The Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 301 et . seq .), as amended by the Medical Device Amendments of 1976 (the amendments) (Public Law 94-295), the Safe Medical Devices Act of 1990 (the SMDA) (Public Law 101-629), and the Food Drug Administration Modernization Act of 1997 (the FDAMA) (Public Law 105-115), established a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the act (21 U.S.C. 360c) established three categories (classes) of devices, depending on the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval).

Under section 513 of the act, devices that were in commercial distribution before May 28, 1976 (the date of enactment of the 1976 amendments), generally referred to as preamendments devices, are classified after FDA has: (1) Received a recommendation from a device classification panel (an FDA advisory committee); (2) published the panel’s recommendation for comment, along with a proposed regulation classifying the device; and (3) published a final regulation classifying the device. FDA has classified most preamendments devices under these procedures.

Devices that were not in commercial distribution prior to May 28, 1976, generally referred to as postamendments devices, are classified automatically by statute (section 513(f) of the act) into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval, unless and until: (1) The device is reclassified into class I or II; (2) FDA issues an order classifying the device into class I or II in accordance with new section 513(f)(2) of the act, as amended by the FDAMA; or (3) FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to previously offered devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and part 807 of the regulations (21 CFR part 807).

A preamendments device that has been classified into class III may be marketed, by means of premarket notification procedures (510(k)), without submission of a premarket approval application (PMA) until FDA issues a final regulation under section 515(b) of the act (21 U.S.C. 360e(b)) requiring premarket approval.

Consistent with the act and the regulations, FDA consulted with the General Hospital and Personal Use Devices Panel (the Panel), an FDA advisory committee regarding the classification of the medical washers and medical washer-disinfectors.

Medical washers intended for general medical purposes to clean and dry surgical instruments, anesthesia equipment, hollowware, and other medical devices, and medical washer-disinfectors intended additionally to decontaminate or disinfect medical devices were in commercial distribution prior to May 28, 1976, the date of the Medical Device Amendment to the act. Medical washers and medical washer-disinfectors are considered medical devices within the meaning of section 201(h) of the act (21 U.S.C. 321(h)). Although they were legally marketed medical devices, the medical washers and medical washer-disinfectors were not included among the devices that were classified in 1980 by the Panel. Because the medical washers and medical washer-disinfectors are not dedicated to a single type of device, FDA has not considered them as accessories to classified medical devices. Although FDA has classified several generic types of washers and washer-disinfectors by regulation, medical washers and medical washer-disinfectors intended for general medical purposes to reprocess a variety of devices have not been classified by regulation and are therefore considered as unclassified devices.

Prior to June 1998, it was unclear to regulated industry whether the unclassified medical washers and medical washer-disinfectors were devices subject to the 510(k) requirements of the act. On June 2, 1998, FDA published on the Center for Devices and Radiological Health (CDRH) Internet site the document entitled “Guidance Document for Washers and Washer-Disinfectors Intended for Processing Medical Devices,” which clarified their regulatory status at that time. FDA informed industry that these devices were subject to the 510(k) requirements of the act; that FDA would have a Panel meeting for the purpose of classifying these devices; and that FDA would provide guidance on the types of information to be included in a submission. The Panel was convened on September 14, 1998. In the Federal Register of November 5, 1998 (63 FR 59794), FDA announced the availability of the draft guidance and invited interested persons to comment on the guidance.

FDA has classified the following generic types of washers and washer-disinfectors that were in commercial distribution prior to May 28, 1976, by regulation. Washers and washer-disinfectors intended to process only “general purpose articles,” such as laboratory glassware, pipettes, bottles, and containers, although considered as medical devices, are treated by FDA as “general purpose” articles exempt from registration under § 807.65(c) and from the 510(k) requirements of the act.

Washers labeled only to wash and sanitize body waste receptacles, such as bedpans, have been classified as class I devices under 21 CFR 880.6800 (washers for body waste receptacles) and are exempt from the 510(k) requirements of the act (subject to the limitations on exemptions found in § 880.9 (21 CFR 880.9)).

Ultrasonic cleaners, which are intended to clean medical instruments by emission of high frequency soundwaves, and any cleaning solution intended for use with the ultrasonic cleaners, have been classified as class I devices under 21 CFR 880.6150 and are exempt from 510(k) requirements of the act (subject to the limitations on exemptions found in § 880.9).

Products used in the cleaning and disinfection of rigid gas permeable and soft (hydrophilic) contact lenses are classified as class II devices under 21 CFR 886.5918 and 886.5925, respectively.

FDA considers washers, washer-disinfectors, or disinfectors intended solely for the processing of flexible endoscopes as accessories to endoscopes. Under the definition of a medical device, an accessory to a medical device is itself considered a medical device and is regulated in the same class as the associated medical device. Therefore, endoscope washers, endoscope washer-disinfectors, or endoscope disinfectors are considered in the same class as endoscopes under 21 CFR 876.1500. Endoscopes and accessories are class II devices.

During a public meeting, which was held on September 14, 1998, the Panel made the following recommendation regarding the classification of the general use washers and washer-disinfector. “General use” was the identifying terminology used at the time of Panel deliberations.

The Panel recommended that the device be identified as follows: A general use washer or washer-disinfector is a device intended for medical purposes to clean, decontaminate or disinfect, and dry surgical instruments, anesthesia equipment, hollowware and other medical devices. A general use washer or washer-disinfector can be equipped with electromechanical control systems or with microprocessor control systems and may have one or more cleaning and decontamination/disinfection cycles for a variety of medical devices. The device can be a free standing, single or double door unit or a wall recessed, pass-through unit with spray arms, nozzles, and adapters for directing fluid flow onto the external and internal surfaces of the medical devices. It may also have accessory inserts, such as specialized trays and racks, for processing a wide variety of instruments. The washer or washer-disinfector may clean, decontaminate or disinfect, and dry medical devices using preset cycles with defined-contact parameters. The cleaning phase may automatically dilute and dispense the cleaning agent or may require the user to dilute and add the cleaning agent manually. In some instances, manual precleaning of patient exposed devices may be necessary before placing them in the general use washer or washer-disinfector because of complex device designs or because of heavy soiling of the medical devices. The disinfection phase may be either a thermal process using heated water or steam or a chemical process using a liquid chemical germicide.

The Panel unanimously recommended that the general use washer and washer-disinfector be classified into class II. The Panel believed that special controls in addition to the general controls would provide reasonable assurance of the safety and effectiveness of the device. The Panel recommended the following as special controls: FDA guidance, voluntary consensus standards, and user information/education.

The Panel considered the information provided by FDA and industry, open discussions during the Panel meeting, and their clinical experience with the device in making their recommendation. The Panel then voted that general use washers and washer-disinfectors that are intended for medical purposes to clean, decontaminate or disinfect, and dry medical devices should be classified into class II. The Panel believed that special controls, in addition to general controls, would provide reasonable assurance of the safety and effectiveness of the device, and that there was sufficient information to establish special controls to provide such assurance.

The Panel discussed a proposal to classify the general use washers and washer-disinfectors according to their intended use into two classes. Devices with cleaning as the only intended use would be placed in class I, whereas devices that are intended to be used for both cleaning and disinfection would be placed in class II. The Panel, however, noted that most of these devices would be placed in central services departments of healthcare facilities and believed that the majority of the devices would be intended for use as a washer-disinfector system rather than for use as a washer. The Panel recognized that a wide variety of medical devices, such as surgical instruments, anesthesia equipment, hollowware, and many other medical devices, are processed in these general use washers and washer-disinfectors and it is extremely difficult to dissociate the cleaning process from the disinfection process. Consequently, the Panel rejected the option of classifying the device intended only for washing as a class I device. The Panel recommended that the general use washers and washer-disinfectors, whether intended only for cleaning or intended for both cleaning and disinfection, be classified as class II.

The Panel acknowledged that those washers and washer-disinfectors already classified by regulation, such as washers for body waste receptacles, washers for general purpose articles, such as laboratory glassware, ultrasonic cleaners, washers and washer-disinfectors for flexible endoscopes, and contact lens cleaners, would not be affected by this classification.

The Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 301 et seq .), as amended by the Medical Device Amendments of 1976 (the 1976 amendments) (Public Law 94-295), the Safe Medical Devices Act of 1990 (the SMDA) (Public Law 101-629) and the Food and Drug Administration Modernization Act of 1997 (FDAMA) (Public Law 105-115) established a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the act (21 U.S.C. 360c) established three categories (classes) of devices, depending on the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval). Under the 1976 amendments, class II devices were defined as those devices for which there is insufficient information to show that general controls themselves will ensure safety and effectiveness, but for which there is sufficient information to establish performance standards to provide such assurance.

The SMDA broadened the definition of class II devices to mean those devices for which there is insufficient information to show that general controls themselves will assure safety and effectiveness, but for which there is sufficient information to establish special controls to provide such assurance. Special controls may include performance standards, postmarket surveillance, patient registries, development and dissemination of guidelines, recommendations, and any other appropriate actions the agency deems necessary (section 513(a)(1)(B) of the act).

Under section 513 of the act, devices that were in commercial distribution before May 28, 1976 (the date of enactment of the 1976 amendments), generally referred to as preamendments devices, are classified after FDA has met the following three requirements: (1) Received a recommendation from a device classification Panel (an FDA advisory committee); (2) published the Panel's recommendation for comment, along with a proposed regulation classifying the device; and (3) published a final regulation classifying the device. FDA has classified most preamendments devices under these procedures.

Devices that were not in commercial distribution prior to May 28, 1976, generally referred to as postamendments devices, are classified automatically by statute (section 513(f) of the act (21 U.S.C. 360c(f)) into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval, unless and until: (1) The device is reclassified into class I or II; (2) FDA issues an order classifying the device into class I or II in accordance with section 513(f)(2) of the act as amended by FDAMA; or (3) FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval.

The agency determines whether new devices are substantially equivalent to previously offered devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and 21 CFR part 807 of the regulations. A preamendments device that has been classified into class III may be marketed, by premarket notification, without submission of a premarket approval application (PMA) until FDA issues a final regulation under section 515(b) of the act (21 U.S.C. 360e(b)) requiring premarket approval.

In 1987, when other orthopedic devices were classified (52 FR 33686 at 33702, September 4, 1987), FDA was not aware that the calcium sulfate bone void filler device, a resorbable bone void filler, intended for orthopedic use in filling bony voids or gaps not intrinsic to the stability of the bony structure, was a preamendment device and inadvertently omitted classifying it. On December 12, 1997, FDA received a Classification Proposal and Summary of Safety and Effectiveness Information for the OsteoSet TM Calcium Sulfate Bone Void Filler from Wright Medical Technology, Inc., requesting that the device be classified into class II (Ref. 1). Consistent with the act and the regulations, FDA consulted with the Panel regarding the classification of this device.

FDA is proposing the following device name and identification name based on the Panel’s recommendation (Ref. 2) and the agency’s review:

A resorbable calcium salt bone void filler device is a resorbable implant intended to fill bony voids or gaps caused by trauma or surgery that are not intrinsic to the stability of the bony structure.

FDA has broadened the classification name and identification of the resorbable calcium salt bone void filler device because of the similarity of the calcium sulfate bone void filler device to other resorbable calcium salt bone void filler devices.

During a public meeting on January 12 and 13, 1998, the Panel unanimously recommended that the calcium sulfate bone void filler device be classified into class II (Ref. 2). The Panel believed that classification in class II with the recommended special controls of FDA guidance documents and FDA recognized voluntary consensus standards would provide reasonable assurance of the safety and effectiveness of the device.

The Panel believed that the calcium sulfate bone void filler device, a resorbable calcium salt bone void filler device, should be classified into class II because special controls, in addition to general controls would provide reasonable assurance of the safety and effectiveness of the device, and there is sufficient information to establish special controls to provide such assurance. Because FDA believes that the safety and effectiveness of bone void filler devices composed of other resorbable calcium salts may also be assured through special controls, in addition to general controls, the agency has broadened the device name to resorbable calcium salt bone void filler device to include bone void filler devices made of other resorbable calcium salts.

The Panel based its recommendation on the information contained in the petition, the information provided by FDA, and their personal knowledge of the device. In addition to information concerning the potential risks to health associated with the use of the resorbable calcium salt bone void filler device described in section VI of this document, there is reasonable knowledge of the benefits of the device. Specifically, the device provides an alternative treatment to use of either autogenous bone grafts, without the potential adverse effects of pain and morbidity associated with a bone harvest procedure, or use of allogeneic bone grafts, without the potential risk of disease transmission, including virus transmission. The device is also more readily and plentifully available than both alternative treatments.

