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Animal and Plant Health Inspection Service, USDA.
Affirmation of interim rule as final rule.
We are adopting as a final rule, without change, an interim rule that amended the Mediterranean fruit fly regulations by removing a portion of Los Angeles County, CA, from the list of quarantined areas. The interim rule was necessary to relieve the restrictions that were no longer needed to prevent the spread of Mediterranean fruit fly to noninfested areas of the United States. As a result of the interim rule, there are no longer any areas in the continental United States quarantined because of the Mediterranean fruit fly.
The interim rule became effective on June 27, 2002.
Mr. Stephen A Knight, Senior Staff Officer, PPQ, APHIS, 4700 River Road Unit 134, Riverdale, MD 20737-1236; (301) 734-8247.
The Mediterranean fruit fly (Medfly) regulations contained in 7 CFR 301.78 through 301.78-10 (referred to below as the regulations) restrict the interstate movement of regulated articles from quarantined areas to prevent the spread of Medfly to noninfested areas of the United States.
In an interim rule effective June 27, 2002, and published in the
Comments on the interim rule were required to be received on or before September 3, 2002. We did not receive any comments. Therefore, for the reasons given in the interim rule, we are adopting the interim rule as a final rule.
This action also affirms the information contained in the interim rule concerning Executive Orders 12866, 12372, and 12988, and the Paperwork Reduction Act.
Further, for this action, the Office of Management and Budget has waived its review under Executive Order 12866.
This action affirms an interim rule that amended the Medfly regulations by removing a portion of Los Angeles County, CA, from the list of quarantined areas. The interim rule was necessary to relieve restrictions on interstate movement of regulated articles from that area.
The entities most likely to be affected are fruit sellers, nurseries, growers, packinghouses, certified farmers markets, and swapmeets. The area that we removed from the list of quarantined areas is a predominantly residential area with many apartment buildings. Available information indicates that there are no entities in the area that sell, process, handle, or move regulated articles interstate.
In the interim rule, we solicited comments, particularly those pertaining to the number and kind of small entities that may incur benefits or costs as a result of the action. We received no comments.
We therefore expect the effect of the interim rule on any affected entities should be minimally positive, as they will no longer be required to treat regulated articles to be moved interstate for Medfly.
For this reason, the termination of the quarantine on that portion of Los Angeles County, CA, should have only a minimal economic effect on any affected entities operating in this area. We anticipate that the economic effect of lifting the quarantine, though positive, will be no more significant than was the minimal effect of its imposition.
Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant impact on a substantial number of small entities.
Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation.
7 U.S.C. 166, 7711, 7712, 7714, 7731, 7735, 7751, 7752, 7753, and 7754; 7 CFR 2.22, 2.80, and 371.3.
Section 301.75-15 also issued under Sec. 204, Title II, Pub. L. 106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 also issued under Sec. 203, Title II, Pub. L. 106-224, 114 Stat. 400 (7 U.S.C. 1421 note).
Board of Governors of the Federal Reserve System.
Final rule; technical amendment.
The Board of Governors is publishing final amendments to
The Board also is amending the penalty provision of Regulation D, which is calculated based on the discount rate, to conform the calculation of penalties for reserve deficiencies to the new discount rate framework.
This final rule will become effective on January 9, 2003.
Brian Madigan, Deputy Director (202/452-3828) or William Nelson, Senior Economist (202/452-3579), Division of Monetary Affairs; or Stephanie Martin, Assistant General Counsel (202/452-3198) or Adrianne Threatt, Counsel (202/452-3554), Legal Division; for users of Telecommunication Devices for the Deaf (TDD) only, contact 202/263-4869.
Under existing Regulation A, three credit programs are available to depository institutions: (1) Adjustment credit, which is available for short periods of time, usually overnight, when a depository institution has exhausted other sources of funds; (2) extended credit, which is available for somewhat longer periods when assistance is not available from other sources; and (3) seasonal credit, which is available largely to small banks with a pronounced seasonal funding need. Over the past decade, the interest rate on adjustment credit has been 25 to 50 basis points below the federal funds rate, which is the rate that applies to uncollateralized overnight loans in the interbank market. The rates for extended and seasonal credit are set by formulas based on market interest rates and typically have been at or above the basic discount rate.
The below-market rate for adjustment credit creates incentives for an institution to borrow at the discount window to exploit the spread between the discount rate and the higher market rate for short-term funds. The current regulation therefore requires that an institution first exhaust other available sources of funds and explain its need for adjustment credit. The regulation also prohibits the use of discount window credit to finance the sale of federal funds. Because of these restrictions, a Reserve Bank must evaluate the financial situation of each borrower to determine that both the reason for borrowing at the discount window and the depository institution's use of borrowed funds are appropriate.
Reserve Bank administration of adjustment credit tends to create uncertainty among depository institutions about their access to discount window credit. In addition, institutions that have borrowed at the discount window after advertising their need for funds in the market have expressed concern that borrowing at the window signals weakness and is a source of stigma. Concerns such as these in some cases have deterred depository institutions from borrowing at the discount window during very tight money markets when doing so would have been appropriate. This in turn has hampered the ability of the discount window to buffer shocks to the money markets.
To improve the operation of the discount window, the Board proposed to replace the existing adjustment and extended credit programs with primary and secondary credit programs (67 FR 36544, May 24, 2002). The Board proposed that primary credit be available to generally sound institutions on a very short-term basis, usually overnight, with little or no administrative burden on the borrower and that borrowers of primary credit not be required to exhaust other sources of funds before obtaining short-term primary credit. The Board also proposed that primary credit be available for periods of up to a few weeks to generally sound institutions that cannot reasonably obtain such funding in the market. The Board proposed no restrictions on the purposes for which the borrower could use primary credit. The proposal contemplated that Reserve Banks would establish a System-wide set of criteria, based on supervisory and other relevant information, which would be used to determine whether an institution was in generally sound financial condition and thus eligible for primary credit. The Board proposed that primary credit normally be available at a rate above the target federal funds rate of the Federal Open Market Committee (FOMC) and that the initial primary credit rate be 100 basis points above the target federal funds rate.
Under the proposed rule, institutions not eligible for primary credit would be permitted to borrow secondary credit to meet temporary funding needs, consistent with the institution's timely return to a reliance on market funds. A Reserve Bank also could extend secondary credit to facilitate the resolution of serious financial difficulties of an institution. The Board proposed that the initial rate be set by formula 50 basis points above the primary credit rate. The Board's proposal contemplated that the secondary credit program would require more Reserve Bank administration than the primary credit program.
The proposed regulation retained the existing seasonal credit program without substantive change, although the Board specifically requested comment regarding whether that program was still necessary and, if so, what the applicable interest rate should be.
The Board received 61 comments on the proposed rule from depository institutions of various sizes, trade associations that represent depository institutions, individuals, and Reserve Banks. This section presents an overview of the main points contained in the comments received. The section-by-section analysis of the final rule, set forth below, discusses the comments in greater detail and responds to the major concerns expressed by commenters.
Of the 30 letters that addressed the primary and secondary credit programs, approximately 14 generally supported moving to an above-market discount window framework. These commenters indicated that replacing the existing below-market discount window facility with an above-market framework would provide more easily accessible funding on more predictable and transparent terms with less burden on borrowers and would remove incentives to borrow in order to exploit interest rate spreads. Owing to the removal of the requirements that a borrower exhaust other funding sources and prove its need for credit and the addition of the requirement that primary credit borrowers be in generally sound financial condition, some supporters of the proposal thought that the stigma associated with discount borrowing would decrease. Commenters also indicated that an above-market framework would provide depository institutions with an incentive to manage their liquidity more prudently under normal market conditions in order to avoid paying the penalty rate but would make it easier for banks to obtain overnight funding during periods of very tight money markets. Supporters
Some commenters questioned the underlying reasons the Board gave for proposing an above-market framework. Several commenters questioned the Board's statement that some depository institutions were deterred from coming to the discount window because of perceptions that discount window borrowing indicated financial weakness. One commenter asserted that, because of limits on lending to undercapitalized institutions, borrowing at the window was more likely to indicate strength than weakness, while others asserted that market participants did not view borrowing as an important factor when assessing financial strength.
Sixteen commenters, eight of whom opposed the proposal, expressed various concerns about the proposal. Commenters' concerns focused mainly on the proposed 100-basis-point spread between the target federal funds and primary credit rates. Other commenters expressed concern that lending funds at an above-market rate inappropriately would introduce a profit motive into actions related to monetary policy, thereby creating a conflict of interest for the Federal Reserve System.
Many commenters expressed concern that the proposal either would not address or would exacerbate the problems that the Board identified as reasons for changing to an above-market framework. Although some critics of the proposal thought that the new framework would prevent extreme spikes in the federal funds rate, many commenters thought that volatility, especially intraday volatility, would increase rather than decrease. Other commenters thought that depository institutions would be at least as reluctant as they are currently to seek discount window credit because stigma would remain or because the above-market rate would deter borrowing. Still other commenters asserted that the Board's proposal would not be less burdensome for borrowers. Suggested Alternatives to and Suggestions Regarding the Board's Proposal.
Some commenters who expressed general concern about the proposed above-market structure suggested that the Board modify or consider alternatives to its proposal. One commenter suggested that the problems with the current discount window programs were not burden and stigma, but rather were uncertainty about the programs and inconsistent requirements and expectations throughout the System. This commenter suggested leaving the current discount window programs in place but clarifying the Reserve Banks' credit policies, expectations, and requirements and applying those criteria more consistently throughout the Federal Reserve System.
Over half the comments the Board received were in response to the Board's solicitation for comment about the continued need for the seasonal credit program. Forty-five commenters addressed the seasonal credit program, with 39 in favor of retaining and six in favor of eliminating the program. These comments are discussed in detail below in the section on seasonal credit.
For the reasons discussed in detail below in the section-by-section analysis, the Board's final amendments to Regulation A substantively are nearly identical to the rule the Board proposed in May 2002. Most notably, the final rule replaces the existing adjustment and extended credit programs with primary and secondary credit programs, and the Reserve Banks will offer these new types of credit at rates that exceed the FOMC's target federal funds rate. The Board has included in the final rule a section under which the primary credit rate could be lowered in a financial emergency in the absence of a quorum of the Board. The Board is retaining the seasonal credit program with only minor technical changes.
A number of commenters argued that moving to an above-market discount window framework generally would increase volatility, especially in light of the proposed 100-basis-point initial spread of the primary credit rate over the target federal funds rate, and therefore would not accomplish one of the Board's stated goals.
It is possible that certain measures of volatility of the federal funds rate—particularly those that give some weight to small deviations from the target, such as the intraday standard deviation of the federal funds rate—will increase under the above-market framework. However, the Board believes that an above-market framework will reduce the potential for more extreme, unintended movements in the funds rate. These extreme movements arguably are more problematic than smaller ones because they tend to occur in the context of, and can exacerbate, conditions of market stress. Most depository institutions will not have an incentive to borrow from the window until the federal funds rate rises to the primary credit rate, at which point institutions likely will view the window as an attractive alternative. The presence of the discount window as a funding option should ensure that the federal funds rate will not rise significantly above the primary credit
Some commenters stated that an above-market discount window framework would place an upper limit on the federal funds rate but argued that the Board should not establish a ceiling on the federal funds rate without also establishing a floor, noting that net sellers of federal funds are disadvantaged by declines in the federal funds rate. The most effective means of establishing a floor would be for the Federal Reserve to pay interest on excess reserve account balances, because a depository institution would have no incentive to lend or sell reserves at a lower rate than the rate of interest those reserve balances could earn. However, the Federal Reserve does not have explicit statutory authority to pay interest on reserve balances at this time.
Although it might be desirable to limit both upward and downward volatility, those limits need not be implemented simultaneously in order to produce beneficial results. The potential advantages of the proposed discount window changes are considerable even in the absence of a rate floor, and delaying implementation of the above-market framework would unnecessarily defer those advantages without any countervailing benefit. The Board therefore has determined that implementation of the above-market framework should proceed without delay.
Reserve Banks will extend primary credit at a rate above the target federal funds rate on a very short-term basis (typically overnight) to depository institutions that the Reserve Banks judge to be in generally sound financial condition. Reserve Banks will determine eligibility for primary credit according to a set of criteria that is uniform throughout the Federal Reserve System and based mainly on examination ratings and capitalization, although supplementary information, including market-based information when available, also could be used. An institution that is eligible to receive primary credit need not exhaust other sources of funds before coming to the discount window, nor will it be prohibited from using primary credit to finance sales of federal funds. However, in view of the above-market price of primary credit, the Board expects that a depository institution will continue to use the discount window as a backup source of liquidity, which is the intended purpose of a central bank lending facility, rather than as a routine one. Reserve Banks will extend primary credit on an overnight basis with minimal administrative requirements, unless an aspect of the request for funds suggests that the credit extension would not meet the conditions of primary credit. Reserve Banks also may extend primary credit to eligible institutions for periods of up to several weeks if such funding is not available from other sources. However, longer-term extensions of primary credit will be subject to greater administration than are overnight loans. The text of § 201.4(a) is essentially the same as that of the Board's proposal, although the final rule includes language highlighting the backup nature of the primary credit facility.
Several commenters supported the Board's proposal that the initial primary credit rate be 100 basis points above the target federal funds rate. These commenters thought that a 100-basis-point spread generally was appropriate and would encourage most financial institutions first to seek credit elsewhere. One commenter thought the proposed spread was acceptable because the Federal Reserve does a good job of keeping the federal funds rate near the target.
The Board received numerous comments, however, that expressed specific concern about the proposed initial primary credit rate. Many commenters, even those that generally supported the proposal, argued that the 100-basis-point spread the Board proposed was too wide and would undermine the Board's articulated goals for the primary credit program. These commenters thought that a discount rate of the target federal rate plus 100 basis points was too high because it was overly punitive, would deter institutions from borrowing at the discount window, and would allow sellers of federal funds to bid the federal funds rate up during periods of limited trading, low reserve volume, or late-day trading. Other commenters thought that a 100-basis-point spread between the target federal funds and discount rates would thwart the Board's efforts to remove the stigma associated with discount window borrowing and to encourage depository institutions and industry analysts to view the window as a normal liquidity source for sound institutions.
Several commenters liked the idea of setting the primary credit rate at rate above the target federal funds rate but suggested that a spread of as few as 25 to as many as 50 basis points would be preferable to the 100-basis-point initial spread the Board proposed.
The Board notes that an appreciable spread between the primary credit and target federal funds rate is necessary for the success of the above-market discount window programs. Given the large number of financial institutions in the United States and the tremendous variation in their sizes and other characteristics, the availability and price of market funding sources available to U.S. financial institutions also vary widely. If the primary credit rate were not at least as high as the highest rate on sources of comparable funding in the market, then some depository institutions frequently would find the primary credit program, rather than the open market, to be the most attractive source of funds. If routine use of the window occurred, the Federal Reserve still would need to administer the discount window heavily to deter institutions from making undue use of primary credit.
Although it is difficult to determine the appropriate rate at which to extend primary credit to ensure that it remains a backup funding source, empirical evidence from several sources suggests that 100 points above the target federal funds rate is an appropriate initial rate. These data cast doubt on whether a lesser spread would accomplish this goal of ensuring that the discount window remains a backup source of liquidity.
Experience with the Special Liquidity Facility (SLF) that the Federal Reserve System established to address unusual liquidity strains that arose during the months surrounding the date change on January 1, 2000, is instructive. The SLF was similar to the primary credit program in many ways because
In addition, Federal Reserve staff conversations with representatives of correspondent banks and other depository institutions found that the overnight funding options for banks without access to the national money markets were priced from
Moreover, a spread on the order of 100 basis points has been used by some, but not all, foreign central banks on their Lombard discount window facilities. Perhaps most notably, the European Central Bank generally has employed a spread of 100 basis points. Conversations with staff of some of these central banks indicate that the experience with spreads of this size generally has been positive and has been consistent with achieving those central banks' goals.
In view of the foregoing evidence, the Board believes that an initial spread of 100 basis points is appropriate and anticipates that a primary credit rate consistent with such a spread will be established as of January 9, 2003. The Board notes, however, that this is only the initial rate. The Reserve Banks are required to establish the primary credit rate, subject to the review and determination of the Board, at least every two weeks or more often if the Board deems necessary. The System therefore can set a primary credit rate at a lesser, or greater, spread above the federal funds rate as needed in light of actual experience with the primary credit program.
Because a change in the stance of monetary policy between now and the recommended initiation of the new programs on January 9, 2003, cannot be ruled out, it is uncertain at this point what level of the primary credit rate will correspond with a spread of 100 basis points on that date. Section 201.51(a), which describes the primary credit rate, therefore at this time simply will state that the primary credit rate is a rate above the target federal funds rate of the FOMC. When the Reserve Banks establish and the Board determines the rate to be in effect on January 9, 2003, the Board will amend § 201.51(a) to indicate the initial primary credit rate for each Reserve Bank. The Board's amendment will be effective on January 9, 2003.
The Board proposed that eligibility for primary credit be determined mainly by a depository institution's supervisory ratings and capitalization, although supplementary information, when available, also could be used. Under the Board's proposed rule, institutions that were rated CAMELS 1 or 2 or SOSA 1 and at least adequately capitalized almost certainly would be eligible for primary credit, while institutions rated CAMELS 4 or 5 almost certainly would not be eligible. Institutions rated CAMELS 3 or SOSA 2 that are at least adequately capitalized might be eligible, depending on supplementary information.
Several commenters specifically addressed the eligibility criteria for primary credit. Most of these commenters thought that the proposed criteria generally were appropriate, although some suggested changes. Several commenters argued that the criteria should rely more heavily on examination ratings and minimize reliance on other types of information in determining eligibility for primary credit. One commenter thought that the guidelines would be more clear, concise, and uniform if the Federal Reserve only took supervisory ratings into account and did not allow supplementary information if a depository institutions were rated CAMELS 1 or 2.
The Board believes that, in order to ensure uniformity of credit eligibility throughout the Federal Reserve System, the criteria must rely heavily on objective supervisory data, which reflect determinations made by an institution's primary regulator after an extensive review process. However, the Board also recognizes that an institution could experience significant changes in its financial strength between examinations, in which case the institution's supervisory ratings might not reflect its current soundness and creditworthiness. To protect the Reserve Banks from the risks and to avoid the allocative distortions that could be involved in lending to such an institution, the Board believes that the eligibility criteria must allow for the use of some amount of supplementary information, including market-based information when available, to confirm that an institution's most recent supervisory data accurately reflect the institution's current condition.
Under the final rule, the Board anticipates that the Reserve Banks will initially adopt criteria that are substantially similar to those articulated in the Board's proposal with some additional elements that will make the eligibility criteria identical to those for daylight credit. The classification scheme used by Reserve Banks for determining access to daylight credit is well developed and provides a good measure of the general soundness of depository institutions. Reserve Banks and depository institutions already have extensive experience with these criteria,
Under the criteria that would be applied at the outset of the program, institutions' eligibility would be based on CAMELS (or SOSA and ROCA) ratings, capitalization, and, at the Reserve Bank's discretion, supplementary information.
In summary, eligibility for primary credit will be restricted to institutions that are in generally sound financial condition. The Reserve Banks will be responsible for determining the general soundness of the institutions in their districts. At the outset of the program, the Reserve Banks will use the criteria that are already used for determining eligibility for daylight credit.
Some commenters disagreed that the proposed revisions would reduce the stigma of borrowing at the discount window and in particular noted that analysts and counterparties might infer that the bank could not obtain funds at market rates and therefore might be in financial difficulty if there were evidence that the bank were paying a premium for funds.
The Board believes that the Federal Reserve can reasonably expect to achieve, over time, some reduction in stigma as a result of the primary credit program. Only generally sound institutions will be eligible to borrow primary credit, and the Board expects that most institutions will be eligible for primary credit. Market participants would have no reasonable basis for inferring that an institution believed to have borrowed primary credit was unsound.
The Reserve Banks will offer secondary credit to institutions that do not qualify for primary credit. As with primary credit, secondary credit will be available as a backup source of liquidity on a very short-term basis, provided that the loan is consistent with a timely return to a reliance on market sources of funds. Longer-term secondary credit would be available if necessary for the orderly resolution of a troubled institution, although any such loan would have to comply with the limitations of § 201.5 regarding lending to undercapitalized and critically undercapitalized institutions. Unlike the primary credit program, secondary credit will not be a minimal administration facility because the Reserve Banks will need to obtain sufficient information about a borrower's financial situation to ensure that an extension of credit complies with the conditions of the program. The description of secondary credit at § 201.4(b) closely tracks the language of the Board's proposed rule but states that short-term secondary credit is a backup funding source.
The rate for secondary credit will be set by formula and will be above the primary credit rate. Initially, the spread between the primary and secondary credit rates will be 50 basis points.
The Board's proposed rule left the seasonal credit intact with two technical revisions. The Board proposed removing the requirement that a potential borrower first demonstrate that it has exhausted special industry lenders as a funding source, because in practice the Reserve Banks have not used this criterion for some time. In addition, the Board proposed eliminating the requirement that the seasonal credit rate
Six commenters favored eliminating the seasonal credit program, arguing that small banks with seasonal needs had adequate access to other sources of liquidity and that the seasonal credit program was unnecessary. These commenters thought that the proposed primary and secondary credit programs could meet the needs of small banks. One commenter indicated that, if the Board kept the seasonal credit program, it should be available only to banks with less than $100 million in assets.
The Board received 39 comments from depository institutions, trade associations that represent small banks, and a Federal Reserve Bank urging the Board to retain the seasonal credit program, and most of these commenters also recommended retaining the existing rate formula.
Several commenters indicated that eliminating the seasonal credit program would be harmful in other ways. Many institutions expressed concern that, without that program, the FHLBs would become their only viable alternative liquidity source and that they would be overly exposed to the FHLBs. Other depository institutions argued that if they could not obtain funding on terms comparable with those of the seasonal credit program, they in turn would not be able to compete effectively with other lenders, including the Farm Credit System, for agricultural loans.
Section 201.4(c) of the final rule leaves the seasonal credit unchanged, except for technical revisions contained in the Board's proposal.
In a financial emergency, lowering the discount rate would help to prevent an undue tightening of money markets, even if the Federal Reserve's ability to provide reserves through open market operations were constrained by the timing or effects of the conditions giving rise to the financial emergency. Especially in light of the events of September 11, 2001, when the System needed to make monetary policy and lending decisions quickly, the Board believes that it is desirable to ensure that the primary credit rate is lowered expeditiously in response to a financial emergency.
Section 201.51(d)(2) of the Board's rule defines a financial emergency as a significant disruption to the U.S. money markets resulting from an act of war, military or terrorist attack, natural disaster, or other catastrophic event. Ideally, a quorum of the Board would be present to review and determine the primary credit rate at the time a financial emergency occurred. However, to ensure that the Board's determination to lower the rate in response to a financial emergency could take effect even in the absence of a quorum, § 201.51(d) of the Board's final rule provides that the primary credit rate is reduced to the FOMC's target federal funds rate if in a financial emergency a Reserve Bank has requested that the primary credit rate be established at the target federal funds rate and the Chairman of the Board (or, in the absence of the Chairman, his designee) certifies at the time of the financial emergency that a quorum of the Board is not available. If the primary credit rate were lowered as a result of this provision, the primary credit rate then would float with the target federal funds rate, which the FOMC would continue to set. This provision of Regulation A implements the Board's decision that lowering the primary credit rate to the target federal funds rate in a financial emergency is the appropriate course of action. The Federal Reserve Banks are establishing analogous internal procedures to address the possibility that their boards of directors or other duly authorized officials might be unavailable or otherwise unable to communicate a rate request to the Board in a timely manner during a financial emergency.
The Board's final rule amends this section to include as sources of authority sections 11(i)-11(j) and 14(d) of the Federal Reserve Act, which respectively provide the Board with rulemaking authority and general supervisory authority over the Reserve Banks and authorize the Reserve Banks, subject to the review and determination of the Board, to establish discount rates. This section also gathers all existing provisions concerning the scope of Regulation A into one section by incorporating language from existing § 201.7(a) regarding the circumstances under which U.S. branches and agencies of foreign banks are subject to the regulation.
This section remains unchanged except for the deletion of five definitions. The definition of “eligible institution” (existing § 201.2(j)) is unnecessary because it related only to the SLF that was established for use during the months surrounding the January 1, 2000, date change. The definition of “targeted federal funds rate” (existing § 201.2(k)) also originally was used only in connection with the SLF. Although the new emergency rate procedure provision also refers to the target federal funds rate, that provision
The Board also is deleting the terms “liquidation loss,” “increased loss,” and “excess loss,” (existing § 201.2(d)-(f), respectively). Liquidation loss and increased loss are used to derive the term excess loss, which is the amount the Board would owe the Federal Deposit Insurance Corporation (FDIC) under section 10B(b) of the Federal Reserve Act if outstanding Reserve Bank advances to a critically undercapitalized depository institution increased the FDIC's cost of liquidating that institution. Since the enactment of section 10B(b) in 1991, section 10B(b)'s payment provision has not been used. The Board continues to believe that the three definitions describe accurately and in detail the calculations required by section 10B(b) and, should it become necessary in the future, the Board would calculate the amount that it owed to the FDIC in accordance with the methods described in these three definitions. However, because the definitions only describe what the statute already requires, the Board believes that the regulation would be less cumbersome but no less accurate if § 201.5 of the final rule (regarding lending to undercapitalized and critically undercapitalized institutions) simply cross-referenced section 10B(b) of the Federal Reserve Act.
One commenter suggested that the Board amend its definition of “depository institution” to include bankers” banks, which specifically are excluded from the definition under existing Regulation A. The Board previously has determined that the discount window is an appropriate source of liquidity for depository institutions that are subject to reserve requirements, and the definition of the term “depository institution” in Regulation A therefore is based on the provisions in section 19 of the Federal Reserve Act and in the Board's Regulation D regarding those institutions that must maintain reserves. Those provisions specifically exempt bankers' banks from maintaining reserves, and because bankers' banks generally avail themselves of that exemption the Board continues to believe that bankers' banks also generally should not have access to the discount window. The Board therefore is not changing its definition of “depository institution” for purposes of Regulation A. However, the Board notes that bankers' banks are free to choose to be subject to the reserve requirements of section 19 of the Federal Reserve Act and Regulation D. The Board previously has allowed Reserve Banks to grant discount window access to a bankers' bank that voluntarily maintain reserves, and the Board expects that practice to continue under this final rule.
The Board is adopting § 201.3 as it appeared in the proposed rule. This section prescribes the Board's general rules governing a Federal Reserve Bank's extension of credit and combines in one place all the existing provisions of Regulation A that relate to the Reserve Bank's authority to extend credit, how credit is extended, and the requirements that apply to extensions of credit. This section states that credit to depository institutions generally will take the form of an advance but preserves a Reserve Bank's discretion to lend through discounting eligible paper if the Reserve Bank determines that a discount would be more appropriate for a particular depository institution. Section 201.3 cross-references the Reserve Banks' authority under section 13A of the Federal Reserve Act to lend to an institution that is part of the farm credit system, and accordingly the Board is deleting existing § 201.8 that deals with that topic.
Section 201.3 preserves existing text of Regulation A stating that a Reserve Bank has no obligation to make, increase, renew, or extend any advance or discount to a depository institution, and that any extension of credit the Reserve Bank chooses to make must be secured to the satisfaction of the Reserve Bank. The collateral policies of the Reserve Banks, as described in the Reserve Banks' Operating Circular No. 8, will remain unchanged. Section 201.3 contains existing text from § 201.4(d) providing that a Reserve Bank should ascertain whether an institution is undercapitalized or critically undercapitalized before extending credit to that institution and includes new text stating that if a Reserve Bank extends credit to such an institution then the Reserve Bank must follow special lending procedures.
Regarding the rules that apply to a borrower's use of central bank credit, § 201.3(d) contains new language that explicitly permits an institution that receives primary credit to use that credit to fund sales of federal funds without Reserve Bank permission. Recipients of secondary or seasonal credit would continue to need Reserve Bank permission to use Reserve Bank credit to fund sales of federal funds. The Board is deleting existing § 201.6(a), which provides that a depository institution may not use Federal Reserve credit as a substitute for capital, because the Board believes that other provisions of the statutes and regulations that it administers adequately address this issue. Section 201.5 Limitations on Availability and Assessments.
This section is unchanged from the proposed rule and describes the limitations on advances to an undercapitalized or critically undercapitalized depository institution set forth in section 10B(b) of the Federal Reserve Act and also applies those limitations to discounts for such institutions. In addition, § 201.5 discusses section 10B(b)'s requirement that the Board pay a specified amount to the FDIC if a Reserve Bank advance to a critically undercapitalized depository institution increases the loss the FDIC incurs when liquidating that institution. The existing regulation explains in detail through the definitions of “liquidation loss,” “increased loss,” and “excess loss” how the Board would calculate that amount. As discussed above, the proposed rule would delete these three definitions and simply provide that the Board will assess the Federal Reserve Banks for any amount the Board pays to the FDIC in accordance with section 10B(b) of the Federal Reserve Act.
In connection with its amendments to Regulation A, the Board is adopting a conforming amendment to § 204.7 of Regulation D. This section currently provides that the penalty charge for reserve deficiencies shall be 2 percentage points per year above the lowest rate (generally the adjustment credit rate) in effect for borrowings from the Federal Reserve Bank. In the recent past, the adjustment credit rate has consistently been set 50 basis points below the target federal funds rate, and the reserve deficiency charge therefore has been 150 basis points above the target federal funds rate.
The amendment to § 204.7 will base the charges for reserve deficiencies on the new primary credit rate in Regulation A and will authorize the Reserve Banks to assess charges for reserve deficiencies at a rate of 1 percentage point above the average primary credit rate. Under the revised formula, when the primary credit rate is 100 basis points above the target federal funds rate the reserve deficiency charge will be 200 basis points above the target federal funds rate. The conforming amendment will maintain approximate uniformity between the current and new levels of the deficiency charge.
The Board does not believe the slight difference between the current and new deficiency charge formulas is significant given the infrequency of reserve deficiency charges, the ability of the Reserve Banks to waive the charges under certain circumstances, and the future potential for variations in the spread between the target federal funds rate and the primary credit rate.
The provisions of 5 U.S.C. 553(b), relating to notice and public participation, were not followed in connection with the adoption of the technical amendment to Regulation D because this change merely adjusts the penalty charged for reserve deficiencies to conform with the amended borrowing rates of Regulation A, while approximating the current level of the reserve deficiency charge. The Board for good cause finds that delaying the change in the penalty charge for reserve deficiencies in order to allow notice and public comment on the change is unnecessary.
Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Board certifies that the amendments to Regulation A will not have a significantly adverse economic impact on a substantial number of small entities.
Regulation A establishes rules under which Federal Reserve Banks may extend credit to depository institutions as a backup source of liquidity. The final rule replaces the existing adjustment and extended credit programs with primary and secondary credit programs. Like the existing regulation, the final rule does not require an institution to use those programs. The vast majority of institutions that choose to borrow under the new programs will be eligible for primary credit, which has fewer conditions, requirements, and administrative costs than the adjustment credit program that it replaces. The final rule does not materially alter the existing seasonal credit program, which is available to small depository institutions with pronounced seasonal funding needs, except to remove a prerequisite to borrowing that the Reserve Banks in practice have not used for some time.
Based on 2001 call report data, there are approximately 16,250 depository institutions in the United States that have assets of $150 million or less and thus are considered small entities for purposes of the Regulatory Flexibility Act. In 2001, approximately 161 small depository institutions received adjustment credit, none received extended credit, and approximately 156 received seasonal credit.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board has reviewed the final rule under the authority delegated to the Board by the Office of Management and Budget. The final rule contains no new collections of information and proposes no substantive changes to existing collections of information pursuant to the Paperwork Reduction Act.
Banks, Banking, Federal Reserve System, Reporting and recordkeeping requirements.
12 U.S.C. 248(i)-(j), 343
(a)
(b)
For purposes of this part, the following definitions shall apply:
(a)
(b)
(c)(1)
(i) An
(ii) A
(iii) A
(iv) An
(v) A
(vi) A
(2) The term
(d)
(e)
(1) Is not a critically undercapitalized insured depository institution; and
(2)(i) Is deemed to be undercapitalized under section 38 of the FDI Act (12 U.S.C. 1831o(b)(1)(C)) and its implementing regulations; or
(ii) Has received from its appropriate federal banking agency a composite CAMELS rating of 5 under the Uniform Financial Institutions Rating System (or an equivalent rating by its appropriate federal banking agency under a comparable rating system) as of the most recent examination of such institution.
(f)
(a)
(2) An advance to a depository institution must be secured to the satisfaction of the Federal Reserve Bank that makes the advance. Satisfactory collateral generally includes United States government and federal-agency securities, and, if of acceptable quality, mortgage notes covering one-to four-family residences, state and local government securities, and business, consumer, and other customer notes.
(3) If a Federal Reserve Bank concludes that a discount would meet the needs of a depository institution or an institution described in section 13A of the Federal Reserve Act (12 U.S.C. 349) more effectively, the Reserve Bank may discount any paper indorsed by the institution, provided the paper meets the requirements specified in the Federal Reserve Act.
(b)
(c)
(2) Each Federal Reserve Bank shall require any information it believes appropriate or desirable to ensure that assets tendered as collateral for advances or for discount are acceptable and that the borrower uses the credit provided in a manner consistent with this part.
(3) Each Federal Reserve Bank shall:
(i) Keep itself informed of the general character and amount of the loans and investments of a depository institution as provided in section 4(8) of the Federal Reserve Act (12 U.S.C. 301); and
(ii) Consider such information in determining whether to extend credit.
(d)
(a)
(b)
(c)
(1) A Federal Reserve Bank may extend seasonal credit only if:
(i) The depository institution's seasonal needs exceed a threshold that the institution is expected to meet from other sources of liquidity (this threshold is calculated as a certain percentage, established by the Board of Governors, of the institution's average total deposits in the preceding calendar year); and
(ii) The Federal Reserve Bank is satisfied that the institution's qualifying need for funds is seasonal and will persist for at least four weeks.
(2) The Board may establish special terms for seasonal credit when depository institutions are experiencing unusual seasonal demands for credit in a period of liquidity strain.
(d)
(a)
(1) If, in any 120-day period, advances or discounts from any Federal Reserve Bank to that depository institution are not outstanding for more than 60 days during which the institution is an undercapitalized insured depository institution; or
(2) During the 60 calendar days after the receipt of a written certification from the chairman of the Board of Governors or the head of the appropriate federal banking agency that the borrowing depository institution is viable; or
(3) After consultation with the Board of Governors. In unusual circumstances, when prior consultation with the Board is not possible, a Federal Reserve Bank should consult with the Board as soon as possible after extending credit that requires consultation under this paragraph (a)(3).
(b)
(1) During the 5-day period beginning on the date the institution became a critically undercapitalized insured depository institution; or
(2) After consultation with the Board of Governors. In unusual circumstances, when prior consultation with the Board is not possible, a Federal Reserve Bank should consult with the Board as soon as possible after extending credit that requires consultation under this paragraph (b)(2).
(c)
(a)
(b)
(c)
(d)
(i) In a financial emergency the Reserve Bank has established the primary credit rate at that rate; and
(ii) The Chairman of the Board of Governors (or, in the Chairman's absence, his authorized designee) certifies that a quorum of the Board is not available to act on the Reserve Bank's rate establishment.
(2) For purposes of this paragraph (d), a financial emergency is a significant disruption to the U.S. money markets resulting from an act of war, military or terrorist attack, natural disaster, or other catastrophic event.
12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611, and 3105.
(a) * * *
(1) * * * Federal Reserve Banks are authorized to assess charges for deficiencies in required reserves at a rate of 1 percentage point per year above the primary credit rate, as provided in § 201.51(a) of this chapter, in effect for borrowings from the Federal Reserve Bank on the first day of the calendar month in which the deficiencies occurred. * * *
Federal Aviation Administration (FAA), DOT.
Final rule.
This action removes Restricted Area R-5207 (R-5207), Romulus, NY. The FAA is taking this action in response to the Department of the Army's notification that the military no longer has an operational need for the restricted area.
0901 UTC, January 23, 2003.
Paul Gallant, Airspace and Rules Division, ATA-400, Office of Air Traffic Airspace Management, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone: (202) 267-8783.
The Department of the Army's position on special use airspace is that it will efficiently utilize only that airspace necessary to accomplish its mission. In keeping with that policy, since the Army has closed the Seneca Army Depot there is no longer a requirement for R-5207 and the Army has requested that the FAA take action to remove the restricted area.
This action amends 14 CFR part 73 by removing R-5207, Romulus, NY. The FAA is taking this action at the request of the Department of the Army. This action returns this airspace for public use.
Since this action only involves removal of restricted airspace, the solicitation of comments would only delay the return of airspace to public use without offering any meaningful right or benefit to any segment of the public. Therefore, I find that notice and public procedures under 5 U.S.C. 553(b) are unnecessary.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this action: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Section 73.52 of 14 CFR part 73 was republished in FAA Order 7400.8K, dated September 26, 2002.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1D, Policies and Procedures for Considering Environmental Impacts,” and the National Environmental Policy Act of 1969. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Navigation (air).
49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action changes the using agency of R-2301W, Ajo West, AZ. On August 12, 2002, the United States Air Force (USAF) and United States Marine Corps (USMC) requested that the FAA change the using agency for R-2301W from “U.S. Air Force, 58th Fighter Wing Luke AFB, AZ,” to “Commanding Officer, USMC Air Station, Yuma, AZ,” to reflect an administrative change of responsibility for the restricted area. This action responds to this request and does not change the boundaries; designated altitudes; time of designation; or activities conducted within the affected restricted area.
0901 UTC, January 23, 2003.
Ken McElroy, Airspace and Rules Division, ATA-400, Office of Air Traffic Airspace Management, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone: (202) 267-8783.
This action amends title 14 Code of Federal Regulations (CFR) part 73 by changing the using agency of R-2301W, Ajo West, AZ. On August 12, 2002, the USAF and USMC requested that the FAA change the using agency for R-2301W from, “U.S. Air Force, 58th Fighter Wing Luke AFB, AZ,” to “Commanding Officer, USMC Air Station, Yuma, AZ,” to reflect an administrative change of responsibility for the restricted area. This action is an administrative change and does not affect the current boundaries; designated altitudes; time of designation; or activities conducted within the affected restricted area. Therefore, notice and public procedures under 5 U.S.C. 553(b) are unnecessary.
The FAA has determined that this action only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The coordinates for this airspace docket are based on North American Datum 83. Section 73.22 of part 73 of the Federal Aviation Regulations was republished in FAA Order 7400.8J, dated September 20, 2001.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1D, Policies and Procedures for Considering Environmental Impacts. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Navigation (air).
49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is classifying the transcutaneous air conduction hearing aid system (TACHAS) into class II (special controls). Elsewhere in this issue of the
This rule is effective November 7, 2002.
Eric Mann, Center for Devices and Radiological Health (HFZ-460), Food and Drug Administration, 9200 Corporate Blvd., Rockville, MD 20850, 301-594-2080.
In accordance with section 513(f)(1) of the act (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976, the date of enactment of the amendments, generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to previously marketed devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and 21 CFR part 807 of the FDA regulations. Section 513(f)(2) of the act provides that any person who submits a premarket notification under section 510(k) of the act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device in class III under section 513(f)(1) of the act, request FDA to classify the device under the criteria set forth in section 513(a)(1) of the act. FDA shall, within 60 days of receiving such a request, classify the device by written order. This classification shall be the initial classification of the device. Within 30 days after issuing an order classifying the device, FDA must publish a document in the
On June 21, 2002, FDA received a petition submitted under section 513(f)(2) of the act by Auric Hearing Systems Inc., seeking an evaluation of the automatic class III designation of its RetroX device. This device is intended to compensate for impaired hearing without occluding the ear canal. In accordance with section 513(f)(1) of the act, FDA issued an order automatically classifying the RetroX device in class III because it was not substantially equivalent to a device that was introduced or delivered for introduction into interstate commerce for commercial distribution before May 28, 1976, or a device that was subsequently reclassified into class I or II. After reviewing information submitted in the petition, FDA determined that the RetroX device and substantially equivalent devices can be classified in class II with the establishment of special controls. FDA believes that class II special controls, in addition to the general controls, will provide reasonable assurance of the safety and effectiveness of the device.
FDA has identified the following risks to health associated specifically with this type of device: (1) Infection /local inflammation, (2) injury to the ear canal, and (3) ineffective amplification.
Therefore, in addition to the general controls of the act, the device is subject to a special control guidance document entitled “Class II Special Controls Guidance Document: Transcutaneous Air Conduction Hearing Aid System (TACHAS); Guidance for Industry and FDA.”
FDA believes the following controls identified in the class II special controls guidance document for a TACHAS device, when combined with the general controls of the act, will provide reasonable assurance of the safety and effectiveness of this type device: (1) Electro-acoustic testing, (2) fatigue testing, (3) strength test validation, (4) biocompatibility, (5) sterility, (6) clinical information, and (7) labeling to include prescription labeling in accordance with 21 CFR 801.109.
FDA believes that adherence to the class II special controls addresses the risks to health identified previously in this section of this document and provides a reasonable assurance of the safety and effectiveness of the device.
Section 510(m) of the act provides that FDA may exempt a class II device from the premarket notification requirement under section 510(k) of the act, if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, FDA has determined that premarket notification is necessary to provide reasonable assurance of safety and effectiveness and, therefore, the device is not exempt from the premarket notification requirements. The device is used as a wearable sound-amplifying device intended to compensate for impaired hearing without occluding the ear canal. FDA review of key design
On August 20, 2002, FDA issued an order classifying the RetroX device and substantially equivalent devices of this generic type into class II under the generic name, transcutaneous air conduction hearing aid system. FDA identifies this generic type of device as:
A wearable sound-amplifying device intended to compensate for impaired hearing without occluding the ear canal. The device consists of an air conduction hearing aid attached to a surgically fitted tube system, which is placed through soft tissue between the post auricular region and the outer ear canal.
FDA is now codifying the classification and the special control by adding new § 874.3950. For the convenience of the reader, FDA is also adding a new § 874.1(e) to inform the reader where to find guidance documents referenced in 21 CFR part 874.
The agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
FDA has examined the impacts of the final rule under Executive Order 12866, and the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this final rule is consistent with the regulatory philosophy and principles identified in the Executive order. In addition, the final rule is not a significant regulatory action as defined by the Executive order and so it is not subject to review under the Executive order.
The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. FDA knows of only one manufacturer of this type of device. Classification of these devices from class III to class II will relieve manufacturers of the device of the cost of complying with the premarket approval requirements of section 515 of the act (21 U.S.C. 360e), and may permit small potential competitors to enter the marketplace by lowering their costs. The agency, therefore, certifies that the final rule will not have a significant impact on a substantial number of small entities. In addition, this final rule will not impose costs of $100 million or more on either the private sector or State, local, and tribal governments in the aggregate and, therefore, a summary statement of analysis under section 202(a) of the Unfunded Mandates Reform Act is not required.
FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies 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. Accordingly, the agency has concluded that the rule does not contain policies that have federalism implications as defined in the order and, consequently, a federalism summary impact statement is not required.
This final rule contains no collections of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.
Medical devices.
21 U.S.C. 351, 360, 360c, 360e, 360j, 371.
(e) Guidance documents referenced in this part are available on the Internet at http://www.fda.gov/cdrh/guidance.html
(a)
(b)
United States Parole Commission, Justice.
Interim rule with request for comment.
The U.S. Parole Commission is amending its procedures governing the mandatory release of military prisoners confined in federal civilian prisons. Such mandatory release is earned through good time credits. The amendment implements a Department of Defense Instruction that permits the U.S. Parole Commission to place a military prisoner who is released from a federal civilian prison under “mandatory supervision as if on parole” until the expiration of the sentence imposed, if the Commission determines that such supervision is necessary for the orderly transition of the offender back into community.
Send comments to the Office of General Counsel, U.S. Parole Commission, 5550 Friendship Blvd., Chevy Chase, Maryland 20815.
Office of General Counsel, U.S. Parole Commission, 5550 Friendship Blvd., Chevy Chase, Maryland 20815, telephone (301) 492-5959. Questions about this publication are welcome, but inquiries concerning individual cases cannot be answered over the telephone.
Former Department of Defense regulations did not permit any military prisoner who was released by operation of law due to good time credits to be subject to supervision in the community for the remainder of the imposed sentence. This was in contrast to the requirement that applies to federal civilian prisoners who are eligible for but denied parole. Prisoners sentenced by military courts martial and then transferred to a federal institution come under the exclusive jurisdiction of the U.S. Parole Commission for parole purposes pursuant to 10 U.S.C. 858. Thus, in the absence of any rule authorizing post-release supervision for military mandatory releasees, there was a gap in the Commission's authority to require post-release supervision for military prisoners mandatorily released on good time from institutions operated by the Federal Bureau of Prisons. (The Bureau of Prisons considered former 18 U.S.C. 4164—which authorizes mandatory release supervision for federal civilian prisoners eligible for parole—to be inapplicable to military prisoners who committed their crimes on or after November 1, 1987.) Thus, if the Commission denied parole and continued a military prisoner to the expiration of his sentence, the Commission was not able to supervise the offender. However, if the Commission paroled the military prisoner prior to the mandatory release date, the Commission could supervise the military offender just as any other parolee to the expiration of the prisoner's sentence.
At the request of the Attorney General of the United States, the Department of Defense has amended its regulations regarding the mandatory release of military prisoners, including prisoners in the custody of the Bureau of Prisons.
The Commission is adopting a paragraph at the end of 28 CFR 2.35 so that the Commission's rules will conform to the Department of Defense regulations and policy regarding the mandatory release of military prisoners. Pursuant to the DoD Instruction, the amended rule states that when the Commission orders a military offender continued to expiration, the military prisoner will be placed on “mandatory supervision” until the expiration of his sentence if the Commission finds that the DoD criteria are met. The Commission is adopting this rule in order to give military offenders incarcerated in federal civilian prisons notice that, if the Commission denies the prisoner parole and continues the prisoner to the expiration of the prisoner's sentence, the prisoner may be required to serve a period of mandatory supervision after the prisoner's release. Although the Commission already has the authority under Department of Defense regulations to order mandatory supervision for military prisoners who committed their offenses on or after August 16, 2001, this rule further clarifies the Commission's authority and explains the Commission's general statement of policy regarding mandatory supervision.
The amended rule also includes the presumption that supervision is appropriate for all military mandatory releasees unless case-specific factors indicate that supervision is not appropriate.
Finally, the rule makes it clear that, a prisoner on “mandatory supervision” will be subject to the conditions of parole at 28 CFR 2.40 and will be eligible for early termination of the supervision under 28 CFR 2.43. Thus, under the rule, military prisoners released on mandatory supervision will be subject to the same conditions and will have the same prospect for early termination of their supervision as federal offenders under parole or mandatory supervision.
This interim rule will be implemented for any military offender mandatorily released on good time deductions from a federal civilian prison if the offender committed his offense after August 15, 2001.
The U.S. Parole Commission has determined that this interim rule does not constitute a significant rule within the meaning of Executive Order 12866. The interim rule will not have a significant economic impact upon a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 605(b), and is deemed by the Commission to be a rule of agency practice that does not substantially affect the rights or obligations of non-agency parties pursuant to Section 804(3)(c) of the Congressional Review Act.
Administrative practice and procedure, Prisoners, Probation and Parole.
18 U.S.C. 4203(a)(1) and 4204(a)(6).
(d) If the Commission orders a military prisoner who is under the Commission's jurisdiction for an offense committed after August 15, 2001 continued to the expiration of his sentence (or otherwise does not grant parole), the Commission shall place such prisoner on mandatory supervision after release if the Commission determines that such supervision is appropriate to provide an orderly transition to civilian life for the prisoner and to protect the community into which such prisoner is released. The Commission shall presume that mandatory supervision is appropriate for all such prisoners unless case-specific factors indicate that supervision is inappropriate. A prisoner who is placed on mandatory supervision shall be deemed to be released as if on parole, and shall be subject to the conditions of release at § 2.40 until the expiration of the maximum term for which he was sentenced, unless the Commission terminates the supervision early under § 2.43.
Department of Veterans Affairs.
Final rule.
This document amends the Department of Veterans Affairs (VA) adjudication regulations concerning presumptive service connection to reflect a statutory presumption that a chronic disease that preexisted the veteran's entry into military service but was first manifest to a 10-percent degree of disability within a specified period after service was aggravated by the veteran's military service. This amendment is necessary to make the regulations conform with the statute and the Court's decision.
John Bisset, Jr., Consultant, Regulations Staff, Compensation and Pension Service, Veterans Benefits Administration, 810 Vermont Avenue, NW., Washington, DC 20420, telephone (202) 273-7213.
Section 1112(a), 38 U.S.C., states that, “a chronic disease becoming manifest to a degree of 10 percent or more within one year from the date of separation from such service * * * shall be considered to have been incurred in or aggravated by such service, notwithstanding there is no record of evidence of such disease during the period of service.”
In the VA General Counsel Precedent Opinion 14-98 (VAOPGCPREC 14-98 (October 2, 1998)), the General Counsel held that Section 1112(a) of title 38, United States Code, does not establish a presumption of aggravation for a chronic disease that existed prior to service but first became manifest to a compensable degree within the presumptive period following service.
In
VA regulations currently prohibit establishing service connection for aggravation of a preexisting chronic disease that first becomes manifest to a degree of 10 percent or more following discharge from military service. This prohibition is inconsistent with the statute as interpreted by the United States Court of Appeals for the Federal Circuit. Therefore, we are amending 38 CFR 3.307(a), (c), (d), and 3.309(a), to conform to the plain language of the statute and the conclusions of the Court.
Presently, 38 CFR 3.307(a), (c), and (d) provide only for a presumption of service incurrence. Accordingly, it is necessary to revise those paragraphs to include a presumption of aggravation.
38 CFR 3.307(d) currently states the factors to be considered in determining whether the presumption of service incurrence has been rebutted. The current regulation is based on the invalid conclusion that the presumption is one of service incurrence only. This provision is inconsistent with
A current VA regulation, 38 CFR 3.306(a), provides that a presumption of aggravation based on an increase in the severity of a preexisting condition during service may be rebutted by evidence that the increase was due to
Changes made by this final rule merely reflect the statutory requirements or the decision of the United States Court of Appeals for the Federal Circuit. Accordingly, there is a basis for dispensing with prior notice and comment and delayed effective date provisions of 5 U.S.C. 552 and 553.
The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more in any given year. This rule would have no consequential effect on State, local, or tribal governments.
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 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. This amendment would not directly affect any small entities. Only individuals could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analyses requirements of sections 603 and 604.
The Catalog of Federal Domestic Assistance program numbers are 64.109 and 64.110.
Administrative practice and procedure, Claims, Disability benefits, Individuals with disabilities, Pensions, Veterans.
38 U.S.C. 501(a), unless otherwise noted.
The revision reads as follows:
(d)
(2) The presumption of aggravation provided in this section may be rebutted by affirmative evidence that the preexisting condition was not aggravated by service, which may include affirmative evidence that any increase in disability was due to an intercurrent disease or injury suffered after separation from service or evidence sufficient, under § 3.306 of this part, to show that the increase in disability was due to the natural progress of the preexisting condition.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; request for comments.
NMFS issues this temporary authorization to allow the use of limited tow times by shrimp trawlers as an alternative to the use of Turtle Excluder Devices (TEDs) in certain waters off Louisiana and Alabama. The exempted area in Louisiana consists of all the Louisiana state waters east of 92° 20′ W. long. (approximately at Fresh Water Bayou in Vermilion Parish, Louisiana); Federal waters are not included. The
This action is effective from November 1, 2002 through December 2, 2002. Comments on this action are requested, and must be received by December 2, 2002.
Comments on this action should be addressed to the Chief, Endangered Species Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Silver Spring, MD 20910.
Bob Hoffman, 727-570-5312, or Barbara A. Schroeder, 301-713-1401.
All sea turtles that occur in U.S. waters are listed as either endangered or threatened under the Endangered Species Act of 1973 (ESA). The Kemp's ridley (
The incidental take and mortality of sea turtles as a result of trawling activities have been documented in the Gulf of Mexico and along the Atlantic Ocean seaboard. Under the ESA and its implementing regulations, taking sea turtles is prohibited, with exceptions identified in 50 CFR 223.206 and 50 CFR 224.104. The regulations require most shrimp trawlers and summer flounder trawlers operating in the southeastern United States (Atlantic Area, Gulf Area, and Summer flounder fishery-sea turtle protection area, all as defined in 50 CFR 222.102) to have a NMFS-approved TED installed in each net that is rigged for fishing to provide for the escape of sea turtles. TEDs currently approved by NMFS include single-grid hard TEDs and hooped hard TEDs conforming to a generic description, two types of special hard TEDs (the flounder TED and the Jones TED), and one type of soft TED (the Parker soft TED).
The TEDs incorporate an escape opening, usually covered by a webbing flap, that allows sea turtles to escape from trawl nets. To be approved by NMFS, a TED design must be shown to be at least 97 percent effective in excluding sea turtles during experimental TED testing (50 CFR 223.207(e)). The TED must meet generic criteria based upon certain parameters of TED design, configuration, and installation, including height and width dimensions of the TED opening through which the turtles escape. In the Atlantic Area, these requirements are currently ≥35 inches (≥89 cm) in width and ≥12 inches (≥30 cm) in height. In the Gulf Area, the requirements are ≥32 inches (≥81 cm) in width and ≥10 inches (≥25 cm) in height.
The regulations governing sea turtle take prohibitions and exemptions provide for the use of limited tow times as an alternative to the use of TEDs for vessels with certain specified characteristics or under certain special circumstances. For example, debris can clog a TED which renders the TED ineffective at catching shrimp as well as excluding turtles. The provisions of 50 CFR 223.206 (d)(3)(ii) specify that the NOAA Assistant Administrator for Fisheries (AA) may authorize compliance with tow time restrictions as an alternative to the TED requirement for up to 30 days, if the AA determines that the presence of algae, seaweed, debris, or other special environmental conditions in a particular area makes trawling with TED-equipped nets impracticable. The provisions of 50 CFR 223.206(d)(3)(i) specify the maximum tow times that may be used when tow-time limits are authorized as an alternative to the use of TEDs. The tow times may be no more than 55 minutes from April 1 through October 31 and no more than 75 minutes from November 1 through March 31 as measured from the time that the trawl doors enter the water until they are removed from the water. These tow time limits are designed to minimize the level of mortality of sea turtles that are captured by trawl nets not equipped with TEDs.
On October 10 and 23, 2002, the NMFS Southeast Regional Administrator received requests from the Secretary of the Louisiana Department of Wildlife and Fisheries (LADWF) and the Director of the Alabama Department of Conservation and Natural Resources' (ALDCNR) Marine Resources Division, respectively, to allow the use of tow times as an alternative to turtle excluder devices (TEDs) in state waters because of excessive storm-related debris on the fishing grounds. The increase in debris on the shrimping grounds was the result of Tropical Storm Isidore and Hurricane Lili. After an investigation, the LADWF and ALDCNR determined that this debris is affecting the fishermen's ability to use TEDs effectively. Both Louisiana and Alabama have stated that their marine enforcement agencies will enforce the tow time restrictions.
NMFS gear technicians interviewed fishermen and surveyed parts of the affected areas in Louisiana and Alabama on October 23 and 24, 2002. The interviews and surveys conducted by the gear technicians and phone conversations between NMFS Southeast Region Protected Resources staff and state resource agency staffs confirmed that there are problems with debris in Louisiana from the Mississippi/Louisiana border around the mouth of the Mississippi River to approximately Fresh Water Bayou in Vermilion Parish, Louisiana and in Alabama from Bon Secour Bay to the Alabama/Mississippi border between the Intracoastal Waterway and the barrier islands.
The AA finds that debris washed into portions of state waters of Louisiana and Alabama from Tropical Storm Isidore and Hurricane Lili have created special environmental conditions that make trawling with TED-equipped nets impracticable. Therefore, the AA issues this notification to authorize the use of restricted tow times as an alternative to the use of TEDs in the state waters of Louisiana (no Federal waters are included with this authorization) from east of 92° 20′ W. long. (approximately at Fresh Water Bayou, in Vermilion Parish, Louisiana) and in Alabama inshore waters (inside the COLREGS demarcation line) including Bon Secour Bay, Mobile Bay, and Mississippi Sound south of the Intracoastal Waterway. This authorization will be in effect for a period of 30 days, unless terminated earlier. Instead of the required use of TEDs, shrimp trawlers may opt to comply with the sea turtle conservation regulations found at 50 CFR 223.206(d)(3)(i) by using restricted tow times. A shrimp trawler utilizing this authorization must limit tow times to no more than 75 minutes measured from the time trawl doors enter the water until they are retrieved from the water.
The ALDCNR and LADWF are continuing to monitor the situation and will cooperate with NMFS in determining the ongoing extent of the debris problem in these areas. Moreover, the marine enforcement agencies of
NMFS encourages shrimp trawlers in the affected areas to continue to use TEDs if possible, even though they are authorized under this action to use restricted tow times. NMFS studies have shown that the problem of clogging by seagrass, algae or by other debris is not unique to TED-equipped nets. When fishermen trawl in problem areas, they may experience clogging with or without TEDs. A particular concern of fishermen, however, is that clogging in a TED-equipped net may hold open the turtle escape opening and increase the risk of shrimp loss. On the other hand, TEDs also help exclude certain types of debris and allow shrimpers to conduct longer tows.
NMFS' gear experts have provided several general operational recommendations to fishermen to maximize the debris exclusion ability of TEDs that may allow some fishermen to continue using TEDs without resorting to restricted tow times. To exclude debris, NMFS recommends the use of hard TEDs made of either solid rod or of hollow pipe that incorporate a bent angle at the escape opening, in a bottom-opening configuration. In addition, the installation angle of a hard TED in the trawl extension is an important performance element in excluding debris from the trawl. High installation angles can result in debris clogging the bars of the TED; NMFS recommends an installation angle of 45°51′, relative to the normal horizontal flow of water through the trawl, to optimize the TED's ability to exclude turtles and debris. Furthermore, the use of accelerator funnels, which are allowable modifications to hard TEDs, is not recommended in areas with heavy amounts of debris or vegetation. Lastly, the webbing flap that is usually installed to cover the turtle escape opening may be modified to help exclude debris quickly: the webbing flap can either be cut horizontally to shorten it so that it does not overlap the frame of the TED or be slit in a fore-and-aft direction to facilitate the exclusion of debris. The use of the leatherback modification or the double cover flap TED will also aid in debris exclusion.
All of these recommendations represent legal configurations of TEDs for shrimpers fishing in the affected areas. This action does not authorize any other departure from the TED requirements, nor does it authorize use of any TED modified in such a manner that it no longer meets the requirements for any of the TEDs approved pursuant to 50 CFR 223.207. In particular, if TEDs are installed in trawl nets, they may not be sewn shut.
The AA, at any time, may modify the alternative conservation measures through publication in the
This action has been determined to be not significant for purposes of Executive Order 12866.
The AA has determined that this action is necessary to respond to an emergency situation to allow more efficient fishing for shrimp, while providing adequate protection for endangered and threatened sea turtles pursuant to the ESA and applicable regulations.
Pursuant to 5 U.S.C. 553(b)(B), the AA finds that there is good cause to waive prior notice and opportunity to comment on this rule, because it is impracticable. The AA finds that unusually high amounts of debris are creating special environmental conditions that make trawling with TED-equipped nets impracticable. The AA has determined that the use of limited tow times for the described area and time would not result in a significant impact to sea turtles. Notice and opportunity to comment are impracticable in this instance because providing notice and comment would prevent the agency from providing relief soon enough to provide the intended benefit. The public was provided with notice and an opportunity to comment on 50 CFR 223.206(d)(3)(ii) which authorizes the use of this emergency exemption.
Pursuant to 5 U.S.C. 553(d)(3), for the same reasons the AA determined that there was good cause to waive prior notice and opportunity to comment, the AA finds good cause to waive the 30-day delay in effective date. NMFS is making the rule effective November 1, 2002 through December 2, 2002.
Since prior notice and an opportunity for public comment are not required to be provided for this action by 5 U.S.C. 553, or by any other law, the analytical requirements of 5 U.S.C. 601
The AA prepared an Environmental Assessment (EA) for this rule. Copies of the EA are available (see
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; request for comments.
NMFS issues this temporary action to allow the use of limited tow times by shrimp trawlers as an
This action is effective from November 1, 2002 through November 21, 2002. Comments on this action are requested, and must be received by November 21, 2002.
Comments on this action should be addressed to the Chief, Endangered Species Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Silver Spring, MD 20910.
Bob Hoffman, 727-570-5312, or Barbara A. Schroeder, 301-713-1401.
All sea turtles that occur in U.S. waters are listed as either endangered or threatened under the Endangered Species Act of 1973 (ESA). The Kemp's ridley (
The incidental take and mortality of sea turtles as a result of trawling activities have been documented in the Gulf of Mexico and along the Atlantic Ocean seaboard. Under the ESA and its implementing regulations, taking sea turtles is prohibited, with exceptions identified in 50 CFR 223.206 and 50 CFR 224.104. The regulations require most shrimp trawlers and summer flounder trawlers operating in the southeastern United States (Atlantic Area, Gulf Area, and Summer flounder fishery-sea turtle protection area, all as defined in 50 CFR 222.102) to have a NMFS-approved TED installed in each net that is rigged for fishing to provide for the escape of sea turtles. TEDs currently approved by NMFS include single-grid hard TEDs and hooped hard TEDs conforming to a generic description, two types of special hard TEDs (the flounder TED and the Jones TED), and one type of soft TED (the Parker soft TED).
The TEDs incorporate an escape opening, usually covered by a webbing flap, that allows sea turtles to escape from trawl nets. To be approved by NMFS, a TED design must be shown to be at least 97 percent effective in excluding sea turtles during experimental TED testing (50 CFR 223.207(e)). The TED must meet generic criteria based upon certain parameters of TED design, configuration, and installation, including height and width dimensions of the TED opening through which the turtles escape. In the Atlantic Area, these requirements are currently ≥35 inches (≥89 cm) in width and ≥12 inches (≥30 cm) in height. In the Gulf Area, the requirements are ≥32 inches (≥81 cm) in width and ≥10 inches (≥25 cm) in height.
The regulations provide for the use of limited tow times as an alternative to the use of TEDs for vessels with certain specified characteristics or under certain special circumstances. For example, debris can clog a TED which renders the TED ineffective at catching shrimp as well as excluding turtles. The provisions of 50 CFR 223.206 (d)(3)(ii) specify that the Assistant Administrator for Fisheries, NOAA (AA), may authorize compliance with tow time restrictions as an alternative to the TED requirement, if the AA determines that the presence of algae, seaweed, debris, or other special environmental conditions in a particular area makes trawling with TED-equipped nets impracticable. The provisions of 50 CFR 223.206(d)(3)(i) specify the maximum tow times that may be used when tow-time limits are authorized as an alternative to the use of TEDs. The tow times may be no more than 55 minutes from April 1 through October 31 and no more than 75 minutes from November 1 through March 31. These tow time limits are designed to minimize the level of mortality of sea turtles that are captured by trawl nets not equipped with TEDs.
On October 16, 2002, the NMFS Southeast Regional Administrator received a request from the Mississippi Director of Marine Resources to allow the use of tow times as an alternative to TEDs in Mississippi state waters because of excessive storm related debris on the fishing grounds. After an investigation, the Mississippi Department of Marine Resources (DMR) has determined that this debris is affecting the fishermen's ability to use TEDs effectively. As part of the request, the DMR sent photo documentation of the debris. Mississippi's Marine Patrol director has also sent NMFS a letter dated October 21, 2002, stating that the Mississippi Marine Patrol will enforce the tow time restrictions.
NMFS gear technicians surveyed the western and central portion of Mississippi Sound on October 8 and 9, 2002. They focused their survey on areas where vessels were actively fishing in concentrated groups. Some areas that fishermen indicated were untrawlable were not able to be surveyed because no trawlers were working those areas. The survey found that there were larger than normal amounts of grass on the tickler chains of the trawls but no large debris was observed in any of the nets in any of the surveyed areas and most of the boats seemed to be satisfied with the shrimp catch, despite excessive grass. During a phone conversation between NMFS Southeast Regional Office Protected Resources staff and DMR staff, DMR staff indicated that their investigation showed that the majority of the problems and the complaints from fishermen were concentrated west of the Cat Island Channel which was not in the area surveyed by NMFS gear technicians. The boundaries for the use of tow times encompass the areas indicated by the DMR as having problems with excessive debris, and include the western extreme of Mississippi Sound and Cat Island Channel.
The duration for this authorization will be set initially for 20 days. Although regulations at 50 CFR 223.206 (d)(3)(v) allow such authorizations to be valid for up to 30 days, the levels of debris documented by DMR and NMFS are not extreme and several weeks have already passed since the storms. Therefore, NMFS believes that a shorter authorization will be sufficient.
NMFS and the DMR Marine Patrol will monitor the situation to ensure there is adequate protection for sea turtles in this area and to determine whether debris in these areas continues to make TED use impracticable. The intent of this action is to relieve the economic hardship on shrimpers while ensuring adequate protection of threatened and endangered sea turtles.
The AA finds that debris washed into portions of Mississippi sound from Tropical Storm Isidore and Hurricane Lili have created special environmental conditions that make trawling with TED-equipped nets impracticable. Therefore, the AA issues this notification to authorize the use of restricted tow times as an alternative to the use of TEDs in the waters off Mississippi in an area from the coastline of Mississippi at its intersection with the line of longitude 89° 30' W., thence southward to its intersection with the line of latitude 30 10' N., thence eastward to the line of longitude 89° 05.5' W. (approximately even with the southern tip of Cat Island), thence northward to the line of latitude 30° 13.8' N. (approximately even with the western tip of Cat Island), thence westward to the line of longitude 89° 10' W., thence northward to its intersection with the coastline of Mississippi, thence continuing along the coastline to the original point. This authorization will remain in effect for a period of 20 days. Instead of the required use of TEDs, shrimp trawlers may opt to comply with the sea turtle conservation regulations found at 50 CFR 223.206(d)(3)(i) by using restricted tow times. Through October 31, 2002, a shrimp trawler utilizing this authorization must limit tow times to no more than 55 minutes, measured from the time trawl doors enter the water until they are retrieved from the water. Starting November 1, 2002, tow times must be limited to no more than 75 minutes measured from the time trawl doors enter the water until they are retrieved from the water.
DMR Marine Patrol is continuing to monitor the situation and will cooperate with NMFS in determining the ongoing extent of the debris problem in this portion of Mississippi Sound. Moreover, the DMR Director of the Marine Patrol has stated that the DMR Marine Patrol will enforce the restricted tow times. Ensuring compliance with tow time restrictions is critical to effective sea turtle protection, and the commitment from the DMR Director of the Marine Patrol to enforce tow time restrictions is an important factor enabling NMFS to issue this authorization.
NMFS encourages shrimp trawlers in the affected areas to continue to use TEDs if they can be used effectively, even though they are authorized under this action to use restricted tow times. NMFS studies have shown that the problem of clogging by seagrass, algae or by other debris is not unique to TED-equipped nets. When fishermen trawl in problem areas, they may experience clogging with or without TEDs. A particular concern of fishermen, however, is that clogging in a TED-equipped net may hold open the turtle escape opening and increase the risk of shrimp loss. On the other hand, TEDs also help exclude certain types of debris and allow shrimpers to conduct longer tows.
NMFS' gear experts have provided several general operational recommendations to fishermen to maximize the debris exclusion ability of TEDs that may allow some fishermen to continue using TEDs without resorting to restricted tow times. To exclude debris, NMFS recommends the use of hard TEDs made of either solid rod or of hollow pipe that incorporate a bent angle at the escape opening, in a bottom-opening configuration. In addition, the installation angle of a hard TED in the trawl extension is an important performance element in excluding debris from the trawl. High installation angles can result in debris clogging the bars of the TED; NMFS recommends an installation angle of 45°, relative to the normal horizontal flow of water through the trawl, to optimize the TED's ability to exclude turtles and debris. Furthermore, the use of accelerator funnels, which are allowable modifications to hard TEDs, is not recommended in areas with heavy amounts of debris or vegetation. Lastly, the webbing flap that is usually installed to cover the turtle escape opening may be modified to help exclude debris quickly: the webbing flap can either be cut horizontally to shorten it so that it does not overlap the frame of the TED or be slit in a fore-and-aft direction to facilitate the exclusion of debris. The use of the leatherback modification or the double cover flap TED will also aid in debris exclusion.
All of these recommendations represent legal configurations of TEDs for shrimpers fishing in the affected areas of Mississippi Sound. This action does not authorize any other departure from the TED requirements, nor does it authorize the use of any TED modified in such a manner that it no longer meets the requirements for any of the TEDs approved pursuant to 50 CFR 223.207. In particular, if TEDs are installed in trawl nets, they may not be sewn shut.
The AA, at any time, may modify the alternative conservation measures through publication in the
This action has been determined to be not significant for purposes of Executive Order 12866.
The AA has determined that this action is necessary to respond to an emergency situation to allow more efficient fishing for shrimp, while providing adequate protection for endangered and threatened sea turtles pursuant to the ESA and other applicable law.
Pursuant to 5 U.S.C. 553(b)(B), the AA finds that there is good cause to waive prior notice and opportunity to comment on this rule, because it is impracticable. The AA finds that unusually high amounts of debris are creating special environmental conditions that may make trawling with TED-equipped nets impracticable. The AA has determined that the use of limited tow times for the described area and time would not result in a significant impact to sea turtles. Notice and comment are impracticable in this instance because providing notice and comment would prevent the agency from providing relief soon enough to provide the intended benefit. The public was provided with notice and an opportunity to comment on 50 CFR 223.206(d)(3)(ii).
Pursuant to 5 U.S.C. 553(d)(3), for the same reasons the AA determined that there was good cause to waive prior notice and opportunity to comment, the AA finds good cause to waive the 30-day delay in effective date. NMFS is
Since prior notice and an opportunity for public comment are not required to be provided for this action by 5 U.S.C. 553, or by any other law, the analytical requirements of 5 U.S.C. 601
The AA prepared an Environmental Assessment (EA) for this action. Copies of the EA are available (see
National Marine Fisheries Service (NMFS), National
Modification of a closure.
NMFS is opening directed fishing by vessels using trawl gear in the Gulf of Alaska (GOA). This action is necessary to fully use the 2002 halibut bycatch allowance for trawl gear in the GOA.
Effective 1200 hrs, Alaska local time (A.l.t.), November 6, 2002, until 1200 hrs, A.l.t., November 10, 2002.
Mary Furuness, 907-586-7228.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
NMFS closed the directed fishery by vessels using trawl gear in the GOA pursuant to § 679.21(d)(7)(i) on October 13, 2002 (67 FR 64066, October 17, 2002). As of October 24, 2002, 67 metric tons of halibut remain in the trawl halibut bycatch allowance in the GOA. Therefore, NMFS is terminating the previous closure and is opening directed fishing by vessels using trawl gear in the GOA from 1200 hrs, A.l.t., November 6, 2002, until 1200 hrs, A.l.t., November 10, 2002.
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA) finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is contrary to the public interest. This requirement is contrary to the public interest as it would delay the opening of the fishery, prevent the full use of the 2002 halibut bycatch allowance specified for trawl gear in the GOA, and therefore reduce the public's ability to use and enjoy the fishery resource.
The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
This action is required by § 679.21 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
Animal and Plant Health Inspection Service, USDA.
Proposed rule; correction.
We are correcting errors in the preamble to a proposed rule that would amend the fruits and vegetables regulations. This proposed rule was published in the
We invite you to comment on the proposed rule (Docket No. 02-026-1), as corrected by this document. We will consider all comments that we receive on or before December 2, 2002.
You may submit comments by postal mail/commercial delivery or by e-mail. If you use postal mail/commercial delivery, please send four copies of your comment (an original and three copies) to: Docket No. 02-026-1, Regulatory Analysis and Development, PPD, APHIS, Station 3C71, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. 02-026-1. If you use e-mail, address your comment to
You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call (202) 690-2817 before coming.
APHIS documents published in the
Dr. Inder P. Gadh, Import Specialist, Phytosanitary Issues Management Team, PPQ, APHIS, 4700 River Road Unit 140, Riverdale, MD 20737-1236; (301) 734-6799.
We published a proposed rule in the
This document corrects errors in the
In addition, under the heading
Therefore, this document corrects the
1. On page 61552, column 2, the last paragraph, beginning with the words “The Government of Spain,” is corrected to read as follows:
The Government of Spain has stated that pink or red tomatoes from the Murcia Province and the municipalities of Albuñol and Carchuna in the Granada Province of Spain would be produced, packed, and shipped in accordance with the systems approach described above. We believe that these measures would ensure that tomatoes from those areas would be free of Medfly. Therefore, we propose to amend §§ 319.56-2t and 319.56-2dd(a)(1) and (a)(7) to allow the importation of pink or red tomatoes grown in greenhouses in the Murcia Province and the municipalities of Albuñol and Carchuna in the Province of Granada in Spain.
2. On page 61553, column 2, the first paragraph under the heading
3. On page 61554, column 1, line 5, is corrected by removing the sentence beginning with the word “Data” and adding in its place the sentence “The information received from the Republic of Korea indicates that the pests of concern are not known to occur in the orchards.”
Nuclear Regulatory Commission.
Petition for rulemaking; notice of receipt; correction.
