The Hawaiian Fruits and Vegetables regulations, contained in 7 CFR 318.13 through 318.13-17 (referred to below as the regulations), govern, among other things, the interstate movement of fruits and vegetables from Hawaii. Regulation is necessary to prevent the spread of dangerous plant diseases and pests that exist in Hawaii, including the Mediterranean fruit fly ( Ceratitis capitata ), the melon fly ( Bactrocera cucurbitae ), and the Oriental fruit fly ( Bactrocera dorsalis ).

On July 18, 2001, we published in the Federal Register (64 FR 37425-37429, Docket No. 98-127-1) a proposal to amend the regulations by providing alternative treatments for rambutan, longan, and litchi moving interstate from Hawaii. We proposed this action because we determined that it would facilitate the interstate movement of rambutan, longan, and litchi from Hawaii while continuing to provide protection against the spread of injurious plant pests from Hawaii to other parts of the United States. In the proposed rule, we also proposed to consolidate and update the existing regulations governing the interstate movement of certain fruits from Hawaii in order to make the regulations easier to understand.

We solicited comments concerning our proposal for 60 days ending September 17, 2001. We received one comment by that date. The comment was from an agricultural scientist. The commenter generally supported the proposed rule and provided additional information for our economic analysis. The commenter also raised a few issues that we have discussed below.

Comment: Whenever inspection for pests is mentioned in the regulations, APHIS should emphasize that only the presence of live (not dead) pests can interrupt a shipment of treated fruits.

Response: Currently, under § 318.13-1, and for the purposes of Part 318 Hawaiian and Territorial Quarantine Notices, plant pests are defined as “the injurious insects and plant diseases referred to in § 318.13, 1 in any stage of development.” We believe that this definition implies that only live plant pests should be of concern to inspectors, though inspectors, based on their own judgment, may consider the presence of dead plant pests to be evidence of pest activity that could warrant more detailed inspection of the affected commodity. In any case, only the presence of live plant pests would be grounds for taking quarantine action on a shipment of treated fruits or vegetables.

However, since the current definition for “plant pests” does not refer to some pests that may be present in Hawaii, we are revising the definition to reflect the most current usage of the term. For the purposes of 7 CFR part 318, a plant pest will be defined as “any living stage of any of the following that can directly or indirectly injure, cause damage to, or cause disease in any plant or plant product: A protozoan, nonhuman animal, parasitic plant, bacterium, fungus, virus or viroid, infectious agent or other pathogen, or any article similar to or allied with any of those articles.” We believe this definition, which is taken from the Plant Protection Act (7 U.S.C. 7701-7772), provides adequate assurance that any plant pest can be subject to quarantine action under the regulations in part 318.

Comment: The hot water treatment protocol for longan states that after treatment, hydrocooling for 20 minutes at 75.2 °F is recommended, though not required, to prevent injury to the fruit from the hot water immersion treatment. Hot water treatment is always injurious to fruit quality, so the protocol should use the term “reduce” rather than the term “prevent.”

Response: We agree with the commenter, and are revising the treatment's hydrocooling recommendation accordingly.

Comment: Recently published data (submitted by the commenter) indicate that the hot water immersion treatment for litchi and longan will also kill the larvae and pupae of moths of the genus Cryptophlebia, two species of which attack litchi and longan in Hawaii. A statement to this effect could be added to the final rule.

Response: We had not previously required treatment of longans and litchis for Crytophlebia spp. because we are confident that we can intercept such pests via inspection. As we will continue to inspect for the presence of Cryptophlebia spp., we do not believe it is necessary to refer to Cryptophlebia spp. in the final rule with regard to the treatment of longans and litchis. We acknowledge, however, that the ability of the hot water treatment to kill Cryptophlebia spp. will contribute to overall quarantine security.

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, with the changes discussed in this document.

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review under Executive Order 12866.

In this document, we are amending the Hawaiian fruits and vegetables regulations to provide for the interstate movement of rambutan, litchi, and longan from Hawaii after the fruit is treated, under certain conditions, for fruit flies. Under this final rule, those fruits will be allowed to move interstate from Hawaii if they are first inspected and then treated for pests using the following types of treatments:

This action will facilitate the interstate movement of rambutan, longan, and litchi from Hawaii while continuing to provide protection against the spread of injurious plant pests from Hawaii to other parts of the United States.

Prior to the adoption of this final rule, the above fruits were already allowed to move interstate from Hawaii if treated with irradiation in accordance with the regulations in § 318.13-4f. Litchi could also be moved interstate from Hawaii if treated with hot water in accordance with the Plant Protection and Quarantine Treatment Manual. Longan and litchi are not allowed to be moved into Florida due to the risk of introducing the litchi rust mite into areas in Florida where longan and litchi are commercially grown.

Providing alternative pest treatment methods for rambutan, litchi, and longan fruits from Hawaii is expected to stimulate growth of the industry and provide access to the larger mainland market.

Production of rambutan in Hawaii decreased from 264,300 pounds in 1997 to about 139,200 pounds in 1998. Rambutan farm prices increased from $2.71 per pound to $3.03 per pound during that period. There are approximately 50 farms in Hawaii that produce rambutan, and each of those farms can be considered to be small entities according to Small Business Administration (SBA) criteria ( i.e., a producer with less than $750,000 in annual sales).

In 1998, the United States produced approximately 2.3 million pounds of litchi, with Hawaii producing 157,000 pounds of litchi, valued at $309,000, during that same period. There are approximately 75 farms in Hawaii that produce litchi, and each is a small entity according to SBA criteria.

The United States produces approximately 1.4 million pounds of longan (mostly in Florida) annually, with a market value of approximately $767,000. Hawaii produced approximately 17,000 pounds of longan in 1998, and anecdotal evidence suggests that production has increased since 1998, though no data is available to confirm that suspected trend. Regardless, any producers of longan in Hawaii are likely to be small entities according to SBA criteria.

Currently, there are 5 fruit packing plants in Hawaii that have a total of 11 high temperature forced air and vapor heat treatment chambers. Four of those chambers have not been used recently and require recertification. In addition, one packing plant has the capability to treat fruits with irradiation. There is one hot water immersion treatment facility that has recently been built in Hawaii, but it has not been certified by USDA.

Vapor heat and high temperature forced air treatments require between 4 and 6 hours of treatment. The cost of treatment ranges from 0.92 to 2.3 cents per pound (approximately $18.40 to $46.00 per ton with capital construction costs of about $0.9 million to $1.2 million), while irradiation requires about 40 minutes of treatment at a cost of approximately 0.93 to 1.58 cents per pound (approximately $18.60 to $31.60 per ton with capital construction cost of about $2.8 million to $3.8 million for a freestanding facility).

The recently built commercial continuous-feed hot water immersion treatment unit cost $75,000 and can process 500-600 pounds of fruit per hour. It is estimated that using hot water treatment as an alternative would cost, taking into account the opportunity cost of capital, labor cost, and fuel cost, about $13.95 per ton. Unless there is a large volume of fruit available for treatment, the equipment would likely be underutilized. It is unclear whether availability and operation of a hot water treatment facility would have an effect on other types of treatment facilities in Hawaii.

Producers would be able to utilize existing facilities in Hawaii to treat fruits under the conditions specified in this final rule. Adoption of this final rule will likely result in increased revenue for the existing vapor heat and dry heat facilities in Hawaii. Additionally, growers in Hawaii may benefit from the increased opportunity for selling their products in a larger and more diverse market and from potential decreases in the cost of treating fruits. If producers respond by planting and harvesting more acreage of these fruits, both consumers and firms that provide treatment services are likely to benefit.

All of the treatment methods would be more economical for owners of facilities and sellers of fruits if the treatments are applied to larger shipments. Initial investments associated with the treatments considered here would depend on the number, capacity, and complexity of required facilities. Costs per pound of fruit treated can rise dramatically when capital-intensive facilities are operated at less than design capacity. This would happen when the commodity is not shipped year round, or when production decreases dramatically (as in the case of a freeze), or if trade patterns or the regulatory environment changes substantially. The effect of underutilized capital equipment on per-unit treatment costs tends to be greater the more expensive the initial capital investment. For example, a recent study estimated that operating strawberry irradiators at 25 percent of their annual throughput capacity can increase the cost of irradiating strawberries by 212 percent, from $0.034/lb treated (when plant is operated at 100 percent annual capacity) to $0.106/lb treated (when plant is operated at only 25 percent of capacity).

The economic effects of this rule on mainland growers and prices on the mainland are not expected to be significant. However, mainland consumers of fresh rambutan, litchi, and longan could likely benefit from increased seasonal and regional availability and from the increased variety of fresh fruits, as well as from more stable prices.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action would not have a significant economic impact on a substantial number of small entities.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

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

The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay certification, and thus delivery, of the affected airplane. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon issuance; however, the FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning these special conditions. The docket is available for public inspection before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays.

We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions in light of the comments we receive.

If you want the FAA to acknowledge receipt of your comments on this proposal, include with your comments a pre-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you.

On March 28, 2002, Duncan Aviation, Inc., P.O. Box 81887, Lincoln, NE 68501, applied for a supplemental type certificate (STC) to modify Israel Aircraft Industries Ltd. Model 1124/1124A airplanes approved under Type Certificate No. A2SW. The Israel Aircraft Industries, Ltd. 1124/1124A airplanes are executive type transports that have two aft mounted turbine engines, a maximum passenger load of 10 passengers, and a maximum operating speed of 360 knots. The modification incorporates the installation of a dual Collins AHS-3000A Attitude Heading Reference System (AHRS). The AHS-3000A is a solid state, strap-down attitude/heading reference system using quartz based inertial sensor technology. Its primary function is to provide measurements of the airplane's pitch, roll, and heading for use by cockpit displays, flight control and management systems, and other avionics equipment. The basic AHS-3000A system consists of a Collins AHC-3000A Attitude/Heading Computer, a Collins FDU-3000 Flux Detector, and a Collins ECU-3000 External Compensation Unit. These advanced systems use electronics to a far greater extent than the original inertial navigation systems and may be more susceptible to electrical and magnetic interference caused by high-intensity radiated fields (HIRF). This disruption of signals could result in loss of attitude or the display of misleading information to the pilot.

Under the provisions of 14 CFR 21.101, Duncan Aviation, Inc. must show that the Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes, as changed, continue to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. A2SW, or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The certification basis for the modified Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes includes Civil Air Regulations (CAR) 4b, effective December 31, 1953, including amendments through amendment level 4b-11. Other applicable amendments, Federal Aviation Regulations, and special conditions are noted in Type Certificate Data Sheet (TCDS) A2SW.

If the Administrator finds that the applicable airworthiness regulations (that is, CAR 4b or 14 CFR part 25, as amended) do not contain adequate or appropriate safety standards for the Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes because of novel or unusual design features, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes must comply with the fuel vent and exhaust emission requirement of 14 CFR part 34 and the noise certification requirement of part 36.

Special conditions, as defined in 14 CFR 11.19, are issued in accordance with § 11.38, and become part of the type certification basis in accordance with § 21.101(b)(2).

Special conditions are initially applicable to the model for which they are issued. Should Duncan Aviation, Inc. apply at a later date for a supplemental type certificate to modify any other model already included on the same type certificate to incorporate the same novel or unusual design features, these special conditions would also apply to the other model under the provisions of 14 CFR 21.101(a)(1).

The Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes will incorporate a dual Collins AHS-3000A Attitude Heading Reference System, which performs critical functions. Each system consists of a Collins AHC-3000A Attitude/Heading Computer, a Collins FDU-3000 Flux Detector Unit, and a Collins ECU-3000 External Compensation Unit. Because these advanced systems use electronics to a far greater extent than the original inertial navigation systems, they may be more susceptible to electrical and magnetic interference caused by high-intensity radiated fields (HIRF) external to the airplane. The current airworthiness standards (14 CFR part 25) do not contain adequate or appropriate safety standards that address protecting this equipment from the adverse effects of HIRF. Accordingly, these instruments are considered to be a novel or unusual design feature.

There is no specific regulation that addresses protection requirements for electrical and electronic systems from HIRF. Increased power levels from ground-based radio transmitters and the growing use of sensitive avionics/electronics and electrical systems to command and control airplanes have made it necessary to provide adequate protection.

To ensure that a level of safety is achieved equivalent to that intended by the regulations incorporated by reference, special conditions are needed for the Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes modified to include the new navigation system. These special conditions will require that the new Collins Avionics AHS-3000A Attitude Heading Reference Systems, which perform critical functions, be designed and installed to preclude component damage and interruption of function due to both the direct and indirect effects of HIRF.

With the trend toward increased power levels from ground-based transmitters, plus the advent of space and satellite communications, coupled with electronic command and control of the airplane, the immunity of critical digital avionics/electronics and electrical systems to HIRF must be established.

It is not possible to precisely define the HIRF to which the airplane will be exposed in service. There is also uncertainty concerning the effectiveness of airframe shielding for HIRF. Furthermore, coupling of electromagnetic energy to cockpit-installed equipment through the cockpit window apertures is undefined. Based on surveys and analysis of existing HIRF emitters, an adequate level of protection exists when compliance with the HIRF protection special condition is shown in accordance with either paragraph 1 or 2 below:

1. A minimum threat of 100 volts rms (root-mean-square) per meter electric field strength from 10 KHz to 18 GHz.

a. The threat must be applied to the system elements and their associated wiring harnesses without the benefit of airframe shielding.

b. Demonstration of this level of protection is established through system tests and analysis.

2. A threat external to the airframe of the field strengths indicated in the table below for the frequency ranges indicated. Both peak and average field strength components from the table below are to be demonstrated.

The threat levels identified above are the result of an FAA review of existing studies on the subject of HIRF, in light of the ongoing work of the Electromagnetic Effects Harmonization Working Group of the Aviation Rulemaking Advisory Committee.

As discussed above, these special conditions are applicable to Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes modified by Duncan Aviation, Inc. to include the Collins AHS-3000A Attitude Heading Reference Systems. Should Duncan Aviation, Inc. apply at a later date for a supplemental type certificate to modify any other model already included on Type Certificate A2SW to incorporate the same novel or unusual design features, these special conditions would apply to that model as well under the provisions of 14 CFR 21.101(a)(1).

This action affects only certain design features on Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes modified by Duncan Aviation, Inc. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.

The substance of the special conditions for this airplane has been subjected to notice and comment procedure in several prior instances and has been derived without substantive change from those previously issued. Because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the supplemental type certification basis for Israel Aircraft Industries, Ltd. Model 1124/1124A airplanes modified by Duncan Aviation, Inc.

1. Protection from Unwanted Effects of High-Intensity Radiated Fields (HIRF). Each electrical and electronic system that performs critical functions must be designed and installed to ensure that the operation and operational capability of these systems to perform critical functions are not adversely affected when the airplane is exposed to high-intensity radiated fields.

2. For the purpose of these special conditions, the following definition applies:

Critical Functions. Functions whose failure would contribute to or cause a failure condition that would prevent the continued safe flight and landing of the airplane.

You can get an electronic copy using the Internet by taking the following steps:

(1) Go to the search function of the Department of Transportation's electronic Docket Management System (DMS) web page ( http://dms.dot.gov/search ).

(2) On the search page, type in the last four digits of the Docket Number shown at the beginning of this rule. Click on “search.”

(3) On the next page, which contains the Docket summary information for the Docket you selected, click on the document number for the item you wish to view.

Also an electronic copy of this document can be downloaded from the FAA regulations section of the Fedworld electronic bulletin board service (telephone: (703) 321-3339) or the Federal Register 's electronic bulletin board service (telephone: (202) 512-1661) using a modem and suitable communications software.

Internet users may reach the FAA's web page at http://www.faa.gov or the Government Printing Office's web page at http://www.access.gpo.gov/nara for access to recently published rulemaking documents.

Any person may obtain a copy of this final rule by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, Attention: Airspace and Rules Division, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591, or by calling (202) 267-8783. Communications must identify the docket number of this final rule. Persons interested in being placed on a mailing list for future NPRM's or final rules should contact the Federal Aviation Administration, Office of Rulemaking, (202) 267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.

On May 20, 1970, the FAA published the Designation of Federal Airways, Controlled Airspace, and Reporting Points Final Rule in the Federal Register (35 FR 7782). This rule provided for the establishment of Terminal Control Airspace (TCA) areas (now known as Class B airspace areas).

On June 21, 1988, the FAA published the Transponder With Automatic Altitude Reporting Capability Requirement Final Rule in the Federal Register (53 FR 23356). This rule requires all aircraft to have an altitude encoding transponder when operating within 30 nautical miles (NM) of any designated Class B airspace area primary airport from the surface up to 10,000 feet MSL. This rule excluded those aircraft that were not originally certificated with an engine-driven electrical system (or those that have not subsequently been certified with such a system), balloons, or gliders operating outside of the Class B airspace area, but within 30 NM of the primary airport.

On October 14, 1988, the FAA published the Terminal Control Area Classification and Terminal Control Area Pilot and Navigation Equipment Requirements Final Rule in the Federal Register (53 FR 40318). This rule, in part, requires the pilot-in-command of a civil aircraft operating within a Class B airspace area to hold at least a private pilot certificate, except for a student pilot who has received certain documented training.

On December 17, 1991, the FAA published the Airspace Reclassification Final Rule in the Federal Register (56 FR 65638). This rule discontinued the use of the term “Terminal Control Area” and replaced it with the designation “Class B airspace area.” This change in terminology is reflected in this final rule.

The Class B airspace area program was developed to reduce the potential for midair collision in the congested airspace surrounding airports with high density air traffic operations by providing an area wherein all aircraft are subject to certain operating rules and equipment requirements. The density of traffic and the type of operations being conducted in the airspace surrounding major terminals increase the probability of midair collisions.

In 1970, a study of terminal airspace areas found that the majority of midair collisions occurred between a general aviation (GA) aircraft and an air carrier, or military aircraft, or another GA aircraft. The basic causal factor common to these conflicts was the mix of aircraft operating under visual flight rules (VFR) and aircraft operating under instrument flight rules (IFR). The establishment of Class B airspace areas provides a method to accommodate increasing numbers of IFR and VFR operations. The regulatory requirements of Class B airspace areas afford the greatest protection for the greatest number of people by giving air traffic control (ATC) the increased capability to provide aircraft separation service, thereby minimizing the mix of controlled and uncontrolled aircraft.

The standard configuration of Class B airspace areas normally contains three concentric circles centered on the primary airport extending to 10, 20, and 30 NM, respectively. The standard vertical limit of these airspace areas normally should not exceed 10,000 feet MSL, with the floor established at the surface in the inner area, and at levels appropriate to the containment of operations in the outer areas. Variations of these configurations may be utilized contingent on the terrain, adjacent regulatory airspace, and factors unique to a specific terminal area.

On December 31, 2001, the FAA published a notice of proposed rulemaking (NPRM) in the Federal Register (Airspace Docket No. 00-AWA-6; 66 FR 67632) proposing to modify the Cincinnati/Northern Kentucky International Airport Class B airspace area. The comment period for this NPRM closed on March 1, 2002.

In response to the proposed rule, the FAA received six written comments. All comments received were considered before making a determination on this final rule. An analysis of the comments received and the FAA's response are summarized below.

The Air Line Pilots Association International (ALPA) wrote in support of the Class B airspace area modifications. All but one of the six commenters supported the lateral boundary modifications.

Five commenters opposed raising the ceiling of the Class B airspace area to 10,000 feet MSL. One commenter said that the higher ceiling would place an unfair burden on those pilots of piston-engine GA aircraft desiring to overfly the Class B airspace area by requiring them to climb to altitudes where supplemental oxygen might be required. This commenter contended the higher ceiling places a “huge cylindrical wall” in the way of north/south traffic from the Michigan, Indiana, and Ohio areas headed to Florida and other points south. Another commenter opposed the higher ceiling based on the belief that GA pilots are rarely permitted to transit the CVG Class B airspace area. According to that commenter, it is easier to remain VFR, monitor ATC frequencies for situational awareness, and climb over the top of the Class B airspace area in lieu of being vectored well around the area, which requires additional fuel and time to travel around CVG. Another commenter wrote that the ability to fly over the Class B airspace area should be maintained and suggested that the upper limit of the Class B airspace area could be raised to 8,400 feet with little effect on transient pilots. One commenter contended that the 10,000-foot ceiling would result in a less safe situation because, instead of overflying the airport in an area of little traffic, he would be forced to go around the side of the Class B airspace area where there is considerable traffic approaching the airport. The Aircraft Owners and Pilots Association (AOPA) also opposed the higher ceiling, calling the change unjustified and requesting that the ceiling be retained at the current 8,000 feet MSL. In making its argument, AOPA wrote that Class B airspace should be established only when there is a significant number and mix of controlled and uncontrolled flights within the same airspace. AOPA said that the VFR flight track data presented in the NPRM do not appear to pose a safety problem for CVG traffic between 8,000 feet MSL and 10,000 feet MSL, and that the VFR track survey information lacked enough detail to support a need to raise the ceiling. AOPA questioned the NPRM's discussion that the higher ceiling would allow reduced coordination requirements between adjacent ATC facilities and added that it is unclear how raising the Class B ceiling would eliminate the need for intermediate level offs by aircraft departing CVG. AOPA maintained that the justification for the vertical expansion of the Class B airspace area was based upon an economic benefit for aircraft that depart CVG without having to level off.