After considering the information in the petition, the Panel’s deliberations, as well as the published literature and medical device reports (MDRs), FDA has evaluated the risks to health associated with the use of the resorbable calcium salt bone void filler device. There were no MDRs for the OsteoSet TM calcium sulfate bone void filler, nor were there any MDRs for any other preamendments resorbable calcium sulfate bone void filler or postamendments resorbable calcium salt bone void filler. FDA now believes that the following are risks to health associated with use of the device: Infection of the soft tissue and/or bone (osteomyelitis) and fever; adverse tissue reaction; transient hypercalcemia; incomplete bone ingrowth, delayed union, and nonunion; fracture of the newly formed bone; and disease transmission and undesirable immune response associated with use of a biological source device material.

Infection of the soft tissue and/or bone (osteomyelitis) and fever are potential risks to health associated with all surgical procedures and implanted orthopedic devices (Ref. 1). Improper or impure material composition may irritate the wound and exacerbate a preexisting infection and improper sterilization or packaging may increase the risk of infection. Use of a device that is not pyrogen-free may elicit a fever response.

Adverse tissue reaction is a potential risk to health associated with all implanted devices (Ref. 1). The use of this device in a wound will elicit a mild acute inflammatory reaction typical of a normal foreign body response. Inappropriate or impure device material composition may increase the severity of a local tissue reaction or may cause a systemic tissue reaction. Also, for a device intended to set in vivo, inappropriate device material composition may result in a significantly more exothermic setting reaction that may cause tissue necrosis.

Inappropriate material composition may lead to substantially more rapid resorption of the implant, which may contribute to, or may cause, transient hypercalcemia. For patients receiving resorbable calcium sulfate bone void filler, transient hypercalcemia usually resolves without any adverse clinical sequelae (Ref. 1). Implanting the resorbable calcium salt bone void filler device in a patient with a preexisting calcium metabolism disorder (e.g., hypercalcemia) may lead to elevated, unsafe, transient hypercalcemia.

Incomplete bone growth into the treated void or gap, delayed union, and nonunion are potential risks to health that may require further surgical treatment. Device-related factors that may contribute to these risks are an improper material composition that resorbs too quickly or too slowly, or causes an infection or a severe local tissue reaction. Other factors, not related to the device, which may also contribute to incomplete ingrowth of new bone include inadequate preparation of the osseous defect and improper placement of the device.

Formation of new bone that is not as strong as the host bone may occur, and may result in fracture of the bone that may require further surgical treatment.

Disease transmission, including virus transmission, and an undesirable immune response may occur if a calcium salt or calcium salt additive derived from a biological source, e.g., either animal or human tissue, is used that has not been adequately deproteinated or immunologically inactivated.

FDA believes that the class II special control draft guidance document entitled “Class II Special Controls Guidance Document: Resorbable Calcium Salt Bone Void Filler Device,” in addition to general controls, is adequate to control the identified risks to health associated with use of the resorbable calcium salt bone void filler device. FDA agrees with the Panel that FDA guidance documents and voluntary consensus standards are appropriate special controls to reasonably assure the safety and effectiveness of the device. FDA believes that the class II special controls draft guidance document, which incorporates FDA guidance documents, voluntary consensus standards, material characterization, performance testing, and instructions for use, addresses the Panel’s recommendation for a guidance document and voluntary consensus standard special controls.

The class II special controls draft guidance document addresses the risks to health associated with the resorbable calcium salt bone void filler device in the following five ways: (1) Adherence to the FDA guidance documents will assure that the device is safe for long-term implantation, control the risk of infection by assuring that only a sterile device is implanted, minimize the additional risk of eliciting a fever response, and assure that only a biocompatible material is used; (2) adherence to the voluntary consensus standards in the guidance document will assure that the device material has an appropriate composition and purity; (3) adherence to the material characterization recommendation will assure that the device has appropriate material properties for bone ingrowth and device resorption; (4) adherence to the performance testing recommendation will assure that implantation of the material provides an adequate environment for bony ingrowth and has the intended dissolution properties. For a calcium salt intended to set in vivo, it will also assure that the device material has an appropriate composition so that the setting reaction is not significantly exothermic to cause tissue necrosis. It will also assure that the device material has an appropriate composition to achieve the intended bone formation and material resorption, and that the newly formed bone is sufficiently strong. Finally, adherence to this section will help control the risks of disease transmission, including virus transmission, and undesirable immune response associated with implantation of a calcium salt or calcium salt additive derived from a biological source, e.g., either animal or human bone that has been inadequately deproteinated or immunologically inactivated; and (5) adherence to the instructions for use will help control the risk of an elevated, unsafe, transient hypercalcemia in patients with a preexisting calcium metabolism disorder.

Based on the available information, FDA believes that the resorbable calcium salt bone void filler device should be classified into class II because special controls, in addition to general controls, would provide reasonable assurance of the safety and effectiveness of the device with the identified risks to health associated with the use of the device, and there is sufficient information to establish special controls to provide such assurance.

The agency has determined under 21 CFR 25.34(b) 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 proposed 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). The agency believes that this proposed rule is consistent with the regulatory philosophy and principles identified in the Executive order. In addition, the proposed rule is not a significant regulatory action as defined by the Executive order and so is not subject to review under the Executive order.

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. As unclassified devices, these devices are already subject to general controls such as premarket notification. The premarket notification guidance document will not substantially change the way in which these devices are regulated. The agency therefore certifies that this proposed rule, if issued, will not have a significant economic impact on a substantial number of small entities. In addition, this proposed rule will not impose costs of $100 million or more on either the private sector or State, local, and tribal governments in the aggregate, and therefore a summary statement or analysis under section 202(a) of the Unfunded Mandates Reform Act of 1995 is not required.

This proposed rule does not contain information collection provisions that are subject to review by the Office of Management and Budget under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Interested persons may submit to the Dockets Management Branch (address above) written or electronic comments regarding this proposal by May 8, 2002. Two copies of any comments are to be submitted, except that individuals may submit one copy. Comments are to be identified with the docket number found in brackets in the heading of this document. Received comments may be seen in the Dockets Management Branch between 9 a.m. and 4 p.m., Monday through Friday.

FDA proposes that any final regulation based on this proposal become effective 30 days after its publication in the Federal Register .

The following references have been placed on display in the Dockets Management Branch (address above) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday.

1. The authority citation for 21 CFR part 888 continues to read as follows:

(a) Identification . A resorbable calcium salt bone void filler device is a resorbable implant intended to fill bony voids or gaps, caused by trauma or surgery, that are not intrinsic to the stability of the bony structure.

(b) Classification . Class II (special controls). The special control for this device is the FDA guidance document entitled “Class II Special Controls Guidance: Resorbable Calcium Salt Bone Void Filler Device.”

The Bureau of Alcohol, Tobacco and Firearms (ATF), as the delegate of the Secretary of the Treasury, has authority under the Federal Alcohol Administration Act, 27 U.S.C. 205(e), to prescribe regulations that insure that alcohol beverages are labeled or marked to “provide the consumer with adequate information as to the identity” of the products.

ATF published Treasury Decision ATF-53 (43 FR 37672, 54624) on August 23, 1978. This decision revised the regulations in 27 CFR part 4, Labeling and Advertising of Wine, to allow the establishment of definitive viticultural areas. The regulations allow the name of an approved viticultural area to be used as an appellation of origin in the labeling and advertising of wine.

On October 2, 1979, ATF published Treasury Decision ATF-60 (44 FR 56692), which added 27 CFR part 9, American Viticultural Areas, the listing of approved viticultural areas, the names of which may be used as appellations of origin.

Section 4.25a(e)(1), title 27 CFR, defines a viticultural area as a delimited grape-growing region distinguishable by geographical features. Viticultural features such as soil, climate, elevation, topography, etc., distinguish it from surrounding areas.

Any interested person may petition ATF to establish a grape growing region as a viticultural area. The petition must include:

• Evidence that the name of the proposed viticultural area is locally and/or nationally known as referring to the area specified in the petition;

• Historical or current evidence that the boundaries of the viticultural area are as specified in the petition;

• Evidence relating to the geographical features (climate, soil, elevation, physical features, etc.) which distinguish the viticultural features of the proposed area from surrounding areas;

• A description of the specific boundaries of the viticultural area, based on features which can be found on United States Geological Survey (U.S.G.S.) maps of the largest applicable scale; and

• A copy of the appropriate U.S.G.S. map(s) with the boundaries prominently marked.

ATF received a petition from Ms. Patricia McRitchie on behalf of Shelton Vineyards, Inc., Dobson, North Carolina, proposing to establish a viticultural area within the State of North Carolina, to be known as “Yadkin Valley.” The viticultural area encompasses Surry, Wilkes, and Yadkin counties and portions of Stokes, Forsyth, and Davie counties, all in North Carolina. The proposed viticultural area is located entirely within the Yadkin River watershed.

The proposed area encompasses approximately 1,924 square miles or 1,231,000 acres. Within these boundaries, there are over 30 growers that devote approximately 350 acres to the cultivation of wine grapes. Currently, there are three bonded wineries and at least two other wineries under construction.

According to the petitioner, the proposed viticultural area has been known as the Yadkin Valley since pre-colonial times. The first written historical appearance of the name Yadkin (also referred to as Yattken or Yattkin) was in 1674 in the writing of an early trader, Abraham Wood, whose English scouts passed through the area in 1673. It was used in reference to the Native American tribe found living along the river known as Yadkin. Subsequently, the name Yadkin was applied to many natural features and man-made structures in the area. In fact, the only references to Yadkin as a place name are to places located in North Carolina: Yadkin Valley, the Yadkin River, Yadkin County, the towns of Yadkin Falls, Yadkin College, and Yadkinville. It is also used to name businesses, schools, and organizations located in the northwestern piedmont of the State.

The petitioner states that there is rich historical and anthropological evidence of settlement and cultivation in the Yadkin Valley. Native American settlements date back to approximately 500 B.C. The first non-Native settlers, the Moravians, arrived in the Yadkin Valley in the 1740's. They originally scouted land in the Blue Ridge Mountains near Boone, but did not find a satisfactory site for settlement. The Moravians followed the Yadkin River east, finally reaching the three forks of the Muddy Creek, a tributary of Yadkin River. It was here that the first of these settlements were made in what are now Forsyth and Stokes counties. These settlements were Bethabara, established in 1753, and Bethania, established in 1759. Bethabara was a fortified settlement built to protect early settlers from attacks by Indians who would sweep down into the Yadkin Valley from the Blue Ridge Mountains during the French and Indian War. The Moravians were meticulous recordkeepers and references to the Yadkin Valley can be found in pre-colonial writings as well as in later resources.

The petitioner contends that references to the Yadkin Valley can be found in histories of the region during the American Revolution and the Civil War periods. Two of the best known Revolutionary battles in the Yadkin Valley are the Whig victories at Kings Mountain and the Battle of Shallow Ford. According to Ann Brownlee, in “The Battle of Shallow Ford” (12/1/96, 2/24/01 http://www.velocenet.net/shallowford/battle.htm ), these battles were believed to have “turned the tide of the War for Independence in North Carolina to the Patriots' advantage.”

The petitioner states that the period immediately after the Civil War was highlighted by a steady influx of settlers into the Yadkin Valley and was characterized by subsistent farming on its rich soils. Toward the latter part of the 19th century, the focus was on cotton and tobacco. By the early 20th century, the change to tobacco as a cash crop was secure. At the close of the 20th century, the predominance of tobacco growing in the northwest piedmont of North Carolina waned. In its place is an increased interest in grape growing, which is rooted in pre-colonial North Carolina.

The petitioner states that, in an article titled “N.C. Winery History” (North Carolina Grape Council Web site, 2/24/01, http://www.ncagr/com/markets/commodit/horticul/grape/winehist.htm ), the first cultivated wine grape in the United States was grown in North Carolina. The first known recorded account of the scuppernong grape is found in the logbook of explorer Giovanni de Verranzano. He wrote in 1524, “Many vines growing naturally there [in North Carolina] that would no doubt yield excellent wines.”

The wine industry in North Carolina thrived through the 19th and 20th centuries until prohibition. At that time, the industry, which was centered in the eastern part of the State, was based on muscadine wine.

The petitioner contends that one of the first modern major plantings of vinifera grapes in North Carolina occurred in 1972, when Jack Kroustalis established Westbend Vineyards, located in the Yadkin Valley. According to “Carolina Wine Country”, “[t]he vines flourished in the rich soil of the Yadkin River Valley.” In 1988, Kroustalis built the first bonded winery in the Yadkin Valley. Other growers in Yadkin Valley took note of Westbend Vineyard's success with vinifera grapes and followed suit. By the end of 2000, over 350 acres of grapes were planted in the Yadkin Valley. The North Carolina Department of Agriculture has recognized this area as a “unique and valuable winegrowing region.”

In 1999, Shelton Vineyards began planting 200 acres of vinifera grapes on land considered perfectly suited to vinifera grape growing. The following year, they opened a state-of-the-art 30,000 case winery. There are currently two wineries under construction in the proposed viticultural area. The Yadkin Valley Wine Grower's Cooperative was recently incorporated.