On November 1, 2002 (67 FR 66588), the U.S. Nuclear Regulatory Commission (NRC) published for public comment a notice of receipt of a petition for rulemaking, dated September 4, 2002, which was filed with the Commission by Lawrence T. Christian, et. al. The petition was docketed by the NRC on September 23, 2002, and has been assigned Docket No. PRM-50-79. The petition requests that the NRC amend its regulations regarding offsite emergency plans for nuclear power plants to insure that all day care centers and nursery schools in the vicinity of nuclear power facilities are properly protected in the event of a radiological emergency. This action corrects an erroneous Agencywide Documents Access and Management System (ADAMS) accession number cited for the petition under the
Submit comments by January 15, 2003.
Michael T. Lesar, Office of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Telephone: 301-415-7163 or Toll-free: 1-800-368-5642. E-mail:
In FR Doc. 02-27861, published on November 1, 2002 (67 FR 66588), the following corrections are made.
On page 66589, in the first column, in the second full paragraph, the final sentence is corrected to read as follows:
The ADAMS accession number for the petition is ML022630462.
On page 66590, in the second column, in the sixth full paragraph, the final sentence is corrected to read as follows:
The petitioners' stated reasons for requesting that the NRC amend its rules to mandate these emergency planning measures are as follows:
On page 66591, in the first column, in the third full paragraph, the second sentence is corrected to read as follows:
Since the ingestion of KI protects against this damage, the petitioners contend that KI should be stocked by daycare centers and nursery schools in the evacuation zone for distribution to the children in their charge in case of radiological emergency.
For the Nuclear Regulatory Commission.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This notice proposes to revise jet route 133 (J-133), and revoke jet route 711 (J-711), in Alaska. The FAA is proposing to realign J-133 from Biorka Island, AK, to Sitka, AK, which would overfly the LAIRE intersection. The proposed realignment of J-133 would eliminate the need for J-711. This proposed action would enhance aircraft operations and improve system efficiency in Alaska.
Comments must be received on or before December 23, 2002.
Send comments on this proposal to the Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001. You must identify the docket number FAA-2001-13247/Airspace Docket No. 02-AAL-5, at the beginning of your comments.
You may also submit comments on the Internet at
An informal docket may also be examined during normal business hours at the office of the Regional Air Traffic Division, Federal Aviation Administration, 222 West 7th Avenue, #14, Anchorage, AK 99533.
Ken McElroy, Airspace and Rules Division, ATA-400, Office of Air Traffic Airspace Management, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone: (202) 267-8783.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers and be submitted to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2002-13247/Airspace Docket No. 02-AAL-05.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule.
The proposal contained in this notice may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the Internet at
Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW.,
The FAA is proposing an amendment to Title 14 Code of Federal Regulations (CFR) part 71 to revise J-133, and revoke J-711, in Alaska. The FAA is proposing this action to realign J-133 from Biorka Island, AK, to Sitka, AK, which would overfly the LAIRE intersection. The proposed realignment of J-133 would eliminate the need for J-711. This proposed action would enhance aircraft operations and improve system efficiency in Alaska.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Jet routes are published in paragraph 2004, of FAA Order 7400.9K dated August 30, 2002, and effective September 16, 2002, which is incorporated by reference in 14 CFR 71.1. The jet routes listed in this document would be published subsequently in the order.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
1. The authority citation for part 71 continues to read as follows:
49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p.389.
2. The incorporation by reference in 14 CFR 71.1 of the Federal Aviation Administration Order 7400.9K, Airspace Designations and Reporting Points, dated August 30, 2002, and effective September 16, 2002, is amended as follows:
From Sitka, AK, NDB; INT Hinchinbrook, AK, NDB 117° and Yakutat, AK 213° radial; to Hinchinbrook, AK, NDB; Johnstone Point, AK; Anchorage, AK; Galena, AK.
Federal Aviation Administration (FAA) DOT.
Notice of proposed rulemaking.
This notice proposes to revise VOR Federal Airway 257 (V-257) between the Phoenix, AZ, Very High Frequency Omnidirectional Radio Range and Tactical Air Navigation Aids (VORTAC) and the Drake, AZ, VORTAC. This proposed change is part of the FAA's National Airspace Redesign effort and is intended to improve the management of aircraft operations near the Phoenix, AZ, terminal area.
Comments must be received on or before December 9, 2002.
Send comments on this proposal to the Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW.,Washington, DC 20590-0001. You must identify the docket number FAA-2002-13524/Airspace Docket No. 02-AWP-07, at the beginning of your comments.
You may also submit comments on the Internet at
An informal docket may also be examined during normal business hours at the office of the Regional Air Traffic Division, Federal Aviation Administration, 15000 Aviation Boulevard, Hawthorne, CA 90261.
Ken McElroy, Airspace and Rules Division, ATA-400, Office of Air Traffic Airspace Management, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone: (202) 267-8783.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers and be submitted to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2002-13524/Airspace Docket No. 02-AWP-07.” The postcard will be date/time stamped and returned to the commenter.
All communications received on or before the specified closing date for comments will be considered before
An electronic copy of this document may be downloaded through the Internet at
Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591, or by calling (202) 267-8783. Communications must identify both docket numbers for this notice. Persons interested in being placed on a mailing list for future NPRM's should call the FAA's Office of Rulemaking, (202) 267-9677, for a copy of Advisory Circular No. 11-2A, notice of proposed rulemaking distribution system, which describes the application procedure.
The FAA is proposing an amendment to title 14 Code of Federal Regulations (CFR) part 71 to revise V-257 between the Phoenix, AZ, VORTAC, and the Drake, AZ, VORTAC. This proposed change is part of the FAA's National Airspace Redesign effort and is intended to improve the management of aircraft operations near the Phoenix, AZ, terminal area. Although the change will slightly increase the length of the route, the proposed action will coincide with revisions made to V-105, and align this route to facilitate Air Traffic Management operations in the Phoenix Terminal Area.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Domestic VOR Federal airways are published in paragraph 6010(a), of FAA Order 7400.9K dated August 30, 2002, and effective September 16, 2002, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airway listed in this document would be published subsequently in the order.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
1. The authority citation for part 71 continues to read as follows:
49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p.389.
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.9K, Airspace Designations and Reporting Points, dated August 30, 2002, and effective September 16, 2002, is amended as follows:
From Phoenix, AZ; INT Phoenix 333° (321°M) and Drake, AZ, 182° (168° M) radials; Drake; INT Drake 003° and Grand Canyon, AZ, 211° radials; Grand Canyon; 38 miles 12 AGL, 24 miles 125 MSL, 16 miles 95 MSL, 26 miles 12 AGL, Bryce Canyon, UT; INT Bryce Canyon 338° and Delta, UT, 186° radials, Delta; 39 miles, 105 MSL INT Delta 004° and Malad City, ID, 179° radials; 20 miles, 118 MSL, Malad City; Pocatello, ID; DuBois, ID; Dillon, MT; Coppertown, MT; INT Coppertown 002° and Helena, MT, 272° radials; INT Helena 272° and Great Falls, MT, 222° radials; Great Falls; 73 miles, 56 MSL, Havre, MT. The airspace within Restricted Area R-6403 is excluded.
Internal Revenue Service (IRS), Treasury.
Withdrawal of notice of proposed rulemaking.
This document withdraws the notice of proposed rulemaking relating to the time and manner of making payments of the railroad unemployment repayment tax. The proposed regulations were published in the
Kyle Finizio at (202) 622-6040 (not a toll-free number).
On May 13, 1993, the IRS published a notice of proposed rulemaking (EE-79-89) in the
Employment taxes, Income taxes, Penalties, Pensions, Railroad retirement, Reporting and recordkeeping requirements, Social security, Unemployment compensation.
Accordingly, under the authority of 26 U.S.C. 7805 and 26 U.S.C. 6302, proposed regulations §§ 31.6011(a)-3A, 31.6157-1, and 31.6302(c)-2A published in the
Fish and Wildlife Service, Interior.
Proposed rule; withdrawal.
We, the U.S. Fish and Wildlife Service (Service), withdraw the proposed rule, published in the
This action is made on December 9, 2002.
The supporting record for this withdrawal is available for inspection, by appointment, during normal business hours at our Ventura Fish and Wildlife Office, 2493 Portola Road, Suite B, Ventura, CA 93003.
Carl Benz at the above address (telephone: 805-644-1766).
The tidewater goby (
Crabtree's (1985) allozyme (enzyme) work on tidewater gobies from 12 localities throughout the range identified fixed allelic (genetic) differences at the extreme northern and southern ends of the range, with the more centrally distributed populations more similar to one another. The results suggest a low level of gene movement between populations in the northern, central and southern parts of the range. However, the sites Crabtree sampled were widely separated geographically, and his results may not indicate gene flow on more local levels, as noted by Lafferty
More recently, David Jacobs (Department of Organismic Biology, Ecology and Evolution, University of California, Los Angeles,
The tidewater goby is a small elongate fish seldom exceeding 50 millimeters (mm), about 2 inches (in), standard length. This goby is characterized by large, dusky pectoral fins and a ventral sucker-like disk formed by the complete fusion of the pelvic fins. It is nearly transparent, with a mottled brownish upper surface, and often with spots or bars on dusky dorsal and anal fins. The mouth is large and oblique with the upper jaw extending nearly to the rear edge of the eye. The eyes are widely spaced. The tidewater goby is a short-lived species, apparently having an annual life cycle (Eschmeyer
The tidewater goby is endemic to California and restricted to coastal brackish water habitats. This species historically ranged from Tillas Slough (mouth of the Smith River, Del Norte County) near the Oregon border to Agua Hedionda Lagoon (northern San Diego County). Within this range, shallow brackish water habitats occur in two relatively distinct situations: (1) The upper edge of tidal bays, such as Tomales, Bolinas, and San Francisco Bays near the entrance of freshwater tributaries, and (2) the coastal lagoons formed at the mouths of small to large coastal rivers, streams, or seasonally wet canyons along the coast of California. Overall, the tidewater goby occupies a very small portion of the California coast (probably less than 5 percent) (C. Swift, Emeritus, Section of Fishes, Natural History Museum of Los Angeles County, CA,
Tidewater gobies can tolerate a wide range of salinities (from 0 to 60 parts per thousand (ppt)) and are frequently found throughout lagoons (Swift
Tidewater gobies usually are collected from water depths of less than 1 meter (m) (3 feet (ft)) and many localities are no deeper than this (Wang 1982, Irwin and Soltz 1984, Swenson 1995). They have been found, however, at water depths greater than 1 m (3 ft) (Worcester 1992, Lafferty and Altstatt 1995, Swift
Tidewater gobies may be preyed upon by native species, such as steelhead (
Tidewater gobies may also be preyed upon by nonnative species other than striped bass, such as the African clawed frog (
Prior to publishing the proposed rule to delist the northern populations of the tidewater goby, we analyzed tidewater goby populations based on the joint National Marine Fisheries Service and U.S. Fish and Wildlife Service Policy Regarding the Recognition of Distinct Vertebrate Populations (61 FR 4722). Concurrently with the proposed delisting of the northern tidewater goby populations, we proposed a distinct population segment for the southern California portion of the tidewater goby range.
When determining whether a distinct vertebrate population segment could be treated as threatened or endangered under the Act, we consider three elements: discreteness, significance, and conservation status in relation to the standards for listing. Discreteness refers to the isolation of a population from other members of the species and is based on two criteria: (1) Marked separation from other populations of the same taxon resulting from physical, physiological, ecological, or behavioral factors, including genetic discontinuity, or (2) populations delimited by international boundaries. Significance is determined by the importance or contribution, or both, of a discrete population to the species throughout its range. The policy (61 FR 4722) lists four examples of factors that may be used to determine significance:
(1) Persistence of the discrete population segment in an ecological setting unusual or unique for the taxon;
(2) Evidence that loss of the discrete population segment would result in a significant gap in the range of the taxon;
(3) Evidence that the discrete population segment represents the only known surviving natural occurrence of a taxon that may be more abundant elsewhere as an introduced population outside its historic range; and
(4) Evidence that the discrete population segment differs markedly from other populations of the taxon in genetic characteristics.
For the tidewater goby, we determined that the southern California portion of the range met the discreteness criterion based on (1) allozyme and mtDNA differences between the northern and southern portions of the tidewater goby range (Crabtree 1985; D. Jacobs,
We first classified the tidewater goby as a Category 2 candidate species in 1982 (47 FR 58454). Category 2 candidate species were species for which information then in our possession indicated that proposing to list the species as endangered or threatened was possibly appropriate, but for which substantial data on biological vulnerability and threats were not currently known or on file to support proposed rules. We reclassified the tidewater goby as a Category 1 species in 1991 (56 FR 58804). Category 1 candidate species were species for which we had sufficient information on biological vulnerability and threats to support preparation of listing proposals. On October 24, 1990, we received a petition to list the tidewater goby as endangered. Our finding (signed March 22, 1991) that the requested action might be warranted was published in a proposal to list the tidewater goby as
On June 24, 1999, we proposed to remove all of the tidewater goby populations north of Orange County, CA (64 FR 33816) from protection under the Act. Because we felt the southern portion of the range met the definition of a DPS and was subject to continuing threats, we concurrently proposed that it be retained as an endangered DPS when the northern portion of the range was delisted. We invited public comments and suggestions to this proposal in three comment periods. The first comment period ended August 23, 1999. Late in that comment period, we received new information on the potential marine dispersal of tidewater gobies, with additional information provided after the comment period closed. On February 15, 2000, we reopened the comment period (65 FR 7483) from February 15 to March 31, 2000, to request additional review of our proposal and to solicit the interpretations of appropriate and independent specialists and the public on the new information. On January 3, 2001 (66 FR 345), we reopened the comment period for a second time. We requested additional public and peer review comment from January 3 to February 2, 2001, on: (1) Our assertion that the original listing rule exaggerated the risk of extinction by overestimating the rate of local population extinction; (2) any information either supporting or contradicting the information in the proposed delisting rule that suggested the tidewater goby was not, in 1994 when it was listed, nor was currently, in danger of extinction due to a high rate of local extinctions; and (3) any new information that suggested a reasonable causal link between any of the threats, or combination of threats, and a high risk of extinction of the tidewater goby.
In addition to our proposal to delist the tidewater goby and the three public comment periods during 1999 to 2001, we designated critical habitat for the tidewater goby in 2000. The Natural Resources Defense Council, Inc., filed a lawsuit on September 18, 1998, in the United States District Court for the Central District of California, against the Service for our failure to designate critical habitat for the tidewater goby. The court ordered, on April 5, 1999, that we “publish a proposed critical habitat designation for the tidewater goby in 120 days' (
In our proposed rule to delist the northern populations of the tidewater goby, we identified three major reasons for our proposed action: (1) There are more populations in the north than were known at the time of listing, (2) threats to those populations are less severe than previously believed, and (3) the tidewater goby has a greater ability than was known to recolonize sites from which it is temporarily absent. We believed that a number of populations had been recolonized following the end of the drought of the late 1980s and early 1990s and that the original listing of the tidewater goby was in error (66 FR 345). Commenters seriously disagreed with all three premises, but the most compelling information and arguments addressed premises 1 and 3. These commenters included a number of scientists with extensive experience with tidewater goby. The commenters' opinions and analyses and additional information received during the comment periods form the basis of this withdrawal. They are discussed in detail below in the Summary of Comments and Recommendations and the Summary of Factors Affecting the Species.
We received a total of 45 written responses from individuals, agencies, or other entities during three public comment periods: June 24 to August 23, 1999 (64 FR 33816), February 15 to March 31, 2000 (65 FR 7483), and January 3 to February 2, 2001 (66 FR 345). Of those 45 written responses, 38 opposed delisting; two supported delisting all northern and southern populations; one supported delisting the northern populations; three requested the Service first delist all populations of the tidewater goby before proposing, if warranted, establishment of a southern distinct population segment; and, one commenter provided new information on the collection of two tidewater gobies near Diablo Cove, south of Morro Bay, CA. Several commenters submitted multiple responses.
During the second and third comment periods, we requested peer review from independent scientists in compliance with our peer review policy (59 FR 34270; July 1, 1994). During the second comment period, one peer reviewer responded and supported the delisting. During the third comment period, we asked two fish biologists familiar with fish ecology, genetics, and the evolution of fish to review the proposed tidewater goby delisting and the designation of a southern California DPS. Both reviewers recommended that we keep the species listed as endangered and provided suggestions for our future review of this species' population dynamics and population genetics. One concluded that the tidewater goby data used and our interpretations were insufficient to support the delisting. Their responses are included in the totals above, and their specific comments are addressed below along with the public comments.
We grouped comments of a similar nature into a single issue for response. Where applicable, we have revised this notice based on factual information provided by the commenters.
The following comments and responses deal with compliance with the Act and other laws, regulations, and policies, and the public involvement in the delisting process.
We wish to clarify that, while a preliminary draft recovery plan for the tidewater goby has been circulated among tidewater goby experts, we have not approved a draft recovery plan. The preliminary draft plan was never published and made available to the public for comment. Because they have not yet been published in an official draft recovery plan available for public comment, the recommendations and recovery criteria in the preliminary draft recovery plan are not our official guidance. We agree that the most appropriate course of action, given our withdrawal of this proposed delisting, is to proceed with the recovery planning process for the tidewater goby.
Had we decided to finalize the proposal to retain a southern DPS as listed, the regulatory situation for landowners in southern California would not have changed because tidewater goby was already listed as endangered in southern California. However, we are withdrawing the proposal to retain a southern California DPS as listed, along with the withdrawal of the proposal to delist the northern populations.
The following comments and responses deal with issues related to the adequacy of the scientific information used for proposing the delisting and establishing the southern California distinct vertebrate population segment. We received comments that challenged our assessment of the available information at the time we proposed delisting the northern populations of the tidewater goby, and we received comments that introduced new information on the species. Comments were received on issues such as: the genetics of the northern and southern portions of the tidewater goby's range (including the determination that southern California constitutes a DPS), the number of known tidewater goby populations and its relevance, metapopulation theory and population dynamics, natural recolonization by marine dispersal of tidewater goby larvae, salinity tolerance, and alternative interpretations of the data.
The following comments and responses are related to our evaluation of threats to the tidewater goby. Some comments provided new information; where applicable, this new information was incorporated into this withdrawal notice.
The following comments and responses involve site-specific issues. Most site-specific issues were incorporated into the withdrawal, as appropriate. Two are addressed specifically below.
Currently all locations are occupied on Camp Pendleton except French Creek and the Santa Margarita River. As recently as 1991, the number of occupied tidewater goby localities was only three (Swift and Holland 1998, D. Holland,
In 1995, the Service issued a programmatic biological opinion on the “Programmatic Activities and Conservation Plans in Riparian and Estuarine/Beach Ecosystems on Marine Corps Base, Camp Pendleton,” including an Estuarine/Beach Ecosystems Conservation Plan (U.S. Fish and Wildlife Service, Biological Opinion 1-6-95-F 02, 1995). The reasonable and prudent measures of the biological opinion require the Marines to adopt and implement the Estuarine/Beach Ecosystem Conservation Plan.
The Estuarine/Beach Ecosystem Conservation Plan is structured to minimize the effects to listed species resulting from potential impacts associated with ongoing and future training, maintenance, recreation, and construction activities. The Marines have the authority to carry out the measures in the plan, and because the terms and conditions are mandatory, there are assurances that the Conservation Plan will be implemented. While the Conservation Plan focuses primarily on avian species and does address the tidewater goby generally, it does not contain specific biological objectives, recovery criteria, or recovery goals for the tidewater goby. While an internal draft recovery plan for the tidewater goby had been informally released in 1996, we have not formalized and published a draft or final recovery plan for the species that establishes recovery criteria and goals for delisting.
In 2001, Camp Pendleton completed an Integrated Natural Resource Management Plan (INRMP) for the Base that addresses the tidewater goby. However, the INRMP, does not provide conservation and management measures for the tidewater goby beyond those indicated in the Conservation Plan.
In addition, other conditions related to the recent drought conditions in southern California and the presence of non-native predators have threatened tidewater goby populations. For example, Hidden Creek appears to have perennial water flow but may become so hypersaline in a severe drought as to be unsuitable for any fish species (Swift and Holland 1998). Aliso Creek, French Creek, and Cockleburr Creek are all relatively ephemeral and have not supported tidewater gobies in times of drought. The Santa Margarita River seemed to contain a large stable population until 1991, but tidewater gobies disappeared in 1991, shortly after the nonnative yellowfin goby became abundant in the estuary.
Overall, taking into consideration the measures in the Conservation Plan for the tidewater goby, the continued threats to the species and its habitat, and the species' intermittent occupancy in the drainages on Camp Pendleton as discussed above, we believe that the populations of tidewater goby on Camp Pendleton still require the protection afforded it under the Act.
A preliminary investigation of the impacts to tidewater gobies from the CP alignment found that adverse impacts would be less than significant after mitigation (Michael Brandman and Associates 1998). However, mitigation proposals have not been included as part of the project description, and the alternatives for this project are still being developed for an Environmental Impact Statement. Absent complete mitigation being incorporated into the project, the FTCS CP alignment may have both short-term and long-term impacts to tidewater gobies in the San Mateo Creek and San Onofre Creek drainage and accompanying watershed (Michael Brandman and Associates 1998). Short-term impacts could include mortality and temporary loss of habitat for breeding, feeding, and sheltering due to blockage or diversion of water flow, increased siltation from the required earthen cut and fill, and the disturbance of low oxygen sediments. Long-term impacts could include: the alteration of the hydrologic regime, primarily in changes to flow regimes, temperature patterns, and sediment movement characteristics of the streams; loss of habitat for breeding, feeding, and sheltering due to siltation; and deterioration in water quality of the streams from the input of heavy metals and other contaminants. These types of changes to the abiotic elements of a stream are often associated with corresponding changes to the ichthyofauna (fish species assemblage within a region). Generally, this kind of disturbance results in an increase of exotic fish species to the detriment of the indigenous (native) ichthyofauna (Moyle and Light 1996). Currently, projects in coastal streams are regulated by the California Environmental Quality Act (CEQA), the State of California's streambed alteration permit program, the Army Corps of Engineers 404 permits and California's delegated authorities under the Clean Water Act which regulates stormwater runoff from highways and during construction. While such effects as are enumerated are possible, they may be remediated in whole or in part by these regulatory controls prior to project approval and construction.
Section 4(a)(1) of the Act and regulations implementing the listing provisions of the Act (50 CFR part 424)
A.
In Orange and San Diego Counties, we identified several recent human activities that may have adversely affected the tidewater goby. We specifically discussed activities at San Onofre Creek Lagoon and San Mateo Creek Lagoon. We thought both of these locations might be important sources of dispersing tidewater gobies, appearing to be two of the three most stable populations in the area. We felt that population losses or reductions of the San Onofre and San Mateo tidewater goby populations were very serious and illustrated ongoing adverse impacts of earthmoving activities in and around creeks and lagoons in the southern portion of the tidewater goby range.
As noted above in the Summary of Comments and Recommendations, several commenters objected to our characterization of the tidewater goby's status relative to coastal development and habitat loss and modification north of Orange and San Diego Counties. They state that we inferred that environmental regulations have substantially reduced the potential for habitat loss and modification from the relatively small number of known population extirpations since the implementation of major environmental programs in the early 1970s (J. Buse, Environmental Defense Center,
Scientists who commented on the proposed delisting pointed out that extirpation is not the only effect we ought to be concerned about. Effects short of complete extirpation should be considered as well. For example, population size and stability are important considerations, as is the combination of human influences and natural perturbations (M. Capelli,
The delisting proposal also included a lengthy discussion of the salinity tolerances of tidewater gobies, suggesting that the tidewater goby appears tolerant of a broad range of salinity conditions and implying, therefore, that salinity changes due to upstream flow alterations would not have adverse effects on the tidewater gobies. Some scientists commenting on the proposed delisting suggested that we confused salinity tolerance with the natural preference of tidewater gobies for mildly brackish water (M. Capelli,
Some scientists who commented on the proposed delisting disagreed with both our characterization of the threat from channelization and our characterization of the situation at Waddell Creek. The effect of channelization is not limited to the increased probability of tidewater gobies being swept into marine environments and to lack of refugia but also includes direct loss of habitat area and increased rate of urban runoff (M. Capelli,
Commenters noted that sedimentation and erosion has also been caused by vineyard conversions in some areas (P. Ashley,
In the proposed delisting rule, we stated that new information and analyses showed that the tidewater goby is very well adapted to the climatically dynamic system in which it evolved and that intermittent occupancy of some sites was a normal aspect of the species biology (Swift
The commenters' arguments that a simple enumeration of locations where tidewater gobies have been identified is not sufficient to evaluate the vulnerability of this species have merit. Information on population sizes, trends and/or viabilities is needed to accurately assess whether the species or individual populations are likely to persist (M. Capelli,
A second reason we proposed to delist the northern populations of the tidewater goby was because we felt that the tidewater goby's ability to recolonize temporarily unoccupied habitat was greater than we had previously thought. We felt that such ability was associated with an increased likelihood that the species would persist. As evidence that recolonization occurred, we noted the reappearance of tidewater gobies after cessation of the drought and tidewater goby salinity tolerance. However, recolonization is not the only possible explanation for the reappearance of tidewater gobies after the drought (
The argument we presented in the proposed delisting rule with respect to unseasonable breaching was couched entirely in terms of extirpation (M. Capelli,
One reason we proposed delisting the northern populations of tidewater goby was that we felt threats to the populations were less severe than we believed at the time of listing. Some commenters provided information suggesting that there is cause for concern about the impacts of coastal development, habitat modification and loss, water diversions, channelization, cattle and pigs, and artificial lagoon breaching on tidewater goby populations throughout its range. As noted below in Factors C and E, such impacts may also exacerbate threats from other sources (
B.
C.
In the delisting proposal, we asserted that tidewater goby populations north of Orange and San Diego Counties were not particularly vulnerable to these introduced fish. Centrarchid fish were known, at the time, to exist at many sites inhabited by large populations of tidewater gobies (
In contrast, we felt that nonnative predation could be a threat to tidewater gobies in Orange and San Diego
Based on comments and new information we received, it appears that nonnative predators are likely to be a threat to tidewater gobies throughout their range. We implied in the proposed delisting that the presence of tidewater gobies with nonnative species (
Some commenters believed that tidewater gobies may have limited ability to repopulate from adjacent streams. We suggested that the ability to repopulate, along with sufficiently large population sizes, made predation by nonnatives a minimal threat. The commenters questioned how many tidewater goby populations might be considered large and how population fluctuations might affect vulnerability (D. Holland,
Our argument that tidewater gobies are not threatened by nonnatives because tidewater gobies have a wider salinity tolerance was not supported by scientists commenting on the proposal. The commenters assert that many of the species known or thought to prey on tidewater goby have a wide range of salinity tolerance, including striped bass, chameleon gobies, yellowfin gobies and shimfuri gobies (D. Holland,
Finally, commenters speculated that ranges of current nonnative species may expand (
We received comments to the effect that there is cause for concern about the impacts of nonnative species on tidewater gobies (M. Capelli,
D.
In the proposed delisting rule, we changed our position, stating that there is little evidence to support the conclusion that existing regulatory mechanisms inadequately protect the tidewater goby or are contributing to substantial or widespread population decline and loss in the northern portion of the species' range. We stated that (1) review and permitting of projects under sections 10 and 404 was unlikely to allow the extent of destruction and modification of habitat that occurred prior to their implementation, (2) measures included in section 404 permits because of the presence of other listed and sensitive species (
Several commenters expressed concern over our changed perspective about the northern range. They stated that we presented no evidence to support the contention that environmental regulations have substantially reduced the potential for the substantial habitat loss and modification that occurred historically, instead inferring the conclusion from the relatively small number of known population extirpations since the implementation of major environmental programs in the early 1970s (J. Buse,
Several comments also suggested that regulatory agencies (
Finally, several comments took issue with our interpretation of the results of our search of EPA's AQUIRE database. They indicated that a vast body of literature documents the effects of effluents, runoff and contaminants on aquatic organisms and habitats. Even if species-specific data about effects to the goby are lacking, this body of literature suggests effluents, runoff, and contaminants could be a threat to the tidewater goby (D. Holland,
We continue to believe that existing State, local, and Federal regulatory mechanisms provide substantial protections to the tidewater goby. We recognize that these existing mechanisms may not address all the threats to the goby discussed in this notice, and are not in themselves sufficient basis to delist the species.
E.
The proposed delisting rule reported that, since the end of the drought, 14 sites believed to be extirpated had been recolonized. The survival and recovery of these populations following the drought alleviated the concern that drought exacerbated by human-induced water reductions would result in significant permanent population decline and loss. In southern California, however, we stated that the loss of many of the larger tidewater goby populations had made recolonization of smaller intermittent lagoons much more unlikely. Therefore, we concluded that extended droughts, along with other physical alterations to the lagoons, threatened the southern California portion of the tidewater goby range.
Periodic droughts are a historical feature of California, which has been repeatedly subject to prolonged droughts (M. Capelli,
We have reconsidered our analysis of the tidewater goby's status with respect to drought. When evaluating the status of a species which fluctuates widely in response to climatic conditions, we should consider a time period which includes the full range of climatic variation. In proposing to delist the tidewater goby, we considered only one drought cycle. Drought can have dramatic negative effects on tidewater goby, at least decreasing goby populations to very low levels (perhaps to the point where they are undetectable) and at most extirpating populations (see final listing rule and delisting proposal). Because future droughts in California are a certainty, we know that tidewater gobies will be subject to the negative effects of drought again. We need to consider the potential magnitude and importance of these drought events on long-term persistence of the tidewater goby prior to delisting any portion of the range of the species.
In the proposed delisting rule, we changed our position, stating that flood events have been shown to have no significant adverse effect on tidewater goby populations. Instead, we felt the flushing action of floods was probably the primary mechanism for colonization of other habitats along the coast (Lafferty
As has been mentioned above, we may have overestimated the tidewater goby's potential for recolonization. If the tidewater goby's ability to recolonize sites is actually highly restricted (
We proposed to delist the northern portion of the tidewater goby range because we felt the original listing was in error. Specifically, we believed that new evidence showed that (1) there were more populations in the northern portion of the range at the time of the delisting proposal than at the time of the listing, (2) the threats to those populations were less severe than previously believed, and (3) the tidewater goby has a greater ability to recolonize than was known at the time of the listing. We received 45 responses from individuals, agencies or other parties. Thirty-eight of the responses opposed our proposal to remove the northern populations of the tidewater goby from the list of endangered and threatened wildlife. Most commenters did not agree that the original listing was in error. Further, our specific conclusions in the proposal were not corroborated by the comments we received during the three comment periods. In particular, the commenters, including many tidewater goby scientific researchers, suggested that we overemphasized the importance of the discovery of new tidewater goby populations, that we minimized the severity of the threats in the northern portion of the range, and that we overstated the recolonization ability of the tidewater goby. After review of the information presented, we find the commenters' arguments with respect to the goby's ability to recolonize compelling and believe that it is prudent to withdraw the proposed delisting. Withdrawing the delisting proposal for the northern populations of the tidewater goby makes the establishment of an endangered southern California DPS unnecessary. We will focus instead on proceeding with the recovery planning process that will both guide conservation activities for the species and make explicit under what criteria the tidewater goby should be considered for delisting.
We conclude, therefore, based on our review of the best information currently available, including these comments and the recommendations of two scientific peer reviewers, and for the reasons discussed throughout this withdrawal notice, that the tidewater goby should remain listed as an endangered species throughout its range. We withdraw our June 24, 1999, proposal to remove the northern populations of tidewater goby from the list of endangered and threatened wildlife and the concurrent proposal to establish an endangered distinct population segment of tidewater goby in Orange and San Diego
A complete list of all references we cited, as well as others, is available on request from our Ventura Fish and Wildlife Office (see
Cooperative State Research, Education, and Extension Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chap. 35) and the Office of Management and Budget (OMB) regulations at 5 CFR part 1320 (60 FR 44978, August 29, 1995), this notice announces the Cooperative State Research, Education, and Extension Service's (CSREES) intention to request approval of an information collection in support of authorizations to use the 4-H Club Name and/or Emblem. Authorization of a similar information collection expired on July 31, 2002.
Comments on this notice must be received on or before January 13, 2003 to be assured of consideration.
Dr. Nancy Valentine; National 4-H Program Leader; Families, 4-H, and Nutrition; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; Stop 2225; 1400 Independence Avenue, SW.; Washington, DC 20250-2225; Telephone: (202) 720-2908; E-mail:
Copies of this information collection can be obtained from Dr. Nancy Valentine, National 4-H Program Leader, 202-720-2908,
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments may be sent to: Dr. Nancy Valentine, National 4- Program Leader, Families, 4-H, and Nutrition; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; Stop 2225; Independence Avenue, SW.; Washington, DC 20250-2225; Telephone: (202) 720-2908; E-mail:
All responses to this notice will be summarized and included in the request to OMB for approval. All comments will become a matter of public record.
Forest Service, USDA Forest Service.
Notice of meeting.
The Opal Creek Scenic Recreation Area Advisory Council is scheduled to meet on Sunday, November 17, 2002 for a field visit to the Opal Creek Scenic Recreation Area. The field visit will provide a general overview of the area to some of the new council members and the current situation related to recreation use for implementing the management plan, and developing transportation and monitoring plans. The tour is scheduled to begin at 8:30 a.m., and will conclude at approximately 3 p.m. The tour will begin at the Oregon Department of Forestry Office at 22965 North Fork Road in Mehama, Oregon.
The Opal Creek Wilderness and Opal Creek Scenic Recreation Area Act of 1996 (Opal Creek Act) (Pub. L. 104-208) directed the Secretary of Agriculture to establish the Opal Creek Scenic Recreation Area Advisory Council. The Advisory Council is comprised of thirteen members representing state, county and city governments, and representatives of various organizations, which include mining industry, environmental organizations, inholders in Opal Creek Scenic Recreation Area, economic development, Indian tribes, adjacent landowners and recreation interests. The council provides advice to the Secretary of Agriculture on preparation of a comprehensive Opal Creek Management Plan for the SRA, and consults on a period and regular basis on the management of the area.
The public comment period will begin at 10 a.m. and the field tour will begin after the last presentation. Time allotted for individual presentations will be limited to 3 minutes. Written comments are encouraged, particularly if the material cannot be presented within the time limits of the comment period. Written comments may be submitted prior to the November 17 meeting by sending them to Designated Federal Official Stephanie Phillips at the address given below. The public is welcome to attend the tour, however individuals must provide their own transportation throughout the tour and bring a lunch.
For more information regarding this meeting, contact Designated Federal Official Stephanie Phillips; Willamette National Forest, Detroit Ranger District, HC 73 Box 320, Mill City, OR 97360; (503) 854-3366.
Forest Service, USDA.
Notice of meeting.
The Ravalli County Resource Advisory Committee will be meeting to discuss 2003 project development and 2002 project monitoring. Agenda topics will include project monitoring reports and a public forum (question and answer session). The meeting is being held pursuant to the authorities in the Federal Advisory Committee Act (Public Law 92-463) and under the Secure Rural Schools and Community Self-Determination Act of 2000 (Public Law 106-393). The meeting is open to the public.
The meeting will be held on November 26, 2002, 6:30 p.m.
The meeting will be held at the Ravalli County Administrative Building, 215 S. 4th Street, Hamilton, Montana. Send written comments to Jeanne Higgins, District Ranger, Stevensville Ranger District, 88 Main Street, Stevensville, MT 59870, by facsimile (406) 777-7423, or electronically to
Jeanne Higgins, Stevensville District Ranger and Designated Federal Officer, Phone: (406) 777-5461.
November 12, 2002; 11:30 A.M.-12:30 P.M.
Cohen Building, Room 3321, 330 Independence Ave., SW., Washington, DC 20237.
The members of the Broadcasting Board of Governors (BBG) will meet in closed session to review and discuss a number of issues relating to U.S. Government-funded non-military international broadcasting. They will address internal procedural, budgetary, and personnel issues, as well as sensitive foreign policy issues relating to potential options in the U.S. international broadcasting field. This meeting is closed because if open it likely would either disclose matters that would be properly classified to be kept secret in the interest of foreign policy under the appropriate executive order (5 U.S.C. 552b. (c)(1)) or would disclose information the premature disclosure of which would be likely to significantly frustrate implementation of a proposed agency action. (5 U.S.C. 552b. (c)(9)(B)) In addition, part of the discussion will relate solely to the internal personnel and organizational issues of the BBG or the International Broadcasting Bureau. (5 U.S.C. 552b. (c)(2) and (6))
Persons interested in obtaining more information should contact either Brenda Hardnett or Carol Booker at (202) 401-3736.
The Department of Commerce has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Copies of the above information collection proposal can be obtained by calling or writing Diana Hynek, Departmental Paperwork Clearance Officer, (202) 482-0266, Department of Commerce, Room 6625, 14th and Constitution Avenue, NW, Washington, DC 20230 (or via the Internet at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to David Rostker, OMB Desk Officer, Room 10202, New Executive Office Building, Washington, DC 20503.
The Department of Commerce has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Copies of the above information collection proposal can be obtained by calling or writing Diana Hynek, Departmental Paperwork Clearance Officer, (202) 482-0266, Department of Commerce, Room 6625, 14th and Constitution Avenue, NW, Washington, DC 20230 (or via the Internet at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to David Rostker, OMB Desk Officer, Room 10202, New Executive Office Building, Washington, DC 20503.
Import Administration, International Trade Administration, Department of Commerce.
November 7, 2002.
Holly Hawkins or Thomas Gilgunn, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-0414 and (202) 482-4236, respectively.
Unless otherwise indicated, all citations are to the Tariff Act of 1930, as amended (the Act). In addition, unless otherwise indicated, all citations to the Department's regulations are codified at 19 CFR part 351 (2001).
On September 20, 2001, the Department of Commerce received a request from Shouzhou Huaxiang Foodstuffs, Co., Ltd. to conduct a new shipper review of the antidumping duty order on freshwater crawfish tail meat from the People's Republic of China. On September 28, 2001, the Department received a similar request from North Supreme Seafood (Zhejiang) Co., Ltd. On November 8, 2001, the Department found that the requests for review met all of the regulatory requirements set forth in section 351.214(b) of the Department's regulations and initiated these new shipper antidumping reviews covering the period September 1, 2001, through August 31, 2001.
Pursuant to section 751(a)(2)(B)(iv) of the Act and section 351.214(i)(2) of the Department's regulations, the Department may extend the deadline for completion of the final results of a new shipper review if it determines that the case is extraordinarily complicated. The Department has determined that this case is extraordinarily complicated, and the final results of these new shipper reviews cannot be completed within the statutory time limit of 90 days after the date on which the preliminary results were issued. The Department needs more time to analyze the issues raised in the parties' briefs with respect to valuation and the
Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce (the Department) has received timely requests to conduct new shipper reviews of the antidumping duty order on freshwater crawfish tail meat from the People's Republic of China. In accordance with 19 CFR 341.214(d), we are initiating a review for Qingdao Jin Yong Xiang Aquatic Foods Co. Ltd. (Qingdao JYX) and its producer Hefei Zhongbao Aquatic Co., Ltd. (Hefei Zhongbao); Siyang Foreign Trading Corporation (Siyang) and its producer Anhui Golden Bird Agricultural Products Development Co., Ltd. (Anhui). We are also initiating a new shipper review for Hubei Qianjiang Houhu Frozen & Processing Factory (Hubei Houhu) and for Zhoushan Huading Seafood Co., Ltd. (Zhoushan Huading), each of which both produced and exported freshwater crawfish tail meat from the People's Republic of China (“PRC”).
November 7, 2002.
Holly Hawkins, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-0414.
Unless otherwise indicated, all citations are references to the provisions of the Tariff Act of 1930, as amended (“the Act”). In addition, unless otherwise indicated, all citations are to the Department's regulations, codified at 19 CFR part 351 (April 2002).
The Department received timely requests from Hubei Houhu, Qingdao JYX, Siyang, and Zhoushan Huading, in accordance with 19 CFR 351.214(c), for new shipper reviews of the antidumping duty order on freshwater crawfish tail meat from the PRC, which has a September anniversary month.
As required by 19 CFR 351.214(b)(2)(i), (ii), and (iii)(A), each company identified above has certified that it did not export freshwater crawfish tail meat to the United States during the period of investigation (“POI”), and that it has never been affiliated with any exporter or producer which did export freshwater crawfish tail meat during the POI. Pursuant to 19 CFR 341.214(b)(2)(iii)(B), the company has further certified that its export activities are not controlled by the central government of the PRC. Further, pursuant to the Department's regulations at 19 CFR 351.214(b)(2)(iv), each company submitted documentation establishing the date on which it first shipped the subject merchandise to the United States, the date of entry of that first shipment, the volume of that shipment and subsequent shipments, and the date of the first sale to an unaffiliated customer in the United States. For Siyang and Qingdao JYX, both of which exported the subject merchandise but did not produce it, complete certifications, as required by section 351.214(b)(2)(ii), were also submitted by Anhui (the producer of crawfish tail meat exported by Siyang) and by Hefei Zhongbao (the producer of crawfish tail meat exported by Qingdao JYX).
In accordance with section 751(a)(2)(B) of the Act and 19 CFR 351.214(b) of the Department's regulations, we find that the requesters (Hubei Houhu, Zhoushan Huading, Siyang and its producer Anhui, and Qingdao JYX and its producer Hefei) submitted all of the information required by the statute and the Department's regulations.
In accordance with section 751(a)(2)(B)(ii)(I) of the Act and 19 CFR 351.214(d)(1), we are initiating new shipper reviews of the antidumping duty order on freshwater crawfish tail meat from the PRC. We intend to issue the preliminary results of these reviews no later than 180 days after the date on which the review is initiated.
We will instruct the Customs Service to allow, at the option of the importer, the posting, until the completion of the review, of a bond or security in lieu of a cash deposit for each entry of the subject merchandise from the above-listed companies. Zhoushan Huading and Hubei Houhu each have certified that they both produce and export the subject merchandise, the sales of which were the basis of these new shipper review requests. Therefore, we will apply the bonding option under 19 CFR 251.107(b)(1)(i) only to subject merchandise for which each is both the producer and exporter. Qingdao JYX has identified Hefei Zhongbao Aquatic Co., Ltd. as the producer of the subject merchandise for the sales under review. in addition, Siyang has identified Anhui Golden Bird Agricultural Products Development Co., Ltd. (Anhui) as the producer of the subject merchandise for the sales under review. We will apply the bonding option under 19 CFR 351.107(b)(1)(i) only to entries of subject merchandise from these two exporters for which the respective producers under review are the suppliers.
Interested parties that need access to proprietary information in this new shipper review should submit applications for disclosure under administrative protective orders in accordance with 19 CFR 351.305 and 351.306.
This initiation and notice are in accordance with section 751(a)(2)(B) of the Act (19 U.S.C. 1675(a)(2)(B)) and 19 CFR 351.214(d).
Import Administration, International Trade Administration, Department of Commerce.
Notice of extension of time limit for final results of antidumping duty administrative review.
The Department of Commerce (“the Department”) is extending the time limit for the final results of the review of stainless steel butt-weld pipe fittings from Taiwan. This review covers the period June 1, 2000, through May 31, 2001.
November 7, 2002.
James Doyle, Enforcement Group III—Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-0159.
Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR part 351 (2001).
On July 23, 2001, the Department published a notice of initiation of this antidumping duty administrative review for the period of June 1, 2000, through May 31, 2001 (66 FR 38252). We published the preliminary results of review on July 9, 2002 (67 FR 45467).
Section 751(a)(3)(A) of the Act states that if it is not practicable to complete the review within the time specified, the administering authority may extend the 120-day period, following the date of publication of the preliminary results, to issue its final results by an additional 60 days. Completion of the final results within the 120-day period is not practicable for the following reasons:
• This review involves certain complex Constructed Export Price (“CEP”) adjustments including but not limited to CEP Profit and CEP Offset which were raised by respondent and petitioners after the verification and after the preliminary results of review.
• The review involves a large number of transactions and complex adjustments other than those mentioned above.
Therefore, in accordance with section 751(a)(3)(A) of the Act, the Department is extending the time period for issuing the final results of review by 30 days until December 6, 2002.
Import Administration, International Trade Administration, Department of Commerce.
Notice of extension of time limits.
The Department of Commerce (the Department) is extending the time limits for the final results of the 2000-2001 administrative review of the antidumping duty order on stainless steel sheet and strip in coils from Mexico. This review covers one manufacturer/exporter of the subject merchandise to the United States, ThyssenKrupp Mexinox S.A. de C.V., and the period July 1, 2000, through June 30, 2001.
November 7, 2002.
Deborah Scott at (202) 482-2657 or Robert James at (202) 482-0649, Antidumping and Countervailing Duty Enforcement Group III, Office Eight, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
On August 7, 2002, we published the preliminary results of the administrative review of stainless steel sheet and strip in coils from Mexico for the period July 1, 2000, through June 30, 2001.
This extension is in accordance with section 751(a)(3)(A) of the Tariff Act (19 U.S.C. 1675 (a)(3)(A) (2001)).
Import Administration, International Trade Administration, Department of Commerce.
November 7, 2002.
Thomas Martin at (202) 482-3936, Paige Rivas at (202) 482-0651 or Crystal Crittenden at (202) 482-0989, AD/CVD Enforcement, Office 4, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Ave, NW., Washington, DC 20230.
The Department of Commerce is postponing the final determinations in the less-than-fair-value investigations of urea ammonium nitrate solution (UANS) from Belarus, the Russian Federation, and Ukraine. The Department will make its final determinations not later than February 18, 2003.
Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR part 351 (2000).
On October 3, 2002, the Department of Commerce (the Department) published notices of preliminary determination of sales at less than fair value for UANS from Belarus, the Russian Federation and Ukraine.
In accordance with 19 CFR 351.210(b), because (1) our preliminary determinations are affirmative, (2) the requesting exporters account for a significant proportion of exports of the subject merchandise from their respective countries, and (3) no compelling reasons for denial exist, we are granting Grodno's, Nevinka's, and the Ukrainian government's requests and are fully extending the time for the final determinations, until no later than February 18, 2003. Where applicable, suspension of liquidation will be extended accordingly.
This notice is issued and published pursuant to Section 735(a)(2) of the Act and 19 CFR 351.210(g).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of cancellation of a public meeting.
The Gulf of Mexico Fishery Management Council (Council) has cancelled a joint meeting of the Reef Fish Management and Artificial reef Committees that was scheduled for Wednesday, November 13, 2002, from 8;30 to 9;30 a.m. The meeting was announced in the
Wayne E. Swingle, Executive Director, Gulf of Mexico Fishery Management Council; telephone (813)228-2815.
The initial notice was published on October 29, 2002 (67 FR 65954). All other previously published information remains the same.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meetings.
The Mid-Atlantic Fishery Management’s Council’s Summer Flounder Monitoring Committee, Scup Monitoring Committee, and Black Sea Bass Monitoring Committee will hold a public meeting.
The meeting will be held on Thursday, November 21, 2002, beginning at 9 a.m. with the Summer Flounder Monitoring Committee, followed by the Scup Monitoring Committee and the Black sea Bass Monitoring Committee.
The meeting will be held at the Holiday Inn BWI, 890 Elkridge Landing Road, Baltimore, MD’ telephone 410-859-8400.
Daniel T. Furlong, Executive Director, Mid-Atlantic Fishery Management Council, telephone: 302-674-2331, ext. 19.
The purpose of this meeting is to recommend the 2003 recreational management measures for summer flounder, scup, and black sea bass.
Although non-emergency issues not contained in this agenda may come before the Committee for discussion, those issues may not be the subject of formal Committee action during this meeting. Committee action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 205 (c) of the Magnuson-Stevens Act, provided the public has been notified of the Committee’s intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Joanna Davis at the Council (see
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Receipt of applications for scientific research permit (1407) and request for comment.
Notice is hereby given that NMFS has received an application for scientific research from California Department of Fish and Game (CDFG) in Chico, CA (1407). This permit would affect three Evolutionarily Significant Units (ESUs) of salmonids identified in Supplementary Information below. This document serves to notify the public of the availability of the permit application for review and comment before a final approval or disapproval is made by NMFS.
Written comments on the permit applications must be received at the appropriate address or fax number (
Written comments on the modification request should be sent to the appropriate office as indicated below. Comments may also be sent via fax to the number indicated for the request. Comments will not be accepted if submitted via e-mail or the Internet. The applications and related documents are available for review, by appointment, for permit 1407: Protected Resources Division, NMFS, 650 Capitol Mall, Suite 8-300, Sacramento, CA 95814 (ph: 916-930-3600, fax: 916-930-3629). Documents may also be reviewed by appointment in the Office of Protected Resources, F/PR3, NMFS, 1315 East-West Highway, Silver Spring, MD 20910 3226 (301-713-1401).
Rosalie del Rosario at phone number 916-930-3600, or e-mail:
Issuance of permits and permit modifications, as required by the Endangered Species Act of 1973 (16 U.S.C. 1531 1543) (ESA), is based on a finding that such permits/modifications: (1) are applied for in good faith; (2) would not operate to the disadvantage of the listed species which are the subject of the permits; and (3) are consistent with the purposes and policies set forth in section 2 of the ESA. Authority to take listed species is subject to conditions set forth in the permits. Permits and modifications are issued in accordance with and are subject to the ESA and NMFS regulations governing listed fish and wildlife permits (50 CFR parts 222 226).
Those individuals requesting a hearing on an application listed in this notice should set out the specific reasons why a hearing on that application would be appropriate (
This notice is relevant to three federally listed salmonid ESUs: endangered Sacramento River Winter-run Chinook salmon (
CDFG requests a 5-year permit for takes of adult and juvenile threatened Central Valley Spring-run Chinook salmon and threatened Central Valley steelhead to study their life history. The goal of the study is to provide baseline population information for evaluating restoration efforts in Butte and Big Chico creeks and to provide information for the recovery of the species.
Notice of meeting.
This notice sets forth the schedule and summary agenda for the next meeting of the Panel to Assess the Capabilities for Domestic Response to Terrorist Attacks Involving Weapons of Mass Destruction. Notice of this meeting is required under the Federal Advisory Committee Act.
November 7 and 8, 2002.
RAND, 1200 S. Hayes Street, 4th floor, Arlington, VA 22202-5050.
Panel to Assess the Capabilities for Domestic Response to Terrorist Attacks Involving Weapons of Mass Destruction will meet from 8:30 a.m. until 5:30 p.m. on November 7, 2002 and from 8:30 a.m. until 2 p.m. on November 8, 2002. Time will be allocated for public comments by individuals or organizations at the end of the meeting on November 8.
RAND provides information about this Panel on its web site at
Department of the Air Force, DoD.
Notice of meeting.
Pursuant to Public Law 92-463, notice is hereby given of the forthcoming meeting of the 311th Human Systems Wing Advisory Group. The purpose of the meeting is to provide technical advice and assessment to the Commander, 311th Human System Wing. Because classified and contractor-proprietary information will be discussed, this meeting will be closed to the public.
November 24-27, 2002.
Brooks City Base, San Antonio, Texas.
Major John Pernot, Air Force Scientific Advisory Board Secretariat, 1180 Air Force Pentagon, Room 5D982, Washington DC 20330-1180, (703) 697-4811.
Department of the Army, U.S. Army Corps of Engineer, DoD.
Notice of Intent.
Authorized channel improvements in the Big Sunflower River Basin began in the 1940s and were completed in the 1960s. The work consisted of channel improvements on a number of streams including the Big Sunflower and Little Sunflower Rivers and Bogue Phalia; channel improvements consisted primarily of clearing and snagging, with some channel enlargement and channel cleanout. The Big Sunflower River Basin has experienced extensive flooding to agricultural land and urban areas in recent years. Results of surveys taken and engineering data collected indicated the lower reaches of the project streams had experienced loss of designed capacity due to vegetation growth and sediment accumulation, thereby requiring major maintenance. Corrective maintenance actions will require extensive channel cleanout, channel clearing, and snagging within the Big Sunflower channel system.
Questions about the proposed action and Draft Supplemental Environmental Impact Statement (DSEIS) should be directed to: Mr. Marvin Cannon, Vicksburg District Corps of Engineers, 4155 Clay Street, CEMVK-PP-PQ, Vicksburg, MS 39183-3435 or telephone (601) 631-5437.
This project is authorized by the Flood Control Act (FCA) of December 22, 1944 (House Document [HD] 516-78-2), as amended by FCAs of July 24, 1946, and May 17, 1950, October 23, 1962 (HD-358-89-2), and October 27, 1965 (HD-308-88-2).
1. A Final Environmental Impact Statement (FEIS), Flood Control, Mississippi River and Tributaries, Yazoo Basin, Mississippi, was completed in December 1975, covering the original flood control project on Big Sunflower River. A Final Supplemental No. 2 to the FEIS, Flood Control, Mississippi River and Tributaries, Yazoo Basin, Mississippi, Big Sunflower River Maintenance Project was completed in July 1996, for maintenance of the original flood control project on the Big Sunflower River. A Draft Environmental Assessment (EA) was prepared in February 2002 to supplement the information contained in Supplement No. 2 to the FEIS, Flood Control, Mississippi River and Tributaries, Yazoo Basin, Mississippi, Big Sunflower River Maintenance Project. The Draft EA was circulated for agency and public review and comment. To ensure the environmental sustainability of this project, the District Engineer has decided to prepare a DSEIS No. 3 to the FEIS, Flood Control, Mississippi River and Tributaries, Yazoo Basin, Mississippi, Big River Maintenance Project.
2. The proposed action involves evaluating several non-structural and structural alternatives of channel cleanout of sediment and debris from the channel bottoms and channel clearing and snagging to restore the project channels to authorized design capacities.
3. A public scoping meeting will be held in December 2002 in Rolling Fork, MS. Significant issues identified during this scoping process will be analyzed in depth in the DSEIS. The following agencies are invited to cooperate: The U.S. Coast Guard; Natural Resources Conservation Service; U.S. Forest Service; U.S. Environmental Protection Agency; U.S. Fish and Wildlife Service; Mississippi Department of Environmental Quality; and Mississippi Department of Wildlife, Fisheries and Parks. Federally recognized Indian Tribes will also be invited to cooperate. These agencies and tribes will be asked to participate in the review of study data and the DSEIS.
4. Upon completion, the DSEIS will be distributed for agency and public review and comment. Additionally, a public meeting will be held to present results of the DSEIS evaluations and the recommended plan.
5. The DSEIS is estimated to be completed in November 2003.
Department of the Army, U.S. Army Corps of Engineers, DoD.
Notice of Intent.
The U.S. Army Corps of Engineers (Corps) and the city of Long Beach propose to assess the feasibility of providing additional storm damage protection for a portion of the Peninsula Beach between the Alamitos Bay west jetty and approximately 54th Place.
A scoping meeting will be held on November 13, 2002, at 6:30 p.m., in the Belmont Plaza Pool, 4000 Olympic Plaza, Long Beach, California.
Questions regarding the scoping process or preparation of the Environmental Impact Statement/Environmental Impact Report (EIS/EIR) may be directed to Mr. Paul Rose, Chief, Environmental Resources Branch, U.S. Army Corps of Engineers, PO Box 532711, Los Angeles, CA 90053-2325, (213) 452-3840.
1.
The gap between the tip of Alamitos Bay west jetty and the east end of the Long Beach Breakwater allows waves to pass through and to directly impact the shoreline at Peninsula Beach. The long-term trend in sediment transport is expected to be to the west. The Corps has estimated the annual sediment loss to be about 55,000 cubic meters.
Due to the sediment loss, there is a potential danger of flooding when wave runup overtops the bulkhead or goes around either end and runs into homes.
2.
3.
The ROD can be published immediately after the FEIS public comment period ends. A certified EIR indicates that the environmental document adequately assesses the environmental impacts of the proposed project with the respect to CEQA. A formal scoping meeting to solicit public comment and concerns on the proposed action and alternatives will be held on Wednesday, November 13, 2002 (see
Department of the Navy, DOD.
Notice.
The inventions listed below are assigned to the United States Government as represented by the Secretary of the Navy and are available for licensing by the Department of the Navy. Navy Case No. 83,913, entitled “Modular, Interoperable Software Definable Command Control Computer Communications Intelligence (C41) Operations Center” and Navy Case No. 84,339, entitled “Infrastructure Linkage and Augmentation System (INFRALYNX)”.
Requests for information about the inventions cited should be directed to the Naval Research Laboratory, Code 1004, 4555 Overlook Avenue, SW., Washington, DC 20375-5320, and must include the Navy Case number.
Catherine M. Cotell, Ph.D., Head, Technology Transfer Office, NRL Code 1004, 4555 Overlook Avenue, SW., Washington, DC 20375-5320, telephone (202) 767-7230. Due to temporary U.S. Postal Service delays, please fax (202) 404-7920, e-mail:
35 U.S.C. 207, 37 CFR part 404.
Secretary of Education's Commission on Opportunity in Athletics; Department of Education.
Notice of open meeting.
This notice sets forth the schedule and proposed agenda of a forthcoming public meeting of the Secretary of Education's Commission on Opportunity in Athletics (the Commission). The Commission invites comments from the public regarding the application of current Federal standards for ensuring equal opportunity for men and women and boys and girls to participate in athletics under Title IX of the Education Amendments of 1972 (“Title IX”). The meeting will take place in San Diego, California.
Individuals who will need accommodations for a disability in order to attend the meetings should notify the Commission office no later than November 13, 2002. We will attempt to meet requests after this date, but cannot guarantee availability of the requested accommodation. The meeting site is accessible to individuals with disabilities.
Notice of this meeting is required under section 10(a)(2) of the Federal Advisory Committee Act.
November 20-21, 2002.
1. Date: November 20, 2002, Time: 9 a.m.-12:30 p.m., 2 p.m.-5 p.m.
2. Date: November 21, 2002, Time: 9 a.m.-1 p.m.
The meeting scheduled for November 21, 2002, will consist of review and discussion by the Commissioners of the information from the previous public meetings in preparation for the Commission's forthcoming report to the Secretary of Education. The public is invited to observe this meeting; however there will not be opportunity for public comment.
If you are interested in participating in the public comment period to present comments on the Federal standards for ensuring equal opportunity for men and
We request that you submit a request to the Commission office by email or fax. Please include your name, the organization you represent if appropriate, and a brief description of the issue you would like to present. Participants will be allowed approximately three to five minutes to present their comments, depending on the number of individuals who reserve time on the agenda. At the meeting, participants are also encouraged to submit two written copies of their comments. Persons interested in making comments are encouraged to address the issues and questions discussed under
Given the expected number of individuals interested in providing comments at the meetings, reservations for presenting comments should be made as soon as possible. Persons who are unable to obtain reservations to speak during the meetings are encouraged to submit written comments. Written comments will be accepted at each meeting site or may be mailed to the Commission at the address listed under
In addition to making reservations, individuals attending the public meetings, for security purposes, must be prepared to show photo identification in order to enter the meeting location.
We would like to receive your written comments on the Act by November 29, 2002.
Submit all comments to the Commission using one of the following methods:
1.
2.
3.
See the Commission address under the
The nation is commemorating the 30th anniversary of the passage of Title IX, the landmark legislation prohibiting recipients of Federal funds from discriminating on the basis of sex. Since this legislation was enacted, there has been a dramatic increase in the number of women participating in athletics at the high school and college levels. The Secretary of Education has determined that this anniversary provides an appropriate time to review the application of Title IX to educational institutions' efforts to provide equal opportunity in athletics to women and men. In order to do so, the Secretary established the Commission on Opportunity in Athletics. The Commission will produce a report no later than January 31, 2003, outlining its findings relative to the opportunities for men and women in athletics in order to improve the effectiveness of Title IX.
Comments are encouraged on the following priority areas:
1. Are Title IX standards for assessing equal opportunity in athletics working to promote opportunities for male and female athletes?
2. Is there adequate Title IX guidance that enables colleges and school districts to know what is expected of them and to plan for an athletic program that effectively meets the needs and interests of their students?
3. Is further guidance or are other steps needed at the junior and senior high school levels where the availability or absence of opportunities will critically affect the prospective interests and abilities of student athletes when they reach college age?
4. How should activities such as cheerleading or bowling factor into the analysis of equitable opportunities?
5. How do revenue producing and large-roster teams affect the provision of equal athletic opportunities? The Department has heard from some parties that whereas some men athletes will “walk-on” to intercollegiate teams—without athletic financial aid and without having been recruited—women rarely do this. Is this accurate and, if so, what are its implications for Title IX analysis?
6. In what ways do opportunities in other sports venues, such as the Olympics, professional leagues, and community recreation programs, interact with the obligations of colleges and school districts to provide equal athletic opportunity? What are the implications for Title IX?
7. Apart from Title IX enforcement, are there other efforts to promote athletic opportunities for male and female students that the Department might support, such as public-private partnerships to support the efforts of schools and colleges in this area?
You may view this document, as well as all other Department of Education documents published in the
To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at (202) 512-1530.
The official version of this document is published in the
Department of Education.
List of correspondence from April 1, 2002 through June 30, 2002.
The Secretary is publishing the following list pursuant to section 607(d) of the Individuals with Disabilities Education Act (IDEA). Under section 607(d) of IDEA, the Secretary is required, on a quarterly basis, to publish in the
Melisande Lee or JoLeta Reynolds. Telephone: (202) 205-5507.
If you use a telecommunications device for the deaf (TDD) you may call (202) 205-5637 or the Federal Information Relay Service (FIRS) at 1-800-877-8339.
Individuals with disabilities may obtain a copy of this notice in an alternative format (
The following list identifies correspondence from the Department issued from April 1, 2002 through June 30, 2002.
Included on the list are those letters that contain interpretations of the requirements of IDEA and its implementing regulations, as well as letters and other documents that the Department believes will assist the public in understanding the requirements of the law and its regulations. The date and topic addressed by a letter are identified, and summary information is also provided, as appropriate. To protect the privacy interests of the individual or individuals involved, personally identifiable information has been deleted, as appropriate.
• Letter dated April 19, 2002 to individual, (personally identifiable information redacted), regarding the circumstances under which transportation must be provided as a related service; and clarifying that IDEA does not address whether parents are entitled to reimbursement for transporting their child if transportation is not a required related service on the individualized education program.
• OSEP memorandum 02-06 dated April 26, 2002, regarding implementation of the new funding formula under IDEA, specifically the year of age cohorts for which a free appropriate public education (FAPE) is ensured.
• Letter dated May 22, 2002 to Louisiana Department of Education Division of Appropriation Control Director Kitty Littlejohn regarding the ability to add program income, generated from registration fees assessed on participants at conferences conducted by the State Department of Education, to the IDEA Part B grant award.
• Letter dated April 2, 2002 to individual, (personally identifiable information redacted), clarifying that (1) the Florida Department of Education (FDE) operates a one-tier due process system; (2) the FDE is revising its eligibility documents which will be reviewed by the Office of Special Education Programs; (3) the FDE is developing a State Improvement Plan; and (4) a school district may include in its annual count children placed by their parents in private schools through Florida's program of Scholarships to Public or Private Schools of Choice for Students with Disabilities if these children are being provided special education or related services under 34 CFR 300.452-300.462.
• Letter dated June 27, 2002 to Dina O. Harris, Esq., John F. Walsh, Esq. and Arizona Assistant Attorney General Kacey Gregson, regarding the ability of a State educational agency (SEA) to reduce or withhold funds from a local educational agency (LEA) that is not meeting its obligation to provide FAPE to all students with disabilities it is responsible for serving.
• Letter dated April 2, 2002 to G. Emerson Dickman, Esquire, clarifying requirements regarding qualifications of personnel under both the IDEA and the No Child Left Behind Act (NCLB Act) and a parent's right to be informed about the qualifications of individuals providing services to a child.
• Letter dated June 27, 2002 to Illinois State Board of Education Director of Special Education Dr. Anthony E. Sims, clarifying that, although the Part B “at no cost” requirement does not preclude incidental fees normally charged to nondisabled students or their parents as part of the regular education program, it would be impermissible for a public agency to charge parents a fee for extended school year services if summer school services, for which incidental fees are charged, are not a part of the extended school year services provided to the student.
• Letter dated June 26, 2002 to Connecticut Department of Education Bureau Chief George P. Dowaliby clarifying that to require that issues be raised at a planning and placement team meeting before they can be addressed at a due process hearing establishes impermissible notice and exhaustion burdens inconsistent with the IDEA and its implementing regulations.
• Letters dated June 25, 2002 to Minnesota Department of Children Families and Learning Director of Special Education Norena A. Hale, Mississippi State Department of Education Program Improvement and Outreach Bureau Director Dr. Melody Bounds, and Missouri Department of Elementary and Secondary Education Coordinator of Special Education Services Melodie Friedebach, clarifying that the States must revise or delete their 30-day time limits because Circuit Court decisions applicable to these States have specifically rejected a 30-day time for appealing due process hearing decisions since it conflicts with the policies and purposes of the IDEA.
• Letter dated June 4, 2002 to Arkansas Department of Education Associate Director of Special Education Marcia Harding, requesting that Arkansas revise its 30-day time limit for filing a civil action under IDEA to be consistent with a case involving the Arkansas time limit.
• Letters dated June 4, 2002 to Minnesota Department of Children, Families and Learning Director of Special Education Norena A. Hale, Mississippi State Department of Education Program Improvement and Outreach Bureau Director Dr. Melody Bounds, Missouri Department of Elementary and Secondary Education Coordinator of Special Education Services Melodie Friedebach, and Nebraska Department of Education Special Populations Administrator Gary M. Sherman, requesting that the States either explain why case law rejecting a 30-day time limit for judicial review of IDEA claims is not applicable to civil actions in their States or revise their 30-day time limits.
• Letter dated June 11, 2002 to Kentucky Acting Part C Coordinator Ms. Trish Howard, clarifying that (1) guidelines established by a State to assist teams in developing an individualized family service plan (IFSP) may not be implemented in a manner that restricts the authority and responsibility of the IFSP team and (2) that the IFSP team makes the final determination of the frequency and intensity of early intervention services needed by the child.
• Dear Colleague letter dated June 14, 2002 regarding preliminary guidance for programs which must be implemented by the 2002-2003 school year on public school choice, supplemental education services, and collective bargaining agreements under the provisions of the NCLB Act.
• Letter dated May 10, 2002 to Florida Department of Education Bureau of Instructional Support and Community Services Chief Shan Goff, regarding Florida's obligation under Federal civil rights laws to ensure that its Scholarship Program for Students with Disabilities is administered in a nondiscriminatory manner.
• Letter dated April 30, 2002 to Alabama Superintendent of Education Edward R. Richardson, clarifying Title I paraprofessional requirements under the NCLB Act.
You may view this document, as well as all other Department of Education documents published in the
To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-800-293-6498; or in the Washington, DC, area at (202) 512-1530.
The official version of this document is published in the
Environmental Protection Agency (EPA).
Notice.
In compliance with the Paperwork Reduction Act (44 U.S.C. 3501
Comments must be submitted on or before January 6, 2003.
Compliance Assessment and Media Programs Division, Office of Compliance, Office of Enforcement and Compliance Assurance, Mail Code 2223A, United States Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460. A hard copy of a specific ICR may be obtained without charge by calling or sending an E-mail to the contact person listed in this notice.
Sharie A. Centilla of the Office of Compliance at (202) 564-0697 or via E-mail at
All owners and operators of existing municipal solid waste landfills must submit an initial design capacity report. If the design capacity of an existing landfill is equal to or greater than 2,500,000 megagrams in weight and equal to or greater than 2,500,000 cubic meters in volume, the owner or operator is required to determine the facility's annual, nonmethane, organic compound (NMOC) emission rate. Based on a three-tier emission rate calculation system, the owner or operator is required to either install a collection and control system, or perform emission test using the criteria specified at the next tier level. If the NMOC emission rate is determined to be less than 50 megagrams per year, as determined by Tier 1, Tier 2, or Tier 3 emission rate calculations, no further calculations or testing is required for that year.
For landfills required to install collection and control systems,
(i) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(ii) evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(iii) enhance the quality, utility, and clarity of the information to be collected; and
(iv) minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
In the previously approved ICR, the estimated number of respondents for this information collection was 3,837 with 384 responses per year. The annual industry reporting and recordkeeping burden for this collection of information was 15,110 hours. On the average, each respondent reported approximately 0.10 times per year and approximately 39 hours were spent preparing each response. The total annual reporting and recordkeeping cost burden for this collection of information was $890,000. This included an annual cost of $788,000 associated with capital/startup costs and $102,000 associated with the annual operation and maintenance costs.
Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.
On April 26, 2002, the U.S. Environmental Protection Agency, Region 6 (EPA) published a Notice of Intent (NOI) in the
Environmental Protection Agency (EPA).
Notification of public NACEPT standing committee on compliance assistance meeting on December 3, 2002.
Pursuant to the Federal Advisory Committee Act, Public Law 92-463, notice is hereby given that the U.S. Environmental Protection Agency (EPA) will hold an open meeting of the NACEPT Standing Committee on Compliance Assistance (Committee) on Tuesday, December 3, 2002 from 8 a.m. to 4 p.m. The meeting will be held at the Adams Mark Hotel at 111 Pecan Street East, San Antonio, Texas 78205. Seating at the meeting will be on a first-come basis and limited time will be provided for public comment. The meeting will focus on the areas of the Compliance Assistance program on which the Committee has been asked to advise the EPA. These are: (1) Strengthening the national compliance assistance network by helping identify opportunities to enhance communication among compliance assistance providers and by promoting collaboration in compliance assistance planning and tool development; (2) developing and testing performance measurement systems to demonstrate the effectiveness and environmental outcomes of compliance assistance; and (3) acting as a sounding board to provide feedback on compliance assistance policies, strategies or other related matters. A formal agenda will be available at the meeting.
NACEPT is a federal advisory committee under the Federal Advisory Committee Act, Public Law 92-463. NACEPT provides advice and recommendations to the EPA Administrator and other EPA officials on a broad range of domestic and international environmental policy issues. NACEPT consists of a representative cross-section of EPA's partners and principal constituents who provide advice and recommendations on policy issues and serve as a sounding board for new strategies. Over the last two years, EPA has undertaken a number of actions to improve our compliance assistance activities. To ensure that the Agency's efforts to improve compliance assistance are implemented in a way that continues to reflect stakeholder needs, NACEPT created a new Standing Committee on Compliance Assistance. This will provide a continuing Federal Advisory Committee forum from which the EPA can continue to receive valuable stakeholder advice and recommendations on compliance assistance activities. For further information concerning the NACEPT Standing Committee on Compliance Assistance, including the upcoming meeting, contact Joanne Berman, Designated Federal Officer (DFO), on (202) 564-7064, or e-mail:
Environmental Protection Agency (EPA).
Notice.
This notice announces receipt of an application 67979-EUP-E from Syngenta Seeds requesting an experimental use permit (EUP) for the plant-incorporated protectant
Comments, identified by docket ID number OPP-2002-0301, must be received on or before December 9, 2002.
Comments may be submitted electronically, by mail, or through hand delivery/courier. Follow the detailed instructions as provided in Unit I. of the
Leonard Cole, Biopesticides and Pollution Prevention Division (7511C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number: (703) 305-5412; e-mail address: cole.leonard@epa.gov.
This action is directed to the public in general. This action may, however, be of interest to those persons who are interested in agricultural biotechnology or may be required to conduct testing of chemical substances under the Federal Food, Drug, and Cosmetic Act (FFDCA), or the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Since other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
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An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA
Certain types of information will not be placed in the EPA Dockets. Information claimed as CBI and other information whose disclosure is restricted by statute, which is not included in the official public docket, will not be available for public viewing in EPA's electronic public docket. EPA's policy is that copyrighted material will not be placed in EPA's electronic public docket but will be available only in printed, paper form in the official public docket. To the extent feasible, publicly available docket materials will be made available in EPA's electronic public docket. When a document is selected from the index list in EPA Dockets, the system will identify whether the document is available for viewing in EPA's electronic public docket. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in Unit I.B.1. EPA intends to work towards providing electronic access to all of the publicly available docket materials through EPA's electronic public docket.
For public commenters, it is important to note that EPA's policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing in EPA's electronic public docket as EPA receives them and without change, unless the comment contains copyrighted material, CBI, or other information whose disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in EPA's electronic public docket. The entire printed comment, including the copyrighted material, will be available in the public docket.
Public comments submitted on computer disks that are mailed or delivered to the docket will be transferred to EPA's electronic public docket. Public comments that are mailed or delivered to the Docket will be scanned and placed in EPA's electronic public docket. Where practical, physical objects will be photographed, and the photograph will be placed in EPA's electronic public docket along with a brief description written by the docket staff.
You may submit comments electronically, by mail, or through hand delivery/courier. To ensure proper receipt by EPA, identify the appropriate docket ID number in the subject line on the first page of your comment. Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments. If you wish to submit CBI or information that is otherwise protected by statute, please follow the instructions in Unit I.D. Do not use EPA Dockets or e-mail to submit CBI or information protected by statute.
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Do not submit information that you consider to be CBI electronically through EPA's electronic public docket or by e-mail. You may claim information that you submit to EPA as CBI by marking any part or all of that information as CBI (if you submit CBI on disk or CD ROM, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is CBI). Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.
In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket and EPA's electronic public docket. If you submit the copy that does not contain CBI on disk or CD ROM, mark the outside of the disk or CD ROM clearly that it does not contain CBI.
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Offer alternative ways to improve the notice.