The FAA has carefully considered these comments regarding the CVG Class B airspace area ceiling. The FAA does not agree that raising the vertical limit of the airspace will deny access to the Class B airspace area, nor will it place a “wall” in the way of north/south traffic transiting the CVG area. When the CVG Class B airspace area was originally established in 1999, the FAA developed suggested VFR flyways for use by those pilots planning VFR flights through or near the CVG terminal area who desire to avoid the Class B airspace. These routes are currently published on the reverse side of the Cincinnati VFR Terminal Area Chart. An ATC clearance is not required to fly these routes. The VFR flyway routes, with minor adjustments, will remain a charted feature of the modified Class B airspace area. FAA representatives from CVG airport traffic control tower (ATCT) meet monthly with users at the Lunken (LUK) and Cincinnati-Blue Ash (ISZ) Airports, which are situated beneath the Class B airspace area, to familiarize pilots with traffic flows in and out of CVG and to solicit feedback on ATC services. At these monthly meetings, FAA representatives also review the process for pilots to transition north/south and east/west through the CVG Class B airspace area, either with or without participation of ATC services, and discuss ATC-recommended altitudes that provide the safest and easiest transitions through the area. Based on feedback from users, pilots, in general, believe that transitioning through the Class B airspace area is not a difficult task. The FAA does not agree with the comment that GA pilots are rarely permitted to transit the CVG Class B airspace area. On visual meteorological condition (VMC) days, approximately 135 aircraft operating on VFR can be expected to transition through the entire CVG terminal area between 3,000 and 10,000 feet. CVG ATCT provides services to approximately 65 percent of these aircraft. Data reviewed since the VFR survey cited in the NPRM has shown that on a typical VMC day, most VFR aircraft transition the terminal area as recommended by CVG ATCT with few VFR aircraft transiting the CVG area between 8,000 feet and 10,000 feet. In addition, raising the ceiling of the CVG Class B airspace area to 10,000 feet MSL will not prohibit VFR aircraft from transiting the Class B airspace area between 8,000 feet and 10,000 feet MSL. VFR pilots will be able to request clearance from ATC to cross the Class B airspace area between those altitudes. ATC can approve such requests subject to traffic.

We agree with AOPA's comment that Class B airspace should be established only when there are significant numbers of, and a mix of controlled and uncontrolled, flights within the same airspace. However, this is but one of several important factors considered. The primary purpose for designating a Class B airspace area is to reduce the potential for midair collisions in the airspace surrounding airports with high density air traffic operations. Additionally, Class B airspace areas are designed to enhance the management of air traffic operations to and from the airports within the area, in addition to aircraft transiting the terminal area. The volume of traffic, number of enplaned passengers, traffic density, and type or nature of operations being conducted, and whether Class B airspace will contribute to the efficiency and safety of operations in the area are all factors that are considered in determining whether to designate Class B airspace.

We do not agree with AOPA's conclusion that the proposed higher ceiling was intended to eliminate the need for ATC to level off departing aircraft, and that the justification for the proposed vertical expansion centers on the economic benefit for aircraft departing without having to level off. The NPRM did not state that the 10,000-foot ceiling would eliminate intermediate level-offs for departing aircraft. Instead, the FAA believes that the higher ceiling decreases the chances that intermediate level offs may be required in some cases. Additionally, while the FAA believes that some economic benefits may be realized, this will be only an ancillary benefit of the change. The primary reason for the higher ceiling is to enhance safety by affording greater protection to air carrier aircraft during critical stages of flight when arriving or departing CVG. The airspace between 8,000 and 10,000 feet MSL is used on a regular basis by air traffic controllers for the purpose of managing instrument operations to and from CVG. As discussed in the NPRM, Indianapolis Air Route Traffic Control Center (ARTCC) currently delivers aircraft inbound to CVG at 11,000 feet MSL. Once in the terminal area, these CVG arrivals are generally descended to 10,000 feet while CVG departures normally climb up to 8,000 feet or 9,000 feet. Once lateral separation between the arrivals and departures has been established, the departures are issued further climb instructions and handed off to Indianapolis ARTCC. Arriving aircraft generally are not descended until abeam the airport on a downwind leg. With the current 8,000 feet ceiling, arriving aircraft often must fly 30-35 NM above the Class B airspace area, depending on runway in use and direction of arrival into the terminal area. Consequently, both arrival and departure IFR traffic must operate between 8,000 and 10,000 feet MSL in the CVG terminal area without the benefit of Class B airspace protection. The FAA believes that the current 8,000-foot ceiling does not provide adequate regulatory airspace protection required for this high density terminal area. The amount of IFR traffic between 8,000 and 10,000 feet in the terminal area is such that CVG has entered into Letters of Agreement with adjacent ATC facilities to limit IFR overflight traffic between those altitudes. Further, the FAA concludes that raising the ceiling to 10,000 feet will enhance safety for all operators in the CVG terminal area.

One commenter questioned the reduction of the size of the Class B airspace area on the east and west sides, specifically the elimination of Area G and the reduction in size of Area F, stating that the horizontal limits could stay as they are currently published without impacting safety or economics. This commenter suggested that future traffic growth in the CVG area should be considered so that the FAA will not have to adjust this airspace again in the future to compensate for growth. The commenter also stated that the current Class B airspace dimensions are well defined and easy to follow and that, if Area G is eliminated, physical features should be used to describe the new boundary rather than very high frequency omni-directional radio range radials. FAA policy requires that all Class B airspace areas be evaluated biennially to determine if any modifications are required. The proposal to eliminate Area G, and to reduce the lateral limits of Area F on the west side, was the result of such a review. Since the original development of the CVG Class B airspace area, COMAIR Airlines (representing approximately 50 percent of CVG traffic) has begun to operate only jet aircraft into the Cincinnati/Northern Kentucky International Airport. This change, due to jet aircraft having greater climb performance capabilities, has allowed the FAA to modify some procedures that previously had required the use of Area G airspace. Consequently, the FAA determined that the lateral boundaries of the Class B airspace area to the east and west of the airport may be adjusted without adversely affecting safety. The FAA considered traffic growth projections at CVG through the National Airspace Redesign workgroup. These modifications to the CVG Class B airspace area will provide enhanced safety to accommodate increased volume at CVG.

This amendment to 14 CFR part 71 modifies the CVG Class B airspace area. Specifically, this action raises the ceiling of the Class B airspace area from 8,000 feet MSL to 10,000 feet MSL; expands the lateral limits of Area C to the north and south of the airport; reconfigures the lateral limits of Area F on the east and west sides of the Class B airspace area; and eliminates Area G. Areas A, B, and E remain unchanged from their existing configurations, except for the new ceiling at 10,000 feet MSL. Area C is expanded to the north and south of the airport to provide additional airspace needed to ensure that the required 1,000 feet vertical separation is maintained while vectoring multiple aircraft for simultaneous ILS approaches. Area D to the north and south of the airport is modified as a result of the expansion of Area C, as described above, thereby reducing the size of the Area D segments located to the north and south of the airport. This action reduces the overall size of Area F by eliminating certain portions of Area F, between 20 NM and 25 NM, located to the west and east of the airport. Area F is also modified to incorporate two small sections of Area G. Except for small segments of airspace in the western-most point and the southern tip of the existing Area G, Area G is eliminated from the Class B airspace area.

These modifications to the CVG Class B airspace area enhance safety by extending Class B airspace protection to a significant volume of aircraft currently operating between 8,000 feet MSL and 10,000 feet MSL in the CVG terminal area. Further, these modifications improve the flow and the management of air traffic operations in the CVG terminal area. The modifications also better accommodate VFR operations providing additional airspace for pilots to circumnavigate the CVG Class B airspace area. Finally, this action supports various efforts to enhance the efficiency and capacity of the National Airspace System, such as the National Airspace Redesign and the Operational Evolution Plan.

The coordinates for this airspace docket are based on North American Datum 83. Class B airspace areas are published in paragraph 3000 of FAA Order 7400.9J, Airspace Designations and Reporting Points, dated August 31, 2001, and effective September 16, 2001, which is incorporated by reference in 14 CFR 71.1. The Class B airspace area listed in this document will be published subsequently in the Order.

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs each Federal agency proposing or adopting a regulation to first make a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (RFA) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Act requires agencies to consider international standards, and use them where appropriate as the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 requires agencies to prepare a written assessment of the costs and benefits and other effects of proposed and final rules. An assessment must be prepared only for rules that impose a Federal mandate on State, local or tribal governments, or on the private sector, likely to result in a total expenditure of $100 million or more in any one year (adjusted for inflation).

In conducting these analyses, FAA has determined:

(1) This rule has benefits that justify its costs. This rulemaking does not impose costs sufficient to be considered “significant” under the economic standards for significance under Executive Order 12866 or under DOT's Regulatory Policies and Procedures. Due to public interest, however, it is considered significant under the Executive Order and DOT policy. (2) This rule will not have a significant impact on a substantial number of small entities. (3) This rule has no affect on any trade-sensitive activity. (4) This rule does not impose an unfunded mandate on state, local, or tribal governments, or on the private sector.

This rule will expand the lateral limits of Area C; reduce the lateral limits of Area F; eliminate Area G, the portion not incorporated into Area F; and raise the upper limit of the entire Class B airspace area from 8,000 feet MSL to 10,000 feet MSL.

The FAA believes that raising the upper limit of the Class B airspace area from the current 8,000 feet MSL to 10,000 feet MSL will reduce the likelihood of a midair collision in that airspace by enhancing ATC authority and capability to separate and sequence air traffic. Contraction of the CVG Class B airspace, in Areas F and G, will result in a more efficient use of the airspace, and will benefit nonparticipating VFR operations. Thus, the FAA has determined that this final rule will be cost-beneficial.

The Regulatory Flexibility Act of 1980 (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objective of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the business, organizations, and governmental jurisdictions subject to regulation.” To achieve that principle, the Act requires agencies to solicit and consider flexible regulatory proposals and to explain the rationale for their actions. The Act covers a wide-range of small entities, including small businesses, not-for-profit organizations and small governmental jurisdictions.

Agencies must perform a review to determine whether a proposed or final rule will have a significant economic impact on a substantial number of small entities. If the determination is that it will, the agency must prepare a regulatory flexibility analysis as described in the Act.

However, if an agency determines that a proposed or final rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the 1980 Act provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

In view of the minimal cost impact of the rule, the FAA has determined that this final rule will not have significant economic impact on a substantial number of small entities. Consequently, the FAA certifies that the rule will not have a significant economic impact on a substantial number of small entities.

The Trade Agreement Act of 1979 prohibits Federal agencies from engaging in any standards or related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and where appropriate, that they be the basis for U.S. standards.

In accordance with the above statute, the FAA has assessed the potential effect of this final rule and has determined that it will have only a domestic impact and therefore no effect on any trade-sensitive activity.

The Unfunded Mandates Reform Act of 1995 (the Act), enacted as Public Law 104-4 on March 22, 1995, is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments.

Title II of the Act requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.”

This final rule does not contain such a mandate. Therefore, the requirements of Title II of the Unfunded Mandates Reform Act of 1995 do not apply.

This rule contains no information collection requests requiring approval of the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)).

In view of the minimal or zero cost of compliance of this rule and the enhancements to operational efficiency that do not reduce aviation safety, the FAA has determined that this rule will be cost-beneficial.

The Commission published in the Federal Register of June 6, 2002, a document concerning final rules relating to the registration of intermediaries. 1 In that document, the Commission indicated that it was revising paragraph (a)(2)(i) of Rule 3.10. This revision was actually of paragraph (a)(2), because the Commission had previously redesignated paragraph (a)(2)(i) as paragraph (a)(2). 2 This correction makes that change.

In the final rule document appearing on page 38874 in the issue of Thursday, June 6, 2002, make the following corrections: in § 3.10, in the first column, in the amendatory instruction Number 3, second line, “paragraph (a)(2)(i)” should read “paragraph (a)(2)”; and in § 3.10, in the second column, sixth line, “(2)(i)” should read “(2)”.

On October 17, 1988, Congress enacted the Indian Gaming Regulatory Act, 25 U.S.C. 2701-21 (IGRA or Act), creating the National Indian Gaming Commission (NIGC or Commission) and developing a comprehensive framework for the regulation of gaming on Indian lands. The Act establishes three classes of Indian gaming.

“Class I gaming” means social games played solely for prizes of minimal value or traditional forms of Indian gaming played in connection with tribal ceremonies or celebrations. 25 U.S.C. 2703(6). Indian tribes regulate class I gaming exclusively.

“Class II gaming” means the game of chance commonly known as bingo, whether or not electronic, computer, or other technologic aids are used in connection therewith, including, if played in the same location, pull tabs, lotto, punch boards, tip jars, instant bingo, and other games similar to bingo, and various card games. 25 U.S.C. 2703(7)(A). Class II gaming, however, does not include any banking card games, electronic or electromechanical facsimiles of any game of chance or slot machines of any kind. 25 U.S.C. 2703(7)(B). Class II gaming thus includes high stakes bingo and pull tabs, as well as non-banking card games such as poker. Tribal governments and the NIGC share regulatory authority over class II gaming without the involvement of state government.

Class III gaming, on the other hand, may be conducted lawfully only if the state in which the tribe is located and the tribe reach an agreement called a tribal-state compact. For a compact to be effective, the Secretary of the Interior must approve the terms of the compact. Class III gaming includes all forms of gaming that are not class I gaming or class II gaming. 25 U.S.C. 2703(8). Class III gaming thus includes all other games of chance, including most forms of casino-type gaming, such as slot machines and roulette, pari-mutuel wagering, and banking card games, such as blackjack. While such gaming usually requires a tribal-state compact, a tribe may operate class III gaming under gaming procedures issued by the Secretary of the Interior if a state has refused to negotiate in good faith toward a compact. Because of the compact requirement, both the states and tribes possess regulatory authority over class III gaming, with the NIGC retaining an oversight role. Jurisdiction over criminal violations is vested in the United States Department of Justice, which also assists the Commission by conducting civil litigation on its behalf in federal court.

Because of the varying levels of tribal, state, and federal involvement in the three classes of gaming, the proper classification of games is essential. As a legal matter, Congress defined the parameters for game classification when it enacted IGRA. As a practical matter, however, several key terms were not specifically defined, and thus subject to more than one interpretation.

A recurring question as to the proper scope of class II gaming involves the use of electronics and other technology in conjunction with bingo and other class II games. In IGRA, Congress recognized the right of tribes to use “electronic, computer or other technologic aids” in connection with class II gaming. Congress provided, however, that “electronic or electromechanical facsimiles of any game of chance or slot machines of any kind” constitute class III gaming. Since class III gaming requires an approved tribal-state compact to be lawful (an unattainable plateau for some tribes), definitions articulating the proper distinctions between the two classes are vital to sound execution of the law.

Under a plain language definition of these terms, the distinction between an electronic “aid” to a class II game and a class III “electromechanical facsimile” of a game of chance is relatively ascertainable. However, the Commission did not apply a plain meaning approach in its early construction of IGRA or in its regulatory definitions, and even if it had, the terms can nonetheless be read to overlap.

The distinction between class II “electronic aids” and class III “electromechanical facsimiles” is further complicated by the extent to which class II gaming is affected by the federal Gambling Devices Act, 15 U.S.C. 1171-78, more commonly known as “the Johnson Act.” The Johnson Act predates IGRA by thirty years and generally prohibits the manufacture or possession of “gambling devices” within specific areas of federal jurisdiction, including Indian country. 15 U.S.C. 1175. The term “gambling device” is defined very broadly in the Johnson Act. It includes “slot machines,” or “any other machine or mechanical device (including, but not limited to, roulette wheels and similar devices) designed and manufactured primarily for use in connection with gambling,” or “any subassembly or essential part intended to be used in connection with any such machine or mechanical device[.]” 15 U.S.C. 1171(a)(1-3).

IGRA explicitly creates an exception to the Johnson Act for gaming devices operated under an approved tribal-state compact for class III gaming, 25 U.S.C. 2710(d)(6); however, it does not specify the effect of the Johnson Act on class II gaming. Since the Johnson Act defines gambling devices very broadly, the omission gives rise to more than one interpretation on the question of the reach of the Johnson Act in relation to devices used in conjunction with bingo and other class II gaming. For example, the common bingo ball blower, which has been used widely in bingo games across the country to determine the order in which bingo numbers are called, falls within the definition of gambling device. Although it is virtually inconceivable that Congress intended the Johnson Act to preclude the use of bingo blowers in class II gaming, IGRA does not specifically address the question.

Faced with the task of sorting through these issues of construction, the newly established Commission set out to provide guidance to the Indian gaming industry by defining certain key terms in IGRA. A “notice and comment” rulemaking initiative commenced soon after the Commission became operational in 1992. The final definitional rule was published on April 9, 1992. 57 FR 12382.

The term “electronic, computer or other technologic aid” to class II gaming was defined as “a device such as a computer, telephone, cable, television, satellite or bingo blower and that when used: (a) Is not a game of chance but merely assists a player or the playing of a game; (b) is readily distinguishable from the playing of a game of chance on an electronic or electromechanical facsimile; and (c) is operated according to applicable Federal communications law.” 25 CFR 502.7. “Electronic or electromechanical facsimile” was defined by reference to the Johnson Act to mean “any gambling device as defined in 15 U.S.C. 1171(a)(2) or (3).” 25 CFR 502.8. Since the IGRA specifies that class II games are to be broadly read to include bingo and other games similar to bingo, the Commission defined the term “game similar to bingo” by reference to the definition of bingo elsewhere in the regulations. 25 CFR 502.9.

In 1992, the Commission viewed the relationship between the Johnson Act and IGRA as key to interpreting congressional intent concerning which gaming-related technology is authorized for class II gaming and which technology might cause what would otherwise be considered class II gaming to become class III. In its analysis, the Commission noted three key points. First, the Johnson Act prohibits the use of gambling devices in Indian Country. 15 U.S.C. 1175. Second, the only explicit exception to the Johnson Act in Indian Country is set forth in 25 U.S.C. 2710(d)(6), which indicates that the Johnson Act shall not apply to compacted class III gaming. 57 FR 12382, 12385 (April 9, 1992). Finally, class II gaming under IGRA is permitted for tribes in states where it is permitted for any other person or entity and is not specifically prohibited on Indian lands by Federal law. 25 U.S.C. 2710(b)(1)(A). Relying on language in a Senate Report on IGRA, the Commission interpreted the reference to “Federal law” to mean the Johnson Act. Under this interpretation, the Johnson Act applies even in the context of class II gaming. See S. Rep. No. 100-446, at 9 (1988).

Under the Commission's interpretation, IGRA required independent compliance with the Johnson Act except where the Indian gaming activity is authorized by a tribal-state compact. This was a reasonable approach in relation to crafting a regulatory definition of “slot machine of any kind” because the term is well defined by the Johnson Act and because congressional intent was clear.

In the context of defining electronic or electromechanical facsimile, however, incorporation of the Johnson Act was less satisfactory. The Commission's facsimile definition includes: “any gambling device” as defined by sections 1171(a)(2) or (3) of the Johnson Act. 25 CFR 502.8. Because the Johnson Act is so broadly construed, a facsimile thus includes any device designed and manufactured for use in connection with gambling, as well as any sub-assembly or essential part intended to be used for such purposes. This definition departs substantially from any plain meaning of the term.

With the benefit of experience and hindsight, it has become increasingly clear that by incorporating the Johnson Act into its “electronic or electromechanical facsimile” definition, the Commission defined a key term in an overly broad manner. Worse, use of the definition produces patently nonsensical results in certain circumstances. We again turn to the common bingo ball blower, a device used to randomly generate numbers for bingo games.

Few would argue that Congress intended the Johnson Act to prohibit the use of bingo blowers or other aids in class II gaming, particularly since the plain language of the Act anticipates such use of electronics and technology. Nevertheless, the broad interpretation of “gambling device” contained in the Johnson Act clearly sweeps bingo blowers within its ambit.