In 1999, Surry Community College began offering continuing education viticulture courses. Spurred by the tremendous interest in grape growing, the College initiated a two-year viticulture program, which began in the fall of 2000. The program was designed with the intent of educating future grape growers to take advantage of the favorable growing environment provided by the Yadkin Valley. In December of 2000, the Golden Leaf Foundation awarded the College over $130,000 to support the establishment of a demonstration vineyard and winery for use by students in the program. The petitioner contends that this provides further evidence and recognition of the promise that Yadkin Valley holds as a valuable and distinct viticultural area.

Reference materials used to prepare this petition consistently include the entire counties of Wilkes, Surry, and Yadkin in the Yadkin Valley, as well as portions of Stokes and Forsyth Counties. Davie and Iredell Counties are also commonly included. However, the petitioner contends that, for reasons discussed in the following section of the petition, Iredell County and the southern portion of Davie County should not be included in the proposed Yadkin Valley viticultural area.

The foregoing is evidence that Yadkin Valley is locally and nationally known as encompassing the area proposed by this petition.

The information in this section was prepared by Roger J. Leab, Soil Scientist, Natural Resource Conservation Service, United States Department of Agriculture. Mr. Leab was Soil Survey Project Leader for Surry County and Stokes County. He is currently the Soil Survey Project Leader for Alamance County. The soil information was compiled from the published soil surveys of Wilkes, Stoke, Yadkin, Davie, and Forsyth Counties and the data collected for the soon-to-be-published soil survey of Surry County.

The soils of the proposed Yadkin Valley viticultural area are formed mainly from residuum (saprolite) weathered from felsic metamorphic rocks (gneisses, schists, and phyllites) of the Blue Ridge Geologic Belt and the Smith River Allochothon and from metamorphosed granitic rocks of the inner Piedmont Belt. The extreme southeastern part of the area is formed from saprolite weathered from igneous intrusive rocks (granites, gabbros and diorites) and some gneisses and schists, all of the Charlotte Belt.

Most of the proposed viticultural area is in the mesic soil temperature regime, which, at a depth of 20 inches, has an average annual soil temperature of 47 to 59 degrees Fahrenheit. The extreme southeastern part of the area is in the thermic temperature regime, which is the 59 to 72 degree Fahrenheit range.

The dominant soil series formed from residuum in the mesic area are Fairview, Clifford, Woolwine, Westfield, Rhodhiss, and Toast soils. The dominant soil series formed from residuum in the thermic area are Pacolet, Cecil, Madison, Appling, and Wedowee soils. There are also some large areas of soils, which formed in old fluvial sediments of high stream terraces. These are the Braddock series in the mesic area and the Masada, Hiwassee, and Wickham series in the thermic area. These soils all have clayey or fine-loamy subsoils with good internal structure and moderate permeability. They are mostly very deep and well drained. These soils are acidic and have low natural fertility, requiring a well-structured fertility plan.

The soil series that formed in residuum from the mafic intrusive rocks (gabbros and diorites), which occur scattered along the extreme southeastern part of the proposed viticultural area, have slightly better natural fertility. However, they have subsoils with mixed mineralogy clays. The Gaston and Mecklenburg series have moderate or moderately slow permeability and are suitable to moderately suitable for viticulture. However, the Enon and Iredell series have high shrink-swell clayey subsoils, which perch water during wet periods and result in less than desirable internal drainage.

The less than desirable, high shrink-swell clayey soils are more abundant to the south and east of the proposed viticultural area. The Blue Ridge Mountains are to the west and north of the proposed area. The petitioner contends that these limitations define the Yadkin Valley as a unique viticultural area.

Data for precipitation, temperature and heat summation were provided by the State Climate Office of North Carolina.

Hardiness Zone. The proposed viticultural area is in Zone 7a of the USDA Hardiness Zone Map. The surrounding areas are in Zones 6b and 7b. This zone is well suited for growing grapes while the adjacent zones are not as favorable for growing vinifera grapes. For example, the Columbia Valley viticultural area in Washington State is also located in Zone 7a.

The Yadkin Valley is located in the warm temperate latitude between 36′00″ and 36′30″ N. This is an area well suited to growing vinifera grapes while latitudes below 35′00″ are not suited to vinifera grape growing, according to Gordon S. Howell and Timothy K Mansfield's article, “Microclimate and the Grapevine: Site Selection for Vineyards (A Review),” in “Vinifera Wine Growers Journal,” Fall 1977, 373.

Precipitation. The Yadkin Valley has an average rainfall of 46.42 inches. The area to the west and northwest receives, on average, more than 68 inches of rain per year. The area to the south and east receives, on average, 43.37 inches of rain per year. In general, the Yadkin Valley receives less precipitation than the area to the west and northwest and slightly more than the areas to the south and the east.

Temperature. The Yadkin Valley has average maximum annual temperatures of 69.85 degrees Fahrenheit and average minimum annual temperatures of 44.90 degrees Fahrenheit. The area to the west-northwest has an average maximum temperature of 58.6 degrees Fahrenheit and an average minimum annual temperature of 40.00 degrees Fahrenheit. The area to the east has an average maximum annual temperature of 68.4 degrees Fahrenheit and an average minimum annual temperature of 46.0 degrees Fahrenheit. The area to the south has an average maximum annual temperature of 71.5 degrees Fahrenheit and an average minimum annual temperature of 48.1 degrees Fahrenheit.

In summary, the Yadkin Valley is much warmer than the area to the west and northwest and has slightly higher maximum and minimum temperatures than the area to the east. The Yadkin Valley has lower maximum and minimum temperatures than the area to the south. Temperature differences become more pronounced the further south one travels. In addition, as you proceed east past the Greensboro area, the temperatures, both maximum and minimum, become warmer than in the proposed viticultural area.

Heat Summation. Using Amerine and Winkler heat summation definitions, the proposed viticultural area is in climatic region IV, with 3743 degree-days. The areas to the east are in region IV. The area to the west-northwest is in region I, and the area to the south is in region V (Greensboro, NC is close to region V).

The data for the following analyses are taken from the North Carolina State University Horticulture Information Leaflet “Average Growing Season for Selected North Carolina Locations” (12/96, revised 12/98) by Katharine Perry.

Frost-Free Season/Growing Season. The proposed viticultural area enjoys a frost-free season lasting from April 22 to October 15. This is a growing season of 176 days and is two to four weeks longer than the region to the west. The frost-free/growing season in the proposed viticultural area is similar to the area immediately to the south. In contrast, the regions to the east-southeast have a frost-free and growing season four to six weeks longer than the proposed viticultural area.

Climate Summary. The proposed viticultural area has more moderate temperatures and precipitation than the surrounding areas. The growing season and frost-dates fall within the optimum range for cultivation of premium vinifera grapes. These data support the proposition that the Yadkin Valley possesses climatic conditions distinguishing it from the surrounding areas.

Matthew Mayberry, Chairman/President, River Ridge Land Company, Inc., provided the following geological commentary.

The rocks and subsequent soils of the Blue Ridge and Piedmont Physiographic Provinces of the proposed viticultural area have origins extending back to the early formation of the earth's continental landmasses. Some rocks of the subject area have been dated to approximately 1.8 billion years old.

The geologic history is tremendously complex and involves plate tectonics (continental drift, continental collisions, subduction zones, intercontinental deformations) and the whole spectrum of uplifting and erosional wearing down for the entire mountain building cycle. Each of these cycles required several hundred million years during which the ongoing uplift and erosional wearing down processes were constantly active. The erosional cycle gradually reduces land surfaces from mountains to relatively level surfaces, gently sloping toward a depositional basin (ocean/sea). Geological evidence indicates at least three complete tectonic cycles, the last of which involved a collision and later separation of the Euro African Plate with the North American Plate. This produced a mountain range approximating the present day Andes Mountains of South America and eventually resulted in the creation of the Atlantic Ocean and the present day plate positions.

During a period of three hundred million years, following the build up of this original Appalachian Mountain system, the forces of weather and erosion have likely removed thousands of meters of rock with the resulting Piedmont and Blue Ridge surfaces of today. Evidence of three erosional cycles is represented by present day mountain peaks, e.g. , Mount Mitchell in North Carolina and Mount Rogers in Virginia. These peaks represent the oldest leveling cycle. The peaks of Kings Mountain, Pilot Mountain, Sauratown Mountain and the ridges of the Blue Ridge system represent the next erosional cycle. This middle cycle is definitely an older cycle (400,000,000 years) than the present-day Piedmont and Coastal Plain, which represent the third leveling cycle with their gentle sloping surface to the Atlantic Ocean. A current hypothesis is that the Appalachian Mountains and Piedmont are in a cycle where uplift is exceeding erosion by about 100 feet per 1,000,000 years for the Appalachian system of today.

The highly complex rocks of the present day Blue Ridge and Piedmont provinces represent a core area that has been present and re-crystallized and re-metamorphosed through several of these mountain building cycles to produce the complex schists, gneisses and igneous rocks of today. Relics of a couple of the hot spots that re-crystallized rock are the granites of Mount Airy and Stone Mountain, North Carolina. The weathering of these Piedmont rocks has produced soils with chemical and physical properties that are very amenable to the viticulture industry. These soils and the climate of the proposed Yadkin Valley viticultural area cover a spectrum that is equal to most vineyards of Europe and California.

After the Yadkin River's origin and descent from mountain springs in the Blowing Rock, North Carolina area, it encounters a major structural feature known as the Brevard Shear Zone (fault system), which also defines the Blue Ridge Escarpment in the area, paralleled by the river. At the base of the Blue Ridge Escarpment, the Yadkin River turns and flows northeastward under the structural control of this shear zone for a distance of approximately 50 miles before bending to the east between the northeast end of the Brushy Mountains and Pilot Mountain. At the Surry, Yadkin, and Forsyth County corner, the Yadkin turns southward and later becomes the Pee Dee River at High Rock Lake, about six miles northwest of Salisbury, North Carolina.

Matthew Mayberry, Chairman/President, River Ridge Land Company, Inc. provided the boundary description.

The area of the proposed Yadkin Valley viticultural area covers approximately 1,924 square miles or 1,231,000 acres in Wilkes, Surry, Yadkin and parts of Stokes, Forsyth, and Davie counties. The subject area is identified on two 1:250,000 scale USGS maps:

(1) Winston-Salem, N.C.; VA., Tenn. 1953 Limited Revision 1962 and,

(2) Charlotte, North Carolina; South Carolina 1953 Revised 1974.

The proposed Yadkin Valley viticultural area boundary is defined as a series of compass bearings and corresponding distances determined with a protractor and a 1:250,000 scale, based on and read from the U.S.G.S. maps. Primarily, the proposed viticultural area is defined by county lines. In cases where directions change, where county lines are too irregular to measure, a “trend direction bearing” with straight-line miles is reported. The beginning point is defined as a point 3.6 miles west of the northeast corner of Surry County on the Surry County and North Carolina/Virginia state line at the crest of Slate Mountain.

The boundaries of the proposed Yadkin Valley viticultural area are more particularly discussed in proposed § 9.174 (c) of the regulations, as identified below in this Notice.

This regulation is not a significant regulatory action as defined in Executive Order 12866. Accordingly, this proposed rule is not subject to the analysis required by this Executive Order.

The proposed regulations will not have significant economic impact on a substantial number of small entities. The establishment of a viticultural area is neither an endorsement or approval by ATF of the quality of wine produced in the area, but rather an identification of an area that is distinct from surrounding areas. We believe that the establishment of viticultural areas allows wineries to more accurately describe the origin of their wines to consumers, and helps consumers identify various wines. Any benefit derived from the use of a viticultural area name is the result of the proprietor's own efforts and consumer acceptance of wines from that area. No new requirements are proposed. Accordingly, a regulatory flexibility analysis is not required.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(j)) and its implementing regulations, 5 CFR part 1320, do not apply to this proposed rule because no requirement to collect information is proposed.

ATF solicits comments from all interested parties. ATF specifically requests comments on the clarity of this proposed rule and how it may be made easier to understand. Comments received on or before the closing date will be carefully considered. Comments received after that date will be given the same consideration, if it is practical to do so. Assurance of consideration can only be given to comments received on or before the closing date.

Copies of this petition, the proposed regulations, the appropriate maps, and any written comments received may be viewed by appointment at the ATF Reference Library, Office of Liaison and Public Information, Room 6480, 650 Massachusetts Avenue, NW., Washington, DC 20226; telephone (202) 927-7890. To receive copies of comments, you must file a Freedom of Information Act (FOIA) request. For instructions on filing a FOIA request, call (202) 927-8480 or refer to the internet address: http://www.atf.treas.gov/about/foia/foia.htm.

For the convenience of the public, ATF will post comments received in response to this notice on the ATF web site. All comments posted on our web site will show the name of the commenter. Street addresses, telephone numbers, and e-mail addresses are removed. We may also omit voluminous attachments or material that we do not consider suitable for posting. In all cases, the full comment will be available in the library or through FOIA requests, as noted above. To access online copies of the comments on this rulemaking, visit http://www.atf.treas.gov/, and select “Regulations,” then “Proposed rules” and this notice. Click on the “view comments” button.

