spectrum several years in advance of the end of the transition, the Commission balances the opportunities for new services with the challenges faced by incumbent broadcasters.

5. The Commission reallocates the entire 48 megahertz of spectrum in the Lower 700 MHz Band to fixed and mobile services, and retains the existing broadcast allocation. This decision is consistent with the Commission's allocation plans as set forth in the Spectrum Reallocation Policy Statement (14 FCC Rcd 19868 (1999)). It is also consistent with the principles of the policy statement “ that flexible allocations can promote efficient spectrum markets, which, in turn, encourages efficient use of the spectrum. Furthermore, it conforms with positions the United States has taken at the World Radio Conference (WRC). The broadcast allocation supports broadcasting that will take place during the DTV transition period (and LPTV and TV translator operations on a secondary basis for the indefinite future). It also draws on the Upper 700 MHz Band proceeding, where the Commission permitted both broadcast and advanced fixed and mobile service use of the band (with service rules that limited the power of any new broadcasting services in order to insure the protection of new wireless entrants in the band). The Commission notes that no commenter suggested an alternative basis for its allocation decision, but, instead, those who do not fully support the Commission's proposal expressed narrow technical concerns about a shared allocation as opposed to broader concerns about the overall spectrum management approach.

6. The Commission describes how the R&O meets several additional statutory responsibilities. 47 U.S.C. 309(j)(14) requires the Commission to reclaim and assign the Lower 700 MHz Band by competitive bidding. Furthermore, 47 U.S.C. 309(j)(3) sets forth objectives that the Commission must promote in developing our competitive bidding methodology including, inter alia , the development, and rapid deployment of new technologies. As in the Upper 700 MHz Band proceeding, the Commission expects many of the new technologies to be developed and deployed will support advanced wireless applications, and wants to provide licensees with the maximum opportunity to make use of these opportunities.

7. The Commission finds that the flexible use approach it is adopting is consistent with 47 U.S.C. 303(y), and meets all four of the criteria outlined in that section. 47 U.S.C. 303(y) requires the Commission to make affirmative findings that a proposed flexible use allocation (1) is consistent with international agreements; (2) would be in the public interest; (3) would not deter investment in communications services and systems, or technology development; and (4) would not result in harmful interference among users. Because the band is allocated worldwide on a primary basis to the broadcasting service, and is also allocated to the fixed and mobile services in Region 2 (which includes the United States) on a primary basis, via footnote to the International Table of Frequency Allocations, the Commission may add a fixed and mobile service allocation to the existing broadcast allocation and be consistent with international band management plans. The Commission envisions that the existing broadcast allocation (in conjunction with the new technical rules designed to support both broadcast and fixed and mobile services) will support investment in and development of a variety of broadcast-type applications in the band, including two-way interactive services and services using coded orthogonal frequency division multiplex (COFDM) technology. These applications could include video transmissions to mobile receivers, similar to services being developed in Europe and Asia. Development of these applications, it concludes, would be in the public interest.

8. The Commission recognizes that these public interest benefits might be frustrated if broadcast and fixed and mobile services cannot successfully co-exist, and it therefore adopts technical rules that account for the differences between the services. The rules it adopts will allow the two services can co-exist without harmful interference among users and, in doing so, will not deter investment in and development of technology for the two services. The flexible use characteristic of the allocation—by which both broadcast and fixed and mobile services is allowed in the band—is identical to the approach the Commission took in the Upper 700 MHz Band proceeding.

9. The Commission prohibits licensees who acquire the reallocated spectrum from providing full-power broadcast services of the type that has traditionally been made available in this band because such high-powered broadcasting is likely to cause harmful interference and deter development of the band. Otherwise, the Commission would have to adopt interference protection criteria that would make a large portion of this band effectively unusable for those licensees who seek to offer new wireless applications. However, the approach the Commission takes also recognizes that a highly restrictive approach to broadcasting power limits would sharply limit broadcasting options for this band and would frustrate the public interest afforded by a broadcast allocation.

10. At the end of the DTV transition, television broadcasting will remain adjacent to the Lower 700 MHz Band, with full power and Class A low power television stations operating on TV Channel 51. The Commission declines to adopt a guard band or other specialized mechanism to protect DTV operations on Channel 51, but instead relies on interference protection criteria to ensure that new licensees adequately protect core TV channel operations. The Commission takes this approach because the protection for Channels 52-59 is no different from the protection for the core TV channels (Channels 2-51)—only the duration of that protection differs. Accordingly, the Commission concludes that there is no basis for adopting additional protective measures at the lower end of the Lower 700 MHz Band and instead finds that the protective measures suggested by commenters are unnecessarily restrictive. Instead of making special considerations for new licensees—such as adjusting our allocation to minimize the presence of systems with low immunity to high-power signals—the Commission chooses a flexible approach and expects licensees to consider potential interference situations when designing and developing their systems. The Commission believes that bidders for this spectrum will take into account criteria established to protect the core TV channels and will develop their business plans, services, and facilities accordingly.

11. The Commission will permit LPTV operations (which, for purposes of this proceeding, includes television translators) in the Lower 700 MHz Band after the end of the transition on a secondary basis. These stations may operate until they cause actual interference to a DTV station or new licensee and LPTV stations may negotiate interference agreements with new service providers. The Commission prohibits LPTV stations, licensed under 47 CFR 74 subpart G from causing harmful interference to stations of primary services—including new licensees in the band. (However, if a licensee who acquires Lower 700 MHz Band spectrum through the competitive bidding process opts to use the spectrum for low power digital broadcasting, such a station would have primary regulatory status.)

12. The Commission concludes that its approach appropriately balances two largely conflicting interests. 47 U.S.C. 337(e)(2) states that after allocating the Upper 700 MHz Band, the Commission “shall seek to assure * * * that each qualifying low-power television station is assigned a frequency below 746 MHz to permit the continued operation of such station.” However, LPTV operators in the Lower 700 MHz Band must be prepared to cease service once television Channels 52-59 are reclaimed, pursuant to 47 U.S.C. 309(j)(14), when new licensees (who will have primary status) begin using the band. Congress has recognized—and the Commission has repeatedly noted—that not all LPTV stations can be guaranteed a certain future due to the emerging DTV service, and the Commission concludes that it is inadvisable to defer the ultimate displacement of LPTV operations to the detriment of new primary service licensees in the band. To grant LPTV operations special considerations vis-à-vis new licensees would turn the concept of secondary status upside down and would retard the potential development of new and innovative services.

13. Because the overall framework for the Commission's treatment of LPTV stations was previously decided outside of this proceeding, the Commission concludes that there is no reason to modify those decisions and notes that those commenters who outline circumstances in which they believe LPTV should have greater protection do not explain how circumstances have changed since the Commission last examined the issue. LPTV licensees have been aware of their secondary status throughout the transition and LPTV entities with operations on Channels 52-59 must recognize the possibility that a primary licensee can initiate service in the band. The DTV Sixth Report and Order (62 FR 26684, May 14, 1997) identified the core DTV spectrum to consist of those TV channels below Channel 52 and stated that secondary operations (such as LPTV) will be able to continue to operate until a displacing DTV station or a new primary service provider is operational. The requirement to auction reclaimed spectrum has also been in place since 1997. Because of the steps it has taken to allow continued LPTV operation, including allowing LPTV licensees to remain in the band until they actually cause interference and permitting LPTV operators to negotiate with new licensees for interference protection agreements, the Commission nevertheless expects that many LPTV licensees will be able to continue to operate in the band for some time to come.

14. The Commission also rejects specific comments that suggest that some LPTV stations should receive the same protection from displacement and interference as full power television stations because of the Commission's obligations with respect to Class A status, and decides that a proposal that out-of-core LPTV stations that are eligible for Class A status be allowed to continue operating until such a time as an in-core channel becomes available is overly broad and inconsistent with the Commission's ultimate goals for the band. Furthermore, it rejects a request to afford continued secondary status to part 74 low power broadcast auxiliary devices (such as wireless microphones) operating in the Lower 700 MHz Band, and to establish a new service in part 95 of our Rules to accommodate their use.

15. The Commission does not include a satellite allocation in the Lower 700 MHz Band and concludes allowing satellite operations would be inconsistent with the principles of effective spectrum management in the Lower 700 MHz Band. The Commission concludes that the inherent difficulties in coordinating satellite and terrestrial services could delay or stifle the introduction of new services in this band; questions whether a flexible satellite allocation in this band could meet the statutory requirements 47 U.S.C. 303(y); and notes that current international allocations do not include satellite operations in this band.

16. The Commission's treatment of issues related to incumbent broadcasters who will continue to use the band throughout the DTV transition recognizes differences between the Upper and Lower 700 MHz Bands. Early recovery of additional spectrum beyond the Upper 700 MHz Band was not contemplated in the DTV transition plan. Even with the mechanisms it adopts to encourage voluntary band clearing in both the Upper and Lower 700 MHz Bands, the Commission has never anticipated that it will be able to clear the Lower 700 MHz Band before the Upper 700 MHz Band. Because of this history, and because encumbrances in the Lower 700 MHz Band are likely to make band clearing a more complex operation, the Commission realizes that some broadcasters may have accepted an allotment in the Lower 700 MHz Band with the expectation that the band would continue to be extensively used for broadcasting throughout the transition.

17. New licensees will need to take into account the large number of digital broadcasters who will operate in the Lower 700 MHz Band during the transition. On average, there are slightly more than ten times the number of digital stations per channel on Channels 52-59 as compared to Channels 60-69. While the planning for the DTV Table of Allotments sought to minimize use of out-of-core channels, the Commission was unable to accommodate a second digital channel for all broadcasters within the “core” broadcast spectrum. The degree of incumbency in the Lower 700 MHz Band—consisting of both digital and analog broadcasters—is likely to make it far more difficult for new services to operate in this band, particularly in major metropolitan markets, prior to the end of the transition. The Commission notes that the degree of incumbency in the Lower 700 MHz Band underscores its obligation to fully protect incumbent full-power analog and digital broadcasters during the transition period, and the rules it adopts are designed to support this core value.

18. Currently, there are 94 licensed full service NTSC analog stations and seven approved analog construction permits in the Lower 700 MHz Band. Although this figure represents approximately the same number of analog incumbents as in the Upper 700 MHz Band, the Lower 700 MHz Band consists of less spectrum and, therefore, incumbent licensees are more densely situated across the band. The Commission addresses requests for new NTSC stations in the 698-746 MHz band in two parts: (1) Petitions for new allotments and (2) applications for construction permits. Some of these applications may also include requests for modifications of the allotment such as changes in frequencies to cure interference to new DTV operations or as a replacement channel for channels in the Upper 700 MHz Band ( i.e. channels 60-69). The Commission dismisses the pending petitions for new NTSC channel allotments in the 698-746 MHz band. In this regard, it notes that its staff previously dismissed a number of petitions for rulemaking for new station allotments on channels 52-58 as defective, and petitions for reconsideration have been filed. Given its decision to dismiss all petitions on these channels, the Commission concludes that the pending petitions for reconsideration are now rendered moot and determines that they will be dismissed. The Commission concludes that beginning the process of adding new analog television allotments or stations at this stage of the transition to digital television would be inconsistent with the DTV transition process because the allotment proceedings, station authorization, and construction would likely not be completed until much later in the DTV transition. The new licensee might then have only a limited period of time to operate in analog before being required to transition to digital service. The Commission also notes that the Balanced Budget Act of 1997 requires that analog television spectrum be reclaimed for new services and concludes that adding analog allotments or stations in the 698-746 MHz band would be inconsistent with the purpose of that Act and would not foster the timely and efficient transition to digital television. The Commission notes that petitioners may, however, refile a new DTV channel allotment petition on a core channel (2-51), subject to meeting the DTV spacing requirements.

19. With regard to applications for construction permits, the Commission recognizes that parties have made investments in these applications and that they are generally further along in the regulatory process and thus could potentially provide service to the public on a more near-term basis. While it believes that these applications can be processed in a manner consistent with our DTV transition policies, the Commission does not believe that deploying service in analog format is consistent with the statutory mandate to reclaim this spectrum for new services or with its DTV transition policies. It concludes that authorizing additional analog television operations at this stage in the DTV transition so close the May 1, 2002, date when commercial broadcast stations are required to be operating on their digital allotments would be inconsistent with the goal of achieving a rapid conclusion of the transition.

20. Although the Commission does not wish to encourage the expansion of analog television service, it also notes that digital deployment on the allotments for which there are pending analog applications will introduce new digital services and will promote the acquisition of digital receiving equipment by consumers. In addition, the Commission concludes that such an approach will avoid the complications that could arise in requiring licensees to convert their analog operation to digital operation relatively soon after they commence analog operation. It also believes that new service providers may be able to co-exist more easily with digital television stations given that such stations operate with lower power and their signals may generally be less susceptible to interference than analog television signals. Accordingly, the Commission provides a 45-day opportunity for applicants to request a change in their pending applications for a construction permit or petition for rule making. Requests to provide analog or digital service in the core spectrum will require the filing of a petition for rulemaking to amend either the TV Table of Allotments (47 CFR 73.606) or the DTV Table of Allotments (47 CFR 73.622) or an amendment to such a petition if the applicants have already filed one. The Mass Media Bureau will set forth these procedures in a soon-to-be released Public Notice. The Commission made the 45-day window effective upon release of the Commission's R&O. Applications can be modified in one of two ways: (1) To provide analog or digital service in the core television spectrum, i.e., channels 2-51 or (2) to provide digital service in the 698-740 MHz band, i.e., channels 52-58 (In this limited circumstance, the Commission will not treat these application amendments to provide digital service in channels 52-58 as new DTV allotments under 47 CFR 73.622(a)(1)). At the end of the 45-day period, the Commission will dismiss any pending application that does not meet either of the above conditions. Finally, because of the adjacent channel interference that new stations on channel 59 could cause to new licensees in the adjacent Upper 700 MHz Band, the Commission will no longer accept or grant any application for channel 59, and parties with outstanding applications that specify channel 59 and who have not yet filed a channel allotment rulemaking petition to specify another channel must do so within the 45-day period. The Commission also amends its rules to specify that petitions requesting a change in the channel of an initial DTV allotment may only be amended to specify channels 2-58.

21. At the time the NPRM was adopted, there were 835 licenses and 244 construction permits for LPTV operations on Channels 52-59, and an additional 607 pending applications for LPTV stations on those channels. Although the Commission recognizes that it must clear all LPTV operations from the Upper 700 MHz Band at the end of the transition, it also finds that it has additional flexibility with respect to operations in the Lower 700 MHz Band. Thus, to ensure the continuation of television service, the Commission will continue to permit LPTV and TV translator stations to request the use of channels 52-69 in order to eliminate or avoid conflicts with NTSC and DTV stations or allotments. This decision recognizes that these “displacement relief” stations may be in very rural areas of the country where the 700 MHz Band could be used by these stations with little chance that they would again be displaced in the near future. The Commission takes a measured approach with regard to the filing and processing of applications seeking new LPTV and TV translator stations to operate on channels 52-69. With respect to all such applications on file, namely those tendered in the August 2000 LPTV and TV translator filing window, the Commission will process these applications and, if found acceptable, grant them. The proposed channel 52-69 operations will also be authorized on a secondary basis.

22. The Commission sought an approach that will not unduly encumber the 700 MHz Band further during the DTV conversion, but will also further its desire to treat fairly all of the nearly 4,700 LPTV and TV translator applicants that filed during the August 2000 window. Accordingly, it revises its LPTV displacement relief policies and rules as follows: Future LPTV and TV translator permittees and licensees that tendered new station applications during or subsequent to the August 2000 filing window and have been authorized to operate in the 700 MHz Band (TV channels 52-69) will be entitled to displacement relief only in order to eliminate or avoid interference conflicts. Priority over pending Class A TV, LPTV or TV translator station applications will not be afforded to the displacement applications of these future LPTV or TV translator permittees or licensees solely by virtue of their authorization to operate in the 700 MHz Band. With respect to future filing windows, the Commission retains the discretion to geographically restrict or preclude altogether the filing of applications for new LPTV and TV translator stations seeking to operate on channels 52-69. The Commission will permit secondary operation of LPTV stations below channel 60 after the end of the transition.

23. Throughout the DTV and related proceedings, the Commission has recognized that the transition and reallocation of spectrum will significantly affect LPTV. It concludes that the rule changes previously adopted in the DTV proceeding, in conjunction with its decision to allow continued LPTV operations in the Lower 700 MHz Band strike the appropriate balance between facilitating the DTV transition and reallocating the spectrum as required by law, and permitting continued LPTV operations outside the core channels.