A chief reason for the Johnson Act's broad construction is that as a criminal statute it is intended to restrict the possession, use, and transportation of gambling devices. The principles of construction used by the courts in interpreting the Johnson Act were designed to “anticipate the ingeniousness of gambling machine designers.” Lion Manufacturing Corp. v. Kennedy, 330 F.2d 833, 836-837 (D.C. Cir. 1964). Accordingly, courts have found the Johnson Act to cover a wide variety of machines. See, e.g., United States v. H.M. Branson Distrib. Co., 398 F.2d 929, 933 (6th Cir. 1968) (pinball machines with knock-off meters that can accumulate free games); United States v. Two (2) Quarter Fall Machines, 767 F.Supp 153, 154 (E.D. Tenn. 1991) (machines where the fall of coins could deliver hanging coins into a pay-off chute); United States v. 11 Star-Pack Cigarette Merchandiser Machines, 248 F.Supp. 933, 934 (E.D. Pa. 1966) (an attachment on a vending machine that could deliver a free pack of cigarettes); United States v. Wilson, 475 F.2d 108 (9th Cir. 1973) (a machine that sold store coupons and prize tickets in a prearranged order from a preprinted bundle even though the player could see the coupon or ticket he was buying).

The traditional broad construction of the Johnson Act encompasses numerous devices manufactured to assist in the play of class II games that the Commission now believes Congress presumed to constitute acceptable technologic aids. In an oft-quoted passage from the legislative history, a Senate Report accompanying the bill that became IGRA indicated that “tribes should be given the opportunity to take advantage of modern methods of conducting class II games and the language regarding technology is designed to provide maximum flexibility.” See S. Rep. No. 100-446, at 9 (1988). In other words, the ingenuity of gaming designers, which was designed to be constrained by the Johnson Act, is arguably intended to be given freer rein by IGRA in the context of class II gaming.

Incorporating the Johnson Act definition of gambling device into the Commission's definition of “electromechanical facsimile” is illogical in certain other respects as well. A good example is the roulette wheel. As the Department of Justice noted in its comments to our proposal to strike the definition of facsimile, equating “electromechanical facsimile” to “Johnson Act gambling device” can lead to absurdity. A roulette wheel, for example, clearly meets the definition of a Johnson Act gambling device, but it is neither “electronic” nor a “facsimile.” In other words, although incorporation of the Johnson Act into the IGRA regulatory definitions seemed, in 1992, to be an expedient method of harmonizing two competing federal statutes, it was imperfect at best and, in the final analysis, created more problems than it solved.

In adopting the definitions, the Commission apparently recognized the problem and sought to sidestep it by including “bingo blower” as one of several permissible devices to be used as a technological aid to class II gaming. This strategy resolved the specific problem of the bingo blower, but failed to address the underlying conceptual problem. Consequently, substantial uncertainty remains as to a myriad of other devices that, like the bingo blower, provide electronic or technological assistance to class II gaming, but that nevertheless also meet the expansive definition of electromechanical facsimile by virtue of its incorporation of the Johnson Act. Moreover, this uncertainty has translated into a substantial amount of litigation, much of which has produced results unfavorable to the Commission's interpretation of the interplay between IGRA and the Johnson Act.

On several occasions during the past ten years, the problems noted above have caused the Commission to informally reconsider the correctness of incorporating the Johnson Act into its definition of electromechanical facsimile. Since enforcement of the Johnson Act is committed to the discretion of the Department of Justice, the Commission and the Department share an interest in the proper resolution of this issue.

Like the Commission, the Justice Department has struggled with these questions of interpretation regarding the applicability of the Johnson Act in relation to Indian gaming. In 1996, the Department's position was that Congress expressly contemplated the use of equipment in class II Indian gaming that would otherwise fall within the Johnson Act. In 2001, however, the Justice Department reevaluated its position, indicating a view that the Johnson Act prohibits any technology that meets its terms, including technological aids to class II gaming.

In the meantime, a series of federal circuit court decisions, discussed more fully below, have informed this Commission's view that its original construction of IGRA and resulting definitional regulations did not properly capture the intent of Congress in relation to the distinction between permissible aids to class II games and impermissible class III facsimiles.

In hindsight, and with the guidance of the courts, the inconsistencies in purpose between IGRA and the Johnson Act are more readily apparent. The federal courts, including no less than three United States circuit courts of appeal, have been virtually unanimous in concluding that the Commission's definitions are not useful in distinguishing between technologic aids and facsimiles. Rather than apply the Commission's rules, the courts instead conducted a plain meaning analysis juxtaposed against the language of the statute and the Senate Report. While most simply ignored the Commission's definitions, one court openly criticized the Commission's rule as unhelpful. Cabazon Band of Mission Indians v. National Indian Gaming Commission, 14 F.3d 633 (D.C. Cir. 1994) (holding that the scope of gaming determination at issue in the case could be made by looking to the statute alone and without examining the Commission's regulatory definitions); Sycuan Band of Mission Indians v. Roache, 54 F.3d 535, 542 (9th Cir. 1994) (resorting to the dictionary definition of facsimile as “an exact and detailed copy of something,” rather than using the regulatory definition); Diamond Game Enterprises v. Reno, 230 F.3d 365, 369 (D.C. Cir. 2000) (“Boiled down to their essence, the regulations tell us little more than that a class II aid is something that is not a class III facsimile.”). In sum, these courts have implicitly rejected the Commission's definition of “electromechanical facsimile,” which incorporates the Johnson Act, and have instead used a plain meaning approach to interpret this key term.

In addition to the lack of deference noted above, two United States circuit courts have reached decisions that can be construed to be at odds with the Commission's definition of facsimile, though at least one of them gave deference to the Commission's findings as to the devices in question. United States v. 103 Electronic Gambling Devices, 223 F.3d 1091, 1095, 1102 (9th Cir. 2000); United States v. 162 Megamania Gambling Devices, 231 F.3d 713 (10th Cir. 2000).

The uncomfortable result is that the Commission cannot faithfully apply its own regulations and reach decisions that conform with the decisions of the courts. Such inconsistency frustrates the Commission's ability to properly discharge its duties under IGRA.

Moreover, the courts' unwelcome reception to the Commission's regulatory definitions of electronic aids and electromechanical facsimile stands in vivid contrast to other definitional regulations promulgated by the Commission. In most circumstances, the Commission's work has garnered substantial judicial deference. See Shakopee Mdewakanton Sioux Community v. Hope, 16 F.3d 261, 264 (8th Cir. 1994) (recognizing ambiguity in the definition of class II and upholding the NIGC's regulations that provide that keno is a class III game); 162 Megamania Gambling Devices, 231 F.3d at 719-20 (turning for guidance to the Commission's definition of “game similar to bingo” and noting that the regulations are entitled to deference); 103 Electronic Gambling Devices, 223 F.3d at 1097 (“The NIGC's conception of what counts as bingo under IGRA * * * is entitled to substantial deference.”) Accordingly, the Commission believes that the courts will be receptive to its efforts to bring greater clarity to these key definitions.

In addition to the developments in the federal case law, the Commission's authorizing committee, the United States Senate Committee on Indian Affairs, has urged the Commission to reconsider these definitions. In a July 10, 2000, letter to the Commission Chairman, Senators Ben Nighthorse Campbell and Daniel K. Inouye, then Chairman and Vice-Chairman, respectively, of the Committee, urged the Commission to revise its definitions pertaining to class II gaming, saying:

In a similar letter dated July 11, 2000, nine congressmen also encouraged the Commission “to bring some clarity to this issue.”

In the decade since 1992, the NIGC has had an opportunity to work extensively with its regulatory definitions and also to develop additional experience in Indian gaming. As the Commission's expertise has evolved, the courts have also been active, providing increasingly clearer guidance on the proper interpretation of the relevant statutes. In light of the courts' apathy or antipathy toward certain NIGC definitions discussed above, and in light of requests among the public, the industry, and Congress, the NIGC has determined that several of its key definitions must be revised.

The Commission recognizes that an agency should move with great care in changing definitions that have been in place for a decade. After much reflection, the Commission revises the definitions in a manner that reaffirms, rather than disrupts, settled industry expectations. Today's Final Rule more properly captures the intent of Congress as to the distinction between permissible class II aids and prohibited class III facsimiles, without compromising Congress' intent to prohibit the play of facsimiles absent an approved tribal-state compact.

The Commission first issued a proposed rule for comment on June 22, 2001, proposing to withdraw its definition of electronic or electromechanical facsimile. The vast majority of comments favored the Commission's proposal to revise its definition of electronic or electromechanical facsimile by deleting reference to the Johnson Act. A number of commenters, however, including the Department of Justice, expressed the view that mere removal of this definition would not be sufficient to provide adequate guidance. Furthermore, many also expressed the view that additional revisions were needed for two other related terms: “electronic, computer or other technological aid” and “game similar to bingo.”

After careful consideration, the Commission recognized that the commenters were correct in asserting that the simple removal of the definition would not be sufficient to achieve the desired level of clarity with regard to game classification. Accordingly, the Commission revised its proposed facsimile definition and crafted two new definitions addressing technological aids and games similar to bingo. On March 22, 2002, the Commission published a proposed rule for final comment (67 FR 13296). The comment period, extended to May 6, 2002, resulted in the receipt of fifty-two comments.

The vast majority of commenters express strong support for the Commission's proposal to revise its definitional regulation. While differences exist as to recommended language, most support removing reference to the Johnson Act from the facsimile definition and thus from the game classification analysis.

The one common ground of nearly all commenters is a frustration with achieving the right interplay between IGRA and the Johnson Act. Some commenters suggest that any machine or device meeting the Johnson Act definition of a gambling device would have to be characterized as class III. This, they assert, would be true even if the machine or device could be fairly characterized as a technologic aid to the play of a class II game. The Commission rejects this comment determining that such an approach renders meaningless the technologic aid language in IGRA, and ignores the analysis of a nearly unanimous judiciary. Taken to its logical extreme, an analysis consistent with this view would produce even greater disharmony in distinguishing aids and facsimiles than exists under the current definitions.

The Commission comes to this conclusion with the benefit of ten years' experience since adoption of the original definition regulations and with the advantage of the views of the federal judiciary on the meaning of the language in IGRA. Reaching this conclusion has not been easy. In part, the confusion can be traced to the Commission's original definition regulations. The Commission now believes that in the infancy of IGRA, its original definition regulations simply had not fully reconciled the language of IGRA with the Johnson Act. The Commission now determines that IGRA does not in fact require an across-the-board treatment of all Johnson Act gambling devices as class III games. Stated differently, “Congress did not intend the Johnson Act to apply if the game at issue fits within the definition of a class II game, and is played with the use of an electronic aid.” U.S. v. 162 MegaMania Gambling Devices, 231 F.3d 713, 725 (10th Cir. 2000).

This is best illustrated by considering the bingo blower. The Commission's original regulation listed bingo blowers as class II technologic aids, a categorization that has not been seriously challenged and that was accepted without significant scrutiny. Cabazon Band of Mission Indians v. NIGC . (DDC 1993) 827 F. Supp. 26 at 31, aff'd 14 F.3d 633 (D.C. Cir. 1994), cert. Den. 512 U.S. 1221 (1994) (“* * *the Johnson Act applies only to slot machines and similar devices (including the pull-tab games here in issue), not to aids to gambling (such as bingo blowers and the like)).” The identification of bingo blowers as class II technologic aids is also consistent with IGRA's legislative history. (“That section [15 U.S.C. 1175] prohibits gambling devices on Indian lands but does not apply to devices used in connection with bingo and lotto.” S.Rep. No.100-446, at 12 (1988).) When employed in gaming, though, bingo blowers are nothing more or less than random number generators.

Random number generation is the creation of numbers for use in games of chance and may occur in a wide variety of ways. Video gambling devices, for example, use computer software to generate numbers at random. Dice, cards, or wheels may also be used.

Significant to the Commission's analysis is the fact that both a bingo blower and a roulette wheel function as random number generators. That is, both produce, on a random basis, the numbers that will determine winners in games of chance. The Johnson Act specifically identifies roulette wheels as an example of a gambling device. 15 U.S.C. 1171(a)(2). Bingo blowers also meet the broad, Johnson Act definition of a gambling device, yet are rightfully classified as technologic aids under IGRA. The physical and operational characteristics of these devices, however, cannot be legally distinguished. The only real distinction between roulette wheels and bingo blowers is the games that they support. Bingo blowers generate numbers for class II games of chance, while roulette wheels generate numbers for class III games of chance. Because of their inconsistent purposes, inclusion of the Johnson Act in a game classification analysis undermines the fundamental principles of IGRA.

There are other such illustrative anomalies among gambling devices that are used as random number generators. Both keno and lotteries are class III games, but the “rabbit ears” used in keno and the ping-pong ball blowers often used to select lottery winners bear a striking resemblance, in appearance and function, to bingo blowers. Conversely, it would be fully consistent with IGRA to employ the kind of computerized random number generation used in video gaming machines, rather than a blower, to draw numbers for the play of bingo, particularly in light of the fact that IGRA specifically allows for electronic draws in the play of bingo. 25 U.S.C. 2703(7)(A)(i)(II).

From the Commission's perspective, the Johnson Act has proven remarkably troublesome as a starting point in a game classification analysis under IGRA. As illustrated above, this is due in large part to its fundamentally different purpose. The Johnson Act is intended to determine whether something is a “gambling device.” IGRA, on the other hand, is intended to distinguish between classes of games. Within the context of IGRA, there is no question as to “gambling” per se—all Indian gaming is “gambling.” Accordingly, determining whether the Johnson Act covers a particular device simply does not answer the question relevant to Indian gaming: whether the game is class II or class III.

The appropriate threshold for a game classification analysis under IGRA has to be whether or not the game played utilizing a gambling device is class II. If the device is an aid to the play of a class II game, the game remains class II; if the device meets the definition of a facsimile, the game becomes class III. This analytical framework is fully consistent with that adopted by the three federal circuits that have squarely addressed the issue and determined that the Johnson Act does not prohibit technological aids to class II gaming. See United States v. 103 Electronic Gambling Devices , 223 F.3d 1091, 1102 (9th Cir. 2000) (rejecting the notion that the Johnson Act extends to technological aids to the play of bingo); Diamond Game Enterprises v. Reno, 230 F.3d 365 (D.C. Cir. 2000) (noting that class II aids permitted by IGRA do not run afoul of the Johnson Act); U.S. v. 162 MegaMania Gambling Devices, 231 F.3d 713 (10th Cir. 2000)(concluding that Congress did not intend the Johnson Act to apply if the game at issue fits within the definition of a class II game, and is played with the use of an electronic aid). See also United States v. Burns, 725 F. Supp. 116, 124 (N.D.N.Y. 1989) (indicating that IGRA makes the Johnson Act inapplicable to class II gaming and therefore tribes may use “gambling devices” in the context of bingo).

Because Congress intended to permit the use of electronic technology in class II gaming (even if the device might otherwise fall within the ambit of the Johnson Act), the important factor in a game classification analysis is whether the technology is assisting a player or the play of a class II game. Accordingly, the Commission's amended definition of electronic, computer or other technologic aid retains its elemental definition in subsection (a). To assist in the analysis under subsection (a), a set of analytical factors (subsection (b)), and specific examples of technologic aids (subsection (c)) have also been included. The Commission believes this modification is responsive to those commenters who were unclear as to how proposed subsections (a) and (b) were intended to interact.

The list of examples contained in the proposed rule received mixed comments. Those opposing the list felt that the approach creates a presumption that other machines or devices unlike those specifically listed could not be allowable aids. Others requested clarification as to whether the list is non-exclusive. The list is intended to assist the public and the industry in interpreting the scope of permissible aids by enumerating examples that have already been deemed lawful. This list is not comprehensive. The Commission is fully aware that other machines or devices not included in the list of examples can satisfy the definition of technologic aid and thus be a permissible form of class II gaming.

One commenter suggests that if it is determined that gambling devices can be used in connection with the play of class II games, IGRA still requires a tribal-state compact for operation of the device. The Commission does not believe that there is textual support for such a proposition in IGRA or that Congress intended the compacting process to be applicable in any way to class II gaming. “S.555 [IGRA] provides for a system for joint regulation by tribes and the Federal Government of class II gaming on Indian lands and a system for compacts between tribes and States for regulation of class III gaming.” S.Rep. No. 100-446, at 1 (1988).

Several commenters believe the proposed definition of technologic aid should be expanded to reflect that broadening participation is an important characteristic of an aid. The Commission agrees that this is an important indicator as to whether a machine or device is a technologic aid, but also recognizes that it is not a required element. This factor was therefore added to subsection (b) of the definition and should be viewed as strong indication that the machine or device is a technologic aid.

Several commenters suggest that the requirement that an aid be “readily distinguishable” from a facsimile is vague. Some argue that this language could possibly create a third category of devices falling somewhere outside both the definition of aid and facsimile. The Commission agrees that the reference has not proven useful in distinguishing between aids and facsimiles, and has therefore removed the reference.

Others suggest that the language “[i]s readily distinguishable from the playing of an electronic or electromechanical facsimile of a game of chance” within the aid definition should be qualified by adding the phrase “in which a single participant can play the game only with or against the device rather than with or against other players.” Others suggest that the same language should be utilized to limit the facsimile definition. In crafting these two new definitions, the Commission focused upon several key factors.

First, the Commission finds it particularly significant that IGRA specifically provides for an electronic draw in bingo games. 25 U.S.C. 2703(7)(A)(i)(II). Second, greater freedom with regard to class II gaming was clearly intended by the Congress. (“[T]ribes should be given the opportunity to take advantage of modern methods of conducting class II games and the language regarding technology is designed to provide maximum flexibility.” S. Rep. No. 100-446, at 9 (1988).) Reading this information along with the judicial analysis in several key cases, the Commission concludes that in the case of bingo, lotto, and other games similar to bingo, the definition “electronic or electromechanical facsimile” should be more narrowly construed. See S.Rep. No.100-446 (1988); United States v. 103 Electronic Gambling Devices, 223 F.3d 1091, 1102 (9th Cir. 2000); U.S. v. 162 MegaMania Gambling Devices, 231 F.3d 713 (10th Cir. 2000).

IGRA permits the play of bingo, lotto, and other games similar to bingo in an electronic or electromechanical format, even a wholly electronic format, provided that multiple players are playing with or against each other. These players may be playing at the same facility or via links to players in other facilities. A manual component to the game is not necessary. What IGRA does not allow with regard to bingo, lotto, and other games similar to bingo, is a wholly electronic version of the game that does not broaden participation, but instead permits a player to play alone with or against a machine rather than with or against other players. To ensure maximum clarity, the revised definitions include appropriate language establishing these parameters.

Several commenters suggest that the proposed definitions of aid and facsimile are circular because of their cross referencing. The Commission agrees, but also notes that it is important to state clearly when terms are intended to be mutually exclusive. The Commission revised the definitions to accommodate the concern, yet still address the Commission's view that, as a general rule, an aid and a facsimile are mutually exclusive.

One commenter suggests that the focus of the facsimile definition should be on the device rather than the format of the game. The Commission disagrees. The Commission reviews aids and facsimiles as part of its analysis to classify games. Therefore, the focus of the facsimile definition is properly on the game.

One commenter suggests that the Commission use the term “resembles” or “simulates” rather than “replicates.” The Commission concludes that these terms are not necessarily more precise than the term “replicates.” It is also noteworthy that the courts have largely utilized the term “replicates.” See e.g. Cabazon Band of Mission Indians v. National Indian Gaming Commission, 14 F.3d 633, 636 (D.C. Cir. 1994); United States v. 162 Megamania Gambling Devices, 231 F.3d 713, 724 (10th Cir. 2000).

Several commenters suggest that the proposed definition is not useful because it provides a single definition for unrelated types of games. Including pull tabs, lotto, punch boards, tip jars, and instant bingo in the definition was viewed as creating confusion. Still others object to the proposed definition on the grounds that the restrictions are contrary to Congress' definition of “bingo.” Upon reflection, the Commission agrees and has made appropriate revisions.

Several commenters suggest that the Commission should not adopt a definition of pull tabs, but allow the definition to evolve on a case-by-case basis. Another commenter noted that the game lotto does not contain a finite deal. Some commenters suggest inserting IGRA's requirement that these games must be played in the same location as bingo. Suitable changes were made in response to these comments.

An overwhelming number of commenters object to the proposed definition requiring the use of paper or other tangible medium. Others assert that the term “preprinted” is ambiguous. The majority of commenters feel that these requirements are not consistent with federal case law, in part because they would eliminate the lawfully recognized use of electronic cards. United States v. 103 Electronic Gambling Devices, 223 F.3d 1091 (9th Cir. 2000); U.S. v. 162 MegaMania Gambling Devices, 231 F.3d 713 (10th Cir. 2000). The requirements were also seen to disregard the legislative history of IGRA, which allows tribes maximum flexibility in using modern technology. S. Rep. No. 100-446, at 9 (1988). The Commission agrees that the proposed language was overly broad and inconsistent with both case law and legislative history. These requirements have therefore been removed.

It is particularly noteworthy that the statutory listing of specific games followed by the phrase, “and other games similar to bingo,” can be read in two ways. 25 U.S.C. 2703(7)(A)(i)(III). First, it can be interpreted to mean merely that the specified games are similar to bingo. The Commission finds this interpretation unlikely. Alternatively, this language can be interpreted to leave class II open to other games that are bingo-like, but that do not fit the precise statutory definition of bingo. This second reading, that the class was left open to a group of non-specific, bingo-like games, or “variants” on the game of bingo, is consistent with legislative history and the holdings of the Courts of Appeal for the Ninth and Tenth Circuits in their analysis of the game Megamania cited above.