ATF will not recognize any comment as confidential. All comments and materials will be disclosed to the public. If you consider your material to be confidential or inappropriate for disclosure to the public, do not include it in the comments. We will also disclose the name of any person who submits a comment.

During the comment period, any person may request an opportunity to present oral testimony at a public hearing by writing the Director within the 60-day comment period. However, the Director reserves the right to determine whether a public hearing will be held.

To submit facsimile transmissions, use (202) 927-8525. Facsimile comments must:

• Be legible.

• Reference this notice number.

• Be on paper 8 1/2 × 11” in size.

• Contain a legible written signature.

• Not be more than three pages.

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

To submit comments by e-mail, send the comments to: nprm@atfhq.atf.treas.gov. You must follow these instructions.

E-mail comments must:

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

• Reference this notice number.

• Be legible when printed on no more than three pages, 8 1/2 × 11” in size.

We will not acknowledge receipt of e-mail. E-mail comments are treated as originals.

There is a comment form provided with the online copy of the proposed rule on the ATF internet web site at: http://www.atf.treas.gov.

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

Title 27, Code of Federal Regulations, Part 9, American Viticultural Areas, is proposed to be amended as follows:

The Digital Performance Right in Sound Recordings Act of 1995 (DPRA) amended 17 U.S.C. 114 to give sound recording copyright owners an exclusive right to perform their works publicly by means of a digital audio transmission, subject to certain limitations and exemptions. Pub. L. No. 104-39, 109 Stat. 336 (1995). Among the limitations placed on the performance of a sound recording was the creation of a statutory license that permits certain subscription digital audio Services to publicly perform those sound recordings through digital audio transmission. In order to operate under the license, eligible subscription digital audio Services must pay the statutorily required fees and comply with certain other conditions, such as adherence to notice and recordkeeping requirements.

In 1998, Congress passed the Digital Millennium Copyright Act (DMCA), which expanded the scope of the section 114 license. It amended section 114 by adding three new categories of Services that may operate under the license, and by redesignating the subscription Services covered by the DPRA statutory license as “preexisting subscription Services.” Pub. L. No. 105-304, 112 Stat. 2860, 2887 (1998). The three new service categories are: (1) Preexisting satellite digital audio radio Services, (2) new subscription Services and (3) eligible nonsubscription transmission Services. The DMCA also amended 17 U.S.C. 112 to add another new license that is available to permit Services to make ephemeral recordings of a sound recording to facilitate the transmissions permitted under section 114.

Both the DPRA and the DMCA direct the Librarian of Congress to establish regulations to require eligible Services to give copyright owners reasonable notice that their sound recordings are being used under one or both of the licenses and create and maintain records of use and make them available to copyright owners. See Secs. 112(e)(4) and 114(f)(4)(A).

On May 13, 1996, the Copyright Office published a Notice of Proposed Rulemaking (NPRM) in the Federal Register requesting comments on the requirements by which copyright owners should receive reasonable notice of the use of their works from subscription digital transmission Services and how records of such use should be kept and made available to copyright owners. The Office asked commentators to consider both the adequacy of notice to sound recording copyright owners and the administrative burdens placed on digital transmission Services in providing notice and maintaining records of use. 61 FR 22004 (May 13, 1996).

On November 14, 1996, and again on January 27, 1999, the Copyright Office met with the parties to facilitate agreement on the notice and recordkeeping requirements under section 114, and to discuss the proper regulatory and recordkeeping role of the Office. 1

Based on the comments filed in response to the first NPRM and the information gleaned from the subsequent meetings, the Copyright Office published a second NPRM on June 24, 1997, presenting certain preliminary decisions and asking the parties for further comments. 2 62 FR 34035 (June 24, 1997). In 1998, after extensive study, the Copyright Office issued Interim Regulations to implement the notice and recordkeeping requirements for section 114 that were enacted in 1995 as part of the DPRA. 63 FR 34289 (June 24, 1998). 37 CFR 201.35-201.37. The interim rules took effect on June 28, 1998. The rules were issued on an interim basis in light of the rapidly developing nature of the digital transmission Service industry and the possibility that new technology might be developed which would allow the reporting requirements to be either expanded or reduced, depending upon the needs of the industries.

Since that time, the subscription digital audio Services (now known as the “preexisting subscription Services”) have filed notices of use and maintained records of use in accordance with these rules. These rules, however, were not adapted to cover the new categories of Services that operate under the licenses in sections 112 and 114, as amended by the DMCA.

The purpose of this proposed rulemaking is to provide interested parties with an opportunity to comment on the Interim regulations and to amend these same rules to include the requirements of the 1998 DMCA amendments that expanded the section 114 license and created the new section 112 license. For a full discussion of the issues underpinning the Interim regulations, please refer to the earlier NPRMs, 61 FR 22004 (May 13, 1996) and 62 FR 34035 (June 24, 1997), and the notice announcing the interim rules. 63 FR 34289 (June 24, 1998).

On May 24, 2001, the Copyright Office received a petition from the Recording Industry Association of America (RIAA) and its SoundExchange division requesting that the Office conduct rulemaking proceedings to develop notice and recordkeeping requirements that substantively address the 1998 DMCA amendments. RIAA, however, advised against establishing any notice or recordkeeping requirements for pre-existing satellite digital audio radio Services, as defined in 17 U.S.C. 114(j)(10), or for pre-existing subscription Services employing transmission media other than those used by such Services on July 31, 1998. RIAA petition at 1-2. This suggestion was based on the fact that RIAA and identified Services were engaged in negotiation discussions regarding notice and recordkeeping issues for these Services which they hoped would result in agreement that would be jointly proposed to the Office for adoption in a second rulemaking proceeding. RIAA petition at 2.

The Office agrees that there is a need to adopt additional notice and recordkeeping requirements for eligible nonsubscription Services at this time in order to have them in place when the current CARP proceeding is concluded. Adoption of such rules will enable copyright owners to receive their royalty payments as expeditiously as possible. See U.S. Copyright Office, Order in Docket No. 99-6 CARP DTRA 1 & 2, Docket No. 2000-3 CARP DTRA2 (December 4, 2000 Order.)

The scope of the rules proposed by the Office, however, covers all Services that operate under the section 112 and 114 licenses. The Office takes this approach because preexisting digital audio satellite Services and new types of subscription Services are already in operation and should have the benefit of knowing what record keeping requirements they must use so that they can structure their businesses accordingly. Moreover, it is likely that the basic requirements for notice and recordkeeping will be similar for all Services. For this reason, the proposed rule is an amended version of the interim rule and addresses the notice and record keeping requirements for all categories of Services.

To make it explicit that the provisions of 37 CFR 201.35-201.37 apply to the Services added by the DMCA, statutory references to them have been inserted as appropriate throughout. Also, the statutory definition for each Service has been added to the definition sections of 37 CFR 201.35-201.37, either expressly or by a cross reference. A definition of “AM/FM Webcast” has also been included in the recordkeeping provisions for section 201.36.

The Office also proposes amending 37 CFR 201.35-201.37 throughout to make those provisions applicable to section 112 licenses in the same way that they apply to section 114 licenses, although differences in the statutory requirements have been taken into account where appropriate. Therefore, statutory references to section 112 licenses have been incorporated along with references to section 114 licenses.

This approach follows RIAA's recommendation with regard to the recordkeeping requirements for section 112 licenses. However, while RIAA recommended that 37 CFR 201.35 be used as a model for section 112 notice requirements, it advocated putting the section 112 notice requirements in a separate section because “the existing notice regulations are so replete with references to the subject matter of the statutory license as to make it confusing to integrate the two notice provisions.” RIAA petition at 11. However, the Copyright Office has decided not to follow that approach at this time and proposes to amend 37 CFR 201.35 to apply its notice provisions to both section 112 and 114 licenses. The Office does not believe that such an approach is confusing, and believes that such an approach is more efficient and will result in less paperwork for the Office and for Services operating under the statutory license. For example, the proposed rule provides that a Service may file a single initial notice stating the Service's intention to use either the section 114 statutory license, or the section 112 statutory license, or both.

Initial Notice. The proposed changes to the notice requirements of 37 CFR 201.35 are intended to apply to situations in which a Service is operating under only one license and those in which a Service is operating under both. Consistent with that approach, the amended rules propose use of a single standard form for both the section 114 license and the section 112 license. A Service will be required to expressly indicate on a standard form Notice of Use of Sound Recordings under Statutory License the license(s) for which the notice is being filed. 3 The form will also require that the Service indicate the categories of license (e.g., preexisting subscription service, non-subscription transmission service, etc.) for which it seeks the license. In addition, the Service must provide the date or the expected date of the initial digital transmission of a sound recording made under section 114 and the date of creation of an ephemeral phonorecord made under section 112.

The Office proposes to require all Services, including those which have previously filed a general Notice of Use for the section 114 license, to file a new Notice of Use. It is the Office's impression that many Services that have filed Initial Notices under the current regulation have ceased using the statutory license and, in many cases, have gone out of business altogether. Requiring all Services to refile a Notice of Use will make the Office's records more reliable, retiring records identifying Services that are no longer using the statutory license. The Office invites comments on this proposal.

Moreover, the Office proposes that all Notices of Use be prepared using a standard form developed for this purpose. In this way, there will be an accurate uniform record currently identifying all Services using these statutory licenses, indicating which licenses are to be used, the type of transmissions to be made under the section 114 license, and information concerning the date of first transmission or the date for making an ephemeral recording of a sound recording. Under current practice, in which parties may submit a notice based on a suggested, but nonmandatory, format, a Notice is more likely to be misfiled and the information in the Notice is less likely to be easily recognized. Parties may comment on the elements required as part of the notice, on when the updated notice should be filed, and on the layout and utility of the proposed standard form. A prototype of the proposed form has been posted on the Copyright Office website at: http://www.loc.gov/copyright/forms/form112-114nou.pdf.

In general, Services transmitting sound recordings under statutory license will be required to file an initial notice with the Copyright Office as before, including the Service name, address, telephone number, and information on how to gain access to the online website or home page of the Service or entity, where information may be posted under these regulations concerning the use of sound recordings under statutory license. If the proposed rules are adopted, the notices will be placed in the public file in the Licensing Division of the Copyright Office, where copyright owners may go to access the information concerning use of sound recordings under the licenses. The Office proposes to discontinue its current practice of posting copies of all notices on its website. The Office questions the continued utility of making this information available on the website, which requires the expenditure of substantial resources. It does not appear that removing the notices from the website would be likely to deprive interested parties of the information found in the notices. The Office proposes to provide copies of all notices of use to the Collective or Collectives designated through the CARP process to receive and distribute royalties under the statutory license, and believes that this, combined with the availability of the notices for inspection and copying in the Licensing Division, adequately makes the information in the notices available to all interested parties.

Moreover, the Office seeks comment on a possible change to the requirement that all notices be filed in the Copyright Office. Would it be more efficient for a Service to file its Notice of Use directly with the designated collection entity, rather than with the Copyright Office? What would be the propriety and efficiencies of having Services file Notices of Use not with the Office, but directly with the Collective designated to receive royalties from the statutory licensees, and requiring the Collective to make the notices available to the public for inspection and copying?

Moreover, the Office is seeking comment on the advisability of requiring periodic filings of the notices of use in order to establish a continually current and updated file of Services operating under either the section 114 and section 112 licenses. If the Office finds there is a need for maintaining an updated file, the final rule will specify that each Service must file a new Notice of Use with the Office every year (or other time period to be determined).

In any event, a new Service will still be required to file its Notice of Use prior to the date of first transmission or the making of an ephemeral recording, and a Service will continue to be required to update its filing within 45 days of a change in the information reported. If notices are to be filed with the Copyright Office, all notices shall be accompanied by the filing fee (currently $20) specified in section 201.3(c) of title 37 of the Code of Federal Regulations. On the other hand, if the Office adopts a rule requiring Services to file the Notices of Use directly with the designated collective, there is an open question on whether there should be a filing fee and how much that fee should be. Interested parties should address this issue in their comments to the Office.

Reports of Use. Where appropriate, the existing recordkeeping requirements have been revised to reflect the changes introduced by the DMCA by inserting the appropriate statutory references. The proposed amendment sets forth specific reporting requirements for each Service category. In fashioning the proposed new regulations, the Office is adopting RIAA's recommended changes for recordkeeping requirements for new subscription Services and for Services making eligible nonsubscription transmissions under section 114 and applies the same rules to the preexisting satellite digital audio radio Services. In addition, the proposed regulations incorporate RIAA's recommendation for section 112 recordkeeping requirements. The Office is taking this approach because the required information seems designed to accomplish the basic reporting objective of providing information with which copyright owners can generally monitor compliance with the terms of the licenses.

As before, a preexisting subscription Service making digital transmissions in the same transmission medium used by such Service on July 31, 1998, would be required to submit reports of use with an Intended Playlist containing all the elements required in the Interim regulations. No changes have been made to the requirements for those Services' Intended Playlists. The amended rules, however, require other types of Services to submit Intended Playlists that provide additional information, such as the type of program and the time zone from which the transmission originated.