24. The Commission adopts the same protection criteria for analog TV stations in the Lower 700 MHz Band at it previously adopted in the Upper 700 MHz Band. Because these limits are based on the results of a thorough experimental study of land mobile interference to analog television conducted many years before the advent of digital television, the Commission concludes that they properly apply only to analog television and finds that it is not necessary or appropriate to apply the same interference protection for DTV stations in the Lower 700 MHz Band. It concludes that the D/U ratio of 17 dB for co-channel interference to digital stations should be 23 dB for protection of DTV from wideband land mobile transmissions. At the edge of the DTV (noise-limited) service area, where the DTV S/N ratio is small, the value of D/U is 23 dB for co-channel interference protection from another DTV station ( i.e. , the desired signal must be at least 23 dB greater than the undesired signal). A wideband land mobile or digital broadcast signal will increase the noise floor for the DTV reception just as though it were a DTV transmission. Because DTV receivers treat interference from wideband co-channel signals as an increase in the noise floor of the desired signal, the Commission finds that new land mobile systems operating in the Lower 700 MHz Band employing wide band noise-like signals need to provide co-channel DTV stations with an additional 6 dB of protection. 6 dB is the difference between the D/U ratio of 17 dB that applies to the Upper 700 MHz Band and the value 23 dB that the Commission finds is necessary to fully protect DTV from wideband transmissions. The corresponding maximum field strengths are 18 dBμ and 64 dBμ respectively for co- and adjacent-channel land mobile transmissions. The Commission permits fields no stronger than these at the DTV service contour where the DTV signal strength is 41 dBμ. This criterion, the Commission concludes, will best protect existing broadcast operations.

25. The Commission concludes that its approach is warranted because the number and density of incumbent TV stations in the Lower 700 MHz Band is greater than those in the Upper 700 MHz Band and a major factor that led to the specific protection standards adopted in the Upper 700 MHz Band_the goal of maximizing the utility of the new public safety allocation_is not present in this case. The Commission also rejects a proposal to revise the Grade B contour predictions/broadcast television protections based on new field strength measurements. The Commission concludes that any such ad hoc re-evaluation of broadcast protections could inadvertently lead to loss of service by viewers.

26. Because the United States is obligated under existing agreements to protect the signals of Canadian and Mexican TV broadcast stations located in the border areas, new licensees' use of the band will be subject to any future agreements that the United States establishes with Canada and Mexico. Until that time, new licensees in the band will be subject to existing agreements and the condition that harmful interference not be caused to, and must be accepted from, television broadcast operations in those countries.

27. The R&O provides the service rule decisions required by the Commission's reallocation of the Lower 700 MHz Band to fixed, mobile, and broadcast services. In the R&O , the Commission generally applies the part 27 licensing and operational rules that it applied previously to the spectrum band 747-762 MHz and 777-792 MHz (Upper 700 MHz Commercial Band). The Commission believes that the general application of the same part 27 licensing and operating rules to the 700 MHz Band as a whole will help promote flexible and efficient use of the spectrum. In the Spectrum Reallocation Policy Statement , the Commission explained that flexibility can be promoted by harmonizing the rules for like services. The Commission continues to believe that regulatory neutrality and operational uniformity across the 700 MHz Band will permit the marketplace to achieve the highest valued end use of the spectrum. These part 27 rules will enable the broadest possible use of this spectrum consistent with the spectrum management obligations and objectives identified in the Commission's Spectrum Reallocation Policy Statement .

28. While the Commission generally adopts the same part 27 framework established for licenses in the Upper 700 MHz Commercial Band, the Commission's service rules for the Lower 700 MHz Band also contain some distinctive elements based on its assessment of similarities and differences between these spectrum resources. These include the specific record pertaining to the band, the potential demand for these licenses, the nature of the spectrum resource ( e.g. , propagation characteristics), statutory considerations, various external constraints ( e.g. , degree of incumbency, scarcity of spectrum suitable for mobile applications), and several longer-term policy objectives ( e.g. , the pace of the DTV transition, the feasibility of clearing the band). As a result, the Commission has added definitional and technical rules to part 27 to reflect what it believes to be the optimal initial scope of licenses for the Lower 700 MHz Band.

29. These service rules, along with the competitive bidding provisions that the Commission adopts in the R&O , derive from the Commission's statutory obligations under 47 U.S.C. 309(j). 47 U.S.C. 309(j)(3) outlines a number of public interest objectives that the Commission must consider when establishing the characteristics of licenses that are to be assigned by competitive bidding and designing auction systems. These statutory objectives include the development and rapid deployment of new technologies, products, and services for the benefit of the public, the promotion of economic opportunity and competition, the recovery of a portion of the value of the spectrum made available for commercial use, and the efficient and intensive use of the spectrum. Further, 47 U.S.C. 309(j)(14)(c) directs the Commission to reclaim, reorganize, and auction this spectrum well before broadcasters are required to vacate the band at the end of the DTV transition period. The Commission believes that adopting flexible, market-based service rules is the most appropriate approach for implementing its 47 U.S.C. 309(j) statutory directives.

30. The NPRM sought comment on the three sets of issues that define the scope of licenses for the Lower 700 MHz Band: the permissible licensed services, the size of spectrum blocks, and the size of licensed service areas. By these decisions, the Commission seeks to define an initial scope of licenses that can be obtained and used by a wide range of entities and services. It is the Commission's intent that market forces assign this spectrum to its highest valued use and thereby determine the ultimate use of the band.

31. The Commission will apply § 27.2 of its rules to define the permissible communications for the Lower 700 MHz Band and allow a multitude of fixed, mobile, and broadcast uses that the market may demand. Because the Commission has declined to reallocate the Lower 700 MHz Band for satellite use, the R&O does not consider service rules for the deployment of satellite operations on this band. Consistent with the Commission's Spectrum Reallocation Policy Statement , this flexible use approach will allow the provision of services to the public that could include mobile and other digital new broadcast operations, fixed and mobile wireless commercial services (including Frequency Division Duplex (FDD) and Time Division Duplex (TDD) based services), as well as fixed and mobile wireless uses for private, internal radio needs. The record in this proceeding demonstrates demand for expanded wireless services in the Lower 700 MHz Band, particularly in non-urban areas, for uses ranging from the implementation of next generation applications and extensions of existing mobile and fixed networks to the implementation of various innovative stand-alone technologies. It also demonstrates demand for certain broadcast and other broadband applications that could include two-way interactive, cellular, and mobile television broadcasting services. The Commission therefore declines to exclude all broadcast services and will instead allow any broadcast services that meet its part 27 technical rules. These technical rules will provide opportunities for existing broadcasters and others who wish to operate certain new digital television services in the Lower 700 MHz Band. The Commission does not wish to exclude competitors by adopting use restrictions on spectrum with characteristics suitable for new broadcast, wireless, and broadband services.

32. This decision will permit market forces to effectively assign spectrum to its highest valued use as well as meet the Commission's statutory mandate under 47 U.S.C. 303(y) to ensure harmful interference will not result from the permitted flexibility. As part of the Commission's commitment to establish maximum practicable flexibility for services, the Commission has determined and lessened the potential for interference by the Commission's power limit and other technical decisions set forth in the R&O . The Commission believes this approach affords maximum flexibility while promoting efficient use of scarce spectrum and preventing harmful interference between mobile wireless and broadcast applications using a variety of different technologies.

33. The Commission adopts a band plan that divides the 48 megahertz of reallocated spectrum into three 12-megahertz blocks, with each block consisting of a pair of 6-megahertz segments, and two 6-megahertz blocks of contiguous, unpaired spectrum. The Commission's decision to institute multiple paired and unpaired blocks in a combination of sizes and pairings accommodates the proposals of nearly all of the parties participating in this proceeding. Although two commenters advocated a larger initial allocation per spectrum block, their recommended sizes were not significantly larger than 12 megahertz. The block sizes that the Commission adopt, therefore, should not burden their attempts to acquire more than 12 megahertz of spectrum in any given area. Moreover, the Commission's decision not to apply any spectrum aggregation limits to the Lower 700 MHz Band will permit parties seeking larger blocks to aggregate spectrum both at auction and in the secondary market.

34. The size and placement of the five blocks reflect several important spectrum management considerations. Each of these blocks corresponds with either one or two 6 megahertz television channels. The Commission agrees that this will facilitate use of the Lower 700 MHz Band by analog and digital broadcasters as well as a variety of fixed and mobile wireless services. In addition, this alignment will minimize the number of incumbent television licensees to which a new Lower 700 MHz Band licensee's operations would potentially cause interference.

35. Placing the two unpaired 6-megahertz blocks at the center of the band plan has several advantages. It provides an opportunity for licensees to aggregate both licenses and thereby offer services with very wide emission types that may require more than 6 megahertz of contiguous spectrum. Centering these two blocks also results in 30-megahertz separation between the upper and lower segments of the 12-megahertz paired licenses. Such separation is consistent with licenses in the Upper 700 MHz Commercial Band and meets the requirements of many two-way technologies and equipment.

36. Finally, the size and nature of each paired segment should make those portions of the spectrum equally suitable to firms employing technologies that rely on unpaired spectrum, as well as firms seeking to launch certain new broadcast operations. Each segment consists of 6 megahertz of contiguous spectrum, an amount cited by both broadcast interests and TDD advocates as instrumental to their operations. In addition, all six segments are symmetric in size and will be subject to power limits based on usage rather than frequency, an approach that was adopted for the Upper 700 MHz Commercial Band in the Upper 700 MHz MO&O and FNPRM. By not imposing different restrictions on operations in upper versus lower segments, the Commission increases the potential use of these segments by new technologies and new service providers that do not rely on paired spectrum.

37. This flexible band plan offers five licenses in any given area that are of sufficient bandwidth to permit a variety of services. The Commission has considered commenters' desires for multiple blocks by adopting smaller blocks of spectrum. The Commission has balanced this demand, however, against its goal of enabling new broadband services and advanced wireless services on spectrum with propagation characteristics well suited for such applications. Although it acknowledges that encumbrances by broadcasters may preclude such services in the near term, the Commission is committed to reorganizing the spectrum in such a way that its bandwidth assignments, at a minimum, can eventually support the deployment of the new technologies and services that it is bound to promote by statute

38. As compared to smaller block sizes, the Commission believes that 12 megahertz paired blocks are required to afford sufficient capacity for the provision of many new services. Accordingly, the Commission has adopted three 12-megahertz paired blocks to provide opportunities for augmentation of existing systems, especially CMRS systems, as well as for new systems. The Commission also believes that 12-megahertz licenses could in some cases facilitate band clearing and new licensees' use of the Lower 700 MHz Band during the DTV transition.

39. In addition to the three 12-megahertz paired blocks, the Commission has adopted two 6-megahertz unpaired blocks because it believes they add flexibility to the band plan while offering the minimum capacity for the provision of additional new services, including certain broadband services. The Commission finds that a combination approach is appropriate given the interest in small spectrum block sizes, the support by broadcasters for 6-megahertz blocks, and the R&O 's technical rule decisions that permit certain new broadcast operations in the Lower 700 MHz Band. In addition, a 6-megahertz contiguous block of spectrum is sufficient to allow for development and deployment of certain services including new broadcast services and fixed and mobile wireless services that do not depend on paired frequencies.

40. In providing a flexible band plan with multiple spectrum blocks and small sizes, the Commission presents ample opportunities for participation by rural telephone companies and small businesses. The Commission therefore declines to set aside 10 to 12 megahertz in each geographic licensing area for designated entities. As opposed to restricting certain firms' access to spectrum, the Commission has created five smaller spectrum licenses in each geographic area of the United States.

41. The Commission adopts a geographic area licensing approach to assign licenses in the Lower 700 MHz Band. This is consistent with the Commission's past experience that geographic area licensing, as compared to site-specific licensing, offers licensees superior flexibility to respond to market demands.

42. Regarding the size of each service area for geographic licensing, the Commission has determined that the most appropriate configuration for the Lower 700 MHz Band is based on a combination of large regional areas and small geographic areas. The Commission therefore will license the five blocks in the Lower 700 MHz Band plan as follows: the two 6-megahertz blocks of contiguous unpaired spectrum, as well as two of the three 12-megahertz blocks of paired spectrum, will be assigned over 6 EAGs as defined in the Upper 700 MHz Band proceeding; the remaining 12 megahertz block of paired spectrum (designated as Block C) will be licensed over 734 MSAs and RSAs originally adopted for the cellular radiotelephone service with modifications for cellular market 306, which covers the Gulf of Mexico, and for all MSAs and RSAs that border the Gulf. See 47 CFR 27.6(c).

43. The Commission's assignment of 36 megahertz of spectrum in this band over EAGs complements the approach used for the Upper 700 MHz Commercial Band. As the Commission observed in the Upper 700 MHz Band proceeding, EAGs can provide licensees significant flexibility to address issues associated with protection of incumbent TV stations. The Commission believes that certain interference risks are offset by avoiding the need for complicated agreements that could arise if spectrum were licensed in smaller areas where several geographic service areas could overlap a TV protection zone.

44. The use of EAGs establishes an initial license scope that provides flexibility and opportunities for a wide variety of fixed, mobile, and new broadcast services. In the Upper 700 MHz Band proceeding, the Commission noted that the ability to build nationwide service was an important advantage of EAGs, along with the opportunity EAGs offer providers to achieve economies of scale in their operations. Such efficiencies have allowed providers to offer or expand innovative pricing plans such as one-rate type plans, which in turn reduce prices to consumers. Licensees may, therefore, use EAGs to build larger, even nationwide footprints.

45. Despite the efficiencies associated with nationwide service, however, the Commission believes the use of EAGs is preferable to the assignment of nationwide service areas. The vast majority of commenters recommend using much smaller geographic areas, and only two commenters recommend assigning any portion of this spectrum across a nationwide service area. Using EAGs instead of nationwide license areas facilitates the acquisition of spectrum by different providers with spectrum needs that are confined to their particular region or market. As the Commission observed in the Upper 700 MHz Band proceeding, EAGs are easier to partition than nationwide licenses, which also may help serve the needs of regional providers. Furthermore, the Commission believes aggregating EAGs into nationwide areas is an administratively straightforward process, and the Commission notes that this may be simplified through the auction process. While any type of aggregation is not without cost, the Commission believes that such costs are outweighed by the significant benefits associated with use of large regional areas, such as EAGs.

46. The Commission's assignment of a 12-megahertz block of paired spectrum, 25 percent of the Lower 700 MHz Band spectrum, over MSAs/RSAs reflects its desire to promote opportunities for a wide variety of applicants, including small and rural wireless providers, to obtain spectrum. This is consistent with the Commission's congressional mandate to promote “economic opportunity and competition” and to disseminate licenses “among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women.” 47 U.S.C. 309(j)(3)(B). In contrast to the Commission's experience in the Upper 700 MHz Band proceeding, many commenters in this proceeding favor geographic areas that are smaller than the 6 EAGs used for the Upper 700 MHz Commercial Band. Licensing a portion of the Lower 700 MHz Band over these small geographic areas balances the playing field such that small and rural providers will have an opportunity to participate in the auction and the provision of spectrum-based services. The Commission believes that a combination of large and small geographic service areas best accomplishes these various statutory objectives.

47. The Commission, therefore, recognizes the importance to small and regional providers of licensing a significant portion of this spectrum band across MSAs and RSAs. The propagation characteristics of the spectrum in this band make it conducive to business models that are built on serving consumers over a large area. The Commission concludes that MSAs and RSA are the appropriate size for small geographic licenses based on the record in this proceeding, which indicates a strong preference for these areas over, for example, EAs or MEAs. MSAs and RSAs represent known area sizes to many business entities, especially small regional and rural providers. These smaller areas also may correspond to the needs of many customers, including customers of small regional and rural providers. Specifically, MSAs and RSAs represent areas over which many customers may desire to receive the majority of their wireless or broadcast-type services and thus can be the focus of smaller carriers that do not wish to bid on or provide service to larger regions. Assigning a portion of the Lower 700 MHz Band across MSAs and RSAs may allow licensees to focus on consumers that seldom travel outside of these geographic areas and that do not place a high value on roaming or long distance services. While some commenters recommend that all of the spectrum in this band be allocated to such small areas, the Commission declines to take such an approach. As the Commission noted in the Spectrum Reallocation Policy Statement , it seeks to make this spectrum available for use by a variety of new technologies and providers. The Commission believes that a combination of large and small geographic service areas, rather than an assignment comprised only of small service areas, best accomplishes these goals.

48. In the interest of maximizing spectrum use, all new broadcast and fixed and mobile wireless operations in the Lower 700 MHz Band will be governed generally by the flexible technical standards contained in part 27 of the Commission's rules. Licensees are subject, therefore, to part 27's provisions relating to equipment authorization, frequency stability, antenna structures and air navigation safety, international coordination, disturbance of AM broadcast station antenna patterns, and protection from interference. See 47 CFR 27.51, 27.54, 27.56, 27.57, 27.63, 27.64. Although part 27 provides an appropriate technical framework for the development of both wireless and new broadcast services, the Commission has revised certain provisions as they apply to the Lower 700 MHz Band so as to promote greater flexibility in the choice of licensed services.

49. For all services operating in the Lower 700 MHz Band, the Commission adopts a maximum power limit of 50 kW ERP subject to specific requirements regarding non-interference. Specifically, for those services operating base or fixed stations at power levels greater than 1 kW ERP, the Commission adopts a power flux density (PFD) standard as a way to address the interference potential, as well as a general notification requirement. Following the approach adopted for the Upper 700 MHz Commercial Band, the Commission adopts a maximum power limit of 30 watts ERP for mobile and control stations, and 3 watts ERP for portable (hand-held) devices. In addition, all operations 1 kW ERP or below will be subject to previously established requirements governing antenna height above average terrain (HAAT).