The Commission now believes that its 1992 definition of “game similar to bingo” is flawed. 25 CFR 502.9. It defies logic to conclude that the Congress intended to require that these other “similar” games satisfy the same statutory requirements of bingo. If this were Congress' intent, there would have been no need for the phrase “and other games similar to bingo.” These games would not in effect be “similar” to bingo; they would be bingo.

The definition announced today corrects this flaw by accurately stating that “other games similar to bingo” constitute a “variant” on the game and do not necessarily meet each of the elements specified in the statutory definition of bingo. The Commission believes that this modification more accurately reflects Congress' intent with regard to games similar to bingo.

One commenter suggests that the proposed rule is unconstitutional either because tribes have vested constitutional property rights in gaming or because the rule is vague and ambiguous. The Commission respects tribal rights to conduct gaming. It has assumed responsibility for modifying the regulations to assist tribal governments in the regulation of gaming and to clarify standards to be applied in the classification decisions required of tribes and the Commission.

One commenter suggests that the Commission unduly burdened the tribes by requiring changes to its classification of games and by failing to consult with tribes. Throughout this regulatory process, the Commission made every effort to reflect existing court decisions. Tribes that adhere to the law as interpreted by the courts will not be changing their approach to game classification as a result of these regulations. Furthermore, two extensive comment periods and issuance of a second change to the proposed definitions reflect the efforts of the Commission to consult and coordinate with tribal governments.

Many commenters offered specific language urging adoption by the Commission. The Commission found this language extremely helpful in the revision process and encourages similar comments in the future. The analysis and rationale underlying these proposals were of high analytical quality, particularly in light of the complexities presented by these issues. Today's revisions reflect in principle the themes common to many of the comments.

This regulation merely codifies existing Federal court decisions and assures that the Commission will follow such decisions. Therefore, we do not expect the regulation to have a significant impact on the approximately 315 tribal gaming operations nationwide. Furthermore, Indian Tribes are not considered to be small entities for the purposes of the Regulatory Flexibility Act. To the extent that tribal gaming operations may be considered small businesses and therefore small entities under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. , this rule will not have a significant economic effect on a substantial number of small entities.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule does not have an annual effect on the economy of $100 million or more. This rule will not cause a major increase in costs or prices for consumers, individual industries, Federal, state, or local government agencies or geographic regions and does not have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of U.S. based enterprises to compete with foreign-based enterprises.

The Commission is an independent regulatory agency and, as such, is not subject to the Unfunded Mandates Reform Act.

In accordance with Executive Order 12630, the Commission has determined that this rule does not have significant takings implications. A takings implication assessment is not required.

In accordance with Executive Order 12988, the Office of General Counsel has determined that the rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order. Instead, the rule is likely to decrease litigation with Indian tribes and reduce unnecessary friction between the Department of Justice and the Commission.

This regulation does not require an information collection under the Paperwork Reduction Act 44 U.S.C. 3501 et seq.

The Commission has analyzed this rule in accordance with the criteria of the National Environmental Policy Act. This rule does not constitute a major Federal action significantly affecting the quality of the human environment. An environmental assessment is not required.

The Florida Department of Transportation requested that the Coast Guard temporarily allow the Hatchett Creek bridge to only open a single leaf of the bridge from June 10, 2002 until July 31, 2002. This temporary deviation from the existing bridge regulations is necessary to complete construction of the new bascule leaves. The Hatchett Creek (US 41), bridge has a horizontal clearance of 30 feet between the fender and the down span.

The District Commander has granted a temporary deviation from the operating requirements listed in 33 CFR 117.5 to allow the owner to complete construction of the new bascule leaves. Under this deviation, the Hatchett Creek (US 41) bridge need only open a single leaf of the bridge from June 10, 2002 until July 31, 2002.

The existing regulations in 33 CFR 117.261(aa) governing the operation of the Atlantic Avenue bridge (SR 806), mile 1039.6, at Delray Beach, Florida allow the draw to open on signal, except that, from November 1 through May 31 from 10 a.m. to 6 pm., Monday through Friday, the draw need open only on the hour, and half hour.

The Florida Department of Transportation requested on June 5, 2002, that the Coast Guard allow single leaf openings from 5 a.m. on July 8, 2002 to 11:59 p.m. on July 12, 2002 and from 5 a.m. on July 22, 2002 to 11:59 p.m. on July 26, 2002 to complete repairs to the bridge spans.

The District Commander granted a deviation from the operating requirements listed in 33 CFR 117.261(aa) to allow the owner to complete repairs to the bridge spans. Under this deviation, the Atlantic Avenue bridge need open only a single leaf from 5 a.m. on July 8, 2002 to 11:59 p.m. on July 12, 2002 and from 5 a.m. on July 22, 2002 to 11:59 p.m. on July 26, 2002.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM, and under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the Federal Register . The permit application was not received in time to publish an NPRM followed by a final rule before the necessary effective date. Delaying this rule would be contrary to the public interest of ensuring the safety of spectators and vessels during this event and immediate action is necessary to prevent possible loss of life or property.

This temporary safety zone is necessary to ensure the safety of vessels and spectators from hazards associated with a fireworks display. Based on recent accidents that have occurred in other Captain of the Port zones, and the explosive hazard of fireworks, the Captain of the Port Chicago has determined firework launches in close proximity to watercraft pose significant risks to public safety and property. The likely combination of large numbers of recreational vessels, congested waterways, darkness punctuated by bright flashes of light, alcohol use, and debris falling into the water could easily result in serious injuries or fatalities. Establishing a safety zone to control vessel movement around the location of the launch platforms will help ensure the safety of persons and property at these events and help minimize the associated risks.

Both a primary and alternate launch site are being established. In the event of inclement weather, the Coast Guard will notify the public via the Broadcast Notice to Mariners if they are using the alternate launch platform.

Entry into, transit through or anchoring within this safety zone is prohibited unless authorized by the Captain of the Port, Chicago or his designated on-scene representative. The designated on-scene representative may be contacted on VHF/FM Marine Channel 16.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT)(44 FR 11040, February 26, l979). The Coast Guard expects the economic impact of this proposal to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary.

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

The Coast Guard certifies under section 605(b) of the Regulatory Flexibility Act (5 U.S.C.601-612) that this temporary final rule will not have a significant economic impact on a substantial number of small entities.

In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), the Coast Guard offered to assist small entities in understanding this rule so that they can better evaluate its effectiveness and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions, call 1-888-REG-FAIR (1-888-734-3247).

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

The Coast Guard has analyzed this rule under Executive Order 13132, Federalism, and has determined that this rule does not have implications under that Order.

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

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

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

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

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

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

The Coast Guard considered the environmental impact of this regulation and concluded that, under figure 2-1, paragraph (34)(g) of Commandant Instruction M16475.1C, it is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES.

Due to the terrorist attacks on New York City, New York, and Washington DC, on September 11, 2001 and continued warnings from national security and intelligence officials that future terrorist attacks are possible, there is an increased risk that subversive activity could be launched by vessels or persons in close proximity to Calvert Cliffs Nuclear Power Plant. On October 3, 2001, Constellation Nuclear-Calvert Cliffs Nuclear Power Plant requested a limited access area to reduce the potential threat that may be posed by vessels that approach the power plant.

On February 28, 2002, the Coast Guard published a temporary final rule entitled “Security Zone; Calvert Cliffs Nuclear Power Plant, Chesapeake Bay, Calvert County, MD,” in the Federal Register (67 FR 9203). The temporary rule established a security zone around the Calvert Cliffs Nuclear Power Plant.

There is a continuing need for the protection of the plant. The temporary security zone surrounding the plant is only effective to 5 p.m. on June 15, 2002. As a result, the Coast Guard is extending the effective date of the rule to 5 p.m. on September 30, 2002. There is no indication that the present rule has been burdensome on the maritime public; users of the areas surrounding the plant are able to pass safely outside the zone. No letters commenting on the present rule have been received from the public.

We did not publish a notice of proposed rulemaking (NPRM) for this rule and it is being made effective less than 30 days after publication in the Federal Register . When we promulgated the rule, we intended to either allow it to expire on June 15, 2002, or to cancel it if we made permanent changes before that date. If we determine that a permanent rule is warranted, we will follow normal notice and comment rulemaking procedures, and a final rule should be published before September 30, 2002. Continuing the temporary rule in effect while the permanent rule rulemaking is in progress will help to ensure the security of this facility and the safety of the public during that period. Therefore, the Coast Guard finds good cause under 5 U.S.C 553(b)(B) and (d)(3) for why a notice of proposed rulemaking and opportunity for comment is not required and why this rule will be made effective fewer than 30 days after publication in the Federal Register .

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

We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary. Vessels may transit around the security zone and may be permitted within the security zone with the approval of the Captain of the Port or his or her designated representative.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), the Coast Guard considered whether this rule would have a significant economic effect upon a substantial number of small entities. “Small entities” include small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. This rule was not preceded by a general notice of proposed rulemaking and, therefore, is exempt from the requirements of the Regulatory Flexibility Act. Although this rule is exempt, we have reviewed it for potential economic impact on small entities.

Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule will have a significant economic impact on it, please submit a comment to the office listed under ADDRESSES. In your comment, explain why you think it qualified and how and to what degree this rule would economically affect it.

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

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

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

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

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

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

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

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

To help the Coast Guard establish regular and meaningful consultation and collaboration with Indian and Alaskan Native tribes, we published a notice in the Federal Register (66 FR 36361, July 11, 2001) requesting comments on how to best carry out the Order. We invite your comments on how this proposed rule might impact tribal governments, even if that impact may not constitute a “tribal implication” under the Order.

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

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

This document amends VA's “Medical” regulations in 38 CFR part 17 to add provisions implementing statutory changes made by Public Law 106-377, the Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriation Act, 2001. This act amended 38 U.S.C. 1734 to provide that the following Filipino veterans who are citizens of the United States, or aliens lawfully admitted for permanent residence in the United States, and who are in receipt of disability compensation under 38 U.S.C. Chapter 11, subchapter II or IV, are eligible for hospital care, nursing home care, and medical services in the same manner as a veteran:

On December 27, 2001, VA established regulations setting forth provisions for certain Filipino veterans who are citizens of the United States, or aliens lawfully admitted for permanent residence in the United States, to receive disability compensation at the full dollar rate (66 FR 66763). A Filipino veteran receiving VA disability compensation at the full dollar rate as set forth in 38 CFR 3.42 would necessarily meet all of the requirements to be eligible for hospital care, nursing home care, and medical services in the same manner as a veteran. Conversely, a Filipino veteran not receiving disability compensation at the full dollar rate as set forth in 38 CFR 3.42, would not meet all of the requirements to be eligible for such care. Accordingly, we have added a new § 17.39 to state that Filipino veterans receiving disability compensation at the full dollar value under § 3.42 are eligible for hospital care, nursing home care, and medical services in the same manner as a veteran.

This final rule is published without regard to the notice and comment and delayed effective date provisions of 5 U.S.C. 553 since it reflects statutory changes and incorporates other provisions already required to be met for eligibility for benefits.

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

This document has been reviewed by the Office of Management and Budget under Executive Order 12866.

The Secretary of Veterans Affairs hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The final rule would have a direct effect only on individuals and would not have any measurable effect on small entities. Accordingly, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance numbers for the programs affected by this rule are 64.005, 64.007.64.008, 64,009, 64.010, 64.011, 64.012, 64.013, 64.014, 64.015, 64.016, 64.018, 64.019, 64.022, and 64.025.

EPA is approving the Puerto Rico plan, and the elements therein, as submitted on February 20, 2001, for the control of air emissions from Hospital, Medical, and Infectious Waste Incinerators (HMIWIs). When EPA developed the New Source Performance Standard (NSPS) for HMIWI, it also developed Emission Guidelines (EG) to control air emissions from existing HMIWI. (See 62 FR 48379, September 15, 1997, 40 CFR part 60, subpart Ce (Emission Guidelines and Compliance Times for HMIWIs) and subpart Ec (Standards of Performance for HMIWIs for Which Construction is Commenced After June 20, 1996)). The Puerto Rico Environmental Quality Board (EQB) developed a plan, as required by sections 111(d) and 129 of the Clean Air Act (CAA), 42 U.S.C. 7411(d) and 7429, to adopt the emission guidelines into its body of regulations, and EPA is acting today to approve it.

On February 20, 2001, Puerto Rico submitted a plan for implementing EPA's emission guidelines for existing Hospital, Medical, and Infectious Waste Incinerators. The plan contained several elements including: (1) A demonstration of Puerto Rico's legal authority to implement the section 111(d)/129 HMIWI Plan; (2) identification of a mechanism to enforce the emission guidelines; (3) an inventory of six (6) known designated facilities along with estimates of their air emissions; (4) emission limits that are as protective as the emission guidelines; (5) a final compliance date no later than September 15, 2002; (6) testing, monitoring, inspection, and reporting and recordkeeping requirements for the designated facilities; (7) documentation from the public hearing on the HMIWI plan; and (8) provisions to make progress reports to EPA. EPA proposed approval on February 25, 2002 (67 FR 8496).

There were no comments received on EPA's proposed approval of the Puerto Rico plan. Therefore, EPA is approving the plan.

For reasons described in this action and in EPA's proposal action, EPA is approving Puerto Rico's section 111(d)/129 HMIWI plan. For further details, the reader is referred to the proposal action and the Technical Support Document.

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

This action will not impose any collection information subject to the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. , other than those previously approved and assigned OMB control number 2060-0363. For additional information concerning these requirements, See 40 CFR 60.38e. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

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

This rule is not subject to Executive Order 13045 because it does not involve decisions intended to mitigate environmental health or safety risks.

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

Under section 6(b) of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by state and local governments, or EPA consults with state and local officials early in the process of developing the proposed regulation. Under section 6(c) of Executive Order 13132, EPA may not issue a regulation that has federalism implications and that preempts state law, unless the Agency consults with state and local officials early in the process of developing the proposed regulation.

In its February 27, 2002 proposal, EPA indicated that this action may have federalism implications in the event that an HMIWI source is identified in the Commonwealth of Puerto Rico that was not previously identified in the plan. However, EPA investigated this matter further and determined that the Puerto Rico plan applies to “all affected sources” regardless of whether it has been identified in the plan. Therefore, EPA has concluded that this rulemaking action does not have federalism implications.

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

This rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions.

This rule will not have a significant impact on a substantial number of small entities because such businesses have already been subject to the federal plan, which mirrors this rule. Therefore, because the Federal approval does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities.

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

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

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

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

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

Under section 307(b)(1) of the Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 16, 2002. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

On March 21, 2002, the Commission released a Report and Order in CC Docket No. 01-150 (Order), April 17, 2002, (67 FR 18827) adopting rules to govern and streamline review of applications for section 214 of the Act. Specifically, the Order establishes a thirty day streamlined review process that will presumptively apply to domestic section 214 transfer applications meeting specified criteria, and that will apply on a case-by-case basis to all other domestic section 214 applications. The Order also sets forth the information that applicants must provide in their domestic section 214 applications, whether filed separately or in combination with an international section 214 application. Moreover, the Order defines pro forma transactions in a manner that is consistent with the definition used by the Commission in other contexts, and harmonizes the treatment of asset acquisitions with the treatment of acquisitions of corporate control. A summary of the Order was published in the Federal Register . See 67 FR 18827, April 17, 2002. The new rules entail new information collection requirements that required OMB approval. On June 4, 2002, OMB approved the information collection requirements. See OMB No. 3060-0989. Sections 63.01, 63.03 and 63.04, published at 67 FR 18827, April 17, 2002, takes effect on June 14, 2002. This publication satisfies the statement in the April 17, 2000 Federal Register notice that the Commission would publish a document in the Federal Register announcing the effective date of the rules.

1. NTIA is the executive branch agency principally responsible for developing and articulating U.S. domestic and international telecommunications policy. NTIA is the principal advisor to the President on telecommunications policies pertaining to the Nation's economic and technological advancement and to the regulation of the telecommunications industry. NTIA also manages the Federal Government's use of the radio spectrum.

2. On August 10, 1993, Title VI of the Omnibus Budget Reconciliation Act of 1993 (OBRA-93) was signed into law. 2 OBRA-93 authorized the Federal Communications Commission (FCC or Commission) to use competitive bidding (auctions) for the reassignment and licensing of spectrum frequencies for certain commercial services. OBRA-93 also directed the Secretary of Commerce to transfer at least 200 megahertz (MHz) of spectrum below 5 gigahertz (GHz) from Federal agencies to the FCC for licensing to the private sector. Pursuant to OBRA-93, NTIA identified Federal bands for reallocation totaling 235 MHz from the Federal Government to non-Government use in its February 1995 Spectrum Reallocation Final Report. 3

3. Title III of the Balanced Budget Act of 1997 (BBA-97) required the Secretary of Commerce to identify an additional 20 MHz below 3 GHz for reallocation to non-Government users. 4 In response to this directive, NTIA issued a Spectrum Reallocation Report in February 1998 which identified the additional bands for reallocation. 5 BBA-97 directed the FCC to auction the 20 MHz by 2002 and the 1710-1755 MHz band identified in the 1995 Spectrum Reallocation Final Report after January 1, 2001. 6 Finally, BBA-97 authorized Federal entities to accept cash or in-kind payment as compensation for costs associated with vacating spectrum transferred from Federal to non-Federal use.

4. In 1998, Congress passed the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (NDAA-99). 7 This legislation sought to encourage the transfer of electromagnetic spectrum from Federal Government to private use by authorizing mandatory compensation payments for Federal entities when they relocate or modify their frequency use to accommodate non-Federal users of the spectrum. 8 Specifically, the Act requires “[a]ny person on whose behalf a Federal entity incurs costs” pursuant to frequency spectrum relocation or modification “to compensate the Federal entity in advance” for the entity's modification or relocation expenses. 9 The Act also references various expenses associated with frequency relocation or modification that qualify for reimbursement including “the costs of any modification, replacement, or re-issuance of equipment, facilities, operating manuals, or regulations incurred by that entity.”  10 Moreover, the Act requires the Federal entity to notify NTIA prior to an auction  11 of the “marginal costs anticipated to be associated with such relocation or with modifications necessary to accommodate prospective licensees.”  12

5. The Act directs NTIA and the FCC to “develop procedures for the implementation of [relocation], which * * * shall include a process for resolving any differences that arise between the Federal Government and commercial licensees regarding estimates of relocation or modification costs.”  13 On January 18, 2001, NTIA issued a Notice of Proposed Rule Making (NPRM) regarding these procedures. The NPRM sets out proposed rules to implement the process by which Federal entities are reimbursed for marginal costs incurred in relocating or modifying facilities as a result of reallocation. The NPRM raised a number of questions and sought public comment on the reimbursement process. The public comments received in response to the NPRM present a wide range of interests that are summarized and discussed below.

6. The NPRM identified the following bands that currently qualify for reimbursement: 216-220 MHz; 1432-1435 MHz; 1710-1755 MHz; and 2385-2390 MHz. These bands are Federal Government spectrum that was previously identified by NTIA for transfer to the private sector pursuant to OBRA-93 and BBA-97. The NPRM sought comment on the bands that qualified for reimbursement, and stated that future bands that qualify for reimbursement would be identified via a public notice and request for comment. Few comments were received with respect to the bands that qualify for reimbursement. We note that the Commission recently released its Report and Order regarding the reallocation of three of these bands, as well as an additional Report and Order adopting service and competitive bidding rules for these bands. 14 A discussion of the particular bands that currently qualify for reimbursement is provided below.

7. Federal assignments within the 216-220 MHz band are eligible for reimbursement for relocation or modification costs pursuant to BBA-97 and NDAA-99.

8. Mobex, an Automated Telecommunications Systems (AMTS) operator, states that it presently operates on a secondary basis to the United States Navy's SPASUR system in the 216.880 MHz to 217.080 MHz band. 15 Mobex maintains that in more than 15 years of operation, it has encountered no difficulty in sharing use of the band with the SPASUR system and does not anticipate any difficulty if it obtains additional AMTS licenses. 16 Mobex states that there may be no other spectrum suitable for the SPASUR purpose. Thus, Mobex submits that if the Navy has no intention of relocating the SPASUR system, the Navy should so inform the Administration so that the 216-220 MHz can be severed from this proceeding. 17 We anticipate that SPASUR will remain in the band at specified locations on a primary basis, and we anticipate that other Federal systems will maintain secondary status in the band and not seek reimbursement costs. As noted in paragraph 6 above, the FCC recently released a Report and Order adopting service and competitive bidding rules for these bands to accommodate new licensees. Accordingly, the 216-220 MHz band will not be severed from this proceeding as Mobex suggests.

9. Federal assignments within the 1432-1435 MHz band are eligible for reimbursement for relocation or modification costs pursuant to BBA-97 and NDAA-99.