In addition to the information in the Intended Playlists, RIAA has made additional requests for information in two instances. In the case of eligible nonsubscription transmissions and transmissions made by a new subscription Service, RIAA has requested that these Services include a “Listener's Log” in the Report of Use. The “Listener's Log” will identify the name of the Service, the channel or program accessed, information on the user, such as date and time the user logged in and out, the time zone of the place at which the user received the transmission, the user identifier, and the country in which the user received the transmission. RIAA has also requested that a Service making ephemeral phonorecords of sound recordings under section 112(e) include an “Ephemeral Phonorecord Log” in its record of use. The “Ephemeral Phonorecord Log” would, among other things, include the name of the Service, the date the phonorecord was made or destroyed, and specific information about the sound recording from which the ephemeral phonorecord was made. Commenters should discuss in detail the reasons for including or excluding specific elements of the Listener's Log and the Ephemeral Phonorecord Log.

On its face, the request for the Intended Playlists, Listener's Log, and Ephemeral Phonorecord Log seems reasonably based on the premise that the copyright owners need certain specific information to monitor compliance and use by the Services. In support of its request for the detailed information, RIAA argues that the information it seeks from the Services is “easily provided, [] not burdensome, and in fact, is currently provided by a number of licensees who have obtained licenses through negotiations with the RIAA and/or Sound Exchange.” RIAA Petition at 10-11. RIAA further justifies the need for the additional reporting requirements on the basis of differences in statutory requirements for the different licenses and on the basis of the different business models used within the different categories of Services. RIAA petition at 9. Other interested parties, however, may find the requirements too stringent and burdensome in spite of RIAA's assertions. Such parties should identify any problems they perceive with the proposed regulations and explain with specificity the reasons why the regulations are unworkable or unduly burdensome, or exceed the needs of the copyright owners.

The Copyright Office issued regulations governing notice and record keeping for the preexisting Services operating under the section 114 statutory licenses as interim regulations because the industry was young and there was a reasonable expectation that the rules would need revision in a short period of time. The Office, however, intends to issue final rules at the conclusion of this proceeding which shall govern all Services operating under both the section 112 and section 114 statutory licenses. Of course, an affected party can always seek revision of the rules at a future time if and when the need for change arises.

In consideration of the foregoing, the Copyright Office proposes amending part 201 of 37 CFR to read as follows:

In December 1975, during the aftermath of the energy crisis created by the oil embargo of 1973-74, Congress enacted the Energy Policy and Conservation Act (EPCA). The Act established an automotive fuel economy regulatory program by adding Title V, “Improving Automotive Efficiency,” to the Motor Vehicle Information and Cost Saving Act. Title V has been amended from time to time and codified without substantive change as Chapter 329 of Title 49 of the United States Code. Chapter 329 provides for the issuance of average fuel economy standards for passenger automobiles and automobiles that are not passenger automobiles (light trucks).

Section 32902(a) of Chapter 329 states that the Secretary of Transportation shall prescribe by regulation corporate average fuel economy (CAFE) standards for light trucks for each model year. That section also states that “[e]ach standard shall be the maximum feasible average fuel economy level that the Secretary decides the manufacturers can achieve in that model year.” (The Secretary has delegated the authority to implement the automotive fuel economy program to the Administrator of NHTSA. 49 CFR 1.50(f).) Section 32902(f) provides that, in determining the maximum feasible average fuel economy level, we shall consider four criteria: technological feasibility, economic practicability, the effect of other motor vehicle standards of the Government on fuel economy, and the need of the United States to conserve energy. Using this authority, we have set light truck CAFE standards through MY 2003. See 49 CFR 533.5(a). The standard for MY 2003 is 20.7 miles per gallon (mpg)(66 FR 17513; April 12, 2001).

We began the process of establishing light truck CAFE standards for model years after MY 1997 by publishing an Advance Notice of Proposed Rulemaking (ANPRM) in the Federal Register . 59 FR 16324; April 6, 1994. The ANPRM outlined the agency's intention to set standards for some, or all, of the model years from 1998 to 2006.

On November 15, 1995, the Department of Transportation and Related Agencies Appropriations Act for FY 1996 was enacted. Pub. L. 104-50. Section 330 of that Act provided:

We then issued a notice of proposed rulemaking (NPRM) limited to MY 1998, proposing to set the light truck CAFE standard for that year at 20.7 mpg, the same standard as had been set for MY 1997. 61 FR 145 (January 3, 1996). This 20.7 mpg-standard was adopted by a final rule issued on March 29, 1996. 61 FR 14680 (April 3, 1996).

On September 30, 1996, the Department of Transportation and Related Agencies Appropriations Act for FY 1997 was enacted. Pub. L. 104-205. Section 323 of that Act provided:

On March 31, 1997, we issued a final rule (62 FR 15859) establishing light truck fuel economy standards for MY 1999. This final rule was not preceded by an NPRM. The agency concluded that the restriction contained in Section 323 of the FY 1997 Appropriations Act prevented us from issuing any standards at a level other than the standard set for MY 1998. Because we had no other course of action, we determined that issuing an NPRM was unnecessary and contrary to the public interest.

Because the same limitation on the setting for CAFE standards was included in the appropriations acts for each of FYs 1998-2001, we followed that same procedure during those fiscal years and did not issue any NPRMs in the series of rulemakings we conducted to establish the light truck fuel economy standards for MYs 2000-2003. The agency concluded in those rulemakings, as it had when setting the MY 1999 standard, that the restrictions contained in the appropriations acts prevented us from issuing any standards other than the standard set for the prior model year. We also determined that issuing an NPRM was unnecessary and contrary to the public interest because we had no other course of action.

The Department of Transportation and Related Agencies Appropriations Act for FY 2001 was enacted on October 23, 2000. Pub. L. 106-346. This law provided appropriations for the Department of Transportation for FY 2001, and is the law under which we issued the light truck CAFE standard for MY 2003. While Section 320 of that Act contains a restriction on CAFE rulemaking identical to that contained in prior appropriation acts, the Conference Committee Report for that Act directed the National Academy of Sciences (NAS) to conduct a study to evaluate the effectiveness and impacts of CAFE standards (H.R. Conf. Rep. No. 106-940, at 117-118).

The NAS submitted its report to the Department of Transportation on July 30, 2001. The final report is being released in January 2002. The report points out that technologies exist that could significantly increase passenger car and light truck fuel economy within 15 years. However, the study found that “the fuel economy improvement that occurred during the 1970s and early 1980s involved considerable downweighting and downsizing” and that that downweighting and downsizing, “some of which was due to CAFE standards,” resulted in additional fatalities. (NAS, 4-14 and 6-1) Specifically, “to the extent that the size and weight of the fleet have been constrained by CAFE requirements * * * those requirements have caused more injuries and fatalities on the road than would otherwise have occurred.” (NAS, 2-29). However, the NAS found that if future weight reductions occur in only the heaviest of the light-duty vehicles, that can produce overall improvements in vehicle safety. (NAS, 4-14) NAS also found that to minimize financial impacts on manufacturers, their suppliers, their employees, and consumers, sufficient lead time, consistent with normal product life cycles, should be given. The report stated that there are advanced technologies that could be employed, without negatively affecting the automobile industry, if sufficient lead time were provided to the manufacturers. In NAS' view, the selection of fuel economy levels will require uncertain and difficult trade-offs among environmental benefits, vehicle safety, cost, energy independence, and consumer preferences. It also suggests that changing the CAFE regulatory program to one based on vehicle attributes, such as weight, and allowing “credit trading” could eliminate the current CAFE program's encouragement of downweighting or the production and sale of more small cars and also reduce costs. (NAS, 6-5) Recognizing the many trade-offs that must be considered in setting fuel economy standards, the committee took no position on what the appropriate CAFE standards should be for future years, leaving that question for policymakers to answer.

Secretary of Transportation Norman Y. Mineta asked House and Senate Appropriations Committees to lift the restriction on the agency spending funds on CAFE in the summer of 2001. The Department of Transportation and Related Agencies Appropriations Act for FY 2002 (Public Law 107-87) was enacted on December 18, 2001, and does not contain a provision restricting the Secretary's authority to prescribe fuel economy standards. Accordingly, the agency will fully consider the NAS report and other factors in its future CAFE rulemaking.

As the agency has been unable to spend any funds in violation of the terms of Section 320 of the FY 2001 Appropriations Act and the predecessor restrictions in earlier appropriations acts, it has not been able to lay the factual or analytical foundation necessary for rulemaking to establish new CAFE levels. To prepare for any fuel economy standard, the agency must collect information relating to prospective CAFE levels, analyze and weigh the information in light of the statutory criteria for determining the practicable maximum feasible average fuel economy level, and incorporate its information and analysis into a rulemaking action to set the standard, with opportunity for notice and comment.

To allow the agency to begin developing a proposal for light truck average fuel economy standards for model years after MY 2004, NHTSA is issuing this notice.

There are several important developments in the oil and vehicle markets that provide a useful context for today's notice.

With respect to the oil market, the United States imported 15 percent of its oil needs in 1955. The import share reached 35.8 percent in 1975, the year in which EPCA was passed, and rose to 46.5 percent in 1977. Although the share declined to below 30 percent in the early 1980s, lately, the United States has again become increasingly dependent on imported oil. Since 1991, import share has risen from 39.6 percent to 52.9 percent in 2000, which is an all time high level of oil imports.

Thus, the United States now imports a substantially higher percentage of its oil needs than it did during 1975. Moreover, the percentage of its oil supplied by OPEC is similar to that of 1975. Oil continues to account for nearly 40 percent of all energy used in the United States, and 95 percent of the energy consumed in the transportation sector. Petroleum demand is projected to grow at an average annual rate of 1.5 percent through 2020, led by growth in the transportation sector, which is expected to account for more than 70 percent of petroleum demand in 2020.

Domestic oil production has declined steadily since reaching a peak of 10.6 million barrels per day in 1985. By 1992, it dropped to 9.0 million barrels per day. Domestic production is expected to continue declining by roughly 0.2 percent from 2000 to 2020, with 2020 production estimated at 5.6 million barrels per day. While the United States is currently the world's second largest oil producer, it contains only about three percent of the world's known oil reserves. Persian Gulf countries contain 63 percent of known world reserves, and Eastern European countries contain 9 percent. The Department of Energy projects a continuing decline in domestic oil production to between 3.77 and 7.21 million barrels per day in 2010.

With respect to the vehicle market, in the early 1980's, during the energy crisis brought on by events in Iran, gasoline prices rose rapidly. That rise significantly increased consumer demand for more fuel-efficient vehicles. Thereafter, however, gasoline prices fell sharply and have remained at very low levels for a decade. The inflation-adjusted price of gasoline in the U.S. reached a post-World War II low in the 1993-1995 period and has risen slightly since. The fuel cost of vehicle travel in constant dollars is only half of what it was before the price shocks of the 1970s. Consumers place much greater emphasis on safety, cost, and high performance, and make little demand for improved light truck fuel economy. Vehicle performance levels (e.g., ability to accelerate) are now significantly higher than they were when EPCA was enacted. The NAS study found that “recent increases in vehicle weight, while resulting in some loss of fuel economy, have probably resulted in a reduction of motor vehicle crash fatalities.” (NAS, 2-29)

In the absence of strong consumer demand or other market pressure for increased efficiency, there is little motivation for manufacturers to make significant technological improvements to light truck fuel economy. Indeed, light truck fuel economy has been gradually declining since MY 1987 and is not expected to change in the next several years. The average light truck fuel economy was 20.7 mpg in MY 1985, and 20.5 mpg in MY 1995, ten model years later. Lately, light truck CAFE has hovered near 21.0 mpg, with the levels for the past three years ranging from 20.9 to 21.3 mpg. Fuel economy data reported by the Environmental Protection Agency shows that unadjusted light truck fuel economy levels have been below 21.0 mpg since 1993, with levels hovering near 20.5 mpg over the past 5 years or so.

A third reason why light truck CAFE standards assume increased importance now is the continued growth in market share of those vehicles. In 2001, for the first time, sales of light trucks surpassed those of passenger cars, accounting for 50.46 percent of all vehicles sold. In contrast, light trucks comprised 48.78 percent of the market in 2000. According to the Automotive News Data Center, there were 8,667,089 light trucks and 8,510,356 passenger cars sold in 2001, for a total of 17,177,445 vehicles sold. In addition, the sales of light trucks set a monthly record with 908,474 units sold in October 2001. That figure surpassed the previous record of 827,692, set in March 2000 (Bureau of Transportation Statistics).