50. The Commission's choice of a 50 kW maximum ERP limit will promote efficiency and maximize flexibility to the extent practicable by allowing the greatest number of different services to co-exist—and to serve more consumers—subject only to reasonable standards for non-interference. The Commission believes such a power limit will produce the most efficient use of this spectrum resource. The Commission disagrees with comments suggesting that use of this spectrum should be limited to wireless applications, or that the 1 kW limit applied to the Upper 700 MHz Commercial Band should be applied to the Lower 700 MHz Band. In the Lower 700 MHz Band, unlike the Upper 700 MHz Band, there is no issue regarding the need to protect public safety spectrum from interference. In addition, the Commission has been able to adopt 6 and 12 megahertz blocks for the Lower 700 MHz Band, a band plan that more readily accommodates new broadcast services. The Commission notes that providers of non-broadcast services may also operate at power levels up to 50 kW ERP, provided they comply with the same technical requirements associated with such operation. The Commission believes that to promote flexibility and efficiency, it is important to create a consistent set of technical rules for all services operating in this band.

51. The Commission recognizes that establishing a power limit in excess of 1 kW ERP creates the potential for stations operating at such power levels to cause interference to systems on adjacent channels, especially those that operate at lower power levels. However, the Commission believes that any risk that such interference will be harmful can be mitigated so as not to outweigh the added flexibility that is afforded by the higher power limit. Accordingly, in order to limit such interference and to make the various services compatible, the Commission imposes the following requirement on licensees operating at higher power levels: Licensees operating base stations at power levels in excess of 1 kW ERP must design their systems such that transmissions from their base station antenna produce PFD levels that are no greater than the PFD levels that would ordinarily occur from stations operating at power levels of 1 kW ERP or less. Specifically, the Commission will require licensees operating base stations at power levels greater than 1 kW ERP to limit the calculated PFD of the signal from their base station to 3000 microwatts per square meter at any location at ground level within 1 km of their base station transmitter.

52. This PFD standard will minimize the likelihood of adjacent channel interference to ground-based devices by effectively limiting the energy received by such devices to levels no greater than what they would receive from adjacent channel base stations operating at 1 kW ERP or less. For UHF operations, antenna height tends to be a more important variable than output power in causing/mitigating interference, so the effect of a 50 kW ERP signal on adjacent channel devices operating on the ground will be minimized given the tower heights likely to be used. The Commission has provided calculations that demonstrate, for example, how 50 kW ERP, high antenna broadcast operations can co-exist with lower-power/low antenna height land mobile operations.

53. The Commission believes that current technologies reasonably and practically allow certain measures to limit interference among various services that may be provided in this band. The Commission provides a table that describes the potential for interference that may be caused by a base station operating at 50 kW ERP to a nearby, adjacent channel base station receiver. Based on these sample computations, the Commission concludes that a licensee operating a base station receiver could mitigate potential harmful interference through use of a selective vertical antenna pattern or by downtilting of its receive antenna. In addition to these antenna selections or adjustments, a licensee could mitigate interference through use of improved filtering, by avoiding the use of spectrum at the edge of its authorized block, or through other measures. In any bid for a license within this band, the Commission expects that prospective licensees will take into account any costs that may be necessary to incorporate technical features to alleviate interference issues if adjacent channel licensees operate systems at power levels greater than 1 kW ERP.

54. The Commission will not, however, permit broadcasting at power levels higher than 50 kW ( e.g. , conventional full-power broadcasting under part 73). As the Commission found for the Upper 700 MHz Commercial Band, the contrasting technical characteristics of broadcasting at these higher power levels and wireless services effectively preclude the development of interference rules that would enable the practical provision of both sets of services on this spectrum. Spectrum for full-power terrestrial broadcast television service has been provided on Channels 2-51. Since the adoption of the Upper 700 MHz First Report and Order , the Commission has received no convincing evidence that contradicts its finding that part 73 full-power broadcasting is too different technically from fixed and mobile commercial wireless services to permit a spectrum-efficient co-existence of these services in the Lower 700 MHz Band. Those commenters who believe that these two services may coexist do not provide any specific engineering proposals and only offer generalized assertions that maximum flexibility should be ensured. Maximizing flexibility without due consideration of harmful interference is not in the public interest. Accordingly, the Commission concludes that a 50 kW ERP limit is practicable for maximizing both flexibility and freedom from harmful interference for the widest number of potential users.

55. The Commission declines to adopt a proposal to let licensees increase their power above 50 kW ERP within their service areas provided they do not cause co- or adjacent-channel interference to other users. The Commission is concerned that this additional flexibility will result in uncertainty as to how all potentially affected licensees (both co- and adjacent-channel) are made aware of a licensee's proposed higher-power and whether these licensees have consented to such operation.

56. In the NPRM , the Commission requested comment on how innovative service rules can maximize use of this spectrum by different services. To facilitate licensees' use of spectrum and prevent harmful interference, the Commission will require licensees intending to operate base or fixed stations in excess of 1 kW ERP to file notifications with the Commission and provide notifications to all part 27 licensees authorized on adjacent blocks in their area of operation. When applicable, this requirement includes notification to part 27 commercial and guard band manager licensees operating on Channel 60 (746-752 MHz) in the Upper 700 MHz Band. The Commission shall require a licensee intending to operate a higher-power base or fixed station to provide notifications to all adjacent channel part 27 licensees authorized to construct and operate base or fixed stations within 75 km of the higher-power base or fixed station. Licensees filing notifications with the Commission and adjacent channel licensees must provide the location and operating parameters of all base and fixed stations operating in excess of 1 kW ERP. See 47 CFR 27.50(c)(5). Such notification must be filed with the Commission and adjacent channel licensees at least 90 days prior to the commencement of station operation. Licensees operating at or below the 1 kW ERP will not be subject to this requirement.

57. This action will ensure that licensees will be notified that their base, fixed, mobile, or portable receivers could be situated in the vicinity of an adjacent channel, high-powered base or fixed station. As discussed in the R&O , the Commission has concluded that, under appropriate regulations, a 50 kW ERP limit can be permitted without causing harmful interference among adjacent channel broadcasting and wireless operations. This notification requirement provides an opportunity for licensees to take steps to mitigate potential interference to their stations— e.g. , by employing filters or modifying base station vertical attenuation patterns. In addition to notification, the Commission believes that licensees could employ voluntary coordination to prevent harmful interference.

58. The Commission will require transmitting facilities and devices in the Lower 700 MHz Band to comply with the existing RF safety criteria identified in § 27.52 of the Commission's rules. See 47 CFR 27.52. The Commission has provided guidance on complying with its RF safety exposure limits in OET Bulletin No. 65. The Commission is adopting these RF safety thresholds for this band because the Commission regards them to be essential for the protection of human beings from exposure to radiated RF energy.

59. Consistent with the Commission's intent to maximize spectrum use through application of flexible technical standards, the Commission is adopting a field strength limit to address co-channel interference in the Lower 700 MHz Band. The Commission agrees that a field strength limit provides established, objective criteria for licensees to understand the co-channel interference environment in which to construct and operate facilities in the geographic edges of their service areas. The Commission is not adopting a general coordination approach because, as it determined in the Upper 700 MHz Band proceeding, such an approach could impose unnecessary coordination costs for facilities and could lead to possible anti-competitive activities.

60. The Commission adopts for the Lower 700 MHz Band a field strength limit of 40 dBuV/m, the same field strength limit the Commission adopted for the Upper 700 MHz Band and the 800 MHz EA-based and 900 MHz MTA-based SMR services. See 47 CFR 27.55(a). The Commission believes that using the same field strength limit that it adopted for these other bands will enable licensees in the Lower 700 MHz Band, including new broadcast providers, to provide effective service within their authorized geographic area, while minimizing co-channel interference to co-channel licensees in adjacent areas. The Commission also notes that § 27.55(a) of the Commission's rules permits licensees, pursuant to mutual agreement, to use a different field strength limit. This will provide licensees with increased flexibility in implementing their systems without increasing the risk of harmful interference.

61. The Commission has determined that licensees operating in the Lower 700 MHz Band should be required to attenuate the power below the transmitter power (P) by at least 43 + 10 log (P) dB for any emission on all frequencies outside the licensee's authorized spectrum. The Commission adopts this standard consistent with the requirements for many of the Commission's radio services, including services in the Upper 700 MHz Commercial Band, which limits out-of-band emissions (OOBE) to no more than 50 microwatts (50 μW) of transmitter output power over a typical instrument measurement bandwidth. The Commission notes one commenter's preference for a stricter limit, but determines that in the absence of data and other support from the many parties to this proceeding, it should not increase OOBE limits given the potential adverse effects that may result on the commercial usefulness of the spectrum.

62. Although the Commission adopted an additional 76 + 10 log P dB limit to apply to OOBE of Upper 700 MHz commercial licensees that might fall within the Upper 700 MHz public safety bands, the Commission sees no need to apply this requirement to licensees in the Lower 700 MHz Band. Given the 18 megahertz of separation between the Lower 700 MHz Band and the Upper 700 MHz spectrum set aside for public safety, the Commission believes that public safety will be adequately protected by the attenuation limits the Commission has imposed on use of the Lower 700 MHz Band.

63. By its decisions in the R&O , the Commission will generally apply part 27's existing rules on applications and licenses to all fixed, mobile, and new broadcast services offered in the Lower 700 MHz Band. The part 27 rules that address applications and licenses provide a licensing framework for the common elements of regulation that are applicable to wireless and new broadcast services alike. Section 27.3 provides for the potential application of specific licensing provisions contained in other parts of the Commission's rules to the extent that they do not conflict with the supervening application of part 27. See 47 CFR 27.3. Therefore, a Lower 700 MHz Band licensee could be subject, for example, to licensing aspects of part 22 if providing public mobile services, to part 73 if providing radio broadcast services, to part 90 if providing private land mobile radio services, and to part 101 if providing fixed microwave services.

64. The Commission finds that the application of part 27 licensing rules permits the flexible use necessary for the variety of services that are permitted by the band's reallocation. The Lower 700 MHz Band, like the Upper 700 MHz Band, is being reclaimed as part of the DTV transition and reallocation for uses that include both broadcast and non-broadcast operations. Part 27 allows licensees to make determinations respecting the services provided and technologies to be used, including provision of the full range of FDD- and TDD-based wireless services, as well as possible new broadcast services. Applying the licensing rules of part 27 will promote innovative services and encourage the efficient use of the 700 MHz Band as a whole.

65. The Commission agrees with the commenters and finds that a part 27 approach is likely to achieve efficiencies in the licensing and administrative process. Consistent with § 27.10 of the Commission's rules, Lower 700 MHz Band licensees will be permitted to provide any combination of services anywhere within their licensed areas at any time, consistent with the regulatory status specified by the licensee on its FCC Form 601 ( i.e. , common carrier, non-common carrier, private internal communications, and/or broadcast services) and with applicable interference protection requirements. Licensees operating in the Lower 700 MHz Band are subject to other FCC rule parts depending on the regulatory status of the services provided. See generally 47 CFR 27.3. For example, providers of CMRS must comply with applicable sections of Title II of the Communications Act, which governs common carrier service, as well as part 20 of the Commission's rules. To fulfill the Commission's enforcement obligations and ensure compliance with the statutory requirements of Titles II and III of the Communications Act, the Commission will require all Lower 700 MHz Band licensees to identify the service(s) they seek to provide. Consistent with § 27.10 of the Commission's rules, licensees in the Lower 700 MHz Band will not be required to describe the specific services they seek to provide, but only to designate the regulatory status of the service(s). Licensees will also be required to notify the Commission within 30 days of service changes that alter their regulatory status. Pursuant to § 27.66 of the Commission's rules, when the change results in the discontinuance, reduction, or impairment of the existing service, a different approach may apply, depending on the nature of the service affected.

66. With respect to the provision of broadcast services, the Commission is adopting the same regulatory approach for the Lower 700 MHz Band as it employed for the Upper 700 MHz Commercial Band. In the Upper 700 MHz First Report and Order , the Commission determined that the provision of new broadcast-type services under a part 27 license does not alter the underlying broadcast nature of such services. However, in the Upper 700 MHz MO&O and FNPRM , the Commission declined to apply the part 73 regulatory regime to part 27 new broadcast-type licensees in the Upper 700 MHz Commercial Band, stating that it would determine the applicable regulatory framework in the context of the offering of specific, actual new broadcast-type services. The Commission adopts this approach for the Lower 700 MHz Band and will allow any new broadcast services that meet the Commission's part 27 power limits and other technical standards. New broadcast services offered under part 27 will remain subject to the statutory provisions of the Communications Act governing broadcasting and the Commission will determine the applicability of additional provisions from part 73 on a case-by-case basis.

67. Consistent with the approach taken for the Upper 700 MHz Commercial Band, the Commission is permitting private radio uses in the Lower 700 MHz Band. In auctioning recaptured broadcast spectrum subject to 47 U.S.C. 309(j)(14), Congress did not preclude use of the spectrum for private, internal communications. The Commission's reallocation of the Lower 700 MHz Band, therefore, includes the ability to provide private fixed and mobile radio services.

68. Consistent with the Commission's tentative conclusion in the NPRM , the Commission will apply § 27.12's eligibility provisions to the Lower 700 MHz Band. See 47 CFR 27.12; see also id. § 27.302. As the Commission determined for the Upper 700 MHz Commercial Band, the Commission believes that the benefits of open eligibility also apply to the Lower 700 MHz Band. The Commission agrees that open eligibility will enhance the opportunities for licensees to provide service in any market or combinations of markets. A policy of open eligibility for the Lower 700 MHz Band will best serve the public interest by encouraging entrepreneurial efforts to develop new services and ensuring the most efficient use of the spectrum.

69. Because the Commission is adopting a flexible approach to regulatory status, all licensees will be subject to the same requirements to file changes in foreign ownership information to the extent required by the part 27 rules. In light of a part 27 licensee's ability to provide common carrier, non-common carrier, private internal communications and/or broadcast services, the part 27 rules require all licensees to report alien ownership to enable the Commission to monitor compliance. By establishing parity in reporting obligations, however, the Commission does not establish a single substantive standard for compliance. A non-broadcast applicant requesting authorization only for non-common carrier or private radio services will be subject to 47 U.S.C. 310(a) but not to the additional prohibitions of 47 U.S.C. 310(b). An applicant requesting authorization for new broadcast or common carrier services will be subject to both 47 U.S.C. 310(a) and 47 U.S.C. 310(b). Regarding foreign ownership of common carrier licenses under 47 U.S.C. 310(b)(4), the Commission will continue to apply the foreign ownership precedent set forth in prior Commission decisions.

70. The Commission will impose no specific limitations on the aggregation of spectrum in the Lower 700 MHz Band. Consistent with the Commission's Spectrum Cap Report and Order (67 FR 1626, January 14, 2002) the Commission believes entities should have the flexibility to aggregate Lower 700 MHz spectrum subject only to its 47 U.S.C. 310(d) public interest review.

71. Accordingly, the Commission will not adopt any Lower 700 MHz in-band or 700 MHz cross-band aggregation limits. The Commission agrees that parties should be afforded flexibility at auction or in the secondary market to aggregate sufficient unencumbered spectrum and to commence new services. The Commission recognizes that a single entity could acquire all 48 megahertz of the Lower 700 MHz Band spectrum in any given geographic area. The Commission believes, however, that given the high level of incumbency in the band and the need for flexibility to engineer around incumbent broadcasters, certain aggregations of spectrum may be in the public interest.

72. The Commission has also determined that the Lower 700 MHz Band should not be subject to any out-of-band aggregation limits, including the CMRS spectrum cap. The Commission disagrees with claims that exempting this band from the spectrum cap would lead to excessive concentration of spectrum in the hands of mega-carriers. Given the additional flexibility the Commission is permitting for the provision of new broadcast services, it is not clear that this spectrum will be used for CMRS. In addition, the Lower 700 MHz Band spectrum is significantly encumbered and is likely to remain so during the DTV transition, especially by the operations of DTV incumbents who await relocation to the core DTV spectrum. Thus, compared to the Upper 700 MHz Commercial Band, there is even less reason to extend the spectrum cap to the Lower 700 MHz Band. Moreover, to count this spectrum against the spectrum cap would be inconsistent with the Commission's decision to sunset the cap three months after the statutory deadline for auctioning Lower 700 MHz Band licenses.

73. Consistent with § 27.13(b) of the Commission's rules, the Commission is establishing a license expiration date of January 1, 2015 for Lower 700 MHz Band licenses. Because licensees need additional time to develop and use this spectrum in light of its continued use by incumbent broadcasters, the Commission has set an expiration date that is eight years after the earliest date that incumbent broadcasters may be required to vacate the Lower 700 MHz Band. The Commission is setting a definite license term that terminates January 1, 2015. The Commission believes that eight additional years will provide new licensees a reasonable period in which to comply with the performance requirements set forth in the R&O . If the continued presence of a substantial number of incumbents remains beyond this date, the Commission will consider whether extensions are warranted at that time. For licensees that elect to commence new broadcast operations prior to January 1, 2007, their renewal deadline will be set at the end of an eight-year term following commencement of such broadcast operations.

74. The Commission also is adopting the right to a renewal expectancy established in § 27.14(b), 47 CFR 27.14(b), for non-broadcast services. To claim a renewal expectancy, a Lower 700 MHz Band renewal applicant involved in a comparative renewal proceeding must demonstrate, at a minimum, the showing required in § 27.14(b) of the Commission's rules. In the event that a license is partitioned or disaggregated, the Commission will permit any partitionee or disaggregatee to hold its license for the remainder of the original licensee's license term and obtain a renewal expectancy on the same basis as other licensees in the Lower 700 MHz Band. All licensees meeting the Lower 700 MHz Band's performance requirements will be deemed to have met this element of the renewal expectancy requirement regardless of which of the construction options the licensee has chosen.