7. Make sure to submit your comments by the deadline in this document.
8. To ensure proper receipt by EPA, be sure to identify the docket ID number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
Syngenta Seeds, 3054 Cornwallis Road, Research Triangle Park, North Carolina 27709-2257, has applied for an EUP for field testing of the plant-incorporated protectant
Following the review of the Syngenta Seeds application and any comments and data received in response to this notice, EPA will decide whether to issue or deny the EUP request for this EUP program, and if issued, the conditions under which it is to be conducted. Any issuance of an EUP will be announced in the
The Agency's authority for taking this action is under 40 CFR part 172.
Environmental protection, Experimental use permits.
Board of Governors of the Federal Reserve System.
Notice.
The Board has approved the fee schedules for Federal Reserve priced services and electronic connections and a private-sector adjustment factor (PSAF) for 2003 of $171.7 million. These actions were taken in accordance with the requirements of the Monetary Control Act of 1980, which requires that, over the long run, fees for Federal Reserve priced services be established on the basis of all direct and indirect costs, including the PSAF.
The new fee schedules become effective January 2, 2003.
For questions regarding the fee schedules: Joseph Baressi, Financial Services Analyst, (202/452-3959); William Driscoll, Financial Services Analyst, check payments, (202/452-3117); Edwin Lucio, Financial Services Analyst, ACH payments, (202/736-5636); Gregory Cannella, Financial Services Analyst, Fedwire funds transfer, Fedwire securities, and noncash collection services, (202/530-6214); Marybeth Butkus, Senior Financial Services Analyst, special cash services, (202/452-3917); or Amy Pierce, Senior IT Analyst, electronic connections, (202/736-5675), Division of Reserve Bank Operations and Payment Systems. For questions regarding the PSAF: Brenda Richards, Senior Financial Analyst, (202/452-2753) or Gregory Evans, Manager, Financial Accounting, (202/452-3945), Division of Reserve Bank Operations and Payment Systems. For users of Telecommunications Device for the Deaf (TDD)
Over the period 1992 through 2001, the Reserve Banks recovered 99.8 percent of their total costs for providing priced services, including special project costs, imputed expenses, and targeted after-tax profits or return on equity (ROE).
Table 1 summarizes the priced services' actual, estimated, and budgeted cost recovery rates for 2001, 2002, and 2003 respectively. Cost recovery is estimated to be 92.2 percent in 2002 and budgeted to be 94.4 percent in 2003. The aggregate cost-recovery rates are heavily influenced by the performance of the check service, which accounts for approximately 85 percent of the total cost of priced services. The electronic services (FedACH, Fedwire funds transfer, Fedwire securities, and national settlement) account for approximately 15 percent of costs, while noncash and special cash services represent a de minimis amount.
Table 2 presents an overview of the 2001 actual, budgeted 2002, estimated 2002, and projected 2003 cost recovery performance by category of priced service.
1.
Forward-processed check volume in 2002 was budgeted to be 2.9 percent higher than in 2001. The Reserve Banks now estimate, however, that 2002 volume will be 1.8 percent lower than in 2001. Even this estimate may be optimistic, as processed check volume through August 2002 is 3.4 percent below 2001 volume for the same period. The deterioration in the Reserve Banks' check volume appears to be consistent with nationwide trends away from check use and toward greater use of electronic payment methods. The Federal Reserve System's recent retail payments research shows that the number of checks written in the United States appears to have been declining since the mid-1990s.
2.
The primary risks to the Reserve Banks' ability to achieve their budget targets are (1) cost overruns in the check modernization projects, (2) significantly lower-than-projected returns on pension assets, and (3) a steeper decline in the Reserve Banks' check volume than the projected 2.8 percent annual decline.
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• The Reserve Banks are raising fees for forward-collection check products 2.5 percent, return check products 4.0 percent, and payor-bank check products 4.8 percent compared with January 2002 fees.
• Since 1996, the price index for check services has increased 31 percent.
• The Reserve Banks will (1) Retain current per-item origination fees for items in large files, (2) reduce per-item origination fees for items in small files from $0.004 to $0.003, and (3) reduce per-item receipt fees (for all items) from $0.0035 to $0.0025.
• The ACH price index has decreased 61 percent since 1996.
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• The price index for Fedwire funds transfer and national settlement services has decreased 60 percent since 1996.
• The Reserve Banks will reduce the on-line transfer origination and receipt fees from $0.66 to $0.40.
• The price index for the Fedwire securities service has decreased 34 percent since 1996.
4.
Table 3 shows the actual 2001, estimated 2002, and projected 2003 cost-recovery performance for the check service.
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Reserve Banks expect lower-than-budgeted pension credits to offset estimated local cost reductions of $27 million. The estimated full-year recovery rate is lower than the rate through August as severance expenses are recognized and data processing and data communications charges increase during the fourth quarter.
The volume of checks handled by the Reserve Banks has declined (as shown in table 5) reflecting a broader market trend in which the number of checks written each year appears to be declining, as discussed in a recent Federal Reserve check study.
Reversing a trend over the past few years, electronic check volumes have declined. Recent data are summarized in table 6. Reserve Banks provide payor banks with electronic check data or images for about 38 percent of the checks they collect. Year-to-date 2002 image volumes have declined about 5 percent, to approximately 884 million check images, which represents about 8.4 percent of all checks collected by the Reserve Banks. The decline in image volume, compared with the target growth of 25.6 percent, is likely due to delays in implementing FedImage services.
3.
In 2003, fees for all check products are increasing 2.8 percent on a volume-weighted basis compared with current fees, as shown in table 7.
Table 8 summarizes ranges of selected check fees for 2002 and 2003, and shows 2003 price changes in bold type.
4.
Total adjusted costs before taxes are projected to increase approximately $6.8 million, or 0.8 percent, from estimated 2002 expenses.
Total check revenue is projected to increase $29 million, or 3.8 percent, from the 2002 estimate due to increased fees for payor-bank products and return-check products. (Increases in fees for forward-collection products are projected to be more than offset by lower volumes and shifts to lower-priced products due to low interest rates.) In 2003, revenues from paper-based services, electronic services, and other operating and imputed revenues are expected to represent about 83 percent, 12 percent, and 5 percent, respectively, of the check service's budgeted $789.0 million in revenue.
In 2003, forward-processed check volume is projected to be 14.4 billion, a decrease of 2.7 percent compared with the 2002 estimate, with the decline coming mostly from large banks, perhaps partly due to their customers' shift to electronic payment instruments. Fine-sort check volume is expected to continue to decline by 41 million checks, or 3.7 percent, from the 2002 estimate. Total returns are projected to be 166 million, a decrease of 2.3 percent compared with the 2002 estimate.
The Reserve Banks expect an increase in payor-bank service volumes. The Reserve Banks project electronic presentment volume to increase 5.5 percent in 2003 and truncation volume to increase 0.9 percent. Image services volume is projected to grow 8.4 percent in 2003, compared with an estimated 2002 increase of 1.9 percent. Image volume growth is expected to be driven by the increased functionality of FedImage services (for example, electronic access to archived check images using web technology). MICR information volume is projected to increase 0.2 percent in 2003, compared with a 9 percent decline estimated for 2002.
The Board believes that the greatest risks to achieving the projected cost-recovery rate for the check service of 93.0 percent are (1) challenges in meeting System volume projections and related revenue projections, (2) challenges in reducing local costs as budgeted, (3) potential downward revisions to priced pension credits, and (4) potential check modernization cost overruns.
Table 9 presents the actual 2001, estimated 2002, and projected 2003 cost-recovery performance for the commercial ACH service.
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The Reserve Banks estimate that their 2002 commercial ACH volume will be 9.1 percent higher than experienced in 2001, which is 20.3 percent higher than budgeted. Year-to-date through August 2002, the Reserve Banks' ACH volume increased 10.8 percent from the same period in 2001. The full-year projection reflects the Reserve Banks' expectation that some large depositors will continue to shift some volume to another ACH operator, or at least split their transactions between the Federal Reserve and another operator.
3.
Table 10 presents the actual 2001, estimated 2002, and projected 2003 cost-recovery performance for the funds transfer and national settlement services.
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Reserve Banks project that the Fedwire funds transfer service will recover 104.1 percent of total costs in 2003, including imputed expenses and targeted ROE. Total costs are expected to decline $8.6 million (14.7 percent) from the 2002 estimate because of lower data communications charges and the full-year effect of savings from the consolidation of local on-line operations support.
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Table 11 presents the actual 2001, estimated 2002, and projected 2003 cost-recovery performance for the Fedwire securities service.
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Through August 2002, total Fedwire securities transfer volume has increased 22.5 percent compared with volume during the same period in 2001. For the full year, the Reserve Banks estimate that total Fedwire securities volume will increase 25.4 percent from 2001, compared with a budgeted 21.0 percent increase. The increased volume is primarily due to the addition of Ginnie Mae securities to the Fedwire securities service earlier this year. Higher-than-anticipated mortgage refinancing activity has also contributed to the overall increase in volume.
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With the consolidation of operational support for processing joint custody collateral, costs for this labor-intensive product can be clearly identified and explicitly recovered by a new surcharge. The Reserve Banks, therefore, are establishing a $22.00 surcharge per customer-initiated joint custody account withdrawal, effective July 2003.
After many years of declining volume, the business of executing orders for the purchase and sale of Fedwire-eligible securities by the Reserve Banks will be discontinued as of year-end 2002. Banking industry consolidation and the availability of discount brokerage services have reduced significantly the need for the Reserve Banks to continue this accommodation for customers. The purchase and sale activity represents less than 0.5 percent of the costs and revenues of the securities service line.
The Reserve Banks project that the Fedwire securities service will recover 104.9 percent of costs in 2003, including imputed expenses and targeted ROE. Total costs are expected to decline $3.9 million (16.5 percent) from the 2002 estimate, primarily due to lower data communication charges, and the full-year impact of savings from the consolidation of local on-line operations support.
The Reserve Banks project that the volume of agency securities transfers in 2003 will increase 4.3 percent from the 2002 estimate and total revenue will decrease 11.2 percent from the 2002 estimate. The volume increase is primarily due to the full-year effect of adding Ginnie Mae securities to the service.
Table 12 lists the actual 2001, estimated 2002, and projected 2003 cost-recovery performance for the noncash collection service.
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Special cash services represent a small portion (less than one tenth of one percent) of overall priced services provided by the Reserve Banks to
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Each year, as required by the Monetary Control Act of 1980, the Reserve Banks set fees for priced services provided to depository institutions. These fees are set to recover, over the long run, all direct and indirect costs and imputed costs, including financing costs, return on equity (profit), taxes, and certain other expenses that would have been incurred if a private business firm provided the services. These imputed costs are based on data developed in part from a model comprising consolidated financial data for the nation's fifty largest bank holding companies (BHCs).
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The amount of the Reserve Banks' assets that will be used to provide priced services during the coming year is determined using Reserve Bank information on actual assets and projected disposals and acquisitions. The priced portion of mixed-use assets is determined based on the allocation of the related depreciation expense. The priced portion of actual Reserve Bank liabilities consists of balances held by Reserve Banks for clearing priced services transactions (clearing balances), estimated based on historical data, and other liabilities such as accounts payable and accrued expenses.
Long-term debt is imputed only when core clearing balances and long-term liabilities are not sufficient to fund long-term assets or if the interest rate risk sensitivity analysis indicates that estimated risk will exceed a change in cost recovery of more than two percentage points.
a.
For simplicity, given that federal corporate tax rates are graduated, state tax rates vary, and various credits and deductions can apply, a specific tax rate is not calculated for Reserve Bank priced services. Instead, the use of a pre-tax ROE captures imputed taxes. The resulting ROE influences the dollar level of the PSAF and Federal Reserve price levels because this is the return a shareholder would expect in order to invest in a private business firm. The use of the pre-tax return on equity assumes 100 percent recovery of expenses, including the targeted return on equity. The recommended PSAF is, therefore, based on a matching of revenues and actual and imputed costs. Should the pre-tax earnings be greater or less than the targeted ROE, the PSAF is adjusted for the tax expense or savings associated with the adjusted recovery. The imputed tax rate is the median of the rates paid by the BHCs over the past five years adjusted to the extent that BHCs have invested in municipal bonds.
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The increase in the 2003 PSAF is primarily due to a significant increase in clearing balances on which investments in marketable securities are imputed and the resulting increase in total assets. Because required imputed equity is based on five percent of total assets, priced services equity and cost of equity increased.
1.
While assets financed through the PSAF such as premises, receivables, and prepaid expenses have decreased, most priced service assets, including the prepaid pension costs, furniture and equipment, and Board of Governors' assets have increased. Table 15 shows that the short-term assets funded with short-term payables and clearing balances total $103.8 million. This amount represents a decrease of $9.5 million, or 8.4 percent, from the short-term assets funded in 2002. Long-term assets funded with long-term liabilities, equity, and core clearing balances are projected to total $1,537.4 million. This amount represents an increase of $58.1 million, or 3.9 percent, from the long-term assets funded in 2002. Growth of $35.9 million in prepaid pension costs explains the majority of the increase, while increases in Reserve Bank leasehold improvements and long-term prepayments and furniture and equipment assets explain an additional $23.5 million. These increases are offset by a decrease of $1.3 million in Reserve Bank premises assets.
2.
Table 17 shows the imputed PSAF elements, the pre-tax return on equity, and other required PSAF recoveries approved for 2003 and 2002. The significant increase in clearing balances from which marketable security investments are imputed increases total assets. An increase in total assets, and the resulting increase in imputed equity, increases expenses associated with the return on equity. Although the pre-tax return on equity rate decreased from 22.1 percent for 2002 to 19.4 percent for 2003, with increased imputed equity, the pre-tax return on equity increased $19.6 million. As indicated previously, the pre-tax return on equity is calculated using the combined results of three models. The effective tax rate used in 2003 also increased to 30.4 percent from 29.3 percent in 2002.
3.
All operational and legal changes considered by the Board that have a substantial effect on payments system participants are subject to the competitive impact analysis described in the March 1990 policy statement “The Federal Reserve in the Payments System.”
The 2003 fees result in a projected ROE below the target established using a model that is based, in part, on the consolidated results over time of the largest fifty bank holding companies. To the extent that these bank holding companies expect a mature, declining business, such as check processing, to have the same return on equity as the organization as a whole, the Reserve Banks' underrecovery could have an adverse competitive effect. Given the current market environment, however, greater fee increases are not likely to materially improve the Reserve Banks' cost recovery and might even reduce the revenue that the Reserve Banks receive as depository institutions seek lower-cost alternatives. Overall, the Board believes that the proposed fees are reasonable.
By order of the Board of Governors of the Federal Reserve System, October 31, 2002.
Office of Governmentwide Policy, GSA.
Notice of meeting.
Notice is hereby given that the Governmentwide Per Diem Advisory Board will hold an open meeting from 2:00 p.m. to 4:00 p.m. on Thursday, November 14, 2002. The meeting will be held at The Crystal City Marriott, 1999 Jefferson Davis Highway, Arlington, VA 22202. This meeting is open to the public. Members of the public who wish to file a written statement with the Board may do so in writing c/o Rob Miller, Designated Federal Officer (MTT), General Services Administration, 1800 F St., NW, Room G-219, Washington, DC 20405, or via e-mail at
For security and building access: (1) ADA accessible facility; (2) Public seating may be limited.
Rob Miller, Designated Federal Officer, on (202) 501-4621, or Joddy Garner on (202) 501-4857, Per Diem Program Manager, General Services Administration. Also, inquiries may be sent to
Pursuant to the Federal Advisory Committee Act, the Department of Health and Human Services (HHS) announces the following advisory committee meeting.
Part T (Agency for Toxic Substances and Diseases Registry) of the Statement of Organization, Functions, and Delegations of Authority of the Department of Health and Human Services (50 FR 25129-25130, dated June 17, 1985, as amended most recently at 62 FR 1119-1120, dated January 8, 1997) is amended to abolish the Office of Federal Programs, Office of the Assistant Administrator, Agency for Toxic Substances and Disease Registry.
Section T-B, Organization and Functions, is hereby amended as follows:
Delete the title and functional statement for the
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) has determined that sodium tetradecyl sulfate injection (Sotradecol) was not withdrawn from sale for reasons of safety or effectiveness. This determination will allow FDA to approve abbreviated new
J. Kenneth Borgerding, Center for Drug Evaluation and Research (HFD-7), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-594-2041.
In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 (Public Law 98-417) (the 1984 amendments), which authorized the approval of duplicate versions of drug products approved under an ANDA procedure. ANDA sponsors must, with certain exceptions, show that the drug for which they are seeking approval contains the same active ingredient in the same strength and dosage form as the “listed drug,” which is a version of the drug that was previously approved under a new drug application (NDA). Sponsors of ANDAs do not have to repeat the extensive clinical testing otherwise necessary to gain approval of an NDA. The only clinical data required in an ANDA are data to show that the drug that is the subject of the ANDA is bioequivalent to the listed drug.
The 1984 amendments include what is now section 505(j)(7) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)), which requires FDA to publish a list of all approved drugs. FDA publishes this list as part of the “Approved Drug Products with Therapeutic Equivalence Evaluations,” which is generally known as the “Orange Book.” Under FDA regulations, drugs are withdrawn from the list if the agency withdraws or suspends approval of the drug's NDA or ANDA for reasons of safety or effectiveness or if FDA determines that the listed drug was withdrawn from sale for reasons of safety or effectiveness (21 CFR 314.162). Regulations also provide that the agency must make a determination as to whether a listed drug was withdrawn from sale for reasons of safety or effectiveness, before an ANDA that refers to that listed drug may be approved (21 CFR 314.161(a)(1)). FDA may not approve an ANDA that does not refer to a listed drug.
Sodium tetradecyl sulfate injection is the subject of NDA 5-970. On August 13, 1946, Elkins Sinn received approval to market sodium tetradecyl sulfate injection. During 2000, Elkins Sinn discontinued manufacture of this product.
On August 13, 2001, Bennett and Company submitted a citizen petition (Docket No. 01P-0350/CP1) under § 10.30 (21 CFR 10.30) to FDA requesting that the agency determine whether sodium tetradecyl sulfate injection was withdrawn from sale for reasons of safety or effectiveness. In addition, on December 6, 2001, Omega Laboratories, Ltd., submitted a citizen petition (Docket No. 01P-0350/CP2) under § 10.30 to FDA making the same request. FDA has reviewed its records and has found no information to indicate that sodium tetradecyl sulfate injection was withdrawn from the market for safety or efficacy reasons. Therefore, FDA concludes that the decision to not manufacture and market the product was not due to safety or efficacy concerns. Accordingly, the agency will maintain sodium tetradecyl sulfate injection in the “Discontinued Drug Product List” section of the Orange Book. The “Discontinued Drug Product List” delineates, among other items, drug products that have been discontinued from marketing for reasons other than safety or effectiveness. ANDAs that refer to sodium tetradecyl sulfate injection may be approved by the agency.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of the guidance entitled “Class II Special Controls Guidance Document: Transcutaneous Air Conduction Hearing Aid System; Guidance for Industry and FDA.” This document describes a means by which transcutaneous air conduction hearing aid systems (TACHAS) may comply with the requirement of special controls for class II devices. Elsewhere in this issue of the
Submit written or electronic comments on this guidance by February 5, 2003.
Submit written requests for single copies on a 3.5″ diskette of the guidance document entitled “Class II Special Controls Guidance Document: Transcutaneous Air Conduction Hearing Aid System; Guidance for Industry and FDA” to the Division of Small Manufacturers, International, and Consumer Assistance (HFZ-220), Center for Devices and Radiological Health, Food and Drug Administration, 1350 Piccard Dr., Rockville, MD 20850. Send two self-addressed adhesive labels to assist that office in processing your request, or fax your request to 301-443-8818. See the
Submit written comments concerning this guidance to the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. Comments should be identified with the docket number found in brackets in the heading of this document. Submit electronic comments to http://www.fda.gov/dockets/ecomments.
Eric M. Mann, Center for Devices and Radiological Health (HFZ-460), Food and Drug Administration, 9200 Corporate Blvd., Rockville, MD 20850, 301-594-2080.
The TACHAS is intended to compensate for impaired hearing without occluding the ear canal. It consists of an air conduction hearing aid attached to a surgically fitted tube system, which is placed through the soft tissues between the post auricular region and the outer ear canal. This special control guidance document lists the risks to health identified by FDA and describes measures that, if followed by manufacturers and combined with the general controls, will generally address the risks associated with these devices.
Elsewhere in this issue of the
This guidance is being issued consistent with FDA's good guidance practices (GGPs) regulation (§ 10.115). The guidance represents the agency's current thinking on TACHAS. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statute and regulations. This guidance document is issued as a level 1 guidance consistent with GGPs.
In order to receive the “Class II Special Controls Guidance Document: Transcutaneous Air Conduction Hearing Aid System; Guidance for Industry and FDA” via your fax machine, call the CDRH Facts-On-Demand system at 800-899-0381 or 301-827-0111 from a touch-tone telephone. Press 1 to enter the system. At the second voice prompt press 1 to order a document. Enter the document number (1414) followed by the pound sign (#). Follow the remaining voice prompts to complete your request.
You may obtain a copy of the guidance from the Internet. CDRH maintains an entry on the Internet for easy access to information including text, graphics, and files that you may download to a personal computer. Updated on a regular basis, the CDRH home page includes device safety alerts,
Interested persons may submit to Dockets Management Branch (see
Office of the Chief Information Officer, HUD.
Notice.
The proposed information collection requirement described below has been submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB approval number (2539-0009) and should be sent to: Lauren Wittenberg, OMB Desk Officer, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503; Fax number (202) 395-2974; E-mail
Wayne Eddins, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410; e-mail
The Department has submitted the proposal for the collection of information, as described below, to OMB for review, as required by the Paperwork Reduction Act (44 U.S.C. chapter 35). The Notice lists the following information: (1) The title of the information collection proposal; (2) the office of the agency to collect the information; (3) the OMB approval number, if applicable; (4) the description of the need for the information and its proposed use; (5) the agency form number, if applicable; (6) what members of the public will be affected by the proposal; (7) how frequently information submissions will be required; (8) an estimate of the total number of hours needed to prepare the information submission including number of respondents, frequency of response, and hours of response; (9) whether the proposal is new, an extension, reinstatement, or revision of an information collection requirement; and (10) the name and telephone number of an agency official familiar with the proposal and of the OMB Desk Officer for the Department.
Sec. 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 35, as amended.
Office of the Chief Information Officer, HUD.
Notice.
The proposed information collection requirement described below has been submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB approval number (2502-0267) and should be sent to: Lauren Wittenberg, OMB Desk Officer, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503; Fax number (202) 395-6974; E-mail
Wayne Eddins, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410; e-mail
The Department has submitted the proposal for the collection of information, as described below, to OMB for review, as required by the Paperwork Reduction Act (44 U.S.C. chapter 35). The Notice lists the following information: (1) The title of the information collection proposal; (2) the office of the agency to collect the information; (3) the OMB approval number, if applicable; (4) the description of the need for the information and its proposed use; (5) the agency form number, if applicable; (6) what members of the public will be affected by the proposal; (7) how frequently information submissions will be required; (8) an estimate of the total number of hours needed to prepare the information submission including number of respondents, frequency of response, and hours of response; (9) whether the proposal is new, an extension, reinstatement, or revision of an information collection requirement; and (10) the name and telephone number of an agency official familiar with the proposal and of the OMB Desk Officer for the Department.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 35, as amended.
Office of Public and Indian Housing, HUD.
Notice of Funding Availability for Revitalization of Severely Distressed Public Housing, HOPE VI Revitalization Grants, Notice of Technical Corrections.
This notice makes two technical corrections to HUD's Fiscal Year (FY) 2002 Notice of Funding Availability for Revitalization of Severely Distressed Public Housing, HOPE VI Revitalization Grants.
Application Due Date. Revitalization grant applications are due
Milan Ozdinec, Deputy Assistant Secretary for Public Housing Investments, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 4130, Washington, DC 20410; telephone (202) 401-8812; fax (202) 401-2370 (these are not toll free numbers). Persons with hearing-or speech-impairments may call via TTY by calling the Federal Information Relay Service at (800) 877-8339.
On July 31, 2002 (67 FR 49766), HUD published its Fiscal Year (FY) 2002 Notice of Funding Availability for Revitalization of Severely Distressed Public Housing, HOPE VI Revitalization Grants (HOPE VI NOFA), which announced the availability of approximately $492.5 million in FY 2002 funds for the HOPE VI Revitalization Program. The July 31, 2002, HOPE VI NOFA provided an application due date of November 29, 2002. Because November 29, 2002, falls on the Friday after Thanksgiving, HUD extended the application due date under the July 31, 2002, HOPE VI NOFA for one week to Friday, December 6, 2002, in a notice published on September 27, 2002 (67 FR 61150). Additionally, in a notice published on October 23, 2002 (67 FR 65139), HUD announced a number of additional technical corrections. This notice makes two additional technical corrections to the July 31, 2002 HOPE VI NOFA.
In Section XIV(B)(4), HUD will reduce the time requirement by the length of the application deadline extension (7 days), meaning that an option must extend for least 173 days after the application deadline of December 6, 2002.
In Section XVI(A)(3) a new paragraph (e) will be added because the page limit of 150 pages of attachments stated under Section XVI(A)(2((b) does not apply to the NOFA criteria under Section XIV(B)(4) and Section XIV(B)(5)(a). Accordingly, documentation provided for attachments 27 and 28, as described in the 2002 HOPE VI Revitalization Application Kit, will not be counted.
Accordingly, FR Doc. 02-19276, the Fiscal Year (FY) 2002 Notice of Funding Availability for Revitalization of Severely Distressed Public Housing, HOPE VI Revitalization Grants, published in the
1. On page 49783, Section XIV(B)(4) in column 3, remove the number “180” and insert in its place the number “173”.
2. On page 49785, Section XVI(A)(3), add paragraph (e) to read as follows:
(e) Documentation for NOFA criteria under Section XIV(B)(4) and Section XIV(B)(5)(a) (Mixed Income Communities).
Office of the Secretary, Department of the Interior.
Notice.
This notice is published in accordance with 41 CFR part 102-3, subpart B, How Are Advisory Committees Established, Renewed, Reestablished, and Terminated. Following the recommendation and approval of the
Douglas Mutter, Department of the Interior, Office of Environmental Policy and Compliance, 1689 “C” Street, Room 119, Anchorage, Alaska, (907) 271-5011.
On March 24, 1989, the T/V
The
The Public Advisory Committee was created pursuant to Paragraph V.A.4 of the Memorandum of Agreement and Consent Decree entered into by the United States of America and the State of Alaska on August 27, 1991 and approved by the United States District Court for the District of Alaska in settlement of
The Public Advisory Committee was established to advise the Trustee Council, and began functioning in October 1992. The Public Advisory Committee consists of 20 members representing the following principal interests: Sport hunting and fishing, conservation and environmental, public-at-large, recreation users, commercial tourism, local government, science/technical, subsistence, commercial fishing, aquaculture and mariculture, marine transportation, regional monitoring programs, tribal government, and Native landowners. Members are appointed to serve a 2-year term.
To carry out its advisory role, the Public Advisory Committee makes recommendations to, and advises, the Trustee Council in Alaska on the following matters:
All decisions related to injury assessment, restoration activities, or other use of natural resource damage recovery monies obtained by the governments, including all decisions regarding:
a. Planning, evaluation and allocation of available funds;
b. Planning, evaluation and conduct of injury assessment and restoration activities;
c. Planning, evaluation and conduct of long-term monitoring and research activities; and
d. Coordination of a, b, and c.
Trustee Council intentions regarding the importance of obtaining a diversity of viewpoints is stated in the
I hereby certify that the renewal of the Charter of the Public Advisory Committee, an advisory committee to make recommendations to and advise the
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications.
The following applicants have applied for a scientific research permit to conduct certain activities with endangered species pursuant to section 10(a)(1)(A) of the Endangered Species Act (16 U.S.C. 1531
Comments on these permit applications must be received on or before December 9, 2002, to receive consideration by us.
Written data or comments should be submitted to the Chief, Endangered Species, Ecological Services, U.S. Fish and Wildlife Service, 911 NE. 11th Avenue, Portland, Oregon 97232-4181 (fax: 503-231-6243). Please refer to the respective permit number for each application when submitting comments. All comments received, including names and addresses, will become part of the official administrative record and may be made available to the public.
Documents and other information submitted with these applications are available for review, subject to the requirements of the Privacy Act and Freedom of Information Act, by any party who submits a written request for a copy of such documents within 20 days of the date of publication of this notice to the address above (telephone: 503-231-2063). Please refer to the respective permit number for each application when requesting copies of documents.
The permittee requests an amendment to take (harass by survey, capture, handle, collect tail tissue, collect voucher specimens, and release) the Sonoma distinct population segment (DPS) of the California tiger salamander (
The permittee requests an amendment to take (harass by survey, capture, handle, collect tail tissue, collect voucher specimens, release, and recapture) the Sonoma distinct population segment (DPS) of the California tiger salamander (
The permittee requests an amendment to take (harass by survey, capture, handle, and release) the Sonoma distinct population segment (DPS) of the California tiger salamander (
The applicant requests a permit to take (capture) the Fresno kangaroo rat (
The applicant requests a permit to take (survey by pursuit) the Quino checkerspot butterfly (
The applicant requests a permit to take (capture, mark) the Stephens' kangaroo rat (Dipodomys stephensi) in conjunction with surveys and demographic studies throughout the species range in California for the purpose of enhancing its survival.
The permittee requests an amendment to take (harass by survey, capture, handle, tag, mark, release, and recapture) the Sonoma distinct population segment (DPS) of the California tiger salamander (
The applicant requests a permit to take (survey by pursuit) the Quino checkerspot butterfly (
The applicant requests a permit to take (harass by survey) the Conservancy fairy shrimp (
The applicant requests a permit to take (capture, mark, and release) the Fresno kangaroo rat (
Bureau of Land Management, Taos Field Office.
Taos Resource Management Plan Amendment and Environmental Impact Statement Scoping Meeting schedule for December 2002.
The following dates, times and locations have been identified for scoping meetings to discuss the Taos Resource Management Plan Amendment and Environmental Impact Statement. The Bureau of Land Management Taos Field Office is considering an amendment to the Taos Resource Management Plan (RMP) to provide for the possible disposal of approximately 160 acres of public land in Rio Arriba County, New Mexico. The land would be used by the North Central Solid Waste Authority for a new regional landfill. The public is invited to provide scoping comments on the issues that should be addressed in the plan amendment and environmental impact statement.
• Agency Scoping Meeting—Wednesday, December 4—at El Convento in Espanola, NM 2 p.m.-4 p.m.
• Public Scoping Meeting 1—Wednesday, December 4—at El Convento in Espanola, NM, 6 p.m.-8 p.m.
• Public Scoping Meeting 2—Thursday, December 5—at the Ojo Caliente Elementary School Cafeteria, Ojo Caliente, NM, 6 p.m.-8 p.m.
For meeting updates please call the BLM—Taos Field office at (505) 751-4709.
Lora Yonemoto, Realty Specialist, Bureau of Land Management, Taos Field Office, 226 Cruz Alta Rd., Taos, NM 87571, or call (505) 751-4709.
1. Agenda for future meetings: none.
2. Minutes.
3. Ratification List.
4. Inv. Nos. 701-TA-430 and 731-TA-1019 (Preliminary)(Durum and Hard Red Spring Wheat from Canada)—briefing and vote. (The Commission is currently scheduled to transmit its determination to the Secretary of Commerce on or before November 25, 2002; Commissioners' opinions are currently scheduled to be transmitted to the Secretary of Commerce on or before December 3, 2002.)
5. Outstanding action jackets: none.
In accordance with Commission policy, subject matter listed above, not disposed of at the scheduled meeting, may be carried over to the agenda of the following meeting.
Notice is hereby given pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16(b)-(h), that a proposed Final Judgment, Stipulation and Order, and Competitive Impact Statement have been filed with the United States District Court for the District of Columbia in
On September 6, 2002, the United States filed a Complaint alleging that the proposed acquisition by Archer-Daniels-Midland Company of Minnesota Corn Processors, LLC would violate section 7 of the Clayton Act, 15 U.S.C. 18, by substantially lessening competition in the manufacture and sale of corn syrup and high fructose corn syrup (“HFCS”) in the United States and Canada. ADM and MCP are two of the largest corn wet millers in the United States, competing against only four other firms in the manufacture and sale of corn syrup and HFCS. MCP sells these products through an exclusive sales joint venture that it formed in December 2000 with another corn wet miller, Corn Products International, Inc. To preserve competition, the proposed Final Judgment requires the defendants to dissolve the joint venture that MCP formed with CPI by December 31, 2002, thus allowing CPI to compete independently. A Competitive Impact Statement, filed by the United States, describes the Complaint, the proposed Final Judgment, and remedies available to private litigants. Copies of the Complaint, the proposed Final
Public comment is invited within 60-days of the date of the notice. Such comments and responses thereto will be published in the
It is hereby
1. The Court has jurisdiction over the subject matter of this action and over each of the parties hereto, and venue of this action is proper in the United States District Court for the District of Columbia.
2. The parties stipulate that a Final Judgment in the form hereto attached may be filed with and entered by the Court, upon the motion of any party or upon the Court's own motion, at any time after compliance with the requirements of the Antitrust Procedure and Penalties Act (15 U.S.C. 16), and without further notice to any party or other proceedings, provided that the United States has not withdrawn its consent, which it may do at any time before the entry of the proposed Final Judgment by serving notice thereof on defendants and by filing that notice with the Court.
3. Defendants shall abide by and comply with the provisions of the proposed Final Judgment pending entry of the Final Judgment by the Court, or until expiration of time for all appeals of any Court ruling declining entry of the proposed Final Judgment, and shall, from the date of the signing of this Stipulation by the parties, comply with all the terms and provisions of the proposed Final Judgment as though they were in full force and effect as an order of the Court.
4. This Stipulation shall apply with equal force and effect to any amended proposed Final Judgment agreed upon in writing by the parties and submitted to the Court.
5. If the United States has withdrawn its consent, as provided in paragraph 2 above, or if the proposed Final Judgment is not entered pursuant to this Stipulation, the time has expired for all appeals of any Court ruling declining entry of the proposed Final Judgment, and the Court has not otherwise ordered continued compliance with the terms and provisions of the proposed Final Judgment, then the parties are released from all further obligations under this Stipulation, and the making of this Stipulation shall be without prejudice to any party in this or any other proceeding.
6. Defendants represent that the required actions set forth in Sections IV and V of the proposed Final Judgment can and will be made, and that the defendants will later raise no claims of hardship, or difficulty of compliance as grounds for asking the Court to modify any of the provisions contained therein.
Respectfully submitted,
For Plaintiff, United States of America:
For Defendant,
For Defendant, Minnesota Corn Processors, LLC:
It is
This Court has jurisdiction over the subject matter of and each of the parties to this action. The Complaint states a claim upon which relief may be granted against defendants under Section 7 of the Clayton Act, as amended, 15 U.S.C. 18.
As used in this Final Judgment:
A. “ADM” means defendant Archer-Daniels-Midland Company, a corporation organized and existing under the laws of the state of Delaware, with its principal offices in Decatur, Illinois, its successors and assigns, and its parents, subsidiaries, divisions, groups, and their officers, managers, agents, and employees.
B. “CPI” means Corn Products International, Inc., a corporation organized and existing under the laws of the state of Delaware, with its principal offices in Bedford Park, Illinois, its successors and assigns, and its parents, subsidiaries, divisions, groups, and their officers, managers, agents, and employees.
C. “CPMCP” means CornProductsMCP Sweeteners LLC, a joint venture between CPI and MCP, which serves as the exclusive sales and distribution outlet in the United States, Canada, and Mexico for CPI and MCP in designated product categories, including
D. “MCP” means defendant Minnesota Corn Processors, LLC, a limited liability company organized and existing under the laws of the state of Colorado, with its principal offices in Marshall, Minnesota, its successors and assigns, and it parents, subsidiaries, divisions, groups, and their officers, managers, agent, and employees.
E. “Transaction” means ADM's proposed acquisition of MCP.
This Final Judgment applies to ADM and MCP, as defined above, and all other persons in active concert or participation with any of them who receive actual notice of this Final Judgment by personal service or otherwise.
A. The defendants are hereby ordered and directed to effect the dissolution of CPMCP on or prior to December 31, 2002. Defendants are further ordered and directed to provide to the General Counsel of CPI in its Westchester, Illinois offices written notice of their election to dissolve CPMCP prior to or simultaneously with the closing of the Transaction.
B. On the same day that the defendants provide written notice to CPI's General Counsel, as required pursuant to Section IV(A) of this Final Judgment, the defendants shall in writing relieve CPI, effective immediately, of any and all obligations to defendants or CPMCP to the full extent necessary to permit CPI to conduct independent operations in competition with defendants and CPMCP.
From the date the defendants provide CPI's General Counsel written notice of their election to dissolve CPMCP until the effective date of the dissolution of CPMCP, defendants shall refrain from selling, marketing, or pricing any products in cooperation or coordination with CPMCP or CPI and shall compete independently of CPMCP and CPI. Nothing in this Final Judgment affects or alters any obligations of defendants to facilitate or ensure that CPMCP completes the performance of any existing contracts or commitments to its customers.
Twenty (20) calendar days from the date of the filing of this Final Judgment, and every thirty (30) calendar days thereafter until the final accounting after dissolution of CPMCP has been completed under this Final Judgment, the defendants shall deliver to the United States an affidavit as to the fact and manner of compliance with Sections IV and V of this Final Judgment. Assuming that the information set forth in the affidavit is true and complete, any objection by the United States to the information provided by the defendants, including limitations on the information, shall be made within fourteen (14) calendar days of receipt of such affidavit. Unit one year after the defendants have completed the final accounting, the defendants shall maintain full records of the dissolution of CPMCP.
A. For the purposes of determining or securing compliance with this Final Judgment, or of determining whether the Final Judgment should be modified or vacated, and subject to any legally recognized privilege, from time to time duly authorized representatives of the United States Department of Justice, including consultants and other persons retained by the United States, shall, upon written request of a duly authorized representative of the Assistant Attorney General in charge of the Antitrust Division, and on reasonable notice to defendants, be permitted:
(1) Access during defendants' office hours to inspect and copy, or at plaintiff's option, to require defendants to provide copies of, all books, ledgers, accounts, records and documents in the possession, custody, or control of defendants, relating to any matters contained in this Final Judgment; and
(2) to interview, either informally or on the record, defendants' officers, employees, or agents, who may have their individual counsel present, regarding such matters. The interviews shall be subject to the reasonable convenience of the interviewee and without restraint or interference by defendants.
B. Upon the written request of a duly authorized representative of the Assistant Attorney General in charge of the Antitrust Division, defendants shall submit written reports, under oath if requested, relating to any of the matters contained in this Final Judgment as may be requested.
C. No information or documents obtained by the means provided in this section shall be divulged by the United States to any person other than an authorized representative of the executive branch of the United States, except in the course of legal proceedings to which the United States is a party (including grand jury proceedings), or for the purpose of securing compliance with this Final Judgment, or as otherwise required by law.
D. If at the time information or documents are furnished by defendants to the United States, defendants represent and identify in writing the material in any such information or documents to which a claim of protection may be asserted under Rule 26(c)(7) of the Federal Rules of Civil Procedure, and defendants mark each pertinent page of such material, “Subject to claim of protection under Rule 26(c)(7) of the Federal Rules of Civil Procedure,” then the United States shall give defendants ten (10) calendar days notice prior to divulging such material in any legal proceeding (other than a grand jury proceeding).
This Court retains jurisdiction to enable any party to this Final Judgment to apply to this Court at any time for further orders and directions as may be necessary or appropriate to carry out or construe this Final Judgment, to modify any of its provisions, to enforce compliance, and to punish violations of its provisions.
Entry of this Final Judgment is in the public interest.
Unless this Court grants an extension, this Final Judgment shall expire ten years from the date of its entry.
Pursuant to Section 5(b) of the Clayton Act, as amended by Section 2 of the Antitrust Procedures and Penalties Act (codified at 15 U.S.C. 16(b)-(h) (“Tunney Act”)), the United States files this Competitive Impact Statement relating to the Proposed Judgment submitted for entry in this civil antitrust proceeding.
On September 6, 2002, the United States of American filed a civil antitrust Complaint alleging that the proposed acquisition by Archer-Daniels-Midland Company (“ADM”) of Minnesota Corn Processors, LLC (“MCP”) would violate Section 7 of the Clayton Act. 15 U.S.C.
When the Complaint was filed, the United States also filed a proposed Final Judgment that would permit ADM's acquisition of MCP, but would preserve competition by requiring,
The United States and the defendants have stipulated that the proposed Final Judgment may be entered after compliance with the Tunney Act. Entry of the proposed Final Judgment would terminate the action, except that the Court would retain jurisdiction to construe, modify, or enforce provisions of the proposed Final Judgment and to punish violations thereof.
ADM is a Delaware corporation, with its principal offices located in Decatur, Illinois. ADM is engaged in the processing and sale of agricultural products, including corn syrup and HFCS, which are among the products it produces from corn through the wet milling process at domestic plants in Cedar Rapids Iowa, Clinton, Iowa, and Decatur, Illinois. Its net sales in 2001 were approximately $20 billion. Its sales of corn wet milled products in the United States in 2001 exceeded $1 billion, including HFCS sales of approximately $480 million and corn syrup sales of approximately $66 million.
MCP is a Colorado limited liability company, with its principal offices in Marshall, Minnesota. MCP is an agricultural processing and marketing business that operates corn wet milling facilities in Marshall, Minnesota and Columbus, Nebraska. MCP's net sales in 2001 were approximately $620 million. MCP's 2001 sales of corn wet milled products in the United States totaled approximately $402 million, with HFCS sales of approximately $153 million and corn syrup sales of approximately $56 million.
MCP sells its corn wet milled products through a joint venture that it formed in December 2000 with CPI. The joint venture, known as CornProductsMCP Sweeteners LLC (“CPMCP”), is the exclusive outlet for MCP's and CPI's corn syrup and HFCS products.
On July 11, 2002, ADM and MCP entered into an agreement under which ADM would acquire MCP. This transaction, which would increase concentration in the already highly concentrated corn syrup and HFCS markets precipitated the government's suit.
Corn syrup and HFCS are manufactured by wet mill processing of corn. In the wet milling process, corn kernels are first soaked in water, then ground and separated from other components of the kernel, producing a starch slurry. To manufacture corn syrup and HFCS, the corn wet millers add enzymes and/or acid that convert the starch slurry to sugars, such as dextrose and fructose.
Corn syrup is used as a sweetener in the preparation of assorted food products, including confectionery, baker, and dairy products, salad dressing, condiments, jams, and jellies, lunch meats, canned food, and vegetables. Specific applications require different grades of corn syrup with different sweetening effect. The corn wet millers that manufacture corn syrup can and do make most or all the various grades of corn syrup.
There are two grades of HFCS—HFCS 42 and HFCS 55—with the numbers referring to the percentage of fructose in the product. HFCS 42 is used as a sweetener in jam, jellies, baked goods, canned food, diary products, and some beverages. HFCS 55 is used mainly in the soft-drink industry as a substitute for sugar.
There are no realistic substitutes for corn syrup or HFCS to which customers could switch in the event of a small, but significant and non-transitory price increase. Corn syrup in its various grades. HFCS 42, and HFCS 55 are each distinct products without practical substitutes, differing from all other sweeteners and one another in their physical characteristics, means of production, many uses, and pricing. Although sugar is functionally interchangeable with corn syrup, HFCS 42 and HFCS 55 in many applications, it is significantly more expensive.
The markets in the United States and Canada for corn syrup, HFCS 42 and HFCS 55 are already highly concentrated. ADM competes against only four other firms in the manufacture and sale of corn syrup, HFCS 42 and HFSCS 55 in the United States or Canada. In these markets, ADM accounts for about 10% of all corn syrup manufacturing capacity, 33% of all HFCS 42 manufacturing capacity, and 25% of all HFCS 55 manufacturing capacity. MCP, in its joint venture with CPI, accounts for more than 20% of all corn syrup manufacturing capacity, more than 15% of all HFCS 42 manufacturing capacity, and more than 15% of all HFCS 55 manufacturing capacity.
If ADM acquires MCP and succeeds to MCP's position in its joint venture with CPI, the markets in the United States and Canada for corn syrup, HFCS 42 and HFCS 55 will become substantially more concentrated. The number of independent competitors will be reduced from five to four, increasing the likelihood of anticompetitive coordination among the few remaining corn wet millers that manufacture and sell corn syrup and HFCS 42 and HFCS 55.
Entry by a new competitor would not be timely or likely to prevent this harm to competition. Successful entry into the manufacture and sale of corn syrup, HFCS 42 and HFCS 55 is difficult time consuming, and costly. Construction of an efficient corn wet milling facility likely would take more than two years from the time of site selection to production of commercial quantities of corn wet milled products.
As the Complaint alleges, the transaction would likely have the following effects, among others: actual competition between the defendants in the corn syrup and HFCS markets will be eliminated; competition generally in the manufacture and sale of corn syrup and HFCS throughout the United States and Canada will lessen substantially; the prices for corn syrup and HFCS will increase; and the amounts of corn syrup and HFCS produced will decrease.
The provisions of the proposed Final Judgment are designed to eliminate the anticompetitive effects resulting from ADM's acquisition of MCP and succession to MCP's interest in the joint venture with CPI and to preserve competition in the manufacture and sale of corn syrup and HFCS. The proposed Final Judgment contains three principal forms of relief. First, it requires the defendants to dissolve the joint venture by December 31, 2002. This relief is intended to ensure that the acquisition does not reduce the number of independent competitors in the corn syrup and HFCS markets in the United States and Canada. Prior to the acquisition, there were five competitors and with the dissolution of CPMCP, there will still be five. Second, the proposed Final Judgment also requires that, prior to or simultaneously with the closing of ADM's acquisition of MCP, the defendants must provide CPI written notice of their election to dissolve CPMCP. Upon written notice of their election to dissolve CPMCP, the defendants are additionally required to provide CPI written notice that CPI is permitted to conduct independent operations in competition with the defendants and CPMCP. This relief is intended to ensure that, prior to accomplishment of the dissolution of CPMCP, CPI is permitted to independently market and sell corn syrup and HFCS. Third, the proposed Final Judgment further requires the defendants to complete independently of CPMCP and CPI. The proposed final Judgment does not affect or alter any obligations of ADM and MCP to facilitate or ensure that CPMCP completes the performance of any existing contracts or commitments to its customers.
Thus, the decree will ensure that there are at least five independent competitors in the corn syrup and HFCS markets, and will preserve and encourage ongoing competition between ADM and CPI.
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any person who has been injured as a result of conduct prohibited by the antitrust laws may bring suit in a federal court to recover three times the damages the person has suffered, as well as costs and reasonable attorney's fees. Entry of the proposed Final Judgment will neither impair nor assist the bringing of any private antitrust damage action. Under provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the proposed Final Judgment has no
The United States and the defendants have stipulated that the proposed Final Judgment may be entered by the Court after compliance with the provisions of the Tunney Act, provided that the United States has not withdrawn its consent. The Tunney Act conditions entry upon the Court's determination that the proposed Final Judgment is in the public interest.
The Tunney Act provides a period of at least 60 days preceding the effective date of the proposed Final Judgment within which any person may submit to the United States written comments regarding the proposed Final Judgment. Any person who wishes to comment should do so within 60 days of the date of publication of this Competitive Impact Statement in the
The proposed Final Judgment provides that the Court retains jurisdiction over this action, and the parties may apply to the Court for any order necessary or appropriate for the modification, interpretation, or enforcement of the Final Judgment.
The United States considered, as an alternative to the proposed Final Judgment, a full trial on the merits against the defendants. The United States is satisfied, however, that the dissolution of the joint venture and other relief contained in the proposed Final Judgment will preserve competition in the production and sale of corn syrup and HFCS and that the proposed Final Judgment would achieve all of the relief that the government would have obtained through litigation, but avoids the time and expense of trial. The United States is satisfied that the proposed relief will prevent the acquisition from having anticompetitive effects in this market. The dissolution of the joint venture will preserve the existence of five independent competitors, thus eliminating the likelihood that the acquisition would have facilitated industry coordination.
The Tunney Act requires that proposed consent judgments in antitrust cases brought by the United States be subject to a 60-day comment period, after which the Court shall determine whether entry of the proposed Final Judgment “is in the public interest.” In making that determination, the Court may consider—
(1) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration or relief sought, anticipated effects of alternative remedies actually considered, and any other considerations bearing upon the adequacy of such judgment;
(2) the impact of entry of such judgment upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial.
In conducting this inquiry, “the Court is nowhere compelled to go to trial or to engage in extended proceedings which might have the effect of vitiating the benefits of prompt and less costly settlement through the consent decree process.”
Accordingly, with respect to the adequacy of the relief secured by the decree, a court may not “engage in an unrestricted evaluation of what relief would best serve the public.”
The proposed Final Judgment, therefore, should not be reviewed under a standard of whether it is certain to eliminate every anticompetitive effect of a particular practice or whether it mandates certainty of free competition in the future. Court approval of a final judgment requires a standard more flexible and less strict than the standard required for a finding of liability. “[A] proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is ‘within the reaches of public interest.’”
Moreover, the Court's role under the Tunney Act is limited to reviewing the remedy in relationship to the violations that the United States has alleged in its complaint, and the Act does not authorize the Court to “construct [its] own hypothetical case and then evaluate the decree against that case.” Microsoft, 56 F.3d at 1459. Since “[t]he court's authroity to review the decree depends entirely on the government's exercising its prosecurtorial discretion by bringing a case in the first place,” it follows that the court “is only authorized to review the decree itself,” and not to “effectively redraft the complaint” to inquire into other matters that the United States might have, but did not, pursue. Id. at 1459-60.
There are no determinative materials or documents within the meaning of the Tunney Act that were considered by the United States in formulating the proposed Final Judgment.
Respectfully submitted,
For Plaintiff United States of America:
I hereby certify that on this 13th day of September, 2002. I have caused a copy of the foregoing United State's Competitive Impact Statement to be served by first class mail, postage prepaid, and by facsimile on counsel for defendants in this matter:
I hereby certify that on this 13th day of September, 2002, I have caused a copy of the foregoing United State's Competitive Impact Statement to be served by first class mail, postage prepaid, and by facsimile on counsel for defendants in this matter:
Pursuant to Section 1008 of the Controlled Substances Import and Export Act (21 U.S.C. 958(i)), the Attorney General shall, prior to issuing a registration under this Section to a bulk manufacturer of a controlled substance in Schedule I or II and prior to issuing a regulation under Section
Therefore, in accordance with Section 1301.34 of Title 21, Code of Federal Regulations (CFR), notice is hereby given that on May 13, 2002, Chattem Chemicals, Inc., 3801 St. Elmo Avenue, Building 18, Chattanooga, Tennessee 37409, made application by renewal to the Drug Enforcement Administration to be registered as an importer of methamphetamine (1105), a basic class of controlled substance listed in Schedule II.
The firm plans to import the listed controlled substance to bulk manufacture controlled substance.
Any manufacturer holding, or applying for, registration as a bulk manufacturer of this basic class of controlled substance may file written comments on or objections to the application described above and may, at the same time, file a written request for a hearing on such application in accordance with 21 CFR 1301.43 in such form as prescribed by 21 CFR 1316.47.
Any such comments, objections, or requests for a hearing may be addressed, in quintuplicate, to the Deputy Assistant Administration, Office of Diversion Control, Drug Enforcement Administration, United States Department of Justice, Washington, DC 20537, Attention: DEA Federal Register Representative (CCR), and must be filed no later than (30 days from publication).
This procedure is to be conducted simultaneously with and independent of the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice at 40 FR 43745-46 (September 23, 1975), all applicants for registration to import basic class of any controlled substance in Schedule I or II are and will continue to be required to demonstrate to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration that the requirements for such registration pursuant to 21 U.S.C. 958(a), 21 U.S.C. 823(a), and 21 CFR 1301.34(a), (b), (c), (d), (e), and (f) are satisfied.
Pursuant to section 1301.33(a) of Title 21 of the Code of Federal Regulations (CFR), this is notice that on May 21, 2002, Aldrich Chemical Company Inc., dba Isotec, 3858 Benner Road, Miamisburg, Ohio 45342-4304, made application to the Drug Enforcement Administration (DEA) for registration as a bulk manufacturer of the basic classes of controlled substances listed below:
The firm plans to manufacture small quantities of the listed controlled substances to produce standards for analytical laboratories.
Any other such applicant and any person who is presently registered with DEA to manufacture such substances may file comments or objections to the issuance of the proposed registration.
Any such comments or objections may be addressed, in quintuplicate, to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, United States Department of Justice, Washington, DC 20537, Attention: DEA Federal Register Representative (CCR), and must be filed no later than January 6, 2003.
Pursuant to section 1301.33(a) of Title 21 of the Code of Federal Regulations (CFR), this is notice that on May 28, 2002, Abbott Laboratories, DBA Knoll Pharmaceutical Company, 30 North Jefferson Road, Whippany, New Jersey, 07981, made application by renewal to the Drug Enforcement Administration (DEA) for registration as a bulk manufacturer of the basic classes of controlled substances listed below:
The firm plans to produce bulk product and finished dosage units for distribution to its customers.
Any other such applicant and any person who is presently registered with DEA to manufacture such substances may file comments or objections to the issuance of the proposed registration.
Any such comments or objections may be addressed, in quintuplicate, to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, United States Department of Justice, Washington, DC 20537, Attention: DEA Federal Register Representative (CCR), and must be filed no later than January 6, 2003.
Pursuant to Section 1008 of the Controlled Substances Import and Export Act (21 U.S.C. 958(i)), the Attorney General shall, prior to issuing a registration under this Section to a bulk manufacturer of a controlled substance in Schedule I or II and prior to issuing a regulation under Section 1002(a) authorizing the importation of such a substance, provide manufacturers holding registrations for the bulk manufacture of the substance an opportunity for a hearing.
Therefore, in accordance with Section 1301.34 of Title 21, Code of Federal Regulations (CFR), notice is hereby given that on June 23, 2002, Noramco Inc., 1440 Olympic Drive, Athens, Georgia 30601, made application by renewal to the Drug Enforcement Administration to be registered as an importer of phenylacetone (8501), a basic class of controlled substance listed Schedule II.
The firm plans to import phenylacetone for the production of amphetamine.
Any manufacturer holding, or applying for, registration as a bulk manufacturer of this basic class of controlled substance may file written comments on or objections to the application described above and may, at the same time, file a written request for a hearing on such application in accordance with 21 CFR 1301.43 in such form as prescribed by 21 CFR 1316.47.
Any such comments, objections, or requests for a hearing may be addressed, in quintuplicate, to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, United States Department of Justice, Washington, DC 20537, Attention: DEA Federal Register Representative (CCR), and must be filed no later than (30 days from publication).
This procedure is to be conducted simultaneously with and independent of the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice at 40 FR 43745-46 (September 23, 1975), all applicants for registration to import basic class of any controlled substance in Schedule I or II are and will continue to be required to demonstrate to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration that the requirements for such registration pursuant to 21 U.S.C. 958(a), 21 U.S.C. 823(a), and 21 CFR 1311.42(a), (b), (c), (d), (e), and (f) are satisfied.
By Notice dated April 11, 2002, and published in the
The firm plans to manufacture finished product for distribution to its customers.
DEA has considered the factors in Title 21, United States Code, Section 823a and determined that the registration of Novartis Pharmaceutical Corporation to manufacture methylphenidate is consistent with the public interest at this time. DEA has investigated Novartis Pharmaceutical Corporation on a regular basis to ensure that the company's continued registration is consistent with the public interest. These investigations have included inspection and testing of the company's physical security systems, audits of the company's records, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 823 and 28 CFR 0.100 and 0.104, the Deputy Assistant Administrator, Office of Diversion Control, hereby orders that the application submitted by the above firm for registration as a bulk manufacturer of the basic class of controlled substance listed above is granted.
By Notice dated April 11, 2002, and published in the
The firm plans to manufacture bulk products for distribution to its customers.
No comments or objections have been received. DEA has considered the factors in Title 21, United States Code, section 823(a) and determined that the registration of Organichem Corporation to manufacture the listed controlled substances is consistent with the public interest at this time. DEA has investigated Organichem Corporation to ensure that the company's registration is consistent with the public interest. The investigation included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 823 and 28 CFR 0.100 and 0.104, the Deputy Assistant Administrator, Office of Diversion Control, hereby orders that the application submitted by the above firm for registration as a bulk
Pursuant to section 1008 of the Controlled Substances Import and Export Act (21 U.S.C. 958(i)), the Attorney General shall, prior to issuing a registration under this section to a bulk manufacturer of a controlled substance in Schedule I or II and prior to issuing a regulation under section 1002(a) authorizing the importation of such a substance, provide manufacturers holding registrations for the bulk manufacture of the substance an opportunity for a hearing.
Therefore, in accordance with section 1301.34 of Title 21, Code of Federal Regulations (CFR), notice is hereby given that on June 13, 2002, Research Triangle Institute, Kenneth H. Davis, Jr., Hermann Building, East Institute Drive, P.O. Box 12194, Research Triangle Park, North Carolina 27709, made application by renewal to the Drug Enforcement Administration to be registered as an importer of the basic classes of controlled substances listed below:
The firm plans to import small quantities of the listed controlled substances for the National Institute of Drug Abuse and other clients.
Any manufacturer holding, or applying for, registration as a bulk manufacturer of these basic classes of controlled substances may file written comments on or objections to the application described above and may, at the same time, file a written request for a hearing on such application in accordance with 21 CFR 1301.43 in such form as prescribed by 21 CFR 1316.47.
Any such comments, objections or requests for a hearing may be addressed, in quintuplicate, to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, United States Department of Justice, Washington, D.C. 20537, Attention: DEA Federal Register Representative (CCR), and must be filed no later than December 9, 2002.
This procedure is to be conducted simultaneously with and independent of the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice at 40 FR 43745-46 (September 23, 1975), all applicants for registration to import the basic classes of any controlled substances in Schedule I or II are and will continue to be required to demonstrate to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration that the requirements for such registration pursuant to 21 U.S.C. 958(a), 21 U.S.C. 823(a), and 21 CFR 1301.34(a), (b), (c), (d), (e), and (f) are satisfied.
The Department of Labor (DOL) has submitted the following public information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35). A copy of this ICR, with applicable supporting documentation, may be obtained by calling the Department of Labor. To obtain documentation, contact Darrin King on (202) 693-4129 or e-Mail:
Comments should be sent to Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for Department of Labor, Office of Management and Budget, Room 10235, Washington, DC 20503 ((202) 395-7316), within 30 days from the date of this publication in the
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Women's Bureau.
The Department of Labor (DOL) has submitted the following public information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35). A copy of each individual ICR, with applicable supporting documentation, may be obtained by calling the Department of Labor. To obtain documentation contact Marlene Howze at (202) 693-4158 or e-mail
Comments should be sent to Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for ESA, Office of Management and Budget, Room 10235, Washington, DC 20503 ((202) 395-7316), within 30 days from the date of this publication in the
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
The Department of Labor (DOL) has submitted the following public information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35). A copy of each individual ICR, with applicable supporting documentation, may be obtained by calling the Department of Labor. To obtain documentation contact Marlene Howze at (202) 693-4158 or e-mail
Comments should be sent to Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for BLS, Office of Management and Budget, Room 10235, Washington, DC 20503 (202) 395-7316), within 30 days from the date of this publication to the
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used:
• Enhance the quality, utility, and clarity of the information to be collected; and minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
The Department of Labor (DOL) has submitted the following public information collection requests (ICRs) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13. 44 U.S.C. Chapter 35). A copy of each individual ICR, with applicable supporting documentation, may be obtained by calling the Department of Labor, Departmental Clearance Officer, Ira Mills (202) 693-4122) or by e-Mail to
Comments should be sent to Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for BLS, DM, ESA, ETA, MSHA, OSHA, PWBA, or VETS, Office of Management and Budget, Room 10235, Washington, DC 20503 ((202) 395-6881), within 30 days from the date of this publication in the
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
In accordance with section 223 of the Trade Act of 1974 (19 U.S.C. 2273) the Department of Labor issued a Certification of Eligibility to Apply for Worker Adjustment Assistance on August 29, 2002, applicable to workers of Glen Oaks Industries, Marietta Sportswear Manufacturing Company, Inc., Dallas, Texas. The certification was amended on September 25, 2002, to include workers formerly employed at Marietta Sportswear Manufacturing Co., Inc., Marietta, Oklahoma. The notice will soon be published in the
At the request of the State agency, the Department reviewed the certification for workers of the subject firm. New information provided by the company official shows that wages for the six workers engaged in the production of men's slacks at the Dallas, Texas, location were reported to the Unemployment Insurance (UI) tax account for Glen Oaks Industries in Oklahoma. The company official also reports that Marietta Sportswear Manufacturing Co., Inc., is no longer an entity of Glen Oaks Industries, and thus, not applicable to this worker group.
Also, the Department has learned from the State that all six workers have been separated from employment and there is no need to have the certification in effect for two years from the date of issuance.
Based on this new information, the Department is again amending the certification to limit coverage to workers producing men's slacks at Marietta Sportswear Manufacturing Co., Inc., Dallas, Texas, whose wages were reported to the State of Oklahoma under the UI tax account for Glen Oaks
The amended notice applicable to TA-W-41,761 is hereby issued as follows:
Workers producing men's slacks at Glen Oaks Industries, Dallas, Texas, whose wages were reported to Glen Oaks Industries in Marietta, Oklahoma, who became totally or partially separated from employment on or after June 16, 2001 through October 4, 2002, are eligible to apply for adjustment assistance under Section 223 of the Trade Act of 1974.
Pursuant to section 221 of the Trade Act of 1974, an investigation was initiated on September 30, 2002, in response to a petition filed by a company official on behalf of workers at Vulcan Chemicals, Wichita, Kansas.
The petitioner has requested that the petition be withdrawn. Consequently, further investigation in this case would serve no purpose, and the investigation has been terminated.
Pursuant to Title V of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182) concerning transitional adjustment assistance, hereinafter called (NAFTA-TAA), and in accordance with section 250(a), subchapter D, chapter 2, title II, of the Trade Act of 1974, as amended (19 U.S.C. 2273), an investigation was initiated on September 27, 2002, in response to a petition filed by Association of Western Pulp and Paper Workers, Local 5 on behalf of workers at BBA Nonwovens Washougal, Inc., Washougal, Washington.
The petitioner has requested that the petition be withdrawn. Consequently further investigation in this case would serve no purpose, and the investigation has been terminated.
Pursuant to Title V of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182) concerning transitional adjustment assistance, hereinafter called NAFTA-TAA and in accordance with Section 250(a), Subchapter D, Chapter 2, Title II, of the Trade Act of 1974, as amended (19 U.S.C. 2273), an investigation was initiated on September 5, 2002, in response to a petition filed by the Bristol Bay Native Association on behalf of Bristol Bay salmon fishermen, Permit #64872Z, Dillingham, Alaska.
The workers stopped fishing in July 2001, more than one year from the September 5, 2002, petition date. Section 223(b)(1) of the Trade Act of 1974, as amended, provides that a certification may not apply to a worker whose separation from employment occurred more than one year prior to the date the petition was filed.
Consequently, further investigation in this case would serve no purpose, and the investigation has been terminated.
In accordance with Section 250(A), Subchaper D, Chaper 2, Title II, of the Trade Act of 1974 (19 U.S.C. 2273) the Department of Labor issued a Certification for NAFTA Transitional Adjustment Assistance on September 23, 2002 applicable to workers of Harris Welco, Division of J.W. Harris Co., Inc., Flux Department, Kings Mountain, North Carolina. The notice was published in the
At the request of the company, the Department reviewed the certification for workers of the subject firm. Findings show that the Department limited its certification coverage to workers of the subject firm's Flux Department.
New information provided by the company show additional worker separations are scheduled and the remaining production of flux coated welding rods and support functions are being shifted to Mexico. The entire plant will close by the end of 2002.
Accordingly, the Department is amending the certification determination to properly reflect this matter.
It is the intent of the Department's certification to include all workers of Harris Welco who were adversely affected by a shift in production of flux coated welding rods to Mexico. Workers of the Plastics Department that was previously certified for NAFTA-TAA on June 24, 2002, remains in effect (NAFTA-6102).
The amended notice applicable to NAFTA—06414 is hereby issued as follows:
“All workers of Harris Welco, Division of J.W. Harris Co., Inc., excluding workers of the Plastics Department, Kings Mountain, North Carolina, who became totally or partially separated from employment on after July 26, 2001, through September 23, 2004, are eligible to apply for NAFTA-TAA under Section 250 of the Trade Act of 1974.”
The Department, on its own motion, reopened on September 3, 2002, the certification regarding eligibility for workers of the subject firm to apply for North American Free Trade Agreement-Transitional Adjustment Assistance (NAFTA-TAA), applicable to workers and former workers of the subject firm engaged in activities related to the production of styrene monomers (NAFTA-5171). The certification was issued on August 29, 2001, and was published in the
The petition investigation was reopened because the Department failed to include a determination as to whether workers in the Utilities Division of Huntsman Polymers Corporation, Odessa, Texas are eligible to apply for NAFTA-TAA. The workers at Huntsman Polymers are separately identifiable by product produced at the plant.
The findings of the investigation on reopening show that workers of Huntsman Polymers Corporation, Utilities Division, Odessa, Texas, “managed” the water supply and other raw materials utilized in the various manufacturing processes performed at the subject firm.
The investigation revealed that the workers of the subject firm do not produce an article within the meaning of section 250(a) of the Trade Act of 1974. The Department of Labor has consistently determined that the performance of services does not constitute production of an article, as required by the Trade Act of 1974. Workers of the subject facility may be certified only if their separation was caused importantly by a reduced demand for their services from a parent firm, a firm otherwise related to the subject firm by ownership, or a firm related by control.
The investigation revealed that the workers in the Utilities Division spent some of their time in support of the production of styrene monomers, but the majority of their work was in support of other production operations at the Odessa, Texas plant.
The certification applicable to workers engaged in activities related to the production of styrene monomers at Huntsman Polymers Corporation, Odessa, Texas (NAFTA-5171), remains in effect through August 29, 2003.
After careful review of the findings of the investigation on reopening, I conclude that workers of Huntsman Polymers Corporation, Utilities Division, Odessa, Texas (NAFTA-5171A), are denied eligibility to apply for NAFTA-TAA under section 250 of the Trade Act.
Pursuant to Title V of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182) concerning transitional adjustment assistance, hereinafter called (NAFTA-TAA), and in accordance with section 250(a), subchapter D, chapter 2, title II, of the Trade Act of 1974, as amended (19 U.S.C. 2273), an investigation was initiated on October 7, 2002, in response to a petition filed on behalf of workers at JSI Industries, Inc, Fort Atkinson, Wisconsin.
The petitioner has requested that the petition be withdrawn. Consequently further investigation in this case would serve no purpose, and the investigation has been terminated.
Pursuant to Title V of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182) concerning transitional adjustment assistance, hereinafter called NAFTA-TAA and in accordance with section 250(a), subchapter D, chapter 2, title II, of the Trade Act of 1974, as amended (19 U.S.C. 2273), an investigation was initiated on September 24, 2002, in response to a petition filed by the company on behalf of workers at Pass & Seymour/Legrand, Whitsett, North Carolina.
The petitioner has requested that the petition be withdrawn. Consequently, further investigation in this case would serve no purpose, and the investigation has been terminated.
Pursuant to Title V of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182) concerning transitional adjustment assistance, hereinafter called NAFTA-TAA and in accordance with Section 250(a), Subchapter D, Chapter 2, Title II, of the Trade Act of 1974, as amended (19 U.S.C. 2273), an investigation was initiated on April 18, 2002 in response to a petition filed by the company on behalf of workers at Peck Manufacturing Company of North Carolina, Inc., Warrenton, North Carolina.
The Department of Labor was unable to locate an official of the company to obtain the information necessary to render a decision. Consequently, further investigation in this case would serve no purpose, and the investigation has been terminated.
Pursuant to Title V of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182) concerning transitional adjustment assistance, hereinafter called (NAFTA-TAA), and in accordance with Section 250(a), Subchapter D, Chapter 2, Title II, of the Trade Act of 1974, as amended (19 U.S.C. 2273), an investigation was initiated on September 9, 2002, in response to a petition filed by the International Association of Machinists and Aerospace Workers Union, District #10 and a company official on behalf of workers at Wisconsin Automated Machinery Corporation, Oshkosh, Wisconsin.
The petitioners have requested that the petition be withdrawn. Consequently, further investigation in this case would serve no purpose and the investigation has been terminated.
National Aeronautics and Space Administration.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, Public Law 92-463, as amended, the National Aeronautics and Space Administration announces a meeting of a NASA Advisory Council (NAC), Earth Systems Science and Applications Advisory Committee (ESSAAC).
Tuesday, November 12, 2002, 1 p.m. to 5 p.m.
Channel Inn Hotel, Suite 250, 650 Water Street SW, Washington, DC 20024.
Mr. Granville Paules, National Aeronautics and Space Administration, Washington, DC 20546, 202/358-0706.
The meeting will be open to the public up to the seating capacity of the room. The agenda for the meeting is as follows:
It is imperative that the meeting be held on this date to accommodate the scheduling priorities of the key participants. Visitors will be requested to sign a visitor's register.
Office of National Drug Control Policy.
Notice of cancellation of meeting.
Linda V. Priebe, (202) 395-6622.
Nuclear Regulatory Commission (NRC).
Notice of pending NRC action to submit an information collection request to OMB and solicitation of public comment.
The NRC is preparing a submittal to OMB for review of continued approval of information collections under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
Information pertaining to the requirement to be submitted:
1.
2.
3.
4.
5.
6.
7.
Submit, by January 6, 2003, comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the burden estimate accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection be minimized, including the use of automated collection techniques or other forms of information technology?
A copy of the draft supporting statement may be viewed free of charge at the NRC Public Document Room, One White Flint North, 11555 Rockville Pike, Room O-1 F21, Rockville, MD
Comments and questions about the information collection requirements may be directed to the NRC Clearance Officer, Brenda Jo. Shelton, U.S. Nuclear Regulatory Commission, T-6 E6, Washington, DC 20555-0001, by telephone at 301-415-7233, or by Internet electronic mail to
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission (NRC).
Notice of pending NRC action to submit an information collection request to OMB and solicitation of public comment.
The NRC is preparing a submittal to OMB for review for new collections approval of information collections under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
Information pertaining to the requirement to be submitted:
1.
2.
3.
4.
5.
6.
7.
Submit, by January 6, 2003, comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the burden estimate accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection be minimized, including the use of automated collection techniques or other forms of information technology?
A copy of the draft supporting statement may be viewed free of charge at the NRC Public Document Room, One White Flint North, 11555 Rockville Pike, Room O-1 F21, Rockville, MD 20852. OMB clearance requests are available at the NRC worldwide Web site:
Comments and questions about the information collection requirements may be directed to the NRC Clearance Officer, Brenda Jo. Shelton, U.S. Nuclear Regulatory Commission, T-6 E6, Washington, DC 20555-0001, by telephone at 301-415-7233, or by Internet electronic mail to
For the Nuclear Regulatory Commission.
1. President's Report.
2. Approval of September 12, 2002 Minutes (Open Portion).
1. Finance Project in Russia and NIS.
2. Approval of September 12, 2002 Minutes (Closed Portion).
3. Pending Major Projects.
4. Reports.
In accordance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 which provides opportunity for public comment on new or revised data collections, the Railroad Retirement Board (RRB) will publish periodic summaries of proposed data collections.
Under Section 6 of the Railroad Retirement Act (RRA), benefits that may be due on the death of a railroad employee
When the RRB receives notification of the death of a railroad employee or survivor annuitant, an RRB field office utilizes Form RL-94-F,
The RRB proposes no changes to Form RL-94-F. The completion time for the RL-94-F is estimated at between 5 to 11 minutes. The RRB estimates that approximately 8,000 responses are received annually.
To request more information or to obtain a copy of the information collection justification, forms, and/or supporting material, please call the RRB Clearance Officer at (312) 751-3363. Comments regarding the information collection should be addressed to Ronald J. Hodapp, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092. Written comments should be received within 60 days of this notice.
Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for public inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by November 26, 2002, to the Secretary, Securities and Exchange Commission, Washington, DC 20549-0609, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of facts or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After November 26, 2002, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.
FirstEnergy Corp. (“FirstEnergy”), a registered holding company, 76 South Main Street, Akron, Ohio, 44308, and GPU Diversified Holdings LLC (“GPUDH”), its wholly owned direct nonutility subsidiary, 300 Madison Avenue, Morristown, New Jersey 07962, have filed an application with the Commission under sections 9(a) and 10 of the Act and rule 54 under the Act.
By orders dated December 17 and December 26, 1996,
By order dated October 29, 2001,
Applicants now propose to restructure their investment. Specifically, they request authority for GPUDH to exchange the BGS Shares for a number of restricted shares
The principal business of BPS and its associated companies is the development, manufacture and commercialization of proton exchange membranes (“PEM”) fuel cells and PEM fuel cell systems for use in transportation, stationary, portable and other power operations. All of BPS' sales revenue is derived from PEM fuel cell products.
(67 FR 66433, October 31, 2002).
Closed Meeting.
450 Fifth Street, NW., Washington, DC.
Additional Meeting.
The Securities and Exchange Commission will hold an additional meeting during the week of November 4, 2002: An additional Closed Meeting will be held on Tuesday, November 5, 2002 at 4 p.m.
Commissioner Atkins, as duty officer, determined that no earlier notice thereof was possible. The subject matter of the Closed Meeting to be held on Tuesday, November 5, 2002, will be an investigation.