The growth in the light truck market has been substantial and according to some estimates is achieving sales figures today that were not predicted until several years in the future. For example, the Automotive News Data Center and J.D. Power projected sales of 8.24 million light trucks in MY 2003 and 8.67 million by MY 2005. Thus, because 8.67 million light trucks were sold in 2001, the estimated market size for light trucks was accomplished four years earlier than predicted. Some of this increase in the light truck sales may be accounted for by the 0 percent financing offers made by most of the major manufacturers starting in October 2001, however none of these offers was limited to light trucks only. Further historical evidence for this rapid growth is the fact that light trucks comprised 40 percent of the total light vehicle production in MY 1995, which was more than double their share in MY 1980. The increase in light truck market share is vitally important, because as light trucks increase their market share, so does their impact on energy consumption and the importance of their potential contribution in addressing the Nation's need to conserve energy.

Additionally, the National Energy Policy, released in May 2001, included recommendations regarding the path that the Administration's energy policy should take and included specific recommendations regarding vehicle fuel economy and CAFE. The National Energy Policy was designed to promote dependable, affordable and environmentally sound energy for the future. The Policy envisions a comprehensive long-term strategy that uses leading edge technology to produce an integrated energy, environmental and economic policy. The report recommends that—

• The President direct the Secretary of Transportation to review and provide recommendations on establishing CAFE standards with due consideration of the National Academy of Sciences study released in July 2001. The President further directs that the CAFE standards be responsibly crafted and increase efficiency without negatively impacting the U.S. automotive industry; and that, the determination of future fuel economy standards be addressed analytically and based on sound science.

• The President direct the Secretary of Transportation to consider passenger safety, economic concerns, and disparate impact on the U.S. versus foreign fleet of automobiles.

• The President direct the Secretary of Transportation to look at other market-based approaches to increasing the national average fuel economy of new motor vehicles.

This notice requests comments to assist NHTSA in developing a proposal for light truck CAFE standards for model years after 2004, possibly through MY 2010. In addition, this notice requests comments on possible modifications and/or reforms to the CAFE program. Any significant reforms to the CAFE program may affect NHTSA's decision about the number of model years that should be covered by a proposed rule under the current CAFE program structure.

To aid the agency in obtaining useful comments, this notice discusses a variety of issues that are considered by NHTSA in evaluating fuel economy, and asks a number of questions and makes a number of requests for data. For easy reference, the questions and requests are numbered consecutively throughout the document.

In providing a comment on a particular matter or in responding to a particular question, interested persons are requested to provide any relevant factual information to support their conclusions or opinions, including but not limited to test data, statistical and cost data, and the source of such information.

In addition to the questions in the body of this notice, NHTSA is also including an appendix to this notice, which consists of a number of additional questions directed primarily toward light truck manufacturers. The appendix questions address their product plans through MY 2010 and the assumptions underlying those plans. The agency would appreciate answers that are as responsive as possible so that appropriate weight can be given to the many factors whose magnitude now can only be estimated. While the questions in the appendix are directed toward manufacturers, the agency welcomes comments from all interested persons in response to those questions.

Chapter 329 of Title 49 of the U.S. Code requires the Secretary of Transportation to issue light truck fuel economy standards for each model year. The Code provides that the fuel economy standards must be set at the maximum feasible average fuel economy level. In determining the maximum feasible average fuel economy level, the Secretary is required under section 32902(f) of Title 49 to consider four factors: technological feasibility, economic practicability, the effect of other motor vehicle standards of the Government on fuel economy, and the need of the United States to conserve energy. The Secretary is permitted but not required to set separate standards for different classes of light trucks. (Responsibility for the automotive fuel economy program was delegated by the Secretary of Transportation to the Administrator of NHTSA (41 FR 25015, June 22, 1976).)

Based on definitions and judicial interpretations of similar terms in other statutes, the agency interprets “feasible” to refer to something that is capable of being done. Therefore, a standard set at the maximum feasible average fuel economy level must: (1) be capable of being done and (2) be at the highest level that is capable of being done, taking account of what manufacturers are able to do in light of technological feasibility, economic practicability, how other motor vehicle standards of the Government affect average fuel economy, and the need of the United States to conserve energy.

Executive Order 12866 requires that the findings of cost-benefit analysis be considered in the development of major rules. When considering the appropriate design and stringency of future standards, NHTSA will consider the incremental costs and benefits of alternative options.

The statute does not expressly state whether the concept of feasibility is to be determined on a manufacturer-by-manufacturer basis or on an industry-wide basis. As discussed in many fuel economy notices, it is clear from the legislative history that Congress did not intend that standards simply be set at the level of the least capable manufacturer. Instead, NHTSA must take industry-wide considerations into account in determining the maximum feasible average fuel economy level.

NHTSA has consistently set light truck standards at a level that can be achieved by manufacturers whose vehicles constitute a substantial share of the market. Because of the relatively high volume of production by those manufacturers, their capability bears a strong and close relationship to that of the industry as a whole.

Among the significant issues involved in developing a proposal for the MY 2005-2010 light truck CAFE standards is the extent of the ability of manufacturers to improve their light truck fuel economy during that period. In the last 18 months, Ford, General Motors and DaimlerChrysler have all issued statements regarding the fuel economy level their vehicles will be able to achieve over the next five or so years. In July 2000, Ford made a voluntary commitment to increase the fuel economy of its sport utility vehicle (SUV) fleet in the United States by 25 percent by the 2005 calendar year. General Motors stated that its SUV fleet would have an even higher average fuel economy than Ford's sport utility vehicle fleet, and that its overall average fuel economy for light trucks in 2005 would also be higher than Ford's. DaimlerChrysler stated that the fleet average fuel economy of all its vehicles—both passenger cars and light trucks—would match or exceed those of other full-line manufacturers. However, no timetable was set for achieving this goal, nor did DaimlerChrysler commit to achieving fuel economy goals in specific market segments such as SUVs. In order to help it analyze manufacturer capabilities for improving light truck fuel economy, NHTSA requests information or comments on the questions that follow.

NHTSA is interested in the technology that could be available for improving fuel economy. It is particularly interested in technological advancements and on manufacturers' future plans for the inclusion of technologies that have been developed under the Partnership for a New Generation of Vehicles (PNGV). The Department of Energy announced a new Freedom CAR initiative earlier this month that will aim at higher risk, higher reward technologies that will apply to vehicle models that are in high demand, including minivans, SUVs, and pickups. The National Research Council of the National Academy of Sciences also found that the structure and goals of the PNGV program were wrong. We are interested in adopting specific changes recommended by NAS to improve the program. Ford, General Motors and DaimlerChrysler have all introduced concept cars that achieve at least 70 mpg. It is anticipated that many of the technologies employed on these vehicles will be included in future product plans and that significant gains on fuel economy can be achieved by their application.

1. The NAS Study found that the CAFE program, as currently structured, has contributed to traffic fatalities and injuries. As an agency whose primary responsibility is safety and is therefore deeply concerned about the NAS finding, NHTSA requests comments on this NAS finding. Among our questions are: Is the safety impact understated or overstated? Would NAS's proposed changes to CAFE reduce this safety penalty? Could CAFE standards be modified so that manufacturers are encouraged to achieve improved fuel economy through application of technology instead of through downsizing and downweighting? NHTSA requests comments on the extent to which increases in light truck fuel efficiency are feasible during MYs 2005-2010 and on whether any of these increases would involve means—such as significant weight and size reduction—that could adversely affect safety. We note that the NAS found that if future weight reductions occur in only the heaviest of the light-duty vehicles, that can produce overall improvements in vehicle safety. If there would be adverse effects, how could they be mitigated?

2. What is the technological feasibility and economic practicability of various fuel efficiency enhancing technologies that fall under the general headings of engine, vehicle and transmission technologies? Please comment on each of the following technologies, listed under the general headings below:

Engine friction and other mechanical/hydrodynamic loss reduction; advanced low-friction lubricants; multi-valve, overhead camshaft valve trains; variable valve timing; variable valve lift and timing; intake valve throttling; cylinder deactivation; engine accessory improvement; engine downsizing and supercharging; camless valve actuation; variable compression ratio engines; electronic engine controls; direct fuel injection for spark ignition or diesel engines; lean burn-fast burn combustion; and two-stroke engines.

Five-speed automatic transmission; six-speed automatic transmission; continuously variable transmission; advanced continuously variable transmission; automatic shift manual transmission; and automatic transmission with aggressive shift logic.

Aerodynamic drag reduction; and electronic controls; lowering rolling resistance; vehicle weight reduction; substitution of lighter-weight materials; 42 Volt electrical system; integrated starter/generator; hybrid drive trains; and fuel cells.

In answering this question, please address, for each of these technologies, as well as any other relevant/related technologies:

(a) The impact on fuel efficiency;

(b) Costs and benefits to the consumer;

(c) Manufacturer costs;

(d) Lead time;

(e) Degree of current use in passenger cars and light trucks;

(f) Impacts on safety, including injuries and fatalities; and

(g) Potential fleet penetration.

(h) Effects of environmental (especially vehicles emissions standards) and other regulations on their application/penetration.

In considering fleet penetration, please address whether some technologies might be appropriate for use on light truck models that would not need high load carrying or towing capability because of primarily personal passenger car type usage. For reference, NHTSA, at the direction of the Congress, commissioned a study entitled Light Truck Capabilities, Utility Requirements and Uses: Implications for Fuel Economy which was published in April 1996. (This study is available from the agency as report number DOT HS 808 378.) Included in that study is a brief summary of fuel economy technologies, their benefits, and their potential conflicts with light truck attributes.

3. What is the cost-effectiveness of each technology identified in Question 2, as well as any other relevant technologies, assuming alternative plausible gasoline prices forecast for MY 2005-2010, and assuming alternative payback periods ranging from 3 years to 10 years?

4. Taking into account the response to Question 2, and the statements recently made by Ford and General Motors about the fuel economy of their vehicles by 2005, and DaimlerChrysler's response, indicate the ability of each manufacturer to improve its light truck CAFE for each model year during the MY 2005-2010 timeframe. Specify the fuel economy improvements on a vehicle-by-vehicle basis that will result in the achievement of the manufacturer's fuel economy pledges. For each vehicle, please list the specific technologies that will be employed and the increase in fuel economy attributed to such technology. By what model year would maximum penetration of all current fuel economy enhancing technologies be feasible? Why wouldn't such maximum penetration be feasible earlier than that model year?

5. What analyses of manufacturer light truck fuel economy capabilities for MY 2005-2010 are available? What are the strengths and weaknesses of each such analysis?

6. What data are available on the usage characteristics of light trucks, i.e., how many passengers and/or how much cargo the different types of light trucks typically carry? What survey and other data are available on the importance that consumers place on the fuel economy of light trucks relative to other vehicle attributes?

7. By their nature, fuel economy standards lower the marginal cost of driving. What effect does this cost difference have on vehicle miles traveled?

8. To what extent are other Federal standards likely to affect manufacturers' CAFE capabilities in MYs 2005-2010? Answers to this question should include not only the effects of such standards when first implemented, but also the prospect for reducing those effects subsequently.

In the final rule establishing light truck CAFE standards for MYs 1996-1997 (59 FR 16312 (April 6, 1994)), NHTSA stated that it believed that CAFE standards for the last decade have not had any measurable effect on light truck weight or size; and, hence, safety. In support of that belief, the agency noted that the levels of the light truck CAFE standards have not varied significantly for more than a decade. The light truck CAFE standards for MY 1987-89 and MY 1994 were set at 20.5 mpg, and, as far back as MY 1984, the standard was only slightly lower at 20.0 mpg. NHTSA also noted that, in setting the light truck CAFE standards over the last decade, the agency has not included in its analyses of manufacturer capabilities any product plan actions that would significantly affect the weight, size or cost of the vehicles the manufacturers planned to offer. Further, the average equivalent test weight of light trucks increased from 3,805 pounds in MY 1984 to 4,360 pounds in MY 1996.

9. In setting CAFE standards, the agency takes into consideration that there are often technological risks associated with actually achieving the full potential fuel economy improvement from a particular type of technology. How should the agency take technological risks into account in setting these light truck CAFE standards? What technological risks are associated with gaining the full potential fuel economy improvements from any of the available types of fuel economy enhancing technologies? What are the prospects for overcoming those risks or offsetting their effects on CAFE capability?

On July 30, 2001, the National Academy of Sciences released its report entitled, “Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards.” This report included fifteen findings and seven recommendations. Several of the recommendations address possible modifications to the CAFE program. Possible modifications to the CAFE program (as it applies to passenger cars as well as light trucks) could include changes to the current structure (i.e., changing the vehicle classification definitions) or could involve more significant reforms (i.e., weight-based standards, credit trading).

A possible modification to CAFE, which has received considerable attention, is an approach with fuel economy targets that are dependent on vehicle attributes, such as vehicle weight, size or load. The NAS recommended this approach, referred to as an attribute-based system, because it would “create incentives to reduce the variance in vehicle weights between large and small vehicles, thus providing for overall vehicle safety. It has the potential to increase fuel economy with fewer negative effects on safety and consumer choice.” Under the current CAFE program, each manufacturer must meet a production-weighted harmonic average for each fleet of vehicles sold. In an attribute-based system, each manufacturer might have to meet an overall production-weighted fuel economy average, and/or each manufacturer might have to meet a different fuel economy average for the vehicles that were produced in each specific size, weight or load class.