75. Consistent with the Commission's approach towards the Upper 700 MHz Commercial Band, the Commission will apply the construction requirement in § 27.14(a) of the Commission's rules to the Lower 700 MHz Band. See 47 CFR 27.14(a). Accordingly, a licensee must provide “substantial service” to its license service area no later than the end of its license term.

76. Section 27.14(a)'s construction requirement provides the flexibility required to accommodate the new and innovative services that are permitted by the Lower 700 MHz Band's reallocation. The substantial service standard is particularly appropriate for the Lower 700 MHz Band given the highly-encumbered nature of this particular spectrum. The Commission disagrees with those commenters that advocate stricter standards such as an unserved area approach. Because new licensees in different geographic areas will not be similarly situated due to the varying levels of incumbency, specific benchmarks for all new licensees would be inequitable. In contrast, the substantial service standard provides the Commission with flexibility to consider the particular circumstances of each licensee and how the level of incumbency has had an impact on the licensee's ability to build-out and commence service in its licensed area.

77. The Commission adopts the following safe harbors for licensees in the Lower 700 MHz Band to demonstrate substantial service: (1) The construction of four permanent links per one million people in the licensed service area of a licensee that chooses to offer fixed, point-to-point services; (2) the demonstration of coverage for 20 percent of the population of the licensed service area of a licensee that chooses to offer fixed, point-to-multipoint services; and (3) the demonstration of coverage for 20 percent of the population of the licensed service area of a licensee that chooses to offer mobile services.

78. The Commission will permit licensees in the Lower 700 MHz Band to partition their service areas and to disaggregate their spectrum in accordance with § 27.15 of the Commission's rules. See 47 CFR 27.15. Compared to an approach that restricts such transfers in the secondary market, the Commission believes that permitting partitioning and disaggregation in the Lower 700 MHz Band improves smaller entities' ability to overcome barriers to entry. The Commission does not agree with certain commenters that allowing licensees to partition and/or disaggregate their licensed spectrum fails to provide opportunities for small entities to enter and compete. As a part of the Commission's broader policy to facilitate efficient use of spectrum by its highest valued use, these allowances provide a mechanism by which all parties, including small businesses and rural telephone companies, can negotiate agreements to modify the geographic or spectral scope of any given license in the Lower 700 MHz Band. The Commission's decisions to adopt multiple blocks of spectrum and MSA/RSA-based service areas for 25 percent of the spectrum are specifically designed to identify an efficient starting point for small entities in this band.

79. A number of commenters recommend that the Commission permit spectrum leasing in the Lower 700 MHz Band. The Commission finds that a Lower 700 MHz Band licensee's right to lease its spectrum usage rights will be subject to decisions the Commission make in the Secondary Markets proceeding.

80. The Commission has considered operating rules for a full range of possible licensees in the Lower 700 MHz Band and believe part 27 provides an appropriate licensing framework for this spectrum. The part 27 rules provide for the potential application of specific operating provisions contained in other parts of the Commission's rules. See 47 CFR 27.3.

81. The Commission declines to adopt additional forbearance initiatives in this proceeding. Although the Commission solicited comment on the proper application of the Commission's forbearance authority with respect to the Lower 700 MHz Band, the Commission received no comments on the appropriate interpretation of the forbearance criteria in this context and only general proposals concerning additional forbearance from regulatory provisions applicable to service providers operating on this spectrum. The Commission continues to invite suggestions on ways in which it can alleviate or streamline regulations that would otherwise be applicable to Lower 700 MHz Band services.

82. Consistent with the approach adopted in the Upper 700 MHz First Report and Order , the Commission finds that an applicant's Equal Employment Opportunity (EEO) requirements will depend on the type of service the applicant chooses to elect on its FCC Form 601. As explained in the R&O , the Commission's FCC Form 601 enables an applicant to choose one, or several, regulatory statuses, including common carrier, non-common carrier, private internal communications and/or broadcast services. All CMRS providers are subject to the Commission's EEO requirements in §§ 22.321 and 90.168 of the Commission's rules. The Commission also notes that CMRS providers are generally subject to the Commission's common carrier EEO obligations. See 47 CFR 1.815.

83. A licensee that provides broadcast service will be subject to the EEO rules contained in § 73.2080 of the Commission's rules. The U.S. Court of Appeals for the D.C. Circuit held a portion of the broadcast EEO rule unconstitutional and vacated the rule in MD/DC/DE Broadcasters Associations v. FCC (236 F.3d 13 (D.C. Cir.), rehearing denied , 253 F.3d 732 (D.C. Cir. 2001), pet. for cert. filed, MMTC v. MC/DC/DE Broadcasters Ass'n , No. 01-639 (October 17, 2001)). The Commission thereafter suspended the EEO program requirements (but not the nondiscrimination requirement) for broadcasters, cable entities, and multichannel video program distributors (MVPDs) until further order of the Commission. That suspension order is still in effect. The Commission recently proposed new EEO requirements for broadcast, cable and MVPDs that would be consistent with the court's decision in MD/DC/DE Broadcasters Associations . Thus, licensees who elect to provide broadcast services will be required to comply with the nondiscrimination requirement currently in effect and any other EEO requirements that may subsequently be adopted by the Commission.

84. Pursuant to statutory mandate, competitive bidding procedures will be used to assign licenses for spectrum in the Lower 700 MHz band.

85. The Commission will use the general competitive bidding rules set forth in part 1, subpart Q, of its rules to conduct the auction of initial licenses in the Lower 700 MHz Band. The Commission's decision to adopt the part 1 rules is consistent with its ongoing effort to streamline the Commission's general competitive bidding rules for all radio services that are subject to competitive bidding and increase the efficiency of the competitive bidding process. Application of the part 1 rules will be subject to any modifications that the Commission may subsequently adopt.

86. The Commission will attribute casino gaming revenues in determining eligibility for small business preferences. The Commission's part 1 rules include an attribution rule that requires auction applicants to include gaming revenues in the calculations used to determine eligibility for small business status. The Commission adopted this policy in recognition that gaming revenues are exceptional revenues that, if not attributed to the applicant, could create an unfair competitive advantage with regard to all other applicants, and not just other Indian tribes. The Commission's attribution rules make no distinction among the types of businesses from which an attributable entity's gross revenues might arise, nor do they consider whether that entity is profitable. Given that gaming revenues are available for telecommunications uses, the Commission finds no basis to grant tribal entities an exemption from the attribution rule for gaming revenues. To the extent that tribal entities seek licenses with the intention to serve tribal lands, however, they may benefit from the Commission's policies and rules under which the Commission will award bidding credits in future auctions, including the Lower 700 MHz auction, for winning bidders who use licenses to deploy facilities and provide service to federally-recognized tribal areas that are either unserved by any telecommunications carrier or that have a telephone service penetration rate below 70 percent.

87. The Commission acknowledges certain commenters concerns regarding the use of combinatorial bidding procedures, but regards them as speculative at this time. The Commission notes that, consistent with statutory obligations, the Wireless Telecommunications Bureau (WTB) will seek comment on auction-related procedural issues, including auction design, prior to the start of the Lower 700 MHz auction pursuant to WTB's existing delegated authority. This will provide WTB with an opportunity to weigh the benefits and disadvantages of any particular bidding design, among other auction-specific issues ( e.g. , minimum opening bids), prior to the start of the Lower 700 MHz Band auction.

88. The Commission will extend bidding preferences to small business entities that seek an opportunity to participate in an auction of Lower 700 MHz Band licenses. The Commission has long recognized that bidding preferences for qualifying bidders provides such bidders with an opportunity to compete successfully against large, well-financed entities. The Commission has also found that the use of tiered or graduated small business definitions is useful in furthering the Commission's mandate under 47 U.S.C. 309(j) to promote opportunities for and disseminate licenses to a wide variety of applicants.

89. The Commission will adopt the same two small business definitions for the EAG-based licenses in the Lower 700 MHz Band that were applied to the EAG-based licenses in the Upper 700 MHz Commercial Band. Specifically, with respect to all EAG-defined licenses in the Upper and Lower 700 MHz Bands, the Commission will define a “small business” as any entity with average annual gross revenues for the three preceding years not exceeding $40 million, and a “very small business” as any entity with average annual gross revenues for the three preceding years not exceeding $15 million. The Commission believes that the considerations that formed the basis for its decision in the Upper 700 MHz Band proceeding are equally applicable with respect to the larger, EAG-based licenses that the Commission is establishing in this decision.

90. The Commission concludes that a third small business definition should be extended to those Lower 700 MHz Band licenses that are defined on the basis of MSAs and RSAs. In light of the expressions of interest in this proceeding by small business and rural interests in favor of smaller license areas, the Commission agrees to use the third small business definition that was suggested in the NPRM to allow “small business and rural telecommunications providers to participate more meaningfully” in a Lower 700 MHz Band auction. The Commission anticipates that new services that may be deployed in the smaller, non-EAG license areas could have different characteristics and capital requirements. Many of the same considerations that led the Commission to adopt smaller-sized licenses in the Lower 700 MHz Band also favor the use of a third small business size standard for those non-EAG licenses. Some new services that may be deployed in the smaller license areas may have lower capital requirements than for the larger EAG-based licenses. For example, these smaller license areas may be suited to applications with relatively low costs, such as fixed broadband wireless services which use only the “white areas” of a heavily-encumbered, smaller license area. In this regard, the Commission believes that this situation is analogous to that of the 24 GHz service, in which license areas were defined on the basis of EAs and a broad range of services were permitted. For these reasons, the Commission will use three small business definitions for the MSA and RSA-based licenses in the Lower 700 MHz Band, and will adjust the terms for size standards in this service accordingly. Thus, for services in the Lower 700 MHz Band, the Commission defines a “small business” as any entity with average annual gross revenues for the three preceding years not exceeding $40 million, a “very small business” as any entity with average annual gross revenues for the three preceding years not exceeding $15 million, and an “entrepreneur” as any entity with average annual gross revenues for the three preceding years not exceeding $3 million. Qualifying small businesses will be entitled to a bidding credit of 15 percent, qualifying very small businesses will be entitled to a 25 percent bidding credit, and qualifying entrepreneurs will be entitled to a 35 percent bidding credit.

91. We do not agree with commenters that criticize the Commission's designated entity preference program on the grounds that it has not been successful in meeting its objectives. The Commission's analysis of the results of its auction of licenses in the 39 GHz band demonstrates that small businesses can and will successfully compete for licenses. In that auction, entities that had average gross revenues of not more than $40 million for the three preceding years (including those that had average gross revenues of not more than $15 million for the preceding three years) successfully bid for 849 licenses, or almost 40 percent of the licenses sold. Such small businesses also successfully bid for 21 of the 46 licenses in the largest EAs (defined for this purpose as the top 25 percent of the EAs, as ranked by population). The Commission believes that the use of a third small entity definition may result in the dissemination of Lower 700 MHz Band licenses among an even wider range of small business entities, consistent with the Commission's obligations under 47 U.S.C. 309(j)(3)(B).

92. The Commission does not find that the Communications Act requires it to adopt an independent bidding credit for large telephone companies that serve rural areas. The consideration of this issue is guided by a line of Commission decisions in which the Commission has consistently found no basis for establishing an independent bidding credit for large telephone companies in rural areas. Large rural telcos have failed to demonstrate any barriers to capital formation similar to those faced by other designated entities. Rural telcos have access to low-cost financing through the National Rural Utilities Cooperative Finance Corporation, and may seek below-market rate lending through the Department of Agriculture's Rural Utilities Service. These financing options suggest that rural telephone companies may have greater ability than other designated entities to attract capital. The Commission also notes that, in conducting the analysis of its 39 GHz auction, all six qualified bidders that identified themselves on their short-form applications as rural telephone companies were successful at auction.

93. The Commission will apply unjust enrichment penalties to assignments of this spectrum. Congress has directed the Commission to establish rules that prevent unjust enrichment. Having recognized the potential for abuse of its designated entity preference policies, the Commission has established unjust enrichment rules to safeguard against speculation in the auction process and participation by entities that lack bona fide intent to offer communications services. The Commission does not rescind the entire bidding discount from a designated entity that partitions or disaggregates portions of its license to a non-qualifying entity. Rather, in such cases, the licensee is required to remit an unjust enrichment payment only in an amount equal to the proportion of the population in the partitioned area. The Commission notes that the question of the applicability of the unjust enrichment rules to leasing situations is under consideration in the Commission's Secondary Markets proceeding and defers its consideration of this issue to that proceeding.

94. The Commission remains committed to meeting the statutory objectives of promoting economic opportunity and competition, avoiding excessive concentration of licenses, and ensuring access to new and innovative technologies by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women. The Commission stated that it will continue to track the rate of participation in the Commission's auctions by minority- and women-owned firms and evaluate this information with other data gathered to determine whether additional provisions to promote participation by minorities and women are warranted.

95. The Commission intends to follow the time periods set forth under § 1.2108 of the Commission's rules. See 47 CFR 1.2108. The Commission has recognized that, in most cases, a ten-day filing period serves the public interest by providing parties, including small businesses, more flexibility in challenging license awards than a five-day period. The Commission also confirms, however, that WTB may, in its discretion, shorten that period to five days, if exigent circumstances exist. In this regard, the Commission notes that the statutory auction deadline is approaching, and that it may be necessary to limit this period to comply with that deadline. In addition, the other time periods set forth in § 1.2108 will apply, including the requirement to allow at least seven days following the issuance of the public notice that long-form applications have been accepted for filing before acting on any such application.

96. The Commission agrees with those commenters that argue that any efforts to clear this band must be purely voluntary. However, in light of certain differences between the Upper and Lower 700 MHz Bands, the Commission concludes that the Commission should employ a different approach from that established for the Upper 700 MHz Band. For instance, there is no public safety allocation in the Lower 700 MHz Band, and there is a significantly greater degree of broadcast incumbency relative to the Upper 700 MHz Band. In addition, the Commission notes that Congress has directed it to reclaim the Upper 700 MHz Band for public safety and commercial use under an accelerated time frame, but did not accord the same priority to recovery of the Lower 700 MHz Band. Therefore, rather than apply the presumptions that the Commission established in the Upper 700 MHz Band for analyzing voluntary band-clearing proposals, the Commission will not adopt any rules, and will instead rely on the Commission's basic responsibility to consider any regulatory requests related to band clearing in the Lower 700 MHz Band on a case-by-case basis, considering all relevant public interest factors. Broadcasters seeking to implement early band-clearing agreements must generally comply with existing broadcast rules and policies. Accordingly, the Commission does not extend to the Lower 700 MHz Band the extended DTV construction period that was provided to certain single-channel broadcasters in connection with the arrangements for early clearing of the Upper 700 MHz Band.

97. Although the Commission did not seek comment in the NPRM on broader issues relating the DTV transition process generally, a number of commenters urge the Commission to adopt proposals that they have been advocating in the Commission's DTV and DTV must-carry proceedings. The Commission believes that these requests in this proceeding do not raise distinctive or additional factual or policy considerations that justify departure from the broad determinations made or under consideration in those other proceedings. The Commission therefore defers consideration of those requests to the proper proceedings.

98. The Commission agrees that incumbent broadcasters and new 700 MHz licensees should not be constrained from developing new and innovative approaches to band clearing, however, the Commission declines to adopt a rule of general applicability for approving sharing arrangements at this time, particularly in light of the limited record on the issue. While the Commission does not adopt a general sharing rule at this time, the Commission will consider any such proposal on a case-by-case basis.

99. As required by section 603 of the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in Appendix C of the NPRM in this proceeding. The Commission sought written public comment on the proposals set forth in the NPRM , including comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) complies with the RFA, as amended by the Contract with America Advancement Act of 1996 (CWAAA) (Public Law No. 104-121, 110 Stat. 847 (1996)).

100. In the R&O , the Commission adopts rules to reclaim and reallocate the Lower 700 MHz Band currently used for TV Channels 52-59, for new commercial services as part of the Commission's transition of TV broadcasting from analog to digital transmission systems, consistent with the statutory directives enacted in the Balanced Budget Act of 1997. This R&O reallocates the entire 48 megahertz of spectrum in the Lower 700 MHz Band to fixed and mobile services, while retaining the existing broadcast allocation. The R&O establishes technical criteria designed to protect incumbent television operations in the band during the DTV transition period, allows LPTV and TV translator stations to retain secondary status and operate in the band after the transition, and sets forth a mechanism by which pending broadcast applications may be amended to provide analog or digital service in the core television spectrum or to provide digital service on TV Channels 52-58. The decision to reallocate this band in a manner that will permit new licensees to provide a broad range of services was guided by the Commission's previously announced policies favoring flexible spectrum allocations. This reallocation is also consistent with the Commission's obligations under sections 303(y) and 309(j)(3) of the Communications Act.

101. The R&O also establishes service rules for the Lower 700 MHz Band using the flexible regulatory framework in part 27 of the Commission's rules. In particular, the band plan for the Lower 700 MHz Band divides this spectrum into three 12-megahertz blocks (with each block consisting of a pair of 6-megahertz segments) and two 6-megahertz blocks of contiguous, unpaired spectrum. The Commission will license the five blocks in the Lower 700 MHz Band plan as follows: the two 6-megahertz blocks of contiguous unpaired spectrum, as well as two of the three 12-megahertz blocks of paired spectrum, will be assigned over six EAGs; the remaining 12 megahertz block of paired spectrum will be licensed over 734 MSAs and Rural Service Areas RSAs. The service rules have been designed to promote the objectives identified in 47 U.S.C. 309(j), including the development and rapid deployment of new technologies, products, and services for the benefit of the public; the promotion of economic opportunity and competition; the recovery of a portion of the value of the spectrum made available for commercial use; and the efficient and intensive use of the spectrum.