The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(5), (6), (7), and (10) and 17 CFR 200.402(a)(5), (6), (7), and (10), permit consideration of the scheduled matter at the Closed Meeting.
At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 942-7070.
On March 14, 2002, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange is proposing a new program to evaluate and regulate UTP specialist performance. Under the proposal, as amended, a new committee, the Market Quality Committee, would administer the Exchange's program to evaluate and enhance UTP specialist performance. The Committee is proposed to consist of seven persons: the Chief Executive Officer of the Exchange, three members of the Exchange's senior management selected by the Chief Executive Officer, and three members selected by the Chief Executive Officer from among Exchange Officials, Senior Floor Officials and Floor Governors. The Committee would regularly evaluate UTP specialists to determine whether they have fulfilled standards relating to: (1) Quality of markets, (2) competition with other market centers, (3) administrative matters, and (4) willingness to promote the Exchange as a marketplace. The Committee also would review transfers
The Commission finds that the proposed rule change, as amended, is consistent with the Act and the rules and regulations promulgated thereunder applicable to a national securities exchange, and, in particular, with the requirements of section 6(b)
Specialists play a crucial role in providing stability, liquidity, and continuity to the trading of securities. Among the obligations imposed upon specialists by the Exchange, and by the Act and the rules thereunder, is the maintenance of fair and orderly markets in their designated securities.
Because the proposed rule change, as amended, institutes a new process for evaluating the performance of specialists that trade securities pursuant to UTP and because the Commission is approving amendments, which relate to the composition of the Market Quality Committee, on an accelerated basis, the Commission believes that the proposal should be approved on a pilot basis through April 5, 2003.
Moreover, the Commission, pursuant to section 19(b)(2)
Interested persons are invited to submit written data, views and arguments concerning Amendment Nos. 3, 4, and 5, including whether the amendments are consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the Amex. All submissions should refer to File No. SR-Amex-2002-19 and should be submitted by November 29, 2002.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
There is no new language. The pilot rule language is as follows:
(a)-(e) No Change.
(f) UTP Exchanges.
(i) A UTP Exchange may voluntarily participate in the NNMS System according to the approved rules for the
(ii) If a UTP Exchange does not participate in the NNMS System, the UTP Exchange's quote will not be accessed through the NNMS, and the NNMS will not include the UTP Exchange's quotation for order processing and execution purposes.
(iii) For purposes of this rule the term “UTP Exchange” shall mean any registered national securities exchange that has unlisted trading privileges in Nasdaq-listed securities pursuant to the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination Of Quotation and Transaction Information For Exchange-Listed Nasdaq/National Market System Securities Traded On Exchanges On An Unlisted Trading Privilege Basis (“Nasdaq UTP Plan”).
In its filing with the Commission, the NASD included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
Nasdaq is proposing to extend an existing pilot, which specifies that if a UTP Exchange elects not to participate in SuperSOES, SuperSOES will not include the UTP Exchange's quotation for order processing and execution purposes.
As was the case with SOES, Nasdaq market makers are required to participate in SuperSOES and, therefore, to accept automatic execution against their displayed quotations. However, UTP Exchanges are not required to accept automatic executions. Whereas Nasdaq can require, by rule, that its member ECNs provide immediate response to an inbound SelectNet order, it has no authority to extend that requirement to a UTP Exchange. As a result, without the implementation of the instant pilot, if a UTP Exchange was alone at the best bid/best offer for a particular security, that UTP Exchange could cause SuperSOES to stop processing orders in that security and hold those orders in queue for up to 90 seconds.
In such a case, if after 90 seconds, a SuperSOES market participant did not join the current best bid/best offer, or the UTP Exchange did not move its quote, SuperSOES would return the orders that were in queue and the system would shut down for that security. The system would only resume once the UTP Exchange moved its quote away from the inside. Nasdaq believes that such delays would adversely affect Nasdaq's ability to ensure the proper functioning of its market through a major Nasdaq market system, and to enable market participants to obtain executions for their customers.
UTP Exchanges that choose not to participate in SuperSOES would be accessible by telephone as contemplated in the Nasdaq UTP Plan,
Nasdaq proposed the pilot for a number of reasons. First, significant changes in market conditions have resulted in the need for Nasdaq, via SuperSOES, to increase the speed of
Nasdaq wants to ensure that the market in a particular security does not shut down—thereby harming investors and the market—if there is an unresponsive UTP Exchange setting the current best bid/best offer for that security. Nasdaq recognizes the importance of maintaining price priority and ensuring that market participants receive the best possible price in the market. As such, SuperSOES was originally designed not to trade through the best quote that appears in the Nasdaq montage. However, that premise assumed all quotes would be immediately accessible.
Participation in SuperSOES by a UTP Exchange is a voluntary action by each exchange. Nasdaq is not obligated to provide UTP Exchanges with access to any of Nasdaq's proprietary systems. Nasdaq's voluntary action, designed to improve efficiency and maintain an orderly market, should not become an opportunity for a Nasdaq competitor to harm the ability of Nasdaq to improve its markets.
Overall, Nasdaq believes it was appropriate to alter the terms under which a UTP Exchange participates in The Nasdaq Stock Market to address all of the concerns described in this proposal. For the same reasons, it is important to continue the pilot program to preserve the status quo as additional UTP Exchanges prepare to commence trading Nasdaq securities.
Nasdaq believes that the proposed rule change is consistent with the provisions of section 15A(b)(6) of the Act,
Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act
Nasdaq has requested that the Commission waive the 5-day pre-filing notice requirement and the 30-day operative delay. The Commission believes that waiving both the 5-day pre-filing notice requirement and the 30-day operative delay is consistent with the protection of investors and the public interest. Acceleration of the operative date will permit the NASD pilot to continue in operation without interruption. Nasdaq states that the pilot reduces the potential for a shut down in Nasdaq's automatic execution systems. Nasdaq's inability to maintain the status quo during that period would create unnecessary, harmful uncertainty. For these reasons, the Commission designates the proposal to be effective and operative upon filing with the Commission.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing will also be available for inspection and copying at the principal office of the NASD. All submissions should refer to File No. SR-NASD-2002-155 and should be submitted by November 29, 2002.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Phlx proposes to amend Phlx By-Law Article V, Section 5-7; Article XII, Sections 12-1(f)(1), (f)(2), (f)(4), (f)(5), (f)(8); 12-4(a), (d); Article XV, Sections 15-1, 15-11, 15-12; Article XVII, Sections 17-1, 17-3; and Phlx Rules 21, 404, 600, 601, 602, 949, and 1024 by removing references to Secretary and Office of the Secretary to properly reflect functions performed by the Phlx Membership Services Department and its Director, the Director of the Examinations Department and the Floor Procedure Committee.
The text of the proposed rule change, as amended, is available at the Office of the Secretary, the Phlx, and at the Commission.
In its filing with the Commission, the Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the significant aspects of such statements.
The Phlx proposes to substitute references to Office of the Secretary and the Secretary with references to the Membership Services Department and its Director, primarily, in the various Exchange By-Law Article sections and Exchange rules relating to the membership processing performed at the Phlx. The proposed amendments recognize the functional split of responsibilities and functions now performed by the Phlx's Membership Services Department as opposed to the Phlx's Office of the Secretary. The Phlx's Membership Services Department, among other things, processes applications for membership, maintains mail and membership lists, conducts the market for memberships and foreign currency options participations, registers inactive nominees as well as compiles and issues the Exchange's Bulletin.
Approximately a year ago, the Membership Services Department was created by the Phlx to align membership, foreign currency options participation, inactive nominee and approved lessor processing and functions in a single, dedicated department. Over time, the role of the Phlx's Office of the Secretary respecting these matters has been transferred. The Phlx's Office of the Secretary now relies on the Phlx's Membership Services Department to compile and keep current the membership, approved lessor, foreign currency options participant and inactive nominee lists. Thus, the Phlx represents that the purpose of the changes to Phlx Bylaw Article V, Section 5-7, and Phlx Rules 600 and 601 are to reflect this situation. In the course of performing the processing functions, the Phlx's Membership Services Department compiles and issues the Exchange's Bulletin. This function is codified and the Phlx is eliminating the reference to the Secretary's Weekly Bulletin in Phlx By-Law Article XII, Section 12-4(d), Article XV, Section 15-1, as well as in Phlx Rule 949. The proposed changes to the following membership provisions also reflect a transfer of such functions: Phlx By-Law Article XII, Sections 12-1(f) and 12-4(a), Article XV, Sections 15-11 and 15-12, as well as Phlx Rules 21, 602, 949 and 1024.
Additionally, with respect to the proposed amendment to Phlx By-Law Article XVII Section 17-3, Investigation of Insolvency, the reference to the Secretary is being substituted by the Director, Membership Services Department and the Director of the Examinations Department because the Phlx believes that they are the appropriate staff officials to contact respecting an investigation for insolvency of a member or member organization.
Similarly, the amendment to Phlx Rule 404 deletes the reference to the Secretary as the Exchange official referenced to officially close an Exchange contract in securities that has not been fulfilled according to its terms and substitutes the Floor Procedure Committee to perform that function because the Phlx believes that they are the appropriate entity to address the matter under the Exchange rules.
The Phlx believes that the proposed amendments are administrative in function and were reviewed by various Phlx Standing Committees, the Phlx Board and the membership without comment.
The Exchange believes that the proposed rule change, as amended, is
The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition.
The Exchange neither solicited nor received written comments.
The proposed rule change, as amended, has become effective on October 28, 2002, the date of filing of Amendment No. 1, pursuant to section 19(b)(3)(A)(iii) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section. Copies of such filing will also be available for inspection and copying at the principal office of the Phlx. All submissions should refer to File No. SR-Phlx-2002-46 and should be submitted by November 29, 2002.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Phlx proposes to amend Phlx Rule 201A(b), Alternate Specialist Assignment, to delete restrictions on members, member organizations and persons affiliated with member organizations from acting as an alternate specialist while that member, member organization or person affiliated with member organization is either a specialist in the options overlying the equity issue or a Registered Options Trader (“ROT”) with an assignment in the overlying options. The text of the proposed rule change is set forth below. Deleted text is in brackets.
Rule 201A (a) No change.
(b)
(c) No change.
In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Phlx has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to delete restrictions on assignment of members and member organizations as alternate specialists if the member, member organization or persons affiliated with the member is the options specialist or an assigned ROT in the options overlying the equity issue. The Phlx does not have any similar restrictions on registered equity specialists (
The instant restrictions were approved by the Commission in 1987.
The Phlx's Market Surveillance and Examinations Departments maintain and review any account activity of alternate specialists. Should the restrictions on appointment be deleted, the Phlx's Market Surveillance Department would coordinate their reviews of any corresponding options activity by an alternate specialist's member firm that may be a registered options specialist or have an affiliated ROT active in the related options to assure compliance with Phlx
The Phlx believes that deleting the restriction on alternate specialist appointment on the Phlx, generally a non-primary market for equities and other securities, would be consistent with the Commission's previous approval of proposals by several of the regional stock exchanges to allow stock specialists on those exchanges to take positions (not limited to hedging positions) in listed options on their specialty stock.
Further, the Phlx notes that Phlx
The Phlx believes that a Phlx alternate specialist will have little or no competitive or market informational advantages accruing to him or his firm in part due to the physical separation of the Phlx options and equity trading floors. The Phlx alternate equity specialist in an underlying security is physically separated from where an options specialist unit or an associated ROT would trade options and therefore, the Phlx believes that alternate specialists would have limited opportunities or abilities to engage in any potential manipulative or other improper trading practices.
On the Phlx, an alternate specialist's primary function is to afford an opportunity to assist in providing liquidity on the Phlx market if requested by the Phlx registered equity specialist. The Phlx believes that it is, therefore, rather doubtful that any possible conflicts between stock and options market making obligations may arise.
The Phlx believes it is inappropriate to restrict alternate specialist assignment due to the affiliation with an options specialist unit or an associated ROT in an environment of multiple market centers participating in trading of the equities and overlying options when the Phlx primary equities specialist is allowed to have such affiliations.
The Phlx believes that proposed rule change is consistent with section 6 of the Act
The Phlx does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Phlx has neither solicited nor received written comments with respect to the proposed rule change.
Within 35 days of the date of publication of this notice in the
(A) by order approve such proposed rule change, or,
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the Phlx. All submissions should refer to File No. SR-Phlx-2002-11 and should be submitted by November 29, 2002.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Department of State.
Notice.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the exhibit objects, contact Carol B. Epstein, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State, (telephone: (202) 619-6981). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001.
Department of State.
Notice.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the exhibit objects, contact Carol B. Epstein, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State, (
The Department of State has renewed the Charter of the Overseas Security Advisory Council. This advisory council will continue to interact on overseas security matters of mutual interest between the U.S. Government and the American private sector. The Council's initiatives and security publications provide a unique contribution to protecting American private sector interests abroad. The Under Secretary for Management has determined that the Council is necessary and in the public interest.
The Council consists of representatives from four (4) U.S. Government agencies and thirty (30) American private sector companies and organizations. The Council will follow the procedures prescribed by the Federal Advisory Committee Act (FACA) (Pub. L. 92-463). Meetings will be open to the public unless a determination is made in accordance with section 10(d) of the FACA, 5 U.S.C. 552b(c)(1) and (4), that a meeting or a portion of the meeting should be closed to the public. Notice of each meeting will be provided in the
For more information contact Marsha Thurman, Overseas Security Advisory
Coast Guard, DOT.
Request for comments.
In compliance with the Paperwork Reduction Act of 1995, this request for comments announces that the Coast Guard has forwarded one Information Collection Report (ICR) abstracted below to the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB) for review and comment. Our ICR describes the information we seek to collect from the public. Review and comment by OIRA ensures that we impose only paperwork burdens commensurate with our performance of duties.
Please submit comments on or before December 9, 2002.
To make sure that your comments and related material do not enter the docket [USCG 2002-13126] more than once, please submit them by only one of the following means:
(1)(a) By mail to the Docket Management Facility, U.S. Department of Transportation, room PL-401, 400 Seventh Street SW., Washington, DC 20590-0001. (b) By mail to OIRA, 725 17th Street NW., Washington, DC 20503, to the attention of the Desk Officer for the Coast Guard. Caution: Because of recent delays in the delivery of mail, your comments may reach the Facility more quickly if you choose one of the other means described below.
(2)(a) By delivery to room PL-401 at the address given in paragraph (1)(a) above, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202-366-9329. (b) By delivery to OIRA, at the address given in paragraph (1)(b) above, to the attention of the Desk Officer for the Coast Guard.
(3) By fax to (a) the Docket Management Facility at 202-493-2251 and (b) OIRA at 202-395-5806, or e-mail to OIRA at
(4)(a) Electronically through the Web Site for the Docket Management System at
The Docket Management Facility maintains the public docket for this notice. Comments and material received from the public, as well as documents mentioned in this notice as being available in the docket, will become part of this docket and will be available for inspection or copying at room PL-401 (Plaza level), 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. You may also find this docket on the Internet at http://dms.dot.gov.
Copies of the complete ICR are available for inspection and copying in public dockets. They are available in docket USCG 2002-13126 of the Docket Management Facility between 10 a.m. and 5 p.m., Monday through Friday, except Federal holidays; for inspection and printing on the internet at
Barbara Davis, Office of Information Management, 202-267-2326, for questions on this document; Dorothy Beard, Chief, Documentary Services Division, U.S. Department of Transportation, 202-366-5149, for questions on the docket.
This request constitutes the 30-day notice required by OIRA. The Coast Guard has already published (67 FR 54009, August 20, 2002) the 60-day notice required by OIRA. That notice elicited no comments.
The Coast Guard invites comments on the proposed collection of information to determine whether the collection is necessary for the proper performance of the functions of the Department. In particular, the Coast Guard would appreciate comments addressing: (1) The practical utility of the collection; (2) the accuracy of the Department's estimated burden of the collection; (3) ways to enhance the quality, utility, and clarity of the information that is the subject of the collection; and (4) ways to minimize the burden of collection on respondents, including the use of automated collection techniques or other forms of information technology.
Comments, to DMS or OIRA, must contain the OMB Control Number of the ICR addressed. Comments to DMS must contain the docket number of this request, USCG 2002-13126. Comments to OIRA are best assured of having their full effect if OIRA receives them 30 or fewer days after the publication of this request.
Federal Aviation Administration, DOT.
Notice of availability and request for comments on the proposed AC.
This notice announces a proposed AC to be used by the Hot Air Balloon community as acceptable methods, techniques, and practices associated with the inspection and repair of Hot Air Balloons. This notice is necessary to give all interested persons the opportunity to present their views on the proposed AC. Hot air balloons derive lift from self-contained, generated heated air and are considered
Comments must be received on or before January 6, 2003.
Send all comments on the proposed AC to: DOT/FAA, Standardization Branch, AFS-640,
George Torres, AFS-640, at the address above,
The proposed AC is available on the FAA Web site at
Federal Aviation Administration, DOT.
Notice of availability and disposition of comments.
This notice announces the availability of Advisory Circular No. 00-62, Internet Communications of Aviation Weather and NOTAMs, and disposes of comments received on an earlier proposed draft.
Steven R. Albersheim, Aerospace Weather Policy Division, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591, (202) 385-7704, or
On January 14, 2002 the FAA issued a draft Advisory Circular (AC) on Internet Communications of Aviation Weather and NOTAMs. The FAA requested comment on all aspects of the proposed AC. This AC sets forth the process to become a Qualified Internet Communications Provider (QICP) and addresses issues that relate to accessing aviation weather and NOTAM information from approved QICPs.
Comments were submitted from industry, special interest groups, and private individuals. The comments covered various issues, but were principally concerned with how a vendor would meet the provisions of reliability, accessibility, and security to be approved as a QICP by the FAA. The following addresses the issues raised by the commenters:
Several commenters questioned and/or did not support that the AC does not address the quality of a QICP's service or the quality of the QICP's data. As stated in the draft AC and reiterated here, the FAA does not intend to provide quality control of QICP data or approve the data accessed from a QICP. While the FAA requires air carriers certificated under 14 CFR parts 121 and 135 to use an FAA-approved source for weather information, the FAA does not approve the information supplied to these carriers, or to pilots conducting operations under part 91. This AC does not change the agency's current position on approving quality of data, or sources for other than part 121 and 135 carriers. A fundamental change such as approving data and/or sources for part 91 operations would require rulemaking with a public process for notice and comment. While these comments are noted, the purpose and goal of this AC are not to add these requirements. The FAA finds value in ensuring that the provider's facility, as an approved source for part 121 and 135 operators, is reliable, accessible and secure. This value may be realized by part 91 operators utilizing QICP vendors, if they so choose. To further clarify that an approved QICP does not include FAA approval of data source or quality, the FAA has added as part of the approval process, the provider's agreement to display a label on its internet site with the following recommended language. Failure to display this label may result in losing QICP status.
This Qualified Internet Communication Provider's (QICP) servers and communication interfaces are approved by the FAA as secure, reliable, and accessible in accordance with AC 00-62.
(1) This QICP does not ensure the quality and currency of the information transmitted to you.
(2) You assume the entire risk related to the information and its use.
Several commenters questioned the nature of the Quality of Service (QOS) agreements. Each approved QICP's maintenance plan has a QOS agreement with each user that addresses how the provider will meet measures of accessibility, reliability, and security. The QOS agreement should at most, only reference the standards and provide for complaint procedures if they are not maintained, allowing the parties to freely negotiate appropriate remedies and limitations of liability in the event the standards cannot be met for some period of time.
Comments were received on the use of standard security technology to ensure site authentication/data integrity. Specifically, a commenter disagreed with the use of Secure Sockets Layer (SSL) because SLL is not a formal standard and there are known bugs in early versions of SSL that allow an attacker to defeat any authentication and integrity assurances that it might provide, with a similar effort to altering data from an unsecured HTTP session.
The FAA agrees with this comment and has changed the AC to reflect that approved QICP's should maintain a security system that is applicable to current state-of-the-art technology. This also allows the applicant greater flexibility in implementing a system that complies with the AC while serving its customers and minimizing costs. In addition, it is noted that this change assists in preventing unauthorized access to or modification of provider data, software and hardware.
One commenter states that this AC inadequately describes the disaster recovery and contingency measures. The FAA does not believe it is necessary to provide specific details on every possible incident that could occur and believes that the AC provides guidance
One commenter states that the FAA's response to an Application or a Letter of Denial following a Capability Demonstration should clearly define the standards/requirements to be met to allow the applicant to have its Application accepted and move on to the Capability Demonstration, or to have its Capability Demonstration completed successfully and qualify as a QICP.
In the event that a vendor's application is unsuccessful initially, the FAA will recommend revisions and inform the applicant of any needed changes. Similarly, a Letter of Denial will indicate the reasons for the denial so that the vendor could make appropriate changes to successfully complete its Capability Demonstration.
A commenter suggested that the approval period last for one or two years with a mandatory performance review of any extension and conduct interim review upon request.
The FAA finds that a six-month review is appropriate. QICPs are to provide facility performance statistics semiannually or upon request. This review assists in ensuring that QICPs are meeting the criteria of this AC.
One commenter argued that the required time for a QICP to respond to a user's Quality of Service complaints should be reduced from 14 calendar days to one business day following receipt.
The FAA maintains the 14-calendar day response period because while some complaints may be resolved in a very short time frame, other complaints may be more difficult to address. Each QICP has the option of implementing a more stringent response period in its QOS agreement. However, the agency finds that at a minimum, some latitude is necessary and that 14 calendar days provides that latitude.
One comment questioned the necessity for QICPs to authenticate users and limit access to authorized users, in order to provide users with information that is publicly available to anyone via other sources. This commenter contends that user authentication can increase the costs of providing such services.
User authentication is only a recommended practice. The significant aspect is that digital authentication is used so that the user knows that he/she has signed on to an approved QICP site. The FAA does not discourage those vendors who choose to provide a value-added service with password restriction to their customers. In accordance with this AC, QICPs are to meet the minimum-security protocol, which is to verify the authenticity of the source of information.
Comments were received on the need to further address the provisions of reliability and accessibility, in that the measures are too stringent. FAA disagrees with this position. In order to meet the purpose of this AC, a QICP's server and communication interface should have very little down time. In developing this measure of service, the FAA consulted with industry and the National Weather Service and believes this is achievable and easily maintained and consistent with current industry practices. FAA did not receive any comments on the burden of meeting the criteria in the AC in response to the solicitation for comments addressing reports requirements under the Paper Work Reduction Act of 1995.
A commenter recommends that the FAA consider the feasibility of requiring a certificate of authority for providers of aviation information, or that other means be identified to provide authentication and integrity protection.
It is recognized that no form of Internet security is totally risk free. The agency's intent with this AC is to reduce the risk to an acceptable level. The use of server digital certificates is consistent with current business practices, which the FAA finds to be an acceptable level. However, a QICP and user have the option of agreeing upon the use of a specific server certificate of their choice if they believe greater security linkage is warranted.
On September 17, 2002 the FAA published a proposed Revision to Operations Specifications (OpSpecs) A010, Aeronautical Weather Data in the
“For Internet communications of aviation weather and NOTAMS used in flight operations, all part 121 and 135 operators are required to use an approved Qualified Internet Communications Provider (QICP):
(1) The QICPs used by the operator must be listed in OpSpec A010.
(2) The QICP used must be obtained from the approved list provided by the FAA.
(3) For more detailed information with regard to QICPs, refer to the appropriate AC pertaining to Internet Communications of Aviation Weather and NOTAMs and Volume 3, Chapter 7, Section 5, of this Order.”
In response to this Notice, the Air Transport Association commented that it supports the proposal and one air carrier requested clarification as to when a Part 121 operator could use an Internet provider for aviation weather services.
The Internet AC addresses measures to be taken by a QICP to assure the security, availability, and accessibility of Internet communications link for providing weather and NOTAM information. Some of the service providers that become QICP will likely provide a very comprehensive service while others will provide a narrower service focus. FAA will approve QICP status to both types of providers who meet the communications capabilities in the interest of enabling providers of weather and NOTAM service to use the public Internet.
Aviation weather information is available on the public Internet from a variety of government and vendor sources with minimal quality control. Users of the National Airspace System, dispatchers, pilots and air traffic controllers/specialists have expressed interest in the ability to utilize the public Internet to retrieve aviation weather text and graphic products for operational decision-making. The FAA issued Advisory Circular 00-62 “Internet Communications of Aviation Weather and NOTAMS” on November 1, 2002 and is available on the FAA Web page at,
Federal Aviation Administration (FAA), DOT.
Notice of availability of a proposed AC and request for comments.
This notice announces the availability of a proposed AC which provides an acceptable means, but not the only means, of developing manuals that are required by regulation for aeronautical repair stations. This notice is necessary to give all interested persons the opportunity to present their views about the proposed AC.
Comments about the proposed AC must be received on or before November 22, 2002.
Send comments about the proposed AC to Diana L. Frohn, General Aviation and Commercial Branch (AFS-340), Room 827, Federal Aviation Administration, 800 Independence Ave., SW., Washington, DC 20591; telephone (202) 267-7027;
Diana L. Frohn at the above address, e-mail address, or telephone number.
You can get a copy of the proposed AC by contacting the person named under
Interested persons are invited to comment about the proposed AC by sending written data, views, or arguments. Commenters should indicate AC 145-MAN, Guide for Developing and Evaluating Repair Station and Quality Control Manuals, in the comment and send comments to the address specified above. The Continuous Airworthiness Maintenance Division will consider all comments before issuing the final AC.
This proposed AC is the result of an amendment to part 145 of Title 14, Code of Federal Regulations (14 CFR), published in the
The proposed AC incorporates several examples of quality systems that repair stations may choose from to determine which best suits their individual needs. The proposed AC also incorporates several “checklists” to determine if the repair station has fully considered all its options and requirements. Further, this AC aids in the development of procedures and programs to assist the harmonization efforts of FAA with the European Joint Aviation Authority and other regulatory authorities.
FAA will consider each comment about the proposed AC and incorporate appropriate changes. This proposed AC will be reviewed in conjunction with the regulatory requirements of 14 CFR parts 43, 65, and 121, as applicable. This proposed AC would not change, add, or delete any requirement or authorize any deviation from part 43, 65, or 121.
Federal Aviation Administration, DOT.
Notice of extension of Aviation Insurance.
This notice contains the text of a memo from the Secretary of Transportation to the President regarding the extension of the provision of aviation insurance coverage for U.S. flag commercial air carrier service in domestic and international operations.
Dates of extension from October 16, 2002 through December 15, 2002.
Helen Kish, Program Analyst, APO-3, or Eric Nelson, Program Analyst, APO-3, Federal Aviation Administration, 800 Independence Ave., SW, Washington, DC 20591, telephone 202-267-9943 or 202-267-3090. Or online at FAA Insurance Web site:
On October 15, 2002, the Secretary of Transportation authorized a 60-day extension of aviation insurance provided by the Federal Aviation Administration as follows:
“Pursuant to the authority delegated to me in paragraph (3) of Presidential Determination No. 01-29 of September 23, 2001, I have extended that determination to allow for the provision of aviation insurance and reinsurance coverage for U.S. Flag commercial air carrier service in domestic and international operations for an additional 60 days.
Pursuant to section 44306(c) of Chapter 443 of 49 U.S.C., Aviation Insurance, the period for provision of insurance shall be extended from October 16, 2002, through December 15, 2002.”
Federal Aviation Administration, DOT.
Notice.
The Northwest Mountain Region, Airports Division, Federal Aviation Administration (FAA), announces it has extended, until December 9, 2002, the scoping comment period pertaining the FAA Notice of Intent to prepare Draft and Final Environmental Impact Statements (EIS) for the construction of a replacement airport at St. George, Utah.
On January 30, 2001, the Federal Aviation Administration (FAA) issued a Record of Decision/Finding of No Significant Impact document for the construction of a replacement airport at St. George, Utah. On December 22, 2001, the Grand Canyon Trust filed suit against the FAA in the U.S. Circuit Court of Appeals for the District of Columbia Circuit. On May 24, 2002, the court issued it's decision on the issues. In summary, the court found that “the FAA must evaluate the cumulative impact of noise pollution of the Park (Zion National Park) as a result of construction of the proposed replacement airport in light of air traffic near and over the Park, from whatever airport, air tours near or in the Park, and the acoustical data collected by the NPS in the Park in 1995 and 1998 mentioned in comments on the draft Environmental Assessment (EA)”. The court remanded the case [to the FAA] “because the record is insufficient for the court to determine whether an EIS is required”.
The purpose of the Draft and final EIS's will be to address the court's issues and any other environmental issues that have changed since issuance of the final environmental assessment in January of 2001.
In previously issued notices (
The proposed action is the construction of a replacement airport at St. George, Utah. Alternatives to be evaluated include:
a. No-Build (continue using the existing airport as is).
b. Build a replacement airport at the preferred site (which is a combination of alternative sites 1 and 1A), and
c. Alternative sites 1, 1A, and 2 as described on pages 32-40 of the final EA.
The proposed action was the subject of a Final Environmental Assessment (FEA) report prepared in January 2001. Persons wishing to review the FEA in order to better understand the proposed action or provide comments regarding environmental concerns may review the FEA at the following locations:
In order to insure that all significant issues related to the proposed action are identified and given consideration, letters containing environmental concerns must be received by Dennis Ossenkop, 1601 Lind Ave. SW., Suite 315, Renton, WA 98055-4056 by December 9, 2002.
Dennis Ossenkop, 1601 Lind Ave. SW., Suite 315, Renton, WA 98055-4056, Telephone: 425 227 2611.
Federal Aviation Administration (FAA), DOT.
Notice of intent to rule on application.
The FAA proposes to rule and invites public comment on the application to impose and use the revenue from a PFC at Nashville International Airport under the provisions of the 49 U.S.C. 40117 and part 158 of the Federal Aviation Regulations (14 CFR part 158).
Comments must be received on or before December 9, 2002.
Comments on this application may be mailed or delivered in triplicate to the FAA at the following address: Memphis Airports District Office, 3385 Airways Boulevard, Suite 302, Memphis, Tennessee 38116-3841.
In addition, one copy of any comments submitted to the FAA must be mailed or delivered to Mr. Raul Regalado, President of the Metropolitan Nashville Airport Authority at the following address ONe Terminal Drive, Suite 501, Nashville, Tennessee, 37214. Air carriers and foreign air carriers may submit copies of written comments previously provided to the Metropolitan Nashville Airport Authority under section 158.23 of part 158.
Cynthia K. Wills, Program Manager, Memphis Airports District Office, 3385 Airways Boulevard, Suite 302, Memphis, Tennessee 38116-3841, (901) 544-3495. The application may be reviewed in person at this same location.
The FAA proposes to rule and invites public comment on the application to impose and use the revenue from a PFC at Nashville International Airport under the provisions of the 49 U.S.C. 40117 and part 158 of the Federal Aviation Regulations (14 CFR part 158).
On October 29, 2002, the FAA determined that the application to impose and use the revenue from a PFC submitted by Metropolitan Nashville Airport Authority was substantially complete within the requirements of § 158.25 of part 158. The FAA will approve or disapprove the application, in whole or in part, no later than February 11, 2003.
The following is a brief overview of the application.
Any person may inspect the application in person at the FAA office listed above under
In addition, any person may, upon request, inspect the application, notice and other documents germane to the application in person at the Metropolitan Nashville Airport Authority.
Federal Highway Administration (FHWA), DOT.
Notice of Intent.
The FHWA is issuing this notice to advise the public that an environmental impact statement will be prepared for a proposed highway project in Shelby County, Tennessee.
Mr. Mark Doctor, Field Operations Team Leader, Federal Highway Administration, 640 Grassmere Park Suite 112, Nashville, Tennessee 37211, Telephone: (615) 781-5788.
The FHWA, in cooperation with the Tennessee Department of Transportation, will prepare an environmental impact statement (EIS) on a proposal to improve and extend North Second Street from Interstate 40 to the State Route 300/U.S. 51 (Thomas Street) interchange in Memphis. This proposed transportation improvement project is identified in the Memphis Metropolitan Area Long Range Transportation Plan as a Priority One facility. The main project purpose is to provide a transportation facility that improves accessibility and promotes economic development opportunities for the north Memphis, Frayser, and downtown Memphis communities.
Alternatives to be considered are: (1) Taking no action; (2) improve existing North Second Street and North Third Street as one-way pairs from I-40 to Henry Avenue and widen North Second Street north of Henry Avenue as a two-way street with three-lanes in each direction; (3) improve existing Auction Avenue and U.S. 51 (Thomas Street) as a six-lane facility; and (4) other alternatives that may arise from public and agency input.
Initial coordination letters describing the proposed action and soliciting comments were previously sent to appropriate Federal, State and local agencies, and to private organizations and citizens who have previously expressed or are known to have an interest in this proposal. Two public information meetings and two preliminary inter-agency scoping meetings have been held for the project and a public hearing will be scheduled upon completion of the Draft EIS. Public notice will be given of the time and place of the hearing. The Draft EIS will be available for public and agency review and comment prior to the public hearing.
To ensure that the full range of issues related to this proposed action are addressed and all significant issues identified, comments and suggestions are invited from all interested parties. Comments or questions concerning this proposed action and the EIS should be directed to the FHWA at the address provided above.
Connotton Valley Railway, Inc. (CVR), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31 to lease and operate, pursuant to an agreement with Wheeling & Lake Erie Railway Company (W&LE), approximately 10.4 miles of rail line. The line extends from milepost 5.1 in Cleveland, OH, to milepost 15.5 at Falls Junction, in Glenwillow, OH (including access to the yard at Falls Junction and all existing siding and run-around tracks within and between said points). CVR certifies that its projected annual revenues as a result of this transaction will not exceed those that would qualify it as a Class III rail carrier, and further certifies that its projected annual revenues will not exceed $5 million.
The parties report that they intend to consummate the transaction on or after the effective date of the exemption. The earliest the transaction could have been consummated was October 15, 2002 (7 days after the exemption was filed).
If the verified notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to STB Finance Docket No. 34264, must be filed with the Surface Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. In addition, one copy of each pleading must be served on Barbara Williams, 14 South Main Street, PO Box 261, West Salem, OH 44287.
Board decisions and notices are available on our Web site at
Financial Crimes Enforcement Network (“FinCEN”), Treasury.
Notice and request for comments.
As part of its continuing effort to reduce paperwork and respondent burden, FinCEN invites comment on a proposed extension of an existing information collection requirement contained in the form, “Currency Transaction Report by Casinos (CTRC).” This request for comments is being
Written comments are welcome and must be received on or before January 6, 2003.
Written comments should be submitted to: Office of Chief Counsel, Financial Crimes Enforcement Network, Department of the Treasury, P.O. Box 39, Vienna, Virginia 22183, Attention: PRA Comments—CTRC Form. Comments also may be submitted by electronic mail to the following address:
Leonard Senia, Senior Regulatory Program Specialist; or Russell Stephenson, Regulatory Program Analyst, Office of Compliance and Regulatory Enforcement, FinCEN, at (202) 354-6015; and Judith R. Starr, Chief Counsel and Christine L. Schuetz, Attorney-Advisor, Office of Chief Counsel, FinCEN, at (703) 905-3590.
Section 5313(a) authorizes the Secretary to issue regulations that require a report when “a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes.” Regulations implementing section 5313(a) are found at 31 CFR 103.22. In general, the regulations require the reporting of transactions in currency in excess of $10,000 a day. Casinos as defined in 31 U.S.C. 5312(a)(2)(X) and 31 CFR 103.11(n)(7)(i) are financial institutions subject to the currency transaction reporting requirement. Card clubs, as defined in 31 CFR 103.11(n)(8)(i), are casinos subject to currency transaction reporting. (
Estimated number of respondents=550.
Estimated Total Annual Responses=237,000.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Records required to be retained under the Bank Secrecy Act must be retained for five years.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected: (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance and purchase of services to provide information.
Notice of Application for Recordation of Trade Name.
Application has been filed pursuant to section 133.12, Customs Regulations (19 CFR 133.12), for the recordation under section 42 of the Act of July 5, 1946, as amended (15 U.S.C. 1124), of the trade name “ORTHOTEC”. The trade name is owned by Orthotec, LLC, a Delaware Limited Liability Company organized and created in the State of Delaware, 9595 Wilshire Blvd., Suite 502, Beverly Hills, California 90212.
The application states that the trade name is used on medical devices, more specifically, surgical implants made of stainless steel or titanium for spinal surgery, comprised of hooks, bolts, screws, rods, instruments and containers to hold the goods and instruments.
The merchandise is manufactured in the United States.
Before final action is taken on the application, consideration will be given to any relevant data, views, or arguments submitted in writing by any person in opposition to the recordation of this trade name. Notice of the action taken on the application for recordation of this trade name will be published in the
This item previously appeared in the Customs Bulletin on October 23, 2002. The time for public comments has since
Comments must be received or on before January 6, 2003.
Written comments should be addressed to U.S. Customs Service, Attention: Office of Regulations & Rulings, Intellectual Property Rights Branch, 1300 Pennsylvania Avenue, NW. (Mint Annex), Washington, DC 20229.
Gwendolyn Savoy, Intellectual Property Rights Branch, 1300, Pennsylvania Avenue, NW., Washington, DC 20229, (202) 572-8710.
Bureau of the Public Debt, Fiscal Service, Department of the Treasury.
Notice.
The Department of the Treasury is announcing a new fee schedule for the transfer of book-entry securities maintained on the National Book-Entry System (NBES). This fee schedule will take effect on January 2, 2003. The basic fee for the transfer of a Treasury book-entry security will decrease from $.49 to $.27, a 45 percent fee reduction from CY 2002. Concurrent with Treasury's fee reduction, the Federal Reserve will be decreasing the fee for the movement of funds from $.06 to $.05. These changes will result in a combined fee of $.32 for a Treasury security transfer. This represents a $.23 fee reduction from CY 2002.
In addition to the basic fee, off-line transfers have a surcharge. The surcharge for an off-line Treasury book-entry transfer in CY 2003 will be $25.00, unchanged from CY 2002.
January 2, 2003.
On October 1, 1985, the Department of the Treasury established a fee structure for the transfer of Treasury book-entry securities maintained on NBES.
Based on the latest review of book-entry costs and volumes, Treasury will decrease its basic fee from the levels currently in effect. Effective January 2, 2003, the basic fee will decrease from $.49 to $.27 for each Treasury securities transfer and reversal sent and received, a 45 percent fee reduction from CY 2002. The surcharge for an off-line Treasury book-entry transfer in CY 2003 will be $25.00, unchanged from CY 2002.
The basic transfer fee assessed to both sends and receives is reflective of costs associated with the processing of a security transfer. The off-line surcharge reflects the additional processing costs associated with the manual processing of off-line securities transfers.
The Treasury does not charge a fee for account maintenance, the stripping and reconstituting of Treasury securities, original issues, or interest and redemption payments. The Treasury currently absorbs these costs and will continue to do so.
The fees described in this notice apply only to the transfer of Treasury book-entry securities held on NBES. The Federal Reserve System assesses a fee to recover the costs associated with the processing of the funds component of Treasury book-entry transfer messages, as well as the costs of providing book-entry services for government agencies on NBES. Information concerning book-entry transfers of government Agency securities, which are priced by the Federal Reserve System, is set out in a separate
The following is the Treasury fee schedule that will take effect on January 2, 2003, for the book-entry transfers on NBES:
31 CFR 357.45
Office of Thrift Supervision (OTS), Treasury.
Notice and request for comment.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on proposed and continuing information collections, as required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3507. The Office of Thrift Supervision within the Department of the Treasury will submit the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. Today, OTS is soliciting public comments on the proposal.
Submit written comments on or before January 6, 2003.
Send comments, referring to the collection by title of the proposal or by OMB approval number, to Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a facsimile transmission to (202) 906-6518; or send an e-mail to
You can request additional information about this proposed information collection from Nadine Washington, Information Systems, Administration & Finance, (202) 906-6706, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
OTS may not conduct or sponsor an information collection, and respondents are not required to respond to an information collection, unless the information collection displays a currently valid OMB control number. As part of the approval process, we invite comments on the following information collection.
Comments should address one or more of the following points:
a. Whether the proposed collection of information is necessary for the proper performance of the functions of OTS;
b. The accuracy of OTS's estimate of the burden of the proposed information collection;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of the information collection on respondents, including through the use information technology.
We will summarize the comments that we receive and include them in the OTS request for OMB approval. All comments will become a matter of public record. In this notice, OTS is soliciting comments concerning the following information collection.
Office of Thrift Supervision (OTS), Treasury.
Notice and request for comment.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on proposed and continuing information collections, as required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3507. The Office of Thrift Supervision within the Department of the Treasury will submit the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. Today, OTS is soliciting public comments on the proposal.
Submit written comments on or before January 6, 2003.
Send comments, referring to the collection by title of the proposal or by OMB approval number, to Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a facsimile transmission to (202) 906-6518; or send an e-mail to
You can request additional information about this proposed information collection from Nadine Washington, Information Systems, Administration & Finance, (202) 906-6706, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
OTS may not conduct or sponsor an information collection, and respondents are not required to respond to an information collection, unless the information collection displays a currently valid OMB control number. As part of the approval process, we invite comments on the following information collection.
Comments should address one or more of the following points:
a. Whether the proposed collection of information is necessary for the proper performance of the functions of OTS;
b. The accuracy of OTS's estimate of the burden of the proposed information collection;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of the information collection on respondents, including through the use information technology.
We will summarize the comments that we receive and include them in the OTS request for OMB approval. All comments will become a matter of public record. In this notice, OTS is soliciting comments concerning the following information collection.
Office of Thrift Supervision (OTS), Treasury.
Notice and request for comment.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on proposed and continuing information collections, as required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3507. The Office of Thrift Supervision within the Department of the Treasury will submit the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. Today, OTS is soliciting public comments on the proposal.
Submit written comments on or before January 6, 2003.
Send comments, referring to the collection by title of the proposal or by OMB approval number, to Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a facsimile transmission to (202) 906-6518; or send an e-mail to
You can request additional information about this proposed information collection from Nadine Washington, Information Systems, Administration & Finance, (202) 906-6706, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
OTS may not conduct or sponsor an information collection, and respondents are not required to respond to an information collection, unless the information collection displays a currently valid OMB control number. As part of the approval process, we invite comments on the following information collection.
Comments should address one or more of the following points:
a. Whether the proposed collection of information is necessary for the proper performance of the functions of OTS;
b. The accuracy of OTS's estimate of the burden of the proposed information collection;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of the information collection on respondents, including through the use information technology.
We will summarize the comments that we receive and include them in the OTS request for OMB approval. All comments will become a matter of public record. In this notice, OTS is soliciting comments concerning the following information collection.
Office of Thrift Supervision (OTS), Treasury.
Notice and request for comment.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on proposed and continuing information collections, as required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3507. The Office of Thrift Supervision within the Department of the Treasury will submit the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. Today, OTS is soliciting public comments on the proposal.
Submit written comments on or before January 6, 2003.
Send comments, referring to the collection by title of the proposal or by OMB approval number, to Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a facsimile transmission to (202) 906-6518; or send an e-mail to
You can request additional information about this proposed information collection from Nadine Washington, Information Systems, Administration & Finance, (202) 906-6706, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
OTS may not conduct or sponsor an information collection, and respondents are not required to respond to an information collection, unless the information collection displays a currently valid OMB control number. As part of the approval process, we invite comments on the following information collection.
Comments should address one or more of the following points:
a. Whether the proposed collection of information is necessary for the proper performance of the functions of OTS;
b. The accuracy of OTS's estimate of the burden of the proposed information collection;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of the information collection on respondents, including through the use of information technology.
We will summarize the comments that we receive and include them in the OTS request for OMB approval. All comments will become a matter of public record. In this notice, OTS is soliciting comments concerning the following information collection.
Office of Thrift Supervision (OTS), Treasury.
Notice and request for comment.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on proposed and continuing information collections, as required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3507. The Office of Thrift Supervision within the Department of the Treasury will submit the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. Today, OTS is soliciting public comments on the proposal.
Submit written comments on or before January 6, 2003.
Send comments, referring to the collection by title of the proposal or by OMB approval number, to Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a facsimile transmission to (202) 906-6518; or send an e-mail to
You can request additional information about this proposed information collection from Nadine Washington, Information Systems, Administration & Finance, (202) 906-6706, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
OTS may not conduct or sponsor an information collection, and respondents are not required to respond to an information collection, unless the information collection displays a currently valid OMB control number. As part of the approval process, we invite comments on the following information collection.
Comments should address one or more of the following points:
a. Whether the proposed collection of information is necessary for the proper performance of the functions of OTS;
b. The accuracy of OTS's estimate of the burden of the proposed information collection;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of the information collection on respondents, including through the use information technology.
We will summarize the comments that we receive and include them in the OTS request for OMB approval. All comments will become a matter of public record. In this notice, OTS is soliciting comments concerning the following information collection.
Office of Thrift Supervision (OTS), Treasury.
Notice and request for comment.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on proposed and continuing information collections, as required by the Paperwork Reduction Act of 1995, 44 U.S.C. 3507. The Office of Thrift Supervision within the Department of the Treasury will submit the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. Today, OTS is soliciting public comments on the proposal.
Submit written comments on or before January 6, 2003.
Send comments, referring to the collection by title of the proposal or by OMB approval number, to Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a facsimile transmission to (202) 906-6518; or send an e-mail to
You can request additional information about this proposed information collection from Nadine Washington, Information Systems, Administration & Finance, (202) 906-6706, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
OTS may not conduct or sponsor an information collection, and respondents are not required to respond to an information collection, unless the information collection displays a currently valid OMB control number. As part of the approval process, we invite comments on the following information collection.
Comments should address one or more of the following points:
a. Whether the proposed collection of information is necessary for the proper performance of the functions of OTS;
b. The accuracy of OTS's estimate of the burden of the proposed information collection;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of the information collection on respondents, including through the use information technology.
We will summarize the comments that we receive and include them in the OTS request for OMB approval. All comments will become a matter of public record. In this notice, OTS is soliciting comments concerning the following information collection.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C., 3501
Comments must be submitted on or before December 9, 2002.
Denise McLamb, Records Management Service (005E3), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-8030, FAX (202) 273-5981 or e-mail:
Send comments and recommendations concerning any aspect of the information collection to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503 (202) 395-7316. Please refer to “OMB Control No. 2900-0458” in any correspondence.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C., 3501
Comments must be submitted on or before December 9, 2002.
Denise McLamb, Records Management Service (005E3), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-8130, FAX (202) 273-5981 or e-mail:
Send comments and recommendations concerning any aspect of the information collection to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503 (202) 395-7316. Please refer to “OMB Control No. 2900-0108” in any correspondence.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C., 3501
Comments must be submitted on or before December 9, 2002.
Denise McLamb, Records Management Service (005E3), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-8030, FAX (202) 273-5981 or e-mail:
Send comments and recommendations concerning any aspect of the information collection to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary:
Board of Veterans' Appeals, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C., 3501
Comments must be submitted on or before December 9, 2002.
Denise McLamb, Records Management Service (005E3), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-8030 or FAX (202) 273-5981 or
Send comments and recommendations concerning any aspect of the information collection to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503 (202) 395-7316. Please refer to “OMB Control No. 2900-0548” in any correspondence.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C., 3501
Comments must be submitted on or before December 9, 2002.
Denise McLamb, Records Management Service (005E3), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-8030, FAX (202) 273-5981 or
Send comments and recommendations concerning any aspect of the information collection to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503 (202) 395-7316. Please refer to “OMB Control No. 2900-New” in any correspondence.
An agency may not conduct or sponsor, and a person is not required to
By direction of the Secretary:
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C., 3501
Comments must be submitted on or before December 9, 2002.
Denise McLamb, Records Management Service (005E3), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-8030, FAX (202) 273-5981 or e-mail:
Send comments and recommendations concerning any aspect of the information collection to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503 (202) 395-7316. Please refer to “OMB Control No. 2900-0107” in any correspondence.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary:
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C., 3501
Comments must be submitted on or before December 9, 2002.
Denise McLamb, Records Management Service (005E3), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-8030, FAX (202) 273-5981 or e-mail:
Send comments and recommendations concerning any aspect of the information collection to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503 (202) 395-7316. Please refer to “OMB Control No. 2900-0399” in any correspondence.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary:
In notice document 02-27720 beginning on page 66386 in the issue of Thursday, October 31, 2002, make the following corrections:
1. On page 66386, in the third column, under the heading
2. On page 66387, in the first column, in the table, in the column “Proposed impacts”, in number 5., “Scrub-Scrub” should read, “Scrub-Shrub”.
Agricultural Marketing Service, USDA.
Proposed rule; Final Decision.
This decision adopts revised product-price formulas for establishing Class III and Class IV milk prices. The formulas are applicable to all Federal milk marketing orders. The orders amended by this decision require producer approval. Referenda will be conducted in two markets, and dairy farmer cooperatives will be polled in the other nine markets to determine whether dairy farmers approve the issuance of the orders as amended.
This final decision differs from the recommended decision by modifying the Class III and IV formulas to include farm-to-plant component losses. Modifications are adopted to the butterfat price formula, the protein price formula, the other solids price formula, and the nonfat milk solids price formula. Additionally, this decision converts the Class III and IV formula divisors to multipliers in order to simplify and promote consistency with all end-product pricing formulas.
Clifford M. Carman, Associate Deputy Administrator, USDA/AMS/Dairy Programs, Order Formulation and Enforcement Branch, Stop 0231, Room 2968, South Building, 1400 Independence Avenue, Washington, DC 20250-0231, (202) 720-6274, e-mail address
This administrative action is governed by the provisions of Sections 556 and 557 of Title 5 of the United States Code and therefore is excluded from the requirements of Executive Order 12866.
These proposed amendments have been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have a retroactive effect. If adopted, this proposed rule will not preempt any state or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.
The Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may request modification or exemption from such order by filing with the Department a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with the law. A handler is afforded the opportunity for a hearing on the petition. After a hearing, the Department will rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has its principal place of business, has jurisdiction in equity to review the Department's ruling on the petition, provided a bill in equity is filed not later than 20 days after the date of the entry of the ruling.
This final decision responds to a Congressional mandate to reconsider the Class III and Class IV pricing formulas included in the final rule for the consolidation and reform of Federal milk orders. The mandate was included in the Consolidated Appropriations Act, 2000 (Pub. L. 106-113, 115 Stat. 1501).
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
The RFA seeks to ensure that, within the statutory authority of a program, the regulatory and informational
USDA has identified as small businesses approximately 62,240 of the 65,464 dairy producers (farmers) that have their milk pooled under a Federal order. Thus, small businesses constitute approximately 95 percent of the dairy farmers in the United States. On the processing side, there are approximately 1,621 plants associated with Federal orders, and of these plants, approximately 928 qualify as “small businesses,” constituting about 57 percent of the total.
During January 2002, there were approximately 410 fully regulated handlers (of which 148 were small businesses), 75 partially regulated handlers (of which 39 were small businesses), and 46 producer-handlers (of which 24 were considered small businesses) for the purpose of this regulatory flexibility analysis. In addition, there were ninety-three exempt handlers with Class I sales of less than 150,000 pounds during the month.
Producer deliveries of milk used in Class I products (mainly fluid milk products) totaled 4.085 billion pounds in January 2002, representing 37.7 percent of total Federal order producer deliveries. The volume of milk pooled under Federal orders represents 76 percent of all milk marketed in the U.S. and is estimated at 78 percent of the milk of bottling quality (Grade A) sold in the country. More than 200 million Americans reside in Federal order marketing areas, representing approximately 81 percent of the total U.S. population (2001).
In order to accomplish the goal of imposing no additional regulatory burdens on the industry, a review of the current reporting requirements was completed pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). In light of this review, it was determined that these proposed amendments would have no impact on reporting, recordkeeping, or other compliance requirements because these would remain identical to the current Federal order program. No new forms have been proposed, and no additional reporting would be necessary.
This proposed rule does not require additional information collection that requires clearance by the OMB beyond the currently approved information collection. The primary sources of data used to complete the forms are routinely used in most business transactions. The forms require only a minimal amount of information which can be supplied without data processing equipment or a trained statistical staff. Thus, the information collection and reporting burden is relatively small. Requiring the same reports for all handlers does not significantly disadvantage any handler that is smaller than the industry average.
No other burdens are expected to fall upon the dairy industry as a result of overlapping Federal rules. This proposed rulemaking does not duplicate, overlap or conflict with any existing Federal rules.
To ensure that small businesses are not unduly or disproportionately burdened based on these proposed amendments, consideration was given to mitigating negative impacts.
A comment filed in regard to the tentative final decision by the managing partner of a large dairy farm argued that dairy producers selling less than 326,000 pounds of milk per month may comprise the majority of dairy farms, but not the majority of milk sold. The comment further stated that it is not appropriate to identify one sector and imply that they are most in need of protection and preservation.
Under the Regulatory Flexibility Act, the definition of a “small” dairy farm has been redefined from a business having an annual gross revenue of less than $500,000 to a business having an annual gross revenue of less than $750,000. Therefore, the production guideline of 326,000 pounds per month has been increased to 500,000 pounds per month in identifying “small” dairy farms.
The production guideline of 500,000 pounds per month in identifying “small” dairy farms is an attempt to relate a measure of size for which data is available (pounds of production per farm) with the criteria specified by the Small Business Administration (revenue from sales), for which data is not readily available to USDA on an individual farm basis. The Regulatory Flexibility Analysis does not represent an attempt to create special privileges for farms defined as small, but to examine the regulations to assure that they do not create a disproportionate burden or competitive disadvantage for such farms.
As was stated in the RFA in the recommended decision, one of the principal issues considered at the hearing was the source of price data that should be used to generate prices for milk components and, thereby, prices to be paid to producers. The options considered were the National Agricultural Statistics Service (NASS) surveys of selling prices of manufactured dairy products, Chicago Mercantile Exchange (CME) prices, and producer costs of production. The recommended decision selected the NASS-reported prices as the most appropriate for use in determining product prices because of the considerably larger volume of product represented in those price series than in the CME price data. Producer cost of production was not included in the calculation of prices because assuring dairy farmers that their costs of production will be covered addresses only the milk supply side of the market and ignores factors underlying demand or changes in demand for milk and milk products.
Various proposals to reduce or increase the levels of the manufacturing (make) allowances of butter, nonfat dry milk, cheddar cheese and dry whey were considered. The present method adjusted these make allowances from the levels adopted under Federal order reform on the basis of data and testimony contained in the hearing record. Most of the adjustments are minimal. Primarily, manufacturing cost surveys performed by USDA's Rural Cooperative Business Service (RBCS) and the California Department of Food and Agriculture (CDFA) were used to determine the most appropriate levels of make allowance for the products used in calculating Federal order class prices.
The only other actual collection of manufacturing cost data for cheddar cheese and dry whey that was cited in the hearing record was a survey of cheddar cheese and dry whey manufacturing costs arranged for by the National Cheese Institute (NCI). This survey was conducted by persons unfamiliar with the dairy industry among cheese processors who did not
In addition, one nonfat dry milk manufacturer testified to costs of manufacture that exceeded those of the two studies by a significant amount, mostly in the areas of return on investment and marketing costs. The data did not include any information about the pounds of product manufactured and could not have been weighted with the data from the two other studies.
Several proposals to change the factor reflecting the yield of nonfat dry milk from nonfat solids in milk would have increased the nonfat solids price and the Class IV skim price, but ignored the need to reflect the generally lower price and higher manufacturing cost of buttermilk powder that also must be considered in calculating the Class IV nonfat solids price. Testimony and data in the record were used to determine a factor more representative of nonfat dry milk yield and the effect of buttermilk powder price and cost. The alternatives to the formula adopted either did not include consideration of the price, cost, and volume of buttermilk powder relative to those of nonfat dry milk or gave those factors too great an influence.
Proposals were made to reduce the butter and cheese product prices used in calculating the butterfat price and the Class III component prices. The record of this proceeding continues to support the use of the product prices adopted in the final rule in the Federal milk order reform process as representing accurately the values of these products. In the case of adjusting the Grade AA butter price to reflect the value of Grade A butter, the record fails to reveal any source of information for obtaining current prices for Grade A butter. In the case of proposals to remove the 3-cent adjustment between the barrel and 40-pound block cheese prices, there was no testimony about the actual difference in cost between the two types of packaging that overcame testimony that 3 cents is the actual cost difference, or any data that indicates that the customary price difference is not at least 3 cents.
Proposals to reconsider the class price relationships in the orders were considered, although a proposal to use a weighted average of the Class III and Class IV prices as a Class I price mover was not noticed for hearing in this proceeding. The hearing record supports the continued relationships between the Class IV and Class II prices and between the higher of the manufacturing class prices and the Class I price.
A proposal that the Class II differential be changed to negate any changes in the Class IV price formula that would affect the current price relationship between nonfat dry milk and Class II failed to consider that the Class II-Class IV price difference adopted in Federal order reform is based on the difference in the value of milk used to make dry milk and the value of milk used to make Class II products.
Proposals that any increases resulting from changes to the Class III and Class IV price formulas not be allowed to result in increases in Class I prices did not address the rationale for the current Class I price differentials above the manufacturing price levels for the purpose of obtaining an adequate supply of milk for fluid (drinking) use.
The changes to the Class III and Class IV price formulas included in the recommended decision would have had no special impact on small handler entities. All handlers manufacturing dairy products from milk classified as Class III or Class IV would remain subject to the same minimum prices regardless of the size of their operations. Such handlers would also be subject to the same minimum prices to be paid to producers. These features of minimum pricing are required by the Agricultural Marketing Agreement Act and should not raise barriers to the ability of small handlers to compete in the marketplace. It is similarly expected that small producers would not experience any particular disadvantage to larger producers as a result of any of the proposed amendments.
An analysis was performed on the effects of the alternatives selected and is summarized below.
In order to assess the impact of changes in Federal order milk pricing formulas, the Department conducted an economic analysis. While the primary purpose of this decision is to amend the product pricing formulas used to price milk regulated under Federal milk marketing orders and classified as either Class III or Class IV milk, these product price formulas also affect the prices of regulated milk classified as Class I and Class II.
The modifications in this decision are analyzed simultaneously as a change from the set of Court-ordered formulas as implemented in January 2001. This analysis focuses on impacts on milk marketed under Federal milk marketing orders. Milk marketed in California, milk marketed under other state regulations, and unregulated milk are treated separately.
Impacts are measured as changes from the model baseline as adapted from the USDA baseline developed in June 2002 for the mid-session budget review. The baseline projections are a Departmental consensus on a long-run scenario for the agricultural sector. Included is a national, annual projection of the supply-demand-price situation for milk. The mid-term review reflects the provisions of the Farm Security and Rural Investment Act of 2002. Baseline assumptions for dairy are: (1) The price support program will extend through December 31, 2007, supporting the price of milk (3.67 percent butterfat) at $9.90; (2) the Dairy Export Incentive Program will continue to be utilized; (3) the Federal Milk Marketing Order Program will continue as reformed on January 1, 2000, as modified by the Select,
In the model the U.S. is divided into 14 milk marketing regions, 11 that generally correspond to the Federal order areas, California, other West, and Alaska-Hawaii. The 11 Federal orders share of the U.S. milk marketings is about 70 percent. About 83 percent of all fluid milk and about 65 percent of all manufactured milk is marketed under Federal order regulations. Given the prominence of Federal order marketings, prices paid for both fluid and manufactured milk outside of the order system are generally aligned with prices paid in the Federal order system. California stands out as the state with the highest production and has its own set of comprehensive market regulations similar to the Federal order system. California milk marketings are estimated as a function of the California pool price. Milk marketed through the Federal order system is the predominant subset of milk marketings in the United States. Fluid grade milk prices for the 11 Federal order regions are estimated as functions of Federal order minimum prices and dairy product prices. The regional all-milk prices, which are used
Demands for fluid milk and manufactured dairy products are functions of per capita consumption and population. Per capita consumption for the major milk and dairy products are estimated as functions of own prices, substitute prices, and income. Retail and wholesale margins are assumed unchanged from the baseline. The regional demands for fluid milk and soft manufactured products are satisfied first by the eligible supply of milk. The milk supply for manufacturing hard products is the volume of milk marketings remaining after satisfying the volumes demanded for fluid and soft manufactured products. Milk is manufactured into cheese or butter/nonfat dry milk according to returns to manufacturing in each class. Wholesale prices for cheese, butter, nonfat dry milk, and dry whey reflect national supply and demand for these products. These prices underlie the Federal order pricing system.
The impacts of the changes to the Class III and Class IV formulas that are adopted in this decision are summarized using annualized five-year, 2003-2007, average changes from the model baseline. The results presented for the Federal order system are in the context of the larger U.S. market. In particular, the Federal order price formulas use national manufactured dairy product prices.
The formula changes increase the protein prices and reduce the prices for butterfat and nonfat solids. The results are higher Class III prices, lower Class IV and Class II prices, and lower Class I prices. The advanced Class I base price is the higher of the Class III or Class IV advance pricing factors. The Class I base price is the Class IV price in all years of the analytical period for the baseline, while Class III becomes the Class I base price in 2003 through 2005 under this decision. The Class I price falls in 2003, 2006 and 2007. The resulting increases in Class I and Class II demand for nonfat and fat solids, sufficiently absorbs production increases to very slightly increase cheese and butter prices and only slightly decrease nonfat dry milk prices.
The distribution of the 2003-2007 annual average changes in the Federal order minimum blend prices across the 11 orders range from (-)$0.05 to (+)$0.08 per hundredweight, reflecting declines in premiums associated with Class III milk. Estimates of annual average price and quantity changes by order are provided in the economic analysis for this decision.
The five-year annual average U.S. all-milk price increases by $0.03 per hundredweight over the baseline. U.S. milk marketings increase by an average 73 million pounds annually (0.04 percent), yielding an average cash receipts increase of $67.2 million annually (0.29 percent) from average baseline receipts of $23,535 million.
The annual average Class III price increase at test (3.52 percent butterfat) is about $0.23 over baseline (1.9 percent), increasing steadily from $0.15 in 2003 to $0.34 in 2007. The increase is the result of the protein price increase of $0.14 per pound, ranging from $0.10 to $0.18 per pound. The increase in the protein price is the result of reducing the impact of the butterfat price on the protein price. The butterfat price effect is reduced by multiplying the butterfat price by 0.90, reflecting a 90 percent butterfat retention rate in the cheese, and replacing the 1.28 factor with 1.17 reflecting the butterfat to protein ratio of milk standardized at 3.5 percent butterfat and 2.99 percent protein.
The Class I base price shifts from the Class IV to the Class III price in 2003-05. The Class I skim milk price increases over baseline levels on average by nearly $0.04 cents per hundredweight, ranging from increases of about 18 cents in 2004-05 to declines of about 7 cents in 2006-07. The Class I price at test (about 2 percent butterfat) declines by an average $0.01 per hundredweight from the baseline, and is similar to the skim milk price change pattern, ranging from 13-cent increases to 12-cent declines.
The price for manufactured dairy products are estimated to increase over baseline by an average $0.004 per pound for butter and $0.001 per pound of cheese. Average annual consumer expenditures over the five-year period are estimated to increase over baseline levels by $5.6 million on butter, and by $4.1 million on American cheese.
A complete Economic Analysis for the Final Decision on Class III and Class IV Price Formulas is available upon request from Howard McDowell, Senior Economist, USDA/AMS/Dairy Programs, Office of the Chief Economist, Room 2753, South Building, U.S. Department of Agriculture, Washington, DC 20250, (202) 720-7091, e-mail address
This final decision is based on the record of a public hearing held May 8-12, 2000, in Alexandria, Virginia, in response to a mandate from Congress included in the Consolidated Appropriations Act, 2000, that required the Secretary of Agriculture to conduct a formal rulemaking proceeding to reconsider the Class III and Class IV milk pricing formulas included in the final rule for the consolidation and reform of Federal milk orders. The consolidated orders were implemented on January 1, 2000. A tentative final decision on the issues considered at the hearing was issued November 29, 2000 (65 FR 76832), and an interim final order (65 FR 82832) became effective January 1, 2001. A preliminary injunction enjoining portions of the interim final order was granted in the U.S. District Court for the District of Columbia on January 31, 2001.
Pursuant to Departmental Regulation (DR) 4300-4, a comprehensive Civil Rights Impact Analysis (CRIA) was
The conclusion of that analysis disclosed no potential for affecting dairy farmers in protected groups differently than the general population of dairy farmers. All producers, regardless of race, national origin, or disability, who choose to deliver milk to handlers regulated under a Federal order will receive the minimum blend price. Federal orders provide the same assurance for all producers, without regard to sex, race, origin, or disability. The value of all milk delivered to handlers competing for sales within a defined marketing area is divided equally among all producers delivering milk to those handlers.
The issues addressed at the May 2000 hearing are issues that were addressed as part of Federal milk order consolidation and reform. Establishing representative make allowances in the formulas that price milk used in Class III and Class IV dairy products is an issue that affects the obligations of handlers of those products to the Federal milk order pool, and similarly the pool obligations of Class I and Class II handlers. The decision should result in no differential benefits in dividing the pool among all producers delivering milk to those regulated handlers. Therefore, USDA sees no potential for affecting dairy farmers in protected groups differently than the general population of dairy farmers.
Decisions on proposals to amend Federal milk marketing orders must be based on testimony and evidence presented on the record of the proceeding. The hearing notice in this proceeding invited interested persons to address any possible civil rights impact of the proposals being considered in testimony at the hearing. No such testimony was received.
Copies of the Civil Rights Impact Analysis done for the final decision on Federal milk order consolidation and reform can be obtained from AMS Dairy Programs at (202) 720-4392; any Milk Market Administrator office; or via the Internet at:
Prior documents in this proceeding:
Notice is hereby given of the filing with the Hearing Clerk of this final decision with respect to proposed amendments to the tentative marketing agreements and orders regulating the handling of milk in the Northeast and other marketing areas. This notice is issued pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601
The Hearing Notice specifically invited interested persons to present evidence concerning the probable regulatory and informational impact of the proposals on small businesses. To the extent that this issue was raised, it is considered in the following findings and conclusions.
This final decision responds to a Congressional mandate to reconsider the Class III and Class IV pricing formulas included in the final rule for the consolidation and reform of Federal milk orders. The mandate was included in the Consolidated Appropriations Act, 2000 (Pub. L. 106-113, 115 Stat. 1501). The findings and conclusions set forth below are based on the record of a public hearing to consider proposals submitted by the industry to change the pricing formulas in the marketing agreements and the orders regulating the handling of milk in the Northeast and ten other marketing areas held in Alexandria, Virginia, on May 8-12, 2000. Notice of such hearing was issued on April 6, 2000, and published on April 14, 2000 (65 FR 20094).
The recommended decision responded to comments received on the tentative final decision (issued November 29, 2000; 65 FR 76832) on the above hearing and was consistent with the injunction issued by the U.S. District Court for the District of Columbia on January 31, 2001. This final decision responds to comments received on the recommended decision (issued October 19, 2001; 66 FR 54064).
As instructed by the legislation requiring this proceeding, the Class III and IV pricing formulas and all of the elements of the formulas were re-considered in developing the tentative final decision, the recommended decision, and this final decision.
The material issues on the record of the hearing relate to:
1. Role of producer costs of production.
2. Commodity prices (CME vs. NASS).
3. Commodity and component price issues.
a. General approaches on make allowances.
b. Class IV butterfat and nonfat solids prices.
c. Class III butterfat, protein, and other nonfat solids prices.
d. Effects of changes to Class III and Class IV price formulas.
4. Class price relationships.
5. Class I price mover.
6. Miscellaneous and conforming changes.
a. Advance Class I butterfat price.
b. Classification.
c. Distribution of butterfat value to producers.
d. Inclusion of Class I other source butterfat in producer butterfat price computation.
7. Reopening of hearing or issuance of a final decision.
The recommended decision differed from the tentative final decision in several respects and included summaries of comments submitted on each of the issues within the discussion of the issue. The key changes that were made to the interim order amendments in the recommended decision were as follows:
1. In Issue 3c, changes were made to the formulas for calculating the protein and other solids prices, and the Class III butterfat price would be the same as that calculated for Class IV on the basis of butter.
2. In Issue 3d, the changes made in the Class III component price formulas would result in different effects on Class III component, skim, and hundredweight prices.
3. In Issue 6b, the classification of frozen cream, plastic cream and anhydrous milkfat would be changed back to Class III.
4. In Issue 6c, butterfat values would be pooled for the purpose of calculating
5. In Issue 6d, the butterfat in other source milk used in Class I is included in calculating the producer butterfat price in marketwide pools that do not use multiple component pricing, but would continue to be included in the producer price differential calculation in multiple component pricing pools.
6. Issue 7 was changed to explain the reasons for issuing a recommended decision at this point in this proceeding, instead of a final decision.
The changes to the recommended decision formulas by this final decision are primarily the result of incorporating a farm-to-plant product loss:
1. In issue 3a, an adjustment to the component price formula yield factors to account for farm-to-plant component losses is added.
2. In issue 3b, changes are made to the yield factor used for computing both the nonfat solids price and the Class III and Class IV butterfat price to reflect farm-to-plant component losses. In addition, the yield factor used for computing the nonfat solids price and the butterfat price is converted from a divisor to a multiplier.
3. In issue 3c, the yield factors used to compute the protein price are adjusted to account for farm-to-plant component losses and to reflect a reevaluation of the quantity of casein retained in the cheese making process. The other solids yield factor is adjusted to account for farm-to-plant component losses. In addition, the yield factor used for computing the other solids price is converted from a divisor to a multiplier.
The following findings and conclusions on the material issues are based on evidence presented at the hearing and the record thereof:
Proposal 29 in the hearing notice proposed that producers' costs of production be incorporated into the Class III and Class IV pricing formulas. A number of dairy farmer witnesses testified that, just as manufacturing processors are assured that their costs of processing milk products will be covered, dairy farmers should also have some assurance that they will be able to continue to operate their dairy farms without losing money. Under the current system, according to the National Farmers Union (NFU) witness, incorporating a make allowance for processors but not for producers leaves dairy farmers to bear the entire burden of changes in supply and demand.
Support for using cost of production in the Class III and IV pricing formulas was reiterated in the comments received in response to the tentative final decision issued November 29, 2000, and the recommended decision of October 25, 2001. The NFU comments expressed disappointment that no portions of the milk pricing formulas were based on producer cost of production. The American Raw Milk Producers Pricing Association suggested that the USDA ignored existing law as written in the 1937 Agricultural Agreement Act, section 608c(18). Two dairy farmers also mentioned their concern about the need to follow 608c(18). Another dairy farmer advocated a producer-influenced supply control/price control system.
Comments filed by the Maine Dairy Industry Association (MDIA) in response to the recommended decision joined in supporting cost of production as a part of the pricing formulas. They expressed the opinion that cost of production should be included because their producers' costs are higher than the price received. The MDIA also voiced the unfairness of processors' being assured some ability to offset their costs through product make allowances while producers are not able to receive such adjustment. Comments received from Schreiber Foods indicated agreement with the recommended decision to not use the cost of production in setting Class prices.
As explained in both the proposed rule and final decision under Federal order reform and in the tentative final decision and the recommended decision in this proceeding, assuring producers that their costs of production will be covered addresses only the milk supply side of the market and ignores factors underlying demand or changes in demand for milk and milk products. As noted by the Dairy Farmers of America (DFA) witness, although pricing proposals incorporating cost of production have been noticed and reviewed several times in the last decade without success, if a sound mechanical concept could be advanced that overcomes the objections relative to supply and demand, it should be considered.
The proposals by NFU and National Farmers Organization (NFO) that advocated adoption of make allowances that would be adjusted for changes in indexes reflecting dairy farmers' production costs are discussed under Issue 3a, General Approaches on Make Allowances.
In this final decision, consideration has again been given to cost of production proposals. As noted by the NFO witness, the current pricing system uses the interaction of supply and demand for milk products as an indirect method of meeting the pricing requirements of the Agricultural Marketing Agreement Act of 1937 (the Act) for milk. According to the recommended decision, the record contained no new dairy farmer cost of production data that could be used to reflect both the supply and demand sides of the market for dairy products. The recommended decision continued to state that there was no evidence in the record that either USDA's Economic Research Service or the CDFA costs of production had ever been used to price milk.
The Act stipulates that the price of feeds, the availability of feeds, and other economic conditions which affect market supply and demand for milk and its products be taken into account in the determination of milk prices. This requirement currently is fulfilled by the Class III and Class IV component price calculations. If conditions increase supply costs, the quantity of milk produced would be reduced due to lower profit margins. As the milk supply declines, plants buying manufacturing milk would pay a higher price to maintain an adequate supply of milk to meet their needs. As the resulting farm profit margins increase, so should the supply of milk. Likewise, the reverse would occur if economic conditions reduce supply costs. The price of feed is not directly included in the determination of the price for milk, but rather is one economic condition which may cause a situation in which the price of milk may increase or decrease. A change in feed prices may not necessarily result in a change in milk prices. For instance, if the price of feed increases but the demand for cheese declines, the milk price may not increase since milk plants would need less milk and therefore would not bid the price up in response to lower milk supplies. Also, other economic conditions could more than offset a change in feed prices and thus not necessitate a change in milk prices.
The pricing system, according to the recommended decision, accounted for changes in feed costs, feed supplies, and other economic conditions, as explained above. The product price formulas adopted in the recommended decision would reflect accurately the market
Additionally, the pricing formulas contained in the recommended decision and this final decision are applicable to handlers, since handlers are the regulated parties under Federal milk order regulation. The formulas are used to establish minimum prices for milk used in making particular dairy products, not for determining payments to dairy farmers.