10. Please comment on the idea of an attribute-based system. Provide feedback on which attribute(s) such a system should be based on and the specific classes of vehicles that might fall under each class. In addition, please suggest the fuel economy level associated with each specific class of that attribute-based system (e.g., vehicles weighing from 2,000 lbs. GVWR to 2,500 GVWR would have to meet an average of xx.x MPG).

Another modification that has been suggested is fuel economy credits that could be traded among vehicle manufacturers. The NAS found that “changing the current CAFE system to one featuring tradable fuel economy credits and a ‘cap’ on the price of these credits appears to be particularly attractive. It would provide incentives for all manufacturers, including those that exceed the fuel economy targets, to continually increase fuel economy, while allowing manufacturers flexibility to meet consumer preferences.” Currently, each manufacturer can only earn credits if it exceeds the standards in any particular year. A manufacturer can carry the credits earned for a particular class of vehicles forward or backward to offset CAFE shortfalls within that same class of vehicles. However, it can neither apply the credits to another of its classes of vehicles nor trade them with other manufacturers. (Thus, if the agency used its authority to set standards for different classes of light trucks, the statute would prevent trading credits between those classes.) If the CAFE program could be modified to allow manufacturers to apply fuel economy credits throughout their own fleets and to trade them with other manufacturers. Credits could be obtained directly from other manufacturers or indirectly from the U.S. Government. This modification has the potential to increase the economic efficiency and flexibility of the CAFE system.

11. Please comment on the possibility of tradable fuel economy credits and the potential cost and benefits to each manufacturer.

The elimination of the two-fleet rule, providing for a domestic passenger car fleet and an import passenger car fleet, has been suggested as a possible modification to CAFE. The distinction is based on the proportion of the car's value that is defined as being domestic; an import is defined as a car with less than 75 percent domestic content. If a manufacturer has both a domestic passenger car fleet and an import passenger car fleet, each fleet must separately meet the passenger car standard. If this rule were eliminated, such a manufacturer could place all its passenger cars in a single fleet.

12. Please comment on the effect that elimination of the two-fleet rule would have on manufacturers, consumers, employment, the U.S. marketplace, and on the automotive industry in general.

A possible modification that has also received considerable attention in Congress and the media is the re-classification of vehicles under the CAFE system. When CAFE was originally conceived, it provided for setting different standards for passenger vehicles and work/cargo vehicles, classified as light trucks. This has allowed light trucks to have higher fuel consumption because extra power, different gearing, and other attributes that were considered necessary for their utilitarian, load-carrying attributes. At that point, in 1975, these vehicles comprised about 20 percent of the market. Light trucks now comprise approximately 50 percent of new vehicles sold. Most important, the functional distinction between cars and trucks (cars for personal use and trucks for work cargo use) has broken down, initially with the introduction of minivans, and more recently with sport utility and cross-over vehicles that are used almost exclusively for passenger transport. NHTSA has the statutory authority to change how these vehicles are classified and may do so in the future to reflect the usage of many types of light trucks as passenger vehicles. However, any modification would accommodate the inability of true work/cargo vehicles to achieve as high fuel economy, due to their utilitarian nature.

13. Please provide suggestions for modifications of the vehicle classification. These suggestions should be as detailed as possible and should state the logic and rationale for the modification, as well as suggested definitions. An analysis of the pros and cons of each suggested modification should also be provided.

Another possible modification to the CAFE program would be raising the maximum gross vehicle weight rating of vehicles covered by the CAFE standards from 8,500 lbs. to 10,000 lbs. Manufacturers currently are selling several models of large sport utility vehicles over the 8,500 lbs. weight limit that are being utilized as passenger vehicles. Because the gross vehicle weight rating is based on manufacturer supplied information on the load carrying capacity of their vehicles, the agency is concerned that some vehicles, which are primarily used as passenger vehicles, are not included in manufacturers' light truck fleets. The agency has the statutory authority to make this change.

14. Please provide comments on the possibility of raising the maximum gross vehicle weight rating and on the effects that this would have on manufacturers, consumers, U.S. automotive industry employment and the automotive industry in general.

15. NHTSA requests comments on the above possible modifications to the CAFE program and other modifications that have been discussed, such as those mentioned in the National Academy of Sciences study. In addressing these possible modifications, please identify their positives and negatives; their estimated costs and benefits; their effect on manufacturers, suppliers, employees, and consumers; and the policy implications of each. The agency requests that each manufacturer specify how much lead time would be needed to respond to each possible modification and provide that information in terms of product planning cycles. To assist NHTSA, please be as specific as possible and provide any information that you believe will be helpful.

The National Academy of Sciences report also included an assessment of the technological potential for improving the fuel efficiency of 10 different classes of vehicles (subcompact cars, compact cars, SUVs, pickups, minivans, etc.), and included a “break-even” analysis for each of these classes. The report identified packages of existing and emerging technologies that could be introduced over the next ten years and that would result in fuel economy improvement up to the point at which further increases in fuel economy would not be reimbursed by fuel savings. It placed these technologies into three product development paths for each of ten vehicle classes. The paths were chosen to represent potential vehicle development steps that would offer increasing levels of fuel economy gain at incrementally increasing costs. In doing the analysis, the committee kept the size and performance characteristics of the vehicles' constant, while increasing vehicle weight five percent to account for future safety requirements.

Two break-even analyses were done for each path. One covered a 14-year period that reflects the entire life of the vehicle, while the other covered a 3-year period that reflects the first purchaser's ownership period. The committee theorized that all consumers do not take the same things into consideration when purchasing a vehicle, and realized that some consumers will be trading in their vehicles on a constant cycle. The 3-year period also represents the average lease term, and thus can serve as a starting point for analyzing the emphasis that vehicle leasers place on fuel economy and advanced technology.

To assist NHTSA in its rulemaking, we ask you to comment on the following:

16. In examining the three paths that were chosen, please comment on whether they represent likely scenarios for technology bundling. If not, please comment on which technologies are likely to be bundled together and please identify the specific vehicle types and vehicles/models that might include them. In addition, please comment on the technologies already included on the vehicle types/models, the projected vehicle weight and the percent of total model sales anticipated for each model (i.e., CVT—45%, 5-Speed Automatic—40%, 5-Speed Manual—5%). Finally, please comment on the assumptions the NAS made in evaluating the three paths. Are there more plausible alternative assumptions?

17. Should hybrid and fuel cell vehicles have been included in the paths? If so, which ones and which specific vehicle types? What technologies would be included with these types of vehicles?

18. Do you believe that the NAS study over or under estimated the fuel economy benefits from specific technologies? If so, which ones and why? Please provide NHTSA with your data that suggest a different benefit resulting from the application of these technologies.

19. Do you agree with the figures derived in the NAS break-even analysis? If not, why? Please address specific areas of differences, explain your reason(s) why, and provide supporting data for your reasons and arguments.

20. For the forthcoming rulemaking and future CAFE rulemakings, benefit analysis will play an important role in NHTSA decisionmaking. NHTSA therefore seeks comments on the following specific benefit issues: Can you provide, in addition to the material in the NAS report, any methods and data that would be helpful in identifying, quantifying, and expressing in dollar units the potential benefits of alternative CAFE standards (including energy security, environmental, and other considerations)? Are there any ancillary studies that NHTSA or other federal agencies should commission to provide a stronger technical foundation for making benefit estimates in future CAFE rulemakings?

This notice was reviewed under E.O. 12866. The agency has considered the potential economic implications of this rulemaking and determined that it is significant within the meaning of the Department's regulatory policies and regulatory procedures. A preliminary regulatory evaluation will be prepared and placed in the public docket before any notice of proposed rulemaking is published.

We have not conducted an evaluation of the impacts of this request for comments under the National Environmental Policy Act. There is no requirement for such an evaluation where, as here, the agency is requesting comments on a possible future rulemaking.

Pursuant to the Regulatory Flexibility Act, the agency has considered the impact this request for comments would have on small entities. I certify that this action would not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis is not required for this action. Few, if any, light truck manufacturers subject to a possible proposed rule subsequent to this notice would be classified as a “small business” under the Regulatory Flexibility Act.

The Regulatory Flexibility Act of 1980 (Public Law 96-354) requires each agency to evaluate the potential effects of a rule on small businesses. Establishment of a fuel economy standard for light trucks affects motor vehicle manufacturers, few of which are small entities. The Small Business Administration (SBA) has set size standards for determining if a business within a specific industrial classification is a small business. The Standard Industrial Classification code used by the SBA for Motor Vehicles and Passenger Car Bodies (3711) defines a small manufacturer as one having 1,000 employees or fewer.

Very few single stage manufacturers of motor vehicles within the United States have 1,000 or fewer employees. Those that do are not likely to have sufficient resources to design, develop, produce and market a light truck. For this reason, we certify that this request for comments and any subsequent proposal would not have a significant economic impact on a substantial number of small entities.

E.O. 13132 requires NHTSA 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.” E.O. 13132 defines the term “Policies that have federalism implications” 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 E.O. 13132, NHTSA may not issue a regulation that has federalism implication, 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 NHTSA consults with State and local officials early in the process of developing the proposed regulation.

This request for comments and any subsequent proposal would 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 E.O. 13132. Thus, the requirements of section 6 of the Executive Order do not apply to this notice.

The Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually.

There are no information collection requirements in this proposal.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.

Executive Order 12866 require each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:

If you have any responses to these questions, please forward them to Otto Matheke, Office of Chief Counsel, National Highway Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC 20590.

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that: (1) is determined to be economically significant as defined under E.O. 12866, and (2) concerns an environmental, health or safety risk that NHTSA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, we 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 us.

This request for comments and any subsequent proposal does not have a disproportionate effect on children. The primary effect of this request for comments and any subsequent proposal is to conserve energy resources by setting fuel economy standards for light trucks.

Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) requires NHTSA to evaluate and use existing voluntary consensus standards  1 in its regulatory activities unless doing so would be inconsistent with applicable law (e.g., the statutory provisions regarding NHTSA's vehicle safety authority) or otherwise impractical. In meeting that requirement, we are required to consult with voluntary, private sector, consensus standards bodies. Examples of organizations generally regarded as voluntary consensus standards bodies include the American Society for Testing and Materials (ASTM), the Society of Automotive Engineers (SAE), and the American National Standards Institute (ANSI). If NHTSA does not use available and potentially applicable voluntary consensus standards, we are required by the Act to provide Congress, through OMB, an explanation of the reasons for not using such standards.

In issuing this notice, the agency is simply seeking information to help it establishing a future goal for manufacturers to meet. Therefore, setting this future standard does not involve the use of any voluntary standards.

In developing this notice, we tried to address the concerns of all our stakeholders. Your comments will help us determine what standards should be set for light truck fuel economy. We invite you to provide different views on questions we ask, new approaches and technologies we did not ask about, new data, how this notice may affect you, or other relevant information. We welcome your views on all aspects of this notice, but request comments on specific issues throughout this notice. We grouped these specific requests near the end of the sections in which we discuss the relevant issues. Your comments will be most effective if you follow the suggestions below:

• Explain your views and reasoning as clearly as possible.

• Provide empirical evidence, wherever possible, to support your views.

• If you estimate potential costs, explain how you arrived at the estimate.

• Provide specific examples to illustrate your concerns.

• Offer specific alternatives.

• Refer your comments to specific sections of the notice, such as the units or page numbers of the preamble, or the regulatory sections.

• Be sure to include the name, date, and docket number of the proceeding with your comments.

Your comments must be written and in English. To ensure that your comments are correctly filed in the Docket, please include the docket number of this document in your comments.

Your comments must not be more than 15 pages long. (49 CFR 553.21). We established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments. There is no limit on the length of the attachments.

Please submit two copies of your comments, including the attachments, to Docket Management at the address given above under ADDRESSES .

Comments may also be submitted to the docket electronically by logging onto the Dockets Management System website at http://dms.dot.gov. Click on “Help & Information” or “Help/Info” to obtain instructions for filing the document electronically.

If you wish Docket Management to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will return the postcard by mail.

If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA, at the address given above under FOR FURTHER INFORMATION CONTACT . In addition, you should submit two copies, from which you have deleted the claimed confidential business information, to Docket Management at the address given above under ADDRESSES. When you send a comment containing information claimed to be confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation. (49 CFR part 512.)

We will consider all comments that Docket Management receives before the close of business on the comment closing date indicated above under DATES . To the extent possible, we will also consider comments that Docket Management receives after that date. If Docket Management receives a comment too late for us to consider it in developing a proposed rule (assuming that one is issued), we will consider that comment as an informal suggestion for future rulemaking action.

You may read the comments received by Docket Management at the address given above under ADDRESSES . The hours of the Docket are indicated above in the same location.