102. Although the decisions in the R&O were patterned on the approach adopted for the Upper 700 MHz Band, the R&O adopts a geographic area licensing approach to assign licenses in the Lower 700 MHz Band that includes smaller license areas than were established for the Upper 700 MHz Band. As with the Upper 700 MHz Band, the R&O for the Lower 700 MHz Band also uses relatively small spectrum block sizes. The 48 megahertz of spectrum that comprises the Lower 700 MHz Band will be licensed with two six-megahertz blocks of contiguous unpaired spectrum and two 12-megahertz blocks of paired spectrum over 6 EAGs. The remaining 12-megahertz block of paired spectrum will be licensed over 734 MSAs/RSAs.

103. The use of these small license areas also is intended to satisfy the Commission's obligations in prescribing characteristics of licenses to “promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women.” 47 U.S.C. 309(j)(3)(B). Establishing such small license areas also furthers the Commission's obligation to “prescribe area designations and bandwidth assignments that promote “ economic opportunity for a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women.” 47 U.S.C. 309(j)(4)(C).

104. The R&O also establishes competitive bidding rules and voluntary clearing procedures for the Lower 700 MHz Band. Consistent with the Commission's responsibility under 47 U.S.C. 309(j) to promote opportunities for, and disseminate licenses to, a wide variety of applicants, the R&O also adopts small business size standards and bidding preferences for qualifying bidders that will provide such bidders with opportunities to compete successfully against large, well-financed entities. In particular, for services in the Lower 700 MHz Band, the Commission has defined a “small business” as any entity with average annual gross revenues for the three preceding years not exceeding $40 million, a “very small business” as any entity with average annual gross revenues for the three preceding years not exceeding $15 million, and an “entrepreneur” as any entity with average annual gross revenues for the three preceding years not exceeding $3 million. The Commission will use its standard schedule of bidding credits, which may be found at § 1.2110(f)(2) of the Commission's rules. See 47 CFR 1.2110(f)(2). The entrepreneur standard and associated 35 percent bidding credit will, however, not apply to the larger EAG-based licenses in the Lower 700 MHz Band. Drawing on recent precedent involving another flexible-use service (the 24 GHz service), the Commission found that “[b]ecause the capital costs of operational facilities in the “ band are likely to vary widely, the Commission believe that the use of three small business definitions will be useful in promoting opportunities for a wide variety of applicants * * *.” The Commission has concluded that these bidding credits will provide adequate opportunities for small businesses to participate in the Lower 700 MHz Band auction.

105. The R&O also establishes a policy of permitting incumbent broadcasters and new licensees to reach voluntary agreements that would result in the early clearing of incumbents from the Lower 700 MHz spectrum. These policies are intended to further the Commission's objective of establishing rules that will facilitate, rather than hinder, the clearing of incumbent broadcasters from this spectrum in a manner consistent with the Commission's DTV transition policy goals.

106. Only one commenter, the National Telephone Cooperative Association (NTCA), specifically raises issues in response to the IRFA. NTCA urges the Commission to assign spectrum in the Lower 700 MHz Band across small geographic areas, arguing that small businesses such as rural telephone companies cannot compete against large carriers in auctions for large geographic areas. According to NTCA, assigning at least a portion of this spectrum across small geographic areas will allow small providers an opportunity to bid on, acquire, and develop service in the more limited areas in which they wish to operate. In response to comments made by NTCA and other small business interests on this issue, the Commission decided to use the smallest geographic area option that was described in the NPRM , the 734 MSAs and RSAs, for 12 of the 48 megahertz of spectrum in the Lower 700 MHz Band.

107. The RFA directs agencies to provide a description of, and, where feasible, an estimate of, the number of small entities to which the rule will apply or an explanation of why no such estimate is available. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction” under section 3 of the Small Business Act. In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. Under the Small Business Act, a “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA. According to SBA reporting data, there were approximately 4.44 million small business firms nationwide in 1992. A small organization is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of 1992, there were approximately 275,801 small organizations. “Small governmental jurisdiction” generally means “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than 50,000.” As of 1992, there were approximately 85,006 local governments in the United States. This number includes 38,978 counties, cities, and towns; of these, 37,566, or 96 percent, have populations of fewer than 50,000. The Census Bureau estimates that this ratio is approximately accurate for all governmental entities. The Commission therefore estimates that, of the 85,006 governmental entities, 81,600 (96 percent) are small entities. The Commission further describes and estimates the number of small entity licensees and regulatees that may be affected by the rules adopted in the R&O .

108. The policies and rules adopted in the R&O and discussed in this FRFA will affect all entities, including small entities, that seek to acquire licenses in wireless services in the 698-746 MHz band, or are television broadcasters in this band.

109. Wireless services. The policies and rules adopted in this R&O affect all small entities that seek to acquire licenses in wireless services in the Lower 700 MHz Band currently used for television broadcasts on Channels 52-59, or are incumbent television broadcasters on Channels 52-59. The Commission has adopted small business size standards that define a “small business” as any entity with average annual gross revenues for the three preceding years not exceeding $40 million, a “very small business” as any entity with average annual gross revenues for the three preceding years not exceeding $15 million, and an “entrepreneur” as any entity with average annual gross revenues for the three preceding years not exceeding $3 million. (The entrepreneur standard does not extend to the larger EAG-based licenses in the Lower 700 MHz Band.) The SBA has approved this small business size standard for the Lower 700 MHz auction. However, the Commission cannot know until the auction begins how many entities will seek entrepreneur, small business, or very small business status. The Commission will allow partitioning and disaggregation, yet it cannot determine in advance how many licensees will partition their license areas or disaggregate their spectrum blocks. In view of the Commission's lack of knowledge of these factors, it is therefore assumed that, for purposes of the Commission's evaluations and conclusions in the FRFA, all of the prospective licenses are small entities, as that term is defined by the SBA or the Commission's small business definitions for these bands.

110. Television Broadcast. The SBA defines a television broadcasting station as a small business where it is independently owned and operated, is not dominant in its field of operation, and has no more than $10.5 million in annual receipts. Television broadcasting stations consist of establishments primarily engaged in broadcasting visual programs by television to the public, except cable and other pay television services. Included in this industry are commercial, religious, educational, and other television stations. Also included are establishments primarily engaged in television broadcasting and which produce taped television program materials. There were 1,509 television stations operating in the United States in 1992, of which 1,155 (76.5 percent) produced less than $10.0 million in revenue. As of May 31, 1998, official Commission records indicate that 1,579 full power television stations, 2,089 low power television stations, and 4,924 television translator stations were licensed. Using the percentage of television broadcasting licensees that were small entities in 1992 (76.5 percent) and the 1998 records indicating 1,579 full power stations, the Commission concludes that there are approximately 1,208 full power television stations that are small entities.

111. The rules adopted in the R&O may affect approximately 1,663 television stations currently operating in the Lower 700 MHz Band, approximately 1,281 of which are considered small businesses. In addition, the rules adopted in the R&O will affect some 12,717 radio stations currently operating in this band, approximately 12,209 of which are small businesses. These estimates may overstate the number of small entities because the revenue figures on which they are based do not include or aggregate revenues from non-television or non-radio affiliated companies. There are also 2,366 LPTV stations. Given the nature of this service, the Commission presume that all LPTV licensees qualify as small entities under the SBA definition.

112. Auxiliary or Special Broadcast. This service involves a variety of transmitters, generally used to relay broadcast programming to the public (through translator and booster stations) or within the program distribution chain (from a remote news gathering unit back to the station). The Commission has not developed a definition of small entities applicable to broadcast auxiliary licensees. The applicable SBA definition is that noted previously, under the SBA rules applicable to television broadcasting stations. The Commission estimates that there are approximately 2,700 translators and boosters. The Commission does not collect financial information on any broadcast facility, and the Department of Commerce does not collect financial information on these auxiliary broadcast facilities. The Commission believes that most, if not all, of these auxiliary facilities could be classified as small businesses if viewed apart from any associated broadcasters. The Commission also recognizes that most commercial translators and boosters are owned by a parent station which, in some cases, would be covered by the revenue definition of small business entity. These stations would likely have annual revenues that exceed the SBA maximum to be designated as a small business ($10.5 million for a TV station). Furthermore, they do not meet the Small Business Act's definition of a “small business concern” because they are not independently owned and operated.

113. Entities interested in acquiring initial licenses for new services in the 698-746 MHz band will be required to submit short form applications (FCC Form 175) to participate in an auction and high bidders will be required to apply for their individual licenses. Also, commercial licenses will be required to make showings that they are in compliance with construction requirements, file applications for license renewals, and make certain other filings as required by the Communications Act and Commission regulations. Entities seeking to acquire licenses (or disaggregated or partitioned portions of licenses) from Commission licensees in the post-auction market are also required to submit long-form applications (FCC Form 601) seeking Commission authority to complete any such transactions. In addition to the general licensing requirements of part 27 of the Commission's rules, other parts may be applicable to commercial licensees, depending on the nature of service provided. For example, commercial licensees proposing to provide broadcast services on these bands may be required to comply with all or part of the broadcast-specific regulations in part 73 of the Commission's rules.

114. By this R&O , the Commission requires licensees to notify the Commission within 30 days of a change in regulatory status between common carrier and/or non-common carrier. In addition, because the Commission considers partitioning and disaggregation to be a form of license assignment, the Commission requires such action to receive Commission approval via application for assignment on FCC Form 603. With regard to alien ownership, the Commission requires licensees to amend their FCC Form 602 to reflect any changes in foreign ownership information, together with the initial information required by FCC Form 601.

115. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its decision, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

116. Commenters in this proceeding recommend a variety of steps the Commission may take to lessen the impact on small businesses while assigning spectrum in the Lower 700 MHz Band. For example, the majority of commenters advocate the use of small geographic license areas, especially MSAs and RSAs, so that small providers may avoid having to bid on areas that are larger than they need. A few commenters suggest the Commission could benefit small providers in a similar manner by assigning the spectrum across multiple blocks, and one party urges a set-aside for small businesses. Another commenter argues that spectrum aggregation limits must be maintained so as to prevent an excessive concentration of licenses by large providers that may work against the interests of other competitors.

117. With these RFA requirements and comments from the record in mind, the Commission adopts rules in the R&O that are designed to reduce regulatory burdens, promote innovative services and encourage flexible use of this spectrum. They increase economic opportunities to a variety of spectrum users, including small businesses. Specifically, the Commission reallocates the entire 48 megahertz of spectrum in the 698-746 MHz band to fixed and mobile services, while retaining the existing broadcast allocation. New licensees, including smaller entities, will enjoy flexible use for the full range of proposed allocated services consistent with necessary interference requirements.

118. In addition, the Commission adopts rules on spectrum block size and geographic areas that may be of even greater significance for small entities. For example, with respect to the size of spectrum blocks for licensees, the Commission declines to allocate the 48 megahertz over a single block, instead choosing an allocation over multiple blocks of six and twelve megahertz each. The Commission also permits disaggregation and partitioning of these spectrum blocks. With respect to the size of geographic license areas, the Commission allocates licenses over large regional EAGs as well as small MSAs/RSAs. As small business commenters have observed, a MSA/RSA-based license area may be a particularly appropriate alternative for small providers that wish to avoid having to acquire a larger license area that they must subsequently partition. At the same time, consistent with the Commission's flexible approach, the Commission allows both partitioning and aggregation of all of these licenses, such that licensees may increase or decrease the size of their service areas to better meet market demands. Because the Commission believes that the use of multiple spectrum blocks and MSAs/RSAs effectively meets the needs of small providers, it therefore declines to adopt other suggested alternatives, such as spectrum aggregation limits, in this band.

119. The Commission further notes that the R&O adopts small business definitions and preferences for qualifying bidders in the 698-746 MHz band. These standards define an “entrepreneur” as any entity with average annual gross revenues for the three preceding years not exceeding $40 million, a “small business” as any entity with average annual gross revenues for the three preceding years not exceeding $15 million, and a “very small business” as any entity with average annual gross revenues for the three preceding years not exceeding $3 million. Although the Commission had initially proposed the adoption of only two small business definitions, it has found that the use of a third small business definition for MSA/RSA-based licenses will allow small business and rural telecommunications providers to participate more meaningfully in a Lower 700 MHz Band auction.

120. Finally, the R&O establishes a policy of permitting incumbent broadcasters and new licensees to reach voluntary agreements that would result in the early clearing of the Lower 700 MHz spectrum. Broadcasters electing to enter into such agreements may be required to seek Commission approvals in order to implement such agreements. Such regulatory requests may be submitted using existing application forms. Because the Commission's policy is entirely voluntary, broadcasters and new licensees, including small entities, are under no obligation to enter into such early clearing arrangements or to seek Commission approval of same.

121. The regulatory burdens contained in the R&O, such as filing applications on appropriate forms, are necessary in order to ensure that the public receives the benefits of innovative new services, or enhanced existing services, in a prompt and efficient manner. The Commission will continue to examine alternatives in the future with the objectives of eliminating unnecessary regulations and minimizing any significant economic impact on small entities.

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

123. This R&O contains either a new or modified information collection. The Commission is seeking immediate approval for the information collection contained herein pursuant to the “emergency processing” provisions of the Paperwork Reduction Act of 1995. See 5 CFR 1320.13. The Commission will publish a document in the Federal Register announcing the effective date of the information collection.

124. Pursuant to sections 1, 2, 4(i), 5(c), 7, 201, 202, 208, 214, 301, 302, 303, 307, 308, 309, 310, 311, 314, 316, 319, 324, 331, 332, 333, 336, 614 and 615 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 155(c), 157, 201, 202, 208, 214, 301, 302a, 303, 307, 308, 309, 310, 311, 314, 316, 319, 324, 331, 332, 333, 336, 534, 535, this R&O is hereby ADOPTED and parts 2, 27 and 73 of the Commission's rules, 47 CFR parts 2, 27 and 73, ARE AMENDED to establish service rules for the 698-746 MHz band, as set forth in the R&O, effective April 8, 2002. The information collection contained in these rules will become effective upon OMB approval.

125. Authority is delegated to the Mass Media Bureau to implement the policies for the introduction of new wireless services and to promote the early transition of incumbent analog television licensees to DTV service to the extent discussed in the R&O.

126. A 45-day filing window period will commence on January 22, 2002 and will end March 8, 2002 for applicants to amend their pending proposals in accordance with the policies and procedures set forth in the R&O.

127. The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this R&O, including the FRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

For several years, the Board has been making filings received in select agency proceedings available to the public by publishing them under the “Filings” link on the Board's Internet website, www.stb.dot.gov. We have used two methods to make filings available on the Internet.

Initially, we made filings available by downloading text files from diskettes, which were required to be filed along with the paper copies in certain cases to facilitate case processing. Public reaction to having filings available on the Internet was positive, and we were encouraged to make all filings available on our website. However, downloading text files was labor intensive, and some files could not be downloaded at all. Moreover, text files included only text that the filer had word processed; no signatures, stamps, or graphics could be made available on-line. A more complete solution was needed.

More recently, the Board acquired scanning resources. Instead of downloading text files, we began to scan filings received in select cases and publish images of the filings on our website. Scanning technology has given the Board the ability to place on the Internet a replica of every documentary filing, in its entirety, in every case. Thus, scanning will be used to provide the public with more complete Internet access to the documentary record in Board proceedings.

To ensure that the highest quality image is captured during the scanning process and to facilitate high-speed scanning, rule 1104.2 will be amended. Amended rule 1104.2 will provide that filings must be typed, double-spaced, on 8 1/2 by 11-inch white paper, with dark type no smaller than 12 point. These standards will provide adequate contrast for scanning and photographic reproduction. To facilitate the scanning process, original documents must be unbound and without driver tabs  1 and printed only on one side of the paper. 2 Documents of more than one page may be clipped with a removable clip or similar device. These measures will reduce the possibility of damage to documents during removal of pins and staples and facilitate the use of the high-speed scanner mechanism for automated scanning. All pages of a submission (each side of each page, if printing is on both sides), including cover letters and attachments, must be paginated continuously. 3 This will help ensure scanning accuracy.

We recognize that some filings may not conform to the above specifications and, therefore, we will be unable to scan them. For example, spreadsheet data in electronic format and oversized maps or blueprints may be included in a filing, but will not be susceptible to scanning. To address this, we have developed procedures for referencing the location of non-scannable submissions and making them available to the public at the Board's offices. Where there are oversized documents, however, parties are encouraged to file, in addition to the oversized documents, representations of them that fit on the standard paper described in section 1104.2(a), if possible. For example, a copy of an oversized map may be reduced in size (but only if the map and any writing on the map remain legible), or may be cut into multiple sequential standard pages that, when placed together, make up the whole. The standard sized representation should be identified and placed immediately behind the oversized document it represents.

The Board has the capability to scan in color. However, scanning of color pages requires special handling. Accordingly, to ensure timely processing of all filings, color printing may not be used for textual submissions. Use of color in filings is limited to images such as graphs, maps and photographs. In addition, pages containing color images may be filed only as appendices or attachments to filings and not inserted among pages containing text. Also, the original of any filing that includes color images must bear an obvious notation, on the cover sheet, that the filing contains color.