As adopted in the interim final rule in this proceeding (published on December 28, 2000 (65 FR 82832)), commodity prices determined by surveys conducted by USDA's National Agricultural Statistics Service (NASS) continue to be used in the component price formulas that replaced the BFP. The recommended decision proposed no changes in the source of product price data. Likewise, this final decision adopts no changes in the source of product price data.
Several proposals (1, 5, 10 and 19) were considered during the current proceeding that recommended using prices reported by the Chicago Mercantile Exchange (CME) instead of the NASS surveys to determine commodity prices. Both the CME and the NASS surveys were supported by testimony at the hearing and in briefs. Several comments to the recommended decision supported continuing to use the NASS surveys.
The CME is a cash market where speculators, producers, and processors can buy and sell products. It is a mechanism for establishing prices on which the dairy industry relies. Thus, many contracts to buy and sell dairy products are based on CME prices. A USDA witness testified that he is unaware of any other indices used to price cheese in the U.S. According to several witnesses, cheese and butter processors generally base their contract sales on CME prices.
The NASS price survey gathers selling prices of cheddar cheese, Grade AA butter, nonfat dry milk, and dry whey from a number of manufacturers of these products nationwide. At the time the proposed rule on Federal order reform was published (January 30, 1998), the NASS survey included prices for cheddar cheese only. This survey began in March 1997. In September 1998, before the final decision was published in April 1999, NASS began surveys of Grade AA butter prices, dry whey prices, and nonfat dry milk prices. In developing these commodity surveys, input was obtained from the dairy industry on appropriate types of products, packaging, and package sizes to be included for the purpose of obtaining unbiased representative prices. A sale is considered to occur when a transaction is completed, the product is shipped out, or title transfer occurs. In addition, all prices are f.o.b. the processing plant/storage center, with the processor reporting total volume sold and total dollars received or price per pound. NASS Dairy Product Prices reports wholesale cheddar cheese prices for both 500-pound barrels and 40-pound blocks, USDA Grade AA butter, USDA Extra Grade or USPH Grade A non-fortified dry milk, and USDA Extra Grade edible non-hygroscopic dry whey. A more detailed description of the surveys can be found in the final decision of April 2, 1999 (64 FR 16093).
The proponents of proposal 1, Western States Dairy Producers Trade Association,
Proponents explained that by using CME prices in the formulas, prices would be known immediately rather than a week later when the NASS prices are published, reflecting more quickly the supply-demand conditions for dairy products. The one-week delay is caused by the time necessary to collect data. A witness for NFO noted that interested persons are able to check the CME value of products on a daily basis and use the reported prices as a factor in establishing what they will pay, or what they will be paid, for cheese.
A witness from WSDPTA went on to explain that buyers, sellers, and speculators trade the CME, trying to obtain a price in their favor, while the price actually is determined by supply and demand forces. He described the rules as fair and the results as transparent, with participants having a number of interests. The witness continued by noting that the CME price result is instant and results cannot be altered. In contrast, he stated, NASS prices are reported by sellers only, who are not disinterested parties. He argued that NASS respondents can modify their numbers or file an initial report after calculating the price impact of the latest reports.
The proponents also concluded that the urging by many hearing participants that the NASS price series include mandatory participation and be audited proves that the NASS series is not reliable enough to be used as a price-discovery method.
Finally, the witness from WSDPTA expressed the view that the NASS price series would feed on itself and result in price setting, not price discovery. He continued by noting that plants and their buyers will obtain prices one week and sell the commodity in the following week at a price derived in large part from the price obtained in the prior week. The witness compared the NASS survey to the CDFA survey of powder prices which, he claimed, results in a circular pricing system that is mathematically incapable of fully reflecting the top of the market price for powder because so little of the survey volume is priced off of the spot market. Proponents expressed the belief that this circularity causes prices to remain lower than they would without it and that prices would increase more slowly and decrease more rapidly than would prices on the CME, causing overall lower prices for dairy farmers.
In the comments filed on the tentative final decision, the proponents of changing from NASS to CME prices commented only that USDA should reconsider the use of NASS prices. A partner/manager of a dairy farm stated that there is little correlation between the NASS and wholesale prices, and questioned the accuracy of NASS survey numbers. He also stated that block and barrel cheese is traded only between manufacturers and that they therefore have an influence on setting the price, especially if the percentage of the product traded is very low. He argued that a fair price would reflect retail prices or at least true wholesale price,
Opponents of changing from NASS to CME prices to compute component prices included International Dairy Foods Association (IDFA), DFA, and National Milk Producers Federation (NMPF). Witnesses for these parties argued that the NASS survey includes pricing based on a significantly larger volume of product than does the CME. In the case of the nonfat dry milk market, the table of 1999 monthly CME Cash Markets data from the 1999 Annual Dairy Market Statistics showed that there were no sales reported for either extra grade or Grade A in the year 1999.
According to a witness from IDFA, the volume of cheddar cheese in the NASS survey is equal to 26.4 percent of all cheddar cheese production in the U.S. for the period September 1998 through February 2000. During the same period, the CME volume of cheddar cheese traded represented only 1.7 percent of U.S. cheddar cheese production. The witness stated that for the same 18-month period, the NASS survey volumes represented 14.4 percent of all U.S. butter production while CME trading consisted of only 2.6 percent. He also noted that switching from the NASS survey data to the CME data would result in a change from a very broad to an extremely thin representation of actual product transactions.
Opponents to the proposal to use CME prices also pointed out that prices at the CME are Chicago or Midwest prices based on the delivery location specification of the contract. Therefore, they argued, the scope of the reported prices for cheese, butter, and nonfat dry milk are not national. A witness for Kraft noted that reliance on the CME alone would exclude the substantial and growing volume of cheese produced in the western United States (U.S.), particularly California. A witness for Northwest Dairy Association suggested that a transportation credit would need to be used with CME prices, at least in the West, to reduce the value of the CME to a more representative level. Opponents went on to explain that since the NASS survey contains data from plants located all over the United States, NASS prices represent a national scope of the prices of each of the particular commodities.
Several of the comments filed in response to the tentative final decision supported use of the NASS price series to determine product prices. Furthermore, there were several comments filed on the recommended decision and they all supported using NASS prices. The Michigan Milk Producers Association (MMPA) comment noted that NASS “provides the broadest range of price information and is representative of the product prices realized by the dairy industry.” In response to the recommended decision, DFA indicated that legislation enacted subsequent to the recommended decision improved the reliability, completeness, and integrity of the NASS price surveys. On November 22, 2000, the Dairy Market Enhancement Act of 2000 was enacted thereby authorizing mandatory and verifiable price reporting.
According to the testimony in the record and a number of the briefs, cheese and butter sellers and buyers look to the CME to identify the most current price levels. As a result, prices move in response to supply and demand conditions in the marketplace as reflected at the CME. Since the transaction prices of commodities are based off of the CME, it is difficult to see how the NASS survey can cause, or result in, circularity. The NASS prices reflect the CME prices with a short lag but are based on a much greater volume, enhancing the stability of the price series. Continued use of the NASS price survey appears to be the best method of obtaining reliable data about commodity prices.
As stated in the final decision on Federal order reform, NASS data traditionally has been collected via a survey with voluntary participation. The price information, like most NASS data, has not been audited. NASS, however, applies various statistical techniques and cross-checking with other sources to provide the most reliable information available. The issue of mandatory and audited NASS data was not within the scope of the rulemaking and could not be addressed on the basis of the hearing record. At the time of the hearing NASS was not authorized to conduct such activities. As noted above, however, the Dairy Market Enhancement Act of 2000 authorized mandatory and verifiable price reporting.
For the calculation of the Class III “other nonfat solids” price, neither the CDFA nor RBCS studies included information on the cost of making dry whey. The tentative final decision determined that the make allowance for dry whey should remain the same as that for nonfat dry milk. However, the results of a survey conducted for this proceeding under the auspices of IDFA were included in the recommended decision to determine the make allowance for dry whey.
A number of the proposals considered in this proceeding would change the manufacturing, or make, allowances adopted for the pricing formulas under Federal order reform. There was considerable testimony on the appropriate factors to be considered in establishing make allowances, and several sources of data were cited as the most accurate to use for such a purpose.
Two surveys of product manufacturing costs that were averaged for use in calculating make allowances under Federal order reform were the CDFA study, which is done annually and includes nearly 100 percent of dairy products manufactured in California, and the RBCS study, which is conducted annually by USDA as an in-plant benchmark study for participating cooperative associations. These two surveys had both been updated since earlier versions had been used in determining the manufacturing allowances used in the component pricing formulas adopted under Federal order reform. In addition, the National Cheese Institute (NCI), an affiliate of International Dairy Foods Association (IDFA), contracted with a third party to conduct a survey of the costs of manufacturing cheese and whey powder for use in this proceeding.
A witness for National Milk Producers Federation (NMPF) stated that make allowances should reflect the costs incurred by average plants manufacturing the particular dairy product used in the component/Class price formulas: butter, nonfat dry milk, cheese, and dry whey. The witness went
The IDFA representative testified that the danger inherent in regulated prices is setting the manufacturing allowance at a level too low to assure that manufacturers will be able to recover their costs of manufacturing finished products and to have the money needed to invest in new plants. The witness pointed out that an inadequate make allowance would force manufacturers either to move to areas that do not have regulated pricing or go out of business. At the very least, the witness explained, the manufacturers would not invest in new plants and equipment, which in the long run would cause a decline in the productivity of the dairy industry. A number of briefs filed on the basis of the hearing transcript emphasized the importance of covering all handlers' costs of manufacturing and not just average costs.
The IDFA witness explained that if make allowances are established at too low a level, proprietary plants are placed at a competitive disadvantage relative to cooperative-owned plants. The witness explained that since cooperatives do not have to pay their producers the minimum order price, as proprietary plants are required to do, cooperative plants can reduce the prices paid to member producers to make up the difference in cost.
The IDFA witness explained further that the problem with a make allowance established below the amount needed to cover plant costs occurs because the plant sells the finished product at the same price that is used in the formula for establishing the minimum price the plant must pay for the raw material (milk). The manufacturing allowances are the only place the plant has the opportunity to cover its costs, and those allowances are fixed in the formula that determines the raw material price.
The witness for IDFA asserted that there is very little risk in setting a make allowance too high. He explained that if the make allowance is established at a level above plant costs, the additional revenue stream will be corrected through market forces by requiring the plant operators to pay competitive over-order premiums to milk suppliers to obtain an adequate supply of milk.
A witness for WSDPTA explained that the most important part of determining a manufacturing allowance is to pick a method and stick with that method. The witness testified that the appropriate method is to use the results of the RBCS study with adjustments to include factors for marketing costs and for capital costs. The witness pointed out that use of the RBCS study is appropriate because the study is voluntary and represents the costs of making the particular commodities, and the plants are geographically widely dispersed. The WSDPTA witness stated that including the results of the CDFA study in the computation of the make allowance for pricing Federal order milk is inappropriate since there is no logical reason for considering the manufacturing costs of plants that do not procure any of the milk that would be priced using those costs.
Witnesses testifying on behalf of NFU and NFO both supported the concept of variable make allowances, in which changes in dairy farmer production cost indexes would be used to adjust handler make allowances. The NFU proposal would use an average national cost of production, presumably as published by USDA's Economic Research Service, and the NFO proposal would use the CDFA milk production cost index. The witnesses supported such an approach as a means of addressing the problem of manufacturers being insulated from changes in supply and demand by their fixed make allowances.
The NFU and NFO witnesses explained that a fixed make allowance, as contained in the current pricing system, does not vary with market conditions and creates a situation in which manufacturers will not respond to market signals since the manufacturers will receive a profit no matter what the supply and demand is for the finished products. The witnesses testified that as long as the make allowance allows manufacturers a sufficient return, the manufacturers will continue to produce the finished product even if there is limited demand for the product, thus resulting in a continued low price paid to producers for their milk. As a result, they argued, producers are left to bear the burden of changes in supply and demand. The NFO witness characterized a variable make allowance tied to the cost of producing milk as a market-oriented system.
The NFU witness described the California milk pricing system, in which manufacturers' production costs are covered through the make allowance, as an example of the problems encountered by producers with the use of product price formulas incorporating make allowances. He testified that California continues to produce a large quantity of lower-valued products because the pricing system makes the manufacturer immune to the supply of and demand for the products. The witness blamed the California make allowance system for the traditionally low milk prices in California that, he claimed, result in expansion of dairy herds to make up for reduced cash flow. The witness predicted that if the Federal order system follows the same pricing path, the same production patterns as witnessed in California would follow in the rest of the United States.
In comments filed in response to the tentative final decision, NFU stated that producers, as well as processors, will fail if they don't attain their costs of production. NFU also argued in its comments that under a variable make allowance, processors can avoid reduced make allowances by increasing product prices.
The NFU comment overlooks the fact that the make allowances included in the component price formulas do not cover all of the costs of all processors, and probably allow for greater costs than are experienced by some processors. In this sense, the margins experienced by processors under product price formulas are variable between plants. Also, it is likely that processors share some of their margin
There appears to be no logical or economic reason for changing make allowances for processing plants because of a change in the cost of producing milk. If milk is to clear the market, plants must be willing to accept it. Make allowances that decline as a result of increasing milk production costs would squeeze plant margins, and manufacturers will have to choose between not receiving milk, refusing to receive pooled milk, or paying less than order prices to cooperative associations for milk used in manufactured products. None of these outcomes would be in the best long-term interests of dairy farmers, processors, or consumers. Many dairy farmers, facing increased costs of production, would have to find alternative outlets for their milk. Decisions on the part of many processors to cease operating, use only nonpool milk, or buy milk below order prices likely would result in very disorderly conditions among dairy farmers looking for outlets for their milk.
Most hearing participants agreed that the make allowance should cover the cost of converting milk to a finished manufactured dairy product. However, several participants disagreed with the IDFA contention that there is very little risk in setting the make allowance too high. They argued that if the make allowance is set in excess of the cost to manufacture finished products, the additional revenue would be kept by the manufacturing plants as higher profits and not distributed to the producers supplying milk to the plant. They explained that in many parts of the country there is little if any competition for the dairy farmers' milk and therefore no incentive for a plant to pay above the minimum Federal order price. These plants, according to the witnesses, could be expected to keep the extra make allowance for themselves. Comments filed by Michigan Milk Producers Association (MMPA) on the tentative final decision and the recommended decision continued to urge caution against logic that suggests a low risk of setting make allowances too high. The cooperative stated that not all of its 2,700 members might survive a market adjustment period if make allowances were set too high, even if theoretically greater premiums might be returned to producers.
Several witnesses opposed the idea of setting make allowances at levels that guarantee plants a profit, or at least a return on investment, when the dairy farmers supplying milk to the manufacturing plants have no similar assurances for covering the costs of producing milk. These witnesses pointed to the Agricultural Marketing Agreement Act of 1937, sec. 608c(18), as justification for setting a lower make allowance for plants, resulting in higher milk prices that would come closer to covering dairy farmers' costs of producing milk.
As supported by most of the hearing participants, the make allowances incorporated in the component price formulas under the Federal milk orders should cover the costs of most of the processing plants that receive milk pooled under the orders. In part, this approach is necessary because pooled handlers must be able to compete with processors whose milk receipts are not priced in regulated markets. The principal reason for this approach, however, is to assure that the market is cleared of reserve milk supplies.
In comments on the tentative final decision, IDFA continued to argue that some legitimate manufacturing costs are excluded from the RBCS survey and attacked the data gathered as “inherently suspicious and unreliable.” IDFA also stated that the survey is not taken seriously by some of its participants. Both IDFA and Leprino Foods Company argued in comments on the tentative final decision that adding factors for costs excluded in the RBCS study constitutes a less accurate result than if those costs were included in a comprehensive study. IDFA also commented that the need to allow for changes in cost factors that might occur over time (such as recent increases in energy costs) also supports the need for a make allowance that is too high rather than one that is too low.
Several comments filed on the recommended decision indicated opposition to establishing make allowances based on an average of plant manufacturing costs. Agri-Mark Dairy Cooperative argued that using an average manufacturing cost in the pricing formulas would result in half of all handlers having higher manufacturing costs. IDFA noted in their comments that mechanically adopting a make allowance survey “would by definition mean that the one-half of cheese produced in plants with greater than average costs would be forced out of business.” Comments received from Northwest Dairy Association and Westfarm Foods, Inc., stated that USDA's use of “a simple average risks half the industry.”
This final decision finds that continuing to use an average make allowance of dairy manufacturing plants' costs is appropriate. Reliance on product-price formulas necessitates the need to reflect and to offset the manufacturing costs incurred and is supported by the record even though there is disagreement on exactly how to accomplish this. Using an average make allowance provides a reasonable measure to reflect and offset manufacturing costs and is the only reasonable measure that can be supported by the record evidence.
Although the RBCS survey does not include such costs as general plant administrative costs, return on investment or capital costs, and marketing costs, it is a survey that has been done for sixteen years with the same fundamental methodology and with some continuity of participants. Because the survey is done for the benefit of the participating organizations (cooperatives) to help them identify their costs and compare them with those of their peer group, there is every reason to believe that the costs provided are as accurate as possible. In addition, the years of experience with the survey have enabled USDA to shape the questions to obtain more accurate results.
When the RBCS survey results are adjusted to include the factors that were mentioned above as not included by using the values for those factors from the CDFA survey, the two surveys' costs are comparable, especially considering that the RBCS survey represents manufacturing plants with a wide distribution around the U.S., while the CDFA survey includes only California plants. The CDFA survey is also done every year and is done according to a published procedure manual, with the costs being audited by personnel employed by the State for that purpose. Although no CDFA employee was available to respond to questions about the conduct of the survey, official notice was taken of the procedure manual and of California publications associated with manufacturing cost data. In addition, several witnesses who are deeply involved with the California dairy industry testified regarding the perceived reliability of the survey results.
The use of manufacturing plant data from California plants that do not procure any of the milk that would be priced using those costs should not
In contrast to the RBCS and CDFA surveys, the survey of cheese and whey powder manufacturing costs arranged for by NCI was developed solely for the purpose of establishing costs to be used in determining make allowances for this proceeding. The survey was conducted by persons unfamiliar with the dairy industry among cheese processors who would benefit from the adoption of overgenerous make allowances. No one who actually conducted the survey was made available to testify, and although the IDFA witness stated that survey participants would testify regarding their responses to the survey later in the hearing, none of the participating firms' witnesses would respond to questions about their firms' results.
Although less weight must be given the NCI survey than either the RBCS or the CDFA surveys for the reasons stated above, the NCI survey's resulting manufacturing costs for cheese are not considerably different from a weighted average of the RBCS and the CDFA surveys. In fact, although the IDFA hearing participants went to great lengths to discredit the RBCS study for use in identifying an appropriate level of manufacturing costs, the hearing record reflects that the NCI survey of cheese and dry whey manufacturing costs used the RBCS 1996 survey results to identify outliers (plus or minus 10 percent) in the study commissioned by NCI.
In comments filed regarding the tentative final decision, IDFA urged that USDA use the NCI and CDFA studies for use in determining make allowances for cheese and whey powder rather than using the RBCS and CDFA studies. IDFA stated that the RBCS study was neutral and was not developed or commissioned for use in this proceeding. Cooperative associations attending the National Milk Producers Federation annual meeting were encouraged to participate in the survey so the results could be used in this proceeding. Since the RBCS study was developed and has continued for sixteen years for purposes other than establishing make allowances, and the methodology did not change from past years for the study used in the hearing, it is unlikely that it was designed for any purpose other than the one for which it was developed and has been used for that period. If the comment is intended to raise concerns that cooperative associations generally favor lower make allowances, it should be noted that only manufacturing cooperatives were surveyed. The record contains ample evidence that many manufacturing cooperatives desire make allowances just as generous as those favored by proprietary manufacturers.
A comment filed on behalf of the Association of Dairy Cooperatives in the Northeast (ADCNE), some of which are national in scope, argued that use of the NCI data would demean the importance of sworn first-hand testimony that is subject to cross-examination.
As a result of the differences in conduct of the three surveys, manufacturing costs used to determine appropriate make allowances for cheddar cheese, butter, and nonfat dry milk in this proceeding are calculated primarily from a weighted average of the RBCS and CDFA surveys, with a check against the NCI survey cost of manufacturing cheddar cheese. Since the record lacks any other data regarding the cost of making whey powder, the NCI survey results are used for the make allowance in the other solids formula.
One proposal included in the hearing notice would have eliminated any marketing allowance from the make allowances, and a number of witnesses' testimony objected to the inclusion of return on investment. The American Farm Bureau witness questioned the need for a marketing allowance since producers already pay a 15-cent assessment for promotion and research. A brief filed by the proponent of eliminating the marketing allowance stated that the allowance appears to be an “adjustment” or a “hedge,” since it is not defined in the final decision in the Federal order reform process.
There was general agreement among those testifying that a marketing allowance should be included in manufacturing costs, but no consensus about the appropriate number. Some of the costs covered by the marketing allowance include maintaining and staffing warehouses, supporting a marketing and sales staff, and transporting product to market, as well as accounting costs associated with the sale of products. The NCI survey identified a marketing cost of $0.0011 per pound of product, while the DFA witness stated that DFA's costs were approximately $0.0018. The DFA witness testified that because the costs included in the activities designated as marketing generally fall within a common department under common management, it is appropriate to apply the same allowance to each product.
A witness for Northwest Dairy Association (NDA), a cooperative association in the Pacific Northwest, stated that NDA's marketing costs are $0.0026 but identified costs associated with the aging of cheese as included in that number. Since the NASS survey price does not include cheese intended for aging, the marketing allowance certainly should not include costs of aging cheese. The Associated Milk Producers, Inc. (AMPI), witness used a $0.0024 marketing allowance in the calculation of AMPI's proposed make allowance for nonfat dry milk. The witness for Agri-Mark, Inc., a large Northeast cooperative association with several processing plants, stated that Agri-Mark's estimates of marketing costs ranged from $0.0025 to $0.005 per pound.
The costs identified as those included in a marketing allowance are necessarily incurred in getting a product to market and are not related to the consumer education and advertising activities covered by the National Dairy Board assessment. The recommended decision stated that since the marketing cost determined by NCI was the only estimate included in the hearing record that was supported by a survey. It varies from the $0.0015 rate included in Federal order reform by only 4 one-hundredths of a cent and applies only to cheese and dry whey. The recommended decision concluded that there was no basis for making any change to the marketing allowance.
Some producer witnesses objected to the inclusion of any allowance for return on investment in manufacturing allowances on the basis that dairy farmers are assured of no such return. The CDFA manufacturing cost surveys include allowances for depreciation, which is included in the non-labor processing costs; and for return on investment, which represents the opportunity cost of the processors' resources invested in the business. These costs are supported by audited data.
Both the marketing allowance and return on investment factors should be included in the manufacturing allowances provided in the component price formulas at the rates supported by the CDFA data. If processors are not provided enough of a manufacturing allowance to market the product they process, or to earn any return on investment, they will not continue to provide processing capacity for producers' milk. At the same time, the manufacturing allowances incorporated in the formulas will not provide enough of an allowance to assure that every processor, no matter how inefficient or
Two cheese manufacturers, IDFA and Land O'Lakes (LOL), continued to argue in their comments on the tentative final decision that make allowances should be increased, or yields reduced, to reflect shrinkage between farms and warehouses.
The tentative final decision and the recommended decision stated that orders have always provided an allowance for shrinkage and that inflating costs of production or reducing yield factors to reflect shrinkage would not properly reflect the value of producers' milk used in manufactured products. The recommended decision also stated that processing costs determined by surveys underlie the manufacturing costs incorporated in the pricing formulas and were expressed in cents per pound of end product manufactured, not in the cost per hundredweight of converting milk to manufactured products. The recommended decision went on to state that the component pricing formulas were based on the content of those components in the finished products for which a manufacturing cost per pound had been established. The recommended decision concluded that both the CDFA and RBCS cost surveys allocated all plant costs to actual end products and that the yield factors in the formulas referred to the amount of finished product resulting from the processing of a given volume of input or to the amount of component present in the finished product.
Comments on the recommended decision from Kraft Foods, Inc., Leprino Foods Company, IDFA, Hilmar Cheese Company, Agri-Mark Dairy Cooperative, Davisco Foods International, Glanbia Foods, Inc., Winger Cheese, Inc., and Northwest Dairy Association and WestFarm Foods (NDA) expressed concern that the Class III and IV milk pricing formulas offered in the recommended decision do not sufficiently address the costs incurred in the assembly, transportation, and delivery of milk and its components. Kraft, Leprino, Hershey, Dairy Farmers of America (DFA), and Dr. David Barbano of Cornell University testified at the hearing as to the need to specifically account for the losses in milk solid components that occur between moving milk from the farm or diverting plants and the receiving manufacturing plant. The witnesses and comments provided testimony that these losses are inherent in the handling of milk and that this issue was inadequately addressed in the recommended decision. This final decision finds the arguments for specific consideration of the impact of shrinkage in the product price formula persuasive.
The hearing testimony as well as comments to the recommended decision provide sufficient evidence to conclude that the recommended decision formulas do not properly consider farm-to-plant losses that occur. Testimony indicates that these losses are 0.25 percent on all milk solids, and that butterfat solid losses are an additional 0.015 pounds per hundredweight of milk. These losses need to be represented in the pricing formula, according to these claimants, to account for the out-of-plant losses that occur prior to processing raw milk into finished products such as cheese or butter/powder.
Witnesses for Kraft, Leprino, DFA, and Hershey, among others, testified that the difference between the quantity of milk, including components, received at the plant should be accounted for in the price formulas, since the formulas are based on yields attributable to components received at the plant. Milk unrecoverable in the movement from farm-to-plant cannot yield finished product.
Comments received from Select Milk Producers, Inc., and Continental Dairy Products, Inc., supported the Class III and IV pricing formulas as offered in the recommended decision, offering that including an adjustment for farm-to-plant loss would cause confusion.
As indicated earlier, Federal orders have always contained provisions for “shrinkage.” Since handlers have to account for all receipts and utilization, the shrinkage provision allows assigning a value to milk losses at the lowest priced class, providing explicit recognition that some milk loss is inevitable in farm-to-plant movement. If, however, the loss exceeds the allowable level, the excess shrinkage is priced at Class I. This “shrinkage,” as discussed above, refers to milk losses associated with how the order classifies and pools milk. Current shrinkage provisions are associated with pool distributing plants that produce fluid milk products. In this context, shrinkage provisions also provide fluid milk handlers the ability to assign milk losses to a lower class use value within certain parameters.
The loss allowances in the Class III and IV formulas are intended to reflect actual losses that are beyond the processing handler's ability to control. In addition, farm-to-plant losses cannot be assigned to a lower class value since the milk solids unavailable for processing effectively have no value in the Class III and IV formulas.
The price formulas in the recommended decision included typical plant losses associated with the conversion of raw milk to the final dairy product and relied on Federal order reform findings that the value of Class III and IV milk would be determined from the NASS survey prices collected on butter, cheese, dry whey, and nonfat dry milk. Pricing formulas generally include both yield factors and make allowances which together account for the entire conversion of raw milk to a final dairy product. Comments received on the recommended decision indicated that milk solid losses between the farm and the receiving plant are real, unavoidable, and common.
Prior to Federal order reform, milk pricing for all Federal milk marketing orders relied on the Grade B Minnesota-Wisconsin (M-W) price series and later the Basic Formula Price (BFP). These prices were determined by manufacture milk plant survey reports of Grade B milk purchases free of government price regulation and represented a competitive pay price for milk. The competitive pay price factored the entire cost of processing milk purchased from farms into finished dairy products. In contrast to the competitive pay prices, Federal order reform could no longer rely on a competitive pay price and purposefully chose NASS surveys of end-product prices and sales to establish Class III and IV prices with product price formulas. Many of the plants reporting to NASS purchase large quantities of milk from individual producer cooperatives. The end-product pricing formulas developed under reform were based in part upon the cost to process raw milk into finished dairy products.
After reevaluation of the hearing testimony and comments, this final decision reverses the recommended decision by including an adjustment for farm-to-plant losses of butterfat and nonfat solids. It is necessary to include such an adjustment in using end-product pricing formulas for determining component prices. Since the handlers receiving milk from producers pay the producers on the basis of farm weights and tests, handlers do not receive all of the milk components due to farm-to-plant losses. An adjustment to the price formulas to account for the difference in milk components paid for versus components actually received is appropriate. Based on the hearing record and comments filed by numerous parties, the farm-to-plant adjustment will reflect a 0.25 percent loss of nonfat solids, including protein and other solids, and a 0.25 percent loss of butterfat plus a 0.015 pounds loss of butterfat. These adjustments are reasonable and are reflected in the respective yield factors used for computing the milk component prices.
These loss allowances are adopted into the Class III and IV pricing formulas. The farm-to-plant losses are reflected on the end-products that result from Class III and IV milk, namely, cheese, dry whey, nonfat dry milk, and butter. They are reflected in this way to ease the concerns raised by Select Milk and Continental Dairy who indicated that reflecting farm-to-plant losses on the front-end of the product formulas (based on farm milk) may cause confusion.
A detailed description of the amendments to each of the respective pricing formulas is provided below. This final decision incorporates an adjustment to the respective yield coefficients of each milk component. The adjustment is based on an overall factor of 0.25 percent loss of each milk component and an additional 0.015 pounds of butterfat lost between the farm and the receiving plant.
In seeking to characterize the provisions of make allowances in Class III and Class IV pricing formulas as ratemaking, the commentors are ignoring the unique and longstanding treatment of the milk pricing provisions, including make allowances, in Federal milk marketing order regulations. The make allowances in the Class III and Class IV pricing formulas do not constitute ratemaking despite arguments that they do. The make allowances adopted are used in establishing minimum prices for milk under the authority and requirements of the Agricultural Marketing Agreement Act and are different in kind from the ratemaking referred to by the commentors.
The recommended decision continued to use the NASS price for Grade AA butter for calculating the butterfat price to be used in Class IV, and it continued to change the manufacturing allowance in the butterfat formula by
Several proposals were heard that would reduce butterfat prices, either by reducing the butter price used in the computation of the butterfat prices for all classes or by subtracting a fixed amount from the butterfat price computed for Class IV. Proposals also were made that would change the make allowance used in calculation of the butterfat prices. There were no proposals to change the butterfat divisor of 0.82, although one witness representing a western cooperative association suggested that it be reconsidered as he felt it did not include a shrinkage factor.
The witnesses complained that under Federal order reform the butterfat value is determined by using the NASS Grade AA price of butter, which effectively increases the butterfat value under Federal milk orders. According to proponents' calculations, the increase does not amount to a full nine cents but is tempered by the use of the NASS Grade AA price, which has averaged approximately three cents below the CME Grade AA price, in the butterfat pricing formula. Therefore, they stated, the actual increase in the butter price used to calculate butterfat prices is approximately six cents. According to the witnesses, subtraction of six cents from the NASS butter price would return the relationship between the butterfat value under the orders and the selling price of butter to the relationship that existed prior to Federal order reform.
Several witnesses explained that when handlers must pay for butterfat on the basis of the Grade AA butter market they cannot then sell cream or finished products at a price that would allow them to recover their costs. They testified that cream is sold at a price that is termed a “multiple” of the butter price, and that the multiples used when the butterfat price was calculated from the Grade A butter price have not adjusted to the new pricing formula using Grade AA butter.
The IDFA witness pointed out that the IDFA proposal to subtract six cents from the NASS Grade AA butter price would apply not only to the butterfat formula for Class II, Class III, and Class IV but would apply to the advance butterfat formula used for computing the Class I butterfat price. The witness testified that by applying the same formula to all classes of butterfat, the current relationship between the class prices would be maintained. The witness contended that there is no justification for changing the relationships between the class prices, particularly if the adjustment would widen the class price spreads or, in effect, increase the Class I and Class II differentials.
Witnesses for NMPF and several large cooperative associations testified in support of NMPF's proposal to reduce the calculated butterfat price by six cents, with the reduction applied to Class IV butterfat only. Under this proposal, the computation of the butterfat prices for other classes would not contain the six-cent adjustment. Several witnesses representing cooperative associations that process butter explained that butter manufacturers incur additional costs when procuring cream used for manufacturing butter as opposed to the cost of converting producer milk to butter. The witnesses explained that these additional costs include transportation, additional handling, and additional pasteurization. The witness for LOL testified that the additional costs amounted to 4.57 cents per pound of butterfat for transportation and 0.4 cents per pound for receiving, storing, and repasteurization. A witness for Agri-Mark stated that Agri-Mark's transportation costs are slightly less than LOL's, probably due to the proximity of the Agri-Mark plant to the sources of cream, but that the other additional costs are slightly higher than the LOL costs, at 0.5 cents per pound of butterfat.
The proponents of reducing the Class IV butterfat value also referred to the computation of the California Class 4a butterfat price, which involves a subtraction of 4.5 cents per pound from the CME Grade AA butter price to adjust for the costs of moving butter from the west coast to the Midwest.
Those parties who favored reducing the butter price before using the butterfat price formula to calculate any of the butterfat prices disagreed vehemently with the proposal to reduce only the Class IV butterfat price. They argued that such a reduction would distort the relationship between the Class II and Class IV prices, resulting in a greatly-increased price for Class II butterfat in relation to Class IV butterfat. Specifically, the projected increase in the Class II-Class IV butterfat price difference was cited as 6.7 cents per pound (from the current difference of 0.7 cents). These parties argued that butterfat values would most appropriately be reduced by the same degree in all classes.
The price to be used for butterfat in Class III and Class IV should be computed by subtracting a make allowance of 0.115 dollars per pound from the monthly average NASS Grade AA butter price and dividing the result by 0.82 since 1.2213 pounds of butter can be made from 1 pound of butterfat. The Class II butterfat price should continue to be the Class IV butterfat price plus 0.007 cents, while the Class I butterfat price will be the advance butterfat price plus the applicable Class I differential.
Contrary to the belief stated by some witnesses, the use of the Grade AA butter price for computing the butterfat price under Federal order reform was not an “oversight.” Trading of Grade A butter on the CME ended June 26, 1998 (not by USDA, as implied in one brief, but by the CME) because the volume of Grade A butter traded was not great enough to warrant maintaining a trading venue. One brief argued that the Grade A butter price represents a minimum price, and that there is no need for concern that there will not be an available market for Grade A and Grade B butter. However, with the end of trading in Grade A butter on the CME, there is no published (or any other known) source for obtaining a price for Grade A butter.
The use of the Grade AA butter price for establishing butterfat prices is appropriate since that is the only grade of butter that has significant enough trading volume to warrant a publicly-reported price. Grade AA butter prices are the only butter prices regularly available and represent the vast majority (about 95 percent) of the butter sold. Although the “multiples” of the butter price apparently had not adjusted to the use of the Grade AA price during the first 4 months of experience under the revised orders and probably should not be expected to adjust during the period in which this proceeding is under consideration, the marketplace should, in time, make the needed adjustments.
Various witnesses estimated that Grade A and Grade B butter combined make up 3-7 percent of the butter in the U.S. Although a witness noted that the Minnesota-Wisconsin (M-W) price for non-Grade A milk continued to be surveyed even after the percentage of milk eligible for the survey had fallen below a 5 percent level, it was widely recognized for some time that a pricing alternative to the M-W must be found because the M-W eventually would no longer provide a representative price for a large volume of unregulated milk. Similarly, with the decline of Grade A butter (and the unavailability of prices for that product), the only alternative available for determining price is Grade AA butter. A finding in the equivalent price determination that a Grade A butter price was “essential” to continued operation of the orders referred solely to the fact that the Grade A price was specified in all of the orders at that time, not that the butterfat value under Federal milk orders could never be based on any other price.
Making an adjustment to a clearly valid price series to approximate a price
The 3-cent average difference between the CME and NASS butter prices makes up
When the RBCS data is adjusted for packaging cost, general and administrative costs, and return on investment with the CDFA data for the high cost group, and with a marketing allowance of $0.0015 added to both sets of data, the weighted average of the two data sets is $0.115. This butter manufacturing allowance was very close to the Federal order reform allowance of $0.114. As adopted in the tentative final decision, the make allowance of $0.115 continues to represent the costs of making butter in plants that serve a balancing function.
The increased costs of making butter, not including transportation, cited by the proponents of reducing the butterfat price are expected to be included in this manufacturing allowance, which exceeds the low cost group in the CDFA survey by 3 cents per pound. The only class of use for which adjustments for transportation have regularly been included under Federal order regulation is Class I. Assuring that the order provides an allowance for moving milk used in manufactured products would interfere with provisions designed to assure an adequate supply of milk for fluid use.
Comments to the recommended decision from IDFA again encouraged lowering the Grade AA butter price by subtracting six cents from the NASS Grade AA butter price before computing the Class III and Class IV butterfat prices. IDFA added that if the Grade AA butter price was not reduced then the make allowance should be increased by 4.5 cents.
For the same reasons as stated above in response to comments on the tentative final decision and the recommended decision, this final decision will continue to use the NASS Grade AA butter price to compute the Class III and Class IV butterfat price.
The loss allowance for butterfat will be reflected by adjusting the 0.82 divisor in the butterfat price formula. Testimony and comments indicate that farm-to-plant losses on all milk solids is 0.25 percent (0.0025) with butterfat incurring an additional loss of 0.015 per 100 pounds of milk. The butterfat price formula is determined as follows:
• For every pound of butterfat, 0.0025 pounds is lost in the farm-to-plant transfer (1.000−0.0025 = 0.9975).
• In addition, for every pound of butterfat, there is an additional 0.0150 farm-to-plant loss on butterfat solids (0.9975−0.0150 = 0.9825 pounds of butterfat).
• Dividing 0.9825 by 0.82 results in a butterfat factor of 1.20 (0.9825/0.82 = 1.20).
• Therefore, the Class III and IV butterfat value per pound is computed as follows:
This final decision chooses to multiply the NASS butter price by 1.20 instead of dividing the NASS butter price by 0.82. This change in the formula from division to multiplication is made to simplify and provide consistency in the pricing formulas used for all milk components and includes an allowance for farm-to-plant losses.
Although one witness suggested that the divisor in the butter price formula that reflects the butterfat content of butter be reconsidered, he did not indicate any number more appropriate than the 0.82 divisor used in the current formula. There was no other testimony in the record questioning the butter content factor. In fact, the only data in the record applicable to the issue was a CDFA report on butter and powder yields at California plants in 1996 that was included in an exhibit. This report shows a 1.2213 weighted average butter yield (1 pound of butterfat results in 1.2213 pounds of butter), which corresponds to the use of the 0.82 divisor.
The record does not support adoption of a Class IV butterfat price that is not reflected directly in the Class II butterfat price. There was testimony from several witnesses that the current Class IV-Class II price relationship is rational and appropriate, and an adjustment to the Class IV butterfat price that is not reflected in the Class II butterfat price would disrupt the current relationship. In addition, it would seem reasonable that some of the extra costs claimed by butter manufacturers, such as transportation costs for supplemental cream supplies, butterfat standardization of outside cream sources, and additional pasteurization would be as applicable for Class II manufacturers of high-fat products using surplus cream as for butter makers. Accordingly, reduction of the Class IV butterfat price only is not considered appropriate.
This final decision modifies the Class III and IV butterfat price formula as follows:
The tentative final decision eliminated the 1.02 divisor in the nonfat solids price formula to reflect the incorporation of dry buttermilk (with a lower product price and higher make allowance).
Six proposals to change some part of the nonfat solids price formula were considered at the hearing. Three of the proposals dealt with the manufacturing allowance for nonfat dry milk (NFDM), with two of the proposals advocating use of the RBCS survey results and one proposal supporting an increase in the make allowance. The other three proposals supported changes in the yield factor of the nonfat solids price formula that would reflect greater powder yield from a pound of nonfat solids. Two of the proposals to change yield factors included using CME NFDM prices instead of the NASS survey. As discussed in the recommended decision, the product prices used in the component pricing formulas will continue to be obtained from the NASS survey.
Southeast Dairy Farmers Association also proposed that the RBCS survey be used to determine a make allowance for NFDM, but did not propose that a marketing allowance be included. The necessity of including a marketing allowance was discussed in the recommended decision.
Associated Milk Producers, Inc. (AMPI), proposed that the NFDM manufacturing allowance be increased from $0.137 to $0.1563 per pound, a rate based on AMPI's cost of making NFDM at its own three plants in the Upper Midwest over a 5-year period. The AMPI witness stated that in addition to a processing and packaging cost of $0.1254, the make allowance should include a marketing allowance of $0.0024 and return on investment of $0.026, for a total allowance of $0.1538 per pound, modified from the level proposed in the hearing notice. The witness testified that the three AMPI plants operate at approximately 80 percent of capacity.
No comments were filed that specifically addressed the adopted make allowance for use in the nonfat solids price.
On the basis of the data and testimony included in the hearing record, the manufacturing cost level that appears to be most appropriate for use in the pricing formula for nonfat solids is $0.14 per pound. This value is calculated by using a weighted average of the RBCS survey and the two less-cost California groups of plants, adding the CDFA General and Administrative costs and Return on Investment expenses for those two groups to the RBCS numbers, and adding a $0.0015 marketing allowance to both sets of data. The basis for using the two lower-cost groups of California plants is that the mid-cost group is of a similar average size as the group included in the RBCS survey, and that the lowest-cost California group has a very similar total cost to the mid-cost group. These three groups of plants (the RBCS plants and the two California groups) are similar enough in size and cost to consider as fairly representative, and should encompass those plants that perform a market balancing function. The highest-cost California group should not be included since its average cost is more than ten cents per pound of NFDM above the RBCS group or either of the other two California groups.
The AMPI cost numbers cannot be included in the weighted average since the number of pounds of NFDM associated with those costs is not available. When the AMPI marketing allowance and return on investment estimates are replaced with the more moderate numbers used in the make allowance calculation, the AMPI manufacturing costs do not differ much from the other two sources. This is true despite the wide discrepancy in the capacity utilization percentage estimates for the two data sets (80 percent for the AMPI plants versus less than 50 percent for the plants in the RBCS survey). Inclusion of the AMPI costs in the RBCS survey would have included a larger representation of NFDM manufactured outside California. However, the record indicates that a high percentage of the NFDM manufactured in the U.S. comes from California and the proportion of cost data representing California in the manufacturing allowance is reasonable.
The tentative and recommended decisions included buttermilk solids in the value of nonfat milk solids. However, a reevaluation of the Class IV nonfat solids pricing formula finds that recognizing a minimum value for buttermilk powder does not materially affect the Class IV skim milk price. Record evidence indicates that the price of buttermilk powder can be a low of 70 percent of the nonfat dry milk price for the same period. In addition, according to the record, the make allowance of buttermilk powder is an additional 2 cents per pound higher than the nonfat dry milk make allowance. Official notice of weekly Dairy Product Prices published by the National Agricultural Statistics Service for January 2000 through May 2002 is hereby taken. Copies of Dairy Product Prices can be located at the Web site:
Using the 2-cent higher make allowance for buttermilk and prices for nonfat dry milk and buttermilk powder for the period of January 2000 through May 2002 it was determined that the effect of including buttermilk powder in the nonfat solids price and the Class IV skim milk price was negligible. Therefore, this decision eliminates the
According to the Economic Research Services publication
• For every pound of dry buttermilk there are 0.919 pounds of nonfat milk solids.
• Assuming a dry buttermilk yield of 0.0521, the nonfat milk solids that end up in dry buttermilk are 0.0479 pounds per pound of nonfat dry milk solids (0.919 × 0.0521 = 0.0479).
The Class IV nonfat milk solids price can therefore be calculated as follows:
• For every pound of nonfat milk solids (nfms), 0.0025 pounds is lost in the farm-to-plant transfer.
• One pound of nfms minus the farm-to-plant loss of 0.0025 equals 0.9975 pounds of nfms at the plant.
• For every pound of nfms, 0.0479 pounds of these solids end up in dry buttermilk powder.
• 0.9975 pounds of nfms minus the 0.0479 pounds of solids in dry buttermilk equals 0.9496 pounds of nfms in the form of nonfat dry milk.
• Since each pound of nonfat dry milk contains 96.2 percent nfms (3.8 percent moisture) then, 0.9496/0.962 = 0.9871 (rounded to 0.99)
Therefore, the Class IV nonfat milk solids price per pound is computed as follows:
A considerable portion of the testimony dealing with the nonfat solids pricing formula pertained to the 1.02 divisor. The divisor is not strictly a yield factor but is intended to reflect the amount of nonfat solids in NFDM, with an adjustment for the small amount of buttermilk powder that is made in conjunction with the manufacture of butter and NFDM. Testimony by a number of witnesses asserted that the product price minus the make allowance should be either multiplied by a number greater than 1 (such as 1.02) or divided by a number smaller than 1 (such as 0.99 or 0.975) to reflect the fact that more than 1 pound of NFDM can be expected to be manufactured from 1 pound of nonfat solids due to the moisture content of NFDM.
Many of the hearing participants supported the 1.02 divisor, adopted under Federal order reform, and expressed understanding of the approach of adjusting the “yield” of NFDM to compensate for the fact that some of the powdered product made from Class IV milk is buttermilk powder (BMP). Although 1.03 to 1.05 pounds of NFDM generally can be obtained per pound of nonfat solids, the formula also recognizes a lower value and higher manufacturing cost for BMP.
Several witnesses correctly assessed an alternate solution to the dilemma of calculating a component price from two commodities with different prices and different make allowances as one requiring addition of dry buttermilk as another component price in the Federal milk order pricing system. As described by at least one witness, such an undertaking would require adding dry buttermilk to the NASS price survey, determining a separate make allowance, and calculating a yield factor. This procedure would be a burdensome undertaking for very little benefit, since dry buttermilk represents only about 5 percent of the dry products resulting from the manufacture of butter and nonfat dry milk. The issue that remains is how best to reflect the value of nonfat solids used in both NFDM and BMP in the same component pricing formula.
The IDFA witness testified that for the 19-month period beginning with September 1998, the Central States' dry buttermilk price had averaged $0.798 per pound, while the Central States' “mostly” price for NFDM averaged $1.043. The LOL witness similarly testified that the 1999 Northeast “mostly” price for NFDM averaged $1.0389, while the BMP price was $0.7686 per pound. On the basis of these numbers, it would appear that the price of BMP is roughly 75 percent that of NFDM. However, comparison of BMP and NFDM prices for the years of 1996 through 1999 and into 2000 reflects a more complex relationship between these prices than the hearing testimony would indicate. The BMP price as a percentage of the nonfat dry milk price (using Western prices) was 100.9 percent in 1996, 94.5 percent in 1997, 88 percent in 1998, and 71 percent in 1999. During the first third of 2000, BMP prices generally averaged less than 70 percent of NFDM prices. As the year 2000 progressed, however, the percentage increased, being at levels up to 100 percent in late July and remaining above 85 percent for the second half of the year in all areas.
The witness representing Agri-Mark stated that Agri-Mark employees engaged in manufacturing operations had estimated that the costs of producing BMP range from 1 to 3 cents more per pound than those of producing NFDM. Given that the manufacturing costs estimated by the Agri-Mark witness for other products were somewhat higher than those supported by the bulk of the hearing record, it is reasonable to consider the extra cost of manufacturing BMP to be generally not more than 2 cents in excess of the cost of manufacturing NFDM. In addition, it is difficult to justify increasing the powder make allowance for all of the powdered product represented in the make allowance since the RBCS witness testified that manufacturing costs of BMP manufactured at the plants included in the RBCS survey are included in the powder costs reported by RBCS.
Testimony regarding actual yields of NFDM and BMP were provided by only one witness representing a manufacturing plant operator. The numbers provided, while not complete enough for an exact accounting of the ultimate disposition of the plant's receipts of producer milk, indicate strongly that the approximate loss of nonfat solids used in the manufacture of NFDM at the specific plant was 3 percent, with 16 percent lost in the manufacture of BMP, for a combined weighted average loss of more than 3.5 percent of nonfat solids. In comparison, data published by the State of California showed a weighted average loss of solids not fat of 2.13 percent in the manufacture of butter and powdered products.
The California data indicate a weighted average powder yield of 1.0252 pounds of NFDM and BMP from 1 pound of nonfat solids. One witness discounted this data by observing that the “high” California yield was reported as 1.0406, which would represent a higher-than-allowable moisture content. This number may be influenced by the “high” reported BMP yield of 0.0749.
As noted above, the general impression conveyed by testimony in the hearing record, that BMP is worth considerably less than NFDM and that the cost of processing it is significantly greater than that of processing NFDM, is misleading. The average BMP price over the period 1996-July 2000 is approximately 87 percent of the NFDM price, and the cost of manufacturing BMP is, on the basis of the information available, no more than 2 or 3 cents in excess of the $0.14 recommended as the NFDM make allowance.
The following information from the hearing record was used to determine a multiplier or divisor for the total nonfat solids pricing formula that would result in a minimum price for nonfat solids while incorporating the data and testimony in the record about the manufacture of NFDM and BMP. To assure that the result represents a
a. The price of BMP represents roughly 80 percent of the price of NFDM (80 percent is less than the average historical relationship of these prices over the past 5 years).
b. The cost of manufacturing BMP is not more than 2 cents greater than the make allowance for manufacturing NFDM.
c. Using a theoretical yield of 1.03 pounds of powder containing 3 percent moisture made from milk containing 8.62 percent nonfat solids would result in 0.054 pounds of BMP and 0.976 pounds of NFDM.
d. Adjusting the theoretical yield of 1.03 pounds to the minimal yield of 1.01 pounds (the “low” yield in the CDFA report) and prorating the BMP and NFDM to 1.01 pounds instead of to 1.03 pounds, the amount of BMP manufactured from a pound of nonfat solids used in butter/powder is approximately 0.053 pounds. When the NFDM yield is prorated, the resulting minimum yield is 0.957 pounds.
Using a NFDM price of $1.03 per pound, a make allowance of $0.14 cents per pound of NFDM, and a divisor of 1, the resulting calculation is: $1.03 - $0.14 = $0.89 per pound of nonfat solids. The same result is achieved through a more complicated calculation using both product prices and make allowances, as follows:
On the basis of this analysis, no multiplier or divisor would be necessary in this formula (same as a multiplier or divisor of 1).
A number of comments were filed in response to this aspect of the tentative final decision, with some supporting the use of a divisor of “1,” two comments suggesting that a divisor of 1.01 would be more appropriate (but one determining that such a change would not be possible on the record of this proceeding), and several insisting that the above analysis is flawed by use of incorrect or inappropriate data and that the divisor should be returned to the 1.02 level in effect before January 1, 2001.
The IDFA comments stated that, in the interest of establishing minimum pricing, no more than 70 percent of the NFDM value should be assumed for the BMP price and that 3 cents should be added to the BMP make allowance instead of 2. IDFA also indicated that the formula should include shrinkage. NDA and LOL criticized the use of the California yield data in determining the comparative yields of NFDM and BMP, both because some of the data reflected information that included powder with higher-than-allowable moisture and because no witnesses who had participated in the survey were present to testify about it. LOL criticized USDA's use of Western prices rather than the Northeast and Central prices quoted by witnesses who discussed the relative values of NFDM and BMP.
Comments filed by Agri-Mark protested elimination of the 1.02 divisor, arguing that USDA relied on a casual remark about the difference between the cost of manufacturing BMP and NFDM rather than on detailed cost information as in the other make allowances. Agri-Mark also stated that the role of Class IV in balancing surplus cream from Class I use increases the ratio of BMP to NFDM over that calculated from an assumption about uses of the nonfat solids in producer milk.
Criticism of use of the Western BMP and NFDM price series to analyze the relative values of BMP and NFDM in the tentative final decision did not consider the fact that the Western price (mostly) series is the only one with an uninterrupted data series for the five years considered. In addition, the percentage of the NFDM price represented by the BMP price for the Western region was lower during each of the years 1996-2000 than for the Central region; and very similar, with some years averaging higher and some lower, to the Northeast region. Criticism of the CDFA yield data ignores the fact that the yield factors used in the initial analysis for the tentative final decision adjusted the relative “weighted average” yields of BMP and NFDM to the “low” yield.
The hearing record contains enough information on the issue of the relative weights, values, and costs of manufacturing NFDM and BMP to support the conclusion reached in the tentative final decision about the appropriate divisor in the nonfat solids price formula. The 0.96 divisor considered in the proposed rule on Federal order reform represented the pounds of nonfat solids in NFDM rather than the yield of nonfat dry milk from nonfat solids. Use of the divisor of 1 recommended in the tentative final decision accounted for all of the nonfat solids used in Class IV and resulted in 3-4 cents less per pound of nonfat solids (over a NFDM price range of $0.86-$1.10) than the value that would be calculated if the formula attributed all of the Class IV skim value to NFDM.
The Agri-Mark comment emphasized that the ratio of BMP to NFDM milk considered in the nonfat solids price calculation should be calculated on the basis of the butterfat content in Class IV because butterfat surplus to Class I use is used in butter. The Agri-Mark comment observed that the butterfat percentage of milk used in Class IV in the Northeast over a 3-month period averaged 5.67 percent.
Even if the national average of butterfat in Class IV (6.4 percent) is used to determine the breakdown between nonfat solids used in BMP and nonfat solids used in NFDM, less than 0.8 pounds of nonfat solids out of the 8.4 contained in a hundredweight of Class IV milk at 6.4 percent butterfat should be attributed to use in BMP. In effect, the price of each of the 8.4 pounds would be reduced by 3-4 cents. Such a calculation results in 25.2-33.6 cents per hundredweight of milk containing 6.4 percent butterfat to cover the additional costs of making 0.8 pounds of BMP and the lower value of 0.8 pounds of BMP compared to the NFMP manufacturing cost and price. A 3-cent additional cost per pound of manufacturing 0.8 pounds of BMP would equal 2.4 cents, and a 25-percent reduction of the BMP value from that of NFDM would equal approximately 20 cents. These calculations would still leave 2.8-11.2 cents per hundredweight to cover any additional costs of making and selling BMP over those of NFDM.
The recommended decision noted that the additional 3 cents per pound cost of making BMP is on the high end of the information in the hearing record, and that the 25 percent reduction in value of BMP compared to NFDM is on the low end. It was also noted that over the past 5 years, only during the period cited by witnesses testifying about the relative values of BMP and NFDM and during the first 4 months of 2000 had the BMP price as a percentage of the NFDM price fallen below eighty percent. It was also mentioned in the recommended decision that calculations assumed that all of the nonfat solids not used in NFDM were used in BMP, whereas some are used in whole milk powder, which has a higher value than either NFDM or BMP.
In considering all of the above discussion, the record supports the finding that this final decision's incorporation of a Class IV nonfat dry
In a change from the orders promulgated under the Federal order reform process, the tentative final decision calculated a Class III butterfat price from the value of butterfat in cheese rather than using the butterfat price calculated from the value of butter for both Classes III and IV. The Class III butterfat price in the tentative final decision was calculated to represent the value of the component in the NASS cheddar cheese price, as was a revised protein price formula.
Before the interim final rule became effective on January 1, 2001, several petitions were filed requesting the Secretary to delay implementation because industry participants objected to the effects of the separate Class III butterfat price.
Implementation could not be stayed because of the Congressional deadline on the rulemaking procedure, and partial implementation was not possible because the interim final rule had been approved by producers in its entirety. Before the separate Class III and Class IV butterfat prices could become effective, implementation of the separate butterfat prices was enjoined in the Federal District Court for the District of Columbia at the urging of organizations representing most of the interests in the dairy industry. The Court's order returned the price formulas for the Class III components to their earlier forms, with the new make allowances and cheese moisture adjustment incorporated.
By the end of the comment period on the tentative final decision, comments representing nearly 100 interested parties from most segments of the industry were received that objected to separating the Class III and Class IV butterfat prices and reducing the level of the protein price. The comments urged USDA to continue to calculate the Class III butterfat price on the basis of the value of butterfat in butter, and return to the Class III price formula formats in use before effectuation of the interim final rule.
Several reasons were given for rejecting the change to Class III component prices based on the contribution of butterfat and protein to cheese yield. Numerous commenters cited the negative effects of a marked increase in the cost of milk for use in high-fat cheeses and the incentive created for handlers to substitute lower-valued Class IV forms of butterfat for use in cheese-making. Others stressed the difficulties created by the decision in marketing cream. Several commenters argued that the shift in value from protein to butterfat caused by the decision did not make sense in light of the importance of protein in cheese-making, and that the reduced protein price would send incorrect economic signals to dairy farmers. One particular concern was the potential significant reduction in the Class I skim value if the Class III price at 3.5 percent butterfat became the mover for the Class I price.
Based on comments received, this final decision determines that the Class III butterfat price be the same as the Class IV butterfat price, calculated from the value of butterfat in butter. In addition, the portion of the protein price formula that adjusts the protein price to accommodate the differential value of butterfat in cheese, as opposed to butter, will continue to be incorporated into the protein price formula. The technical corrections to the protein price formula made in the recommended decision to make the protein price correlate somewhat more closely with the cheese price are adopted in this final decision.
The tentative final decision made only one modification to the specifications of the cheese price, currently a weighted average of the prices of cheese sold in 40-pound blocks and 500-pound barrels (with a 3-cent addition to the barrel price). That change, to adjust the price of 500-pound barrels to 38 percent moisture instead of the 39 percent moisture price currently reported by NASS, is continued in this final decision. Also, as in the tentative final and recommended decisions, this final decision reduces the make allowance for cheese from $0.1702 to $0.165 per pound.
As proposed in the recommended decision, the other nonfat solids price adopted in this final decision will continue to be calculated by subtracting the make allowance from the NASS-reported price for dry whey. However, the result will now be multiplied by 1.03 instead of dividing by 0.968. In addition, the recommended make allowance of 15.9 cents per pound of dry whey is also adopted.
Several proposals included in the hearing notice would, if adopted, have changed the NASS cheese price used in the Class III pricing formulas. One proposal would limit the cheese prices included to 40-pound blocks reported by the CME, while another would add 640-pound blocks to the prices surveyed by NASS for inclusion in the cheddar cheese price. A third proposal would replace the current 3-cent price adjustment between 500-pound barrel prices and 40-pound block prices to a value that reflects the actual differential industry cost of making 40-pound blocks over 500-pound barrels. Still another proposal would adjust 40-pound block cheese prices for moisture, as 500-pound barrel prices are adjusted.
As discussed above in Issue 2, CME commodity prices should not be used as the basis for calculating component prices. Eliminating 500-pound barrels, which represent approximately two-thirds of the cheese represented in the NASS survey, from calculation of the market value of cheddar cheese would reduce greatly the degree to which the current product prices represent U.S. cheddar cheese prices. The record of this hearing provides no support for relying solely on prices for 40-pound blocks to identify a market price of cheddar cheese.
Several parties testified that the NASS weighted average cheese price should include the value of 640-pound block cheese in the cheese price computation. They contended that such inclusion would improve the reliability of the average cheese price by adding a substantial quantity of cheese to the price survey. Witnesses' estimates of the percentage of U.S. cheddar cheese production represented by 640-pound blocks ranged from 20 to 27 percent. Witnesses testified that the increased volume would better reflect the true value of cheese and additionally would reduce the potential for price distorting manipulation by individual handlers.
In comments filed on the tentative final decision, IDFA stated that USDA had erred by excluding 640-pound blocks. IDFA reiterated the argument that 640-pound blocks represent as much as 27 percent of total cheddar cheese production. Furthermore, the comment noted that past data-collection problems are irrelevant because “all participation in NASS surveys regarding data used to calculate federal order minimum prices is now mandatory.” IDFA concluded that the argument that 640-pound blocks should not be used due to their being made on a custom basis to customers' specifications is not
Opponents to inclusion of the 640's in the cheese price computation explained that the vast majority of 640's are made on a custom basis to customers' specifications and therefore are not sufficiently uniform to have a standard identity. One witness noted that much of the commerce in 640's is made on a long-term contractual basis and as such would rarely be reflective of changing market conditions.
The Association of Dairy Cooperatives in the Northeast (ADCNE) comments on the tentative final decision reiterated USDA's position, stating that “the market in 640-pound blocks of cheddar cheese does not involve sufficient buyers and sellers in arms-length transactions to provide good data to establish the Class III price for producer milk in all federal milk orders.” As stated in the tentative final decision, standardized pricing cannot be developed without a standard identity for the product, which 640-pound blocks lack. In addition, there appears to be an insufficient volume of 640-pound block cheese transactions to warrant inclusion. At the beginning of the NASS survey, price data for 640-pound blocks was collected but was discontinued due to lack of volume and too few participants to allow disclosure of data. Even earlier (1995-96), the former National Cheese Exchange attempted to include trading in 640-pound blocks but discontinued doing so because of lack of interest. Testimony from witnesses representing organizations that manufacture cheese in 640-pound blocks, and who favored inclusion of such product in the NASS survey, stated that the 640-pound blocks manufactured by their organizations are used internally, making that cheese ineligible for inclusion. Therefore, even though price reporting is now mandatory, 640-pound blocks of cheese do not meet the criteria necessary for the prices of these products to be eligible for inclusion in the NASS survey.
Elimination or reduction to one cent of the three-cent adjustment that is added to the barrel price for computing the weighted average cheese price was advocated in testimony at the hearing, comments contained in post-hearing briefs, and comments responding to the tentative final decision. The witnesses argued that since the barrel cheese price is adjusted to 39 percent moisture and block cheese is approximately 38 percent moisture, at least 2 cents of the observed difference in price between 40-pound blocks and 500-pound barrels is due to moisture and has nothing to do with actual differences in costs. In fact, they argued that there is no difference in packaging costs between block and barrel cheese.
The witness for DFA, a cooperative that manufactures cheese packaged in both 40-pound blocks and 500-pound barrels, testified that three cents is an acceptable and reasonable spread between blocks and barrels and that there is no compelling reason to change the three-cent addition to the barrel price. The witness for LOL testified that the three cents is an appropriate difference between blocks and barrels and that adding three cents to the barrel price when computing the weighted cheese price is an appropriate adjustment. DFA and ADCNE argued, in a brief filed on behalf of both parties, that the record supports a conclusion that the 3-cent adjustment of the barrel price is attributable to volume utility and cost differences in packaging and handling.
The National Cheese Institute, which proposed reducing or eliminating the 3-cent adjustment, argued that the adjustment should include only the actual cost differences involved in manufacturing and packaging the two sizes of cheese. Although a number of witnesses representing cheese manufacturers testified in favor of reducing or eliminating the adjustment, including one whose employer makes both sizes of cheddar, none of them addressed the actual cost differences of packaging and manufacturing 40-pound blocks and 500-pound barrels. Instead, the only testimony that was offered involved attributing a 2-cent difference to the moisture-adjusted value of the two sizes of cheese packages. In comments responding to the tentative final decision, ADCNE argued that the 3-cent adjustment is representative of the historical difference in market value between barrel cheese and block cheese after adjustments for moisture.
If the difference between the block and barrel prices were due to the difference in moisture, the difference between the prices should widen as the cheese price increases since the moisture adjustment is based on the price and moisture of the cheese. An analysis of historical cheese prices indicates that the difference between the block cheese and barrel cheese prices does not change with changes in price level. In fact, three of the largest differences between the block and barrel prices occurred at approximately the 40-month NASS weighted average monthly prices.
In comments filed by Leprino Foods Company (Leprino) on the tentative final decision, Leprino argued that comparisons of the block and barrel cheese prices from May 1995 through December 1999 are not valid because of artificial market distortions. Leprino stated that valid relative price data is available only for calendar year 2000, during which the average spread is 1.54 cents. Leprino continued, in its comment, that the price spread between blocks and barrels does not move in lock-step because it is affected by many factors, and will continue to be driven by current market forces.
In comments to the recommended decision, Kraft reiterated their position that at equal moisture tests of 38 percent, the appropriate value to add to the barrel price is 1-cent. In comments to the recommended decision, Glanbia stated that the difference in cost of production between blocks and barrels is $0.008 per pound of cheese at their plant. In comments received to the recommended decision, DFA and Select indicated that the 3-cent adjustment is the correct adjustment to the barrel price.
The record contains no basis for concluding that the actual cost of manufacturing and packaging the two sizes of cheese is not the historical 3-cent price spread. In fact, during the period September 1998 through June 2000 the difference between the block and barrel prices has been 4.4 cents per pound. The record supports maintaining the 3-cent addition to the barrel cheese price.
An expert witness, and several other witnesses, testified that the moisture content of the cheese used for determining the NASS cheese prices and the moisture content used in the Van Slyke cheese yield formula used for computing the “yield” coefficients in the protein formula should be the same. The witnesses explained that failure to align the formula and the moisture content represented by the cheese price survey would result in overstating or understating the formula coefficients.
The expert witness explained that the barrel cheese price is reported at 39 percent moisture after being adjusted from the actual moisture, while the block cheese price is reported at an unknown moisture level. The only testimony dealing with the actual moisture level of block cheese indicates that it averages about 38 percent.
The coefficients originally used for determining the Class III protein price and the Class III butterfat price and used in the formulas in the recommended decision were derived from using the Van Slyke cheese yield formula at 38 percent moisture. Therefore, it is appropriate to use cheese prices that reflect cheese containing 38 percent moisture. The current practice of using
In several comments on the tentative final decision, commenters stated that the 38-percent moisture adjustment to the barrel price requires an adjustment to 1 cent and not 3 cents for the price spread between 500-pound barrels and 40-pound blocks. Other interested persons filed comments supporting both adjustments. DFA argued in its comment that eliminating either adjustment should result in use of only 40-pound block cheese prices.
The hearing record provides no basis for altering the composition of cheese prices surveyed for use in the Class III pricing formulas or for changing the calculation of the NASS weighted average cheese price, other than the moisture adjustment to 38 percent for 500-pound barrels.
Several witnesses testified that types of cheeses other than cheddar should be included in the NASS price survey as a more comprehensive basis for identifying a cheese price, although such a proposal was not included in the hearing notice. The cheddar cheese included in the NASS survey meets certain standard criteria that makes prices for the reported cheese sales comparable. If the survey included other descriptions of cheddar and other types of cheese, such as mozzarella, it would not be possible to consider the reported price as representative of the value of any particular product. Further, the manufacturing costs surveyed are, to a great extent, limited to the costs of processing cheddar cheese.
The witness representing NCI testified that the cheese make allowance should be no less that $0.1687, the weighted average of the NCI-sponsored and CDFA surveys with the addition of a marketing cost of $0.0011. He stated that such an allowance would represent the production of 24 cheese plants and 53 percent of U.S. cheese. Several cheese manufacturer representatives supported use of the NCI-supported make allowance, stressing the importance of adoption of an allowance that covers
A witness representing Farmers Union and the American Farm Bureau witness both supported adoption of a make allowance of $0.1521, as a weighted average of RBCS and CDFA data; and a witness for National Farmers Organization supported a make allowance of $0.141 composed of the RBCS cost with the addition of a marketing allowance and return on investment.
Although ADCNE, in its comments on the tentative final decision, supported the use of California data as compiled and audited by a state agency, ADCNE disagreed with inclusion in the cheese make allowance of the CDFA “general and administrative expense” item, which added 1.9 cents per pound to the make allowance. ADCNE described this allowance as “generous, to say the least,” as it represents $2-$3.5 million for the newest, largest, and most efficient cheese plants, and stated a preference for having some basis in testimony before building that sort of expense level into plant costs at the expense of minimum producer prices.
The general and administrative expense was one of the cost factors included in the CDFA weighted average cost study, but not in the RBCS study. Therefore, it must be added to the RBCS data to make the two cost studies comparable.
The make allowance used for computing the Class III protein and butterfat prices, $0.165, was determined by combining the CDFA plant survey with the RBCS survey. As was pointed out by several witnesses at the hearing, several cost factors that are necessary to maintain the viability of processing plants are not represented in one or both of the RBCS and the CDFA studies. These cost factors include marketing costs, return on investment, and general and administrative expenses. A discussion of these expenses is included earlier. Neither the CDFA nor the RBCS survey included a marketing cost, so the $0.0015 marketing allowance was added to both studies. In addition, the CDFA return on investment cost of $0.0103 and the general and administrative expense of $0.0190, both of which were included in the CDFA weighted average cost, were added to the RBCS study, which included neither factor. The resulting adjusted costs for each survey are $0.1708 for CDFA and $0.15996 for RBCS. A weighted average of the two studies was computed using the respective adjusted make allowances and the pounds of cheese reported in each study—466,396,548 for the CDFA study and 633,142,812 for the RBCS study—to arrive at the Class III price make allowance of $0.165.
In a comment filed in response to the tentative final decision, NFU stated that the reduction in the cheese make allowance should have been greater than $0.0052, but that the cooperative could support an increased make allowance if it were tied to producer cost of production and market price through implementation of a variable make allowance. The $0.165 make allowance is based on actual costs discovered by two surveys, the conduct of which were open to review in the hearing record, and is very close to the results of another that was conducted in a somewhat less accessible manner. There is no basis in the record for adopting a lower make allowance and, as discussed earlier, no acceptable rationale for implementing variable make allowances.
The tentative final decision was based on the observation that market distortions occur due to using the Class IV butterfat price calculated from the value of butterfat in butter to also represent the value of butterfat in cheese (Class III), and trying to incorporate the difference in value in the protein price. Analysis shows that there is very little relationship between the cheese price and either the current butterfat price or the current protein price.
As a result, instances have occurred when the protein price declines while, at the same time, the cheese price is increasing. This outcome is contrary to the concept of pricing components on the basis of the value of the products in which they are used. The same inverse price scenario has affected the butterfat price, with occurrences in which the Class III butterfat price increases because the butter price has increased while the cheese market has been declining.
Although reflection of the value of a manufactured product in the prices for the milk components that are instrumental in the yield of that product would require that the Class III protein and butterfat prices be tied more directly to their value in cheese than the result obtained from the Federal order reform price formulas, that outcome cannot be accomplished on the basis of this hearing record. However, any distortion between the Class III butterfat and protein prices and the cheese price should be ameliorated partially by the following changes included in the protein formula.
The tentative final decision on the hearing record for this proceeding derived formulas for calculating a Class III butterfat price and a protein price that considered only the contribution of each of those components to cheese yield and resulted in a 100 percent correlation with the cheese market. Therefore, the individual factors in the portion of the earlier protein price formula that adjusted the contribution of protein to cheese yield to account for differences in value between butterfat used in cheese and in butter and accounted for much debate in the hearing record were not considered in any detail.
The protein price formula resulting from the tentative final decision took the following form:
This formula eliminated the following butterfat adjustment portion of the earlier protein price formula:
This butterfat adjustment portion of the formula represents the difference between the value of butterfat used in cheese and the value of butterfat used in butter. The butterfat adjustment portion became unnecessary when the Class III butterfat price was calculated from the value of butterfat in cheese in the tentative final decision.
Reconsideration of the protein formula in light of the determination that there should be only one butterfat price for Class III and Class IV resulted in the following recommended protein price formula:
Leprino, in response to the tentative final decision, urged that the 1.405 factor used to reflect the yield effect of one pound of protein in milk be reduced to 1.367 because the 1.405 factor assumes that true protein contains more casein (83.3 percent) than is supported by testimony in the record (82.2-82.4 percent).
The hearing record contained much discussion of the derivation of the 1.32 cheese yield factor per pound of crude protein used to determine the 1.405 cheese yield factor per pound of true protein. Two explanations of the factor were advanced. The first involved assumption of 75 percent casein retention, 90 percent butterfat retention, and 38 percent moisture content in the cheese. Holding butterfat and moisture constant and changing the protein content by 0.1 results in a 0.1318 (rounded to 0.132) pound change in the cheese yield, or a one percent change in protein results in a 1.32 pound change in cheese yield. The second method assumes 78 percent casein retention, 90 percent butterfat retention, and a 38 percent moisture content in the cheese. In this second method the cheese yield is computed using a 3.2 percent protein and zero butterfat. The resulting cheese yield is divided by 3.2 to arrive at 1.316 pounds of cheese per pound of protein. The 1.316 was rounded to 1.32. Given these particular assumptions, both methods resulted in the same answer—1.32. A witness for National All Jersey testified that the second method is the appropriate procedure and was the one used to compute the 1.32 yield factor in past Federal order protein price decisions. However, if 78 percent is a more appropriate factor to use as the appropriate value for casein retention, then the first method yields a 1.37 yield factor. The 1.32 factor was used in the protein price formula in the Federal order reform proposed rule and in the five Upper Midwest markets beginning in January 1996 to compute the protein price prior to Federal order reform. The 1.32 yield factor generally has been accepted as an appropriate factor to use for computing a protein price.
When the final decision on Federal order reform was issued, the protein price computation was changed to compute the protein price on the basis of true protein rather than crude protein, which had been the basis for protein price computations in the past. As in determining the 1.32 factor, certain assumptions were made to arrive at the current 1.405 yield factor. The 1.405 factor was computed based on the assumption that milk testing 3.3 percent crude protein has an equivalent true protein test of 3.1 percent. The relationship between crude protein and true protein was based on the results of laboratory testing of producer milk for both crude and true protein. The resulting percentage change in protein is 1.0645 (3.
Regardless of which procedure is used, assumptions must be made with regard to the various factors used in the formulas. These assumptions directly affect the outcome of the factors used in the protein formula and the resulting protein price and value. Since use of the 1.405 factor resulted in an equivalent protein value to use of 1.32—and there was no testimony or comments filed that the 1.32 factor was not appropriate—there was no reason to change the 1.405 cheese yield factor in the recommended decision.