10. Federal assignments within this band are eligible for reimbursement costs for relocation or modification pursuant to BBA-97 and NDAA-99. Affected Federal agencies will submit estimated relocation or modification costs to NTIA pursuant to these rules.

11. The Federal Aviation Administration (FAA) asked whether agencies that are located in the 1710-1755 MHz band would be required to relocate by January 2004 if no private entities bid on the particular frequencies. 19 January 2004 is not a statutory driven date. To the extent that no non-Government entities have been licensed in the 1710-1755 MHz band, we see no reason why the Federal entities would be required to relocate by that date. Accordingly, Federal agencies within the 1710-1755 MHz band will submit estimated costs to relocate pursuant to these final rules.

12. Federal assignments within this band are eligible for reimbursement of relocation or modification costs pursuant to BBA-97 and NDAA-99. Affected Federal agencies will submit estimated relocation or modification costs to NTIA pursuant to these rules.

13. Future bands that qualify for reimbursement will be identified via a public notice and request for comments.

14. The NPRM sought comment on whether Federal entities should be required to relocate in those cases where sharing is technically possible. 20 Most of the commenters supported the idea of the non-Government licensee sharing with the incumbent Federal entity, under certain conditions. The Industrial Telecommunications Association, Inc. (ITA), for example, stated that sharing, as well as voluntary relocation, would expedite the auction process by reducing uncertainty, and avoiding the costly process of unnecessarily relocating Federal incumbents. 21 ITA further noted that relocation may not be necessary because licensees could deploy systems around incumbent Federal users without overlapping contours. 22 Other commenters, however, contended that certain conditions should accompany any sharing arrangement. For example, some commenters noted that the decision about whether the Federal entity should relocate or be permitted to share should be made by the new licensee as opposed to the Federal entity. 23 Motorola supported the sharing of spectrum provided that it does not hamper the deployment of services. 24 AT&T stated that sharing would be a superior option to full relocation in terms of cost, time and convenience, and might be appropriate where the Government's use is restricted to a small geographic area or an off-use time period. 25 AT&T maintained that a licensee's choice between relocation and sharing, retuning or modification (as discussed below) should govern unless the Government demonstrates that the licensee's choice is impracticable. 26

15. The Department of Defense (DoD) stated that if sharing is technically possible, the private entity would be required to pay for any modification required by the Federal entity. 27 DoD further maintained that it is the Federal entity that must first determine how to achieve comparability of operations, and that “permitting” DoD to remain on a non-interference basis is not likely to be sufficient to achieve comparability. 28 DoD also argued that to leave sharing as a potentially feasible option, no requirement should be established that would serve to limit the possibility of achieving comparability.

16. Commenters also offered suggestions and recommendations with respect to establishing sharing as an option. Motorola stated that clear rules need to be established to ensure that deployed systems are compatible and will not affect non-Government operations or mission critical Government facilities. 29 Motorola further stated that costs required for system modification to support sharing must be provided prior to an auction of the reallocated spectrum so that a new entrant can consider the costs as part of a spectrum acquisition strategy. 30 Securicor commented that NTIA should clarify that relocation of incumbent Federal entities is a right that is at the option of the auction winners. 31 AT&T similarly commented that new licensees should have the ultimate choice among sharing, retuning, or full relocation of the Federal incumbents. 32 ITA recommended that NTIA allow licensees to “rely upon resources such as frequency advisors to evaluate proposed systems and either: (1) Ensure that there will be no prohibited overlap with incumbent, Governmental entities; or (2) begin a relocation negotiation process with the Federal incumbent licensee.” 33 DoD stated that sharing should be considered on a case-by-case basis, and that NTIA should make the clarification in the final rule that sharing is to be made available only if the incumbent Federal entities believe that it would meet their needs. 34

17. Although sharing appears to be an option that private sector parties favor, OBRA-93, BBA-97, and NDAA-99 require non-exempt Federal entities to relocate from bands reallocated to non-Government uses in order to exercise their rights to reimbursement. Therefore sharing by non-exempt Federal systems will not be permitted once the requirements of OBRA-93, BBA-97, and NDAA-99 have been met. To the extent that a non-exempt Federal entity decides to remain in a reallocated band, the Federal entity would remain in the band on a non-interference basis and would not be entitled to reimbursement for any modification costs under these rules.

18. We recognize that as a practical matter, however, during relocation of Federal Government stations from these bands, Federal agencies and private sector licensees may find it efficient for both entities to operate in these bands for a period of time. It may take a number of years for the relocation process to be completed in some of the subject bands depending upon the number of Government systems that must be relocated. We anticipate that the negotiation process, addressed below, will provide the new licensee and the Federal Government incumbent with a framework within which to negotiate an efficient transition of facilities. During the transition period, all incumbent Government systems will remain on a primary basis and must be protected by the non-Government licensee.

19. The NPRM discussed circumstances where radiocommunication systems in certain bands can be modified to tune outside of the reallocated band to the upper or lower portion of the incumbent system's tuning capability. We noted that retuning is oftentimes less expensive to implement, assuming that there is no congestion in the upper or lower portion of the band as a result of the migration and assuming the transmitter-receiver frequency separation can be met. To the extent that a Federal entity is able to retune or modify its equipment in these circumstances, we proposed to limit reimbursement to the costs associated with retuning. AT&T supported our proposed limitation of reimbursement costs for retuning or modification in those situations where it is a technically feasible alternative to relocation. 35 Thus, to the extent that a Federal entity that is required to relocate is able to modify/re-tune its equipment with the result that the modified equipment provides operational capabilities comparable with the original system, reimbursement will be limited to the marginal costs associated with modification/re-tuning.

20. The NPRM sought comment on whether a Federal entity should be entitled to reimbursement of relocation costs if it relocates to a landline communications system or a commercial radio service. 36 Commenters overwhelmingly agreed that agencies should be reimbursed for relocation costs if they choose to relocate to a landline or commercial service. DoD stated that moving to a commercial service or landline system would qualify as “modification,” and moving to a commercial radio service would certainly be considered “relocation to another frequency.” 37

21. We agree with the commenters and find that Federal entities are entitled to reimbursement of relocation costs if they relocate to landline communications systems or commercial radio systems. For Federal entities that choose to relocate to landline communications systems or commercial radio systems, reimbursement will be limited to the marginal costs associated with such a relocation.

22. Private industry commenters overwhelmingly recommended that auction proceeds be used to pay for expenses incurred by the Federal entities as a result of relocation. 38 Several commenters stated that this process would be more efficient and cost effective, eliminating the need for extensive negotiations, discussions and cost sharing considerations, thus permitting new licensees to rapidly deploy networks. 39 Commenters also stated that using auction proceeds to compensate Federal entities would provide certainty on the part of the Federal entities that they would be fully and timely paid because of the guaranteed source of funds. 40 Likewise, commenters noted that this approach would provide certainty on the part of potential bidders who would be free to value the licenses solely on the basis of the value of unencumbered spectrum, thereby reducing the risks associated with bidding on the spectrum and decreasing the likelihood of lengthy post-auction disputes. 41

23. Commenters provided other benefits of reimbursing Federal entities from auction revenues. AT&T, for example, stated that reducing the overall financial obligations of potential bidders would increase the number of bidders and thus promote competition. 42 MicroTrax argued that using auction revenues to pay for relocation would encourage participation from smaller firms because they would not face any uncertainty about total spectrum costs and would be able to bid the full amount they judge the spectrum to be worth. 43 Cingular noted that this approach is better because potential and winning bidders would not need information regarding classified or sensitive facilities, and because auction revenues would likely be higher. 44

24. We appreciate the arguments advanced by commenters on this issue however, as several commenters have acknowledged, 45 existing law requires that new non-Government licensees reimburse the Federal entity for relocation costs and it does not allow for reimbursement through auction proceeds. 46 In fact, PCIA stated that several entities have been actively pursuing legislative relief. 47 Accordingly, in the absence of a statutory change, auction proceeds will not be used to reimburse Federal entities for relocation costs.

25. The NPRM proposes a rule that requires Federal entities to provide NTIA with the marginal costs anticipated to be associated with relocation or modification at least 240 days prior to an FCC auction. 48 Pursuant to the NPRM, NTIA would forward that information to the FCC within 180 days prior to an auction. 49

26. Mobex stated that the time line proposed in the NPRM is unduly long and would impair the Commission's objective of bringing new, competitive services to the public expeditiously. 50 Mobex further stated that the time periods in the NPRM could prevent an auction from occurring for as much as two years from the present time. Mobex suggested that because all Federal entities can be “deemed to have notice of the Administration's proposals now, they should be planning now, and NTIA should require the submission of the agencies' marginal cost data 30 days after the effective date of the NTIA order * * * [and] NTIA should then provide that cost information to the FCC within 15 days after receiving it.” 51

27. DOD noted that the requirement for agencies to notify NTIA of the marginal costs 240 days prior to an auction does not allow Federal entities the ability to provide the most up-to-date and accurate cost data. 52 DOD believes that the rules must reflect the complexity of the processes each Executive branch agency and the FCC must take in order to successfully auction Federal spectrum. 53 DOD requested that NTIA work with the Commission and its companion rules to provide agencies a more reasonable time frame to provide cost data. 54 In response to Mobex's proposal that Federal entities present their cost data to NTIA 30 days after the effective date of the rules, DOD argued that 30 days will be insufficient for DOD to undertake the complex task of developing marginal costs. 55 DOD stated that it is important for costs to be developed as close to the auction date as feasible and that, in some circumstances, identification of replacement spectrum will be a condition precedent for the estimation of marginal costs to relocate. 56

28. The timeframe established in the NPRM was established to give NTIA a sufficient amount of time to gather pertinent information from the Federal entities and to put that information into a relevant format to forward to the FCC. More importantly, the time frame gives the FCC a reasonable amount of time to provide potential bidders with “sufficient time to develop business plans, assess market conditions, and evaluate availability of equipment for the relevant services.” 57 Many of the comments received in this proceeding have expressed the importance and necessity of bidders being well informed of potential costs so that they can form bidding strategies. Hence, the time frame proposed is also an attempt to give bidders as much time as possible to consider potential costs associated with bidding on licenses.

29. Mobex argued that the proposed time period established for Federal entities to submit costs could prevent an auction from occurring for as much as two years. It is the auction date that drives the time that Federal entities must submit costs and not the other way around. With respect to DOD's argument that the proposed time-period would not allow the Federal entities to provide up-to-date cost information, we note that any cost information provided prior to an auction and prior to actual relocation would necessarily not be up-to-date. In fact, DOD noted that costs submitted prior to an auction may have to be modified post-auction. 58 We note also that DOD did not suggest a time prior to an auction that would be suitable or reasonable for it to provide up-to-date estimated cost information. Accordingly, we adopt as final the time frames set forth in the proposed rules.

30. Mobex asserted that “[p]ursuant to the Act, NTIA has proposed to establish a Relocation Cost Cap, beyond which a non-Federal licensee would not be required to compensate a Federal user for frequency relocation.”  59 Mobex supported the establishment of a relocation cap, and a cap on the costs to be imposed on a non-Federal user in the event that the Federal user decides to reclaim the spectrum. 60 Mobex asserted that a cap is necessary to determine whether to participate in competitive bidding and to establish a bidding strategy. 61

31. Securicor recommended that total relocation costs provided by Federal entities be set as the ceiling in post-auction negotiation and mediation to prevent “new” costs from being introduced after the bidders have relied on the cost valuation in the bid calculation. 62 MicroTrax agreed that a cap would give more certainty to potential bidders prior to an auction, and thus more confidence leading them to participate in the auction. 63 AT&T argued that the Federal entity should have no reimbursement rights to cost overruns ten percent or more over the initial pre-auction estimate. 64

32. DOD stated that it is unable to locate any rule or discussion regarding a relocation cost cap in the proposed rules. 65 DOD further stated that the Act does not authorize a cap on relocation costs or the right to reclaim. 66 DOD maintained that because circumstances change, good faith estimates can be low or high. 67 Finally, DOD stated that there is no suggestion in the statute that estimates cannot be modified post-auction, and thus NTIA has correctly not made such a proposal. 68

33. We agree with DOD that a relocation cap costs cannot be imposed on the Federal agencies. The statute requires any person on whose behalf a Federal entity incurs costs as a result of reallocation shall compensate the Federal entity in advance for such costs. 69 Nothing in the statute indicates that Congress intended to limit or cap the reimbursement of costs incurred by the Federal entity in relocating or modifying their facilities. As a result, the NPRM neither recommended nor discussed a cap on relocation costs. Moreover, we find AT&T's recommendation to limit cost overruns to ten percent over estimated costs to essentially constitute a cap.

34. The NPRM noted that there were Federal power agencies and other Government agencies that were statutorily exempt from the requirements to relocate. 70 We sought comment on whether these agencies could voluntarily relocate, and, if so, whether they would be subject to the proposed rules or left exclusively to voluntary negotiations. Motorola stated that permitting the operation of exempted operations within certain spectrum bands threatens the viability of the use of these bands by non-Government entities. 71 For example, Motorola argued that the usefulness of the 1710 to 1755 MHz band for third generation wireless services would be severely threatened if exempted Federal operations are permitted to operate in that band. 72 Thus, Motorola recommended relocating these exempted Federal users, and requiring that these users submit potential relocation costs at the same time as other Federal users who are subject to mandatory relocation. 73

35. By statute, exempted Federal assignments/facilities are not required to relocate, therefore Federal entities operating on these exempted assignments/facilities are not obligated to provide estimated relocation costs. The final rules, however, permit exempted Federal entities to accept reimbursement for relocation costs in cases of voluntary relocation. In cases where exempt Federal entities wish to relocate, they may negotiate the marginal cost to relocate with the new non-Government licensee in the same manner as non-exempt entities.

36. The NPRM identified the marginal relocation and modification costs that are reimbursable, and proposed to define “marginal costs” as those that would be incurred by a Federal entity to achieve comparable capability of systems relocated to a new frequency assignment or band or otherwise modified. 74 We also stated that marginal costs would include all engineering, equipment, software, site acquisition and construction costs, as well as any legitimate and prudent transaction expenses, including outside consultants, and reasonable additional costs incurred by the Federal entity that are attributable to relocation, including increased recurring costs associated with the replacement facilities.

37. The FAA stated that Federal agencies should be reimbursed for the money spent in developing the estimated costs that the Federal entity must submit to NTIA 240 days in advance of an auction. 75 We note that the definition of marginal costs in the Final rules would permit Federal agencies to recover such costs so long as they could reasonably be attributed to the relocation. Under the current definition of marginal costs, however, Federal agencies would not be permitted to recover costs associated with any estimates prepared as part of a reallocation assessment.

38. DOD noted that the elements that define marginal costs are included in the proposed rule, section 301.110(a), which is not definitional but operational. 76 DOD recommended that these elements be incorporated into the definition of marginal costs found in the proposed “Definitions” section 301.20(l). We agree and will modify the rules accordingly.

39. The NPRM does not require a Federal entity to relocate until a comparable facility is available to it for a reasonable time to make adjustments, determine compatibility, and ensure a seamless transition from an existing facility or frequency band(s) to the new or modified facility or frequency band(s). 77 We proposed to define “comparable facility” to mean that the replacement facility restores the operational capabilities of the original facility to an equal or superior level. We also proposed to use four basic factors to determine comparability of replacement facility: communications throughput, system reliability, operating costs, and operational capability. 78 We noted in the NPRM that these four factors may not be appropriate measures for all Federal Government stations required to relocate, and noted that radar systems, in particular, may require other measurements. 79

40. We further proposed to define the four factors to determine comparability. “Communications throughput” is defined as the amount of information transferred within the system for a given amount of time. For digital systems, communications throughput is measured in bits per second (bps); for analog systems, the communications throughput is measured by the number of voice, video or data channels. “System reliability” is defined in the NPRM as the percentage of time information is accurately transferred within a system. The reliability of a system is a function of equipment failures and the availability of the frequency channel given the propagation characteristics and equipment sensitivity. System reliability also includes the ability of a radio-communications station to perform required functions under stated conditions for a stated period of time. System reliability may involve three distinct concepts: attaining a specified level of performance; the probability of achieving that level; and maintaining that level for a specified time. For digital systems, this would be measured by the percentage of time the bit error rate (BER) exceeds a desired value; for analog transmissions, this would be measured by the percentage of time the receiver carrier-to-noise ratio exceeds the receiver threshold. We noted in the NPRM that, for many DOD systems, performance is defined by sophisticated system specifications as related to specific mission requirements. In measuring/assessing DOD systems, these specific system specifications must be used. “Operating costs” is defined as the costs to operate and maintain the Federal entity's replacement system. New licensees would compensate Federal entities for any increased recurring costs associated with the replacement facilities for five years after relocation. “Operational capability” is defined as the measure of a system's ability to perform its validated functions within doctrinal requirements, including service, joint service, and allied interoperability requirements with related systems.

41. Securicor noted that the totality of costs proposed are, in general, consistent with the notion of comparable facilities. 80 Securicor expressed concern, however, that the NPRM could be interpreted to provide better facilities than those the Federal entities currently use and that relocation should simply put them in a comparable place. Thus, Securicor argued, the Federal entities should not have increased value in their facilities as a result of relocation. We believe that Securicor's concern was addressed in the NPRM. We proposed that marginal costs include costs related to the need to achieve comparable capability when replacing, modifying or reisssuing equipment in order to relocate when the systems that must be procured or developed have increased functionality due to technological growth. Marginal costs would not include costs related to optional increased functionality that is independent of the need to achieve comparable capability. 81

42. The FAA stated that Federal agencies should be reimbursed for operating costs for a minimum of five years, with costs for the years thereafter subject to negotiation between the parties. 82 The FAA believes that a five-year limit may not fully reimburse Federal entities for the costs of relocation. 83 We believe that the parties are free to negotiate on any aspect of relocation, including operating costs. We will not, however, dictate the terms of negotiations between the parties. We believe that five years is a sufficient amount of time for a licensee to compensate a Federal agency for increased recurring costs as described herein. To the extent that the parties wish to extend that period, it may be addressed in the negotiation/mediation period as described herein, but it will not be a mandatory requirement of these rules.

43. In the NPRM, we proposed to adopt a cost-sharing plan in those situations where the requirement to reimburse a Federal entity could disproportionately fall upon one licensee or a small number of licensees. Such a cost-sharing plan would also ensure that a Federal entity is compensated in those circumstances where a portion of the spectrum is not licensed or acquired by any particular licensee. As part of this proposal, we sought comment on the appropriate entity to serve as a clearinghouse to administer a cost-sharing plan.

44. The commenters were supportive of the proposal for a cost-sharing plan and recommended that NTIA adopt an industry-run clearinghouse similar to the one adopted by the Commission in the relocation of microwave incumbents. 84 Specifically, PCIA and ITA recommended that NTIA follow the Commission's example and request interested parties to submit business plans with certain minimum criteria including financial data, timing, accounting methods, confidentiality, neutrality and dispute resolution. 85 PCIA noted that it has prior and continuing experience as a Commission-certified cost-sharing clearinghouse and has recommendations for selecting a qualified clearinghouse. 86 PCIA also offered that it would be fully qualified to serve as a cost-sharing clearinghouse in this matter and relayed its experience in providing clearinghouse functions for the relocation of fixed microwave licensees. 87 AT&T suggested that although the cost-sharing rules in the microwave relocation process have generally worked well, more detailed guidance regarding problem areas and some modification to the rules would speed relocation, increase the fairness and efficiency of reimbursement, and reduce conflict. 88 AT&T also stated that any clearinghouse should be funded by auction proceeds throughout the life cycle of the clearinghouse, which could last beyond the sunset date. 89

45. DOD did not take a position on any particular plan with respect to a cost-sharing plan, but states that it will work with the private sector to address this complex issue. 90 DOD provided examples of the complexity of its systems and the possible difficulties that would burden one successful bidder to cover the full cost of relocation. 91 DOD believes that it would be helpful to establish a framework whereby each Federal agency could request that all licensees of frequency assignments affecting a Federal agency participate in a single negotiation process. 92 DOD warned that relocation implementation will not be easy and that successful bidders may need to compensate DOD for multiple systems that are likely to be geographically dispersed throughout the world. 93 Moreover, DOD stated that technical solutions to achieve comparability are likely to be different for different systems. 94

46. We agree with commenters that a cost-sharing plan may be appropriate, in certain circumstances. At the present time, however, we decline to adopt rules to establish such a plan. Instead, we intend, in the near future through a further notice of proposed rulemaking, to develop a cost-sharing plan and seek proposals for a clearinghouse or some other mechanism for administering a cost-sharing plan. At that time, we would make any modifications to our reimbursement rules that are necessary to implement such a cost-sharing plan. The absence of a cost-sharing plan does not adversely affect the scheduled auction of the 2385-2390 MHz band because the FCC has adopted a nationwide licensing plan for that band. However, we recognize that addressing the cost-sharing question would be necessary prior to the auction of bands that are licensed in smaller geographic areas or multiple spectrum bands.