Confidential filings will be processed so that persons using the Board's website will know by looking at the on-line list of filings that a particular filing is in the record as a confidential filing. However, the contents of confidential filings will not be viewable or downloadable from the Board's website. 4

Rule 1104.3 is being amended to clarify the number and type of electronic filings required by the Board and to reflect the Board's use of more current technology. Electronic submissions must be submitted on compact discs or 3.5-inch IBM-compatible floppy diskettes (collectively referred to as discs). 5 Discs should be clearly labeled with (1) the Docket Number of the proceeding in which it is filed; (2) the name(s) of the party(ies) on whose behalf the filing is made; and (3) “CONFIDENTIAL” or “REDACTED” as appropriate. If more than one disc is needed for a single filing, the label of each disc must be sequentially numbered to indicate the disc number and the total number of discs filed (e.g., the first disc of a 4-disc set should be labeled “Disc 1 of 4,” the second disc “Disc 2 of 4,” and so forth.)

Rule 1104.15, which addresses certification of eligibility for Federal benefits, is being amended to reflect that the underlying statute has been transferred to a different section of the U.S. Code without substantive change.

Because these changes update rules to agency procedure and practice and are not substantive changes, we find good cause to dispense with notice and comment. 5 U.S.C. 553(b)(A) and (B).

The amended regulations are set forth in the Appendix.

Pursuant to 5 U.S.C. 605(b), we certify that these rules will not have a significant economic impact on a substantial number of small entities. They affect only the technical specifications for filing the original copy of documentary submissions and for filing electronic submissions.

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

Hackelia venusta (showy stickseed) is a showy perennial herb of the Borage family (Boraginaceae). The plant was originally described by Charles Piper as Lappula venusta , based on a collection from Tumwater Canyon, Chelan County, Washington made by J. C. Otis in 1920. In 1929, Harold St. John reexamined the specimen and placed it in the related genus Hackelia upon recognizing that, being a perennial plant, it more properly fit with Hackelia than Lappula , a genus of annual plants (St. John 1929).

Hackelia venusta is a short, moderately stout species, 20 to 40 centimeters (cm) (8 to 16 inches (in)) tall, often with numerous, erect to ascending stems from a slender taproot. It has large, showy, five-lobed flowers that are white and reach approximately 1.9 to 2.2 cm (0.75 to 0.87 in) across. Basal leaves are 7 to 14 cm (2.8 to 5.5 in) long and 0.64 to 1.3 cm (0.25 to 0.5 in) wide, while the upper stem leaves are 2.5 to 5.1 cm (1 to 2 in) long and 0.38 to 0.64 cm (0.15 to 0.25 in) wide (Barrett et al. 1985). The fruit consists of a prickly nutlet, approximately 0.38 to 0.43 cm (0.15 to 0.17 in) long, and is covered with stiff hairs that aid in dispersal by wildlife.

Hackelia venusta is morphologically uniform and is distinct from other species of Hackelia occurring in central Washington. It can be distinguished from other species in the genus, in part, by its smaller stature, shorter leaf length, fewer basal leaves, and the large size of the flowers. High-elevation Hackelia populations that have, in the past, been assigned to Hackelia venusta have distinct morphological features with the most obvious distinction being blue flowers. The Tumwater Canyon flowers are white and on rare occasion washed with blue. Other distinct morphological differences between the Tumwater Canyon and the high-elevation Hackelia populations are limb width, plant height, and radical leaf length (Harrod et al. 1999).

Hackelia venusta is shade-intolerant (Robert Carr, Eastern Washington University, pers. comm., 1998) and grows in openings within Pinus ponderosa (ponderosa pine) and Pseudotsuga menziesii (Douglas-fir) forest types. This vegetation type is described as the Douglas-fir zone by Franklin and Dyrness (1988). H. venusta is found on open, steep slopes (minimum of 80 percent inclination) of loose, well-drained, granitic weathered and broken rock fragmented soils at an elevation at about 486 meters (m) (1,600 feet (ft)). The type specimen for H. venusta was collected at a site between Tumwater and Drury in Tumwater Canyon, west of Leavenworth, Washington. H. venusta is restricted to this single population in Tumwater Canyon. The population is found in an area designated as the Tumwater Botanical Area by the Wenatchee National Forest. This designation was originally established in 1938 to protect a former candidate plant, Lewisia tweedyi (Tweedy's lewisia), that has been found to be more widespread than previously considered (F.V. Horton, U.S. Forest Service (Forest Service), in litt. 1938; Forest Service 1971). The designation for the botanical area remains because of the presence of Hackelia venusta and Silene seelyi (Seely's catch-fly), a species of concern due to its declining status.

Three other locations within 20 km (12 mi) of the type locality were thought to harbor Hackelia venusta. One location near Crystal Creek Cirque was relocated in 1986 after not having been seen since 1947 (Gamon 1988a). A second location near Asgard Pass was not discovered until 1987 (Gamon 1988a). The Asgard Pass population was apparently extirpated by a major landslide during 1994 or 1995 (Richy Harrod, Forest Service, pers. comm., 1996). A third location was discovered on Cashmere Mountain in August 1996 (R. Harrod, pers. comm., 1996). The Crystal Creek and Cashmere Mountain locations occur about 10 km (6 mi) apart and are both within the Alpine Lakes Wilderness Area of the Wenatchee National Forest. Elevations for these populations range from 1,920 to 2,255 m (6,300 to 7,400 ft). Recent information indicates these two high-elevation locations are a distinct taxon, different from the H. venusta found in the Tumwater Canyon population (Harrod et al. 1999). The Tumwater Canyon plants have a larger white corolla, a taller habit, remote lower leaves, and in general, the leaves are less stiff and leathery. The Crystal Creek and Cashmere Mountain populations, in contrast, have small, blue flowers and are more compact. The population at Tumwater Canyon does not have individuals that are intermediate in these characters. Also, the Tumwater Canyon population is geographically and reproductively isolated from the Crystal Creek and Cashmere Mountain populations. The Crystal Creek and Cashmere Mountain populations are temporally isolated from the Tumwater Canyon population in relation to their local seasons and climatic zones. The Tumwater Canyon population flowers in spring, while the Crystal Creek and Cashmere Mountain populations are under several meters of snow and normally flower in July.

Isozyme analysis conducted by the Forest Service indicates a clear separation between the Tumwater Canyon and high-elevation populations of Hackelia (Carol Aubry, Forest Service, pers. comm., 1998; Wilson et. al. , in review). This analysis measures the differences in plant proteins (usually an enzyme) and can be used to detect genetic differences among populations. Dr. Robert Carr, Professor of Botany, Eastern Washington University, attempted specific and intraspecific crosses with 18 species of North American Hackelia over a 3-year period but was unable to produce viable seed from these crosses in the greenhouse. Dr. Carr indicated that he had not attempted to cross the Tumwater Canyon and Crystal Creek/Cashmere Mountain populations, primarily because of the difficulty of growing Hackelia from seed in the greenhouse, and the temporal differences in the two populations' flowering. Dr. Carr, an expert on the genus Hackelia , has confirmed on numerous occasions that the Tumwater Canyon and high-elevation populations are separate and should be considered two separate and distinct species (R. Carr, pers. comm., 1998, in litt. 2000). The high-elevation species of Hackelia has been recently described and named as H. taylori (Harrod et al. , in review). Since the Crystal Creek and Cashmere Mountain populations are distinct from Hackelia venusta, they are not the subject of this final rule and will not be further discussed.

An occurrence of what was originally cataloged as Hackelia venusta was found in 1948 in Merritt, WA, in Chelan County, but attempts to relocate the site have failed. Changes in land use do not support growth of this species in this area anymore. The current element occurrence records of the Washington Natural Heritage Program designate this site as historic. Recent taxonomic work on the genus Hackelia indicates that the herbarium specimen for the Merritt site fits more closely into the subspecies H. diffusa var. arida. This subspecies will often have large white flowers and could have been misleading to the early plant collectors (Harrod et al. , 1999; R. Harrod, in litt. 2000). This being the case, the Tumwater Canyon population of Hackelia venusta may have always been the only location for the species.

In Tumwater Canyon, Hackelia venusta occurs primarily on unstable soils on steep rocky slopes and outcrops, though scattered individuals formerly occurred along a State highway roadcut and within the road right-of-way (ROW). The species is found entirely on Federal land administered by the Wenatchee National Forest. H. venusta appears to be somewhat adapted to natural and possibly human-caused substrate disturbance (R. Carr pers. comm., 1998). Although potential habitat for this species is widespread in Tumwater Canyon, the plant is scattered throughout an area of less than 1 hectare (ha) (2.5 acres (ac)).

In 1968, the taxon appeared “limited to a few hundred acres” (Gentry and Carr 1976), and in 1981 the population was estimated to have 800 to 1,000 plants. In 1984, and again in 1987, fewer than 400 individuals were found over an area of approximately 5 ha (12 ac) (Gamon 1988a). Personal observations by Ted Thomas (Service) (in cooperation with Richy Harrod (Forest Service) and Paul Wagner, Washington Department of Transportation (WDOT)), using an intensive search and count method on May 11, 1995, revealed fewer than 150 individuals growing on less than 1 ha (2.5 ac) of suitable habitat. According to Dr. Carr, the area occupied by H. venusta is greatly reduced, and the number of individual plants has seriously declined since he first visited the Tumwater Canyon population in the early 1970s (R. Carr, pers. comm., 1996). Although earlier counts were conducted by different workers using different techniques, the population size shows a clear downward trend.

During the late 1990s, and since the publication of the proposed rule to list the species on February 14, 2000 (65 FR 7339), the population of H. venusta has been monitored on an annual basis. In May 2000, nearly 300 plants were counted, and in May 2001, the number of plants in the population approached 500 plants (Lauri Malmquist, Forest Service, in litt. 2000, pers comm., 2001). The increase in the population size can be attributed to several events that have occurred in the past 7 years within the habitat for the species. Wildfires burned through Tumwater Canyon in 1994, resulting in both positive and negative effects on H. venusta habitat. The primary positive outcome was that the forest canopy was reduced, creating less shade and competition, and more open growing space that created new, suitable sites for the natural regeneration and establishment of H. venusta seedlings. The negative impact is the increased potential of landslides when wildfire removes overstory vegetation. Additionally, the Forest Service has been proactive in their treatment of the nonnative noxious weed problem within Tumwater Canyon. To reduce the nonnative plant threat to H. venusta , the Leavenworth Ranger District staff, Wenatchee National Forest, have both removed weeds by hand and carefully applied herbicides to them in H. venusta habitat. This project was implemented in 1999 and 2000, emphasizing treatment to the habitat directly adjacent to the State highway where invasive species tend to become established and then spread into the remainder of the population. (R. Harrod, pers comm., 2001).

Lastly, during the winter of 2000, the Forest Service, in cooperation with the WDOT and the Service, implemented a restoration project within the habitat of Hackelia venusta. About 35 small trees and one very large standing dead tree were felled and removed from the site (L. Malmquist, in litt. 2001; R. Harrod, pers. comm., 2000), using a deep snowpack to avoid impacts to the soil and protect the dormant H. venusta population. Each of these projects reduced shade; increased light onto the slope; reduced competition for light, water, and nutrients with native and nonnative trees, shrubs, and weeds; and provided new germination substrates for the establishment of H. venusta seedlings.

Section 12 of the Act (16 U.S.C. 1541) directed the Secretary of the Smithsonian Institution to prepare a report on those plants considered to be endangered, threatened, or extinct in the United States. This report, designated as House Document No. 94-51, was presented to Congress on January 9, 1975. We published a notice in the July 1, 1975, Federal Register (40 FR 27823) announcing our decision to treat the Smithsonian report as a petition within the context of section 4(c)(2) (petition provisions are now found in section 4(b)(3)) of the Act and our intention to review the status of those plants. Hackelia venusta was included in this petition as an endangered species.

On December 15, 1980, we published a Notice of Review for plants (45 FR 82480) that included Hackelia venusta as a category 1 candidate species. Category 1 candidates were those species for which we had on file substantial information on biological vulnerability and threats to support preparation of listing proposals. The plant notice revision of September 27, 1985 (50 FR 39525), included H. venusta as a category 2 candidate. Category 2 candidates were those species for which information in our possession indicated that proposing to list as endangered or threatened was possibly appropriate, but for which conclusive data on biological vulnerability and threats were not currently available to support a proposed rule. Pending completion of updated status surveys, the status was changed to category 1 in the February 21, 1990, Notice of Review (55 FR 6183). In the September 30, 1993, Notice of Review (58 FR 51144), H. venusta remained a category 1 candidate.

In the February 28, 1996, Notice of Review (61 FR 7596), we discontinued the use of multiple candidate categories and considered the former category 1 candidates as simply “candidates” for listing purposes. However, in that Notice of Review, Hackelia venusta was removed from the candidate list due to questions regarding the species' taxonomic status. An updated status review, completed in June 1997, reflected the new taxonomic information that determined only a single population of H. venusta currently existed. In the October 29, 1999, Notice of Review (64 FR 57534), H. venusta was included as a candidate species with a listing priority of 2.

We published a proposed rule to list the species as endangered on February 14, 2000 (65 FR 7339). The final rule for Hackelia venusta was delayed because of the need to focus our limited listing resources on listing actions that were under court order or settlement agreement during fiscal year 2001 which did not include H. venusta .

In March 2000, the Forest Service consulted with the Service on a restoration project to improve the habitat where Hackelia venusta is found. In an informal conference report, we concurred that the project “was not likely to jeopardize the continued existence” of H. venusta . If the species was listed in the future, the Forest Service concluded that the determination of effects for the project “may affect, not likely to adversely affect” the species (Service 2000).

On October 2, 2001, a consent decree was entered to settle listing litigation with the Center for Biological Diversity, Southern Appalachian Biodiversity Project, Foundation for Global Sustainability, and the California Native Plant Society which requires us to complete work on a number of species proposed for listing. Under this settlement, we will issue several final listing decisions, including a final decision for Hackelia venusta . The consent decree requires us to send a final listing determination for this species to the Federal Register by February 6, 2002 ( Center for Biological Diversity, et al. v. Norton, Civ. No. 01-2063 (JR) (D.D.C.)). On November 7, 2001, we reopened the comment period for an additional 30 days to accommodate the public notice requirement of the Act (66 FR 56265).

In the February 14, 2000, proposed rule (65 FR 7339), we requested all interested parties to submit factual reports, information, and comments that might contribute to the development of the final listing decision. We contacted appropriate State agencies, county and city governments, Federal agencies, university scientists, consulting organizations, conservation organizations and other interested parties and requested them to comment. Following the publication of the proposed rule, we received 20 written comments during the 60-day comment period. Comments were received from a variety of sources, including three Federal agencies, three Washington State agencies, three non-governmental organizations, four botanical and environmental consultants, one university, and six individuals. We reopened the comment period on November 7, 2001 (66 FR 56265) for 30 days and requested any new information from the public on the species since publication of the proposed rule. We published a legal notice in the Wenatchee World newspaper on November 13, 2001. We received an additional 12 comments during the second comment period, although three of these commenters had provided comments during the first comment period. Therefore, we received comments from a total of 29 respondents.

All 29 commenters supported the listing of Hackelia venusta as endangered. Several commenters provided new information on the current status of the species, and information on new threats to this single population of the H. venusta , which we have incorporated into this final rule. We have addressed each of the substantive issues raised by commenters by grouping the comments into four issues that are discussed below.

Issue 1: The overwhelming comment received from 28 of the 29 commenters was that designation of critical habitat for Hackelia venusta is not prudent. The principal concern is the increased risk of collection of the species that would occur from the publication of maps. Only one commenter supported critical habitat designation, although he admitted that designation of critical habitat would increase collection pressure on the population.

Our Response: Under the critical habitat section in the proposed rule, we stated that it was prudent to designate critical habitat for Hackelia venusta because it did not appear that collection of the species was a threat to its existence. However, information provided in the “Summary of Factors Affecting the Species” section (Factor B) of the proposed rule indicated otherwise. This section presented evidence of collection as a threat to the species. This information is consistent with the public comments expressing opposition to the designation of critical habitat for H. venusta . Only one commenter supported the designation of critical habitat, although this letter offered no substantive reason for this support. We are supported in our determination of a not prudent finding for the designation of critical habitat by a consensus of scientists, land managers (Federal, State, and county), professional botanists, local wildflower enthusiasts, non-governmental organizations, and environmental and botanical consultants. Each of these commenters expressed concern that the publicity associated with designating critical habitat for H. venusta would increase the threat of collection of the species, which exists in only one location.

Twenty commenters noted that they have witnessed, or were aware of collection of the species; many of these commenters admitted they have personally collected the species for herbarium or voucher specimens. One commenter presented information about a field botany class that had extensively collected the species on a taxonomy outing (Florence Caplow, Calypso Consulting, in litt. 2000). The rarity of the species was not known to the class or the instructor until they had returned to the laboratory to key and identify the plant. During the summer of 2000, while Forest Service personnel were counting the number of plants in the population and monitoring the habitat, they witnessed collection of a large individual specimen of Hackelia venusta and reported the action to our office the following day (L. Malmquist, pers. comm., 2000; J. Brickey, in litt. 2001; Terry Lillybridge, Forest Service, in litt. 2001; and R. Harrod, pers. comm., 2000). Forest Service personnel suspect the collector had purposely targeted a specific individual plant from the population because it was full, vigorous, and attractive (L. Malmquist, pers. comm., 2000). The specific plant had caught the attention of the Forest Service botanists as a particularly enticing plant, and its absence and the hole left from it being removed was easily noticed. Another commenter stated that “rare plants bring a lot of money” to collectors and designation of critical habitat would further advertise the species' presence, beyond listing of the species, so that it may be increasingly pursued (D. Werntz, in litt. 2000).