You may also see the comments on the Internet. To read the comments on the Internet, take the following steps:

(1) Go to the Docket Management System (DMS) Web page of the Department of Transportation ( http://dms.dot.gov/ ).

(2) On that page, click on “search.”

(3) On the next page ( http://dms.dot.gov/search/ ), type in the four-digit docket number shown at the beginning of this document. Example: If the docket number were “NHTSA-1998-1234,” you would type “1234.” After typing the docket number, click on Asearch.”

(4) On the next page, which contains docket summary information for the docket you selected, click on the desired comments. You may download the comments. However, since the comments are imaged documents, instead of word processing documents, the downloaded comments are not word searchable.

Please note that even after the comment closing date, we will continue to file relevant information in the Docket as it becomes available. Further, some people may submit late comments. Accordingly, we recommend that you periodically check the Docket for new material.

Historically, the Columbia Basin pygmy rabbit occurred in dense, shrub steppe habitats in five central Washington counties. Currently, this population segment consists of a single known wild colony, totaling fewer than 25 individuals in Douglas County, Washington, and an additional 17 individuals that are being held in captivity. The Columbia Basin pygmy rabbit is imminently threatened by its extremely small population size and restricted distribution, coupled with the risks from catastrophic environmental events, habitat impacts, disease, predation, and loss of genetic heterogeneity.

Pursuant to the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ) (Act), we published an emergency rule to list the Columbia Basin pygmy rabbit as endangered on November 30, 2001 (66 FR 59734). The emergency rule provides immediate Federal protection to this distinct population segment for a period of 240 days. We also published a proposed rule on November 30, 2001, to list the Columbia Basin pygmy rabbit as endangered under our normal listing procedures (66 FR 59769).

For further information regarding background biological information, previous Federal actions, factors affecting the species, and conservation measures available to the Columbia Basin pygmy rabbit, please refer to our emergency and proposed rules published in the Federal Register on November 30, 2001.

With this notification, we solicit additional information and comments that may assist us in making a final decision on the proposed rule to list the Columbia Basin pygmy rabbit as endangered. We intend that any final listing action resulting from our proposal will be as accurate and effective as possible. Therefore, we request comments and additional information from the general public, other concerned governmental agencies, the scientific community, industry, or any other interested party concerning this proposed rule. Comments are particularly sought concerning:

(1) Biological, commercial trade, or other relevant data regarding any threat (or lack thereof) to the Columbia Basin pygmy rabbit;

(2) Information regarding the range, distribution, and population size of this distinct population segment, including the locations of any additional colonies of the Columbia Basin pygmy rabbit;

(3) Information ( e.g., maps, data, unpublished reports) and justification regarding why any habitat should or should not be determined to be critical habitat for the Columbia Basin pygmy rabbit as provided by section 4 of the Act;

(4) Current or planned activities that could potentially impact the Columbia Basin pygmy rabbit.

In making any final decision on the proposed action, we will take into consideration the comments and any additional information we receive, and such communications may lead to a final regulation that differs from the proposal.

The primary author of this notice is Chris Warren of the Upper Columbia Fish and Wildlife Office (see ADDRESSES section).

The authority of this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ).

The Dry Tortugas are located approximately 70 miles (112 km) west of Key West, a strategic location for a marine reserve. The Dry Tortugas contain the healthiest coral reefs found in the Florida Keys. Coral pinnacles as high as 40 feet (12 m), with the highest coral cover (over 30 percent) found in the Florida Keys, rise up from the ocean floor. These coral formations are bathed by some of the cleanest waters found in the Florida Keys and occur where the tropical waters of the Caribbean mingle with the more temperate waters of the Gulf of Mexico.

The Tortugas region is important because of its location and the resulting effect of unique oceanographic processes. The Dry Tortugas play a dynamic role in supporting marine ecosystems throughout south Florida and the Florida Keys. Marine organisms that spawn in the Tortugas area produce larvae that are spread throughout the Keys by a persistent system of ocean eddies and currents. As the larval stages of various species range in duration from hours for some coral species, to as much as a year for spiny lobster, these eddies and currents provide the retention time in the water column and current pathways necessary for successful recruitment for numerous species. In addition, the upwelling and convergence of the ocean currents in the Dry Tortugas area act to concentrate food supplies for the larvae of numerous animal species.

The Tortugas region, relative to the rest of the Florida Keys, appears to have a greater population abundance and larger average individual size of many key species (e.g., groupers, snappers, and lobster). However, throughout the Florida Keys, including the Tortugas region, there appears to be an overfishing problem. Furthermore, the coral resources of the Florida Keys are under significant ecological stress resulting from coastal development and fishing activities (e.g., sedimentation and pollution, and fishing gear impacts).

The Florida Keys National Marine Sanctuary (FKNMS) is managed under NOAA’s National Ocean Service. FKNMS managers completed a collaborative effort with the State of Florida, the Dry Tortugas National Park (managed by the National Park Service), and NMFS to establish the boundaries for two inter-jurisdictional marine reserves known as Tortugas North ecological reserve and Tortugas South ecological reserve. The Tortugas North ecological reserve encompasses an area of 120 square nautical miles (nm2); the Tortugas Amendment affects a 13 nm2 portion of this reserve located in the EEZ. The Tortugas South ecological reserve encompasses 60 nm2 , totally located in the EEZ; the Tortugas Amendment includes this entire area. The Tortugas South ecological reserve includes the Riley’s Hump mutton snapper spawning aggregation site proposed by the Gulf of Mexico Council and approved and implemented by NMFS in 1994.

Based on available literature, these two marine reserves are expected to supply adults and larvae to adjacent areas. Additional expected benefits of the Tortugas marine reserves include the following: Establishment of a refuge and replenishment area to ensure continued abundance and diversity of coral reef resources; protection of critical fish spawning stock biomass and recruits from overfishing; physical protection of the coral reef structures; and “spillover” effects wherein organisms, such as fish, move from within to outside the reserve area, thereby providing improved fishing opportunities in the vicinity of the reserve.

The Gulf of Mexico fisheries for coastal migratory pelagics, coral and coral reefs, red drum, reef fish, shrimp, spiny lobster, and stone crab are managed under fishery management plans (FMPs) prepared by the Gulf of Mexico Council and approved and implemented by NMFS. These FMPs were prepared by the Gulf of Mexico Council, except for the FMPs for coastal migratory pelagics and spiny lobster, which were prepared jointly by the Gulf of Mexico Council and the South Atlantic Fishery Management Council (South Atlantic Council).

The Tortugas Amendment implemented by this rule amends the following FMPs to provide additional protections in the portion of the Tortugas North ecological reserve that falls within the Gulf of Mexico exclusive economic zone (EEZ) and in the Tortugas South ecological reserve, which resides entirely within the EEZ: Fishery Management Plan for Coral and Coral Reefs of the Gulf of Mexico; Fishery Management Plan for the Red Drum Fishery of the Gulf of Mexico; Fishery Management Plan for the Stone Crab Fishery of the Gulf of Mexico; Fishery Management Plan for the Shrimp Fishery of the Gulf of Mexico; Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico; Fishery Management Plan for Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic; and Fishery Management Plan for the Spiny Lobster Fishery of the Gulf of Mexico and South Atlantic. All of these FMPs, except the FMPs for spiny lobster and stone crab, are implemented under the authority of the Magnuson-Stevens Act by regulations at 50 CFR part 622. The FMP for spiny lobster is implemented by regulations at 50 CFR part 640; the FMP for stone crab is implemented by regulations at 50 CFR part 654.

The approved measures of the Tortugas Amendment prohibit fishing for any species, other than Atlantic highly migratory species (Atlantic HMS), within these marine reserves. Additionally, the amendment also prohibits anchoring by all fishing vessels within the marine reserves. These fishing and anchoring prohibitions are intended to achieve the maximum benefits (see discussion above) from the two marine reserves over their initially anticipated duration of 10 years.

Under the Magnuson-Stevens Act, NMFS, acting on behalf of the Secretary of Commerce, has full management responsibility for Atlantic highly migratory species (HMS). In its Tortugas Amendment, the Gulf of Mexico Council proposed that its fishing and anchoring prohibitions within the reserves apply to Atlantic HMS for several reasons, including significant enforcement considerations as well as the overall biological benefits to the marine reserve ecosystem. The U.S. Coast Guard and NMFS advised the Council that unless fishing for all species and anchoring of all fishing vessels were prohibited within the Tortugas Reserves, there was no way to enforce adequately such prohibitions for just those species managed under the Gulf of Mexico Council’s FMPs. Regarding the biological benefits of protecting Atlantic HMS species within the reserves, the region serves as a spawning ground for a variety of Atlantic HMS, including bluefin tuna. The Tortugas region has also been identified under the Fishery Management Plan for Atlantic Tunas, Swordfish, and Sharks as constituting a portion of the essential fish habitat for several tuna species and a variety of shark species. NMFS will consider the comments received on the Tortugas Amendment and on this proposed rule, which contains proposed regulatory language regarding the fishing and anchoring prohibitions as applied to Atlantic HMS. NMFS may adopt fishing and anchoring prohibitions with respect to Atlantic HMS, within the two Reserves.

The Tortugas Amendment protects the marine reserves for a period of at least 10 years, during which period the ecological benefits of the reserves will be evaluated. The prohibition on fishing and anchoring of fishing vessels should minimize human disturbances in the Tortugas reserves and help to restore and maintain their ecological integrity, including a full assemblage of fish, coral, and other benthic invertebrates. The reserves will also create a reference or baseline area for studying human impacts on coral reef ecosystems.

After NMFS published a notice of availability of the Gulf of Mexico Council’s Tortugas Amendment for public comment in the Federal Register on March 7, 2001 (66 FR 13692). On June 6, 2001, NMFS approved those Tortugas Amendment management measures that amend the following FMPs: Fishery Management Plan for Coral and Coral Reefs of the Gulf of Mexico; Fishery Management Plan for the Red Drum Fishery of the Gulf of Mexico; Fishery Management Plan for the Stone Crab Fishery of the Gulf of Mexico; Fishery Management Plan for the Shrimp Fishery of the Gulf of Mexico; and Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico. However, the Tortugas Amendment’s proposed measures that would amend the two FMPs prepared jointly (joint FMPs) by the Gulf of Mexico Council and the South Atlantic Council (namely, the Fishery Management Plan for Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic and the Fishery Management Plan for the Spiny Lobster Fishery of the Gulf of Mexico and South Atlantic) had not yet been adopted by the South Atlantic Council. Therefore, those measures were not eligible for Secretarial review and approval under the Magnuson-Stevens Act at the time the Gulf of Mexico Council submitted its Tortugas amendment to NMFS.

At its meeting of June 18-23, 2001, the South Atlantic Council adopted the measures that would amend the two joint FMPs. Based on this action, NMFS determined that these measures had been properly submitted by the Gulf of Mexico Council and South Atlantic Council and could be reviewed and, if approved, implemented. Accordingly, on July 19, 2001, NMFS published a notice of availability of these amendment measures for public comment through September 17, 2001 (66 FR 37635). On October 16, 2001, NMFS approved the measures amending the Fishery Management Plan for Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic and the Fishery Management Plan for the Spiny Lobster Fishery of the Gulf of Mexico and South Atlantic.

This proposed rule includes all Tortugas Amendment measures that NMFS approved on June 6, 2001, and October 16, 2001. All comments received by NMFS on the Tortugas Amendment, under both current and previous Secretarial review periods, or on this proposed rule during its comment period will be summarized and addressed in the preamble of the final rule issued to implement the amendment’s approved measures.

NMFS has determined that the Tortugas Amendment is consistent with the national standards of the Magnuson-Stevens Act and other applicable law.

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

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities, as follows:

Accordingly, an initial regulatory flexibility analysis was not required for this proposed rule. However, copies of the RIR and original IRFA are available (see ADDRESSES ).

The Council prepared a final supplemental environmental impact statement (FSEIS) for the FMP that was filed with the Environmental Protection Agency for public review and comment. A notice of its availability for public comment for 30 days was published in the Federal Register on March 16, 2001 (66 FR 15241). According to the FSEIS, the elimination of consumptive uses within the marine reserves will protect EFH from fishery-related impacts and eliminate fishing mortality. Establishment of the marine reserves may result in many benefits to the ecosystem, including increased size and abundance of marine species. This may potentially improve reproductive success which could enhance recruitment to other areas of the Gulf of Mexico and the Florida Keys. The FSEIS states that although commercial and recreational fishermen could experience increased costs because of further restrictions on their activities within the marine reserves, they and non-consumptive users are expected to realize long-term benefits resulting from the maintenance of healthy and diverse marine ecosystems. It is noted that following NMFS’ publication in the Federal Register of the notice of availability of the Tortugas Amendment for public comment, the FKNMS regulations became effective, thereby prohibiting all commercial and recreational fishing in the marine reserve areas. Accordingly, this proposed rule should not impact commercial and recreational fishermen in terms of a new prohibition on fishing and anchoring in the reserves.