Leprino argued that the appropriate casein recovery should be 82.3 percent which, when using the second procedure above with a 2.99 true protein level, would result in a factor of 1.388. However, the majority (
Comments received from Leprino, IDFA, Kraft, NDA and others explained that the recommended decision did not correct what these parties considered as errors in the protein price formula. With regard to the protein price computation, the parties argued that the percentage of casein in true protein used in the Van Slyke formula was too high. They were of the opinion that since the Van Slyke formula is generally used to analyze in-plant efficiencies, an adjustment needs to be made for applying the formula to milk priced on farm weights and tests. Leprino, commenting on behalf of cheese processors, stated that, “In order to properly adopt the Van Slyke formula for use in setting milk price policy * * * it is critical to understand the context for its use.” Leprino further commented that the Van Slyke formula is commonly used by the industry to measure in-plant operational performance, namely, product yield. Leprino expressed the importance of including an allowance in the Van Slyke formula for farm-to-plant shrinkage. Leprino stated that “The Van Slyke yield formula can be used to determine cheddar yields of milk measured at the farm, but only if component losses [farm-to-plant] are accounted for. Although the Van Slyke yield formula was developed to measure production efficiency starting at the vat, the yield formula can still be useful in determining the yield of farm level milk. However, if the Van Slyke formula is to be used for this purpose, component losses prior to the vat must be accounted for to accurately reflect the composition of milk actually entering the vat.” Nine other comments supported Leprino's position on the need to include an allowance for farm-to-plant losses within the Van Slyke cheese yield computation in order for it to accurately determine the value of Class III farm milk.
This final decision finds that good reason exists to provide for incorporating farm-to-plant loss allowances into the Van Slyke cheese yield formula for determining the Class III milk price. As explained earlier in this final decision, the record supports a finding that such losses are 0.25 percent on all milk solid components and that butterfat losses are fractionally higher. Butterfat losses are an additional 0.015 pounds on top of the 0.25 percent farm-to-plant loss. When farm-to-plant losses are incorporated into the Van Slyke cheese yield formula, the Van Slyke formula results in the protein price factors from which the Class III protein price is derived.
The Van Slyke formula as proposed under reform and in the recommended decision utilized a casein-to-protein ratio of 83.25 percent or 0.8325.
Comments received on the recommended decision indicated that the cheese industry considers 82.2 percent casein as a reasonable and appropriate reflection of milk composition nationally. An expert witness testified that the casein from true protein ranges between 0.822 and 0.824. In this regard, according to Leprino, “The Hearing Record contains clear evidence regarding milk chemistry * * * that true protein contains 82.20 percent casein.”
This final decision finds that using a casein percentage of 82.2 is appropriate. The 0.822 is at the lower end of the range indicated by the expert witness and is appropriate for use in determining minimum Federal order prices. This casein-to-protein ratio is included in the Van Slyke formula for determining the Class III protein formula factors. In addition, this final decision computes the protein yield factor by dividing the cheese yield attributable to protein by the protein test. This method is consistent with record evidence and, according to comments received in response to the recommended decision, is superior to using the additional cheese yield that occurs when additional protein is added. This results in reducing the 1.405 factor in the protein price formula to 1.383. The computation of 1.383 is shown later in this discussion.
As was proposed in the recommended decision, this final decision adopts a butterfat-to-protein ratio of 1.17. The recommended decision proposed a fat-to-protein ration of 1.17 that was based upon the fat-to-protein ratio of standard milk at the dairy farm (3.5/2.9915 = 1.17). The recommended decision concluded that a 1.17 (or lower) butterfat-to-protein ratio assured that the value adjustment for butterfat in butter to the value of butterfat in cheese (included in the protein price formula) would account for the total value of butterfat in producer milk.
Comments received in response to the recommended decision from NMPF, Select, Leprino and others supported the use of the 1.17 butterfat-to-protein ratio in the protein price formula. This final decision continues to use the 1.17 factor.
This final decision uses the following variables in the Van Slyke formula for computing the protein and butterfat yield factors used for computing the protein price:
1.
2.
3.
4.
5.
For illustration purposes how the Van Slyke cheese yield formula has been relied upon since Federal order reform is provided below for ease in comparing the adopted changes to previous formulas.
• Cheddar cheese pounds attributable to butterfat = ((0.9 × 3.5) × 1.09)/(1-0.38) = 5.5379 pounds of cheddar cheese
• Cheddar cheese pounds attributable to protein = ((0.8325 × 2.9915) −0.01 ) ×1.09/(1-0.38) = 4.2025 pounds of cheddar cheese
• Cheddar cheese pounds attributable to standard farm milk =
• Cheddar cheese yield contribution per pound of fat at farm = 5.5379 pounds of cheddar/3.5 pounds of fat at farm = 1.582
• Cheddar cheese yield contribution per pound of protein at farm = 4.2025 pounds of cheddar/2.9915 pounds of protein at farm = 1.405
• Protein pounds in standard milk = 3.1 × 0.965 = 2.9915
• The butterfat-to-protein ratio factor used under reform was a fixed 1.28
• Cheddar cheese pounds attributable to butterfat = ((0.9 × 3.5) × 1.09)/(1-0.38) = 5.5379 pounds of cheddar cheese
• Cheddar cheese pounds attributable to protein = ((0.8325 × 2.9915) −0.01 ) ×1.09/(1-0.38) = 4.2025 pounds of cheddar cheese
• Cheddar cheese pounds attributable to standard farm milk =
• Cheddar cheese yield contribution per pound of fat at farm = 5.5379 pounds of cheddar/3.5 pounds of fat at farm = 1.582
• Cheddar cheese yield contribution per pound of protein at farm = 4.2025 pounds of cheddar/2.9915 pounds of protein at farm = 1.405
• The butterfat-to-protein ratio factor proposed under the recommended decision was 1.17 and was derived by dividing the butterfat in standard milk by the protein in standard farm milk (
• Cheddar cheese pounds attributable to butterfat = ((0.9 × 3.5) × 1.09 / (1 − 0.38) = 5.5379 pounds of cheddar cheese
• Cheddar cheese pounds lost due to the 0.015 farm-to-plant butterfat loss = ((0.9 × 3.5) × 1.09 / (1 − 0.38) = 0.0237 pounds of cheddar cheese, 5.5379 − 0.0237 = 5.5142 of cheese after farm-to-plant loss.
• Cheddar cheese pounds lost due to the 0.25 percent solids loss on fat solids = 5.5142 pounds of cheese from butterfat × (1 − 0.0025), 5.5142 × 0.9975 = 5.5004 pounds of cheese from farm butterfat
• Cheddar cheese yield contribution per pound of fat at farm = 5.5004 pounds of cheddar / 3.5 pounds of fat at farm = 1.572
• Cheddar cheese pounds attributable to protein = ((0.8220 × 2.9915) − 0.01) × 1.09 / (1 − 0.38) = 4.1473 pounds of cheddar cheese
• Cheddar cheese pounds lost due to the 0.25 percent solids loss on protein solids = 4.1473 pounds of cheese from protein × (1 − 0.0025) for farm-to-plant loss = 4.1473 × 0.9975 = 4.1369 pounds of cheese from farm protein
• Cheddar cheese yield contribution per pound of protein at farm = 4.1369 pounds of cheddar / 2.9915 pounds of protein at farm = 1.383
• Cheddar cheese pounds from standard farm milk =
• The butterfat-to-protein ratio factor in this final decision is 1.17 and is derived by dividing the farm butterfat by the farm protein (
The results of the above computations yield the following protein price formula:
As stated in the recommended decision, since all of the butterfat used in Class III is to be priced on the basis of its value in butter, an adjustment must be made to account for the difference in butterfat values between cheese and butter. The butterfat adjustment portion of the protein price formula is the method chosen for making that adjustment. The first part of the butterfat adjustment portion of the protein price formula calculates the value of butterfat in Cheddar cheese using the Van Slyke formula, assuming a 90 percent recovery of butterfat in the finished cheese. The resulting cheese yield factor attributable to butterfat is a multiplier of 1.582. Testimony in the hearing record and comments on the tentative final decision urged adoption of different multipliers in the butterfat adjustment portion of the protein price formula that represents the effects of butterfat on cheese yield. Suggestions to increase the butterfat recovery factor of 1.582 (to 1.6 or 1.617) were made by DFA; Select, Elite, et. al; and National All-Jersey, Inc. These commenters relied on hearing testimony that butterfat recovery in cheddar cheese generally ranges between 90 and 93 percent, although Kraft testified that their butterfat recovery is lower. The commenters favored use of a factor that reflected 91 or 92 percent fat recovery because that level of recovery is common. In a comment filed by Leprino, the cheese manufacturer urged that the 1.582 factor not be increased, as any increase would exacerbate the overvaluation of whey fat in the current formula and because the 90 percent recovery factor reflects results from many cheese vats installed prior to the late 1980's.
The recommended decision stated that even though many cheese makers may be able to achieve a higher fat retention in cheese, the use of the 1.582 factor representing 90 percent fat recovery in cheese continued to be appropriate. The recommended decision also stated that as a result of the 90 percent level, butterfat in cheese was not overvalued, and those cheese makers who fail to recover more than 90 percent of the fat would not suffer a competitive disadvantage. The preponderance of the record indicates that most cheese manufacturers should be able to obtain a 90 percent butterfat recovery.
In testimony at the hearing and comments filed on the tentative final decision the issue was raised of whether the butterfat adjustment portion of the protein price formula in which the value of butterfat in butter is subtracted from the value of butterfat in cheese is based on equivalent amounts of butterfat. The 1.582 factor represents 90 percent recovery in cheese of one pound of butterfat used in its manufacture, while the butterfat price represents the value of one pound of butterfat used to make butter. Clearly, subtracting the value of a pound of butterfat in butter from the value of 0.9 pounds of butterfat in cheese reduces the actual value of butterfat used in cheese. Therefore, the value of butterfat used in butter should be reduced by 10 percent in this calculation.
Comments received from Select, NMPF, LOL and National All-Jersey (NAJ), in response to the recommended decision, supported the use of the factor resulting from multiplying the butterfat price by 0.9 prior to subtracting the butterfat price from the value of butterfat in cheese. NAJ was of the opinion that the 0.9 adjustment is appropriate in that it recognizes that only ninety percent of the butterfat is retained in cheese. Select explained that using an adjustment to the value of butterfat in cheese (the 0.9) provides an important factor for correcting the relatively low butterfat retention in cheese, but maintained that the butterfat retention factor should be larger. LOL supported the addition of the 0.9 factor and indicated that it represented a more consistent margin across a wide range of butter and cheese prices.
Opponents to the use of the 0.9 adjustment factor to the butterfat value included Leprino, Kraft, IDFA, and the Wisconsin Cheese Makers Association (WCMA). These parties instead favored using a 0.95 factor. They explained that
As explained in the previous discussion on shrinkage, this final decision makes a purposeful adjustment for farm-to-plant milk losses, but not for in-plant losses. The use of the 0.9 factor is more appropriate than a 0.95 factor since the Van Slyke formula uses a 0.9 butterfat retention factor for computing the cheese yield attributable to butterfat. The aforementioned adjustment for farm-to-plant loss is also contained in the butterfat factor (1.572) used for computing the protein price, as well as an adjustment for farm-to-plant losses in the Class III butterfat price. It would not be appropriate to include additional reductions in the protein price for butterfat losses. This finding is also supported by testimony by several witnesses indicating that whey cream is often returned to the cheese vat for use in cheese making, thus increasing the value of whey cream above the value of whey cream used for whey butter, which is not accounted for in the protein formula.
As stated in the recommended decision, testimony at the hearing and analysis of the relationship between the current cheese, butterfat, and protein prices revealed that the current Class III pricing formulas cause inequities in producer payments based on the relationship between producers' butterfat and protein tests. The inequities were attributed to the use of the 1.28 factor used in the portion of the protein price formula that is designed to incorporate the butterfat value of milk used in cheese that is not already accounted for by the Class III and IV butterfat price. Such a factor is necessary to reflect the fact that there is more than one pound of butterfat in cheese for every pound of protein. The record supports a conclusion that when the price of butter increases, the price paid for milk used in cheese and for milk delivered by producers will decline if the milk has a fat to protein ratio of less than 1.28, and decline at a more rapid rate than that at which the butter price increases. According to the record and numerous comments filed, most milk delivered by producers has a fat-to-protein ratio less than 1.28.
In a number of the comments filed in response to the tentative final decision, commenters argued that this factor should be reduced—to 1.22, 1.19, or 1.17—to better reflect the fat-to-protein ratio in producer milk. The factor, which originally appeared in a comment filed early in the Federal order reform process as 1.20, was calculated by dividing 1.582 by 1.32. When the change was made from crude protein to true protein, 1.20 was multiplied by 1.0645 to reflect that change, becoming 1.28. The recommended factor of 1.17 in the protein price formula represented a minimum value for the ratio of butterfat to true protein in producer milk. Its use assures that the value adjustment for butterfat in butter to butterfat in cheese included in the protein price formula accounts for the full amount of butterfat in producer milk.
The Alliance of Western Milk Producers argued in a comment filed in response to the tentative final decision that the Class III component price formulas adopted in that decision would lead to disorderly marketing and provide an incentive for processors to seek alternative sources of butterfat, resulting in negative effects on producer income. The Alliance favored a return to the Federal order reform Class III component price formulas, but suggested that a snubber to prevent the butterfat value adjustment to the protein price from becoming negative would mitigate the potential for undervaluing protein under the formula.
This final decision concludes that the Class III protein formula to be adopted is as follows:
As proposed in the recommended decision, the manufacturing allowance for dry whey is increased from the 14 cents per pound adopted in the tentative final decision to 15.9 cents per pound of dry whey to reflect a higher cost of drying whey relative to the cost of drying nonfat dry milk.
The hearing included several proposals that would change the dry whey or other solids price formula by changing the make allowance. Although the hearing notice included a proposal to use the CME average dry whey price, the proponent withdrew support for the proposal when it became apparent that the CME has no cash exchange market for dry whey. The NASS survey that currently is being used to identify commodity prices has included price data on dry whey since September 1998. There were no proposals to change the 0.968 yield factor in the other solids price formula. The 0.968 factor reflects the solids content of dry whey, given a 3.2 percent moisture content.
As explained earlier in this decision, an adjustment factor for farm-to-plant losses on all milk solids is 0.0025. Application of this loss adjustment to the other solids price computation formula is as follows:
• One pound of dry whey minus 0.0025 farm-to-plant solids loss equals 0.9975 pounds of dry whey.
• Since each pound of dry whey contains 96.8 percent milk solids, 0.9975 is divided by 0.968 to equal a dry whey factor of 1.03.
• Therefore, the Class III dry whey price per pound is computed as follows:
The other solids formula divisor is converted to a multiplier to simplify and provide consistency with the other formulas contained in this final decision.
Since the most recent CDFA and RBCS cost surveys did not include costs for drying whey, there is no information from those two studies to use for computing the dry whey make allowance. A witness from NMPF suggested using the nonfat dry milk manufacturing cost allowance for dry whey since both products involve similar processing equipment and then adding $0.01 per pound to reflect the additional energy and higher equipment costs incurred in drying whey. Since the make allowance for nonfat dry milk adopted under the tentative final decision is $0.140, this procedure would result in a dry whey make allowance of $0.150. DFA proposed a dry whey make allowance of $0.1478 per pound based on costs at its plant at Smithfield, Utah. The plant is a cheddar block plant running throughout the year
A witness from Western States Dairy Producers Trade Association, et al. (WSDPTA) testified that there is no reason to change the other solids price computation from the current formula, and that it is a necessary component of the cheese pricing formula. He noted that the use of dry whey as a commodity is correct and that the 0.968 factor in the pricing formula reflects 96.8 pounds of solids in 100 pounds of dry whey.
Most witnesses who testified about the cost of drying whey expressed the belief that drying whey costs more than drying nonfat dry milk. Two cooperative association witnesses testified that their organizations have determined that the returns from whey powder with the current make allowance would not cover the costs associated with building and operating whey powder plants. At the hearing, IDFA presented the results of the survey contracted for by NCI. The IDFA witness testified that the survey showed a dry whey manufacturing cost of at least $0.1592. The IDFA witness testified that using the nonfat dry milk make allowance significantly understates the manufacturing cost of dry whey due to the relatively higher percentage of water in liquid whey compared to skim milk and the additional crystallization process required.
A witness representing Leprino testified on the differences in the manufacturing processes for dry whey and nonfat dry milk that result in higher costs to produce whey powder. The witness concluded that the cost of making dry whey is $0.02559 above the cost of drying nonfat dry milk.
The brief submitted by Leprino argued that the additional costs of processing whey powder over those of processing nonfat dry milk should include additional staffing, cleaning, and maintenance associated with the additional equipment for whey product.
A witness from Kraft agreed that the dry whey manufacturing costs are about 2.6 cents per pound greater than the nonfat dry milk manufacturing costs. Although Kraft described its Tulare plant as large and efficient, it also represents a recent capital investment, meaning that depreciation costs are likely higher than average.
Comments on the dry whey make allowance portion of the tentative final decision generally followed the lines of the testimony in the hearing record. WSDPTA favored maintaining the 14-cent make allowance adopted in the tentative final decision, and ADCNE/DFA supported not using the NCI survey on the manufacturing cost of dry whey. IDFA, Leprino, and Northwest Dairy Association advocated adoption of a dry whey make allowance of at least 15.92 cents per pound, the level determined in the NCI survey. These comments cited testimony in the record that the cost of drying whey is as much as 2.6 cents greater than that of drying skim milk, a calculation that would result in a make allowance of 16.6 cents. Kraft favored adding a value reflecting the reduced value of butterfat in whey to the whey make allowance and increasing the make allowance by at least 2 cents.
Since information regarding the costs of drying whey was not available from the sources used for determining the other make allowances in product price formulas, the tentative final decision determined that the dry whey make allowance should remain the same as that for nonfat dry milk. However, in the recommended decision it was determined that the dry whey make allowance should be changed to reflect testimony and other evidence in the hearing record that the cost of drying whey is greater than that of drying nonfat dry milk.
The recommended decision concluded that the other solids price would be computed by subtracting the make allowance of $0.159 from the NASS weighted average dry whey price and dividing the result by 0.968. The differential costs of manufacturing whey powder, from one source, over those of nonfat dry milk, from others, did not provide close enough agreement with the NCI-sponsored survey to use them with any confidence. Neither of the witnesses who testified that the extra costs of drying whey are 2.6 cents greater than the costs of drying nonfat dry milk testified about the total costs of either operation.
In lieu of other studies and direct evidence of the total cost of drying whey, the recommended decision concluded that the NCI-commissioned study results, rounded to the nearest
DFA and Select/Continental, in their comments to the recommended decision, opposed the recommended decision's proposed increase from 0.14 to 0.159. They based their opposition on lack of credible evidence.
The comments opposing the recommended decision's increase to the dry whey make allowance are not persuasive. This final decision concludes that the NCI-commissioned study should be utilized in the absence of other studies or direct evidence of the total cost of drying whey. This final decision adopts the $0.159 make allowance as proposed in the recommended decision.
The snubber in the other solids price formula was opposed in comments filed by two parties. Leprino stated that sound policy should allow not only positive, but negative net revenues to be reflected in the milk price to prevent overvaluing milk. IDFA opposed the snubber on the grounds that it would prevent manufacturers of dry whey from covering all manufacturing costs if wholesale prices for dry whey failed to fully cover manufacturing costs. Both commenters suggested that if the component price were to become negative, the negative value could be pooled as part of the producer price differential, as inferred by the DFA witness.
The prices calculated for the components in Class III milk are intended to reflect the value of those components in the products from which the prices are calculated. Use of a snubber to limit the other nonfat solids price would be inconsistent with the purpose of a pricing formula to reflect a component value and would appear to be an arbitrary adjustment to the price formula. After a thorough review of the record, including briefs and the comments on the tentative final decision and the recommended decision, USDA has determined that the snubber on the other solids price should be eliminated.
The changes to the Class III and Class IV component price formulas discussed above would result not only in changes to the respective component prices, but also to the resulting Class III and Class IV skim milk and hundredweight milk prices at 3.5 percent butterfat. The changes discussed are relative to the formulas resulting from Federal order reform. The calculations that were made in the recommended decision showed some increase in the level of the Class III price. USDA believed that the Class III pricing formulas incorporated in the recommended decision were more technically correct than those adopted as a result of Federal order reform because they were based on more complete information derived through the formal rulemaking process. The product-price formulas adopted as part of Federal order reform have contributed to further industry analysis and participation in developing more precise and accurate measures of determining the pricing formulas adopted herein.
It is important to note that these calculated class price differences, or the “static effect” of the recommended changes, are based on historical product price data and not on product prices that will occur in the future. The price differences calculated in this portion of the decision cannot be used to calculate or estimate changes in revenue that would have occurred or may occur in the future because changing intersections of supply and demand for each product result in different prices.
The 19-month comparisons included in the recommended decision were calculated based on the NASS weighted average commodity prices from January 2000 through July 2001. NASS weighted average commodity prices for that time period were available, and no estimates of the relevant commodity prices were needed. Although that time period was relatively short, a number of interesting price relationships occurred in the data series.
For instance, during that period the cheddar cheese (39 percent moisture) market ranged from a low of $1.0245 per pound during November 2000 to a high of $1.6434 per pound during July 2001. The November low was about 7.5 cents below the $1.10 per pound support price for 40-pound blocks of cheddar. During this same 19-month period the NASS weighted average nonfat dry milk price showed little movement until July 2001, ranging from a high of $1.0165 per pound during January 2001 to a low of $0.9634 per pound during July 2001. The July 2001 decline was the result of a reduced support price. In fact, the nonfat dry milk price stayed within about one cent of support over the January 2000 through June 2001 period.
Unlike the cheese and nonfat dry milk market, the butter price did not trade anywhere near the butter support price of $0.65 per pound or the revised support price of $0.8548 per pound. The butter price traded in a range from a low of $0.8820 per pound during January 2000 to a high of $1.9263 per pound during June 2001. It is important to keep in mind that since all milk is priced on the basis of butterfat and skim or nonfat components under Federal orders, focusing on the calculated hundredweight prices at 3.5 percent butterfat that are announced for comparison purposes may result in misleading conclusions.
The formulas used for computing the Class IV prices in the recommended decision were unchanged from those contained in the tentative final decision which currently are being used.
Changing the butterfat price make allowance from $0.114 to $0.115 would have resulted in a calculated average decline in the Class IV butterfat price of $0.0012 over the 19-month period included in the recommended decision. The two changes to the Class IV nonfat solids formula—increasing the make allowance from $0.137 to $0.140 and eliminating the 1.02 divisor—would have resulted in a net increase of $0.0141 per pound in the Class IV nonfat solids price in the absence of any other changes. Since the Class II prices were to continue to be computed on the basis of the Class IV formulas plus the Class II differential of $0.70 per hundredweight, changes to the Class II prices would have been the same as the changes to the Class IV prices. The calculated Class IV skim milk price would have increased by an average of $0.127 per hundredweight. The calculated 3.5 percent Class IV milk price would have increased by an average of $0.118 per hundredweight, reflecting the net difference between the increase in the skim milk price and the very small decline in the Class IV butterfat price.
As a result of the 38 percent moisture adjustment to barrel cheese prices, the NASS weighted average cheese price used for computing the Class III protein price would have been calculated to be higher by $0.011 per pound over the 19-month period January 2000 through July 2001. Use of this cheese price increase in the recommended protein price formula would have resulted in an increase of 3.6 cents per pound of protein. The decrease in the make allowance from $0.1702 to $0.165 in the recommended protein price formula would have accounted for an increase of 1.7 cents per pound of protein. The two changed factors in the protein price formula (0.9 and 1.17), using data for the 19-month period, would have resulted in an increase in the calculated protein price averaging approximately 14.8 cents. The total increase in the protein price as a result of three changes to aspects of the Federal order reform protein price formula (moisture adjustment, make allowance, and formula changes) would have been approximately 20.6 cents above the price that would have been computed based on the formula prior to 2001.
At the same time, the increase from $0.137 to $0.159 in the dry whey make allowance for calculating the other solids price would have resulted in a calculated decline in the other solids price of $0.0227 over the 19-month period. Elimination of the snubber on the other solids price would have made no difference during the period considered. The combination of the changes in both the protein price and the other solids price would have resulted in an average of about $0.50 per hundredweight increase in the Class III skim milk price over the 19-month period if cheese and dry whey prices were unchanged.
The recommended decision showed that the changes in the protein price formula improved significantly the relationship between the cheese price and the protein price, from a correlation coefficient of 0.54, using the Federal order reform protein formula, to a correlation coefficient of 0.70 using the formula recommended in that decision. In addition to improving the relationship between the cheese price and the protein price, the recommended protein formula reduced the variability of the protein price and moderated the extremes that occurred under the Federal order reform protein formula, thereby giving producers a more consistent and positive protein price signal.
The calculation of the Class III price at 3.5 percent butterfat, based on the formulas contained in the recommended decision, would have averaged about $0.48 per hundredweight above the 3.5 percent Class III price based on the Class III formulas implemented under Federal order reform.
In comments filed in response to the tentative final decision, IDFA and Leprino urged that in no case should the Class III price be enhanced relative to price levels under Federal order reform. Leprino reiterated the importance of assuring that yield factors not be too
The recommended decision stated that the record provided ample basis for believing that the margins provided in the formulas would have been adequate for cheesemakers to maintain their operations. As observed at the hearing and in comments filed in response to the tentative final decision by the expert witness from Cornell, a break-even point would be where the value of cheese plus whey cream plus whey powder equals the value of the milk price plus the make allowances. According to the witness, under Federal order reform, and to a greater extent in the tentative final decision, the total value of these products exceeded the sum of the milk price and the make allowances.
The discussion at the hearing centered specifically on the make allowance used in the protein formula, with the implication that it represented the entire make allowance for cheese. The recommended decision stated that unlike the Class IV price formulas, where the make allowances used in the butterfat and nonfat solids price formulas can be attributed directly to butter and nonfat dry milk, the make allowances used for butterfat, protein, and other solids in the pricing formulas for Class III must be looked at in aggregate. The recommended decision also stated that all three components are involved in the cheesemaking process and have a significant effect on cheesemakers' costs and returns.
The recommended decision stated that gross margins (including make allowances) could be compared using both the cost of milk based on the Federal order reform Class III formulas, and the cost of milk based on the Class III formulas. For this purpose, gross margins in the recommended decision were defined as the difference between the sum of the selling price of cheese and dry whey based on monthly average NASS prices and whey butter, estimated at nine cents below the NASS AA butter price, and the cost of milk under the two sets of formulas. The gross margins therefore reflected the amount of money available to processors to procure, process, and market the end products of milk used in Class III: cheese, whey butter and dry whey.
The recommended decision stated that using Class III component tests from the Upper Midwest market to estimate product yields, the estimated gross margins would have averaged approximately $3.00 per hundredweight using the Federal order reform Class III formulas and $2.52 per hundredweight over the 19-month period of January 2000 through July 2001 if the recommended Class III formulas had been in effect. The gross margins indicated in the recommended decision were significantly different than the cheese make allowances of $0.1702 and $0.165 used in the formulas, which would have been equivalent to approximately $1.70 and $1.65 per hundredweight of milk with an estimated yield of 10 pounds of cheese. Such a difference was expected since the make allowances for whey butter and dry whey were significantly lower than the cheese make allowance. Any residual value could have been used by the handler to improve returns or increase producer pay prices. Also, the lower gross margins under the recommended formulas could have lead to reduced over-order premiums to reflect increased milk costs and maintain current gross margins.
Comments received from Leprino, IDFA, and NDA expressed concern with the accuracy of gross margin analysis contained in the recommended decision. Comments received from Select and Continental stated that the gross margins presented in the recommended decision effectively restored the margins to their computed “implied margin” offered in their testimony at the hearing. Because of industry concerns regarding the accuracy of the gross margin analysis together with the industry's concern regarding the definition of “implied margin,” the gross margin analysis was not considered in adopting the provisions contained in this final decision.
This final decision compares prices over the period of January 2000 through May 2002 instead of the more limited 19-month price period from January 2000 to July 2001. Nevertheless, the 29-month period from January 2000 through May 2002 used in this final decision arrives at similar conclusions as those reached in the recommended decision. In particular, the conclusions made in the recommended decision regarding make allowances continue to be valid. Product yield formulas have been amended to include a farm-to-plant loss allowance and to provide simplification and consistency in pricing formulas. The effects on class prices are different due to the amendments adopted in this final decision together with their application to the expanded 29-month period.
It is important to again note that these calculated class price differences, or the “static effect” of the following adopted changes, are based on historical product price data and not on product prices that will occur in the future. The price differences calculated in this portion of the decision cannot be used to calculate or estimate changes in revenue that would have occurred or may occur in the future because changing intersections of supply and demand for each product result in different prices.
The price relationships between Classes I, II , III and IV established under the Federal order reform process should be maintained. One proposal heard in this proceeding would have reduced the Class IV butterfat price without affecting the computation of other butterfat or product prices. That proposal is addressed specifically in the Class IV Butterfat price.
The current pricing system uses the same formulas for computing the advance component prices used to compute the Class I skim milk and butterfat prices and Class II skim milk price as are used to calculate the Class III and Class IV component prices. Several witnesses testified as to what the class price relationships should be if changes were made to any of the Class III or Class IV component price formulas. The witness for IDFA and several other parties stated that any changes to the Class III and Class IV formulas should also apply to the advance price formulas used for computing the Class I and Class II prices. The witness explained that failure to use the same formulas between the related classes of use would result in a direct impact on the Class I and Class II differentials which was clearly not the intent of Congress when it instructed the Secretary to conduct a rulemaking proceeding concerning the Class III and Class IV price formulas.
A witness for Hershey Foods pointed out that the Secretary went to great lengths to justify the 70-cent Class II differential above the Class IV price. In support of Proposal 31, the witness said that there is no justification or new evidence for changing the current price relationship that exists between the manufactured products (butter and nonfat dry milk) and the Class II price if the Class IV formulas were revised as suggested in several proposals. The witness stated that such changes in price relationships clearly were not the intent of Congress. A brief filed on behalf of IDFA in support of Proposal 31 stated that the correct price relationship between NFDM and Class II is 70 cents and that the record provides no basis for changing that relationship. Actually, as explained in the final decision on Federal order reform, 70 cents represents the correct price relationship between milk used to make dry milk powder and milk used in Class II, as nearly as can be determined from the information available.
A proposal (Proposal 30) by two parties that any increases resulting from changes to the Class III and Class IV price formulas not be allowed to result in increases in Class I prices was supported in testimony by one of the parties, who argued that any increases in the Class I price mover should be balanced with reductions in Class I differentials. The witness stated that the proponents want to be sure that Class I prices are not further decoupled from Class III and Class IV pricing formulas, or that Class I prices are not artificially inflated.
Neither Proposal 30 nor Proposal 31 was adopted under the tentative final decision.
In comments on the tentative final decision filed by ADCNE and fully supported by DFA, consideration of Proposal 30 was opposed as being beyond the scope of the Congressional mandate and not fully debated at the hearing. ADCNE further opposed any modifications to Proposal 30, such as the Family Dairies' testimony supporting a weighted average Class I price mover, or to a similar proposal relative to the Class II price, that would change the basis for Class I and Class II prices or Class I and Class II differentials. ADCNE continued that there was no evidence presented at the hearing that would support the substantial revenue reductions to farmers throughout the Federal order system which Proposals 30 and 31 would cause. ADCNE urged that the conclusions of the tentative final decision to deny proposals 30 and 31 be affirmed.
The recommended decision also did not adopt Proposal 30 or Proposal 31. Comments received on the recommended decision from DFA indicated agreement with the Department's reasoning for rejecting these proposals and any modifications to those proposals that called for changing how Class I and Class II prices as established. Accordingly, this final decision continues with the findings contained in the recommended decision for not adopting Proposal 30 or 31.
According to the recommended decision, neither the price relationships established in the tentative final decision between milk used in Class III and Class IV, nor milk used in Classes I and II, should be changed. The recommended decision stated that changes should be reflected in the Class I and Class II prices to the extent that there may be differences in the Class III or Class IV prices between the current prices as a result of adjustments to the component pricing formulas. Any reevaluation of the formulas used to price the components used in manufactured products should be carried through to the class prices that are based on those component prices. A change in the computation of the nonfat solids price, for instance, is intended to better reflect the value of those solids in dry milk products. If the new nonfat solids price formula results in an increase in the Class IV price, the record provides no basis for changing the difference in the value of the milk used in those solids between Class IV and Class II use. Similarly, the availability of milk for use in Class I is related to the higher of the alternative manufacturing
Many witnesses provided comments on the recommended decision in regard to the relationship of Federal order Class III prices as compared to the California 4b prices. These two prices are considered to be minimum prices that reflect the value of producer milk used to make cheese. Multiple comments received indicated the importance of maintaining a close relationship between these prices.
Northwest Dairy Association expressed concern that the recommended decision “simply ignored” the “issue of price alignment with the nation's largest dairy producing state” and that there are “differences between the Federal and California pricing systems that the Department has utterly failed to explore and explain.”
A comment received from Agri-Mark stated that “USDA must take in consideration the competitive situation between California and Federal Order Class III and IV plants.”
In their comments, Dairylea stated that “It is important that manufacturers buying Federal order milk pay Class prices that are competitive with similar manufacturers in California and Idaho.”
A comment received from Western United Dairymen stated that, “It is imperative that California's prices maintain a close relationship with Federal order prices.”
Lastly, a comment received from Select Milk Producers and Continental Dairy Products stated that, “Considering the fact that California has transformed itself into the number one dairy state and soon to be number one cheese producing state in little more than a decade, it is appealing to consider modeling the decision in this hearing off the California system.” They go on to state that “Producer groups in California along with others are now seeking to have California adjust to the Federal scheme. It would be a sad day indeed if the [Department] reduced prices to meet California's while California was in the process to make such an effort unnecessary.”
Class III and Class IV prices established under the Federal milk order program should not be based upon, aligned with, or identical to the equivalent class prices established for milk under California's State milk order program. The equivalent class prices established under the California milk order program are based largely on the conditions unique to California while the Class III and Class IV prices established under Federal milk orders are based on national dairy product prices which reflect the national supply and demand conditions of milk used in these two classes. The California milk program is single-state oriented while the Federal program is national in scope.
Class III and Class IV dairy products compete in a national market. Because of this, Class III and Class IV milk prices established for all Federal milk marketing order areas are the same. The Federal milk order program gradually adopted the Minnesota-Wisconsin (M-W) price as the Class III price in all Federal milk marketing orders. Although the M-W was first adopted in 1963, it was not until the mid 1970's that the M-W established a uniform class price for milk used in Class III products in all Federal milk orders. Observations of the market place for cheese, butter, and nonfat dry milk provided the basis for concluding that these products compete in a market that is national in scope. Such findings were upheld with the adoption of the Basic Formula Price (BFP), which provided an interim pricing method for milk (due largely to the declining statistical reliability of the M-W price series) until a more long-term pricing method could be developed.
The implementation of milk order reform in January 2000 continued finding that Class III and Class IV dairy products compete in a national marketplace. However, a competitive price for milk, as represented by the M-W and BFP prices, was no longer viable. As an intended long-term method, the Federal milk order program has adopted end-product price formulas, valuing Class III and Class IV milk on the basis of the value of Class III and Class IV end-products in the marketplace. The NASS price survey for dairy products used as a basis for establishing Class III and Class IV prices includes all dairy product prices and sales volumes in all regions of the country, including California. In this regard, the Federal order program has and will continue to reflect California's impact on dairy product prices while establishing Class III and Class IV prices that are reflective of national supply and demand conditions.
With the adoption of end-product pricing formulas under order reform, the need for periodic adjustments that would arise with the changes in marketing conditions is acknowledged. Although the relationship of Federal Order prices to California prices is important, the record does not indicate how California and Federal order prices should be aligned or what the appropriate relationship between the California and the Federal order program should be.
A proposal that was not included in the hearing notice was made at the hearing by a Family Dairies, USA, witness on behalf of that cooperative and the Midwest Dairy Coalition, which represents 13 additional organizations of dairy farmers. The proposal would change the Class I price mover from the higher of the Class III and Class IV prices to a weighted average of the two. The witness for Family Dairies testified that the results of the current regulation are disturbing and unanticipated with the unexpected strength of the Class IV price relative to Class III.
In testimony at the hearing, the Family Dairies representative complained that 10 percent of production under Federal orders (milk used to make nonfat dry milk) has been driving the Class I price that applies to 40 percent of the milk. As a result, he testified, milk production for fluid purposes is encouraged in markets with high Class I differentials and relatively high Class I use at a time when marketing conditions (an oversupply of milk) should have the opposite effect. As fluid-oriented markets are receiving increased prices relative to markets in which cheese is the dominant use, he complained, inequities in blend prices between markets are increasing.
A group representing Upper Midwest producer interests filed a brief describing the recent movement of milk from the Upper Midwest pool onto the Central and Mideast marketwide pools as disorderly marketing caused by increases of Class I prices in these higher-Class I use markets.
An argument in another brief stated that since the 1960's the dairy industry has used a Class I mover tied to a market-clearing price represented by a weighted average of milk used in butter, cheese, and powder.
In several briefs it was argued that the Regulatory Impact Analysis (RIA) published with the final decision on Federal order reform stated that the price formulas adopted therein were expected to generate a sufficient quantity of milk, and that both the adoption of Class I pricing option IA and use of the higher of the Class III and IV prices as the price mover have worked to enhance Class I price levels.
A brief filed by a group representing fluid milk handlers suggested that USDA should give careful consideration to the proposal to use a weighted average of the Class III and Class IV prices to move Class I prices.
Based on analysis of the hearing record and briefs filed by interested persons, the tentative final decision continued use of the higher of the advance Class III or Class IV prices as the mover for Class I prices.
In comments on the tentative final decision, the Midwest Dairy Coalition repeated its position that the existing mover should be changed to a weighted average of the advanced Class III and advanced Class IV prices, with the weight based on the portion of manufacturing milk used for Class III and Class IV during the prior year. The Coalition stated that using the higher of Class III or Class IV prices could result in setting a minimum fluid milk price that is actually above the market clearing price for milk, especially if the higher of the Class III and IV prices were not representative of manufacturing markets. The Coalition also expressed concern that the tentative final decision adopted, as an unnoticed and unsupported change, the higher of the advanced Class III or Class IV milk prices at 3.5 percent butterfat as the new Class I mover instead of using the skim value.
In comments, NMPF noted that significant fluctuation that could occur in the Class I skim milk price mover due to using the higher of the advanced Class III or Class IV prices at 3.5 percent butterfat. Several parties noted that use of the advanced price at 3.5 percent butterfat could cause the Class III price to be the Class I price mover, even with a very low Class III skim milk price, causing significant month-to-month changes in the Class I skim milk price.
Michigan Milk Producers Association (MMPA) filed comments, stating that using a weighted average to set the Class I mover would severely impact fluid users' ability to attract sufficient quantities of milk when there were large differences between Class III and Class IV prices. MMPA and NMPF supported the continued use of the higher of the Class III or Class IV prices as the Class I mover.
ADCNE's comments to the tentative final decision, fully supported by DFA, expressed opposition to the Family Dairies' proposal for a weighted average Class I price mover or any other proposal that would change the basis for Class I and Class II prices or Class I and Class II differentials. ADCNE argued that there was no evidence presented at the hearing that would support the substantial revenue reductions to farmers throughout the Federal order system which would result from adoption of the weighted average Class I price mover. ADCNE urged that the conclusions of the tentative final decision to continue to use the higher of the advanced Class III and IV prices as the basis for calculating the Class I price mover be affirmed.
The shift in the pooling of milk from the Upper Midwest to higher-valued markets complained of in one Upper Midwest brief has been a long-sought outcome on the part of Upper Midwest producer groups. It is difficult to understand why it is now seen as a manifestation of disorderly marketing.
Those briefs that cited the sufficient level of milk production projected under the RIA for Federal order reform appeared to base their arguments in opposition to use of the “higher of” Class I price mover on that projection. It should be noted that Congressional action relative to Class I prices following issuance of the final decision on Federal order reform applied only to the Class I pricing surface. Use of the higher of the Class III and IV prices as the Class I price mover was included in Federal order reform and in the accompanying RIA.
The Upper Midwest Coalition's concern that the tentative final decision adopted the higher of the advanced Class III or Class IV milk prices at 3.5 percent butterfat instead of using the skim value as the new Class I mover, and the NMPF criticism that doing so would result in significant fluctuations in the Class I skim price is now moot because of the return to the use of one butterfat price. Use of the same butterfat price for the Class III and Class IV prices will result in the “higher of” the two being determined by the relative skim milk prices. Therefore, the recommended decision concluded that fluctuations in the Class I skim milk price projected under the tentative final decision should be reduced.
The price referred to in the brief expressing preference for the historical use of a weighted average of prices paid for milk used in butter, cheese, and powder was, at first, the Minnesota-Wisconsin price series (the M-W). The M-W, and later the M-W adjusted by a weighted average of current product prices for manufactured products, was specific to the Upper Midwest area and included very little NFDM, since that area manufactures a higher percentage of cheese, relative to NFDM, than the rest of the U.S. The current pricing system is much more representative of national supply and demand for manufactured dairy products than either of the versions of the former Class I mover.
As explained in the final decision on Federal order reform, the higher of the Class III or Class IV prices are used to move the Class I price to assure that fluid plants will be better able to attract milk away from manufacturing uses. Use of the weighted average of the two prices when there is a significant difference between them would provide no assurance that milk would be available as needed for fluid uses and would be more likely to result in Class price inversions (where the Class I price falls below one or more of the manufacturing class prices). In addition, use of a weighted average Class I price mover would increase the occurrence of the blend price falling below the Class III or IV price in markets with low Class I utilization.
Aside from the fact that the proposal to use a weighted average of the Class III and Class IV prices as the Class I mover was not noticed for consideration in this proceeding, it should be rejected on the basis of its lack of merit.
Comments received on the recommended decision from the Kroger Company opposed using the higher of Class III or Class IV for establishing the Class I price for milk. They suggested a review of alternatives that would not lead to higher Class I milk prices. Comments received from MMPA and DFA on the recommended decision, however, continued to express their support for using the “higher of.” MMPA was of the opinion that using the higher of the Class III or Class IV prices as the Class I mover establishes farm milk prices that assure priority in providing milk for Class I uses. After consideration of the entire record on this proceeding this final decision adopts the recommended decision provision to continue to use the higher of the advance Class III or Class IV prices for establishing the Class I base price or, as it is sometimes referenced, the Class I mover.
a.
b.
As noted in the tentative final decision, a difference between the classification of these products, which have a very high butterfat content, and butter should not cause any market dislocation in a pricing plan where butterfat used in Class III products has the same value as butterfat used in Class IV products. One commenter to the tentative final decision opposed changing the classification of these products.
In comments to the recommended decision, MMPA disagreed with returning anhydrous milkfat, butteroil, and plastic cream back to Class III classification because, in their opinion, the products compete with butter and therefore should have a cost base similar to butterfat. Comments received from NDA and WestFarm Foods also indicated opposition to returning these products back to Class III.
As a result of the elimination of the separate Class III butterfat price, this final decision finds that anhydrous milkfat, butteroil, and plastic cream is most appropriately classified as Class III.
In a comment filed in response to the tentative final decision, Hershey Foods urged that the Federal orders adopt a 2-class pricing system. Such a suggestion is entirely outside the scope of the current proceeding.
c.
In a post-hearing brief, National All-Jersey (NAJ) urged that USDA retain the current practice of using Class III milk component values to price producer component values. NAJ noted that this scenario makes it easier to use accepted hedging tools, such as Class III futures contracts, and helps simplify pricing for producers. NAJ further stated that the current procedure maintains the same producer butterfat price in all Federal orders with multiple component pricing (MCP).
Seventy-nine dairy organizations supported payment to producers on the basis of the milk components priced in Class III, including the Class III butterfat price instead of a pooled butterfat price, plus the producer price differential in a comment filed in response to the tentative final decision. The commenters argue that payment to producers on the basis of Class III components facilitates the use of risk management tools by producers and avoids wider fluctuations in Class I and producer fat, skim, and component values.
One of the principal reasons given in the tentative final decision for changing the pooling provisions of the MCP orders was that potential large differences between the Class III and Class IV/II butterfat prices would be likely to result in significant distortions in the effect of those differences on the producer price differential. The recommended decision also concluded that according to observation made under the tentative final decision, it was possible that pool calculations in some markets would result in a negative producer price differential if the producer butterfat price was not changed to represent a blend of the values of butterfat in the four classes of use.
The reversal to calculate separate Class III and Class IV butterfat prices invalidated the principal reason for pooling butterfat under the MCP orders.
Therefore, in the recommended decision it was determined that producer payments under the MCP orders would continue to be made on the basis of the prices for milk components used in Class III rather than pooling the butterfat values of the four classes and this continues in this final decision. The four orders that do not have component pricing will continue to pool the class use butterfat values and return a weighted average butterfat price to producers. The difference adopted in this final decision may result in some inconsistency between the producer butterfat prices under MCP and non-MCP orders. However, it is expected that such inconsistency will not result in disorderly marketing.
d.
In the component pricing orders, the changes made in the interim final rule to include the Class I other source butterfat value in the butterfat pool should be reversed. Although the District Court's injunction had the effect of reversing these changes and the Federal order reform language has continued in effect, the order language in the Code of Federal Regulations reflects the provisions adopted in the interim final rule. The proposed order language amendments in the recommended decision and in this final decision reflect the language that is currently in effect in the MCP orders, reversing the changes that were made to include Class I other source butterfat in the butterfat pool.
The statute requiring that this proceeding be held to reconsider the Class III and Class IV pricing formulas also required that a final decision be published by December 1, 2000, with any amendments to the orders to be effective January 1, 2001.
The hearing record reflected unanimity among those addressing the issue that the industry should be afforded the opportunity to comment on a decision before its content results in a final rule. Consequently, a tentative final decision was issued affording interested persons an opportunity to comment even though the amendments adopted in the decision were to become effective January 1, 2001. An injunction was issued on January 31, 2001, to prevent some of the provisions adopted in the interim final rule from becoming effective.
The recommended decision noted that several interested parties commented in opposition to reopening the proceeding with regard to the Class III butterfat and protein price formulas. The only commenter that favored revisiting any of the issues involved stated that some way of reflecting increased energy costs in make allowances should be explored. The commenter seemed to refer to conducting an entirely new proceeding rather than reopening the current proceeding. At that time it was decided that reopening the proceeding would not be considered due to the lack of interest in pursuing development of Class III component prices that are more closely correlated with cheese prices.
Two commenters on the tentative final decision urged that USDA act quickly to conclude the proceeding. The most rapid conclusion to the proceeding was through issuance of a tentative final decision, followed by a determination of producer approval and issuance of a final rule for the orders approved. However, because significant changes were made to the tentative final decision by the District Court order and by the recommended decision, interested parties were given an additional opportunity to comment on those changes. Therefore, USDA issued the recommended decision and provided for a 30-day comment period. Additional time to file comments was requested by a number of proprietary and cooperative handlers in order to allow for more thorough analysis of the impacts of the technical changes in the pricing formulas.
Several comments on the recommended decision were received urging prompt implementation of the amendments recommended. The National Milk Producers Federation (NMPF) supported the recommended decision's amendments in their entirety. They stated that, “In the absence of a clear-cut industry consensus for change, and without clear evidence of a market failure caused by federal order provisions, we believe it would be detrimental to the industry to reopen these proceedings in the near future.”
Several comments from both processors and producers on the recommended decision suggested reopening the hearing. A few comments noted the outdated nature of some of the data, while other comments indicated a need to further study the impacts that new price formulas would have on cheese plants that are small businesses. The proceeding is not being reopened and this final decision is being issued.
Briefs, proposed findings and conclusions, and comments on the tentative final decision and the recommended decision were filed on behalf of certain interested parties. These briefs, the proposed findings and conclusions, the comments, and the evidence in the record were considered in making the findings and conclusions set forth above. To the extent that the suggested findings and conclusions filed by interested parties are inconsistent with the findings and conclusions set forth herein, the requests to make such findings or reach such conclusions are denied for the reasons previously stated in this final decision.
The findings and determinations hereinafter set forth supplement those that were made when each of the aforesaid orders were first issued and when they were amended. The previous findings and determinations are hereby ratified and confirmed, except where they may conflict with those set forth herein.
The following findings are hereby made with respect to each of the aforesaid tentative marketing agreements and orders;
(a) The tentative marketing agreements and the orders, as hereby proposed to be amended, and all of the terms and conditions thereof, will tend to effectuate the declared policy of the Act;
(b) The parity prices of milk as determined pursuant to section 2 of the Act are not reasonable in view of the price of feeds, available supplies of feeds, and other economic conditions which affect market supply and demand for milk in the aforesaid marketing areas, and the minimum prices specified in the tentative marketing agreements and the orders, as hereby proposed to be amended, are such prices as will reflect the aforesaid factors, insure a sufficient quantity of pure and wholesome milk, and be in the public interest; and
(c) The tentative marketing agreements and the orders, as hereby proposed to be amended, will regulate the handling of milk in the same manner as, and will be applicable only to persons in the respective classes of industrial and commercial activity specified in, marketing agreements upon which a hearing has been held.
In arriving at the findings and conclusions, and the regulatory provisions adopted in this final decision, all exceptions received were considered in conjunction with the record evidence. To the extent that the findings and conclusions and the regulatory provisions of this final decision are at variance with any of the exceptions, such exceptions are hereby overruled for the reasons previously stated in this final decision.
Annexed hereto and made a part hereof are two documents, a Marketing Agreement regulating the handling of milk, and an Order amending the orders regulating the handling of milk in the Northeast and other marketing areas, which have been decided upon as the detailed and appropriate means of effectuating the foregoing conclusions.
It is hereby ordered that this entire decision and the two documents annexed hereto be published in the
It is hereby directed that referenda be conducted and completed on or before the 30th day from the date this decision is issued, in accordance with the procedure for the conduct of referenda (7 CFR 900.300-311), to determine whether the issuance of the orders as amended and as hereby proposed to be amended, regulating the handling of milk in the Northeast and Mideast marketing areas are approved or favored by producers, as defined under the terms each of the orders, as amended and as hereby proposed to be amended, who during such representative period were engaged in the production of milk for sale within the aforesaid marketing areas.
The representative period for the conduct of such referenda is hereby determined to be May 2002.
The agents of the Secretary to conduct such referenda are hereby designated to be the respective market administrators of the aforesaid orders.
May 2002 is hereby determined to be the representative period for the purpose of ascertaining whether the issuance of the orders, as amended and as hereby proposed to be amended, regulating the handling of milk in the Appalachian, Florida, Southeast, Upper Midwest, Central, Pacific Northwest, Southwest, Arizona Las-Vegas, and Western marketing areas is approved or favored by producers, as defined under
Milk marketing orders.
(This order shall not become effective unless and until the requirements of § 900.14 of the rules of practice and procedure governing proceedings to formulate marketing agreements and marketing orders have been met.)
The findings and determinations hereinafter set forth supplement those that were made when the orders were first issued and when they were amended. The previous findings and determinations are hereby ratified and confirmed, except where they may conflict with those set forth herein.
(a)
Upon the basis of the evidence introduced at such hearing and the record thereof, it is found that:
(1) The said orders as hereby amended, and all of the terms and conditions thereof, will tend to effectuate the declared policy of the Act;
(2) The parity prices of milk, as determined pursuant to section 2 of the Act, are not reasonable in view of the price of feeds, available supplies of feeds, and other economic conditions which affect market supply and demand for milk in the aforesaid marketing areas. The minimum prices specified in the orders as hereby amended are such prices as will reflect the aforesaid factors, insure a sufficient quantity of pure and wholesome milk, and be in the public interest; and
(3) The said orders as hereby amended regulate the handling of milk in the same manner as, and are applicable only to persons in the respective classes of industrial or commercial activity specified in marketing agreements upon which a hearing has been held.
It is therefore ordered, that on and after the effective date hereof, the handling of milk in the Northeast and other marketing areas shall be in conformity to and in compliance with the terms and conditions of the order, as amended, and as hereby amended, as follows:
The provisions of the proposed marketing agreements and orders amending the orders contained in the recommended decision issued by the Associate Administrator, Agricultural Marketing Service, on October 19, 2001, and published in the
1. The authority citation for 7 CFR parts 1000, 1001, 1005, 1006, 1007, 1030, 1032, 1033, 1124, 1126, 1131, and 1135 continues to read as follows:
7 U.S.C. 601-674.
1. Section 1000.40 is amended by adding paragraph (c)(1)(ii) and revising paragraph (d)(1)(i) to read as follows:
(c) * * *
(1) * * *
(ii) Plastic cream, anhydrous milkfat, and butteroil; and
(d) * * *
(1) * * *
(i) Butter; and
2. Section 1000.50 is amended by revising the last sentence of the introductory text; by revising paragraphs (a), (b), (c), (g), (h), (j), (l), (m), (n), (o), (p)(1), and (q)(3); and by removing paragraph (q)(4) to read as follows:
* * * The price described in paragraph (d) of this section shall be derived from the Class II skim milk price announced on or before the 23rd day of the month preceding the month to which it applies and the butterfat price announced on or before the 5th day of the month following the month to which it applies.
(a)
(b)
(c)
(g)
(h)
(j)
(l)
(m)
(n)
(1) Compute a weighted average of the amounts described in paragraphs (n)(1)(i) and (ii) of this section:
(i) The U.S. average NASS survey price for 40-lb. block cheese reported by the Department for the month; and
(ii) The U.S. average NASS survey price for 500-pound barrel cheddar cheese (38 percent moisture) reported by the Department for the month plus 3 cents;
(2) Subtract 16.5 cents from the price computed pursuant to paragraph (n)(1) of this section and multiply the result by 1.383;
(3) Add to the amount computed pursuant to paragraph (n)(2) of this section an amount computed as follows:
(i) Subtract 16.5 cents from the price computed pursuant to paragraph (n)(1) of this section and multiply the result by 1.572; and
(ii) Subtract 0.9 times the butterfat price computed pursuant to paragraph (l) of this section from the amount computed pursuant to paragraph (n)(3)(i) of this section; and
(iii) Multiply the amount computed pursuant to paragraph (n)(3)(ii) of this section by 1.17.
(o)
(p) * * *
(1) Multiply 0.0005 by the weighted average price computed pursuant to paragraph (n)(1) of this section and round to the 5th decimal place;
(q) * * *
(3) An advanced butterfat price per pound, rounded to the nearest one-hundredth cent, shall be calculated by computing a weighted average of the 2 most recent U.S. average NASS AA Butter survey prices announced before the 24th day of the month, subtracting 11.5 cents from this average, and multiplying the result by 1.20.
1. Section 1001.60 is amended by revising paragraphs (c)(3), (d)(2), and (h) to read as follows:
(c) * * *
(3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price.
(d) * * *
(2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price.
(h) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to § 1000.43(d) and § 1000.44(a)(3)(i) and the corresponding step of § 1000.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to § 1000.44(a)(8) and the corresponding step of § 1000.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order.
2. Section 1001.61 is revised to read as follows:
For each month, the market administrator shall compute a producer price differential per hundredweight. The report of any handler who has not made payments required pursuant to § 1001.71 for the preceding month shall not be included in the computation of the producer price differential, and such handler's report shall not be included in the computation for succeeding months until the handler has made full payment of outstanding monthly obligations. Subject to the conditions in this paragraph, the market administrator shall compute the producer price differential in the following manner:
(a) Combine into one total the values computed pursuant to § 1001.60 for all handlers required to file reports prescribed in § 1001.30;
(b) Subtract the total of the values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to § 1001.60 by the protein price, other solids price, and the butterfat price, respectively;
(c) Add an amount equal to the minus location adjustments and subtract an amount equal to the plus location adjustments computed pursuant to § 1001.75;
(d) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund;
(e) Divide the resulting amount by the sum of the following for all handlers included in these computations:
(1) The total hundredweight of producer milk; and
(2) The total hundredweight for which a value is computed pursuant to § 1001.60(h); and
(f) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result, rounded to the nearest cent, shall be known as the producer price differential for the month.
3. Section 1001.62 is amended by revising paragraphs (e) and (g) to read as follows:
(e) The butterfat price;
(g) The statistical uniform price for milk containing 3.5 percent butterfat computed by combining the Class III price and the producer price differential.
4. Section 1001.71 is amended by revising paragraphs (b)(2) and (b)(3) to read as follows:
(b) * * *
(2) An amount obtained by multiplying the total pounds of protein, other solids, and butterfat contained in producer milk by the protein, other solids, and butterfat prices respectively; and
(3) An amount obtained by multiplying the pounds of skim milk and butterfat for which a value was computed pursuant to § 1001.60(h) by the producer price differential as adjusted pursuant to § 1001.75 for the location of the plant from which received.
5. Section 1001.73 is amended by revising paragraphs (a)(2)(ii) and (b)(3)(vi) to read as follows:
(a) * * *
(2) * * *
(ii) Multiply the pounds of butterfat received by the butterfat price for the month;
(b) * * *
(3) * * *
(vi) Multiply the pounds of butterfat in Class III and Class IV milk by the butterfat price for the month;
1. Section 1030.60 is amended by revising paragraphs (c)(3), (d)(2), and (i) to read as follows:
(c) * * *
(3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price.
(d) * * *
(2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price.
(i) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to § 1000.43(d) and § 1000.44(a)(3)(i) and the corresponding step of § 1000.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to § 1000.44(a)(8) and the corresponding step of § 1000.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order.
2. Section 1030.61 is revised to read as follows:
For each month the market administrator shall compute a producer price differential per hundredweight. The report of any handler who has not made payments required pursuant to § 1030.71 for the preceding month shall not be included in the computation of the producer price differential, and such handler's report shall not be included in the computation for succeeding months until the handler has made full payment of outstanding monthly obligations. Subject to the conditions of this paragraph, the market administrator shall compute the producer price differential in the following manner:
(a) Combine into one total the values computed pursuant to § 1030.60 for all handlers required to file reports prescribed in § 1030.30;
(b) Subtract the total values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to § 1030.60 by the protein price, other solids price, and the butterfat price, respectively, and the total value of the somatic cell adjustment pursuant to § 1030.30(a)(1) and (c)(1);
(c) Add an amount equal to the minus location adjustments and subtract an amount equal to the plus location adjustments computed pursuant to § 1030.75;
(d) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund;
(e) Divide the resulting amount by the sum of the following for all handlers included in these computations:
(1) The total hundredweight of producer milk; and
(2) The total hundredweight for which a value is computed pursuant to § 1030.60(i); and
(f) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result shall be known as the producer price differential for the month.
3. Section 1030.62 is amended by revising paragraphs (e) and (h) to read as follows:
(e) The butterfat price;
(h) The statistical uniform price for milk containing 3.5 percent butterfat, computed by combining the Class III price and the producer butterfat price differential.
4. Section 1030.71 is amended by revising paragraphs (b)(2) and (b)(4) to read as follows:
(b) * * *
(2) An amount obtained by multiplying the total pounds of protein, other solids, and butterfat contained in producer milk by the protein, other solids, and butterfat prices respectively;
(4) An amount obtained by multiplying the pounds of skim milk and butterfat for which a value was computed pursuant to § 1030.60(i) by the producer price differential as adjusted pursuant to § 1030.75 for the location of the plant from which received.
5. Section 1030.73 is amended by revising paragraphs (a)(2)(ii), (c)(2)(v), and (c)(3)(ii) to read as follows:
(a) * * *
(2) * * *
(ii) The pounds of butterfat received times the butterfat price for the month;
(c) * * *
(2) * * *
(v) The pounds of butterfat in Class III and Class IV milk times the butterfat price;
(3) * * *
(ii) The pounds of butterfat received times the butterfat price for the month;
1. Section 1032.60 is amended by revising paragraphs (c)(3), (d)(2), and (i) to read as follows:
(c) * * *
(3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price.
(d) * * *
(2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price.
(i) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to § 1000.43(d) and § 1000.44(a)(3)(i) and the corresponding step of § 1000.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to § 1000.44(a)(8) and the corresponding step of § 1000.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order.
2. Section 1032.61 is revised to read as follows:
For each month the market administrator shall compute a producer price differential per hundredweight. The report of any handler who has not made payments required pursuant to § 1032.71 for the preceding month shall not be included in the computation of the producer price differential, and such handler's report shall not be included in the computation for succeeding months until the handler has made full payment of outstanding monthly obligations.
(a) Combine into one total the values computed pursuant to § 1032.60 for all handlers required to file reports prescribed in § 1032.30;
(b) Subtract the total values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to § 1032.60 by the protein price, the other solids price, and the butterfat price, respectively, and the total value of the somatic cell adjustment pursuant to § 1032.30(a)(1) and (c)(1);
(c) Add an amount equal to the minus location adjustments and subtract an amount equal to the plus location adjustments computed pursuant to § 1032.75;
(d) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund;
(e) Divide the resulting amount by the sum of the following for all handlers included in these computations:
(1) The total hundredweight of producer milk; and
(2) The total hundredweight for which a value is computed pursuant to § 1032.60(i); and
(f) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result shall be known as the producer price differential for the month.
3. Section 1032.62 is amended by revising paragraphs (e) and (h) to read as follows:
(e) The butterfat price;
(h) The statistical uniform price for milk containing 3.5 percent butterfat, computed by combining the Class III price and the producer price differential.
4. Section 1032.71 is amended by revising paragraphs (b)(2) and (b)(4) to read as follows:
(b) * * *
(2) An amount obtained by multiplying the total pounds of protein, other solids, and butterfat contained in producer milk by the protein, other solids, and butterfat prices respectively;
(4) An amount obtained by multiplying the pounds of skim milk and butterfat for which a value was computed pursuant to § 1032.60(i) by the producer price differential as adjusted pursuant to § 1032.75 for the location of the plant from which received.
5. Section 1032.73 is amended by revising paragraphs (a)(2)(ii), (c)(2)(v), and (c)(3)(ii) to read as follows:
(a) * * *
(2) * * *
(ii) The pounds of butterfat received times the butterfat price for the month;
(c) * * *
(2) * * *
(v) The pounds of butterfat in Class III and Class IV milk times the butterfat price;
(3) * * *
(ii) The pounds of butterfat received times the butterfat price for the month;
1. Section 1033.60 is amended by revising paragraphs (c)(3), (d)(2), and (i) to read as follows:
(c) * * *
(3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price.
(d) * * *
(2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price.
(i) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to § 1000.43(d) and § 1000.44(a)(3)(i) and the corresponding step of § 1000.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to § 1000.44(a)(8) and the corresponding step of § 1000.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order.
2. Section 1033.61 is revised to read as follows:
For each month the market administrator shall compute a producer price differential per hundredweight. The report of any handler who has not made payments required pursuant to § 1033.71 for the preceding month shall not be included in the computation of the producer price differential, and such handler's report shall not be included in the computation for succeeding months until the handler has made full payment of outstanding monthly obligations. Subject to the conditions of this paragraph, the market administrator shall compute the producer price differential in the following manner:
(a) Combine into one total the values computed pursuant to § 1033.60 for all handlers required to file reports prescribed in § 1033.30;
(b) Subtract the total values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to § 1033.60 by the protein price, the other solids price, and the butterfat price, respectively, and the total value of the somatic cell adjustment pursuant to § 1033.30(a)(1) and (c)(1);
(c) Add an amount equal to the minus location adjustments and subtract an amount equal to the plus location adjustments computed pursuant to § 1033.75;
(d) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund;
(e) Divide the resulting amount by the sum of the following for all handlers included in these computations:
(1) The total hundredweight of producer milk; and
(2) The total hundredweight for which a value is computed pursuant to § 1033.60(i); and
(f) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result shall be known as the producer price differential for the month.
3. Section 1033.62 is amended by revising paragraphs (e) and (h) to read as follows:
(e) The butterfat price;
(h) The statistical uniform price for milk containing 3.5 percent butterfat, computed by combining the Class III price and the producer price differential.
4. Section 1033.71 is amended by revising paragraphs (b)(2) and (b)(4) to read as follows:
(b) * * *
(2) An amount obtained by multiplying the total pounds of protein, other solids, and butterfat contained in producer milk by the protein, other solids, and butterfat prices, respectively;
(4) An amount obtained by multiplying the pounds of skim milk and butterfat for which a value was computed pursuant to § 1033.60(i) by the producer price differential as adjusted pursuant to § 1033.75 for the location of the plant from which received.
5. Section 1033.73 is amended by revising paragraphs (a)(2)(ii) and (b)(3)(v) to read as follows:
(a) * * *
(2) * * *
(ii) The pounds of butterfat received times the butterfat price for the month;
(b) * * *
(3) * * *
(v) The pounds of butterfat in Class III and Class IV milk times the butterfat price;
1. Section 1124.60 is amended by revising paragraphs (c)(3), (d)(2), and (h) to read as follows:
(c) * * *
(3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price.
(d) * * *
(2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price.
(h) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to § 1000.43(d) and § 1000.44(a)(3)(i) and the corresponding step of § 1000.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to § 1000.44(a)(8) and the corresponding step of § 1000.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order.
2. Section 1124.61 is revised to read as follows:
For each month the market administrator shall compute a producer price differential per hundredweight. The report of any handler who has not made payments required pursuant to § 1124.71 for the preceding month shall not be included in the computation of the producer price differential, and such handler's report shall not be included in the computation for succeeding months until the handler has made full payment of outstanding monthly obligations. Subject to the conditions of this paragraph, the market administrator shall compute the producer price differential in the following manner:
(a) Combine into one total the values computed pursuant to § 1124.60 for all handlers required to file reports prescribed in § 1124.30;
(b) Subtract the total values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to § 1124.60 by the protein price, the other solids price, and the butterfat price, respectively;
(c) Add an amount equal to the minus location adjustments and subtract an amount equal to the plus location adjustments computed pursuant to § 1124.75;
(d) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund;
(e) Divide the resulting amount by the sum of the following for all handlers included in these computations:
(1) The total hundredweight of producer milk; and
(2) The total hundredweight for which a value is computed pursuant to § 1124.60(h); and
(f) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result shall be known as the producer price differential for the month.
3. Section 1124.62 is amended by revising paragraphs (e) and (g) to read as follows:
(e) The butterfat price;
(g) The statistical uniform price for milk containing 3.5 percent butterfat, computed by combining the Class III price and the producer price differential.
4. Section 1124.71 is amended by revising paragraphs (b)(2) and (b)(3) to read as follows:
(b) * * *
(2) An amount obtained by multiplying the total pounds of protein, other solids, and butterfat contained in producer milk by the protein, other solids, and butterfat prices respectively; and
(3) An amount obtained by multiplying the pounds of skim milk and butterfat for which a value was computed pursuant to § 1124.60(h) by the producer price differential as adjusted pursuant to § 1124.75 for the location of the plant from which received.
5. Section 1124.73 is amended by revising paragraphs (a)(2)(ii), (c)(2)(v), and (c)(3)(ii) to read as follows:
(a) * * *
(2) * * *
(ii) The pounds of butterfat received times the butterfat price for the month;
(c) * * *
(2) * * *
(v) The pounds of butterfat in Class III and Class IV milk times the butterfat price;
(3) * * *
(ii) The pounds of butterfat received times the butterfat price for the month;
1. Section 1126.60 is amended by revising paragraphs (c)(3), (d)(2), and (i) to read as follows:
(c) * * *
(3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price.
(d) * * *
(2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price.
(i) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to § 1000.43(d) and § 1000.44(a)(3)(i) and the corresponding step of § 1000.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to § 1000.44(a)(8) and the corresponding step of § 1000.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order.
2. Section 1126.61 is revised to read as follows:
For each month the market administrator shall compute a producer price differential per hundredweight. The report of any handler who has not made payments required pursuant to § 1126.71 for the preceding month shall not be included in the computation of the producer price differential, and such handler's report shall not be included in the computation for succeeding months until the handler has made full payment of outstanding monthly obligations. Subject to the conditions of this paragraph, the market administrator shall compute the producer price differential in the following manner:
(a) Combine into one total the values computed pursuant to § 1126.60 for all handlers required to file reports prescribed in § 1126.30;
(b) Subtract the total of the values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to § 1126.60 by the protein price, other solids price, and the butterfat price, respectively, and the total value of the somatic cell adjustment pursuant to § 1126.30(a)(1) and (c)(1);
(c) Add an amount equal to the minus location adjustments and subtract an amount equal to the plus location adjustments computed pursuant to § 1126.75;
(d) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund;
(e) Divide the resulting amount by the sum of the following for all handlers included in these computations:
(1) The total hundredweight of producer milk; and
(2) The total hundredweight for which a value is computed pursuant to § 1126.60(i); and
(f) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result shall be known as the producer price differential for the month.
3. Section 1126.62 is amended by revising paragraphs (e) and (h) to read as follows:
(e) The butterfat price;
(h) The statistical uniform price for milk containing 3.5 percent butterfat, computed by combining the Class III price and the producer price differential.
4. Section 1126.71 is amended by revising paragraphs (b)(2) and (b)(4) to read as follows:
(b) * * *
(2) An amount obtained by multiplying the total pounds of protein, other solids, and butterfat contained in producer milk by the protein, other solids, and butterfat prices respectively;
(4) An amount obtained by multiplying the pounds of skim milk and butterfat for which a value was computed pursuant to § 1126.60(i) by the producer price differential as adjusted pursuant to § 1126.75 for the location of the plant from which received.
5. Section 1126.73 is amended by revising paragraphs (a)(2)(ii) and (b)(3)(v) to read as follows:
(a) * * *
(2) * * *
(ii) Multiply the pounds of butterfat received times the butterfat price for the month;
(b) * * *
(3) * * *
(v) The pounds of butterfat in Class III and Class IV milk times the butterfat price;
1. Section 1135.60 is amended by revising paragraphs (c)(3), (d)(2) and (h) to read as follows:
(c) * * *
(3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price.
(d) * * *
(2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price.
(h) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to § 1000.43(d) and § 1000.44(a)(3)(i) and the corresponding step of § 1000.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to § 1000.44(a)(8) and the corresponding step of § 1000.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order.
2. Section 1135.61 is revised to read as follows:
For each month the market administrator shall compute a producer price differential per hundredweight. The report of any handler who has not made payments required pursuant to § 1135.71 for the preceding month shall
(a) Combine into one total the values computed pursuant to § 1135.60 for all handlers required to file reports prescribed in § 1135.30;
(b) Subtract the total values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to § 1135.60 by the protein price, the other solids price, and the butterfat price, respectively;
(c) Add an amount equal to the minus location adjustments and subtract an amount equal to the plus location adjustments computed pursuant to § 1135.75;
(d) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund;
(e) Divide the resulting amount by the sum of the following for all handlers included in these computations:
(1) The total hundredweight of producer milk; and
(2) The total hundredweight for which a value is computed pursuant to § 1135.60(h); and
(f) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result shall be known as the producer price differential for the month.
3. Section 1135.62 is amended by revising paragraphs (e) and (g) to read as follows:
(e) The butterfat price;
(g) The statistical uniform price for milk containing 3.5 percent butterfat computed by combining the Class III price and the producer price differential.
4. Section 1135.71 is amended by revising paragraph (b)(2) and removing and reserving paragraph (b)(3) to read as follows:
(b) * * *
(2) An amount obtained by multiplying the total pounds of protein, other solids, and butterfat contained in producer milk by the protein, other solids, and butterfat prices respectively; and
(3) [Reserved]
5. Section 1135.73 is amended by revising paragraphs (a)(2)(ii) and (b)(3)(v) to read as follows:
(a) * * *
(2) * * *
(ii) The pounds of butterfat received times the butterfat price for the month;
(b) * * *
(3) * * *
(v) The pounds of butterfat in Class III and Class IV milk times the butterfat price;
The parties hereto, in order to effectuate the declared policy of the Act, and in accordance with the rules of practice and procedure effective thereunder (7 CFR Part 900), desire to enter into this marketing agreement and do hereby agree that the provisions referred to in paragraph I hereof as augmented by the provisions specified in paragraph II hereof, shall be and are the provisions of this marketing agreement as if set out in full herein.
I. The findings and determinations, order relative to handling, and the provisions of §§ ____
II. The following provisions: § ____
(a) Record of milk handled. The undersigned certifies that he/she handled during the month of____
(b) Authorization to correct typographical errors. The undersigned hereby authorizes the Deputy Administrator, or Acting Deputy Administrator, Dairy Programs, Agricultural Marketing Service, to correct any typographical errors which may have been made in this marketing agreement.
§ ____
In Witness Whereof, The contracting handlers, acting under the provisions of the Act, for the purposes and subject to the limitations herein contained and not otherwise, have hereunto set their respective hands and seals.
Occupational Safety and Health Administration (OSHA), Labor.
Final rule.
The Occupational Safety and Health Administration (OSHA) is revising its standards for means of egress. The purpose of this revision is to rewrite the existing requirements in clearer language so they will be easier to understand by employers, employees, and others who use them.
The revisions reorganize the text, remove inconsistencies among sections, and eliminate duplicative requirements. The rules are performance-oriented to the extent possible, and more concise than the original, with fewer subparagraphs, and fewer cross-references to other OSHA standards. Additionally, a table of contents has been added that is intended to make the standards easier to use.
Also, OSHA is changing the name of the subpart from “Means of Egress” to “Exit Routes, Emergency Action Plans, and Fire Prevention Plans” to better describe the contents.
Finally, OSHA has evaluated the National Fire Protection Association's Standard 101, Life Safety Code, 2000 Edition (NFPA 101-2000), and has concluded that the standard provides comparable safety to the Exit Routes Standard. Therefore, employers who wish to comply with the NFPA 101-2000 instead of the OSHA standards for Exit Routes may do so.
The final rule becomes effective December 9, 2002.