The District Ranger for the Leavenworth Ranger District commented that a critical habitat designation is not desirable, and it is against Forest Service policy (Forest Service Manual 2671.2) to make public the location of proposed, endangered, threatened, or sensitive species. This policy is consistent with the Thomas Bill (Pub. L. 105-391, section 207, 16 U.S.C. 5937), which was enacted to give the National Park Service the authority to withhold from the public any specific locality data for endangered, threatened, and rare species or commercially valuable resources within a park. The Forest Service believes that divulging locations or producing maps of Hackelia venusta habitat would greatly compromise their ability to protect the species on Forest Service lands where it occurs. Additionally, he commented that publicizing the location of critical habitat for this species was contrary to the ongoing coordination and Cooperative Agreement between Washington State's Natural Heritage Program, the Forest Service, and the Service, which includes a mutual agreement to not make public the location of proposed, endangered, threatened, or sensitive species.

It is not possible to designate critical habitat without increasing the public's attention to the species' location, and increased collection pressure will adversely affect the species and degrade its habitat. A single, heavily used highway allows access to the species' single location. While the species is in bloom, the plant population is easily visible. We have designated critical habitat for other attractive plants that were much less accessible to collectors, such as Hudsonia montana (mountain golden heather). Hudsonia montana was collected extensively and dwindled to only two plants soon after critical habitat was designated (Nora Murdock, Service, pers. comm., 2000). The situation for Hackelia venusta is comparable to the Hudsonia montana example, although the site location for H. venusta is more accessible to potential collectors than the more remotely located Hudsonia montana . We believe that because of the highly accessible location of this species, a designation of critical habitat would increase collection and thereby increase the risk of extinction to this species.

Collection of Hackelia venusta has been documented for more than 35 years (R. Carr, in litt. 2000). The species has been collected for scientific purposes, by random visitors who were likely unaware of the rarity of the species, and perhaps by plant collectors who have purposely visited the site to collect the species. Those who have collected the species in the past for scientific purposes have observed the plant population decline to a low of 150 plants, and the spatial distribution of the suitable habitat has dwindled to less than 1 ha (2.5 ac) (T. Thomas, pers. obs., 1995, with R. Harrod and P. Wagner). These scientists are now aware of the extreme rarity and status of the species and seek its protection, without the designation of critical habitat (R. Carr, in litt. 2000; K. Robsen, in litt. 2001; R. Crawford, in litt. 2001; T. Lillybridge, in litt. 2001; William Null, in litt. 2001; E. Guerrant, in litt. 2001; Sarah Reichard, University of Washington, in litt. 2001). The conservation Chair of the Washington Native Plant Society (WNPS), on behalf of its 1,800 members, stated that “the only real protection for rare plants is safeguarding of the specific location data and maps' (Debra Salstrom, WNPS Conservation Chair, in litt. 2001). In summary, the issue of long-term plant collection, and the high probability of continued and increased plant collection in the future support our determination to not designate critical habitat or publish associated maps for H. venusta.

We believe anything that increases the risk of losing individuals in this single population, such as publicizing its location, further imperils the species' survival and recovery. Based on the information provided in the comments, the recent, continued evidence of collection of the species, and the highly accessible and visible location of this showy plant, we have reconsidered our earlier decision that designation of critical habitat was prudent. We have determined that the designation of critical habitat is not prudent for Hackelia venusta. It would increase the threat of collection of the species and the associated degradation of its habitat.

Issue 2 : Nine commenters were concerned that any increased visitation to the site resulting from designating critical habitat and publishing maps of the plant's location would increase erosion of the habitat and the potential for trampling Hackelia venusta . Dr. Ed Guerrant summarized this concern well by stating “Even if the enthusiasts don't take whole plants (a common form of collection) or seeds, simply climbing up the very loose sandy hill on which they occur to photograph the plants will seriously erode and further damage their fragile habitat” (E. Guerrant, in litt. 2000). Dr. Sheryl McDevitt, a local wildflower enthusiast, stated that the “designation of critical habitat might be the most deleterious thing we could do. Aside from the possibility of rare plant collectors trudging up to grab their prize, a few amateur wildflower enthusiasts scrambling up the hill could do immeasurable damage to the existing plants and their habitat” (Sheryl McDevitt, in litt. 2000). Other commenters having experience with H. venusta habitat were concerned that any activity occurring on the species' habitat would adversely impact the fragile, highly erodible, steep slope where the plants are found (Jane Wentworth, WDNR, in litt. 2001; T. Lillybridge, in litt. 2001; L. Malmquist, in litt. 2001).

Our Response : We agree with the commenters that the site is fragile and easily eroded. Just walking on the slope where the plants are found dislodges small rocks and boulders that can dislodge plants, crush or bury them by movement of the substrate. Any increased visitation would likely lead to increased disturbance of the habitat and trampling of the plants. Therefore, we have determined that designating critical habitat for Hackelia venusta is not prudent.

Issue 3 : Four commenters expressed concern for public safety along the highway, which is highly constrained in this narrow and dangerous stretch of Tumwater Canyon (C. Antieau, in litt. 2000). Their major concern was that designating critical habitat would increase public interest in the species, thereby promoting increased pedestrian traffic to visit the site, causing safety issues for pedestrians and motorists, in addition to the increased threat of collection. WDOT also strongly opposes designation of critical habitat for Hackelia venusta , especially because of their concern that as more people walk on the steep, unstable slope, it will increase the probability that rocks and other debris will be dislodged and fall down the slope onto the highway, endangering auto traffic and their occupants or pedestrians on the roadway (F. Caplow, in litt. 2001).

Our Response : Public safety is not a factor in the evaluation of whether or not designation of critical habitat is prudent. However, we are concerned about public safety, and recognize the issues associated with this narrow stretch of highway. We have cooperated with WDOT on developing their “Management Plan for Rare Plant Species in Tumwater Canyon” (WDOT 2000).

WDOT constructed a small asphalt roadside turnout directly below and on the same side of the highway as the Hackelia venusta population during the spring of 2000. This turnout was constructed to provide a safe place for highway crews to park their vehicles in the narrow canyon when conducting road maintenance. However, because this turnout gave people greater access to the H. venusta population, the Forest Service coordinated with WDOT to remove the turnout in order to protect the plant species and its habitat (L. Malmquist, in litt. 2001). By removing the turnout, it also removed some of the danger to pedestrians who would stop to photograph the scenery or collect the plant.

Issue 4: Many commenters mentioned that because the species is found entirely on Federal land in an area under special management designation as the Tumwater Botanical Area, where the conservation and protection of Hackelia venusta and other rare plants is the primary management goal, it would be a redundant effort to designate critical habitat for the species. Consensus among these commenters was that the greatest benefit afforded to this species would be to determine that the designation of critical habitat is not prudent. Several of these commenters felt that the most effective use of funds would be for us to continue to cooperate with the Forest Service, WDOT, and WDNR on research and habitat restoration actions that would benefit the species and its habitat (R. Crawford, in litt. 2001; F. Caplow, in litt. 2001).

Our Response: We have determined that designation of critical habitat for Hackelia venusta is not prudent (see responses to Issue 1 and 2). Consideration of whether ongoing special management is sufficient to exempt a critical habitat designation is not necessary unless we determine that critical habitat is prudent. We do, however, encourage the cooperative endeavors of State and Federal agencies in their management of H. venusta and its habitat.

In accordance with our policy published on July 1, 1994 (59 FR 34270), we have sought the expert opinions of at least three appropriate and independent specialists regarding our proposal to list Hackelia venusta . The purpose of these reviews is to ensure that listing decisions are based on scientifically sound data, assumptions, and analyses. We sent these peer reviewers copies of the proposed rule immediately following its publication in the Federal Register . All the peer reviewers who responded agreed with listing, supported our determination that collection pressure is a serious threat, and opposed designation of critical habitat. We have incorporated their comments into this final determination (many are in the “Summary of Comments” section).

Section 4 of the Act and regulations (50 CFR Part 424) promulgated to implement the listing provisions of the Act set forth the procedures for adding species to the Federal lists. We may determine a species 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 Hackelia venusta (showy stickseed) are as follows:

The range of Hackelia venusta has been reduced to a scattered distribution occupying less than 1 ha (2.5 ac) in Tumwater Canyon, entirely on Federal lands of the Wenatchee National Forest. This restricted population consisted of approximately 500 plants in 2001 (L. Malmquist, pers. comm., 2001) and constitutes the sole population of Hackelia venusta .

The primary loss of habitat for Hackelia venusta has resulted from changes in habitat due to plant succession in the absence of fire. Fire suppression has been a factor in reducing the extent of the Tumwater Canyon population (Gamon 1988a; Gamon 1988b; D. Werntz, in litt. 2000). Wildfires play a role in maintaining open, sparsely vegetated sites as suitable habitat for H. venusta , a requirement of this shade-intolerant plant (R. Carr, pers. comm., 1998, in litt. 2000). The species prefers habitat that has been burned, has little competing vegetation (D. Werntz, in litt. 2000), and likely has soil low in organic matter (R. Carr, pers. comm., 1998). The species has expanded its distribution into canopy openings created by a wildfire in 1994, where it was not previously found (T. Thomas, pers. obs. 1998; P. Wagner, in litt. 2000). These plants are all found in close proximity to the original population and are probably offspring of the existing population. Seeds were likely carried to the open substrate by wind or gravity, and germination was aided by the increase in light and moisture within these canopy gaps where there is reduced competition from native trees and shrubs and noxious weeds.

Two nonnative, Washington State-listed noxious weeds (Ch. 16, WAC and Ch. 17.10 RWC 1997) occur within the habitat of Hackelia venusta in Tumwater Canyon. Linaria dalmatica (dalmatian toadflax) and Centaurea diffusa (diffuse knapweed) are present along the roadside, and have increased in their numbers and distribution during the 1990s, and have encroached into the population of H. venusta (J. Wentworth, in litt. , 2001). During visits to the H. venusta population in 1995, 1996, 1997, and 1998, the Service (T. Thomas, pers. obs.) noted that the cover and distribution of the noxious weeds had increased over this 1995-1998 time period. Without intervention, these species have the ability to completely outcompete H. venusta and replace native vegetation, and eventually dominate the site (J. Wentworth, in litt. 2001).

Highway maintenance activities are an ongoing threat. The highway is sanded during winter months, and occasionally a mixture of sand and salt is applied, affecting the immediate roadside habitat where Hackelia venusta is found. Highway maintenance activities involving the clearing of landslide material from the highway ROW resulted in the destruction of approximately 50 H. venusta individuals several years ago (R. Harrod, pers. comm., 1997, 2001). Although the roadsides have not been sprayed with herbicides in recent years by WDOT, spraying did occur for a considerable period of time prior to 1980. The residual effect of herbicide spraying on H. venusta is unknown. Some herbicides are known to be resident in the soil for long periods of time, affecting the plants that persist there. In 1999 and 2000, the application of herbicides by Forest Service personnel was used as a method for reducing the amount and distribution of nonnative, noxious weeds. Although they were used with great caution by Forest Service staff with knowledge of H. venusta's presence, the threat from herbicide drift and residue remains.

Small surface erosion events and large landslides of the unstable slope where the Hackelia venusta population is located are also a threat to the species. The steepness of the slope exceeds 100 percent (45 degree) inclination in many places, and the slope's instability constitutes a significant threat as a major landslide could bury the entire population (Gamon 1997). The threat of soil being dislodged and the burying, trampling, or dislodging of plants below these soil releases has been witnessed as more people visit the habitat to photograph or collect the plant (Pam Camp, in litt. 2000; Susan Ballinger, in litt. 2000; Joan Frazee, Washington Native Plant Society, in litt. 2000; F. Caplow, in litt. 2000; K. Robson, in litt. 2001). The potential for slumping (deep-seated mass movement) has increased since 1994, when wildfires burned through the forest in Tumwater Canyon where H. venusta is located. The reason for a higher potential for landslides is that water uptake by trees and other vegetation that were killed by the 1994 fire is reduced plus there is no transpiration from the vegetation, therefore there is more soil water. This is a case where the response to fire may have negative consequences. Another contributing factor is that when tree roots decompose, their ability to bind soil particles and water is decreased. When this happens, the potential for landslides increases. A large landslide in the location of the Tumwater Canyon population of H. venusta would severely degrade the habitat and reduce the plant population.

Although there are no data regarding the effects of automobile emissions on this species, such emissions should be considered a potential threat, given the proximity of the road to the population. The highway is heavily used, with 3,900 to 5,200 automobiles traveling daily through Tumwater Canyon, which is very narrow (WDOT 1996). According to population projections, 100,000 people will move into the State of Washington each year (Washington Office of Financial Management 1995). Trends for Chelan County indicate an increase from the current human population of 52,250 (1995) to more than 86,000 people in the year 2020, a 39 percent increase (Washington Office of Financial Management 1995). A larger human population will increase the demands for recreational activities and bring more people to central Washington. Automobile emissions are likely to increase along this heavily traveled corridor. These emissions, containing ozone and sulphur and nitrate oxides, negatively affect photosynthesis of coniferous and herbaceous plants (Forest Service 1979).

The remaining known population is at risk of extirpation due to a variety of threats. The greatest threat to Hackelia venusta is the long history of collection pressure (R. Carr, in litt. 2000; Rex Crawford, Washington Department of Natural Resources (WDNR), in litt. 2001; L. Malmquist, in litt. 2000; Jennifer Brickey, University of Washington graduate student, in litt. 2001; Kali Robson, Cowlitz County Soil and Water Conservation District, in litt. 2001; Ed Guerrant, Berry Botanic Garden, in litt. 2001) and associated physical disturbance to the habitat and the individual plants from people trampling the slope to monitor the population and photograph the plants (Clayton Antieau, WDOT, in litt. 2000). Regional and local botanical professionals and wildflower enthusiasts who are interested in observing the plant in its natural habitat visit the site, as well as curious individuals who have requested directions and information about the plant in response to numerous references about the rarity of the species, either in the local newspaper or broadcasts on the local radio station (L. Malmquist, in litt. 2001). The radio broadcast, which featured local rare plants, gave a lot of notoriety to H. venusta , and the local Forest Service district office experienced an increase in the number of people coming in to ask where they could find the species (L. Malmquist, pers. comm., 2001).

Wildflower collecting poses a serious threat, and future collecting could increase, especially if the Hackelia venusta site becomes known to the general public by the publication of maps or from media exposure (L. Malmquist, in litt. 2001). H. venusta has been collected by scientists, amateur wildflower enthusiasts, and random visitors to the population for more than 30 years (R. Carr, in litt. 2000; R. Harrod, in litt. 2000; F. Caplow, in litt. 2000; L. Malmquist, in litt. 2001; R. Crawford, in litt. 2001). The Tumwater Canyon population is easily accessible to the public because it is located near a heavily used highway with a turnout directly across the road. Amateur and professional botanists know of the location of the H. venusta population, and their collecting activities likely have reduced the number of plants in the population and have degraded the habitat (Gamon 1997; R. Carr, in litt. 2000; Glenn Hoffman, Forest Service, in litt. 2000; R. Harrod, in litt. 2000; R. Crawford, in litt. 2000, 2001, F. Caplow, in litt. 2001).

In May 1998, representatives from the Service, the Forest Service, and Eastern Washington University witnessed a person collecting the plant as they inspected the Hackelia venusta site (T. Thomas, pers. obs., 1998; Jon Gilstrom, in litt. 2000; R. Harrod, in litt. 2000). The species was also witnessed being collected while Forest Service personnel monitored the plant population in the spring of 2000 (L. Malmquist, pers. comm., 2000, in litt. 2001). Both incidents, and the large number of comments we received about collection of the plant, indicate that the species, when in bloom, is eye-catching and sufficiently attractive to cause someone to stop and remove the plant, presumably for personal use. Not only does the removal of plants cause a loss of reproductive potential, but trampling the site to access the plants could have a devastating effect on the remaining plants.

Disease is not currently known to be a threat to this species. No livestock or wildlife are known to graze on Hackelia venusta.

Although the known population of Hackelia venusta is located in an area designated as a special management area, the species remains vulnerable to threats. The Tumwater Canyon Botanical Area was designated by the Wenatchee National Forest in 1938 because of the occurrence of Lewisia tweedyi. Lewisia tweedyi has since been found to be more widespread than previously known and is no longer a species of concern for the area. The Wenatchee National Forest has maintained the Botanical Area designation and has implemented special management specifically targeted to conserve rare species, such as H. venusta and Silene seelyi. Both species are listed on the Forest Service Regional Forester's Sensitive Species List, which requires the Forest Service to maintain or enhance the viability of these species by considering the species in their project biological evaluations, and to mitigate actions that may adversely affect the species. The Forest Service also prohibits the collection of native plants without a permit, although this regulation has been difficult to enforce (R. Harrod, pers. comm., 1998). Silene seelyi grows in rock outcrop crevices near where H. venusta is located, but it does not occupy the talus habitat where H. venusta is found.