47. The NPRM identifies the type of information that NTIA proposes to provide the FCC regarding unclassified, classified and sensitive Government assignments. 95 Commenters generally argued that more information was needed and that the information proposed was not specific. AT&T submits that the proposed rules do not recognize the potential bidders' need for specific information prior to an auction, and that further disclosure of specific information is essential so that bidders can formulate bidding strategies that take into account likely reimbursement costs or whether to participate in the auction at all. 96 AT&T further states that a lack of necessary information may have the effect of luring bidders into auctions that they otherwise might have not entered, had they fully realized the costs of relocation. 97 Such uninformed participation in the auction could lead to bankruptcy or a default on the awarded licenses. 98

48. Motorola and PCIA noted that Government use of spectrum is inherently different from non-Government use and, as such, non-Government users have limited experience with the systems and face difficulty ascertaining relocation costs for Government equipments. 99 Thus, Motorola argued, it is difficult for non-Government licensees to negotiate in a meaningful way to determine relocation costs after an auction. 100 Motorola recommended that OMB and NTIA, working in conjunction with the Commission, would be in the best position to work with Government users to accurately determine relocation costs prior to an auction. 101 PCIA likewise argued that NTIA should develop procedures that provide final technical cost information to be made available to auction participants well in advance of the auction. 102 PCIA argued that for the relocation/reimbursement process to be effective, the pre-auction cost estimate must be sufficiently definitive. 103

49. Securicor stated that potential bidders should be informed about whether the incumbent facilities can be relocated on a single, local or regional basis, or whether an entire system can be relocated. 104 PCIA noted that information provided should be sufficiently complete to permit bidders to assess relative relocation costs of spectrum blocks within each geographic area. 105

50. With respect to unclassified Government assignments, the NPRM provided the following list of information that we propose to provide to the FCC prior to an auction of the affected bands:  106

(1) List of Government facilities;

(2) Government agency operating each facility;

(3) Location of each facility;

(4) General type of operation and equipments (e.g. fixed microwave tactical mobile radio, etc.);

(5) Whether the facility can be retuned, modified, or must be relocated;

(6) Estimated marginal cost of retuning, modification, or relocation;

(7) Whether the facility overlaps to one or more license areas or spectrum blocks; and

(8) Total estimated costs for all assignments.

51. Commenters maintained that the proposed rules for the release of information regarding unclassified facilities is too broadly defined and more details should be provided. They argued that our proposal to provide information regarding “location of each facility” does not clarify what data would fall within that disclosure requirement, e.g., the general geographical area, the licensed area, specific geographical coordinates such as latitude or longitude, or other information. 107 As an example, AT&T stated that when a microwave or similar facility is being relocated, a potential bidder would need to know, at a minimum, the number of microwave paths for the applicable license area that would need to be relocated. 108 Moreover, AT&T and Securicor maintained that bidders need more detailed information regarding the type, amount, condition and functions of the current equipment being replaced. 109 Finally, AT&T submitted that a simple “yes or no” regarding whether equipment can be retuned is insufficient. 110 According to AT&T, the bidder would need detailed information regarding the agency's analysis in order to determine if the agency's plan is viable or cost-efficient, or whether the bidder should propose a superior plan of its own. 111 AT&T stated that “NTIA's anemic disclosure requirements in the unclassified context would hinder the ability of bidders to evaluate the true costs of their participation in the auction while serving no compelling countervailing purpose such as the protection of important national security information.”  112

52. DOD maintained that NTIA's proposed rules regarding the release of information for unclassified assignments are adequate. 113 DOD argued that its systems are unique and a general mandate of more information will not be helpful. 114 Thus, DOD stated that it will attempt to present information relating to its systems in a meaningful fashion to bidders, and feels it can do more to reach that result on a case-by-case basis. 115 DOD maintained that information regarding whether a facility can be retuned, modified or relocated is an operational decision that can only be made by the Federal entity before it can estimate its marginal costs. 116 DOD further stated that the Federal entity cannot provide information as to whether the facility overlaps one or more licensed areas or spectrum blocks and notes that, while it would know that a nationwide system would overlap licensed areas, it would not be able to make that determination for systems serving smaller areas. 117 DOD stated that it would provide its best estimate of marginal costs taking into account the solution it deems appropriate ( e.g., retuning, modification, relocation) on a pre-auction basis. 118 This estimate, DOD maintained, may not include all relocation costs incurred, and may have to be modified post-auction. 119 DOD noted that neither the licensee nor the Federal entity can know until after negotiation if, for example, “in kind” reimbursement is possible. 120 Thus, DOD maintained that it may not be possible for a Federal entity to provide all relocation costs that would be included in a petition for relocation on a pre-auction basis to NTIA. 121

53. The comments here appear to be two-fold: (1) Commenters want a total and final cost for relocation prior to the auction or; (2) commenters want a validation of the Federal entities' cost estimates. The statute only requires that potential bidders be notified of the estimated relocation or modification costs prior to an auction. 122 Despite this sole requirement, we proposed to provide the estimated cost of relocation, retuning or modification as well as other information related to the Government facility. We understand the commenters' desire for certainty in the actual costs associated with acquiring a license at an auction, but it is unlikely that a Federal entity, prior to an auction, would be able to state unequivocally its total costs to relocate at that time. Congress apparently recognized this difficulty when it required Federal users to submit estimated costs. We encourage the Federal entities to put forth their best estimates, and leave the parties to negotiation and mediation in order to come to an agreement on the actual costs. Commenters also listed additional information that they needed, but gave no compelling reasons for requiring that information. Costs should be the only information that potential bidders require to form a bidding strategy. To the extent that an agency provides a cost estimate, the only reason that a potential bidder would need more information ( e.g., age, condition, type of equipment) would be to validate or challenge the Federal agency's cost estimate. We believe that the parties will have ample opportunity during post-auction negotiations to discuss estimated and actual costs to relocate, retune, or modify.

54. Accordingly, the final rule reflects the list of information contained in the NPRM regarding unclassified Federal assignments with one exception. NTIA will not be able to provide the FCC with information as to whether the facility overlaps into one or more license areas (no.7, para. 50). The proposed licensed area for an auction is determined by the FCC, and without prior knowledge of the licensing scheme to be used in a particular auction, NTIA is not able to make a determination of overlapping facilities. The FCC, however, may be able to make this determination based on other information provided by NTIA, particularly the location of each facility (no. 3, para. 50).

55. The NPRM took a different approach with respect to the treatment of classified Government facilities and sensitive assignments. We proposed that the information that would ultimately be provided to bidders with respect to classified facilities would be a single, consolidated and unclassified figure for the cost of relocating, retuning or modifying. 123 This information would be provided to the bidder with the following condition: to the extent that it is consistent with national security considerations, this figure would be broken down by geographical location and spectrum block. 124 After the auction, the winner would be able to apply for a facility clearance pursuant to the National Industrial Security Program Operating Manual and related individual security clearances. 125 With respect to sensitive assignments, we proposed to provide information in the same manner as classified assignments, except that following the auction, we proposed that the Government agency release the sensitive information to the winning bidder pursuant to a non-disclosure agreement.

56. Cingular stated that under the proposal for sensitive and classified information, potential bidders may lack crucial information concerning the relocation costs associated with a given band of spectrum. 126 Thus, Cingular argued, the risk posed by acquiring encumbered spectrum with unknown liabilities could serve to depress the prices bidders are willing to pay for licences. 127 Moreover, Cingular maintained that such a procedure could exacerbate disputes between Federal incumbents and winning bidders insofar as winning bidders are saddled with a price tag that is significantly higher than what was anticipated. 128 Cingular warned that endless litigation and delay would likely result as licensees attempt to verify relocation expenses. 129

57. AT&T stated that NTIA's proposal with respect to the release of classified information would place bidders in the untenable position of “relying entirely on an unverifiable estimate of costs created by a unknown methodology by a financially-interested Government entity with no real-world cost pressures informing its calculation.” 130 AT&T maintained that far less restrictive methods are available, such as disclosing essential bidding information to company representatives who have the proper security clearances. 131 AT&T also suggested that a neutral panel or an independent consultant with the proper security clearances could review the submitted information. 132

58. Mobex supported NTIA's proposal for dealing with classified and sensitive Government assignments because it would provide the Government with the necessary security while providing non-Government licensees with sufficient information to conduct business in a reasonable manner. 133

59. DOD maintained that the process set forth for releasable classified systems reflect the requirements of Executive Order 12958  134 and related Federal law and regulations regarding the release of or access to classified information. 135 DOD stated that the proposal requiring successful bidders to apply for a security clearance to gain access to classified material as necessary to reach resolution of reimbursement costs, strikes a reasonable balance between national security interests and the bidder's commercial interests. 136

60. We believe that the proposed rule regarding classified assignments strikes a reasonable balance between protecting national security interests and providing auction participants with the necessary information to bid for licenses. Again, commenters have not made a convincing argument for needing more information than that related to cost in order to formulate a bidding strategy. Post-auction, the auction winner or the licensee, with proper security clearances, can have access to classified information consistent with the National Industrial Security Program Operating Manual. With respect to sensitive assignments, NTIA will request that Federal entities review sensitive assignments and consider the releasability of those assignments to the extent possible. Otherwise, we will provide a single, consolidated and unclassified figure for the cost of relocating, retuning or modifying sensitive assignments, and require that the winning bidder or licensee sign a non-disclosure agreement regarding sensitive information pertaining to the Federal assignment, if required. The consolidated figure would be broken down by geographical location and spectrum block to the extent possible.

61. The NPRM sets out proposed rules regarding negotiation and/or mediation between the Federal entities and the winning bidders and licensees. DOD objects to the proposed rules as they relate to issues other than costs. 137 Proposed rule 301.120(a) provides in part that “parties are encouraged to resolve any differences with respect to relocation or modification costs or any other related issues * * *”  138 According to DOD, 47 U.S.C. section 923(g)(1)(E) only permits NTIA and the FCC to develop rules resolving differences between the Federal Government and licensees with respect to estimates of relocation or modification costs. Thus, DOD believes that the mediation and negotiation process should not include issues other than cost. 139

62. We believe that DOD's interpretation of the statute is too restrictive. Initially, we note that costs, or issues closely related to costs, will be the primary focus of any negotiation or mediation. We believe, however, that issues other than costs will arise in these negotiations and that these rules are intended to incorporate those issues. For example, the Petition for Relocation clearly gives NTIA the authority to make determinations on a number of issues other than costs. Pursuant to the statute, when NTIA is presented with a Petition for Relocation, it must make a determination on whether the person seeking relocation has guaranteed to pay all relocation costs, whether all activities necessary for relocation have been implemented, and whether replacement facilities, equipments modifications or other changes have been implemented. 140 Thus, the statute gives NTIA authority to make determinations on issues other than costs. More importantly DOD admits in this proceeding that NTIA has the authority to make a determination “that the proposed use of the spectrum frequency band to which the Federal entity will relocate its operations is (i) consistent with obligations undertaken by the United States in international agreements and with United States national security and public safety interests; and (ii) suitable for the technical characteristics of the system and consistent with other uses of the band.”  141 This issue, which DOD admits NTIA can make a determination on, does not relate to cost. We believe that the statute provides authority for NTIA to promulgate rules that permit the parties to negotiate and/or mediate about relocation or modification costs “or any related issues.” The rules that we adopt in this proceeding are intended to afford parties enough flexibility in their negotiations to ensure that the Federal agencies are fully reimbursed and that the spectrum is made available to the private sector in an expeditious manner. We see no benefit in limiting the issues that the parties wish to negotiate. Thus, we adopt the proposed rules regarding negotiation and mediation.

63. The NPRM discusses the Petition for Relocation, which a licensee seeking to relocate a Federal entity must submit to NTIA in order for NTIA to eventually limit or terminate the Federal entity's license. 142 The statute requires NTIA to limit or terminate the Federal entity's licenses within six months after receiving the petition if the following requirements are met:

(A) The person seeking relocation of the Federal Government station has guaranteed to pay all relocation or modification costs incurred by the Federal entity, including all engineering, equipment, site acquisition and construction, and regulatory fee costs;

(B) All activities necessary for implementing the relocation or modification have been completed, including construction of replacement facilities (if necessary and appropriate) and identifying and obtaining new frequencies for use by the relocated Federal Government station;

(C) Any necessary replacement facilities, equipment modifications, or other changes have been implemented and tested to ensure that the Federal Government's station is able to accomplish its purpose; and

(D) NTIA has determined that the proposed use of the spectrum frequency band to which the Federal entity will relocate is:

(i) Consistent with obligations undertaken by the United States in international agreements and United States national security and public safety interests; and

(ii) Suitable for the technical characteristics of the system and consistent with other uses of the band. 143

64. According to DOD's comments, NTIA is only required to make a determination on the fourth condition, i.e., “the proposed use of the spectrum frequency band to which the Federal entity will relocate is consistent with * * *.”  144 With respect to the other three conditions, DOD maintained that NTIA should defer to the Federal entity. DOD recommended that the proposed rules that reference NTIA's determination on a Petition for Relocation be changed to reflect that interpretation. 145 Moreover, DOD recommended that the proposed rule be amended to require NTIA to serve a copy of the Petition to Relocate on the affected Federal entity. 146 DOD also claimed that the proposed rule stating that NTIA may consult with the Office of Management and Budget and other executive branch agencies in making its determination, is not necessary because “NTIA can always consult with OMB or other agencies.”  147

65. DOD's view is overly narrow in this area. If the statute did not contemplate that NTIA would make a determination on all of the factors surrounding a Petition for Relocation, then there would have been no need for a party to submit a Petition for Relocation to NTIA. Moreover, Congress clearly identified that portion of the Petition for Relocation upon which NTIA could not solely make a determination. Subsection 2(D) provides that NTIA must consult with the Secretary of Defense, the Secretary of State, or other appropriate officers of the Federal Government when determining whether the Petition for Relocation is consistent with obligations undertaken by the United States in international agreements and with Untied States national security and public safety interest. 148 If NTIA was required to consult with or defer to other agencies on other Petition for Relocation factors, Congress would have expressly made that clear, as it did in section 2(D). “Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.”  149 Accordingly, DOD's proposal that NTIA defer to the Federal entity on a Petition for Relocation is rejected, and NTIA will make its own determination on the factors presented in a Petition for Relocation.

66. The NPRM sought comments on the requirement that parties enter into non-binding arbitration if they have not reached agreement after the negotiation/mediation period and have not agreed to extend such period, or if the time on a prior extended negotiation/mediation period has expired. The arbitrator's non-binding decision may then be requested by NTIA as part of the record in a petition for relocation. The American Arbitration Association (AAA) noted that the disputes likely to arise from these proceedings would be well suited for resolution through arbitration. In fact, the AAA suggested using binding arbitration in disputes related to cost sharing. 150 DOD supported the use of non-binding arbitration when the parties do not come to an agreement and notes that it is not able to engage in binding arbitration at this time. 151

67. As mentioned, Congress authorized NTIA and the FCC to develop procedures for the implementation of relocation of Federal Government stations, including a process for resolving any differences that may arise between the Federal Government and commercial licensees regarding estimates of relocation or modification costs. 152 The Administrative Dispute Resolution Act (ADRA), 153 as amended, was enacted to authorize and encourage the use of alternative means of dispute resolution by Federal agencies. Congress recognized that the use of prompt and informal methods of dispute resolution, such as conciliation, mediation and arbitration, yields significant cost-savings and efficiencies, among other advantages, and results in outcomes that are more stable and less contentious. 154 We note DOD's comments regarding its inability to engage in binding arbitration pursuant to the ADRA, and because other agencies may likewise be prohibited from engaging in binding arbitration, we will not include it in our rules as the AAA recommends. Accordingly, we adopt with minor changes the proposed rule with respect to non-binding arbitration.

68. AT&T recommended that NTIA narrowly construe the Government's right to reclamation under title 47 U.S.C. section 923(g)(3), which requires the non-Government licensee to take reasonable steps to remedy defects or to move a Federal entity back to its original spectrum if that entity demonstrates that the new facility is not comparable to the original facility. 155 AT&T argued that the imposition of such burdens on licensees is inappropriate when Federal entities have failed to raise such comparability issues with the auction winners. 156 We noted in the NPRM that a Federal entity must demonstrate “to the FCC” that its new facilities are not comparable in order to reclaim previously held facilities. 157 We also noted that the FCC would be promulgating rules regarding a Federal entity's right to reclaim. 158

69. As required by the Regulatory Flexibility Act, 159 an Initial Regulatory Flexibility (IRFA) was prepared for the NPRM. Written comments were requested but none were submitted that directly addressed the issues raised in the IRFA. There was very little mention of small businesses in the comments submitted in response to the NPRM. The comments that addressed small businesses are discussed in the text of the final rules, and repeated below. None of the comments received raised issues with respect to the impact of these rules on small businesses. NTIA has prepared a Final Regulatory Flexibility Analysis of the expected impact on small entities of this rule. NTIA's final regulatory flexibility analysis, in accordance with the Regulatory Flexibility Act  160 is as follows:

70. Need for, and Objectives of, the Rules: This rulemaking proceeding implements procedures pursuant to NDAA-99 for the reimbursement of relocation costs to Federal entities by the private sector as a result of reallocation of frequency spectrum. NDAA-99 requires the private sector to reimburse Federal entities for the costs that are incurred as a result of the reallocation of radio spectrum mandated by OBRA-93 and BBA-97 and future reallocations. Moreover, NDAA-99 requires NTIA and the Commission to “develop procedures for the implementation of [relocation] which * * * shall include a process for resolving any differences that arise between the Federal Government and commercial licensees regarding estimates of relocation and modification costs.”  161 These rules provide relevant information regarding reimbursement, such as: identification of frequency assignments eligible for reimbursement; a definition of marginal costs that are reimbursable; a description of the dispute resolution process; and criteria for determining a comparable facility.

71. Issues Raised in Response to the IRFA: Although requested, there were no comments that raised issues directly in response to the IRFA. There were, however, comments submitted in response to the NPRM that addressed the economic impact of these rules. As noted in the discussion of the the final rules, commenters recommended that, if relocation costs were to be paid from auction proceeds, the overall financial burden associated with these rules would be reduced. AT&T, for example, argued that reducing the overall financial obligations of potential bidders to payment for the spectrum would increase the number of bidders that could participate in the auction.”  162 MicroTrax states that paying relocation costs from auction revenues would encourage participation from smaller firms because such firms would not face uncertainty about total spectrum costs. 163 Motorola likewise argues that paying relocation costs from auction revenues would provide a level of certainty and, in turn, enable new entrants faster access to encumbered spectrum. 164

72. Although there may be some merit in the arguments made by commenters, the legislation does not permit auction proceeds to be used to pay for relocation costs. Although reimbursement from auction proceeds may be a less expensive alternative and one that could possibly lessen the economic impact on small businesses, that is not an alternative that is legally permissible at this time. We note, however, that the President's Budget for Fiscal Year 2003 included a proposal to amend the current statute to streamline the reimbursement process by creating a central spectrum relocation fund in which auction receipts sufficient to cover agencies' relocation costs would be deposited, and from which Federal agencies would be reimbursed. 165 Legislative action would be necessary to implement this proposal. We do not believe that we have the statutory authority under the current law to pursue this alternative at this time.

73. Description and Estimate of the Number of Small Entities to Which the Rule Will Apply: None of the comments submitted in response to the NPRM addressed the number of small entities to which these rules will apply. As noted in the IRFA, it is difficult, if not impossible to estimate the number of small entities, if any, to which these rules will apply. Although NTIA makes reallocated spectrum available to the FCC for auction to the private sector, NTIA has no control over: (1) The auction participants; (2) the auction winners; or (3) the service for which the spectrum will be used. A determination of those factors is critical to providing a description or estimate of the number of small entities to which these rules will apply. There is no way, at this time, to predict the types of entities that will be potential bidders for spectrum that the FCC makes available in the future. In fact, entities that are not even in existence at this time may be participating in future auctions for particular spectrum frequencies and be subject to these rules. We note, however, that the FCC promulgates service rules prior to auctions that provide a description and estimate of the number of small entities that are affected by that particular auction.

74. Steps Taken to Minimize Significant Economic Impact on Small Entities and Significant Alternatives Considered: The NPRM proposed and solicited a number of alternatives to minimize the economic impact on small entities. For example, the NPRM solicited comments on whether a Federal entity could retune or modify its equipment outside of the upper or lower portion of the incumbent band. Retuning is usually less expensive to implement and can save an agency a considerable amount of money, thereby reducing the reimbursement obligation of the private sector. We received comments supportive of this alternative and, therefore, we will permit Federal agencies to retune or modify their equipment when feasible. This alternative will minimize the economic impact of small entities to the extent that they bid on licenses subject to reimbursement.