In accordance with 28 U.S.C. 2112(a), the Agency designates the Associate Solicitor of Labor for Occupational Safety and Health, Office of the Solicitor of Labor, Room S-4004, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210 to receive petitions for review of the final rule.
OSHA, Ms. Bonnie Friedman, Director, Office of Public Affairs, N-3647, Occupational Safety and Health Administration, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210; telephone: (202) 693-1999. For additional copies of this
For electronic copies of this
References to comments and testimony in the rulemaking record (Docket S-052) are found throughout the text of the preamble. In the preamble comments are identified by an assigned exhibit number as follows: “Ex. 5-1” means Exhibit 5-1 in Docket S-052. For quoted material in the preamble, the page number where the quote can be located is included if other than page one. The transcript of the public hearing is cited by the page number as follows: Tr. 37. A list of the exhibits, copies of the exhibits, and transcripts are available in the OSHA Docket Office.
In 1971 and 1972, OSHA adopted hundreds of national consensus and established Federal standards under section 6(a) of the Occupational Safety and Health Act of 1970. Section 6(a) allowed the Agency to adopt these standards for a limited period of time without going through traditional rulemaking. Many of these “start-up standards” have been criticized for being overly wordy, difficult to understand, repetitive and internally inconsistent.
On September 10, 1996, OSHA published a proposed rule in the
OSHA proposed two versions of the revision of subpart E. The first version was organized in the traditional regulatory format characteristic of most OSHA standards. The second version was in a question and answer format. OSHA invited interested parties to comment on the content and effectiveness of the proposed changes and to indicate which version they preferred. Both versions left unchanged the regulatory obligations placed on employers and the safety and health protection provided to employees. Based on the majority of comments (
In the proposal, OSHA stated what it expected to achieve by revising subpart E: (1) To maintain the safety and health protection provided to employees without increasing the regulatory burden on employers; (2) to create a regulation that is easily understood and; (3) to state employers' obligations in performance-oriented language to the extent possible.
The proposal attempted to simplify, rather than to substantively revise, OSHA's means of egress standards. In finalizing this proposal, the Agency has been careful to ensure that the protections afforded employees were not weakened. Employers who are in compliance with the original subpart E will continue to be in compliance with the revised subpart E that is being promulgated in this rule.
In developing the proposal, OSHA reviewed relevant OSHA decisions of the Federal courts, the Occupational Safety and Health Review Commission, and Agency letters of interpretation (Ex. 2) to determine how each provision of subpart E has been interpreted. Also, OSHA reviewed comparable State regulations, training materials and current consensus standards including the National Fire Protection Association's Life Safety Code, NFPA 101 (at that time the 1994 Edition). This review enabled OSHA to reorganize subpart E, eliminate duplicative provisions, and have confidence that the revisions did not diminish the safety and health protection afforded by existing rules.
OSHA discovered during the review process that some provisions of subpart E were outdated and not consistent with contemporary fire safety options in then current NFPA 101, Life Safety Code, 1994 Edition. Where it was possible to expand permissible employer compliance options without lessening employee safety, the proposal included these expanded options. For example, OSHA incorporated NFPA 101, 1994 Edition, the Life Safety Code's option to exit to a refuge area rather than to the outside (proposed paragraph 1910.36(f)(3)). The proposal also permitted the use of self-luminous and electroluminescent exit signs (proposed paragraph 1910.37(c)(6)). (
OSHA did not substitute performance-oriented language for current language where doing so would either eliminate a requirement that protects employee safety and health, or expand an employer's compliance obligation. For example, the proposal continued the existing requirement that a means of egress must be at least 28 inches wide (proposed paragraph 1910.37(j)). The Agency chose not to substitute performance-oriented criteria for this provision (such as “means of egress be of adequate width to support building occupants”) because this change would eliminate the existing minimum width specification and might not provide adequate protection to employees leaving the workplace in an emergency. For this reason, OSHA decided not to revise the minimum clearance requirement.
OSHA noted in the proposal that for some employers, reliance on performance-oriented standards might create confusion as to the specific precautions necessary in a variety of situations. In the past, OSHA has used NFPA 101 as an aid in interpreting subpart E. OSHA intends to continue to rely on NFPA 101 as guidance in implementing performance-oriented provisions of revised subpart E.
In addition to organizing the requirements of the revised subpart E in a logical and understandable manner, OSHA has organized the requirements around three aspects of exit routes: (1) Design and construction requirements; (2) maintenance, safeguards, and operational requirements; and (3) requirements for warning employees of the need to escape. Reorganizing subpart E in this manner has enabled OSHA to eliminate many duplicative provisions. For example, in existing subpart E, both paragraph 1910.36(b)(8) and paragraph 1910.37(e) contain the design requirements that where workplaces are required to have two means of egress, these means of egress must be located as far away as practical (remote) from one another.
Other significant revisions to subpart E include: Removal of obligations that are not related to employee protection but pertain to the protection of the general public, and the deletion of any recommended as opposed to required actions (
As noted above, OSHA proposed two versions of subpart E; a traditional regulatory text version and a question and answer version. The traditional regulatory text version was preceded by a descriptive section heading that told the reader what information could be found in that section. The question and answer version was written in a form by which an employer might ask a question about the rule, and this question was then followed by an answer that told the employer about the requirement.
Other efforts to make subpart E more user-friendly included: removal of unused terms and ordinary terms from the definitions; elimination of cross-references to other standards; removal of overly technical terms in favor of more common words; use of the active voice; and, the use of positive as opposed to negative sentences.
The Agency invited public comment and requests for a hearing on the proposed revision to subpart E. An informal public hearing was requested by the National Fire Protection Association (Ex. 5-18) and Hallmark Cards (Ex. 5-51).
On March 3, 1997, OSHA published a notice in the
In the hearing notice, OSHA invited comment on ten issues that will be discussed below in more detail. In summary, OSHA asked: (1) How OSHA should use the Life Safety Code in the final rule; (2) how or if OSHA should use model building codes; (3) whether the use of performance language creates new enforcement problems; (4) how OSHA should address the issues of exit capacity and the number of required exits; (5) whether or not the exit sign provisions were too general; (6) whether or not the revised requirements for exit illumination were too general; (7) whether or not there were still provisions or terms in the proposed revision that were too technical or difficult to understand; (8) whether OSHA achieved in the proposed revision its goal of not changing employers obligations; (9) whether any of the proposed provisions provided greater protection than in the original subpart E; and (10) whether any of the requirements presented technological feasibility problems for affected employers.
The subpart E rulemaking record contains 23 exhibits, 69 comments, 170 pages of testimony and four post-hearing comments.
This section contains an analysis of the record evidence and policy decisions pertaining to the various provisions of revised subpart E.
As stated previously, OSHA's goals in revising subpart E were to maintain the safety and health protection provided to employees in subpart E without increasing the regulatory burden on employers, create a regulation that is easily understood, and, to the extent possible, express employers' obligations in performance-oriented language.
The majority of commenters supported OSHA's use of plain language. Owens Manufacturing, Inc. (Ex. 5-1) stated they were “in favor of this change as it allows the production people in our manufacturing area to understand the scope and meaning of this regulation much easier.” United Refining Company (Ex. 5-2) remarked “For those individuals who occasionally reference a standard the Plain English version will be beneficial.” The commenter from Medical Environment, Inc. (Ex. 5-7) stated “I commend your actions in correcting the highly technical language into wording that is understandable to the average person. I have read your proposed changes, and find them to be significantly improved.” The Institute for Interconnecting and Packaging Electronic Circuits (IPC) (Ex. 5-25) observed that:
Given IPC members' commitment to advancing employee health and safety, IPC applauds OSHA's proposed Means of Egress rule. The proposed changes are designed to make the standard more understandable and, therefore promote industry compliance. “Translating” OSHA's current regulations into “plain English” is an outstanding activity that should be aggressively applied to ALL federal regulations—not just OSHA regulations, and IPC supports OSHA's actions to effect such change.
The International Brotherhood of Teamsters (Ex. 5-31) commended OSHA for undertaking the revision effort and stated that the International:
[I]s pleased to see the Occupational Safety and Health Administration attempt to develop plain English standards. This International Union feels that this approach to safety and health standards will enable our members and other workers across the
The National Institute for Occupational Safety and Health (NIOSH, Ex. 5-42) also supported the effort observing that “By revising the Means of Egress rule in easy to understand terms as part of a shorter, performance-oriented standard, the standard will be easier to use and provide more compliance options for employers.”
Schirmer Engineering Corporation (Ex. 5-57) stated:
Review of the revisions introduced in the proposed rule indicates an effort to provide language which is more condensed and clear, with the removal of verbose wording. The sections that were deleted from the original version did not greatly affect the overall life safety concept as it pertains to egress from a building. In addition, the reorganization helps to clarify some of the requirements of the code which, in turn, facilitates overall compliance.
On the other hand, some commenters did object to the revision of subpart E on the grounds either that it was not productive for OSHA to re-write these standards, or that the revised language actually changed the requirements. For example, James R. Hutton, a fire protection engineer (Ex. 5-9), believed the “proposed revisions will complicate and cause more difficulties, not less, for smaller businesses who do not have the resources to undergo the time or expense required to develop “custom solutions” to “plain English” requirements.” OSHA disagrees. The revised subpart E only makes compliance requirements clearer and it refers employers and employees to NFPA 101 for added details, when necessary.
It was also suggested by some commenters that instead of finalizing the proposed revision, OSHA should adopt NFPA 101, the Life Safety Code, or that OSHA should rely on building codes, instead of revising subpart E. (
The National Fire Protection Association (NFPA, Ex. 5-18) remarked:
NFPA agrees with several of the goals as contained in the OSHA/NPRM but find serious flaws in the methodology being proposed to attain these goals. Specifically, NFPA applauds OSHA's goal “to maintain the safety and health protection provided to employees by subpart E * * *” and “to create a regulation that is easily understood.” We also applaud OSHA's desire “to allow employers the flexibility of relying on more contemporary compliance approaches.”
However, we do not believe these goals can be achieved by either “plain English” alternative taken together or separately as being proposed by OSHA in the NPRM. Specifically, NFPA recommends OSHA abandon its attempt to rewrite a 25-year old standard as represented in the first alternative of the NPRM * * *.
Further, NFPA asserted that OSHA's rewrite would make enforcement more difficult especially when performance-oriented language is substituted for specifications; that the proposal drops all references to the NFPA Life Safety Code even though the proposal indicated OSHA would continue to rely on that Code; and, that the proposed rewrite did not specifically allow for contemporary compliance options as contemplated by OSHA and as set forth in the current edition of NFPA 101 (1994). NFPA recommended that:
[T]he first alternative be abandoned [traditional regulatory text] and that OSHA instead adopt by reference the 1994 edition of NFPA 101 * * * Further, NFPA believes the adoption of the 1994 edition of NFPA 101, together with a supplemental Q&A (question and answer) format as proposed in the second NPRM alternative, would be the best approach to achieve the desired goals as stated by OSHA in the NPRM.
At the time of the proposal, the latest version of NFPA 101 was the 1994 Edition. NFPA subsequently issued a 1997 edition and then a 2000 edition. OSHA has reviewed the NFPA 101-2000 edition carefully and found that compliance with its provisions would protect employees as well as the parallel provisions of subpart E. Adopting NFPA 101 as an OSHA standard would require OSHA to conduct a full rulemaking under section 6(b) of the OSH Act, scrutinizing each provision, accounting for each cost impact on employers, justifying why the new standard is reasonably necessary and appropriate, and showing that the adoption would reduce significant risk to employees. This would be inconsistent with the goal of this project which was to clarify employer obligations without increasing compliance burdens. However, OSHA has been convinced by commenters that consideration should be given to compliance with NFPA 101.
The 2000 Life Safety Code goes far beyond the requirements of OSHA's standard, both in details of compliance and flexibility for unique workplace conditions. If an employer complies with NFPA 101-2000, OSHA will deem such compliance to be compliance with the OSHA standard. OSHA believes that allowing employers to comply with NFPA 101 as an alternative to the revised Exit Routes standard will provide greater flexibility to employers who want to go beyond OSHA's basic provisions. Additionally, the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 3701 (1996)) directs Federal agencies to use voluntary consensus standards to the extent practicable. Under section 6(b)(8) of the OSH Act, the Agency must consider using national consensus standards as the basis for its safety and health standards wherever possible. By allowing employers to comply with the exit route provisions of NFPA 101-2000, OSHA has struck a balance that is consistent with its goals for this rulemaking as well as the spirit of the National Technology Transfer and Advancement Act.
OSHA has evaluated NFPA 101-2000 and has concluded that an employer who complies with the provisions of that code for means of egress will provide employees with safety that is comparable with compliance with OSHA's revised Exit Routes standard. OSHA is adding a new § 1910.35 to the final rule to recognize NFPA 101-2000 in this regard.
The South Carolina Department of Labor, Licensing & Regulation (Ex. 5-49, p.2) remarked that “It is a shame to spend this amount of time to adjust the wording when the whole standard is in need of repair.”
Others criticized the proposal, feeling that it did not achieve its stated goal. For example, the American Health Care Association (Ex. 53) indicated that by “Developing new terminology for traditional means of egress requirements, we firmly believe, is a step backward and counter to OSHA's stated goal of creating a regulation that is easily understood.” The United Steelworkers of America (Ex. 5-69) objected “to the very general performance language of this proposal. The language gives little, if any direction to employers and employees on how to comply with this proposed standard * * * Further, the proposed standard is somewhat confusing.” (
OSHA does not agree with commenters who have concluded that OSHA has failed to meet its goals of (1) maintaining the safety and health protection provided to employees by subpart E without increasing the regulatory burden; (2) creating a regulation that is easily understood; and, (3) stating employers' obligations in performance-oriented language to the extent possible. Many commenters suggested improvements and language changes. Unfortunately in some cases the recommendations would have made substantive changes in the requirements of subpart E (
In response to comments, OSHA has changed the name of subpart E to better reflect the contents of the final rule. OSHA proposed to call the subpart “Exit Routes,” but several commenters (Exs. 5-24, 40, 45) noted that the subpart contains provisions not only for exit routes but also for emergency action plans, and fire prevention plans. OSHA agrees with these commenters and has therefore changed the name of subpart E to reflect its coverage of Exit Routes, Emergency Action Plans, and Fire Prevention Plans.
In the preamble to the proposal OSHA stated that it included a table of contents to make it easier to access the provisions. The table was inadvertently left out of the proposed regulatory language in the
As indicated in the Regulatory Format section above, the proposed rule offered two versions of a revised subpart E. The first version was written in the traditional format of OSHA standards. The second version was written in a question and answer format.
Commenters who addressed this issue indicated a preference for the traditional regulatory format as opposed to the question and answer format. For example, Medical Environment, Inc. (Ex. 5-7) supported the traditional “regulatory format, because this is what everyone is used to seeing. The question/answer format seemed too “loose” to find an answer to a specific question.” Similarly, the International Dairy Foods Association (IDFA) (Ex. 5-22) believed “that the “traditional” plain English version is the preferred version. In contrast, we find that the question and answer format quickly becomes condescending, and to a degree, annoying.”
The American Petroleum Institute (API) (Ex. 5-29, p.2) supported the traditional format because of perceived pitfalls in the question and answer format.
While the Q/A version has some appeal in terms of better first-impression, API believes that the traditional format makes it easier to understand the rule in total, and to locate specific requirements.
Another API concern is that of confusion. The Q/A format could be associated with OSHA's Field Directives, in which questions and answers are sometimes used to explain requirements. The questions and answers in Field Directives, however, do not hold the same weight as regulatory language. As a result, confusion could be caused by the use of questions and answers in both the OSHA standards and in Field Directives.
API is also concerned that the potential for inadvertent change of requirements is greater during a Q/A conversion. This is because more structural revision and reorganization is required to accommodate the Q/A approach, as demonstrated by comparison of the two approaches in this pilot conversion. It follows that the Q/A approach would face even greater conversion problems for other, more complicated safety and health regulations.
In addition, the International Brotherhood of Teamsters recommended that OSHA not adopt the question and answer format because the union believed that the format is neither well organized nor easy to read. (
Several commenters stated that either version would be acceptable (Exs. 5-12, 17, 25). Other commenters supported the question and answer version (Exs. 5-16, 23, 32, 42, 48). Some suggested that the question and answer version be included in an appendix or some other OSHA publication (Exs. 5-20, 24, 26, 45, 54, 59). The Agency, after considering the comments, has decided to use the traditional format in the final rule. The Agency believes that including the question and answer version in an appendix might result in confusion. OSHA does use the question and answer format for other, non-regulatory documents, and will consider that format for future guidance in this area.
Additional comments ranged from remarks that OSHA should do nothing, revise subpart E and reference NFPA 101, or adopt NFPA 101 entirely (Exs. 5-10, 18, 28, 38, 41, 47, 53, 62, 66, 68, 71). The subject of how to address NFPA 101 in the plain language revision was also issue 1 in the hearing notice (at 62 FR 9403). Liberty Mutual Insurance Group (Ex. 5-19) recommended that OSHA “include a provision that compliance with a national consensus standard such as NFPA 101, Life Safety Code * * *would be recognized as compliance with the OSHA standard.” The Building Owners and Managers Association (BOMA) stated that it believed that “it is essential for OSHA to add appendix language stating that compliance with the Life Safety Codes NFPA 101, constitutes compliance with subpart E. Current OSHA practices essentially recognize this now (Tr. 23).”
OSHA's intention in the proposed rule was to simplify subpart E, not to replace it. First, OSHA could not simply adopt “NFPA 101” as an OSHA standard, because it can only consider versions of that standard that are currently in existence. To do otherwise (
As discussed earlier, OSHA has reviewed NFPA 101-2000 and has determined that compliance with that standard will provide comparable protection to subpart E. Although the Agency is not adopting NFPA 101-2000, an employer who demonstrates compliance with that standard will be deemed to be in compliance with §§ 1910.34, 1910.36, and 1910.37 of subpart E. Many commenters (
Some commenters also asserted that OSHA should base its standard on the model building codes or allow compliance with the various national building codes (Exs. 5-19, 27, 47, 67; Tr. 23, 26, 32, 43). At the time of the rulemaking, there were three different national building codes in the United States: The Building Officials and Code Administrators' (BOCA) National Building Code, the International Conference of Building Officials' (ICBO) Uniform Building Code, and the Southern Building Code Congress International's (SBCCI) Standard Building Code.
OSHA emphasizes again that it did not propose to substantively revise subpart E, nor did it propose to allow the use of building codes to comply with subpart E. OSHA is not familiar enough with the detailed requirements
In the proposal, § 1910.35 was entitled “Coverage.” It noted that all general industry employers were covered by subpart E, and that “exits” and “exit routes” were covered. The section went on to define these unique terms in the proposal. OSHA has retitled this section as “coverage and definitions,” and has moved it to § 1910.34 of the final rule. The “coverage” paragraph, § 1910.34(a), specifies that the standard covers all workplaces in general industry except mobile workplaces. Paragraph (b) sets forth the “coverage” of the subpart: The minimum requirements for exit routes, emergency action plans, and fire prevention plans. Paragraph (c) of § 1910.34 includes the definitions pertinent to the subpart.
In the proposal, OSHA included definitions for “Exit” and “Exit Route,” eliminating all other definitions, believing they were unnecessary. However, commenters thought that OSHA went too far by not defining other terms or inappropriately failed to define other important terms (
As discussed previously in this preamble, this section provides that an employer who complies with corresponding provisions of NFPA 101-2000 is deemed to be in compliance with subpart E, sections 1910.34-1910.37.
Section 1910.36 contains requirements for the design and construction of exit routes. It includes a requirement that exit routes be permanent, addresses fire resistance-ratings of construction materials used in exit stairways (exits), describes openings into exits, defines the minimum number of exit routes in workplaces, addresses exit discharges, and discusses locked exit route doors, and exit route doors. It also addresses the capacity, height and width of exit routes, and finally, it sets forth requirements for exit routes that are outside a building.
Many of these requirements are identical or nearly the same as those proposed, but have been rearranged in a more logical order or reworded so that the requirements are clearer and easier to understand and follow.
Paragraph (a)(1) of 1910.36 (proposed paragraph 1910.36(a)), requires that exit routes be a permanent part of the workplace. This provision remains as proposed. OSHA believes that exit routes must be a permanent part of a structure and that employees must know the route to safety. Otherwise, during an emergency, employees may become confused and take the wrong path to safety.
Paragraph (a)(2) of 1910.36 (proposed paragraph 1901.36(d)), specifies the fire resistance-rating of construction materials used to separate exits from other parts of the workplace (
One commenter, IMC Global, Inc. (Ex. 5-54), suggested that OSHA include information in the standard or the appendix that would specify what construction materials or combination of materials would meet the fire resistance-ratings required by the standard. They explained that the information would be used by in-house personnel who make alterations or repairs to the building. OSHA believes that the reference to NFPA 101 in § 1910.35 will assist employers and employees in answering these questions.
IMC Global, Inc. also recommended that OSHA define the term “story,” suggesting that OSHA use the definition used in the NFPA 101, Life Safety Code, but did not provide any rationale or support to demonstrate that the failure to include a definition would have a negative impact on worker safety or health. OSHA notes that the NPFA 101-2000, defines the term “story” to mean “That portion of a building between the upper surface of a floor and the upper surface of the floor or roof next above.” OSHA believes this definition to be generally understood and has determined not to include a definition of “story” in the regulatory text of the final rule.
Another commenter, the American Trucking Association (Ex. 5-52), suggested that OSHA reword proposed paragraph 1910.36(d), to make it similar to the wording in the existing subpart E concerning fire resistant-materials (paragraphs 1910.37(b)(1) and (b)(2)). That wording requires that for exits protected by separation from other parts of the building, the separation shall meet certain construction requirements. The commenter noted that the proposed wording appears to require all exits to be separated by fire resistant-materials. OSHA agrees that the provision was not clearly worded and has revised the language of the final rule to specify the required fire resistance-rating of materials used to construct separations,
Paragraph (a)(3) of 1910.36 (proposed paragraph 1910.36(c)), restricts the number of openings into exits to those openings necessary to allow access to the exit from occupied areas of the workplace, or from the exit to the exit discharge. It also specifies that openings must be protected by a self-closing fire door that remains closed unless the fire door automatically closes in an emergency when the fire alarm or employee alarm system is sounded.
The final rule differs from the proposal in that it permits fire doors to remain open as long as they close automatically during an emergency. This change was made in response to comments from H. M. Bucci and the NFPA (Exs. 5-10, 18). Both pointed out that NFPA 101, Life Safety Code, permits the exception. OSHA notes that
A commenter, Dennis Kirson (Ex. 5-4), noted that the proposed provision did not provide guidance on the fire rating for fire doors opening into an exit. Such ratings are based on the purpose of the door. To be listed or approved as a fire door, the door would have to meet the fire rating set by a nationally recognized testing laboratory (see next paragraph).
Paragraph 1910.36(a)(3) (proposed paragraph 1910.36(c)), requires that each fire door, including its frame and hardware, be listed or approved by a nationally recognized testing laboratory. The International Dairy Foods Association (Ex. 5-22), suggested that OSHA include the definition of the terms “listed,” “approved,” and “nationally recognized testing laboratory” in the regulatory language of the final rule instead of giving a cross-reference to another section of the standards. Section 1910.7 contains what employers need to know about “listed,” “approved,” and “nationally recognized testing laboratory.” OSHA does not agree that adding additional definitions, which are duplicated elsewhere in part 1910, to the standard would be particularly helpful. Therefore, OSHA has retained in the final rule the cross-reference to the standard containing the terms.
Two commenters (Exs. 5-10, 11) commented on OSHA's failure to address other openings in exits made for electrical and mechanical systems. One commenter (Ex. 5-11) suggested that OSHA delete the provision because it precludes the use of protected openings when such openings are necessary for certain mechanical or electrical penetrations. The other commenter (Ex. 5-10) asked OSHA to address such openings by requiring that they be sealed with an approved fire barrier sealant or fire stop. The existing rule does not contain requirements addressing such openings and, as discussed above, the purpose of the revision is not to add new requirements that would impose new obligations on employers. If an employer has these openings, OSHA notes that such openings into exits are addressed in NFPA 101. The employer may use NFPA 101-2000 for guidance even though the final rule does not address this issue.
Paragraph 1910.36(b) of the final rule, the proposal, and issue 4 in the hearing notice (at 62 FR 9403), all address the general requirement that all workplaces have at least two exit routes, as far away as practical from each other, to ensure that all employees and other building occupants can promptly and safely evacuate the workplace during an emergency. Where two are insufficient, the employer must have additional exit routes (see NFPA 101-2000 for guidance). The number of exit routes can be reduced to one where the number of employees, the size of the building, its occupancy, or the arrangement of the workplace is such that all employees would be able to evacuate safely during an emergency.
Although OSHA does not have direct authority to regulate non-employee occupants of a building, in assuring the safe evacuation of employees, the impact of other occupants in a building must be taken into consideration to assure a safe evacuation of all employees. Thus, OSHA refers to “other building occupants” generally as it does in the existing subpart E.
“As far away as practical” (“remote” in the proposal) means that exit routes must be located far enough apart so that if one exit route is blocked by fire or smoke, employees can evacuate using the second exit route. The paragraph also provides a note that employers must consider the number of employees, the size of the building, its occupancy, and the arrangement of the workplace to determine the correct number of exit routes, recommending that employers consult the NFPA 101-2000 for the number of exit routes appropriate to their particular workplace.
The provision in the final rule differs from the proposed rule in that it has been reworded to state specifically that an employer must have at least two exits (final paragraph 1910.36(b)(1)), or a sufficient number of exit routes (final paragraph 1910.36(b)(2)) to ensure that all occupants can safely and promptly leave the workplace during an emergency. An exception to the two-exit route rule is provided in those circumstances where an employer can demonstrate that the number of employees, size of the building or arrangement of the workplace is such that one exit route alone is sufficient (final paragraph 1910.36(b)(3)).
There were a number of comments on the required number of exit routes provision in the proposal (
OSHA agrees with some of the commenters in part, and has made it clear that employers must have at least two exit routes, except where one exit route would be sufficient to allow all employees to evacuate the workplace safely and promptly. OSHA has added a note to the provision stating that employers may consult NFPA 101-2000 for guidance on how to determine the appropriate number of exit routes.
Other commenters suggested that the expression in proposed paragraph 1910.36(b)(2), “other means of escape * * * should be available,” invited confusion, made the provision vague, and was unenforceable, and that OSHA should remove it in the final rule (Exs. 5-4, 11, 24, 40). OSHA agrees with the commenters and has eliminated the advisory wording in the final provision.
Paragraph 1910.36(c)(1) of the final rule (proposed paragraph 1910.36(f)) requires that each exit discharge lead directly outside or to a street, walkway, refuge area, public way, or open space with access to the outside. Paragraph 1910.36(c)(2) requires that the street, walkway, refuge area, public way, or open space to which an exit discharge leads must be large enough to accommodate the building occupants likely to use the exit.
Lastly, paragraph 1910.36(c)(3) (proposed paragraph 1910.36(f)(4)) requires that exit stairs that continue beyond the level on which the exit discharge is located must be interrupted at that level by doors, partitions, or other effective means to make clear the direction to go to the exit discharge. This paragraph differs from the proposed provision. It has been reworded to make it clear that where exit stairs continue beyond the level of the exit discharge, there must be some effective way to direct occupants to the exit discharge. This rewording responds to comments questioning the clarity of the provision as proposed (Exs. 5-22, 41).
A number of commenters indicated their support for allowing exit discharges to lead to a refuge area as proposed in paragraph 1910.36(f)(3) (Exs. 5-24, 29, 40, 45); they also suggested that the paragraph heading and the definition of exit route needed to be reworded to reflect the acceptability of refuge areas. The American Petroleum Institute remarked:
Section 1910.35(b)(2) should be revised to clarify that an exit route does not necessarily lead to the outside but could lead to a refuge area * * *.
As currently written, section 1910.35(b)(2) incorrectly defines an ‘exit route’ as a means of travel to safety ‘outside’ and further states that one part of an ‘exit route’ is the way from the exit to the ‘outside.’ is incorrectly misleads users into thinking that the only endpoint for an exit route is outside.
Similarly, the heading of section 1910.36(f) incorrectly states that an exit must lead to the outside. This heading should be amended to include the endpoint of a refuge area. Organization Resources Counselors, Inc. (5-45, p. 3) stated that it “agrees that the concept of refuge areas is one that should be adopted by OSHA.”
In response to the comments, OSHA has revised the definition of exit route (paragraph 1910.34(c) of the final rule) to reflect the acceptability of refuge areas. Also, the heading to paragraph 1910.36(f) of the proposal, “An Exit Must Lead Outside,” has been changed to “Exit Discharge” in final rule paragraph 1910.36(c).
Paragraphs 1910.36(d)(1), (2), and (3) of the final rule (proposed as paragraph 1910.36(g)), address locking exit route doors. Paragraph 1910.36(d)(1) specifies that employees must be able to open an exit route door from the inside at all times without keys, tools, or special knowledge. Devices that only lock from the outside at the exit discharge door, such as panic bars, are permitted. Paragraph 1910.36(d)(2) specifies that exit route doors must be free of any device or alarm that could restrict emergency use of the exit route if the device or alarm fails. Finally, paragraph 1910.36(d)(3) of the final rule states that in mental, penal or correctional facilities, an exit route door may be locked from the inside if supervisory personnel are continuously on duty and the employer has a plan to remove occupants from the facility during an emergency.
The final rule requirements on locking exit doors are essentially those in the proposal, except that the provisions are now located in paragraph 1910.36(d) in the final rule (instead of paragraph 1910.36(g) in the proposal). There were three comments on the proposal addressing locking exit doors. Commenter Dennis Kirson (Ex. 5-4) suggested that OSHA delete the sentence “A device that locks from the outside such as a panic bar is permitted because,” he said, “it deals with ingress (to be locked out) rather than egress (to be locked in), it serves no purpose.” Mr. Kirson further noted that this sentence did not modify the first sentence. OSHA has not made the suggested change because to avoid any misunderstandings it believes that the rule should include specific language to indicate what is acceptable. The Agency believes it is necessary in this context to state what is permitted along with what is not permitted, because of the widespread use of panic bars. The commenter also suggested OSHA delete the reference to mental, penal, or correctional institutions because they did not appear to fit the definition of general industry worksites. OSHA has not made the suggested change because such institutions are indeed “general industry” establishments and employees in these establishments are afforded the same protections as employees in other general industry workplaces. In recognition of the unique problems these institutions have with regard to the need to ensure occupants remain inside the facilities, OSHA is providing specific language to indicate clearly the performance to be achieved at these worksites.
Another commenter, the Department of Energy (Ex. 5-11), suggested that this last provision should also reflect national security at Federal locations and that OSHA should add “or other facility requiring security from unauthorized access.” While OSHA does not disagree with the commenter, it has not made the suggested change because the inclusion of this additional language is beyond the stated scope of this proceeding. However the Agency will consider adding the suggested language in the future when substantive revisions are made to this subpart.
Paragraph 1910.36(e) (proposed paragraph 1910.36(h)), sets out requirements for doors leading to an exit route. The paragraph requires that a side-hinged door must be used to connect any room to an exit route and that the door that connects any room to an exit route must swing out in the direction of exit travel if the room is designed to be occupied by more than 50 people or if the room is used as a high hazard area (
The final rule provision in paragraph 1910.36(e) is essentially the same as the proposed provision (paragraph 1910.36(h) in the proposal) with minor reorganizing to emphasize the requirements of the provisions. OSHA has divided the paragraph into two concise paragraphs in the final rule, paragraphs 1910.36(e)(1) and (2). Two commenters recommended changing the language of the proposed provision that required exit doors “swing out.” Mr. Dennis Kirson (Ex. 5-4) suggested adding an exception to the provision that doors swing out, to allow for containment of hazardous materials, because of the greater hazard (to the public) of loss of containment of such materials. Such a change is beyond the scope of this project but the Agency may consider such a change as part of a future rulemaking. Tenneco (Ex. 5-41) suggested the phrase be changed to “swing with the exit travel” for further clarity. OSHA has revised the provision to incorporate the recommended change.
Eastman Kodak Company (Ex. 5-21) asked if security pass-through gates/turnstiles that free wheel when an alarm goes off would be considered an exit. Another commenter (Ex. 5-18) suggested that sliding doors be acceptable to OSHA if their operation is maintained to NFPA 101 specifications. The commenter noted that the current code (at that time NFPA 101-1994) allows vertical and sliding doors. OSHA has not modified the provision to address sliding doors or turnstiles because it would be a substantive change to the Exit Routes standard. However, these configurations are addressed in NFPA 101-2000. Employers who comply with that standard for the requirements concerning gates, turnstiles, and vertical or sliding doors, will be deemed to comply with this provision of subpart E.
Final rule paragraph 1910.36(f) (proposed paragraph 1910.36(i)) and issue 4 in the hearing notice (at 62 FR 9403)), address the required capacity for exit routes. The paragraph requires that exit routes be able to support the maximum permitted occupant load for each floor served by the exit routes, and that the capacity of exit routes may not decrease in the direction of exit route travel to the exit discharge.
OSHA has divided this proposed provision into two provisions in the final rule. The Agency has also made an editorial change in response to a concern raised by the Tennessee Valley Authority (TVA) (Ex. 5-47). TVA pointed out that in the existing standard, each exit route does not have to support the maximum permitted occupant load; rather, the existing standard requires that the combined capacity of the exits must support the maximum permitted occupant load for that floor. OSHA agrees with the commenter and has revised final paragraph 1910.36(f) accordingly.
Several commenters (Exs. 5-14, 36) expressed concerns about how to determine adequate capacity or the expected occupancy load for each floor. Argonne National Laboratory (Ex. 5-14) suggested that OSHA adopt the latest NFPA 101 to determine “whether or not adequate exiting capacity is provided from an area.” Another commenter, Mr. Donald R. Delano (Ex. 5-36), suggested that OSHA define “maximum permitted occupant load” and “expected occupant
Final rule paragraph 1910.36(g) (proposed paragraph 1910.36(j)) addresses the height and width requirements for exit routes and specifies that the ceiling of an exit route must be at least seven feet six inches (2.3 m) high. The paragraph specifies that any projection from the ceiling cannot decrease the space between the projection and the floor to less than six feet eight inches (2.0 m). Paragraph 1910.36(g) also specifies that the width of an exit access must be at least 28 inches (71.1 cm) wide at all points and that where a single way of exit access leads to an exit, its width must be at least equal to the width of the exit to which it leads.
Final paragraph 1910.36(g) also specifies that the width of an exit route must be sufficient to accommodate the maximum permitted occupant load of each floor served by the exit route. Lastly, the paragraph specifies that any objects that project into the exit route must not reduce the width of the exit route to less than the minimum width requirements for exit routes.
Paragraphs 1910.36(h)(1) through (4) (proposed paragraphs 1910.36(k)(1)(i) through (iv)), set out special requirements for exit routes that are outside of a building. The paragraphs require that each outdoor exit route must meet the minimum height and width requirements for indoor exit routes and must also meet certain other requirements. Specifically, (1) an outdoor exit route must have guardrails to protect unenclosed sides if a fall hazard exists; (2) an outdoor exit route must be covered if snow or ice is likely to accumulate along the route, unless the employer can demonstrate that any snow or ice accumulation will be removed before it presents a slipping hazard; (3) an outdoor exit route must be reasonably straight and have smooth, solid, substantially level walkways; and (4) an outdoor exit route must not have a dead-end that is longer than 20 feet (6.2 m).
Several commenters addressed this paragraph. Two commenters (Exs. 5-29, 40) suggested adding the wording “if a fall hazard exists” to the requirement for guardrails. OSHA agrees that guardrails only need to protect unenclosed sides if a fall hazard exists. One commenter (Ex. 5-10) suggested that the Agency use a 50 foot dead-end rather than a 20 foot dead-end. This would be a significant change and appears to be a decrease in safety to employees during emergencies and therefore OSHA has not changed the length of a dead-end. Other changes to these provisions are editorial only.
OSHA proposed in § 1910.37 to include provisions covering the operation and maintenance of exit routes. OSHA has expanded the name from the proposal's “Operation and Maintenance Requirements for Exit Routes” to better reflect its contents. In the final rule, § 1910.37 is entitled “Maintenance, safeguards, and operational features for exit routes.” Provisions of this section include the safe use of exit routes during an emergency, lighting and marking exit routes, fire retardant paints, exit routes during construction, repairs, or alterations, and employee alarm systems.
OSHA has made several changes to paragraph 1910.37(a) of the proposed rule, by combining related provisions. In the final rule, paragraph 1910.37(a) remains titled “The Danger To Employees Must Be Minimized” and addresses furnishings and decorations (proposed paragraph 1910.37(a)(2)), travel toward a high hazard area (proposed paragraph 1910.37(a)(3)), unobstructed access to exit routes (proposed paragraph 1910.36(e)), and properly operating safeguards designed to protect employees (proposed paragraphs 1910.37(a) and 1910.37(e)). Minor editorial changes have been made to these paragraphs, with the exception that final paragraph 1910.37(a)(2) has been modified because commenters found the requirement confusing (Exs. 5-5, 18, 26, 63). This confusion resulted from OSHA's use of the terminology “An exit route must not require employees to travel toward materials that burn very quickly, emit poisonous fumes, or are explosive.” OSHA has modified the language to more closely reflect the current subpart E language: “Exit routes must be arranged so that employees will not have to travel toward a high hazard area, unless the path of travel is effectively shielded from the high hazard area by suitable partitions or other physical barriers.” In addition, OSHA added a definition for “high hazard area” to the final rule's definition section, 1910.34. The new definition is from NFPA-101 with slight editorial changes.
In the proposal, paragraph 1910.37(b) required that exit route lighting be adequate, and paragraph 1910.37(c) required that exits be marked appropriately. OSHA has combined these paragraphs into paragraph 1910.37(b) in the final rule, in part because the provisions are closely related and the Agency believes that the standard will be easier to understand and use if all the requirements covering lighting and marking of exit routes are arranged together. The content of these paragraphs remains virtually the same in the final rule except for editorial clarifications (
Issue 6 in the hearing notice (62 FR at 9403) asked whether the proposed requirements for exit lighting were too general. Some commenters objected to OSHA's use of the word “adequate” to describe the required amount of lighting in exit routes (Exs. 5-4, 18, 19, 22, 54, 57, 63, 64). (Issue 6 in the hearing notice at 62 FR 9403.) OSHA's current subpart E uses the term “adequate” (existing paragraph 1910.36(b)(6)); OSHA did not revise the word “adequate” in the proposal because specifying a level of lighting could be viewed as a substantive change. However, OSHA has clarified in the final rule (paragraph 1910.37(b)(1)), to make it clear and performance-oriented. The revised provision requires that employees with normal vision be able to see their way along an exit route. Therefore, OSHA has retained the word “adequate” but clarified its meaning in the final rule. Employers and employees can refer to NFPA 101-2000 for more detailed guidance.
Final paragraph 1910.37(b)(4) (proposed paragraphs 1910.37(c)(3) and (c)(4)), addresses the marking of the direction of travel to an exit. Signs would be redundant where the direction of travel is apparent. Therefore, OSHA has added the existing subpart E language to the final rule “where the direction of travel to the nearest exit is not immediately apparent” because such signs are needed only in that situation (Exs. 5-4, 14, 21, 64).
Final paragraph 1910.37(b)(5) (proposed paragraph 1910.37(c)(5)), requires that doors that could be mistaken for exit doors must be marked
In final paragraph 1910.37(b)(6) (proposed paragraph 1910.37(c)(6)), OSHA has restored the language from subpart E referring to the color of exit signs. In the proposal OSHA stated “An exit sign must show a designated color.” OSHA has changed the language back to the current subpart E language, “distinctive in color” (paragraph 1910.37(q)(4)) at the request of several commenters (Exs. 5-30, 41). OSHA does not believe that the proposed language improved the provision and has accordingly changed it back to existing subpart E as recommended by commenters. This paragraph also retains the use of “electroluminescent” and “self-luminous” signs and has defined the terms in the definition section (§ 1910.34).
Paragraph 1910.37(b)(7) of the final rule was not in the proposed rule. OSHA proposed to delete the following requirement from current subpart E (paragraph 1910.37(q)(8)) “Every exit sign shall have the word ‘Exit’ in plainly legible letters not less than 6 inches high, with the principal strokes of letters not less than three-fourths-inch wide.” The Agency believed that this requirement could be handled without specifications (issue 5 in the hearing notice at 62 FR 9403). Commenters disagreed and suggested that the current exit sign dimensions also be included in the final rule. For example, Donald R. Delano, P.E., (Ex. 5-36, p. 3) remarked:
Final paragraph 1910.37(c) (proposed paragraph 1910.37(d)), addresses the upkeep of fire-retardant properties of paints or solutions used in the workplace that might impact the safety of an exit route. In the proposal, OSHA stated that an employer must maintain the fire retardant properties of paints or other coatings used in the workplace. Commenters suggested that OSHA return to the existing subpart E language because the proposed language is vague and harder to understand than the existing language (
Final paragraph 1910.37(d) (proposed paragraph 1910.37(f)) addresses the maintenance of exit routes during construction, repairs, or alterations. “Alterations” were not included in the heading of the proposed provision; however, in the final rule, the heading has been modified to include “alterations.” Both the proposal and final rule include the word “alterations” in the regulatory text.
The first paragraph concerning new construction remains the same as proposed and is now paragraph 1910.37(d)(1). Minor editorial changes have been made to final paragraph 1910.37(d)(2) that address repairs and alterations. Final paragraph 1910.37(d)(3) concerning flammable and explosive substances or equipment used during construction, repairs, or alterations, remains the same as proposed except for some minor changes. As discussed above OSHA has added the word “alterations” to the proposed language. In addition, the Agency returned to the use of “substances” instead of “materials.” Finally, OSHA has added “equipment” to the paragraph. The words “substances” and “equipment” are in the present subpart E requirement (paragraph 1910.37(c)(3)) but were inadvertently left out of the proposal. OSHA has changed the proposed language “flammable or explosive materials used during construction or repair must not expose employees to hazards * * *” to “Employees must not be exposed to hazards of flammable or explosive substances or equipment used during construction, repairs, or alterations, that are beyond the normal permissible conditions in the workplace * * *.”
Final rule paragraph 1910.37(e) (proposed paragraph 1910.37(g)), requires the installation and maintenance of an employee alarm system meeting § 1910.165, unless employees can promptly see or smell a fire or other hazard. This requirement remains unchanged from the proposed rule.
In the final rule, OSHA has retained the separate sections for emergency action plans and fire prevention plans, §§ 1910.38 and 1910.39 respectively. OSHA believes it is clearer for the plans and their requirements to be contained in separate sections. Because commenters tended to address both plans at the same time in their comments or their comments were quite similar about the plans, OSHA is discussing them together.
Final paragraph 1910.38(a) states that an emergency action plan is required, and final paragraph 1910.39(a) states that a fire prevention plan is required, when an OSHA standard requires such a plan. A number of commenters (Exs. 5-14, 20, 21, 23, 40, 49) recommended that OSHA include a listing of all OSHA standards that require an emergency action plan or a fire prevention plan. The Agency considered modifying the appendix to add a list of such standards. Instead, OSHA has issued a Compliance Directive that contains a list of current OSHA standards that require emergency action plans or fire prevention plans. The Agency has included this information in a Compliance Directive instead of an appendix to the standard because it is easier to amend the Compliance Directive as needed to keep it current.
For informational purposes, OSHA has identified the following general industry standards that require an emergency action plan or a fire prevention plan.
1. Process Safety Management of Highly Hazardous Chemicals, paragraph 1910.119(n), emergency action plan.
2. Hazardous Waste Operations and Emergency Response, paragraphs 1910.120(l)(1)(ii), (p)(8)(i), (q)(1), and (q)(11)(ii), emergency action plan.
3. Portable Fire Extinguishers, paragraphs 1910.157(a) and (b)(1), emergency action plan and fire prevention plan.
4. Grain Handling Facilities, paragraph 1910.272(d), emergency action plan.
5. Ethylene Oxide, paragraph 1910.1047(h)(1)(iii), emergency action plan and fire prevention plan.
6. Methylenedianiline, paragraph 1910.1050(d)(1)(iii), emergency action plan and fire prevention plan.
7. 1,3-Butadiene, paragraph 1910.1051(j), emergency action plan and fire prevention plan.
Final paragraph 1910.38(b) and paragraph 1910.39(b) address written emergency action plans and fire prevention plans respectively. They require that the plans must be in writing and available; and for employers with 10 or fewer employees the plan may be transmitted orally rather than in writing. In the final rule, proposed paragraphs 1910.38(a)(2) and (a)(3) are combined into one paragraph, 1910.38(b), and proposed paragraphs 1910.39(a)(2) and (a)(3) become final paragraph 1910.39(b). Combining these paragraphs involved some minor editorial changes.
The Department of Energy (Ex. 5-11, p. 2) suggested that plans should be communicated orally to a “limited number” of employees rather than the 10 or fewer required by OSHA because the intent would be better served by not using an arbitrary number. OSHA disagrees with this suggestion. Since their promulgation in 1980, the emergency action plan and the fire prevention plan have used 10 as a reasonable number of employees for a plan to be communicated orally.
The International Brotherhood of Teamsters (IBT) (Ex. 5-31, p. 6) did not agree with the language in proposed paragraph 1910.38(a)(2) and paragraph 1910.39(a)(2), which stated that “the plan must be made available to employees on request.” IBT asked the Agency to use the current language of subpart E, requiring the plans “be available for employees to review.” The IBT believed the proposed language added an obstacle to employees by making them request to see the plan. OSHA agrees; in the proposal it had inadvertently changed the language from the current subpart E. OSHA fully believes that the plan should be available for employee review and in the final rule the language reflects this intent.
OSHA has reordered final paragraph 1910.38(c), containing the elements of an emergency action plan, to better reflect the order of an emergency response. Final paragraph 1910.38(c)(1) (proposed paragraph 1910.38(b)(3)) requires that the plan include procedures for reporting a fire or other emergency. OSHA believes reporting a fire or other emergency should be the first thing done in an emergency. The rest of the elements remain in the same order.
Final paragraphs 1910.38(c)(2), (3), and (4) remain for the most part the same as the proposed paragraphs—procedures for evacuation and exit route assignments, procedures to be followed by employees who remain to operate critical plant operations before they evacuate, and procedures to account for all employees after evacuation.
Final paragraph 1910.38(c)(3) concerning emergency operations or shutdown of plant equipment during an emergency has been changed back to the current subpart E language. This was done to clarify that this element of the plan does not apply to all employees and all plants, only to those plants that use employees for these emergency or shutdown procedures (Exs. 5-4, 18, 54).
Eastman Kodak Company (Ex. 5-21, p.3) suggested that OSHA delete the wording that addresses accounting for employees (final paragraph 1910.38(c)(4)):
OSHA disagrees with this commenter and believes that accounting for employees after an emergency is critically important information to rescuers. Employees could, for example, be assigned designated locations away from the facility at which to meet.
In final paragraph 1910.38(c)(5), which requires that the plan include procedures for rescue or medical duties, OSHA has added language to clarify that the requirements only apply to those employees who will be performing such duties. This language parallels more closely the current subpart E language (paragraph 1910.38(a)(2)(iv)). The Agency has also changed “rescue and medical duties” in the proposal to “rescue
Final paragraph 1910.38(c)(6), which addresses names or job titles of employees to be contacted for more information or for an explanation of duties, has been revised from the proposal and is closer to the current language in subpart E (paragraph 1910.38(a)(2)(vi)). The change clarifies the requirement.
A few commenters (
Final paragraph 1910.38(e), regarding training of designated employees to assist in a safe and orderly evacuation of other employees, remains as proposed except for minor reorganization.
Final paragraph 1910.38(f) (proposed paragraph 1910.38(e)) requires that employers review the emergency action plan with each employee when the plan is developed or the employee is assigned initially to a job, when responsibility under the plan changes or the plan changes. Only minor editorial changes have been made to the final provision.
With regard to 29 CFR 1910.39, fire prevention plans, final paragraph 1910.39(c) (proposed paragraph 1910.39(b)) remains the same as proposed. Few comments were received with respect to the elements of the fire prevention plan.
Final rule paragraph 1910.39(d) (proposed rule paragraph 1910.39(c)) requires employers to inform employees of workplace fire hazards and review those parts of the fire prevention plan necessary for the employee's self-protection. Only minor editorial changes were made to this paragraph.
OSHA is also amending the sections listed in the preamble's discussion of 1910.38 and 1910.39 above (
As discussed earlier in this preamble, OSHA asked a series of questions in its hearing notice (62 FR 9402). To the extent possible, OSHA has included the questions with the pertinent discussions in the preamble. For example, the use of performance-oriented language in the proposal was discussed earlier in this preamble (issue 3). “Are terms too technical” (issue 7) was discussed by commenters addressing the definitions of the standard or when commenters identified unclear language. However, some of the issues raised in the questions were more general and the vast majority of commenters did not definitively respond to these questions. These issues were numbered 3, 7, 8, 9, and 10 in the hearing notice (62 FR at 9403), and they asked: Would performance-oriented standards create compliance problems; are there terms that might be too technical; whether the revision imposes additional obligations; whether any requirements result in greater safety; and whether any requirements present technical feasibility problems. The questions raised in the hearing notice were intended to assure that various aspects of the proposal were fully considered. Some commenters addressed the issues through their comments regarding specific provisions of the proposal and did not respond to the questions specifically set forth in the hearing notice. To the extent that interested persons commented on these issues, OSHA has responded to these comments in the context of specific provisions of the proposed rule.
Because the final rule is only a plain language redrafting of a former Agency subpart, it is not necessary to determine significant risk or the extent to which the final rule reduces that risk. As noted above, most of the provisions of subpart E were adopted under section 6(a) of the Occupational Safety and Health Act, which gave the Secretary of Labor the authority, for a limited period of time, to adopt as occupational safety and health standards any established Federal Standard or national consensus standards unless the promulgation of such a standard would not result in improved safety and health for designated employees. By including section 6(a) in the OSH Act, Congress implicitly found that the promulgation of occupational safety and health standards was reasonably necessary or appropriate to provide safe or healthful employment and places of employment. In
The Agency believes, however, that improved employee protection is likely to result from promulgation of the final rule because employers and employees who clearly understand a rule's requirements are more likely to comply with that rule. In addition, employers may find it easier to comply with the final rule because the final rule is more performance-oriented than the former rule.
This final rule has been designated as significant and reviewed by the Office of Management and Budget under Executive Order 12866. It is not an economically significant rule under Executive Order 12866 or a major rule under the Unfunded Mandates Reform Act or section 801 of the Small Business Regulatory Enforcement Fairness Act (SBREFA). The final rule imposes no additional costs on any private or public sector entity and does not meet any of the criteria for an economically significant or major rule specified by the Executive Order or the other statutes. Certain provisions of the rule that add flexibility, such as permitting fire doors to remain open as long as they close automatically during an emergency and modifying the definition of exit route to reflect the acceptability of refuge areas, may even reduce costs for employers. Because the rule does not impose any additional costs on employers for exit routes, emergency action plans, and fire prevention plans, no economic or regulatory flexibility analysis of the final rule is required.
In accord with the Regulatory Flexibility act, 5 U.S.C. 601
OSHA has reviewed the final rule in accordance with the requirements of the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321
The final rule contains no information collection requirements (paperwork) that are subject to the Paperwork Reduction Act. Therefore, approval under the Paperwork Reduction Act is unnecessary.
For the purposes of the Unfunded Mandates Reform Act of 1995, this rule does not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments, or increased expenditures by the private sector of more than $100 million in any year.
OSHA has reviewed this final rule in accordance with the Executive Order on Federalism (Executive Order 13132, 64 FR 43255) which requires that agencies, to the extent possible, refrain from limiting state policy options, consult with states prior to taking any actions that would restrict state policy options, and take such actions only when there is clear constitutional authority and the presence of a problem of national scope. The Order provides for preemption of State law only if there is a clear Congressional intent for the Agency to do so. Any such preemption is to be limited to the extent possible.
Section 18 of the Occupational Safety and Health (OSH) Act (29 U.S.C. 651
Although Congress has expressed a clear intent for OSHA standards to preempt State job safety and health rules in areas involving the safety and health rules of employees, this rule nevertheless limits State policy options to a minimal extent.
OSHA concludes that this action does not significantly limit State policy options.
OSHA encourages the 26 States and Territories with their own OSHA-approved occupational safety and health plans to revise their standards regulating means of egress, emergency action plans, and fire prevention plans according to the final rule that resulted from this rulemaking. These states include Alaska, Arizona, California, Connecticut (state and local government employees only), Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Jersey (state and local government employees only), New Mexico, New York (state and local government employees only), North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Virgin Islands, Washington, and Wyoming.
Means of egress, Exit, Exit route, Emergency action plan, Fire prevention, Occupational safety and health, Reporting and recordkeeping, Signs and symbols.
This document was prepared under the direction of John L. Henshaw, Assistant Secretary of Labor for Occupational Safety and Health, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210.
Sections 4, 6, and 8 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657); Secretary of Labor's Order No. 3-2000 (65 FR 50017) and 29 CFR part 1911.
OSHA amends 29 CFR part 1910 as follows:
Secs. 4, 6, 8, Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657); Secretary of Labor's Order Nos. 12-71 (36 FR 8754), (8-76 41 FR 25059), 9-83 (48 FR 35736) or 1-90 (55 FR 9033), 6-96 (62 FR 111), or 3-2000 (65 FR 50017), as applicable.
This section lists the sections and paragraph headings contained in §§ 1910.34 through 1910.39.
(a)
(b)
(c)
(1) A space along an exit route that is protected from the effects of fire by separation from other spaces within the building by a barrier with at least a one-hour fire resistance-rating; or
(2) A floor with at least two spaces, separated from each other by smoke-resistant partitions, in a building protected throughout by an automatic sprinkler system that complies with § 1910.159 of this part.
An employer who demonstrates compliance with the exit route provisions of NFPA 101-2000, the Life Safety Code, will be deemed to be in compliance with the corresponding requirements in §§ 1910.34, 1910.36, and 1910.37.
(a)
(2)
(3)
(b)
(2)
(3)
For assistance in determining the number of exit routes necessary for your workplace, consult NFPA 101-2000, Life Safety Code.
(c)
(2) The street, walkway, refuge area, public way, or open space to which an exit discharge leads must be large enough to accommodate the building occupants likely to use the exit route.
(3) Exit stairs that continue beyond the level on which the exit discharge is located must be interrupted at that level by doors, partitions, or other effective means that clearly indicate the direction of travel leading to the exit discharge.
(d)
(2) Exit route doors must be free of any device or alarm that could restrict emergency use of the exit route if the device or alarm fails.
(3) An exit route door may be locked from the inside only in mental, penal, or correctional facilities and then only if supervisory personnel are continuously on duty and the employer has a plan to remove occupants from the facility during an emergency.
(e)
(2) The door that connects any room to an exit route must swing out in the direction of exit travel if the room is designed to be occupied by more than 50 people or if the room is a high hazard area (
(f)
(2) The capacity of an exit route may not decrease in the direction of exit route travel to the exit discharge.
Information regarding “Occupant load” is located in NFPA 101-2000, Life Safety Code.
(g)
(2) An exit access must be at least 28 inches (71.1 cm) wide at all points. Where there is only one exit access leading to an exit or exit discharge, the width of the exit and exit discharge must be at least equal to the width of the exit access.
(3) The width of an exit route must be sufficient to accommodate the maximum permitted occupant load of each floor served by the exit route.
(4) Objects that project into the exit route must not reduce the width of the exit route to less than the minimum width requirements for exit routes.
(h)
(1) The outdoor exit route must have guardrails to protect unenclosed sides if a fall hazard exists;
(2) The outdoor exit route must be covered if snow or ice is likely to accumulate along the route, unless the employer can demonstrate that any snow or ice accumulation will be removed before it presents a slipping hazard;
(3) The outdoor exit route must be reasonably straight and have smooth, solid, substantially level walkways; and
(4) The outdoor exit route must not have a dead-end that is longer than 20 feet (6.2 m).
(a)
(2) Exit routes must be arranged so that employees will not have to travel toward a high hazard area, unless the path of travel is effectively shielded from the high hazard area by suitable partitions or other physical barriers.
(3) Exit routes must be free and unobstructed. No materials or equipment may be placed, either permanently or temporarily, within the exit route. The exit access must not go through a room that can be locked, such as a bathroom, to reach an exit or exit discharge, nor may it lead into a dead-end corridor. Stairs or a ramp must be provided where the exit route is not substantially level.
(4) Safeguards designed to protect employees during an emergency (
(b)
(2) Each exit must be clearly visible and marked by a sign reading “Exit.”
(3) Each exit route door must be free of decorations or signs that obscure the visibility of the exit route door.
(4) If the direction of travel to the exit or exit discharge is not immediately apparent, signs must be posted along the exit access indicating the direction of travel to the nearest exit and exit discharge. Additionally, the line-of-sight to an exit sign must clearly be visible at all times.
(5) Each doorway or passage along an exit access that could be mistaken for an exit must be marked “Not an Exit” or similar designation, or be identified by a sign indicating its actual use (
(6) Each exit sign must be illuminated to a surface value of at least five foot-candles (54 lux) by a reliable light source and be distinctive in color. Self-luminous or electroluminescent signs that have a minimum luminance surface value of at least .06 footlamberts (0.21 cd/m
(7) Each exit sign must have the word “Exit” in plainly legible letters not less than six inches (15.2 cm) high, with the principal strokes of the letters in the word “Exit” not less than three-fourths of an inch (1.9 cm) wide.
(c)
(d)
(2) During repairs or alterations, employees must not occupy a workplace unless the exit routes required by this subpart are available and existing fire protections are maintained, or until alternate fire protection is furnished that provides an equivalent level of safety.
(3) Employees must not be exposed to hazards of flammable or explosive substances or equipment used during construction, repairs, or alterations, that are beyond the normal permissible conditions in the workplace, or that would impede exiting the workplace.
(e)
(a)
(b)
(c)
(1) Procedures for reporting a fire or other emergency;
(2) Procedures for emergency evacuation, including type of evacuation and exit route assignments;
(3) Procedures to be followed by employees who remain to operate critical plant operations before they evacuate;
(4) Procedures to account for all employees after evacuation;
(5) Procedures to be followed by employees performing rescue or medical duties; and
(6) The name or job title of every employee who may be contacted by employees who need more information about the plan or an explanation of their duties under the plan.
(d)
(e)
(f)
(1) When the plan is developed or the employee is assigned initially to a job;
(2) When the employee's responsibilities under the plan change; and
(3) When the plan is changed.
(a)
(b)
(c)
(1) A list of all major fire hazards, proper handling and storage procedures for hazardous materials, potential ignition sources and their control, and the type of fire protection equipment necessary to control each major hazard;
(2) Procedures to control accumulations of flammable and combustible waste materials;
(3) Procedures for regular maintenance of safeguards installed on
(4) The name or job title of employees responsible for maintaining equipment to prevent or control sources of ignition or fires; and
(5) The name or job title of employees responsible for the control of fuel source hazards.
(d)
“Appendix E To Part 1910—Exit Routes, Emergency Action Plans, and Fire Prevention Plans.”
Sections 4, 6, and 8 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657); Secretary of Labor's Orders Nos. 12-71 (36 FR 8754), 8-76 (41 FR 25059, 9-83 (48 FR 35736), 1-90 (55 FR 9033), 6-96 (62 FR 111), 3-2000 (65 FR 50017), as applicable; and 29 CFR part 1911.
Sections 1910.103, 1910.106 through 1910.111, and 1910.119, 1910.120, and 190.122 through 126 also issued under 29 CFR part 1911.
Section 1910.119 also issued under section 304, Clean Air Act Amendments of 1990 (Pub. L. 101-549), reprinted at 29 U.S.C. 655 Note.
Section 1910.120 also issued under section 126, Superfund Amendments and Reauthorization Act of 1986 as amended (29 U.S.C. 655 Note), and 5 U.S.C. 553.
(n)
(l) * * *
(1)(i) * * *
(ii) Employers who will evacuate their employees from the danger area when an emergency occurs, and who do not permit any of their employees to assist in handling the emergency, are exempt from the requirements of this paragraph if they provide an emergency action plan complying with 29 CFR 1910.38. * * *
(p) * * *
(8) * * *
(i)
(q) * * *
(1)
(11) * * *
(i) * * *
(ii) Where the clean-up is done on plant property using plant or workplace employees, such employees shall have completed the training requirements of the following: 29 CFR 1910.38, 1910.134, 1910.1200, and other appropriate safety and health training made necessary by the tasks they are expected to perform such as personal protective equipment and decontamination procedures. * * *
Sections 4, 6, and 8 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657); Secretary of Labor's Order No. 12-71 (36 FR 8754), 8-76 (41 FR 25059), 9-83 (48 F 35736), 6-96 (62 FR 111), or 3-2000 (65 FR 50017), as applicable; and 29 CFR part 1911.
(a)
(b)
Sections 4, 6, 8 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657); Secretary of Labor's Order No. 12-71 (36 FR 8754), 8-76 (41 FR 25059), 9-83 (48 FR 35736), 6-96 (62 FR 111), or 3-2000 (65 FR 50017), as applicable; and 29 CFR part 1911.
(b) * * *
(1) * * *
(i) * * *
(ii) * * *
(iii)
b. In Appendix A to § 1910.272, under the heading “2. Emergency Action Plans” the second sentence is revised.
The revised text is set forth as follows:
(d)
* * * The emergency action plan (§ 1910.38) covers those designated actions employers and employees are to take to ensure employee safety from fire and other emergencies. * * *
Sections 4, 6, and 8 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, and 657); Secretary of Labor's Order No. 12-71 (36 FR 8754), 8-76 (41 FR 25059), 9-83 (48 FR 35736), 1-90 (55 FR 9033), 6-96 (62 FR 111), and 3-2000 (65 FR 50017), as applicable, and 29 CFR part 1911.
All of subpart Z issued under section 6(b) of the Occupational Safety and Health Act of 1970 (29 U.S.C 653), except those substances that have exposure limits in Tables Z-1, Z-2, and Z-3 of 29 CFR 1910.1000. Section 1910.1000 also issued under section (6)(a) of the Act (29 U.S.C. 655(a)). Section 1910.1000, Tables Z-1, Z-2, and Z-3 also issued under 5 U.S.C. 553, but not under 29 CFR part 1911, except for the inorganic arsenic, benzene, and cotton dust listings.
Section 1910.1001 also issued under section 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 333) and 5 U.S.C. 553.
Section 1910.1002 also issued under 5 U.S.C. 553, but not under 29 U.S.C. 655 or 29 CFR part 1911.
Sections 1910.1018, 1910.1029, and 1910.1200 also issued under 29 U.S.C. 653.
(h) * * *
(1) * * *
(i) * * *
(ii) * * *
(iii) The plan shall include the elements prescribed in 29 CFR 1910.38 and 29 CFR 1910.39, “Emergency action plans” and “Fire prevention plans,” respectively.
(d) * * *
(1) * * *
(i) * * *
(ii) * * *
(iii) The plan shall specifically include provisions for alerting and evacuating affected employees as well as the elements prescribed in 29 CFR 1910.38 and 29 CFR 1910.39, “Emergency action plans” and “Fire prevention plans,” respectively.
(j)
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), designate critical habitat pursuant to the Endangered Species Act of 1973, as amended (Act), for
Critical habitat identifies specific areas, both occupied and unoccupied, that are essential to the conservation of a listed species and that may require special management considerations or protection.
Section 7(a)(2) of the Act requires that each Federal agency shall, in consultation with and with the assistance of the Service, insure that any action authorized, funded or carried out by such agency is not likely to jeopardize the continued existence of an endangered or threatened species or result in the destruction or adverse modification of critical habitat. Section 4 of the Act requires us to consider economic and other relevant impacts of specifying any particular area as critical habitat.We solicited data and comments from the public on all aspects of the proposal, including data on economic and other impacts of the designation.
This rule is effective December 9, 2002.
Comments and materials received, as well as supporting documentation, used in the preparation of this final rule are available for public inspection, by appointment, during normal business hours at the Ventura Fish and Wildlife Office, U.S. Fish and Wildlife Service, 2493 Portola Road, Suite B, Ventura, CA 93003.
Diane Noda, Field Supervisor, Ventura Fish and Wildlife Office (see
We proposed to designate critical habitat for
During the public comment period, we received a recommendation from a peer reviewer to delay the publication of a final rule for
The soils associated with
The four locations currently known to be occupied by
Two of the known locations of
Because
A study of one of the groups at Vandenberg that is potentially composed of one genet showed that
Some biologists have suggested that disturbance other than fire (
Incompatible fire management practices (
As is typical of annual plant species, the number of individuals present above-ground from one year to the next varies dramatically, most likely depending on climatic conditions such as amount of rainfall, timing of rainfall, and temperature regimes during critical stages of germination and seedling growth. There are some years when patches may contain few to no individuals (Howald 1989), but a seed bank likely persists in the soil. In 1995 and 1997, the species was not abundant at the locations known at the time (K. Rindlaub,
Until several years ago, populations of
Soil characteristics have been studied most extensively near the Gaviota location. There, the plant is restricted to Conception and Milpitas-Positas soils, which consist of acidic, fine, sandy loams (All American Pipeline Company (AAPC) 1995). A subsurface clay layer 2.5 to 90 cm (1 to 36 in) deep may serve as a reservoir of soil moisture in an area otherwise characterized by summer drought (Howald 1989). However,
The narrow coastal terrace at Gaviota is bisected lengthwise by Highway 101, a railroad, and several pipelines. Most of the habitat for
Until recently, the overall trend for this species has been characterized as one of decline (CDFG 1992); this was based primarily on impacts occurring on the Gaviota populations. The populations in the vicinity of Point Conception and Government Point were discovered in the year 2000. The populations in this area face similar threats to those in the Gaviota area, specifically from activities associated with the decommissioning of oil and gas facilities, and from alteration of habitat due to the spread of iceplant (
At least two decommissioning efforts will be undertaken in the near future in areas where
Federal action on these plants began as a result of section 12 of the Act (16 U.S.C. 1531
On June 16, 1976, we published a proposal in the
We published an updated Notice of Review (NOR) for plants on December 15, 1980 (45 FR 82480). This notice included
The NOR for plants was revised on September 27, 1985 (50 FR 39526). In this notice,
A proposed rule to list
Section 4(a)(3) of the Act, as amended, and our implementing regulations (50 CFR 424.12) require that, to the maximum extent prudent and determinable, the Secretary designate critical habitat at the time the species is determined to be endangered or threatened. Our regulations (50 CFR 424.12(a)(1)) state that designation of critical habitat is not prudent when one or both of the following situations exist: (1) The species is threatened by taking or other human activity, and identification of critical habitat can be expected to increase the degree of threat to the species, or (2) such designation of critical habitat would not be beneficial to the species. At the time
On June 17, 1999, our failure to issue final rules for listing
The proposed rule to designate critical habitat for the species was signed on November 2, 2001, and sent to the
On May 7, 2002, we published a notice announcing the reopening of the comment period on the proposal to designate critical habitat for
In August 2002, we agreed through a joint stipulation with the plaintiffs (Southwest Center for Biological Diversity and California Native Plant Society) to extend the deadline by which the Service shall submit for publication the final rule for
We contacted appropriate Federal, State, and local agencies, scientific organizations, and other interested parties and invited them to comment on the proposal to designate critical habitat for
We received individually written letters from 11 parties, which included 4 designated peer reviewers, 1 Federal agency, and 1 State agency. Of the 11 parties responding individually, 6 supported the proposed designation, 3 were neutral, and 2 were opposed.
In accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited independent opinions from four knowledgeable individuals who have expertise with the species, with the geographic region where the species occurs, and/or familiarity with the principles of conservation biology. All four of the peer reviewers supported the proposal
We reviewed all comments received from the peer reviewers and the public for substantive issues and new information regarding critical habitat and
Similar comments were grouped according to peer review or public comments into three general issues relating specifically to the proposed critical habitat determination. We did not receive any comments on the draft economic analysis of the proposed determination. However, we did receive one comment on economic issues during the first comment period on the proposed designation.
(1)
We discussed with the plaintiffs, the Center for Biological Diversity and CNPS, appropriate action on the critical habitat designation given the questions raised by the recent review of
(2)
We agree that future conservation of the species depends not only on the areas that it currently occupies, but also on providing the opportunity for it to shift in distribution over time, and to expand its current distribution. We have addressed this by designating as critical habitat the areas that surround existing populations and that contain the primary constituent elements. This is particularly important for annual plant species such as
Within the geographic area occupied by the species, we designate only areas currently known to be essential. Essential areas already have the features and habitat characteristics that are necessary to sustain the species. We do not speculate about what areas might be found to be essential if better information became available, or what areas may become essential over time. If the information available at the time of designation did not show that an area provides essential life cycle needs of the species, then the area was not included in the critical habitat designation. Within the geographic area occupied by the species, we do not designate areas that do not now have the primary constituent elements, as defined at 50 CFR 424.12(b), which provide essential life cycle needs of the species.
We recognize that designation of critical habitat may not include all of the habitat areas that may eventually be determined to be necessary for the recovery of the species. Critical habitat designations do not signal that habitat outside the designation is unimportant or not required for recovery. Areas outside the critical habitat designation continue to be subject to the regulatory protections afforded by section 7 and the applicable prohibitions of section 9 of the Act, as determined on the basis of the best available information at the time of the action.
(3)
While additional surveys would help in further defining the distribution of the taxon, we are required to designate those areas we know to be critical habitat, using the best information available to us. Due to time constraints
(4)
When we designate critical habitat we are required to use the best available information. This final critical habitat designation is based on our best assessment at this time of the areas that are needed for the conservation of the taxon. We have encompassed those areas we believe provide some or all of the habitat components that are currently known to be essential for the conservation of
(5)
(6)
While the developed site itself may not currently be considered critical habitat, the area within which Aruguello's facilities is located is essential to the conservation of
For ongoing pipeline maintenance activities that require Corps permits or other Federal authorization, consultation requirements under the Act can be addressed through a programmatic biological opinion. In the event that emergency repair or maintenance of the Gaviota Facility, pipelines and associated ROW is necessary, regulations for section 7 provide a modified consultation procedure allowing us to respond in an expedited manner if consultation on
(7)
We are not including roads that border the critical habitat units in our designation. For this final rule, we adjusted unit boundaries to exclude roads whenever possible. However, due to mapping and time constraints, we did not map critical habitat in sufficient detail to exclude all roads, although these would not contain the primary constituent elements essential for the conservation of
(8)
CVM is an approach used by some economists to directly elicit non-use values from individuals through the use of carefully designed survey instruments. A CVM study will provide respondents with a framework wherein they are asked to value the resource given the parameters of the framework. For the CVM to work properly, and provide meaningful information on non-use values, considerable resources must be expended to adequately design and administer this tool. We have not employed CVM studies to capture the non-use values certain individuals may place on critical habitat designation.
In preparation for development of our final designation of critical habitat for
(1) For
(2) We deleted one of the units of
In total, the removal of lands on Vandenberg resulted in a reduction of 2,126 ha (5,253 ac), approximately 23 percent of the area that had been proposed as
(3) We modified the boundaries of one unit of
The new boundary lines were drawn within the boundaries previously defined; in no case was the new boundary line drawn outside of that described in the legal description for the units in the proposed designation. The purpose of these changes was to exclude areas that do not appear to contain the primary constituent elements, and for which we were unable to draw more precise boundaries at the time of the proposed designation. New information provided during the preparation of the final rule, along with recently acquired high resolution aerial photographs dating from April 2000, enabled us to undertake the more precise mapping. We received maps of vegetation within the Santa Ynez, Santa Ynez Mountains, and Conception-Gaviota Units from the Hollister Ranch Conservancy, and information from the Nuevo Energy Company regarding the Solomon Hills Unit. We found it appropriate to modify boundaries of the Solomon Hills and Santa Ynez Unit, upon consideration of the new information and high resolution aerial photographs, as described below
(1) The Solomon Hills Unit of
(2) The Santa Ynez Unit of
Section 3 of the Act defines critical habitat as—(i) the specific areas within the geographic area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features (I) essential to the conservation of the species and (II) which may require special management considerations or protection; and (ii) specific areas outside the geographical area occupied by the species at the time it is listed upon a determination that such areas are essential for the conservation of the species. “Conservation” means the use of all methods and procedures that are necessary to bring an endangered or a threatened species to the point at which listing under the Act is no longer necessary.
Critical habitat receives protection under section 7 of the Act through the prohibition against destruction or adverse modification of critical habitat that with regard to actions authorized, funded, or carried out by a Federal agency. Section 7 of the Act also requires conferences on Federal actions that are likely to result in the destruction or adverse modification of proposed critical habitat. Aside from the added protection that may be provided under section 7, the Act does not provide other forms of protection to lands designated as critical habitat. Because consultation under section 7 of the Act does not apply to activities on private or other non-Federal lands that do not involve a Federal nexus, critical habitat designation would not afford any additional regulatory protections under the Act against such activities.
Critical habitat also provides non-regulatory benefits to the species by informing the public and private sectors of areas that are important for species recovery and where conservation actions would be most effective. Designation of critical habitat can help focus conservation activities for a listed species by identifying areas that contain the physical and biological features essential for the conservation of that species, and can alert the public as well as land-managing agencies to the importance of those areas. Critical habitat also identifies areas that may require special management considerations or protection, and may help provide protection to areas where significant threats to the species have been identified, by helping people to avoid causing accidental damage to such areas.