Management activities in the Botanical Area have emphasized botanical values (T. Lillybridge, pers. comm., 1998). In 2000, the Forest Service developed a habitat restoration plan in which they conducted an environmental analysis, conferenced with us, and implemented restoration activities to improve and restore Hackelia venusta and Silene seelyi habitat. The Botanical Area is also managed as a designated Late-Successional Reserve (LSR) under the Northwest Forest Plan, which permits some silvicultural and fire hazard reduction treatments (Forest Service and Bureau of Land Management 1994).

WDOT developed a management plan, “Final Management Plan for Rare Plant Species in Tumwater Canyon, Wenatchee National Forest with associated Best Management Practices'' (BMPs) (WDOT 2000). This plan provides guidance and BMPs for road crews conducting maintenance activities that are undertaken along the stretch of the highway in Tumwater Canyon that Hackelia venusta occupies (WDOT 2000). Funding for maintenance activities is covered through base allocations to keep the highway cleared of snow, debris, and overhanging vegetation, the guidelines outlined in the plan are implemented during the course of routine maintenance operations. The management practices outlined in the plan enable WDOT crews to accomplish maintenance goals without harming the plant or its habitat. The plan was developed in coordination with the Forest Service, WDNR, and the Service. Funding for implementation of this plan cannot be assured on an annual basis.

The Washington Natural Heritage Program, in coordination with the Wenatchee National Forest, also developed management guidelines for Hackelia venusta in 1988 (Gamon 1988b). The plan contained recommendations that specific actions be taken to protect the plant on National Forest land. These guidelines included the recommendation that the Wenatchee National Forest develop a species management guide to provide management direction for the habitat of this species. The Wenatchee National Forest developed a draft management guide several years ago, but has not yet finalized it (T. Lillybridge, pers. comm., 1997).

The WDNR designated Hackelia venusta as endangered in 1981 (Washington Natural Heritage Program 1981), and the species designation has been retained in subsequent updates of the State's endangered species list. However, this listing does not provide any regulatory protection for the plant.

Low seed production, as well as low genetic variation, are factors in the decline of Hackelia venusta. At the Tumwater Canyon site, an estimated high proportion (60 to 70 percent) of H. venusta seeds did not develop in 1984 (Barrett et al. 1985). Fruit development was poor on many plants; only a few individuals exhibited mature fruit development. It is unknown why this occurred, but low genetic variation may have contributed to poor reproduction success (R. Carr, in litt. 2000; D. Werntz, in litt. 2000). This reduced reproductive potential may be a major factor in the reduction of plants at the type locality. The age structure of the extant population at Tumwater Canyon, poor seed production and germination of new seedlings, and historical estimates of population size indicate that the population is declining (Barrett et al. 1985; Gamon 1997), although recent Forest Service monitoring of the population has shown that the population has increased during the period from 1995 to 2001 (L. Malmquist, pers. comm., 2000; in litt. 2001; P. Wagner, in litt. 2000). The increase in population size can likely be attributed to the improved habitat conditions brought on by restoration activities and the effects of a wildfire that burned through Tumwater Canyon in 1994 (see our response for Issue 4 in the (“Summary of Comments and Recommendations”)).

The small size of the Hackelia venusta population is a major problem. Seedling establishment is most critical, and trampling may significantly affect the germination of seedlings (R. Carr, pers. comm., 1998, in litt. 2000; K. Robson, in litt. 2001). Human activities along the roadside turnout at the Tumwater Canyon site represent a significant threat to plants nearest the turnout. Motorists use the area to view the Wenatchee River, often venturing over the guardrail and along the bank below the road. Plants on this bank are damaged by trampling, burial by loose rock, and root exposure as a result of human traffic on the unstable slopes (Gamon 1997).

Fire suppression during this century is likely a factor in the reduced spatial distribution of the Tumwater Canyon population. Historically, fuels in the forest type where Hackelia venusta is found were rarely at high levels because of the frequent fires that consumed forest floor fuels and pruned residual trees (Agee 1991). In the past, fires suppressed the encroachment of woody vegetation and maintained open areas more conducive to H. venusta reproduction and growth. Continued suppression of fires in this forest type could bring about additional losses to suitable habitat (Barrett et al. 1985; Gamon 1997; D. Werntz, in litt. 2000).

Competition from Linaria dalmatica (dalmatian toadflax) and Centaurea diffusa (diffuse knapweed) is a threat to Hackelia venusta (J. Wentworth, in litt. 2001). Both of these noxious weeds outcompete many native plant species through uptake of water and nutrients, interference with photosynthesis and respiration of associated species, and production of compounds that can directly affect seed germination and seedling growth and development. These noxious weeds co-occur with H. venusta at the Tumwater Canyon site and have become more widespread on the available habitat (J. Wentworth, in litt. 2001).

The species' habitat is threatened by plant succession in the absence of fire (D. Werntz, Northwest Ecosystem Alliance, in litt. 2000) and by competition with nonnative plants (R. Harrod, pers. comm., 1996, 2001; Ted Thomas, Service, pers. obs., 1995 through 1998), as well as from native trees and shrubs that have become established on the site. Other threats include the mass-wasting or erosion of soil that occurs on these unstable slopes and from highway maintenance activities. These erosion events (either small-scale surface erosion or large landslides) are not predictable in timing, frequency, or magnitude. However, large landslides have occurred within Tumwater Canyon in close proximity to the Hackelia venusta population. The last time a large landslide occurred, which was in 1992, the road was closed for emergency repairs by WDOT. The repairs undercut the slope and up to 50 Hackelia venusta plants were destroyed and removed from the habitat of Tumwater Canyon (R. Harrod, pers. comm., 2001).

The species previously occurred in the road ROW which, although maintained by WDOT, is Federal land. In the past, road salting and herbicide spraying were probable factors in reducing the vigor and number of Hackelia venusta in the ROW. Currently, WDOT maintenance crews rarely apply road salt and, when they do, they apply it in a diluted, 20:1 ratio with road sand (Luther Beaty, WDOT, pers. comm., 1995). Since 1998, however, WDOT has been using de-icers on the roadway during winter months. The disappearance of H. venusta along the roadcut and ROW corresponds to the WDOT's use of de-icers starting in 1998. We believe that the de-icers may be associated with the decline of individual plants in the ROW and we now consider it a threat to the species. The de-icer used by WDOT is called CalBan, a formulation of calcium chloride, which is a salt. Residue from the salts build up in the soil and are retained on soil particles. When plants emerge in the spring, the concentration of salt is greater in the soil than found in the plant, so any moisture that is in the plant or soil surrounding the plant is drawn to the calcium chloride crystals, which causes the plant to wilt and die (J. Brickey, pers. comm., 2002).

Herbicides have also been applied in the past by WDOT, which sprayed the roadside vegetation. Overspray and splatter of herbicides may have contributed to the reduced number of Hackelia venusta plants in the population. WDOT has discontinued the use of herbicides in Tumwater Canyon (L. Beaty, pers. comm., 1995).

In the narrow confines of Tumwater Canyon, automobile emissions may continue to be a cause for reduced vigor to the Hackelia venusta population because ozone and oxides of sulphur and nitrate emitted from vehicle tailpipes negatively affect photosynthesis of plants (Forest Service 1979). In addition, several individual plants occur on level ground near the roadside turnoff and are threatened with trampling and collecting.

The small number of individuals (about 500 plants) remaining in the sole population located in Tumwater Canyon makes Hackelia venusta vulnerable to extinction due to random events such as slope failure (mass-wasting or surface erosion) or drought. A single random environmental event could extirpate a substantial portion or all of the remaining individuals of this species and cause its extinction. Also, changes in gene frequencies within small, isolated populations can lead to a loss of genetic variability and a reduced likelihood of long-term viability (Franklin 1980; Soule 1980; Lande and Barrowclough 1987; R. Carr, in litt. 2000).

We have carefully assessed the best scientific and commercial information available concerning the past, present, and future threats faced by Hackelia venusta in developing this final rule. Currently, only one known population of H. venusta exists. The plant is threatened by a long history of plant collection and the physical degradation of the habitat associated with people walking on the steep, easily eroded substrate where the species is found. Habitat modification associated with fire suppression, competition and shade from native shrubs and trees and nonnative noxious weeds, maintenance of the highway located near the population, poor seed development, low reproductive capacity, and incidental loss from human trampling, threaten the continued existence of this species. Also, the single, small population of this species is particularly susceptible to extinction from random environmental events such as rock slides. 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.

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 not prudent for Hackelia venusta.

We are mindful that several court decisions have overturned determinations for a variety of species that designation of critical habitat would not be prudent (e.g., Natural Resources Defense Council v. U.S. Department of the Interior 113 F. 3d 1121 (9th Cir. 1997); Conservation Council for Hawaii v. Babbitt, 2 F. Supp. 2d 1280 (D. Hawaii 1998)). However, based on the standards provided in those judicial decisions, a not prudent critical habitat finding for Hackelia venusta is warranted.

Hackelia venusta consists of only one population made up of approximately 500 individual plants and cannot recolonize habitat quickly. Because this species occupies such a limited area, even a single person walking on the talus habitat where it occurs could cause significant damage to the species and its habitat that could lead to the extirpation of the entire population. Increased visits to the population location, stimulated by critical habitat designation and related maps and publicity, even without deliberate collecting, could adversely affect the species due to the associated increase in trampling of its fragile habitat. We believe that the designation of critical habitat, and the required public dissemination of maps and descriptions of the population site, would significantly increase the degree of threat to this species. Publicity could generate an increased demand and intensify collecting pressure or facilitate opportunities for vandalism. This species has already been subjected to excessive collecting by collectors. Increased publicity and a provision of specific location information associated with critical habitat designation could result in increased collection from the population. Although the taking and reduction to possession of endangered plants from land under Federal jurisdiction is prohibited by the Act, the taking prohibitions are difficult to enforce. We believe the publication of critical habitat descriptions would make H. venusta more vulnerable to collectors and curiosity-seekers and would increase enforcement problems for the Forest Service, and we have documented evidence that collecting and other human disturbance have already detrimentally affected this species.

Our concerns of increased human threats to the species from the publication of maps of the population site are based on specific experience. Another federally listed mountain plant ( Hudsonia montana ) for which critical habitat was designated was severely impacted by collectors immediately after the maps were published. This collection happened even though this plant was not previously known to be desired by rare plant collectors and had never been offered for sale in commercial trade. Some of the collectors appeared in the local Forest Service district offices, with the critical habitat map from the local newspaper in their hands, asking directions to the site (Nora Murdock, Service, pers. comm., 2000). Such incidents are extremely difficult to document. The only reason we were able to do so in this case was because, for this very rare and restricted plant, every individual was mapped. When plants vanished from our permanent plots, we were able to find the carefully covered excavations where they had been removed. Otherwise, we would have only observed a precipitous crash in the populations without knowing that the cause was directly attributable to collection, apparently stimulated by the publication of specific critical habitat maps. In the case of Hackelia venusta, a local radio station interviewed a professor from the University of Washington, Center for Urban Horticulture, which was fire bombed in spring, 2001. Apparently the professor repeated several times in the interview that propagated H. venusta plants were lost in the fire bombing. After this announcement, the local Forest Service Ranger District received requests to know the location of the plant (L. Malmquist, pers. comm., 2001). Also, a Tacoma newsreporter made several inquiries to our Western Washington Fish and Wildlife Office about visiting the plant population during the spring of 2001. We declined the request with the concern that additional news coverage would be detrimental to the species or its habitat.

It is our finding that the designation of critical habitat would increase threats to Hackelia venusta, and that a critical habitat designation would exacerbate these threats and possibly lead to extinction of the species; therefore a not prudent finding is warranted.

Because of the precarious status of the species, the small size of the only surviving population, the restricted range of the species, and the limited amount of suitable habitat available to the species, a Federal action subject to consultation under section 7 of the Act that triggers the standard for destruction or adverse modification of critical habitat for H. venusta would very likely also jeopardize the species' continued existence. Therefore, it is doubtful that additional protection would be provided to this species through the designation of critical habitat that would not already be provided through the jeopardy standard. We recognize that critical habitat designation in some situations may provide additional value to a species, for example, by identifying areas important for conservation. However, for H. venusta, we have weighed the potential benefits of designating critical habitat against the significant risks of doing so and find that the minor benefits of designating critical habitat do not outweigh the potential increased threats from collection and inadvertent habitat degradation caused by curiosity-seekers. Therefore, we have determined that the designation of critical habitat for H. venusta is not prudent.

Conservation measures provided to species listed as endangered or threatened under the Act include recognition, recovery actions, requirements for Federal 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 the Service carry out recovery actions for all listed species. The protection required of Federal agencies, and the prohibitions against certain activities involving listed plants are discussed, in part, below.

Section 7(a) of the Act, as amended, requires Federal agencies to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened, and with respect to its critical habitat, if any is being designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) 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) 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 any has been designated. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into formal consultation with us.

Federal agencies whose actions may require consultation include the Forest Service, Federal Highway Administration, and U.S. Army Corps of Engineers (Corps). State highway activity, implemented by the State and partly funded by the Federal Government, includes highway maintenance activities such as roadside vegetation control, and may be subject to consultation under the Act. Forest Service activities that may require consultation under section 7 of the Act would include fire suppression, activities associated with fire suppression, timber harvest, and habitat restoration activities. The Corps may be required to consult with us on proposed actions planned on the Wenatchee River, which is adjacent and directly below the highway ROW. The distance from the base of the Hackelia venusta population to the Wenatchee River is less than 30 m (100 ft).

Listing Hackelia venusta as endangered will provide for the development of a recovery plan. Such a plan would bring together Federal, State, and local efforts for the conservation of the species. 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 the State of Washington 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 plants. All prohibitions of section 9(a)(2) of the Act, implemented by 50 CFR 17.61 for endangered plants, would apply. These prohibitions, in part, make it illegal for any person subject to the jurisdiction of the United States to import or export, transport in interstate or foreign commerce in the course of a commercial activity, sell or offer for sale in interstate or foreign commerce, or remove the species from areas under Federal jurisdiction. In addition, for plants listed as endangered, the Act prohibits the malicious damage or destruction in areas under Federal jurisdiction and the removal, cutting, digging up, damaging, or destroying of such endangered plants in knowing violation of any State law or regulation, or in the course of any violation of a State criminal trespass law. Certain exceptions to the prohibitions apply to our agents and State conservation agencies.

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

With respect to Hackelia venusta, based upon the best available information, the following actions would not be likely to result in a violation of section 9, provided these activities are carried out in accordance with existing regulations and permit requirements:

(1) Activities authorized, funded, or carried out by Federal agencies (e.g., grazing management, agricultural conversions, wetland and riparian habitat modification, flood and erosion control, residential development, recreational trail development, road construction, hazardous material containment and cleanup activities, prescribed burns, pesticide/herbicide application, and pipeline or utility line construction crossing suitable habitat), when such activity is conducted in accordance with any biological opinion issued by us under section 7 of the Act;

(2) Activities on private lands that do not require Federal authorization and do not involve Federal funding, such as grazing management, agricultural conversions, flood and erosion control, residential development, road construction, and pesticide or herbicide application when consistent with label restrictions;

(3) Residential landscape maintenance, including the clearing of vegetation around one's personal residence as a fire break; and

(4) Casual, dispersed human activities (e.g., bird watching, sightseeing, photography, camping, hiking) in the habitat of the species.

With respect to Hackelia venusta, the following actions could result in a violation of section 9; however, possible violations are not limited to these actions alone:

(1) Unauthorized collecting of Hackelia venusta on Federal lands;

(2) Application of pesticides/herbicides in violation of label restrictions;

(3) Interstate or foreign commerce, import, or export of this species without a valid permit; and

(4) Removal or destruction of the species on Federal land, or on non-Federal land if done in knowing violation of Washington State law or regulations, or in the course of any violation of a Washington State criminal trespass law.

Questions regarding whether specific activities risk violating section 9 should be directed to our Western Washington Fish and Wildlife Office (see ADDRESSES section). The Act and 50 CFR 17.62 and 17.63 also provide for the issuance of permits to carry out otherwise prohibited activities involving endangered plants under certain circumstances. Such permits are available for scientific purposes or to enhance the propagation or survival of the species. Requests for copies of the regulations regarding listed species and general inquiries regarding prohibitions and permits may be addressed to the U.S. Fish and Wildlife Service, Ecological Services, Permits Branch, 911 N.E. 11th Avenue, Portland, OR 97232-4181 (telephone 503/231-2063; facsimile 503/231-6243).

We have determined that an Environmental Assessment or Environmental Impact Statement, as defined under the authority of the National Environmental Policy Act of 1969, need not be prepared in connection with regulations adopted pursuant to section 4(a) of the Endangered Species Act of 1973, as amended. 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 that require approval by the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ). This rule will not impose new record-keeping or reporting requirements on State or local governments, individuals, businesses, or organizations. 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. For additional information concerning permits and associated requirements for endangered plants, see 50 CFR 17.62 and 17.63.

A complete list of all references cited in this document, as well as others, may be requested from our Western Washington Fish and Wildlife Office (see ADDRESSES section).

The primary author of this final rule is Ted Thomas, Western Washington Fish and Wildlife Office (see ADDRESSES section).