75. Another alternative suggested in the NPRM was to permit Federal entities to relocate to a landline communications system or a commercial radio service. As stated in the text of the final rules, commenters overwhelmingly agreed that agencies should be reimbursed for relocation costs if they choose to relocate to a landline or commercial service. This option may be a cost-effective alternative to the Federal entity relocating to another frequency, and thus may reduce the reimbursement obligation borne by the private sector and, perhaps, small entities.

76. The proposed rules address those circumstances where one auction winner could be made to pay for the entire spectrum allocation held by a Federal entity despite the fact that only a portion of the bandwidth may be needed. For example, there may be multiple bidders in a geographic area for a small bandwidth that may result in division of a Federal entity's bandwidth. Because there is no mechanism in place to compensate the Federal entity for that portion of the spectrum that is not licensed or acquired by a particular licensee, relocation costs could disproportionately fall upon one auction winner. In the NPRM, we proposed establishing a clearinghouse to administer a cost-sharing plan. The comments received in response to the NPRM were supportive of the proposal, and recommended that NTIA adopt an industry-run clearinghouse similar to the one adopted by the FCC in the relocation of microwave incumbents. In the text of the final rules, we note our intention to seek proposals for a clearinghouse or some other entity to administer a cost-sharing plan. A cost-sharing plan would spread the financial burdens among the auction participants, thereby reducing the overall financial obligation on an individual licensee.

77. The NPRM solicited proposals on other alternatives that may reduce reimbursement expenses and thus reduce the economic impact on small entities. As stated above, the only alternative suggestion that we received from the comments was to pay for reimbursement from auction proceeds. As noted above, the current legislation does not permit us to pursue this alternative.

78. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements: These rules do not impose reporting, recordkeeping or other compliance requirements on the private sector, small entities or otherwise.

79. NTIA prepared an Analysis of Benefits and Costs of the Mandatory Reimbursement Rules (Analysis). To view the complete analysis, please contact Milton Brown at the address and telephone number provided above. In summary, the analysis reveals the difficulty in performing a realistic cost-benefit analysis because of the number of factors that cannot be foreseen at this stage that would weigh heavily into such an analysis. Although NTIA makes reallocated spectrum available to the Federal Communications Commission (FCC) for auction to the private sector, NTIA has no control over: (1) The auction participants; (2) the auction winners; or (3) the service for which the spectrum will be used. Those determinations are all within the authority of the FCC and play a significant role in any analysis of benefits or costs. We note in the analysis that this rulemaking examined a number of alternatives to accomplish the statutory directive. For example, we determined that allowing Federal entities to retune equipment, and to relocate to landline or commercial systems may be a cost-effective alternative to relocating to another set of frequencies. This rulemaking also explored the option of cost-sharing in those situations where relocation costs could disproportionately fall upon one auction winner. We note also that the benefits of the rule include the addition of commercial wireless services for consumers. Without the rules, there would be a cloud of uncertainty over the auction, the relocation process, and the reimbursement obligations. These issues are discussed in greater detail in the full analysis, as well as in the text of the discussion section of the final rules.

The FMCSA believes that an additional 30 days are necessary to fully consider all of the comments received on the rule, including those related to potential environmental impacts of this action. The FMCSA's implementation of this action without opportunity for public comment, effective immediately upon publication today in the Federal Register , is based on the good cause exceptions in 5 U.S.C. 553(b)(B) and 553 (d)(3). Seeking public comment is impracticable, unnecessary, and contrary to the public interest. The brief 30-day delay in effective date is necessary to give agency officials the opportunity to do further analysis in response to the comments. Given the imminence of the effective date, seeking prior public comment on this brief delay would have been impracticable, as well as contrary to the public interest in the orderly promulgation and implementation of regulations. The imminence of the effective date is also good cause for making this action effective immediately upon publication.

Pound net leaders with greater than or equal to 12 inches (30.5 cm) stretched mesh and leaders with stringers have been documented to incidentally take sea turtles (Bellmund et al. , 1987). High strandings of threatened and endangered sea turtles are documented on Virginia beaches each spring, and the magnitude of the stranding event has increased in recent years. No cause of mortality is immediately apparent for the majority of turtles that strand in Virginia, but the circumstances surrounding the recent stranding events are consistent with fishery interactions. In 2001, NMFS explored the various mortality sources potentially contributing to the high annual stranding event. While a number of fisheries may contribute to sea turtle strandings, based upon the best available information, pound net leaders were a likely contributor to high sea turtle strandings in Virginia in May and June of 2001. The documented incidental take of sea turtles in leaders, the ability of leaders to continue to take sea turtles in the future, and the annual high mortality of sea turtles in Virginia in May and June are of particular concern because approximately 50 percent of the Chesapeake Bay loggerhead foraging population is composed of the northern subpopulation, a subpopulation that may be declining. In addition, recently most of the stranded turtles have been juveniles, a life stage found to be critical to the long term survival of the species. This action is necessary to provide for the conservation of threatened and endangered turtles by minimizing incidental take in the Virginia pound net fishery during the spring. Details concerning the justification for the pound net leader restriction regulations and the high sea turtle stranding events in Virginia were provided in the preamble to the proposed rule (67 FR 15160, March 29, 2002) and are not repeated here.

To conserve sea turtles, the Assistant Administrator, NOAA, (AA) prohibits the use of all pound net leaders measuring 12 inches (30.5 cm) or greater stretched mesh and all pound net leaders with stringers in the Virginia waters of the mainstem Chesapeake Bay and portions of the Virginia tributaries from May 8 to June 30 each year. The area where this gear restriction applies includes the Virginia waters of the mainstem Chesapeake Bay from the Maryland-Virginia state line (approximately 37° 55′ N. lat., 75° 55′ W. long.) to the COLREGS line at the mouth of the Chesapeake Bay; the James River downstream of the Hampton Roads Bridge Tunnel (I-64; approximately 36° 59.55′ N. lat., 76° 18.64′ W. long.); the York River downstream of the Coleman Memorial Bridge (Route 17; approximately 37° 14.55′ N. lat, 76° 30.40′ W. long.); and the Rappahannock River downstream of the Robert Opie Norris Jr. Bridge (Route 3; approximately 37° 37.44′ N. lat, 76° 25.40′ W. long.).

This prohibition of pound net leaders is effective upon filing through June 30 for this year, and from 12:00 a.m. local time on May 8 through 11:59 p.m. local time on June 30 each subsequent year. For the duration of this gear restriction, fishermen are required to stop fishing with pound net leaders measuring 12 inches (30.5 cm) or greater stretched mesh and pound net leaders with stringers in the designated area.

In addition to establishing the annual restriction on leader mesh size and leaders with stringers, this interim final rule also establishes year-round reporting (enforceable after OMB approval pursuant to the Paperwork Reduction Act (PRA)) and monitoring requirements for this fishery.

This interim final rule also establishes a framework mechanism by which NMFS may make changes to the restrictions and/or their effective dates on an expedited basis in order to respond to new information and protect sea turtles. Under this framework mechanism, if NMFS believes based on, for example, vessel reports, observer information, or water temperature and the timing of sea turtles' migration, that sea turtles may still be vulnerable to entanglement in pound net leaders after June 30, the AA may extend the effective dates of the prohibition established by this regulation. Should an extension of the effective dates of the prohibition of pound net leaders measuring 12 inches (30.5 cm) or greater stretched mesh and pound net leaders with stringers be necessary, NMFS would issue a final rule to be effective upon publication in the Federal Register explicitly stating the duration of the extension of the prohibition. Under this framework provision, such an extension would not exceed thirty days, or beyond July 30. Should NMFS determine that this gear restriction needs to be in place at other times of the year, NMFS would take action either pursuant its emergency rulemaking authority under the ESA or under the Administrative Procedure Act, but not under the framework mechanism established by this rule.

NMFS intends to continue to monitor sea turtle stranding levels and other fisheries active in the Virginia Chesapeake Bay and ocean waters, including pound net leaders with a stretched mesh size measuring less than 12 inches (30.5 cm). If monitoring of pound net leaders during the time frame of the gear restriction, May 8 through June 30 of each year, reveals that one sea turtle is entangled alive in a pound net leader less than 12 inches (30.5 cm) stretched mesh or that one sea turtle is entangled dead and NMFS determines that the entanglement contributed to its death, then NMFS may determine that additional restrictions are necessary to conserve sea turtles and prevent entanglements. Such additional restrictions may include reducing the allowable mesh size for pound net leaders or prohibiting all pound net leaders regardless of mesh size in Virginia waters. Should NMFS determine that an additional restriction is warranted, NMFS would immediately file a final rule with the Office of the Federal Register. Such a rule would explicitly state the new mandatory gear restriction as well as the time period, which may also be extended for up to 30 days by a final rule pursuant to this framework mechanism. The area where additional gear restrictions would apply includes the same area as the initial restriction, namely the Virginia waters of the mainstem Chesapeake Bay from the Maryland-Virginia State line (approximately 38° N. lat.) to the COLREGS line at the mouth of the Chesapeake Bay, and portions of the James River, the York River, and the Rappahannock River.

On March 29, 2002, NMFS published a proposed rule that would prohibit the use of all pound net leaders measuring 12 inches (30.5 cm) and greater stretched mesh and all pound net leaders with stringers in the Virginia waters of the mainstem Chesapeake Bay from May 8 to June 30 each year. Comments on this proposed action were requested through April 15, 2002. Nine comment letters were received during the public comment period for the proposed rule. NMFS considered these comments on the proposed rule as part of its decision making process. A complete summary of the comments and NMFS' responses, grouped according to general subject matter, is provided here.

Comment 1: Six commenters supported the adoption of the proposed regulations to ensure sea turtle populations are not further compromised in the Virginia Chesapeake Bay.

Response: NMFS agrees that the restriction of pound net leaders is necessary to conserve sea turtles listed as threatened or endangered under the ESA.

Comment 2: Two commenters stated that the proposed pound net restrictions may not be effective at reducing spring sea turtle strandings in Virginia waters. Both commenters suggested NMFS consider the contribution of other fisheries active in Virginia during the spring to the high turtle strandings.

Response: NMFS does not believe that pounds nets are the sole source of spring turtle mortalities in Virginia. NMFS does believe that pound nets play a role in the annual spring stranding event. Prohibiting a gear type known to entangle sea turtles, leaders with greater than or equal to 12 inches (30.5 cm) stretched mesh and leaders with stringers, will protect sea turtles from entanglement in pound net leaders while minimizing the impacts to the pound net fishery. However, should sea turtle entanglement in compliant pound net leaders occur, NMFS may enact additional management measures as appropriate.

Based upon available information, it does not appear that another fishery was a significant contributor to the high strandings exhibited in 2001. In fact, a number of the fisheries active in the spring had adequate observer coverage, and few turtle takes were observed. However, NMFS recognizes that variations in fishery-turtle interactions may occur in any given year, and is committed to continued monitoring of fisheries active in Virginia state waters. Again, it should be stressed that NMFS believes that high spring strandings may be a result of an accumulation of factors, most notably fishery interactions, but pound net leaders are known to take sea turtles and likely contribute to the overall strandings.

Comment 3: Three comments were received on the timing of the regulations, namely May 8 to June 30. Two commenters supported the time frame of the restrictions. One commenter felt that the time frame of the restrictions was too long given the distribution of strandings in Virginia waters, and suggested a time period of approximately late May to mid-June.

Response: NMFS believes that, given the available information, the time period for the pound net restrictions is appropriate. From 1994 to 2001, the average date of the first reported stranding in Virginia was May 15. However, sea turtle mortality would have occurred before the animals stranded on Virginia beaches. While the peak of the spring strandings may occur later in May, historical strandings data indicate that sea turtle mortality begins in early May and regulations should be in effect as close to that time as possible if sea turtle protection measures are to be effective at reducing takes in leaders and strandings. In order for the proposed pound net restrictions to reduce sea turtle interactions with pound net leaders and reduce subsequent strandings on Virginia beaches, the proposed measures should go into effect at least 1-week prior to the stranding commencement date, or on May 8 each year. Information submitted with one of the comments shows that in approximately 7 years prior to 1994, the date of the first turtle stranding was earlier than May 15. This supports the implementation of the leader restrictions in early May.

Strandings data from 1999 to 2001 show that the state of decomposition for the majority of stranded turtles progresses with the season, suggesting that most turtles stranding in later June may have been subjected to mortality sources earlier in the season (Mansfield et al. , 2002). Turtles stranding in June may have been dead for anywhere from a few days to two weeks. Whether the differences in decomposition levels by week are statistically significant remains to be determined. Based on historical Sea Turtle Stranding and Salvage Network (STSSN) stranding data, strandings in Virginia typically remain elevated until June 30, indicating that turtles may be vulnerable to entanglement in pound net leaders until this time. Implementing management measures for only a 3 to 4-week period (ending in approximately early to mid-June) may result in a large number of sea turtles remaining vulnerable to pound net leader entanglement after the restrictions are lifted. Furthermore, information submitted with one of the comments shows that the stranding peak persists until late June in some years. In some years the peak period of high strandings may be shorter than the time period of the regulations, but historically, high sea turtle strandings have been documented throughout the proposed time period of the leader restrictions. Implementation of the gear restrictions from May 8 to June 30 will account for stranding peak variability among years and is expected to prevent the occurrence of sea turtle takes in the pound net fishery in the spring and reduce the high numbers of strandings in Virginia. NMFS retains the option to lift the restriction if information such as stranding levels, monitoring, or observations of turtles, suggests that it would be appropriate.

Comment 4: One commenter suggested that the initiation of large mesh and stringer prohibitions coincide with 16°C surface water temperature.

Response: While monitoring surface water temperature and implementing restrictions based on reaching a pre-designated water temperature may account for seasonal variability, enacting regulations based upon real time water temperature is impractical due to the amount of time required for the agency to implement and for fishermen to comply with the regulations, and the potential variability of water temperature within different locations in the Chesapeake Bay and within the water column. NMFS understands that the Virginia Institute of Marine Science (VIMS) has collected strandings data for 22 years, and spring strandings occur every year, generally when surface water temperature reaches 18°C. NMFS has considered historical surface water temperatures (not real time monitoring) in establishing previous area closures, but real time monitoring of water temperature as a trigger for regulations is not practical for this situation, nor is it appropriate given the predictable time period of annual spring strandings in Virginia. Further, NMFS believes that a consistent effective date better enables industry to plan their fishing activities, as fishermen would know in advance specifically when the restrictions would be effective. As mentioned, from 1994 to 2001, the average stranding commencement date in Virginia was May 15. While NMFS recognizes that the commencement date of strandings may vary from year to year, NMFS believes that an average date of May 15 accounts for seasonal variability and should be used as the average date when turtles begin to strand on Virginia shores.

Comment 5: One commenter expressed concern with the delay in publishing the proposed regulations and the limited public comment period.

Response: NMFS has been working with the Commonwealth of Virginia, in particular the Virginia Marine Resources Commission (VMRC), since August of 2001 to address potential sea turtle interactions with Virginia pound nets. In September 2001, VMRC forwarded to NMFS a proposed plan, developed in conjunction with the pound net industry and VIMS, intending to reduce sea turtle interactions with pound net leaders in Virginia. As NMFS wanted to ensure that the Commonwealth of Virginia had ample opportunity to develop a plan for reducing sea turtle interactions with pound nets, discussions on the specifics and content of this proposed plan continued until mid-December 2001. By that time, it became clear that NMFS should initiate its own rulemaking process to develop a plan to conserve listed sea turtles. NMFS has been committed to enacting regulations on the Virginia pound net fishery as expeditiously as possible, in order to give the fishermen advance notification and ensure measures are in place before the historical period of high strandings. NMFS issued the proposed rule as soon as possible after taking the necessary time to acquire and sufficiently analyze the available data, explore all of the management alternatives, and prepare and review the appropriate documents.

Further, NMFS believes that the 15-day comment period was a reasonable amount of time given the relative simplicity of the proposed rule, consisting of only a restriction on leader mesh size and use of stringers, plus the framework procedure. A notice of the proposed regulation was also sent to all Virginia pound net licensees on March 29, 2002, to augment notice provided through the Federal Register and expedite public comments.

Comment 6: One commenter supported that the strandings were specifically a result of fishery interactions.

Response: NMFS believes that the circumstances surrounding the recent spring strandings are consistent with fishery interactions, which include relatively healthy turtles prior to the time of their death, a large number of strandings in a short time period, no external wounds on the majority of the turtles, no common characteristic among stranded turtles that would suggest disease as the main cause of death, and turtles with fish in their stomach. Sea turtles are generally not agile enough to capture finfish under natural conditions, and thus would only consume large quantities of finfish by interacting with fishing gear or bycatch (Mansfield, et al. 2002, Bellmund, et al. 1987, Shoop and Ruckdechel 1982).

Comment 7: Two commenters felt that there is not a significant relationship between pound nets and sea turtle strandings. Both commenters noted that there are currently fewer pound nets in the Chesapeake Bay, but strandings have increased in recent years. One commenter was concerned that justification for the proposed regulations were based upon 1980s strandings data, when there were more pound nets being fished.

Response: NMFS recognizes that there are currently fewer pound net leaders, in particular those utilizing large mesh leaders, in the Virginia Chesapeake Bay in comparison to the 1980s. NMFS disagrees that turtle strandings cannot be attributed to large mesh leaders because strandings have increased while the number of large mesh leaders have decreased. The best available information does date back to the mid-1980s, but this study found that in 173 pound nets examined with large mesh leaders (defined as greater than 12 to 16 inches (30.5 to 40.6 cm) stretched mesh), 30 turtles were found entangled (0.2 turtles per net ; Bellmund et al. , 1987). This study also found that in 38 nets examined with stringer mesh, 27 turtles were documented entangled (0.7 turtles per net ). NMFS recognizes that the increase in documented sea turtle mortalities could be a function of the increase and improvement in the level of stranding effort and coverage that has occurred, as well as a function of the apparent increase in abundance of the southern population of loggerheads, which make up approximately 50 percent of the loggerheads found in the Virginia Chesapeake Bay. However, even with a decline in pound net leaders, interactions proportional to what have been documented in this gear type in the past could lead to an increase in strandings. Listed sea turtles in the Chesapeake Bay must be protected to ensure that populations recover.

In response to the claim that the information available to link the recent sea turtle mortalities to the pound net fishery is limited and old, NMFS recognizes that many of the documented sea turtle entanglements in large mesh and stringer leaders are from the 1980s, but the factors involved in entanglement remain the same now as they were then—sea turtle head and flipper size relative to leader mesh size and stringer use. Large mesh nets (regardless of how many are in the Chesapeake Bay) still entangle sea turtles, based upon the mesh size and manner in which they are fished. Additionally, the ESA requires NMFS to use the best available scientific information. There have been several documented sea turtle entanglements in large mesh leaders that were determined to have caused mortality by drowning. While it is possible that some turtles documented in 2001 may have been dead prior to entanglement and floated into the leaders, there have been observations of live turtles entangled in leaders under water.

Few sea turtles strand with evidence of fishery interactions, but the lack of gear on a carcass is not indicative of a lack of fishery interaction (see response to Comment 6). While none of the sea turtles in Virginia have had pound net fishing gear on them when they have washed up on shore, it is not unusual for turtles to strand without gear on them, especially given the fact that pound net leaders are fixed fishing structures and secured to stakes set in the ground. It is very unlikely that a turtle would dislodge the gear so that it remained on the turtle when it stranded.

Comment 8: Three commenters disagreed that pound nets are a significant factor in the high spring stranding events, given other potential mortality sources in Virginia waters (e.g., boat strikes). One commenter stated that the location of the average percentage of strandings (55 percent) from 1986 to 2001 occurred in Virginia Beach Ocean and Western Chesapeake Bay areas, and it is likely that other mortality sources outside of Virginia waters resulted in a number of these strandings.

Response: NMFS recognizes that additional mortality sources may result in sea turtle strandings in Virginia during the spring. Consequently, NMFS has investigated other potential causes for the annual spring sea turtle mortality event and concludes that natural or non-fishing related anthropogenic causes are not consistent with the nature of most of the strandings. The absence of other species in the most recent stranding events and the absence of consistently high sea turtle strandings in other Atlantic states during the time period when turtles are migrating are inconsistent with cold stunning, a toxic algae bloom, epizootic or other disease. Further, the stranded turtles exhibited no major traumatic injuries such as might be caused by dredging or blasting. From May through December 2001, Virginia STSSN members documented 34 turtles with injuries that appeared to be from boat strikes, 4 entangled or hooked in hook and line fishing gear, and 2 entangled in longline/trotline gear, but most of the stranded sea turtles appeared to be relatively healthy. It is possible that vessel collisions or recreational fishing gear resulted in some spring strandings, but if these factors were a major contributor to strandings, a larger number of stranded sea turtles would exhibit carapace wounds or imbedded fish hooks. As mentioned, the majority of the strandings were consistent with fishery interactions. Nevertheless, NMFS will continue to explore and consider the contributions of other mortality sources to the annual spring stranding event.