In order to be included in a critical habitat designation, the habitat must first be “essential to the conservation of the species.” Critical habitat designations identify, to the extent known, and using the best scientific and commercial data available, habitat areas that are essential to the conservation of the species. Section 3(5)(C) of the Act states that not all areas that can be occupied by a species should be designated as critical habitat except in those circumstances determined by the Secretary. Our regulations (50 CFR 424.12(e)) also state that, “The Secretary shall designate as critical habitat areas outside the geographic area presently occupied by the species only when a designation limited to its present range would be inadequate to ensure the conservation of the species.”
Section 4(b)(2) of the Act requires that we take into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat. We may exclude areas from critical habitat designation when the benefits of exclusion outweigh the benefits of including the areas within critical habitat, provided the exclusion will not result in extinction of the species.
Our Policy on Information Standards Under the Endangered Species Act, published in the
Section 4 of the Act requires that we designate critical habitat based on what we know at the time of designation. Habitat is often dynamic, and species may move from one area to another over time. Furthermore, we recognize that designation of critical habitat may not include all of the habitat areas that may eventually be determined to be necessary for the recovery of the species. For these reasons, it is important to understand that critical habitat designations do not signal that habitat outside the designation is unimportant or may not be required for recovery. Areas outside the critical habitat designation will continue to be subject to conservation actions that may be implemented under section 7(a)(1) of the Act and to the regulatory protections afforded by the section 7(a)(2) jeopardy standard and the applicable prohibitions of section 9 of the Act, as determined on the basis of the best available information at the time of the action. Federally funded or assisted projects affecting listed species outside their designated critical habitat areas may still result in jeopardy findings in some cases. Similarly, critical habitat designations made on the basis of the best available information at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans, or other species conservation planning efforts if new information available to these planning efforts calls for a different outcome.
As required by the Act and regulations (section 4(b)(2) and 50 CFR 424.12), we used the best scientific and commercial data available to determine areas that contain the physical and biological features that are essential for the conservation of
The proposed critical habitat units for
For the final rule, we then modified the boundaries of proposed critical habitat using recent aerial imagery dated from April 2000 (AirPhoto USA), and additional maps of vegetation submitted by the Hollister Ranch Conservancy. The boundaries of the final critical habitat units are defined by Universal Transverse Mercator (UTM).
In accordance with section 3(5)(A)(i) of the Act and regulations at 50 CFR 424.12, in determining which areas to propose as critical habitat, we consider those physical and biological features (primary constituent elements) that are essential to the conservation of the species and that may require special management considerations or protection. These include, but are not limited to: Space for individual and population growth, and for normal behavior; food, water, air, light, minerals or other nutritional or physiological requirements; cover or shelter; sites for germination or seed dispersal; and habitats that are protected from disturbance or are representative of the historic geographical and ecological distributions of a species.
All areas designated as critical habitat for
The designated critical habitat, combined with those areas located on Vandenberg Air Force Base that are critical to the species' survival but were excluded from the final designation, is intended to provide sufficient habitat to maintain self-sustaining populations of
Based on our knowledge to date, the primary constituent elements of critical habitat for
(1) Soils with a large component of sand and that tend to be acidic; and
(2) Plant communities that support associated species, including maritime chaparral, particularly where the following associated species are found:
Based on our knowledge to date, the primary constituent elements of critical habitat for
(1) Sandy soils associated with coastal terraces adjacent to the coast or uplifted marine sediments at interior sites up to 5.6 km (3.5 mi) inland from the coast; and
(2) Plant communities that support associated species, including needlegrass grassland and coastal sage scrub communities, particularly where the following associated species are found: needlegrass species (
Special management considerations or protections may be needed to maintain the primary constituent elements for the two taxa within the units being designated as critical habitat. In some cases, protection of existing habitat and current ecological processes may be sufficient to ensure that populations of the plants are maintained at those sites, and have the ability to reproduce and disperse in surrounding habitat. In other cases, however, active management may be needed to maintain the primary constituent elements for the two taxa. We have outlined below the kinds of special management and protection that these two taxa would most likely require. These recommendations for management and protection are general in nature. Specific management actions should be developed according to local site conditions. Not all of these will apply to each plant taxon equally.
(1) Existing soil conditions should be protected by avoiding activities that cause the erosion or compaction of soils. Maintaining an intact soil profile may be necessary to maintain edaphic features such as a horizon of permeable sandy soils on the surface layer. For example,
(2) Existing hydrologic conditions should be protected by avoiding activities that cause a change in surface or subsurface water flows upon which the plant taxa depend. For example, development of areas adjacent to a population may result in an increase in runoff and surface water flow. This alteration may affect the soil moisture content to which the local population has adapted.
(3) In all plant communities where these taxa occur, invasive, non-native species, such as harding grass (
(4) The composition of the native plant and animal communities associated with the taxa must be maintained. Native plant diversity may limit the ability of aggressive non-native plants to invade a population (Dukes 2002). In addition, a decline in biodiversity may increase the potential impact of invasive plants on a
(5) The local distribution of plant communities should be managed to provide for the physical requirements of the taxa (
(6) Certain areas where these taxa occur may need fencing to protect them from accidental or intentional trampling by humans and livestock. Portions of three of the five units are currently used by livestock.
Throughout this designation, when selecting areas of critical habitat we made an effort to avoid developed areas, such as housing developments, that are unlikely to contribute to the conservation of
During the development of this rule, we considered the role of unoccupied habitat in the conservation of
Portions of the critical habitat units designated for
When designating critical habitat, we assess whether the areas determined to be essential for conservation may require special management considerations or protections. We considered the status of habitat conservation plan (HCP) efforts during the development of this rule. As discussed in the section entitled “Relationship to Habitat Conservation Plans”, we may exclude HCPs from critical habitat designation if the benefits of excluding them would outweigh the benefits of including them. Currently, there are no HCPs that include
If we determine that essential areas on military lands do not require special management considerations or protections, we may be able to exclude them from critical habitat, as discussed in the section entitled “Relationship of Critical Habitat to Military Lands.” The Air Force has developed a Draft Integrated Natural Resources Management Plan (INRMP) for Vandenberg. Although measures to provide for the conservation of
We also evaluated areas that may be in need of special management considerations or protections in the context of a recovery strategy and broader regional planning efforts. Because
Certain areas, such as the Gaviota Coast, have been the target of broader planning efforts due to the development and operation of oil and gas facilities and pipelines in environmentally sensitive areas. The Gaviota Coast constitutes one of the critical habitat units for
As mitigation for the development of its oil and gas facilities in this area, All-American Pipeline and Chevron provided for the establishment of the Gaviota Tarplant Reserve as a mitigation bank in its Mitigation and Management Plan (AAPC,
The County established Coastal Resource Enhancement Fund (CREF) in 1987 to help mitigate significant impacts of offshore oil and gas development to environmentally sensitive coastal resources, among other impacts (SBPDED 2002b). Santa Barbara County has awarded 195 grants for a total of $13.3 million from its CREF. Half of these mitigation funds have been used to acquire or establish conservation easements on coastal properties to protect environmentally sensitive coastal habitats. One of the grants from the CREF contributed to the purchase of Rancho Arroyo Hondo by the Land Trust of Santa Barbara (SPDED 2002c). Rancho Arroyo Hondo consists of 316 ha (782 ac) that extend from the top of the Santa Ynez Mountains down to the ocean along the Gaviota Coast. The boundaries of the ranch follow the ridgelines on either side of the canyon, encompassing nearly the entire watershed of Arroyo Hondo Creek. This area overlaps with one of the
The critical habitat areas described below include one or more of the primary constituent elements described above and constitute our best assessment at this time of the areas needed for the conservation of each of the two taxa. Critical habitat includes habitat throughout the species' current range in Santa Barbara County, California. Lands designated as critical habitat are under State, local, and private ownership. State lands include areas owned and managed by the CDPR and the CDFG. Local lands include parks owned by the County of Santa Barbara. Private lands include areas that are being managed for conservation by private landowners, as well as those that are being managed for agriculture, ranchlands, or oil production. We are designating critical habitat on lands that are considered essential to the conservation of each of the two taxa. Each of the critical habitat units is considered to be occupied by either seeds as part of the seed bank or standing plants, and contain habitat that includes the specific soils, hydrology, and plant communities that are associated with each of the two species. Portions within the units may be currently unoccupied by the species, but still contain habitat that includes the specific soils, hydrology, and plant communities that are associated with the species.
We are designating critical habitat for
Protection of each of the locations where
We are designating approximately 2,590 ha (6,401 ac) of land as critical habitat for
The two units of critical habitat for
In summary, these critical habitat units support two of the four locations of a species endemic to western Santa Barbara County, California. They support the ecological associates (
A brief description of each critical habitat unit is given below:
The Solomon Hills Unit consists of a low hill (locally known as Orcutt Hill) located southeast of the community of Orcutt and west of Highway 1. This unit encompasses 906 ha (2,239 ac) and is privately owned, primarily by a single corporation. Habitat in this unit has been dissected by roads, pads, and pipelines associated with oil well drilling. This unit is approximately 24 km (15 mi) from the nearest
The Solomon Hills Unit includes watersheds from the ridgelines downslope to the bottoms of the nearest drainages. Sites on the ridgetops have very shallow soils consisting of exposed parent material; soils in this unit are unique in that they are excessively drained (Arnold sands with a low clay content). The inland location of this unit, combined with its well-drained soils, may subject this population to warmer, drier, conditions than the other known populations. It is likely that the
The unit contains scattered Bishop pine and live oak, along with maritime chaparral comprised primarily of
The
The Santa Ynez Mountains Unit consists of an 8 km (5 mi) long segment of the Santa Ynez Mountains between the Canada del Coho and Arroyo Bullito drainages. This is the larger of the two units, encompassing 1,684 ha (4,162 ac), and is privately owned. This unit includes several populations of
We are designating critical habitat for
Protection of each of the units where
Encompassed within each critical habitat unit we are designating for
Preserving habitat within a population and the surrounding area is essential to maintain the plant-animal interactions on which movement of pollen and seeds depends. For example, groups of flowering plants that are isolated from native plant communities (
Intervening native habitat between populations within each unit is also necessary to promote gene flow between populations of
Isolation of small populations from one another can lead to loss of genetic variation due to genetic drift and increased inbreeding (Hamrick and Godt 1996). Genetic drift, which are genetic changes in the allelic composition or allelic frequencies, occurs in small or suddenly depauperate bottleneck populations. A population bottleneck is an episode of reduction in population size due to such things as environmental stress or habitat fragmentation. Genetic consequences of drift and loss of genetic variation include loss of adaptability to change and inbreeding, which is the mating of individuals likely to share some of their genes due to common ancestry. Inbreeding depression is thought to reduce fitness of individual plants; it may negatively affect components such as seed viability, germination success, and flower and fruit production (Falk 1992). Therefore, preservation of genetic variation is essential to promote adaptability to change and the reproductive success necessary for the conservation of the species.
Preserving gene flow between colonies that are scattered across the landscape, as in the Conception-Gaviota Unit, is especially important for this species due to its breeding system. The type of incompatibility system that
In summary, maintaining the habitat surrounding and between the current
We are designating approximately 3,929 ha (9,709 ac) of land as critical habitat for
A brief description of each critical habitat unit is given below:
The Sudden Peak Unit consists of a 5-km (3-mi) stretch of ridgeline in the western portion of the Santa Ynez Mountains west of Sudden Peak, and generally includes grasslands above the 215-meter (700-foot) contour line. This unit is 320 ha (791 ac) and is comprised entirely of privately owned lands. Vandenberg Air Force Base holds an easement on a portion of these private lands. This unit includes two populations of
The Santa Ynez Unit consists of a 9.7-km (6-mi) stretch of ridgeline of the Santa Ynez Mountains, ranging from Cañada de las Agujas east to Cañada del
The Conception-Gaviota Unit consists of a 51.5-km (23-mi) long stretch of habitat along the coast from Point Conception, east to Gaviota, and encompasses 3,176 ha (7,848 ac). At its widest point, this unit extends inland approximately 3.2 km (2 mi). This unit is comprised almost entirely of privately owned lands (98 percent). This unit also consists of State lands at Gaviota State Beach and lands in the process of being transferred to CDFG for the Gaviota Tarplant Reserve (2 percent). This unit is particularly important because it supports most of the known populations of
Section 7 of the Act requires Federal agencies, including the Service, to ensure that actions they fund, authorize, or carry out do not destroy or adversely modify critical habitat. Destruction or adverse modification of critical habitat occurs when a Federal action directly or indirectly alters critical habitat to the extent it appreciably diminishes the value of critical habitat for the conservation of the species. Individuals, organizations, States, local governments, and other non-Federal entities are affected by the designation of critical habitat only if their actions occur on Federal lands, require a Federal permit, license, or other authorization, or involve Federal funding.
Section 7(a) of the Act requires Federal agencies, including the Service, to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened, and with respect to its critical habitat, if any is designated or proposed. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) of the Act requires Federal agencies to confer with us on any action that is likely to jeopardize the continued existence of a species proposed for listing, or result in destruction or adverse modification of proposed critical habitat. Conference reports provide conservation recommendations to assist the action agency in eliminating conflicts that may be caused by the proposed action. The conservation recommendations in a conference report are advisory.
We may issue a formal conference report, if requested by the Federal action agency. Formal conference reports include an opinion that is prepared according to 50 CFR 402.14, as if the species was listed or critical habitat designated. We may adopt the formal conference report as the biological opinion when the species is listed or critical habitat designated, if no substantial new information or changes in the action alter the content of the opinion (see 50 CFR 402.10(d)).
If a species is listed or critical habitat is designated, section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of such a species or to destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us. Through this consultation, the Federal action agency would ensure that the permitted actions do not destroy or adversely modify critical habitat.
If we issue a biological opinion concluding that a project is likely to result in the destruction or adverse modification of critical habitat, we also provide “reasonable and prudent alternatives” to the project, if any are identifiable. Reasonable and prudent alternatives are defined at 50 CFR 402.02 as alternative actions identified during consultation that can be implemented in a manner consistent with the intended purpose of the action, that are consistent with the scope of the Federal agency's legal authority and jurisdiction, that are economically and technologically feasible, and that the Director believes would avoid the likelihood of jeopardizing the continued existence of listed species, or resulting in the destruction or adverse modification of critical habitat. Reasonable and prudent alternatives can vary from slight project modifications to extensive redesign or relocation of the project.
Regulations at 50 CFR 402.16 require Federal agencies to reinitiate consultation on previously reviewed actions in instances where critical habitat is subsequently designated and the Federal agency has retained discretionary involvement or control over the action or such discretionary involvement or control is authorized by law. Consequently, some Federal agencies may request reinitiation of consultation or conference with us on actions for which formal consultation previously has been completed if those actions may affect designated critical habitat or adversely modify or destroy proposed critical habitat.
Activities on Federal lands that may affect
All of the units we are designating are known to be occupied by either above-ground plants or a seed bank of the two taxa, and Federal agencies already consult with us on activities in areas where the species may be present to ensure that their actions do not jeopardize the continued existence of the species. Each unit also contains some areas which are considered unoccupied. However, we believe, and the economic analysis discussed below illustrates, that the designation of critical habitat is not likely to result in a significant regulatory burden above that already in place due to the presence of the listed taxa. Few additional consultations are likely to be conducted due to the designation of critical habitat. Actions on which Federal agencies
(1) Development on private lands requiring permits from Federal agencies, such as 404 permits from the U.S. Army Corps of Engineers or permits from other Federal agencies such as Housing and Urban Development;
(2) Military activities of the U.S. Department of Defense (Air Force) on their lands or lands under their jurisdiction;
(3) Activities of the BLM on their lands or lands under their jurisdiction;
(4) Watershed management activities sponsored by the Natural Resources Conservation Service;
(5) Activities of the Federal Aviation Authority on their lands or lands under their jurisdiction;
(6) The release or authorization of release of biological control agents by the U.S. Department of Agriculture;
(7) Regulation of activities affecting point source pollution discharges into waters of the United States by the Environmental Protection Agency under section 402 of the Clean Water Act; and
(8) Construction of communication sites licensed by the Federal Communications Commission, and authorization of Federal grants or loans.
Where federally listed wildlife species occur on private lands proposed for development and an HCP is submitted by an applicant to secure a permit to take according to section 10(a)(1)(B) of the Act, our issuance of such a permit would be subject to the section 7 consultation process. In those situations where
Section 4(b)(8) of the Act requires us to evaluate briefly and describe, in any proposed or final regulation that designates critical habitat, those activities involving a Federal action that may adversely modify such habitat or that may be affected by such designation. Activities that may destroy or adversely modify critical habitat would be those that alter the primary constituent elements to the extent that the value of critical habitat for the conservation of
Activities that, when carried out, funded, or authorized by a Federal agency, may directly or indirectly destroy or adversely modify critical habitat for
(1) Activities that alter watershed characteristics in ways that would appreciably alter or reduce the ability of the chaparral habitat to maintain a mosaic of stands in different age classes, such as maintaining an unnatural fire regime either through fire suppression or prescribed fires that are too frequent or poorly-timed; residential and commercial development, including road building and golf course installations; agricultural activities, including orchardry, viticulture, row crops, and livestock grazing; and vegetation manipulation such as brush clearance in the watershed upslope from
(2) Activities that appreciably degrade or destroy native maritime chaparral and oak woodland communities at interior sites, including but not limited to livestock grazing, clearing, discing, introducing or encouraging the spread of nonnative species, and heavy recreational use.
Activities that, when carried out, funded, or authorized by a Federal agency, may directly or indirectly destroy or adversely modify critical habitat for
Activities that alter watershed characteristics in ways that would appreciably alter or reduce the ability of the coastal terraces to maintain healthy grassland communities, such as maintaining an unnatural fire regime either through fire suppression or prescribed fires that are too frequent or poorly-timed; residential and commercial development, including road building and golf course installations; agricultural activities, including orchardry, viticulture, row crops, and livestock grazing, oil field development, oil contamination remediation, and construction and decommissioning of pipelines and utility corridors.
Several other wildlife species that are listed under the Act occur in the same general areas as
If you have questions regarding whether specific activities will likely constitute adverse modification of critical habitat, contact the Field Supervisor, Ventura Fish and Wildlife Office (see
Special management and protection for the species are not required if adequate management and protection are already in place. Adequate management or protection is provided by a legally operative plan/agreement that addresses the maintenance and improvement of the primary constituent elements important to the species, and that manages for the long-term conservation of the species. If any areas containing the primary constituent elements are currently being managed to address the conservation needs of
We consider several factors to determine if a plan provides adequate management or protection. These factors are: (1) Whether there is a current plan specifying the management actions and whether such actions provide sufficient conservation benefit to the species; (2) whether the plan provides assurances that the conservation management strategies will be implemented; and (3) whether the plan provides assurances that the conservation management strategies will be effective (
In determining if management strategies are likely to be implemented, we consider whether: (a) A management plan or agreement exists that specified the management actions being
In determining whether an action is likely to be effective, we consider whether: (a) The plan specifically addresses the management needs, including reduction of threats to the species; (b) such actions have been successful in the past; (c) there are provisions for monitoring and assessment of the effectiveness of the management actions; and (d) adaptive management principles have been incorporated into the plan.
The Sikes Act Improvements Act of 1997 (Sikes Act) requires each military installation that encompasses land and water suitable for the conservation and management of natural resources to have completed, by November 17, 2001, an Integrated Natural Resources Management Plan (INRMP). An INRMP integrates implementation of the military mission of the installation with stewardship of the natural resources found there. Each INRMP includes an assessment of the ecological needs of the installation, including needs to provide for the conservation of species listed as threatened or endangered pursuant to the Endangered Species Act; a statement of goals and priorities; a detailed description of management actions to be implemented to provide for these ecological needs; and a monitoring and adaptive management plan.
As required by section 7 of the Act, consultation is conducted on the development and implementation of INRMPs for installations with listed species. We believe that military installations that have completed and approved INRMPs which address the needs of species generally do not meet the definition of critical habitat discussed above, as they require no additional special management or protection. Therefore, we generally do not include these areas in critical habitat designations if they meet the following three criteria: (1) A current INRMP must be complete and provide a benefit to the species; (2) the plan must provide assurances that the conservation management strategies will be implemented; and (3) the plan must provide assurances that the conservation management strategies will be effective, by providing for periodic monitoring and revisions as necessary. If all of these criteria are met, then the lands covered under the plan would not meet the definition of critical habitat.
As discussed above, the Sikes Act requires that Vandenberg Air Force Base develop an INRMP. In 1997, the Air Force developed and submitted for Service review a Draft INRMP for the Air Force Base, which is intended to provide an adaptive management approach to natural resource issues on Vandenberg (Tetra Tech, Inc. 1997). Because we determined that the 1997 Draft INRMP did not provide any specific measures to address the conservation and recovery of
As part of its management strategy, the Air Force will also address measures to meet management goals for the following activities on Vandenberg Air Force Base: Grazing; fire control; maintenance activities, and vegetation management. The Air Force will work with the Service and research groups to develop methods for enhancement of
The INRMP will also provide for an annual assessment of the Air Force's management plan. As part of the INRMP, the Air Force will develop a peer-reviewed monitoring plan to assess the status of
The Air Force will give their proposed protection and management actions a high funding and implementation priority. The Air Force has committed to submit the revised Draft INRMP to the Service by January 15, 2003, and will implement the Final INRMP no later than 90 days following our approval.
The Service considers these proposed measures for the protection and management of the two species to be sufficient to constitute adequate “special management.” However, because the measures have not yet been included in the INRMP, the Service cannot conclude at this time that Vandenberg does not meet the definition of critical habitat under section 3(5)(A) of the Act for these species. However, section 4(b)(2) of the Act allows the Service to exclude areas form critical habitat designation if the benefits of such exclusion outweigh the benefits of specifying such areas as critical habitat, unless exclusion would result in the extinction of the species.
The Service has analyzed the benefits of including Vandenberg Air Force Base as part of the critical habitat designation and the benefits of excluding these areas, and determined that the benefits of exclusion outweigh those of inclusion. A major factor in that analysis was that, even if excluded, the proposed units on Vandenberg will nonetheless receive special management and protection through Vandenberg's revised INRMP, due to be submitted in
There are few additional benefits of including Vandenberg Air Force Base in this critical habitat designation beyond what will be achieved thru implementation of Vandenberg's INRMP. The principal benefit of any designated critical habitat is that activities in and affecting such habitat require consultation under section 7 of the Act. Such consultation would ensure that adequate protection is provided to avoid destruction or adverse modification of critical habitat. If adequate protection can be provided in another manner, the benefits of including any area in critical habitat are minimal.
Because Vandenberg's INRMP is not complete, the area may require special management. However, we have evaluated the protection measures the Air Force has proposed for
The development and implementation of Vandenberg's amended INRMP will provide other important conservation benefits, including the development of biological information to guide conservation efforts and assist in species recovery and the creation of innovative solutions to conserve species while allowing for development. The educational benefits that might follow critical habitat designation, such as providing information to the military of areas that are important for the long-term survival and conservation of the species, are essentially the same as those that will occur in the development of the INRMP. For these reasons, then, we believe that designation of critical habitat would have few, if any, additional benefits beyond those that will result from continued consultation under the jeopardy standard and Vandenberg's revision of its draft INRMP to provide for species management and protection.
The benefits of excluding Vandenberg from being designated as critical habitat are more significant. Our economic analysis prepared for this rule cites an impact of approximately $650,000 on activities relating to Vandenberg. As noted above, designation of unoccupied areas within units may require consultation under section 7 of the Act for projects affecting those areas; absent the designation of critical habitat, these consultations may not be required if there are no plants present.
The proposed critical habitat designation included 4,532 acres of Vandenberg land. Most of this land is zoned as open space by Vandenberg's INRMP, but various activities on these lands may be affected by the designation. Lompoc Federal Penitentiary has a lease to graze cattle on 23,500 acres within Vandenberg. Approximately 1,470 of these acres (six percent) are within the designation. Of these, approximately 150 acres are in the Arguello unit, 850 acres are in the Sudden Peak unit, and 470 acres are in the Conception-Gaviota unit. The Service does not expect that the penitentiary will stop grazing these areas but may recommend a modified grazing plan to accommodate the needs of the tarplant. One formal consultation will likely be initiated on behalf of the grazing land in all three units.
In order to accommodate the needs of the tarplant, the Lompoc Federal Penitentiary, which leases land from Vandenberg, will likely only graze the proposed units before and after the months during which the tarplant blooms (June through September), stopping one month in advance of the ordinary grazing routine. The penitentiary already operates a grazing system of rest and rotation. As a result, the penitentiary will lose profits on the amount of meat they could have sold if the calves were able to gain weight for an additional month. Assuming that the calves gain two and a half pounds (lbs) per day and there are 30 days in a month, this would be 75 lbs per calf per month. At a price of $.90 per lb, this would be a loss of $68 per calf. This per calf amount probably overstates losses, because the costs of caring for the calves for an additional month are not netted out of the sale price. Approximately 390 calves would graze these lands, which would result in a total loss of $26,520. Over a ten-year period, this will be a $265,200 loss for the penitentiary.
The Arguello unit also contains a site, Space Lodge Complex-6 (SLC-6), that will begin space launches in 2003. Because the site is fully constructed and acidic deposition resulting from each launch is likely to be very localized, the impact of this activity is not anticipated to be great. A formal consultation was initiated with Vandenberg in December 1999, over a different space launch site; this consultation addressed the beach layia, a federally listed plant, as well as the snowy plover and the southwestern willow flycatcher. Based on this similar past consultation, and because it is difficult to state conclusively at this time whether the PCEs for the tarplant are present at the site, the analysis conservatively predicted that there will be a formal consultation regarding the activity.
For the SLC-6 launch site, located within the Arguello unit, the project modifications are likely to be similar to those proposed by the Service in the December 1999, consultation over a different launch site. In that case, the Service suggested a program of monitoring both the level of acid deposition around the site and the state of the plants before and after each launch. Vandenberg anticipates that this type of monitoring program will cost approximately $10,000 per launch and that there will be approximately 32 launches in the next ten years, for a total cost of $320,000.
Some of the economic effects to Vandenberg resulting from the critical habitat designation would remain if critical habitat were not designated on the base. However, the Service concludes that not designating critical habitat on Vandenberg would have benefits beyond those of a reduced economic effect. Moreover, the economic losses discussed above may still result, at least in part, if
In summary, the benefits of including Vandenberg in critical habitat for these species are small, and are limited to additional certainty about the availability of adequate special management for the species. The benefits of excluding Vandenberg from being designated as critical habitat for the two plant species are more significant, and include encouraging the continued development and implementation of the protective measures Vandenberg plans to take to establish Sensitive Resource Protection Areas for the plants in the areas proposed for critical habitat designation; the monitoring, survey, enhancement, and restoration activities Vandenberg will undertake that will provide additional benefits to the species; and the encouragement that this decision provides to Vandenberg for positive environmental protection programs on base and partnerships that may lead to future conservation. We find that the benefits of excluding these areas from critical habitat designation outweigh the benefits of including these areas. We intend to complete a section 7 of the Act consultation on the amended INRMP when it becomes available, and will be able to address any effects that might pose jeopardy at that time. However, we are not expecting any such effects.
Under section 4(b)(2) of the Act, the Service may exclude areas from the critical habitat designation, as discussed above, but only if it is determined, “based on the best scientific and commercial data available, that the failure to designate such area as critical habitat will result in the extinction of the species concerned.” Here, we have determined that exclusion of Vandenberg from the critical habitat designation for
(1) Activities on Vandenberg that may affect
(2) Vandenberg has committed to designating the areas proposed as critical habitat for both species as Sensitive Resource Protection Areas (SRPA), that will be protected and managed according to the revised INRMP. Vandenberg has committed that no development of new facilities or build-out will occur in these areas unless its military mission so requires; and in this eventuality, that it will identify other adjacent similar habitat for replacement lands for the SRPAs. In short, Vandenberg has committed to protect the same acreage amounts for these two species as were proposed for critical habitat.
With these protections in place, we have concluded that this exclusion from critical habitat will not result in the extinction of these two species. Accordingly, we have determined that lands on Vandenberg Air Force Base should be excluded under subsection 4(b)(2) of the Act because the benefits of exclusion outweigh the benefits of inclusion and will not cause the extinction of the species. For this reason, we are excluding from this critical habitat designation those proposed units and portions of proposed units that were located on Vandenberg.
Section 10(a)(1)(B) of the Act authorizes us to issue permits for the take of listed wildlife species incidental to otherwise lawful activities. An incidental take permit application must be supported by an HCP that identifies conservation measures that the permittee agrees to implement for the species to minimize and mitigate the impacts of the permitted incidental take. Although take of listed plants is not prohibited by the Act, listed plant species may also be covered in an HCP for wildlife species. Currently, there are no HCPs that include
Subsection 4(b)(2) of the Act allows us to exclude from critical habitat designation areas where the benefits of exclusion outweigh the benefits of designation, provided the exclusion will not result in the extinction of the species. We believe that in most instances the benefits of excluding HCPs from critical habitat designations will outweigh the benefits of including them. In the event that future HCPs are developed within the boundaries of proposed or designated critical habitat, we will work with applicants to ensure that the HCPs provide for protection and management of habitat areas essential for the conservation of the species. This will be accomplished by either directing development and habitat modification to nonessential areas, or appropriately modifying activities within essential habitat areas so that such activities will not adversely modify the critical habitat. We will provide technical assistance and work closely with applicants throughout the development of any future HCPs to identify lands essential for the long-term conservation of
Section 4(b)(2)of the Act requires us to designate critical habitat on the basis of the best scientific and commercial information available and to consider the economic and other relevant impacts of designating a particular area as critical habitat. We may exclude areas from critical habitat upon a determination that the benefits of such exclusions outweigh the benefits of specifying such areas as critical habitat. We cannot exclude such areas from critical habitat when such exclusion will result in the extinction of the species concerned.
Following the publication of the proposed critical habitat designation,
Our draft Economic Analysis evaluated the potential future effects associated with the listing of
In addition, the draft Economic Analysis analyzed costs incurred through consultations and modifications of activities on lands under the Federal jurisdiction of Vandenberg Air Force Base; the following discussion of potential economic effects and the values presented below assumes the inclusion of these lands in the critical habitat designation. However, we are excluding lands owned by Vandenberg from the area designated as critical habitat for
To quantify the proportion of total potential economic impacts attributable to the critical habitat designation, the analysis evaluated a “without critical habitat” baseline and compared it to a “with critical habitat” scenario. The “without critical habitat” baseline represented the current and expected economic activity under all modifications prior to the critical habitat designation, including protections afforded the species under Federal and State laws. The difference between the two scenarios measured the net change in economic activity attributable to the designation of critical habitat. The categories of potential costs considered in the analysis included the costs associated with: (1) Conducting section 7 consultations associated with the listing or with the critical habitat, including reinitiated consultations and technical assistance; (2) modifications to projects, activities, or land uses resulting from the section 7 consultations, (3) uncertainty and public perceptions resulting from the designation of critical habitat; and (4) potential offsetting beneficial costs associated with critical habitat including educational benefits.
Our economic analysis recognizes that there may be costs from delays associated with reinitiating completed consultations after the critical habitat designation is made final. There may also be economic effects due to the reaction of the real estate market to critical habitat designation, as real estate values may be lowered due to a perceived increase in the regulatory burden.
Based on our economic analysis, we concluded that the designation of critical habitat would not result in a significant economic impact, and estimated the potential economic effects over a 10-year period would range from $3.1 to $3.65 million. The total estimated costs associated with the Lompoc Yerba Santa and the Gaviota Tarplant is estimated to range between $2.5 and $2.8 million. Based on the U.S. Office of Management and Budget's prescribed seven percent discount rate, the annualized cost of compliance with the designation of critical habitat for these two species is estimated to be between $247,200 and $286,400 with a corresponding total present value between $1.7 and $2.0 million. While the potential economic impact associated with the listing of the taxa and critical habitat designation appears to be large, it must be considered in the context of the economic activity in the region. Given a total value of $1.09 billion in income (over 10 years) from farming, agricultural services, construction, and oil and gas extraction activities in Santa Barbara County, the annualized total cost of section 7 implementation represents less than 0.3 percent of the total value of affected economic activities, as estimated in the economic analysis.
The total consultation costs attributable exclusively to the critical habitat provision of section 7 may range from $2,300,000 to $2,700,000. Economic impacts due to consultations and modifications of oil and gas activities, primarily in the Conception-Gaviota Unit, are estimated to be approximately $1,481,900. Costs of consultations and modifications of private development projects, primarily in the Santa Ynez Mountains, Santa Ynez, and Conception-Gaviota units, are estimated at $1,083,600. Costs of consultations and modifications of agricultural activities, distributed among six of the units, are estimated to be $194,800. Costs of consultations and modifications of activities at Parks, Recreational Areas, and the National Wildlife Refuge, primarily in the Pismo-Orcutt Unit (of the proposed
Total costs resulting from technical assistance, formal and informal consultations, development of biological assessments, and project modifications due to listing and critical habitat designation are presented in the economic analysis, according to land use activities and individual critical habitat units. A per-effort cost is developed for section 7 consultations incurred by the Service, a Federal action agency, and a third party. Cost estimates of an individual formal or informal consultation are developed from a review and analysis of the section 7 history of a number of Service field offices around the country. Cost estimates for technical assistance are based on an analysis of past technical assistance efforts by the Service with agencies in this area. Per-effort costs for project modifications are based on an estimated hourly rate of botanist and total time to implement the project modification.
Costs to third parties (
Technical assistance associated with the listing and critical habitat is estimated to occur primarily for agricultural activities; a total of 60 efforts are anticipated over the next 10 years, based on estimates of future consultations. Informal consultations are estimated to occur primarily on private development projects; a total of 10 efforts, most likely associated with
We did not receive any comments on the draft economic analysis of the proposed determination. Following the close of the comment period, the economic analysis was finalized. There were no revisions or additions to the draft economic analysis. The values presented above are likely to be an overestimate of the potential economic effects of this final critical habitat designation because we have removed
A copy of the final economic analysis and a description of the exclusion process with supporting documents are included in our administrative record and may be obtained by contacting our Ventura Fish and Wildlife Office (see
In accordance with Executive Order 12866, this document is a significant rule and has been reviewed by the Office of Management and Budget (OMB), as OMB determined that this rule may raise novel legal or policy issues. As required by Executive Order 12866, we have provided a copy of the rule, which describes the need for this action and how the designation meets that need, and the economic analysis, which assesses the costs and benefits of this critical habitat designation, to OMB for review.
Under the Regulatory Flexibility Act (5 U.S.C. 601
Small entities include small organizations, such as independent non-profit organizations, small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents, as well as small businesses (13 CFR 121.201). Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than $27.5 million in annual business, special trade contractors doing less than $11.5 million in annual business, and agricultural businesses with annual sales less than $750,000. To determine if potential economic impacts to these small entities are significant, we consider the types of activities that might trigger regulatory impacts under this rule as well as the types of project modifications that may result. In general, the term “significant economic impact” is meant to apply to a typical small business firm's business operations.
To determine if the rule would affect a substantial number of small entities, we consider the number of small entities affected within particular types of economic activities (
Designation of critical habitat only affects activities conducted, funded, or permitted by Federal agencies. Some kinds of activities are unlikely to have any Federal involvement and so will not be affected by critical habitat designation. In areas where the species may be present, Federal agencies already are required to consult with us under section 7 of the Act on activities that they fund, permit, or implement that may affect
Our Economic Analysis found that private development, oil and gas production, and agriculture (particularly, vineyard conversion) are the primary activities anticipated to take
To be conservative (
On average, over the 10 year period of analysis, in each year there could be between 1 and 2 consultations for private development projects. Assuming each consultation involves a different business, approximately less than 1 percent of the total number of small private development companies could be affected annually by the designation of critical habitat for
On average, over the 10 year period of analysis, in each year there could be approximately three consultations for oil and gas production activities. Assuming each consultation involves a different business, approximately 3 to 4 percent of the total number of small gas and oil companies could be affected annually by the designation of critical habitat for
On average, over the 10 year period of analysis, in each year there could be approximately less than one consultation for agriculture (vineyard) activities. Assuming each consultation involves a different business, approximately less than 1 percent of the total number of small agriculture companies could be affected annually by the designation of critical habitat for
The percentage of small businesses that could be affected by this designation is far less than the 20 percent threshold that would be considered “substantial.” Therefore, the economic analysis concludes that the designation of critical habitat for
In general, two different mechanisms in section 7 consultations could lead to additional regulatory requirements for the approximately four small businesses, on average, that may be required to consult with us each year regarding their project's impact on
Based on our experience with consultations pursuant to section 7 of the Act for all listed species, virtually all projects-including those that, in their initial proposed form, would result in jeopardy or adverse modification determinations in section 7 consultations—can be implemented successfully with, at most, the adoption of reasonable and prudent alternatives. These measures, by definition, must be economically feasible and within the scope of authority of the Federal agency involved in the consultation. As we have no consultation history for
It is likely that a developer or other project proponent could modify a project or take measures to protect
As required under section 4(b)(2) of the Act, we conducted an analysis of the potential economic impacts of this critical habitat designation, and that analysis was made available for public review and comment before finalization of this designation.
Based on estimates provided in the economic analysis, the total economic costs associated with the listing and critical habitat designation for
In summary, we have considered whether this rule would result in a significant economic effect on a substantial number of small entities. We have determined, for the above reasons, that it will not affect a substantial number of small entities. Furthermore, we believe that the potential compliance costs for the number of small entities that may be affected by this rule will not be significant. Therefore, we are certifying that the designation of critical habitat for
OMB's Office of Information and Regulatory Affairs has determined that this rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. In the economic analysis, we determined whether designation of critical habitat would cause (a) any effect on the economy of $100 million or more, (b) any increases in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions, or (c) any significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Refer to the final economic analysis for a discussion of the effects of this determination.
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501
(a) This rule will not “significantly or uniquely” affect small governments. A Small Government Agency Plan is not required. Small governments will be affected only to the extent that they must ensure that any activities involving Federal funds, permits, or other authorized activities will not adversely affect the critical habitat.
(b) This rule will not produce a Federal mandate of $100 million or greater in any year; that is, it is not a “significant regulatory action” under the Unfunded Mandates Reform Act. The designation of critical habitat imposes no obligations on State or local governments.
On May 18, 2001, the President issued an Executive Order 13211 on regulations that significantly affect energy supply, distribution, and use. Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. Although this rule is a significant regulatory action under Executive Order 12866, it is not expected to significantly affect energy supplies, distribution, or use. In our Economic Analysis, we did not identify energy production or distribution as being significantly affected by this designation, and we received no comments indicating that the proposed designation could significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required.
In accordance with Executive Order 12630 (“Government Actions and Interference with Constitutionally Protected Private Property Rights”), we have analyzed the potential takings implications of designating critical habitat for
In accordance with Executive Order 13132, the rule does not have significant Federalism effects. A Federalism assessment is not required. As discussed above, the designation of critical habitat in areas currently occupied by
In accordance with Executive Order 12988, the Department of the Interior's Office of the Solicitor has determined that this rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order. We have designated critical habitat in accordance with the provisions of the Endangered Species Act, as amended. The rule uses standard property descriptions and identifies the primary constituent elements within the designated areas to assist the public in understanding the habitat needs of
This rule does not contain any information collection requirements for which OMB approval under the Paperwork Reduction Act is required. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB Control Number.
We have determined that an Environmental Assessment and/or an Environmental Impact Statement as defined by the National Environmental Policy Act of 1969 need not be prepared in connection with regulations adopted pursuant to section 4(a) of the Endangered Species Act, as amended. We published a notice outlining our reason for this determination in the
In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations
A complete list of all references cited herein, as well as others, is available upon request from the Ventura Fish and Wildlife Office (see
The primary authors of this final rule are Diane Gunderson and Diane Steeck, Ventura Fish and Wildlife Office (See
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
16 U.S.C. 1361-1407; 16 U.S.C. 1531-1544; 16 U.S.C. 4201-4245; Pub. L. 99-625, 100 Stat. 3500, unless otherwise noted.
(h) * * *
(a) * * *
(1) Critical habitat units are depicted for Santa Barbara County, California, on the maps below.
(2) The primary constituent elements of critical habitat for
(i) Sandy soils associated with coastal terraces adjacent to the coast or uplifted marine sediments at interior sites up to 5.6 km (3.5 mi) inland from the coast, and
(ii) Plant communities that support associated species, including needlegrass grassland and coastal sage scrub communities, particularly where the following associated species are found: Needlegrass species (
(3) Critical habitat does not include existing features and structures, such as buildings, roads, aqueducts, railroads, airports, other paved areas, lawns, and other urban landscaped areas not containing one or more of the primary constituent elements.
(i) Data layers defining map units were mapped using Universal Transverse Mercator (UTM) coordinates.
(ii)
(4) Sudden Peak Unit: Santa Barbara County, California.
(i) From USGS 1:24,000 quadrangle maps Tranquillon Mountain, Lompoc Hills, Santa Rosa Hills, lands bounded by the following UTM zone 10 NAD83 coordinates (E,N): 729958, 3827610; 729742, 3827440; 729579, 3827450; 729425, 3827600; 729439, 3827710; 729508, 3827830; 729376, 3827830; 729212, 3827800; 729116, 3827760; 729008, 3827960; 728870, 3828070; 727858, 3828370; 727151, 3828380; 726435, 3828390; 726349, 3828300; 726296, 3828210; 726142, 3828370; 725873, 3828420; 725662, 3828470; 725478, 3828790; 724801, 3829170; 724588, 3829000; 724595, 3829180; 724666, 3829350; 724689, 3829390; 724710, 3829420; 724742, 3829500; 724748, 3829510; 724772, 3829520; 724802, 3829490; 724864, 3829440; 724894, 3829450; 724903, 3829460; 724923, 3829490; 724952, 3829510; 724982, 3829500; 724993, 3829460; 725000, 3829450; 725013, 3829430; 725045, 3829430; 725100, 3829430; 725105, 3829430; 725116, 3829420; 725120, 3829410; 725124, 3829350; 725129, 3829320; 725139, 3829300; 725145, 3829290; 725196, 3829290; 725210, 3829290; 725229, 3829280; 725242, 3829270; 725252, 3829260; 725266, 3829230; 725267, 3829200; 725289, 3829140; 725294, 3829130; 725325, 3829110; 725354, 3829110; 725375, 3829150; 725383, 3829160; 725444, 3829140; 725456, 3829150; 725460, 3829160; 725460, 3829180; 725452, 3829200; 725437, 3829230; 725430, 3829260; 725427, 3829310; 725432, 3829350; 725406, 3829410; 725427, 3829420; 725435, 3829420; 725496, 3829400; 725526, 3829410; 725556, 3829420; 725581, 3829410; 725586, 3829410; 725617, 3829380; 725651, 3829330; 725679, 3829310; 725708, 3829340; 725738, 3829340; 725774, 3829300; 725786, 3829260; 725796, 3829240; 725862, 3829220; 725869, 3829220; 725888, 3829190; 725912, 3829130; 725917, 3829120; 725956, 3829090; 725986, 3829080; 726017, 3829070; 726048, 3829070; 726056, 3829090; 726061, 3829130; 726069, 3829170; 726090, 3829220; 726100, 3829280; 726112, 3829300; 726130, 3829310; 726163, 3829290; 726242, 3829220; 726253, 3829200; 726284, 3829170; 726314, 3829160; 726333, 3829160; 726478, 3829080; 726500, 3829060; 726529, 3829020; 726558, 3829050; 726570, 3829080; 726584, 3829090; 726616, 3829100; 726651, 3829100; 726738, 3829050; 726768, 3829040; 726799, 3829020; 726830, 3829000; 726907, 3828970; 726925, 3828950; 726935, 3828920; 726942, 3828910; 726964, 3828860; 726961, 3828830; 726952, 3828800; 726957, 3828760; 726995, 3828750; 727013, 3828740; 727022, 3828720; 727026, 3828680; 727046, 3828620; 727053, 3828560; 727083, 3828570; 727121, 3828590; 727140, 3828600; 727145, 3828620; 727143, 3828660; 727168, 3828720; 727186, 3828780; 727223, 3828840; 727232, 3828870; 727242, 3828940; 727251, 3828960; 727273, 3828970; 727281, 3828970; 727291, 3828960; 727312, 3828930; 727343, 3828910; 727414, 3828880; 727433, 3828870; 727521, 3828760; 727579, 3828670; 727659, 3828660; 727724, 3828680; 727806, 3828720; 727873, 3828820; 728014, 3829090; 728073, 3829130; 728179, 3829170; 728262, 3829210; 728345, 3829230; 728412, 3829250; 728414, 3829240; 728688, 3829280; 728783, 3829210; 728830, 3829050; 728820, 3828900; 728839, 3828590; 728863, 3828400; 728940, 3828300; 729160, 3828270; 729685, 3828110; 729721, 3828100; 729755, 3828070; 729958, 3827610.
(ii)
(5) Conception-Gaviota Unit: Santa Barbara County, California.
(i) From USGS 1:24,000 quadrangle maps Gaviota, Lompoc Hills, Point Conception, Sacate, and Tranquillon Mountain, lands bounded by the following UTM zone 10 NAD83 coordinates (E,N): 729837, 3821770; 729855, 3821690; 729971, 3821490; 730078, 3821250; 730181, 3821200; 730191, 3821100; 730302, 3820990; 730393, 3820950; 730490, 3820870; 730490, 3820840; 730445, 3820790; 730431, 3820750; 730455, 3820690; 730520, 3820630; 730464, 3820600; 730344, 3820590; 730333, 3820570; 730346, 3820500; 730377, 3820470; 730496, 3820520; 730587, 3820480; 730593, 3820450; 730530, 3820400; 730514, 3820360; 730523, 3820330; 730625, 3820210; 730716, 3820200; 730731, 3820190; 730718, 3820160; 730653, 3820100; 730646, 3819980; 730614, 3819910; 730617, 3819860; 730679, 3819780; 730729, 3819750; 730822, 3819770; 730967, 3819830; 730997, 3819830; 731013, 3819810; 730970, 3819750; 730793, 3819640; 730748, 3819560; 730764, 3819530; 730761, 3819440; 730779, 3819410; 730783, 3819260; 730921, 3819080; 731051, 3819040; 731073, 3819060; 731099, 3819240; 731134, 3819290; 731148, 3819290; 731160, 3819400; 731174, 3819330; 731164, 3819290; 731149, 3819290; 731155, 3819210; 731165, 3819180; 731211, 3819140; 731219, 3819020; 731282, 3818980; 731303, 3818890; 731356, 3818870; 731386, 3818900; 731418, 3819100; 731472, 3819130; 731510, 3818920; 731511, 3818770; 731540, 3818740; 731587, 3818790; 731627, 3818860; 731641, 3818850; 731651, 3818830; 731631, 3818650; 731641, 3818600; 731658, 3818590; 731785, 3818620; 731841, 3818730; 731900, 3818770; 731931, 3818750; 731924, 3818600; 731936, 3818580; 731999, 3818550;
(ii)
(6) Santa Ynez Mountains Unit (Gaviota tarplant): Santa Barbara County, California.
(i) From USGS 1:24,000 quadrangle maps Santa Rosa Hills and Sacate, lands bounded by the following UTM zone 10 NAD83 coordinates (E,N): 747710, 3821530; 747708, 3821520; 747676, 3821490; 747651, 3821470; 747601, 3821430; 747545, 3821390; 747491, 3821350; 747409, 3821330; 747383, 3821320; 747323, 3821300; 747288, 3821300; 747240, 3821300; 747204, 3821310; 747150, 3821330; 747123, 3821340; 747104, 3821350; 747051, 3821380; 747023, 3821380; 746956, 3821370; 746929, 3821340; 746918, 3821330; 746903, 3821290; 746900, 3821270; 746909, 3821240; 746925, 3821220; 746945, 3821200; 746980, 3821180; 746998, 3821150; 747011, 3821140; 747023, 3821130; 747042, 3821120; 747072, 3821090; 747081, 3821080; 747092, 3821050; 747102, 3820980; 747108, 3820960; 747124, 3820950; 747134, 3820940; 747194, 3820930; 747216, 3820900; 747220, 3820890; 747230, 3820860; 747231, 3820820; 747257, 3820730; 747344, 3820660; 747492, 3820540; 747783, 3820400; 747831, 3820350; 747902, 3820290; 747931, 3820270; 747964, 3820290; 748102, 3820440; 748147, 3820460; 748170, 3820470; 748195, 3820490; 748232, 3820520; 748257, 3820540; 748280,
(1) Critical habitat units are depicted for Santa Barbara County, California, on the maps below.
(2) The primary constituent elements of critical habitat for
(i) Soils with a large component of sand and that tend to be acidic; and
(ii) Plant communities that support associated species, including maritime chaparral, particularly where the following associated species are found:
(3) Critical habitat does not include existing features and structures, such as buildings, roads, aqueducts, railroads, airports, other paved areas, lawns, and other urban landscaped areas not containing one or more of the primary constituent elements.
(4) Critical Habitat Map Units
Data layers defining map units were mapped using Universal Transverse Mercator (UTM) coordinates.
(5) Santa Ynez Mountains Unit (Lompoc yerba santa). Santa Barbara County, California
(i) From USGS 1:24,000 quadrangle maps Lompoc Hills, Point Conception, Sacate, lands bounded by the following UTM zone 10 NAD83 coordinates (E,N): 739493, 3817820; 739352, 3817850; 739008, 3817860; 738828, 3817800; 738440, 3817810; 738377, 3817820; 738294, 3817900; 738288, 3817900; 738104, 3817960; 738034, 3817960; 738028, 3817900; 738026, 3817900; 737925, 3817940; 737892, 3817950; 737726, 3817950; 737666, 3818000; 737619, 3817970; 737540, 3817910; 737423, 3817890; 737416, 3817960; 737414, 3818040; 737489, 3818070; 737612, 3818160; 737622, 3818190; 737676, 3818230; 737715, 3818280; 737744, 3818320; 737757, 3818380; 737791, 3818440; 737809, 3818500; 737838, 3818550; 737862, 3818600; 737916, 3818660; 737924, 3818710; 737903, 3818760; 737865, 3818820; 737823, 3818880; 737791, 3818950; 737804, 3819010; 737791, 3819100; 737774, 3819180; 737701, 3819270; 737662, 3819360; 737624, 3819450; 737611, 3819560; 737633, 3819670; 737661, 3819750; 737679, 3819800; 737708, 3819870; 737731, 3819930; 737729, 3820000; 737717, 3820070; 737725, 3820140; 737753, 3820210; 737777, 3820240; 737816, 3820290; 737829, 3820360; 737868, 3820430; 737942, 3820490; 738005, 3820560; 738019, 3820610; 737996, 3820700; 737947, 3820820; 737893, 3820930; 737840, 3821030; 737813, 3821090; 737897, 3821130; 738005, 3821060; 738136, 3821070; 738167, 3821060; 738214, 3821020; 738264, 3821030; 738308, 3821050; 738328, 3821090; 738373, 3821110; 738439, 3821080; 738520, 3821060; 738581, 3821060; 738652, 3821060; 738698, 3821030; 738759, 3821030; 738830, 3821010; 738891, 3821010; 738951, 3821010; 739027, 3821020; 739077, 3821020; 739111, 3821060; 739161, 3821090; 739227, 3821090; 739288, 3821070; 739384, 3821050; 739541, 3821060; 739607, 3821020; 739669, 3820990; 739714, 3821020; 739762, 3821080; 739796, 3821140; 739825, 3821180; 739969, 3821260; 740158, 3821340; 740234, 3821350; 740295, 3821320; 740387, 3821280; 740453, 3821280; 740503, 3821280; 740575, 3821270; 740631, 3821250; 740677, 3821220; 740710, 3821150; 740767, 3821070; 740784, 3821010; 740786, 3820950; 740822, 3820930; 740869, 3820870; 740917, 3820790; 740919, 3820720; 740917, 3820630; 740945, 3820540; 741007, 3820480; 741084, 3820430; 741186, 3820400; 741298, 3820400; 741383, 3820400; 741510, 3820380; 741666, 3820390; 741747, 3820400; 741808, 3820400; 741863, 3820390; 741990, 3820390; 742184, 3820310; 742250, 3820300; 742356, 3820290; 742458, 3820280; 742554, 3820270; 742604, 3820280; 742645, 3820260; 742690, 3820260; 742741, 3820260; 742817, 3820270; 742907, 3820270; 742973, 3820280; 743029, 3820250; 743100, 3820250; 743139, 3820280; 743224, 3820310; 743315, 3820320; 743406, 3820320; 743461, 3820320; 743528, 3820300; 743579, 3820260; 743632, 3820200; 743644, 3820130; 743686, 3820090; 743727, 3820040; 743779, 3819990; 743826, 3819960; 743857, 3819910; 743889, 3819860; 743926, 3819820; 743958, 3819770; 743999, 3819720; 744026, 3819680; 744028, 3819620; 744039, 3819570; 744061, 3819530; 744067, 3819490; 744074, 3819420; 744096, 3819360;
(6) Solomon Hills Unit. Santa Barbara County, California.
(i) From USGS 1:24,000 quadrangle map Orcutt, lands bounded by the following UTM zone 10 NAD83 coordinates (E,N): 737417, 3856100; 737363, 3856080; 737307, 3856040; 737239, 3856000; 737175, 3856000; 737140, 3856010; 737105, 3856070; 737059, 3856130; 736981, 3856170; 736919, 3856190; 736825, 3856180; 736785, 3856210; 736755, 3856250; 736747, 3856310; 736677, 3856370; 736618, 3856410; 736583, 3856440; 736581, 3856480; 736669, 3856620; 736664, 3856670; 736629, 3856680; 736545, 3856600; 736451, 3856570; 736373, 3856590; 736298, 3856650; 736258, 3856730; 736239, 3856830; 736217, 3856960; 736147, 3857020; 736067, 3857040; 736018, 3857030; 735919, 3856920; 735881, 3856830; 735798, 3856740; 735620, 3856630; 735534, 3856390; 735378, 3856240; 735233, 3856110; 735139, 3856060; 735052, 3856040; 734942, 3856040; 734875, 3856060; 734778, 3856160; 734716, 3856270; 734705, 3856380; 734792, 3856490; 734985, 3856680; 734902, 3856760; 734811, 3856770; 734747, 3856930; 734572, 3857050; 734549, 3857170; 734576, 3857260; 734640, 3857350; 734687, 3857490; 734576, 3857560; 734488, 3857710; 734512, 3857810; 734582, 3857880; 734687, 3857900; 734802, 3857860; 734945, 3857850; 735007, 3857890; 735042, 3857970; 735063, 3858170; 735141, 3858250; 735367, 3858250; 735539, 3858220; 735720, 3858150; 735768, 3858170; 735803, 3858200; 735870, 3858370; 735919, 3858410; 736045, 3858370; 736228, 3858140; 736354, 3858150; 736497, 3858060; 736637, 3858070; 736403, 3858210; 736363, 3858320; 736363, 3858410; 736384, 3858450; 736443, 3858460; 736494, 3858470; 736519, 3858500; 736497, 3858560; 736446, 3858650; 736287, 3858850; 736024, 3859120; 735900, 3859270; 735905, 3859310; 735935, 3859340; 735972, 3859350; 736126, 3859280; 736336, 3859170; 736524, 3859030; 736580, 3859030; 736605, 3859080; 736607, 3859190; 736683, 3859240; 736779, 3859250; 736868, 3859260; 737000, 3859190; 737102, 3859190; 737186, 3859210; 737240, 3859240; 737430, 3859200; 737572, 3859160; 737721, 3859160; 737818, 3859200; 737915, 3859040; 737934, 3858970; 738022, 3858840; 738108, 3858670; 738286, 3858510; 738364, 3858370; 738498, 3858350; 738646, 3858230; 738754, 3858160; 738859, 3858100; 738907, 3858050; 738905, 3857960; 738883, 3857860; 738810, 3857710; 738808, 3857600; 738811, 3857490; 738800, 3857370; 738770, 3857240; 738734, 3857130; 738675, 3857000; 738613, 3856960; 738509, 3856890; 738452, 3856830; 738398, 3856710; 738240, 3856630; 738188, 3856580; 738149, 3856550; 738100, 3856580; 738059, 3856570; 737904, 3856510; 737780, 3856510; 737635, 3856540; 737608, 3856510; 737632, 3856470; 737687, 3856410; 737833, 3856320; 737890, 3856260; 737928, 3856160; 737869, 3856080; 737787, 3855920; 737740, 3855950; 737651, 3856020; 737576, 3856050; 737484, 3856100; 737417, 3856100.
(ii)
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), determine endangered status for two plants,
This rule is effective December 9, 2002.
The complete file for this rule is available for inspection, by appointment, during normal business hours at U.S. Fish and Wildlife Service, Oregon Fish and Wildlife Office, 2600 SE. 98th, Suite 100, Portland, OR 97266.
Kemper McMaster, Oregon Fish and Wildlife Office (
Vernal pools are seasonal wetlands that form only in regions where specialized soil and climatic conditions exist. During fall and winter rains, water collects in shallow depressions in areas where downward percolation of water is prevented by the presence of an impervious hard pan or clay pan layer below the soil surface (Keeley and Zedler 1998). Later in the spring when rains decrease and the weather warms, the water evaporates, and the pools generally disappear by May. These shallow depressions then remain relatively dry until late fall and early winter with the advent of greater precipitation and cooler temperatures. Vernal pools thus provide unusual “flood and drought” habitat conditions to which certain plants and animals have specifically adapted.
A perennial forb in the carrot family (Apiaceae),
James Kagan first collected
A delicate annual in the meadowfoam, or false mermaid, family (Limnanthaceae),
In his monograph of the genus
The Agate Desert landscape consists of a gentle mound-swale topography with a characteristic appearance in aerial photographs that is sometimes referred to as “patterned ground.” During the fall and winter rainy season, a striking pattern of shallow pools develops in the swales. These vary in size from 1 to 30 meters (m) (3 to 100 feet (ft)) across, and attain a maximum depth of about 30-cm (12-in) (ONHP 1997). Plants native to these pools, including
The historical range for
In the French Flat/Illinois Valley area,
The historical range of
In the Agate Desert, there are believed to be about 15 sites containing
Two sites each of
Two known sites of each taxon are on State land, mainly in the Ken Denman Wildlife Area, where much of the habitat has been altered and planted to grasses. Two sites containing
Each year, plant populations exhibit some natural variation in numbers, related primarily to temperature and rainfall conditions for that year. In general, numbers of annual plants, such as
Information regarding three status changes considered outside the natural range of year-to-year variation for these plants became available to the Service between May 15, 2000, when the proposed rule was published in the
The 2000-2002 observations of these two vernal pool plant species must be considered within the context of the status and trends of their habitat overall. Recent studies of the Agate Desert vernal pool hydrology and vegetation indicate that no undisturbed vernal pool habitat remains (ONHP 1997, 1999). The latter study (ONHP 1999) indicates that the highest quality remaining Agate Desert vernal pool habitat, that with intact hydrology and altered vegetation, is now present on approximately 17.6 percent of the area that historically contained vernal pools. This is a decrease from the earlier study (ONHP 1997), cited in the May 15, 2000, proposed rule, which estimated that this highest quality remaining habitat occurred on 23.1 percent of the area. This reported decrease in the amount of best available habitat is partially due to better-refined mapping techniques, but there is evidence that additional land leveling also occurred between the two studies (ONHP 1999). Both reported and unreported fills of Agate Desert vernal pool wetlands are occurring continually (C. Tuss, Service biologist, pers. comm., 2001). ONHP (1999) reports that over 19 percent of Agate Desert vernal pool habitat has been leveled, and development (structures, roads, and other impermeable surfaces) has occurred on an additional 41 percent of this area (ONHP 1999). Thus, over 60 percent of the habitat of these plants in the Agate Desert has been destroyed, and none of the remaining habitat has escaped the invasion of weedy competitors. This compares with just under 60 percent habitat destruction reported in ONHP 1997 and in the proposed rule (65 FR 30941).
Recent evidence also indicates that non-native annual grasses, particularly medusahead (
Populations of
Federal action on
In 1978, amendments to the Act required that all proposals over two
Upon publication of the February 28, 1996, NOR (61 FR 7596), we ceased using category designations and included as candidates only those taxa previously designated as category 1,
Section 4(b)(3)(B) of the Act requires the Secretary to make certain findings on pending petitions within 12 months of their receipt. Section 2(b)(1) of the 1982 amendments further requires that all petitions pending on October 13, 1982, be treated as having been newly submitted on that date. This was the case for
On May 15, 2000, the Service published a proposed rule to list
We contacted Federal and State agencies, county governments, scientific organizations, and other interested parties and asked that they comment. We requested that all interested parties submit factual reports or information that might contribute to the development of this final rule. We received a total of 19 comment letters over two comment periods. Four letters were received during the first comment period and fifteen letters were received during the second comment period. Of the nineteen total responses, sixteen were in support and three opposed the listing action. Two responses were from groups that commented during both comment periods, expressing the same or similar viewpoints in both letters. No comments were received from Federal, State, or community government agencies. All responses were submitted by individuals or groups.
This final rule reflects the comments and information we received during the comment period. We addressed opposing comments and other substantive comments concerning the rule below. Comments of a similar nature or point are grouped together (referred to as issues for the purpose of this summary) below, along with our response to each.
The perceived ambiguity between the positive and negative effects of grazing on these species may lie in how the effects differ depending on the time of year, intensity, and duration of grazing within vernal pools. Prevailing livestock practices on the Agate Desert are considered “moderate” grazing. In Jackson County, 37,000 head of cattle and 3,000 head of sheep were pastured in 2000. The Natural Resources Conservation Service, U.S. Department of Agriculture, soil survey for Jackson County (Soil Conservation Service 1993) determined that the winter production on the Agate Desert soils amounts to 362 kilograms (kg) (800 pounds (lbs.)) of forage per acre, annually. This amount of forage is just above the estimated requirements of a cow/calf pair for a month (or 353 kg “animal unit month” or 12 kg per day ) (780 lbs. “animal unit month” or 26 lbs. per day). Stocking rates in the Agate Desert are about one cow/calf pair for each 2.5 to 4 or more acres and typically grazing occurs in the late fall, winter and early spring (D. Borgias,
Preliminary survey results indicate early fall grazing may be beneficial to
In accordance with our July 1, 1994 (59 FR 34270), Interagency Cooperative Policy on Peer Review, we requested the expert opinion of at least three independent specialists regarding pertinent scientific or commercial data and assumptions relating to supportive biological and ecological information in the proposed rule. The purpose of such a review is to ensure that the listing decision is based on scientifically sound data, assumptions and analyses, including input of appropriate experts and specialists.
We requested peer review from six individuals who possess expertise on
All four peer reviewers agreed with our conclusion to list these species as endangered. Each supported the scientific basis for our decision and addressed the urgency of the threats to the species. The peer reviewers' comments included suggestions to correct technical errors, clarify differences between
An error was found in our taxonomic description of
Population data regarding the status of both taxa was supplied to us by the ONHP which transferred their data to Oregon State University Institute for Natural Resources. As of June 28, 2002, the organization name was changed to Oregon Natural Heritage Information Center. The change in citation has been noted in this final rule.
A peer reviewer suggested a name change to differentiate three
Special concern was expressed regarding the population of
Section 4 of the Act and its implementing regulations (50 CFR part 424) set forth the procedures for adding species to the Federal lists. A species may be determined to be endangered or threatened due to one or more of the five factors described in section 4(a)(1). These factors and their application to
A.
Human-related impacts to vernal pool habitat in the Agate Desert began in the mid-1800s, when the area was grazed by cattle and sheep (ONHP 1997). In 1905, a land speculation company acquired a large part of the area and attempted to establish pear orchards by constructing an extensive system of shallow irrigation ditches and in some cases, blasting through the hardpan layer. This failed, and grazing continued as the dominant use until 1942, when the U.S. military purchased a large segment of the Agate Desert for a training center. When this center was decommissioned in 1946, a 158-ha (390-ac) portion of the area west of Highway 62 was purchased by a timber industry consortium, and a timber mill industrial center began to grow (ONHP 1997). Other industries were drawn to the area, and around 1980, the City of Medford established the 290-ha (720-ac) Whetstone Industrial Park. Much of this area has been leveled and compacted, destroying any vernal pools, although some potential vernal pool habitat remains in the area (ONHP 1997). Another area west of Highway 62, encompassing some 728-ha (1,800-ac), is State land, managed by the Oregon Department of Fish and Wildlife, as the Ken Denman Wildlife Area (ONHP 1997). Devoted to waterfowl production, much of this area has been covered with log deck debris, plowed in strips, and planted with non-native wildlife food plants (Brock 1987; J. Kagan, pers. comm., 1997).
East of Highway 62, much of the Agate Desert landform was subdivided into 2-ha (5-ac) homesites in the 1950s, many of which were leveled. This area harbors some intact vernal pool habitat (Brock 1987, ONHP 1997).
The southernmost section of the historical Agate Desert has been largely modified by cultivation for pasture. The Medford-Jackson County Airport occupies some 374 ha (925 ac) at the southern limit of the landform. A Foreign Trade Zone at this airport has
Jackson County is experiencing a rapid human population increase. Between 1990 and 2000 the population of Jackson County increased 23.8 percent (U.S. Department of Commerce, Census Bureau 2000). It is the seventh fastest growing county in Oregon, and the majority of this growth is centered in the Medford area (Portland State University, Population Research Center. 2000). Much development has occurred in and around
A habitat assessment map and report (ONHP 1997) indicated that residential, commercial and industrial development, along with land leveling, have claimed nearly 60 percent of the historic Agate Desert vernal pool landscape. According to this assessment, no pristine vernal pool habitat remains due to the presence of introduced plants throughout the Agate Desert. The highest quality remaining vernal pool habitat occurs on 23 percent of the landform. By overlaying ONHIC plant occurrence polygons on the habitat assessment base map, one can determine that over 50 percent of
In 1992, a sewage line was built by the City of Medford across the southwest corner of the Cardinal Avenue site in the Agate Desert. A large department store was built on land adjacent to this site. The Cardinal Avenue site, with a population of approximately 140
In 1986, private lands with 4 ha (10 ac) of
Another project related to development in the Agate Desert area that adversely affected
Two sites where
In the early 1990's, a proposed highway connector between Interstate 5 and Highway 140 across the Agate Desert would have impacted a number of sites of both
The only
The Agate Desert Preserve, supporting the largest populations of
During development of land west of the Preserve, land-moving equipment
To summarize these plants' current status in the Agate Desert, existing
Sites containing
Indirect effects from mining operations in French Flat could also occur due to off-site activities such as road construction, which are likely to alter hydrologic cycles at
ORV use damages other
The Oregon Parks & Recreation Department has undertaken protective measures for
Several sites containing
Residential development and road building in the Illinois Valley also threaten populations of
Therefore, the on-going and future threats associated with mining, ORV use, and development may lead to continued loss of individual plants and/or habitat throughout the Illinois Valley.
B.
About 80 percent of the
C.
Cattle grazing can cause substantial impacts to
The effects of cattle grazing on
D.
A ruling by the Supreme Court (
The Nationwide Permit Program (33 CFR Part 330) was recently revised in January 2002 (67 FR 2020) and became effective March 18, 2002. The Nationwide Permit Program was designed to eliminate the need for individual permits, requiring agency review and public comment, for some activities involving relatively small amounts of discharge or fill into waters of the U.S. Nationwide Permit (NWP) number 14, addressing liner transportation projects; NWP 39, addressing residential, commercial, and institutional developments; NWP 40, addressing agricultural activities; NWP 42, addressing recreational activities; and NWP 44, addressing mining activities allow the discharge of fill affecting up to only 0.2 ha (0.5 ac) of non-tidal wetlands. For NWPs 14, 39, 40, and 42 the permittee must notify the Corps prior to discharge if the discharge causes the loss of greater than 0.04-ha (0.10-ac) of non-tidal wetland and must generally provide a compensatory mitigation proposal to offset the permanent loss of wetlands. Under NWP 44, the permittee must avoid and minimize discharges into wetlands to the maximum extent practicable, and the Corps must be notified in a written statement detailing compliance with this provision.
The Clean Water Act does not regulate drainage of wetlands unless that action results in the discharge of dredged or fill material into a wetland. In addition, normal farming, silviculture, and ranching activities do not require permits for discharge or fill activities (
Most
State of Oregon wetland laws do not protect many
With the listing of
E.
Invasion of non-native annual plants in the Agate Desert has altered native perennial plant communities (Brock 1987) where
Mowing, burning, light grazing, or even raking of vernal pool habitat after
Catastrophic events, such as severe fire, could eliminate the large areas of
We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats faced by
Critical habitat is defined in section 3(5)(A) of the Act as—(i) the specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features (I) essential to the conservation of the species and (II) which may require special management considerations or protection; and (ii) specific areas outside the geographical area occupied by the species at the time it is listed in accordance with the provisions of section 4 of the Act, upon a determination by the Secretary that such areas are essential for the conservation of the species. “Conservation” means the use of all methods and procedures needed to bring the species to the point at which listing under the Act is no longer necessary.
Critical habitat designation, by definition, affects Federal agency actions including actions involving private lands, through consultation under section 7(a)(2) of the Act. Section 7(a)(2) requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of a listed species or destroy or adversely modify its critical habitat.
Section 4(a)(3) of the Act, as amended, and implementing regulations (50 CFR 424.12) require that, to the maximum extent prudent and determinable, we designate critical habitat at the time the species is determined to be endangered or threatened. Our regulations (50 CFR 424.12(a)) further state that the designation of critical habitat is not prudent when one or both of the following situations exist—(1) the species is threatened by taking or other human activity, and identification of critical habitat can be expected to increase the degree of threat to the species, or (2) such designation of critical habitat would not be beneficial to the species.
The Final Listing Priority Guidance for FY 1999/2000 (64 FR 57114) states that the processing of critical habitat determinations (prudency and determinability decisions) and proposed or final designations of critical habitat will be funded separately from other section 4 listing actions and will no longer be subject to prioritization under the Listing Priority Guidance. Critical habitat determinations, which were previously included in final listing rules published in the
The deferral of the critical habitat designation for these species will allow us to concentrate our limited resources on higher priority listing actions, while allowing us to put in place protections needed for the conservation of
We plan to employ a priority system for deciding which outstanding critical habitat designations should be addressed first. We will focus our efforts on those designations that will provide the most conservation benefit, taking into consideration the efficacy of critical habitat designation in addressing the threats to the species and the magnitude and immediacy of those threats. Currently, and for the immediate future, most of the Service's listing budget must be directed to complying with numerous court orders and settlement agreements, as well as due and overdue final listing determinations.
Conservation measures provided to species listed as endangered or threatened under the Endangered Species Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain activities. Recognition through listing results in public awareness and conservation actions by Federal, State, and local agencies, private organizations, and individuals. The Act provides for possible land acquisition and cooperation with the States and requires that recovery plans be developed for all listed species. The protection required of Federal agencies and the prohibitions against certain activities involving listed plants are discussed below.
Section 7(a) of the Act, as amended, requires Federal agencies to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened, and with respect to its critical habitat if any is being designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(2) of the Act requires Federal agencies to confer with us on any action that is likely to jeopardize the continued existence of a species proposed for listing, or result in destruction or adverse modification of proposed critical habitat. If a species is listed subsequently, section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of the species or destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into consultation with us.
Several Federal agencies are expected to have involvement under section 7 of the Act regarding these species. BLM currently has about 15 sites containing
Listing
The Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to all endangered plants. All prohibitions of section 9(a)(2) of the Act, implemented by 50 CFR 17.61, apply. These prohibitions, in part, make it illegal for any person subject to the jurisdiction of the United States to import or export, transport in interstate or foreign commerce in the course of a commercial activity, sell or offer for sale in interstate or foreign commerce, or remove and reduce the species to possession from areas under Federal jurisdiction. In addition, for plants listed as endangered, the Act prohibits malicious damage or destruction on areas under Federal jurisdiction and the removal, cutting, digging up, or damaging or destroying of such plants in knowing violation of any State law or regulation, including State criminal trespass law. Certain exceptions to the prohibitions apply to our agents and State conservation agencies.
The Act and 50 CFR 17.62 and 17.63 also provide for the issuance of permits to carry out otherwise prohibited activities involving endangered plants under certain circumstances. Such permits are available for scientific purposes and to enhance the propagation or survival of the species. We anticipate that few trade permits would ever be sought or issued for
It is our policy, published in the
Questions regarding whether specific activities will constitute a violation of section 9 should be directed to the State Supervisor of our Oregon Fish and Wildlife Office (see
We have determined that Environmental Assessments and Environmental Impact Statements, as defined under the authority of the National Environmental Policy Act of 1969, need not be prepared in connection with regulations adopted pursuant to section 4(a) of the Endangered Species Act of 1973, as amended. We published a notice outlining our reasons for this determination in the
This rule does not contain any new collections of information that require approval by Office of Management and Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. 3501
On May 18, 2001, the President issued an Executive Order on regulations that significantly affect energy supply, distribution, and use. Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This rule is not expected to significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required.
A complete list of all references cited herein is available upon request from the State Supervisor, Oregon Fish and Wildlife Office (see
The authors of this final rule are Richard Szlemp, Anne Walker, and Judy Jacobs, U.S. Fish and Wildlife Service, Oregon Fish and Wildlife Office (see
Endangered and threatened species, Exports, Imports, Reporting and record keeping requirements, and Transportation.
Accordingly, we hereby amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 16 U.S.C. 1531-1544; 16 U.S.C. 4201-4245; Pub. L. 99-625, 100 Stat. 3500, unless otherwise noted.
(h) * * *