It is possible that some Virginia Chesapeake Bay turtle strandings are swept into the Chesapeake Bay from elsewhere, or that some sea turtles are swept out of the Chesapeake Bay and onto ocean-facing beaches (if they strand at all), as the water patterns and currents entering or leaving the Chesapeake Bay could concentrate sea turtle strandings around the mouth of the Chesapeake Bay. However, it is likely that in the Virginia Chesapeake Bay, most mortalities have occurred relatively close to the stranding location (Lutcavage, 1981). Further, it has been estimated that strandings on ocean facing beaches represent, at best, only approximately 20 percent of the at-sea nearshore mortality, as only those turtles killed close to shore are most likely to strand (NMFS SEFSC 2001). NMFS agrees that, historically, most of the spring strandings in Virginia have been documented on the ocean facing beaches south of Cape Henry and the inshore beaches in the southern Chesapeake Bay. However, the majority of the spring strandings in 1998, 2000, and 2001 occurred in inshore waters with concentrations around the southern tip of the eastern shore and the southern portion of the Chesapeake Bay around Virginia Beach and Hampton. Strandings in 2001 were of particular concern because the majority of the strandings in May and June occurred along the Chesapeake Bay side of the eastern shore of Virginia and along the southern tip near Kiptopeke and Fisherman's Island, indicating a possible localized interaction. Pound nets are the dominant fishing gear observed immediately offshore of this area. During 1980, high strandings were also documented in areas where there were large numbers of working pound nets (Lutcavage, 1981).

As mentioned in the proposed rule (67 FR 15160, March 29, 2002), NMFS evaluated the potential inshore and offshore contributors to high strandings in 2001. While a number of the fisheries active in Virginia were observed, NMFS did not detect significant sea turtle incidental take. However, additional observer coverage is needed to better determine the level of sea turtle interactions with the various fisheries operating during the spring. NMFS intends to continue both monitoring and characterizing the offshore and nearshore Virginia fisheries that may potentially contribute to the spring strandings.

As presented in the responses to Comments 6 and 7, sea turtle interactions with fishing gear are not always apparent. NMFS must rely on the best available information to determine the cause of sea turtle mortality and enact appropriate measures to reduce this mortality. Based on the best available information, including the nature and location of turtle strandings, the type of fishing gear in the vicinity of the greatest number of strandings, the lack of observed takes in other fisheries operating in Virginia waters during the 2001 stranding period, the known interactions between sea turtles and large mesh and stringer pound net leaders, and several documented sea turtle entanglements in pound net leaders, NMFS concluded that pound nets contributed to the high sea turtle strandings in Virginia in May and June 2001.

Comment 9: Two commenters noted that the recent data on sea turtle entanglements in pound net leaders are limited (e.g., 10 turtles documented in 2001).

Response: NMFS recognizes that the data on observed sea turtle entanglements in pound net leaders are limited, and that other factors likely contribute to some spring sea turtle mortality in Virginia. The level of sea turtle interactions with other potential mortality sources (e.g., other fisheries) has not yet been conclusively determined, but available information suggests that the level of interaction between non-pound net fisheries and sea turtles in Virginia waters during the spring has not been high. Conversely, NMFS has data indicating that pound net leaders have resulted in sea turtle entanglements. The documentation of live sea turtles entangled in pound net leaders (e.g., 1 documented in 2001, 2 in 2000) with limited observer coverage, as well as previous scientific studies indicating that entanglements occur in large mesh and stringer leaders, indicates that sea turtle entanglements occur in pound net leaders and the frequency of these interactions may not have been sufficiently documented in recent years.

The exact number of turtles found in association with pound net leaders has been difficult to definitively determine, due to the number of entities involved in collecting the data and the interpretation of whether the turtle was entangled in the leader, floated in post-mortem, or impinged on the leader and died as a result. It is likely that many more turtles interacted with pound net leaders last year than were reported. Observers (NMFS, VMRC, and VIMS) did not begin to monitor pound nets until mid-June, well after the high stranding period, so some sea turtle entanglements could have been missed earlier in the season. NMFS has established a reporting system for 2002 to ensure that all involved monitoring personnel are collecting the appropriate data should an entanglement of a sea turtle in a pound net leader be documented.

Comment 10: One commenter noted that there were no turtle entanglements observed during side scan sonar surveys conducted on 55 active leaders from June 1 to October 31, 2001.

Response: The use of side scan sonar as a means to detect sub-surface sea turtle entanglements has potential, but is still being explored. A number of factors may influence the utility of sonar to detect sea turtle entanglements, including weather, sea conditions, water turbidity, the size and decomposition state of the animal, and the orientation of the turtle in the net. Further research on the effectiveness and practicality of side scan sonar techniques in observing sea turtle entanglements in pound net leaders, and real time verification of the side scan sonar surveys by video, will be conducted during May and June 2002. Until this technique can be validated with ground truthing and verification, NMFS is reluctant to base management decisions on the lack of sea turtle acoustical signatures.

Additionally, sonar surveys conducted after the initiation of the mass stranding period may not be reflective of what was occurring in May. It appears that a large number of spring sea turtle mortalities occur in May, given the decomposition states of the stranded sea turtles (Mansfield et al. , 2002). Sea turtles may be more common in the upper water column in May, where the surface temperatures range from 18° to 24° C (Musick and Mansfield, 2001), but they are known to occur in water temperatures 11° C or greater. As such, turtles may be periodically near the bottom during the spring and subject to entanglement in leaders sub-surface. The lack of sea turtle acoustic signatures in pound net leaders at depth during the VIMS June to October 2001 survey does not necessarily indicate that turtles are not periodically entangled sub-surface during the spring.

Comment 11: One commenter stated that the majority of strandings on the eastern shore were severely decomposed, when one would expect much fresher turtle strandings if the pound nets in close proximity to the eastern shore were responsible for the strandings.

Response: NMFS can understand how one might think that mortality sources close to shore should result in a higher proportion of fresh dead turtles. Nearshore mortality sources also would increase the likelihood for the carcasses reaching the shore. However, one factor that may contribute to the decomposition state of a stranded sea turtle is the duration of time the sea turtle is entangled in the water, or in this case, the pound net leader. It is NMFS' understanding that pound net fishermen do not typically tend their leaders, so a turtle entangled in a leader, even at the surface, may go undetected. While additional information is necessary to adequately determine how often sea turtles become disentangled from pound net leaders, it is plausible that entangled turtles may become dislodged from pound net leaders either by the strong current in certain areas of the Chesapeake Bay, by the decomposition process, or by fishermen disentangling dead sea turtles if detected. This hypothesis needs to be explored, but it is possible that turtles remain in leaders and wash onto beaches several days, or even weeks, after their death in various stages of decomposition from slight to severe.

Comment 12: Two commenters requested additional time to equip leaders with a mesh size that would be in compliance with the regulations.

Response: NMFS is sensitive to the industry's time constraints required to outfit their gear with mesh in compliance with the regulations. However, the time frame for the implementation of this regulation is also of concern, as the large mesh and stringer leader restriction should be in effect 1 week prior to the historical average stranding date to effectively protect sea turtles. Therefore, to maximize the ability to conserve sea turtles, the restrictions should be in effect immediately.

Comment 13: One commenter supported the implementation of the plan proposed by VMRC and the pound net industry (Non-Preferred Alternative 3 analyzed in the EA/RIR), namely the component of the plan requiring pound net leaders with stringers to drop the mesh to 9 feet (2.7 m) below mean low water and to space stringer lines at least 3 feet (0.9 m) apart. This commenter specifically requested implementation of a plan that would permit a leader with 16 inches (40.6 cm) stretched mesh 10 ft (3 m) below the surface.

Response: Lowering the mesh on those leaders using stringers may allow the sea turtles near the surface to swim over the larger mesh leaders and through the stringers. However, sea turtles are still vulnerable to entanglement in leaders more than 9 ft (2.7 m) below the surface. Musick et al. , (1984) documented two sea turtles entangled in pound net leaders approximately 9 ft (2.7 m) below the surface in early June 1983. Turtles may be more common in the upper water column during the spring, but if they are foraging for preferred prey, they are periodically near the bottom, and thus subject to entanglement in leaders more than 9 ft (2.7 m) below the surface. Sea turtle entanglements have been documented in large mesh leaders and are likely to occur in stretched mesh greater than 16 inches (40.6 cm). Without adequate support that these measures will reduce sea turtle entanglement in the stringers themselves and in the mesh dropped more than 9 ft (2.7 m) below mean low water, the specific benefits to sea turtles remain unclear. A detailed description and review of all of the components of this plan are included in the EA/RIR.

Comment 14: One commenter disagreed with NMFS' assumption that fishermen are using the minimum leader mesh size that is operational, and indicated that mesh in compliance with the regulations will not be available by May 8.

Response: NMFS explained in the EA/RIR that, because the data used for the economic analysis did not give the exact location of pound nets, it would assume for the purposes of the impact analysis that fishermen were using the minimum leader mesh size that they believed to be operational. The EA/RIR then described the economic impacts based on that assumption, which provided for a worst-case analysis. However, the EA/RIR also indicated that another scenario is possible; namely that fishermen could switch to a smaller leader mesh size and remain operational. The EA/RIR also described the impacts based on that different assumption. This regulation is necessary to conserve listed sea turtles, so for the regulation to be effective at reducing sea turtle mortality and preventing entanglement in large mesh and stringer pound net leaders, all pound net leaders, in the geographical area affected by the restriction, must have mesh smaller than 12 inches (30.5 cm) stretched mesh during the restricted period or fishermen must remove their non-compliant leaders.

Comment 15: Two commenters supported the framework in the proposed rule, which includes monitoring the smaller mesh pound net leaders and the implementation of additional restrictions if necessary.

Response: NMFS believes that prohibiting leaders with greater than or equal to 12 inches (30.5 cm) stretched mesh and leaders with stringers will reduce sea turtle entanglements and subsequent spring strandings. The framework monitoring program will document any sea turtle interactions with smaller leader mesh sizes, which will provide information beneficial for future management, both in Virginia and potentially in other states. Should the monitoring of pound net leaders during May and June document turtle entanglement, under the framework mechanism NMFS may impose additional restrictions during the gear restriction period on an expedited basis. The gear restriction as proposed and any additional restrictions could be extended by NMFS for a period not to exceed 30 days after June 30, or not beyond July 30.

Comment 16: Four commenters recognized the need for NMFS to continue monitoring the sea turtle stranding situation in Virginia and supported increased observer coverage on the other spring fisheries in the Virginia Chesapeake Bay, nearshore, and offshore waters.

Response: NMFS will continue to closely monitor sea turtle stranding levels and other fisheries active in Virginia waters. While NMFS believes that pound nets contribute to the high spring sea turtle strandings, NMFS also recognizes that other fisheries may contribute to some of the annual sea turtle stranding event in Virginia and is committed to appropriately addressing the mortality sources. The NMFS 2002 monitoring program includes observer coverage of the large mesh and small mesh gillnet fisheries in offshore Virginia and Chesapeake Bay waters; alternative platform observer coverage of the large mesh gillnet black drum and sandbar shark fisheries; offshore and inshore aerial surveys to record sea turtle distribution, sea surface temperature, and commercial fishing gear; investigations into sea turtle interactions with the whelk and crab pot fisheries; and pound net monitoring. Coverage of the pound net fishery will include alternative platform observer coverage of pound net leaders, pound net leader monitoring using side scan sonar and video, and aerial monitoring of the pound net fishery. Additionally, NMFS will continue to evaluate interactions with other fisheries not previously considered that may contribute to sea turtle strandings.

Comment 17: Two commenters expressed their concern with the level of 2001 observer coverage on fisheries in the Virginia area (e.g., on large mesh and small mesh gillnet fisheries), and felt that more observer coverage was necessary.

Response: NMFS believes the coverage on these fisheries in 2001 was sufficient to monitor the take of sea turtles. The federally managed monkfish large mesh gillnet fishery (approximately 10-12 inch (25.4-30.5 cm) mesh) had approximately 41 percent observer coverage in waters off Virginia from May 1 until it stopped operating off Virginia on May 29 when the fleet moved northward. In Virginia, 107 monkfish trips were observed, and one dead and two live loggerhead turtles were incidentally captured in this fishery. The state water black drum large mesh (approximately 10-14 inch (25.4-35.6 cm) mesh) gillnet fishery had approximately 8 percent observer coverage during May and June, and no turtle takes were observed. Twenty-two trips targeting both black drum and sandbar shark were conducted from May 15 to June 6. The amount of small mesh (smaller than 6 inch (15.2 cm) mesh) gillnet effort occurring in the Chesapeake Bay waters during May and June appears to be relatively minimal. NMFS observed 2 percent of the Atlantic croaker fishery and 12 percent of the dogfish fishery during May and June; no turtle takes were observed.

While 100-percent observer coverage was intended for the Federal monkfish fishery in 2001 (note that the percent coverage off of North Carolina was higher than off of Virginia), the limited number of observers and increase in the number of vessels fishing for monkfish resulted in less than 100-percent coverage. NMFS intends to continue observer coverage in these gillnet fisheries during 2002 to document any sea turtle takes that may ensue.

Comment 18: One commenter stated that aerial surveys are needed from mid-April through June to identify the active spring fisheries and determine the number of participants in these fisheries.

Response: In 2001, aerial surveys in both offshore and inshore Virginia waters were conducted to document sea turtle distribution and commercial fishing gear. During May and June, offshore aerial surveys from the beach out to the shelf break were conducted from the Virginia/North Carolina border to the Virginia/Maryland border. Inshore aerial surveys were flown from late May to October, surveying transect lines from the mouth of the Chesapeake Bay to the Virginia/Maryland border. NMFS considered the results of these aerial surveys (e.g., observations of fishing activity) in the development of the 2001 temporary rule on the Virginia pound net fishery (66 FR 33489, June 22, 2001), as well as this action. NMFS will conduct similar aerial surveys in May and June 2002.

Comment 19: One commenter suggested that NMFS work with the VMRC, VIMS, and the Virginia Department of Game and Inland Fisheries (VA DGIF), on the development of monitoring plans.

Response: NMFS has been in close coordination with VMRC and VIMS on the development of the pound net monitoring plan and schedule, as well as the aerial survey flights and observer coverage on other spring fisheries in Virginia. To date, NMFS has had limited contact with the VA DGIF, as their role in managing the fisheries that may be resulting in sea turtle mortality was not previously defined.

Based on review of the comments received on the proposed rule and on its own review, NMFS has added two new paragraphs in the interim final rule. One requires that when a turtle is captured live and uninjured in the pound, fishers in the Virginia pound net fishery notify NMFS within 24 hours of returning from the trip. This provision also requires fishers to immediately notify NMFS and the appropriate rehabilitation or stranding network, as determined by NMFS, if a turtle is captured live but injured or if a turtle is entangled or captured dead in the pound net gear. The second requires that pound net fishing operations must be observed by a NMFS-approved observer if requested by the Northeast Regional Administrator. It also provides that all NMFS-approved observers will report any violations of this section, or other applicable regulations and laws, and that information collected by observers may be used for law enforcement purposes.

The interim final rule also does not include the proposed revision to 50 CFR 224.104, which provided NMFS' proposed policy determination that no civil penalties will be sought against those who are in compliance with the gear restrictions and other requirements above, but that nevertheless incidentally take an endangered sea turtle. While NMFS has the discretion to make that determination, NMFS at this time chooses not to issue a regulatory statement to that effect.

NMFS continues to request public comments on this interim final rule to assist in the development of a final rule on Virginia pound nets and perhaps a management scheme for pound nets in other states via NMFS' Strategy for Sea Turtle Conservation and Recovery in Relation to Atlantic Ocean and Gulf of Mexico Fisheries (66 FR 39474, July 31, 2001).

This interim final rule has been determined to be significant for purposes of Executive Order 12866.

The AA finds good cause under 5 U.S.C. 553(d)(3) not to delay the effective date of this interim final rule for 30 days. Such a delay would be contrary to the public interest because sea turtles typically migrate into Virginia waters in May, and at this time, they would likely be subject to entanglement in pound net leaders and potential subsequent mortality, unless this rule is in effect immediately (see response to Comment 3). Any delay in the effective date of this interim final rule would prevent NMFS from meeting its obligations under the ESA to prevent harm to sea turtles.

NMFS has prepared a final regulatory flexibility analysis (FRFA) that describes the economic impact this interim final rule would have on small entities. The FRFA is as follows: This rule prohibits pound net leaders with stretched mesh 12 inches (30.5 cm) or greater and leaders with stringers, requires year round reporting and monitoring, and provides a mechanism for modifying the restrictions from May 8 to June 30, and for extending the original or additional restrictions through July 30. The purpose is to prevent entanglement of threatened and endangered sea turtles in pound net leaders. This action is necessary to conserve listed sea turtles, help promote their recovery, and aid in the enforcement of the ESA.

The fishery affected by this interim final rule is the Virginia pound net fishery in the Chesapeake Bay. According to the 2001 VMRC survey data, of the 160 pound net licenses issued in Virginia, where one license is assigned to each pound net, 72 licenses are fishing in the waters potentially affected by this proposed (67 FR 15160, March 29, 2002) rule. According to VMRC data from 1999 to 2001, 27 fishermen were fishing approximately 64 pound nets from May 8 to June 30. Prohibiting the use of all pound net leaders with greater than or equal to 12 inches (30.5 cm) stretched mesh and leaders with stringers from May 8 to June 30 would potentially affect approximately 11 fishermen fishing approximately 24 pound nets. If pound net leaders greater than or equal to 8 inches (20.3 cm) are prohibited, approximately 13 fishermen fishing approximately 31 pound nets would be affected. If all pound net leaders regardless of mesh size are prohibited, 27 fishermen fishing approximately 64 pound nets would be affected.

This interim final rule prohibits pound net leaders with 12 inches (30.5 cm) and greater stretched mesh, as well as those using stringers, from May 8 to June 30, and provides a mechanism for extending and/or modifying the restrictions. This interim final rule employs the best available information on sea turtle and pound net leader interactions to reduce sea turtle entanglement and strandings, while minimizing the impacts to the pound net industry. Four alternatives to the interim final rule have been considered. Given the inability to provide a quantitative analysis of these regulatory alternatives, the alternatives were considered with respect to mitigating the known costs on small entities while providing sea turtle protection. One alternative being status quo would not provide any protection to sea turtles, but would not have any economic consequences at least in the short term. No action now may lead to more severe and costly action to protect sea turtles in the future. The non-preferred alternative 1 would have prohibited pound net leaders with 8 inches (20.3 cm) and greater stretched mesh, as well as those using stringers, from May 8 to June 30. Compared to this interim final rule's restrictions, the non-preferred alternative 1 may not necessarily have provided greater sea turtle protection, and the industry costs would have been higher. The level of interaction between sea turtles and pound net leaders with between 8 inches (20.3 cm) and 12 inches (30.5 cm) stretched mesh has not been adequately documented in Virginia waters. The non-preferred alternative 2 that would have prohibited all pound net leaders from May 8 to June 30, would not necessarily have provided the most protection to sea turtles, but it would have been the most costly to the industry. The level of interaction between sea turtles and pound net leaders with less than 12 inches (30.5 cm) stretched mesh has not been adequately documented in Virginia waters. Finally, the non-preferred alternative 3 would have prohibited pound net leaders with greater than 16 inches (40.6 cm) stretched mesh, and would have required fishermen to drop the mesh of those leaders using stringers to 9 ft (2.7 m) below mean low water and to space stringer lines at least 3 ft (0.9 m) apart, for approximately a three and a half week period beginning on May 15. This alternative would have been the least burdensome to industry, but would have offered the lowest expected protection to sea turtles, with the exception of the no action alternative. Without adequate support to ensure that sea turtles would not have become entangled in the allowable leaders of this alternative, the benefits of this alternative to sea turtles are uncertain.

No comments were received on the initial regulatory flexibility analysis. New § 223.206(d)(2)(v)(C) requires a collection of information which is not approved pursuant to the PRA. This section will only be effective upon receipt of that approval and publication of that approval in the Federal Register .

A formal consultation pursuant to section 7 of the ESA was conducted on this action. The biological opinion on this action concluded that NMFS' sea turtle conservation measures for the Virginia pound net fishery, may adversely affect but are not likely to jeopardize the continued existence of the loggerhead, leatherback, Kemp's ridley, green, or hawksbill sea turtle, or shortnose sturgeon. An incidental take statement was issued for this action. Copies of this biological opinion are available (see ADDRESSES ).

This interim final rule contains policies with federalism implications that were sufficient to warrant preparation of a federalism assessment under Executive Order 13132. Accordingly, the Assistant Secretary for Legislative and Intergovernmental Affairs provided notice of the proposed action to the Governor of Virginia on April 2, 2002. No comments on the federalism implications of the proposed action were received in response to the April 2002 letter.

Administrative practice and procedure, Endangered and threatened Species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.

Administrative practice and procedure, Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements.