This rule has been determined to be significant, and was reviewed by the Office of Management and Budget (OMB) under Executive Order 12866. Pursuant to Sec. 6(a)(3) of Executive Order 12866, the Natural Resources Conservation Service (NRCS) conducted an economic analysis of the potential impacts associated with this final rule. Copies of this economic analysis may be obtained from Mitch Flanagan, Conservation Operations Division, NRCS; telephone: (202) 690-5988; fax: (202) 720-4265; e-mail: mitch.flanagan@usda.gov, Attention: Conservation of Private Grazing Land.

The Regulatory Flexibility Act is not applicable to this final rule. The Department of Agriculture (USDA) is not required by 5 U.S.C. 553, or any other provisions of law, to publish a notice of proposed rulemaking with respect to the subject matter of this rule.

The Conservation of Private Grazing Land (CPGL) Program does not consist of financial assistance, nor does it provide NRCS with the authority or opportunity to control the actions of private landowners and managers. The CPGL Program provides NRCS with the authority to provide management alternatives to landowners and managers about techniques to improve the quality of their grazing lands. The landowners and managers are responsible for determining which actions to take in which there would be positive environmental effects. There is no specific Federal action that would affect the human environment; therefore, there is no basis on which to conduct a meaningful analysis of environmental effects. In addition, the CPGL Program, and this regulation do not result in any irretrievable commitment of resources.

No substantive changes have been made to this rule that would affect the record-keeping requirements and estimated burdens previously reviewed and approved under OMB control number 0578-0013. Requesting technical assistance through the CPGL program may result in applying and receiving financial assistance through existing long-term contracting conservation programs. (0578-0013 Long-Term Contracting Paperwork Package). CPGL is not a financial assistance program.

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, Public Law 104-4, NRCS assessed the effects of this rulemaking action on State, local, tribal governments, and the public. The action does not comply with the expenditure of $100 million, or more, by any State, local, or tribal governments, or anyone in the private sector, and therefore, a statement under section 202 of the Unfunded Mandates Reform Act of 1995 is not required.

USDA classified this final rule as “not major” under Section 304 of the Department of Agriculture Reorganization Act of 1994, Public Law 103-354, therefore, a risk assessment is not required.

Section 386 of the FAIRA of 1996, 16 U.S.C. 2005b, sets forth policy and authority for the conservation of private grazing land program. This rule sets forth policy for NRCS to implement the new authority when funded, as authorized by FAIRA.

NRCS' CPGL Program will expand the agency's capability to provide technical assistance. It is stated in 7 CFR Part 610 that the NRCS mission promotes the quality of all agricultural lands, including cropland, forestland, and grazing land. This also includes pastureland, rangeland, and grazed forestland so that the long-term sustainability of the resource base is achieved.

Private grazing land constitutes nearly one-half of the non-Federal land of the United States. This land is basic to the environmental, social, and economic stability of rural areas. Private grazing land includes private, State-owned, tribally owned, and any other non-Federally owned land managed to produce forage or browse. Grazing land is found in every State, and constitutes the single largest watershed cover type in the United States. Healthy grazing land is the foundation for economic sustainability of many communities, and is the cornerstone of a healthy environment.

Grazing land is the single largest private land use in the Nation. This land is voluntarily managed by over 1.2 million individuals. Less than 4 percent currently receive voluntary technical assistance through NRCS for the management of these natural resources.

The use of technical assistance is voluntary. The assistance will allow grazing land owners and managers to implement their conservation planning decisions on private grazing land in order to maintain and improve grazing land resources.

NRCS' technical assistance program provides assistance to private grazing land owners and managers to address soil and water conservation issues. However, the conservation agenda continues to expand as a result of greater scientific understanding of ecosystems. This agenda increases the number of policy actions, as well as Federal, State, and local laws on environmental quality. These policy actions place new requirements on landowners and land users, thus increasing the need for voluntary conservation technical assistance to address emerging resource issues and regulations. Many of today's owners of grazing land have difficulty staying abreast of environmental regulations. Every landowner or manager's actions are important because they have a significant impact on a particular piece of land. These decisions affect neighboring lands, as well as the larger ecosystem and watershed in which they occur.

Since 1935, NRCS has provided technical assistance to landowners and managers to address soil erosion and water quality problems. Section 386 of FAIRA expands current technical assistance authorities to include:

• Using and improving energy-efficient ways to produce food and fiber;

• Improving the dependability and consistency in water supplies;

• Improving and conserving fish habitat and aquatic systems;

• Protecting and improving water quality;

• Conserving and improving habitat for wildlife;

• Sustaining forage and grazing plants;

• Using plants to sequester greenhouse gases;

• Enhancing recreational activities;

• Maintaining or reducing weed, noxious weed, and brush encroachment;

• Enhancing long-term economic opportunities;

• Providing opportunities for improved nutrient management from the land application of animal manure and other by-product nutrient sources;

• Improving the quality of animals produced on these lands; and

• Producing food and fiber from lands that will not support cultivated crop production.

Technical assistance in the past has provided assistance for these authorities when the primary purpose was addressing soil and water conservation issues. With this rule, technical assistance will be provided to individuals when soil and water conservation issues may not be the primary resource concern, but are of secondary importance. However, in applying this authority, conservation technical assistance is available for wildlife habitat improvement, animal health improvement, forage quality improvement, air quality improvement, and addressing other natural resource issues beyond soil and water conservation. Congress authorized assistance for these additional purposes, realizing there are competing demands on private land grazing resources. These lands can be enhanced by offering technical assistance to individuals, which will provide benefits to all citizens of the United States.

There are approximately 280 million acres of rangeland and 75 million acres of pastureland in need of conservation treatment. An estimated 17 percent of all of these acres have soil-related and water-related resource concerns that could be addressed by NRCS' existing technical assistance program. This leaves 83 percent or 295 million acres in need of conservation treatment not directly related to soil and water conservation.

What happens on the land remains critical to the U.S. economic and environmental well-being, even for those who never set foot on grazing land. Grazing land produces much of our food and water supplies, and provides wildlife habitat that allows many recreational opportunities. There are many types of products derived from animals that are raised on grazing lands: Household products including furniture, clothes, soap, insulation, deodorants, and paints; pharmaceutical products including blood plasma and medical sutures; and manufacturing products including hydraulic fluid, airplane lubricants, machine oils, car polish, and textiles.

NRCS provides technical assistance to land users and others who are responsible for making decisions related to land use, conservation treatment, and resource management. Technical assistance, furnished by NRCS, consists of conservation program delivery through resource planning, and the evaluation and application of conservation practices, including assistance in the technical phases of administering USDA cost-share programs.

NRCS works with the local conservation district to prioritize a request to ensure that technical assistance is provided in a fair and equitable manner.

Planning assistance includes the evaluation and inventory of soil, water, animal, plant, air, and other resource information needed to make land use, environmental, and conservation treatment decisions. NRCS assists land users in developing conservation plans for farms, ranches, and other land units. The land user's decisions are recorded in the plan, and based on their conservation objectives. These plans document an orderly installation of conservation practices that ultimately make up a conservation system.

Application assistance is provided to help land users apply and maintain planned conservation practices. NRCS assistance for applying the conservation practices and systems may include:

• Design, layout, and evaluation of conservation practices;

• Development of management alternatives and cultural practices needed to establish and maintain vegetation; and

• Planning, construction, and maintenance of other conservation practices needed to protect and enhance natural resources.

• Maintain and improve private grazing land resources that provide multiple benefits. For example, a grazing management plan not only benefits domestic livestock, but it may also benefit wildlife. A grazing management plan prevents overgrazing, maintains the vigor and diversity of the plant community, discourages invasion of weeds, prevents erosion, and protects streambanks and water quality;

• Ensure the long-term sustainability of private grazing land resources. The cyclical economic patterns in the grazing industry affect how intensively grazing land resources are used. The Nutrition Balance Analyzer is a model used to help managers make effective decisions about nutrition management of their livestock. A manager saves an estimated $10-$32 per animal per year by improving the production efficiency from use of this technology;

• Implement new grazing land management technologies. Technologies impacting grazing land, as in other industries, are always changing. Technical assistance provided to an individual helps with identifying and implementing new technologies to improve the environmental, economic, and/or social challenges of the private landowners or managers. These new and improved technologies may include new fencing materials, livestock watering facilities, chemicals to control invasive weeds, livestock health products, grazing management practices, fertilizer technologies, geographic information systems, and other computerized decision support systems;

• Manage resources on private grazing land through conservation planning, including, but not limited to; grazing management, nutrient management, soil quality, and weed and invasive species control. Technical assistance helps the producer adjust management decisions, as new information becomes available;

• Maintain and improve water quality and quantity, aquatic and wildlife habitat, recreational opportunities, and aesthetics on private grazing land;

• Harvest, process, and market private grazing land resources. Technical assistance may be provided to help an individual identify opportunities to develop specialty meats, leather, feathers, wool, and mohair products, or other products that are nontraditional; and

• Identify opportunities to diversify private grazing land enterprises. Many operations have an opportunity to diversify their operation with technical assistance by establishing recreational opportunities that include hunting, fishing, kayaking, canoeing, hiking, biking, picnicking, camping, bird watching, nature photography, or farm and ranch vacations as additional enterprises.

The resources, goals, and objectives vary with each individual. Technical assistance helps landowners understand the land and the tools available to manage their land. Conservation solutions that are developed and implemented are based upon the specific resources and needs of an individual as a result of technical assistance.

Private grazing land owners and managers use technical assistance for planning and implementing resource conservation plans on grazing land. The objectives of planning grazing lands are to assist landowners and managers to understand the basic ecological principles of plant/herbivore interaction, management implications to their land (soil, water, air, plants, and animals) and develop a plan that meets the needs of the resources and owners/managers management objectives.

Conservation plans for grazing land include decisions for managing the plant community to conserve or enhance the soil, water, air, plant, and animal resources. The major objective for grazing land is to design and establish a grazing management plan. When combining the appropriate conservation practices, the plan sustains the resources to meet landowners' or managers' objectives. Landowners and managers make decisions to implement the necessary conservation practices.

The economic benefits vary between every individual operation. The net financial benefits of increased forage production will vary among producers, depending upon the cost and benefits of implementing grazing land practices. Costs vary from a few dollars to several hundred dollars per acre, depending on the individual situation. If minor adjustments are needed, the cost for the adjustments may be inexpensive. However, if major changes are needed (such as brush control, fence installation, fertilizer, and watering facilities), the costs may be significantly higher. Furthermore, the results will vary due to the climatic differences and other resource differences between grazing land operations. Gaining benefits from proper management may take a few months to several years.

The agency believes that providing voluntary technical assistance to private grazing landowners and operators will also result in public benefits. These benefits include an overall improved quality of life from reduced soil erosion and sedimentation, improved water quality, increased wildlife habitat, and other resource improvements. The benefits provide economic stability to many communities, and keep the Nation's grazing land productive.

In general, many of the respondents expressed appreciation for the opportunity to comment on the proposed rule. There were a total of 10 respondents to the proposed rule (individuals from Federal agencies, universities, and other organizations). The comments centered on four issues: (1) Educational role of NRCS; (2) partnership between NRCS, Cooperative State Research, Education, and Extension Service (CSREES), and others; (3) funding; and (4) other agency programs and activities.

Comment: Five comments expressed concern that NRCS is duplicating the educational activities provided by CSREES.

Response: NRCS provides technical assistance on a one-on-one basis to landowners and managers to address natural resource issues. It is this process of transferring technology to the producer that we provide assistance, and is not the same type of “education” provided by the Cooperative Extension System.

Comment: Eight comments suggested that a partnership between NRCS, CSREES, and others needs to be initiated or improved to meet the training and educational requirements necessary to address many of the natural resource issues facing grazing land.

Response: NRCS values relationships with other Federal, State, local resource agencies, and others with which common objectives are shared, although their missions may differ. NRCS partners with many agencies and organizations to enhance and strengthen conservation efforts throughout the country.

There were a few comments received regarding program funding and other agency programs and activities. Although these comments were reviewed and considered, they were not germane to this rule.

Some minor editorial and other changes in the text were suggested; these comments are not included in an analysis, but most were considered.

The New Markets Venture Capital Program Act of 2000 (“the Act”) was created by the Consolidated Appropriations Act of 2001, Public Law 106-554, enacted December 21, 2000. SBA published in the Federal Register a final rule implementing the Act on May 23, 2001 (66 FR 28602) and a technical correction on June 19, 2001 (66 FR 32894).

On May 20, 2002, SBA published in the Federal Register a proposed rule making amendments to the regulations implementing the Act (67 FR 35449). SBA received one comment on the proposed rule, which SBA discusses in the following section-by-section analysis. With the exception of a minor clarifying change to the lead-in phrase in section 108.2005(d), SBA has made no changes to the text of the amendments to the regulations as published in the proposed rule.

SBA has conducted a first application round for the NMVC program, and has selected seven companies as conditionally approved NMVC companies. The amendments in this rule would apply to those seven companies as well as to applicants for the NMVC program in future application round(s) and to entities SBA selects for participation in the NMVC program as a result of any future application round(s).

SBA amends three of the definitions in § 108.50. The definitions of “New Markets Venture Capital Company” and “Participation Agreement” are amended to correct typographical errors.

The definition of “Regulatory Capital” is amended to simplify it by consolidating into § 108.230, which addresses private capital, all the current restrictions on what may be included in regulatory capital. The definition states that regulatory capital is private capital, excluding any portion of private capital that the NMVC company designates as grant matching resources.

SBA amends paragraphs (b), (c), and (d) of § 108.230. In paragraph (b), SBA makes a technical change. The word “contributed” is changed to read “paid-in,” to indicate more clearly that only capital contributions actually made are considered “contributed capital” for purposes of § 108.230.

SBA amends paragraph (c) by adding a new subparagraph (5) to move to this section language concerning questionable commitments that currently is in the definition of regulatory capital in § 108.50. This is a non-substantive change.

SBA revises paragraph (d) to allow NMVC companies to include in private capital SBA-approved organizational and management expenses paid on behalf of an NMVC company prior to SBA's final approval of the NMVC company. SBA intends to provide guidance on the limitations by percentage and/or dollar amounts on such expenses that SBA will approve for inclusion in private capital. Other non-cash assets, such as “pre-licensing investments,” would continue to not be allowed for inclusion in private capital. SBA previously determined that such other non-cash assets would not be acceptable for inclusion in regulatory capital. (See discussion on this subject in the preamble to the proposed rule implementing the Act, 66 FR 20536, April 23, 2001, and the preamble to the final rule implementing the Act, 66 FR 28603, May 23, 2001.)

SBA makes technical changes to § 108.310 to more clearly articulate what an NMVC company applicant must state in its application regarding the amounts of regulatory capital and grant matching resources it proposes to raise. The amendment requires an applicant to state specific amounts of regulatory capital and grant matching resources, both of which must comply with the statutory minimums established by the Act. SBA also makes a minor technical change to § 108.320.

SBA amends § 108.360(k) to allow SBA, when making selections as to which applicants will receive conditional approval, to compare the applications submitted by NMVC company applicants to the applications submitted by SSBICs that intend to invest in the same or proximate LI areas. This change will allow SBA to more effectively utilize limited NMVC program appropriations. This change also will increase the potential for achieving the nationwide distribution of the NMVC program's benefits that the Act directs.

SBA makes three technical changes to § 108.380. As amended, subsections (a)(1)(i)(A) and (a)(1)(i)(B) more clearly state that the amounts of regulatory capital and grant match that applicants must raise before they can be finally approved are the exact same amounts that they said they would raise in their applications. SBA amends subsection (b)(3) to correct a typographical error.

SBA adds new § 108.900, based in part on § 107.900 for the small business investment company (SBIC) program, governing fees for management services and similar services (for example, negotiating bank debt, sale of the company, or a lease, or structuring an employee stock ownership plan) charged by an NMVC company or its associates to small businesses that the NMVC company finances. The regulation requires SBA's prior written approval of all such fees charged. The regulation states that it does not apply to operational assistance that an NMVC company or its associate provides to a business that the NMVC company has financed or in which it expects to make a financing, and that the NMVC company may not charge the business a fee for such operational assistance. SBA expects an NMVC company to use its grant funds (both SBA funds and grant matching resources) to cover the costs of providing such operational assistance.

This regulation also requires that at least 50 percent of all such fees paid to an associate (as defined in 13 CFR 108.50) of an NMVC company by a small business must be allocated back to the NMVC company for its benefit. SBA understands that an NMVC company or its associate (for example, its management company) may want to provide management and other services to the NMVC company's portfolio companies and charge a fee for such services. It may be in the best interests of the small business that the NMVC company or its associate provide such services rather than an outside third party. However, SBA believes that the NMVC company's manager should share equally with the NMVC company the financial benefit ( i.e. , fees) of providing those services, since that relationship (of the manager to the NMVC company) is what brought about the opportunity for the manager to obtain that financial benefit. In addition, SBA believes that neither the NMVC company itself nor the NMVC program in general is well served if the focus of the NMVC company's manager is on fee generation rather than managing the NMVC company. SBA believes that a 50-50 allocation of such fees between the NMVC company manager and the NMVC company itself strikes an appropriate balance between these objectives and reflects what knowledgeable private investors often require in commercial equity venture capital funds.

The commenter disagreed with the approach SBA takes in this section 108.900. The commenter stated that a prior approval requirement would place an excessive burden on the NMVC company's management of small businesses in which it invests and that the 50-50 allocation of the fees would not appreciably change the economics or incentives of the NMVC program. The commenter suggests that NMVC companies are likely to want to charge their portfolio companies two types of management services fees, (1) regular fees of up to $2,000 per quarter per portfolio company, to be paid to the managers of the NMVC company for managing the portfolio company, and (2) more substantial fees that will arise “in the ordinary course of business.” SBA notes that while the commenter characterizes the amount of the first type of fee as “modest,” an NMVC company could earn up to $80,000 per year from such fees, if one assumes the company has 10 portfolio companies paying $2,000 per quarter. This would allow the NMVC company to receive more than a third again as much as the typical annual management fee earned by an NMVC company (assuming it is a $5 million regulatory capital fund).

The first type of fee presumes that the manager of an NMVC company also will be managing the day-to-day operations of the companies in which an NMVC company invests. SBA does not believe that this would be an appropriate role for an NMVC company's managers to play in most cases. First of all, the fact that such managers have the expertise to manage a venture capital fund does not mean that such managers have the necessary skills and ability to manage an operating business concern. In any event, the appropriate role of an NMVC company's managers is to actively oversee the affairs of the portfolio concerns, which implies a degree of counseling and advising as a board member or otherwise, usually delivered in the form of a close, informal working relationship. Those activities usually are compensated by an NMVC company's annual management fee and any profit participation received from its investment in the business. In addition, an NMVC company has the opportunity to provide management expertise, at no cost to the business or to the NMVC company's investors, through the expenditure of operational assistance grant resources. For these reasons, SBA believes that the first type of fees will require scrutiny and, therefore, it is critical that SBA have the opportunity to review in advance any such fees that an NMVC company proposes to charge.

The commenter characterizes the second type of fee as for management services that are occasional and opportunistic, and states that requiring SBA's advance approval might result in an NMVC company losing significant opportunities to provide such services and earn such fees. SBA intends to require NMVC companies to complete one form (SBA Form 2217) requesting prior approval of such fees, which SBA does not believe constitutes “extensive reporting.” SBA believes that it will be sensitive to any time constraints on a potential deal or on an NMVC company, and be able to provide a timely response to such requests.

SBA removes § 108.2000 and replaces it with several smaller, more easily readable sections, §§ 108.2000-108.2007. Section 108.2000 (currently § 108.2000(a)) provides a more comprehensive list of the regulations applicable to operational assistance grants to NMVC companies and to SSBICs. Section 108.2001 (currently § 108.2000(b)(1) and (b)(3)(i)) is unchanged in content.

Section 108.2002 (currently § 108.2000(b)(2)) includes several technical corrections. First, the term “Developmental Venture Capital Investments” is replaced with “Low-Income Investments” in new subsections (a) and (c). The term “Low-Income Investments” already is defined in § 108.50, and more accurately reflects the statutory requirement that an SSBIC must use all of its new capital raised for the NMVC program, to make equity capital investments in smaller enterprises located in LI areas. Second, the phrase “after December 21, 2000” is added to the end of new subsection (c), to incorporate the NMVC program statutory effective date and make more clear that an SSBIC may use operational assistance grant funds only in connection with investments it makes after such date.

Section 108.2003 (currently § 108.2000(b)(3)(ii)) is unchanged in content. Section 108.2004 (currently § 108.2000(b)(4)(i) and (ii)) makes technical changes to more clearly articulate what an SSBIC must state in its application regarding the amounts of regulatory capital and grant matching resources it proposes to raise. The regulation requires that an SSBIC state specific amounts of regulatory capital and grant matching resources, and that the amount of grant matching resources comply with the statutory minimum established by the Act.

Section 108.2005 (currently § 108.2000(b)(4)(ii)(A) through (G)) replaces the term “Developmental Venture Capital Investments” with “Low-Income Investments” in new subsections (a), (c), (d) and (f), for the reasons described above. Subsections (a) and (d) adds new requirements that an SSBIC identify specific LI areas in which it intends to make investments and provide operational assistance, and specify how much of its investments it will make in each of the specified LI areas. These requirements parallel the information required from NMVC company applicants, and will allow SBA to better determine the potential impact on specific LI areas, when making selections as to recipients of NMVC program benefits.

Section 108.2006 (currently § 108.2000(b)(5)) would replace the term “Developmental Venture Capital Investments” with “Low-Income Investments” in new subsection (d), for the reasons described above. The regulation also allows SBA to add an interview component to its selection process, paralleling SBA's current authority to require an interview with NMVC company applicants (see 13 CFR 108.340). SBA is considering interviewing applicants in future application rounds. New subsection (h), as amended, allows SBA, when making selections as to which SSBICs conditionally will receive an operational assistance grant, to compare the applications submitted by SSBICs to the applications submitted by NMVC company applicants that intend to invest in the same or proximate LI areas. This change allows SBA to more effectively utilize limited NMVC program appropriations. This change also increases the potential for achieving the nationwide distribution of the NMVC program's benefits contemplated by the Act.

Section 108.2007 (currently § 108.2000(b)(6)) is unchanged in content.

Section 108.2010 adds a new paragraph (b) (and redesignates paragraph (b) as paragraph (c)) requiring that an NMVC company must use at least 80 percent of its grant funds (both funds from SBA and grant matching resources) to provide operational assistance to smaller enterprises whose principal office is located in an LI area at the time the operational assistance commences.

The Act explicitly requires that all operational assistance funded by the NMVC program go only to smaller enterprises. The regulation imposes an additional requirement that a specific percentage, 80 percent, of such operational assistance provided by NMVC companies go to businesses located in LI areas. This requirement serves to maximize the impact of the operational assistance funded by SBA on the LI areas targeted for assistance through the NMVC program. This 80 percent requirement also parallels the existing regulatory requirement (see 13 CFR 108.710(a)) that NMVC companies must use at least 80 percent of its capital (both funds from SBA and private capital) to make equity capital investments in smaller enterprises located in an LI area at the time the investment is made.

The commenter recommended that SBA determine whether the operational assistance provided by an NMVC company falls within the 80 percent basket of assistance to smaller enterprises located in LI areas or the 20 percent basket of assistance to businesses outside those areas, based on the ultimate location of the business, not its location when the assistance commenced. In other words, consider OA provided by a NMVC company to a business not located in an LI area to fall within the 80 percent basket as long as the business moved into the LI area “within a reasonable period of time” after the start of the assistance.

SBA declines to implement this suggestion. As in the context of 13 CFR 108.710(a) concerning the required percentage of capital that must be invested in businesses located in LI areas, SBA intends that NMVC companies will determine the status of the business's location at the time the operational assistance commences, not at some later date. SBA intends that NMVC companies make an assessment of the business at the time operational assistance commences (or at the time of its initial financing to the business, in the case of financial assistance) and determine whether its principal office is located in an LI area at that moment in time. The assessment of the business is set at that point in time, and becomes the basis to determine whether the NMVC company may count the assistance given to that business toward the 80 percent requirement. SBA considered and rejected alternative approaches when it developed the requirements in 13 CFR 108.710. SBA believes that this “snapshot” approach is the most efficient and workable means of tracking both investments and operational assistance, as well as achieving the statutory mission of directing the majority of the program's resources to smaller enterprises located in LI areas. SBA believes that an NMVC company will have some flexibility in the way it structures its financial and operational assistance. For example, an NMVC company might provide a small amount of operational assistance to a business located outside an LI area (which would fall within the 20 percent basket of assistance) and advise the business that more assistance will be forthcoming once the business relocates into an LI area.

SBA revises redesignated paragraph (c) to correct the title of the part of the Federal Acquisition Regulations containing the definition of G&A expense.

Technical amendments are made to §§ 108.2020(b), 108.2030(c)(2)(iii), 108.2030(c)(2)(iv), 108.2030(d)(2), and 108.2040(a) to correct cross-references to other sections in this part and to clarify requirements. The changes to § 108.2030(c) allow grant matching resources to be payable over a multiyear period not to exceed the term of the grant from SBA, and in no event more than 10 years. This change provides support for SBA to allow an applicant to request a specific grant term within a range acceptable to SBA and as long as it did not exceed the 10 year limit set forth in the Act, rather than having SBA establish one allowable grant term for all applicants. This gives each NMVC company and selected SSBIC greater flexibility to determine how best to use operational assistance funds from SBA to accomplish its mission. This change is made possible by a change in the law governing SBA's appropriation for the NMVC program. On July 24, 2001, Congress passed a supplemental appropriations bill (Pub. L. 107-20) that extended the availability of the funds appropriated to SBA for the NMVC program.

The Office of Management and Budget (OMB) has determined that this rule is a “significant regulatory action” under Executive Order 12866. A regulatory assessment of the potential costs and benefits of the regulatory action follows. Because this is a new program and only one NMVC Company is operational as yet, SBA does not have relevant data to estimate actual dollar values for these amendments.

The NMVC program is an equity venture capital program designed to promote the economic development of, and address the unmet equity capital needs of smaller enterprises located in, LI areas. The program has a one-time no-year appropriation of $52 million to fund newly formed NMVC companies. To date, SBA has selected seven applicants as conditionally approved NMVC companies, and has finally approved one of those conditionally approved NMVC companies as an NMVC company. SBA anticipates a second application round, and the amendments concerning the application process will affect applicants in the second round. The amendments that concern participation in the program apply to all NMVC companies selected through both application rounds and SSBICs applying under the second application round.

This rule makes several amendments to the existing regulations implementing the program. Most of the amendments are technical changes that have no impact on the costs associated with the program to the Government or to the program beneficiaries. After SBA's first year of experience in creating and administering this new program, SBA also makes a few substantive changes which SBA believes will result in more efficient and effective delivery of NMVC program benefits to the targeted LI areas and businesses. SBA believes that these changes will result in reduced operational costs for the program to both the government, the NMVC companies, and to the beneficiary small businesses financed by the NMVC companies with SBA leverage.

The most significant change SBA makes is to add a requirement that NMVC companies must use at least 80 percent of the SBA grant funds (and the required match funding from non-SBA sources) to assist smaller enterprises whose principal office is in an LI area. This is consistent with the existing requirement on the use of an NMVC company's capital. This change ensures that the primary impact of the grant will be on the LI areas targeted by the NMVC program. It also will have the effect of enabling smaller enterprises in LI areas to qualify for equity investment, or otherwise assisting such enterprises to grow at no cost to such businesses.

SBA's experience over the past year indicates that some NMVC companies may charge management services fees to smaller enterprises in connection with investments made by the NMVC company, but SBA's existing regulations are silent in this area. SBA believes that adding a regulation governing such fees will give SBA the necessary tools to ensure that smaller enterprises are not being charged too much for such services and that an NMVC company's management is not motivated solely by fee generation. SBA adds section 108.900 which places limits on such fees, requires SBA's advance approval, and requires that at least 50 percent of any fees charged by the fund manager be for the benefit of the NMVC company.

SBA also makes several changes to clarify the application requirements for SSBICs to participate in the NMVC program and to do so on a parallel basis as NMVC companies. For example, one change requires SSBICs to identify specific LI areas they intend to target, thereby allowing comparison with any NMVC applicant for the same LI area and avoiding duplicative coverage of a LI area. The overall results of these changes are to ensure even-handed treatment of SSBICs and NMVC companies, maximize the nationwide impact of the NMVC program, and achieve greater administrative efficiency in program administration.

SBA also clarifies that SBA will permit SBA-approved organizational and management expenses incurred prior to SBA's final approval of the NMVC company to be credited in whole or part against the regulatory capital the NMVC company is required to raise. This credit is in lieu of an NMVC company being required to pay out cash at its outset for the same pre-approved costs. This change will improve the efficiency of an NMVC company's operations and prevent unnecessary paperwork on the part of the NMVC company, which will streamline the program. This change also will bring the NMVC program in line with the SBIC program and with best practices of the private venture fund industry in this area.

In sum, the changes will result in more NMVC program funds going to smaller enterprises in LI areas, in line with the legislative intent, and greater cost-effectiveness and efficiency in SBA's administration of the NMVC program to execute the congressional mandate.

For purposes of Executive Order 12988, SBA has determined that this rule is drafted, to the extent practicable, in accordance with the standards set forth in section 3 of that order.

For purposes of Executive Order 13132, SBA has determined that this rule has no federalism implications because the legislation authorizing it addresses private, for-profit concerns (NMVC companies) working directly with entrepreneurs. The regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, under Executive Order 13132, SBA determines that this rule does not have sufficient federalism implications warranting the preparation of a Federalism Assessment.

SBA has determined that this rule imposes new information collection requirements that require approval by OMB under the Paperwork Reduction Act, 44 U.S.C. 3501-3520. The rule includes two new collections of information: (1) A request for prior SBA approval of management services fees and other fees and (2) concerning the application process for SSBICs, an additional component to the plan for use of the operational assistance grant, and an interview component. These information collections were described in more detail in the preamble to the proposed rule SBA published in the Federal Register on May 20, 2002 (67 FR 35449).

SBA already has provided the public with a 60-day comment period on this collection (67 FR 35449). SBA received no comments on the collection. On July 29, 2002, OMB approved, without change, the collection under OMB number 3245-0338.

You may request a copy of the collections by calling Louis Cupp at (202) 619-0511 or writing to him at Office of New Markets Venture Capital, Investment Division, U.S. Small Business Administration, 409 Third Street, SW., 6th Floor, Washington, DC 20416.

Under the Regulatory Flexibility Act (RFA), SBA has determined that this rule does not have a significant economic impact on a substantial number of small entities, within the meaning of the RFA, for the following reasons.

The NMVC program is expected to result in the creation of fewer than 20 NMVC companies. The program's impact will be felt to a greater extent on the small businesses that the NMVC companies invest in and assist through this program. The Act authorizes $150 million to guarantee debentures to NMVC companies, which will result in a discounted amount of approximately $100 million with which NMVC companies can make investments, and $30 million for operational assistance grants to NMVC companies and SSBICs. In addition, NMVC companies must raise capital totaling $100 million, and NMVC companies and SSBICs must raise grant matching resources totaling $30 million. Thus, the total net funding for the NMVC program, including matching funds raised by NMVC companies and SSBICs, is $260 million. Based upon industry practices, it is likely that the funds will be disbursed over a five to seven year period. A NMVC company's minimum life is 10 years and NMVC companies' investments are typically made during their first five to seven years of existence. Generally, a NMVC company will fund three or at most four businesses in one year out of the 20 to 30 businesses it will fund over its life. Therefore, NMVC program funds will flow out to businesses at a rate of approximately $50 million per year.

The average size of an investment by a community development company is approximately $300,000. Based upon total funding of $260 million and an average investment in a small business of $300,000, approximately 867 small businesses will be affected by this program during the lives of the NMVC companies authorized by the Act. SBA estimates that there are approximately 22.4 million small businesses in the United States and 867 constitutes less than 1/10 percent of those businesses.

Further, NMVC companies must invest in “smaller enterprises” which are defined as businesses with a net worth not greater than $6 million and average net income of not greater than $2 million. Based upon an average investment of $300,000, an investment in a business with a net worth of $6 million would equate to 5 percent of the business's net worth. Additionally, industry practices indicate that while the average investment in a particular business is $300,000, this amount may not be disbursed all at once. The average investment per round in the industry is approximately $185,000, which is only 3 percent of the business's net worth.

A proposal to amend 14 CFR part 39 to include an AD for ECF Model EC 155B helicopters was published in the Federal Register on August 14, 2002 (67 FR 52898). That action proposed to require inspecting and adjusting, if necessary, the position of the locking pins on each pilot, co-pilot, and passenger-hinged and sliding door (door) initially and each time a door is replaced.

The Direction Generale De L'Aviation Civile (DGAC), the airworthiness authority for France, notified the FAA that an unsafe condition may exist on ECF Model EC 155B helicopters. The DGAC advises of two reports of the passenger-hinged doors opening in flight. The investigation revealed noncompliant installation and adjustment of the door-locking mechanism, which can result in the door unlocking and a risk of losing the door in flight.

ECF has issued Alert Telex 52-A008, dated March 11, 2002, which specifies checking and adjusting the position of each door's locking pins to prevent the door opening in flight. The DGAC classified this service bulletin as mandatory and issued AD No. 2002-186-005(A), dated April 3, 2002, to ensure the continued airworthiness of these helicopters in France.

This helicopter model is manufactured in France and is type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral agreement. Pursuant to the applicable bilateral agreement, the DGAC has kept the FAA informed of the situation described above. The FAA has examined the findings of the DGAC, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

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

The FAA estimates that 2 helicopters of U.S. registry will be affected by this AD, that it will take approximately 4 work hours per helicopter to accomplish the required actions, and that the average labor rate is $60 per work hour. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $480.

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

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

A proposal to amend 14 CFR part 39 by superseding AD 2000-05-15, Amendment 39-11625 (65 FR 14209) for ECF Model AS355N helicopters was published in the Federal Register on July 15, 2002 (67 FR 46423). That action proposed determining the S-G clamp torque and the vibration level on both engines at specified intervals. That action also proposed recording each vibration level on the component history card or equivalent record. If the S-G vibration level is equal to or higher than 0.5 IPS (12.7 mm/s), that action proposed repairing or replacing the S-G, as necessary. Also, that action proposed retaining the requirement to visually inspect the four ejectors, the lugs, the two half clamps, and the S-G flange for a crack and replacing any cracked part with an airworthy part before further flight.

The Direction Generale De L'Aviation Civile (DGAC), the airworthiness authority for France, notified the FAA that an unsafe condition may exist on Eurocopter France Model AS355N helicopters. The DGAC advises of further cases of S-G deterioration, which may lead to failure of the engine exhaust pipe lugs and loss of the ejector.

ECF has issued Eurocopter Alert Telex (Telex) No. 01.00.45 Revision 3, dated November 22, 2001 that supersedes Alert Telex No. 01.00.45 Revision 2, dated August 24, 2000, and No. 01.00.15 Revision 2, dated April 3, 2000, that superseded Alert Telex No. 01.00.45, dated October 27, 1999. Alert Telex No. 01.00.45 Revision 3 specifies checking the S-G clamp torque and vibration levels and recording vibration levels. If the vibration level is equal to or above 0.5 IPS (12.7 mm/s), Telex 01.00.45 Revision 3 specifies repairing the S-G as well as conducting additional inspections and repairs. The Telex states that ECF is developing modifications to return to an acceptable maintenance program.

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

The FAA estimates that this AD will:

• Affect 13 helicopters of U.S. registry;

• Require 5.5 work hours for the inspections and 5 work hours to replace the parts at an average labor rate of $60 per work hour;

• Cost approximately $6,346 for each S-G, $12,148 for each exhaust pipe, $500 for each flange, and $175 for each clamp or $38,338 per helicopter; and

• Result in a total cost impact of $506,584, assuming one inspection and replacement of all parts per helicopter.

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

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

A search by the FAA of the service difficulty database has revealed 10 cracked bellcrank incidents on Cessna Models 208 and 208B airplanes. As a result, Cessna has re-evaluated the bellcrank life limit analysis and determined 7,000 landings is more accurate than the original estimate of 9,000 landings. Cessna has revised the Models 208 and 208B Maintenance Manual and developed a service bulletin to notify the public that the inboard forward flap bellcrank life limit has been reduced to 7,000 landings. Since some Model 208 airplanes have exceeded 7,000 landings, we have determined that an AD is necessary to require replacement of the bellcrank in those airplanes.

If not detected and corrected, a cracked bellcrank could fail. Such failure could lead to damage to the flap system and surrounding structure and result in reduced or loss of control of the airplane.

We issued a proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to all Cessna Models 208 and 208B airplanes. This proposal was published in the Federal Register as a notice of proposed rulemaking (NPRM) on June 26, 2002 (67 FR 43056). The NPRM proposed to repetitively inspect the inboard forward flap bellcranks for cracks or replace bellcranks depending on the amount of usage and reduce the life limits of the bellcranks from 9,000 landings to 7,000 landings.

The FAA encouraged interested persons to participate in the making of this amendment. The following presents the comments received on the proposal and FAA's response to each comment:

A commenter asks if the proposed AD only affects the right inboard flap bellcrank or the right and the left flap inboard bellcranks?

The Cessna Model 208 airplane has only one inboard flap bellcrank assembly and it is located on the right hand side of the aircraft. This flap bellcrank assembly controls both the right and left flaps. Therefore, inspection of the only flap bellcrank assembly in accordance with the Cessna Service Bulletin CABO2-1 will comply with the proposed AD.

We have not changed the final rule as a result of this comment.

A commenter states that Cessna has revised their airworthiness limitations to reflect what the NPRM proposes. The limitations now include a 7,000 landings limit, with repetitive inspections every 500 landings until 7,000 landings are accumulated. For this reason, the commenter recommends that we withdraw the NPRM.

We disagree. Airworthiness Directives that apply more restrictive limits to products are issued when the current limits contribute to an unsafe condition. The AD establishes a deadline to come into compliance with the new life limits.

We have not changed the final rule as a result of this comment.

We carefully reviewed all available information related to the subject presented above and determined that air safety and the public interest require the adoption of the rule as proposed except for the changes discussed above and minor editorial questions. We have determined that these changes and minor corrections:

We estimate that this AD affects 1,300 airplanes in the U.S. registry.

We estimate the following costs to accomplish the inspection:

We estimate the following costs to accomplish any necessary replacements that would be required based on the reduced life limits:

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

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

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

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

An electronic copy of this document may be downloaded using a computer, modem and suitable communications software from the Government Printing Office's Electronic Bulletin Board Service at (202) 512-1661. Internet users may reach the Office of the Federal Register's home page at: http://www.archives.gov and the Government Printing Office's Web page at: http://www.access.gpo.gov/nara.

On October 7, 2002, at 67 FR 62370, the FHWA, jointly with the FTA, issued a final rule to provide the New York City metropolitan area additional time to review and update its transportation plan by waiving the regulatory requirement for a triennial plan update for the New York City metropolitan area for up to three years, until September 30, 2005. This action was necessary because the New York City Metropolitan Transportation Council's (NYMTC) offices were destroyed by the terrorist attacks that occurred on September 11, 2001, and without this waiver, Federal highway and transit funding could be disrupted after September 30, 2002. The purpose of this notice is to correct the docket number to the final rule. The correct docket number for the final rule is FHWA-2001-10836.

Section 274(d) provides that a taxpayer is not allowed a deduction or credit for certain expenses unless the expense is substantiated. These substantiation requirements apply to deductions under section 162 or 212 for any traveling expense (including meals and lodging) while away from home. Under section 274(d), the Secretary may issue regulations that provide that some or all of the substantiation requirements will not apply to expenses that do not exceed a prescribed amount. Section 1.274-5(j)(1) of the regulations permits the Commissioner to establish a method under which a taxpayer may substantiate the amount of meal expenses paid or incurred while traveling away from home by means of an allowance in lieu of substantiating the actual cost of meals.

Under this authority, the Commissioner has provided a method for taxpayers to substantiate deductible costs of business meal and incidental expenses while away from home by means of an allowance. See Rev. Proc. 2001-47 (2001-42 I.R.B. 332). These temporary regulations amend § 1.274-5T to authorize the Commissioner to establish a method under which a taxpayer may substantiate the amount of incidental expenses paid or incurred while traveling away from home by means of an allowance in lieu of substantiating the actual cost. The taxpayer will not be relieved of the requirement to substantiate the actual cost of other travel expenses as well as the time, place and business purpose of the travel.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based upon the fact that these regulations do not require a collection of information and do not impose any new or different requirements on small entities. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these temporary regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact.

The principal author of these regulations is John Moriarty, Office of Associate Chief Counsel (Income Tax & Accounting). However, other personnel from the IRS and Treasury Department participated in their development.

The Uniform Offering Circular, in conjunction with the offering announcement for each auction, provides the terms and conditions for the sale and issuance to the public of marketable Treasury bills, notes, and bonds. 1 In this document, we provide some background on the NLP and its reporting requirements. Next we discuss the public comments we received in response to an Advance Notice of Proposed Rulemaking (“ANPR”) regarding NLP reporting, published on April 29, 2002. 2 We then describe the final amendment.

One of the requirements of the Treasury auction process is the reporting of NLPs, which we use to limit the amount that we will award to any one bidder in an auction (“the 35 percent rule”). This rule ensures that awards in our auctions are distributed to a number of auction participants. This goal of broad distribution is intended to encourage participation by a significant number of competitive bidders in each auction. Broad participation keeps our borrowing costs to a minimum, helps ensure that Treasury auctions are fair and competitive, and makes it less likely that ownership of Treasury securities will become overly concentrated.

A bidder in an auction must report its NLP if, in the security being auctioned, the bidder's NLP plus its bids in the auction meet or exceed a certain dollar-amount threshold as stated in the security's offering announcement. The NLP reporting threshold currently is $1 billion for Treasury bills and $2 billion for Treasury notes. In addition, if the sum of a bidder's bids equals or exceeds the NLP reporting threshold, but the bidder has no position or has a net short position, it must report an NLP of zero. A bidder must determine its NLP as of one-half hour prior to the deadline for receipt of competitive bids. If a bidder meets or exceeds the reporting threshold as of the NLP determination time in the auction offering announcement, the bidder must report its NLP prior to the competitive bidding deadline.

The NLP is generally the amount of the security being auctioned that a bidder has obtained, or has arranged to obtain, outside of the auction in the secondary market. The components of the NLP are intended to capture the various ways that a bidder can acquire a Treasury security. 3 The term “net long” refers to the extent to which an investor has bought (or has agreed to buy) more of a security than it has sold (or has agreed to sell). For example, if an investor has bought $900 million of a security in the when-issued market, and it has sold $300 million of the same security in the when-issued market, it has a net long position of $600 million in that security, assuming it has no other positions.

We published an ANPR for public comment on April 29, 2002, 4 to solicit comments on four alternatives for addressing the half-hour time lag between the time as of which the NLP is calculated (the “NLP as-of time”) and the competitive bidding deadline. It was pointed out in the ANPR that, because a bidder's NLP can change significantly during this time period, the reported NLP may not provide an accurate, or even approximate, measure of a bidder's position at the time that a bidder actually submits its bids. As a result, a bidder's award may be cut back to the 35 percent award limit based on NLP information that no longer reflects the bidder's actual NLP. Conversely, a bidder's award may not be cut back if it builds a large position in the security being auctioned between the NLP as-of time and the competitive bidding deadline. We also stated in the ANPR that we were more fundamentally reconsidering the rule. In addition, we invited comments on potential changes to the NLP reporting threshold amount, and indicated that we were considering changes in this area regardless of whether or not we implement any modifications to the NLP as-of reporting timeframes.

The four alternatives were as follows:

Alternative 1: Reduce the half-hour interval between the NLP as-of time and the competitive bidding deadline.

Alternative 2: Make the NLP as-of time the same as the competitive bidding deadline, with the NLP reporting time to follow (for example, one-half hour later). Bidders would be responsible for ensuring that their bids plus their positions, if they are net long, do not exceed the 35 percent award limit.

Alternative 3: Eliminate the NLP reporting requirement, and either maintain or reduce the 35 percent limit. Treasury would rely on its Large Position Reporting rules  5 and other mechanisms to monitor the market and address concentrations of ownership.

Alternative 4: Retain both the 35 percent limit and the NLP as-of and reporting timeframes as they exist now.

Potential change to NLP reporting threshold amount. Regarding this potential change, we stated in the ANPR that we are considering changing the NLP reporting threshold from $1 billion for Treasury bills and $2 billion for Treasury notes to the actual 35 percent award limit for each auction. This rule change would apply to all marketable Treasury securities auctions. We also stated that we would provide the 35 percent award limit on the auction offering announcement in each auction. Bidders whose bids plus NLPs equal or exceed the limit would be required to report their positions. For example, if the 35 percent award limit for a particular auction is $3 billion, and the total of a bidder's bids is $2.5 billion and its NLP is $1 billion, the bidder would have to report its $1 billion NLP. Bidders whose bids plus NLPs do not equal or exceed the limit would not be required to report any positions. Bidders whose total bids equal or exceed the limit but either have no position or a net short position would not have to report a zero as their NLP.

We received one comment in response to the ANPR, which was from The Bond Market Association (TBMA). 6 The commenter recommended that we make three changes to the NLP rules.

First, TBMA supported Alternative 1 by advocating reducing the half-hour interval between the NLP as-of time and the competitive bidding deadline. Specifically, the commenter suggested requiring bidders to calculate their NLPs as of 12:40 p.m. rather than 12:30 p.m. TBMA stated that this modification would take advantage of technological advances by dealers while still ensuring the accuracy of submitted bids and NLPs. The commenter pointed out a disadvantage of this alternative, which is, “Because auction support staff will have less time to work with, there is certainly the possibility that Treasury may initially see a small spike in the number of NLP submission errors.” The commenter opposed providing bidders with less than 20 minutes to determine, verify and report their NLPs, primarily because “moving the time up further would put substantial strain on existing personnel,” particularly for those securities dealers with numerous domestic and foreign affiliates.

Second, TBMA strongly supported modifying the NLP reporting thresholds for bill and note auctions to 35 percent of the issuance amount, because it would “better capture only those bidders that are most likely to exceed the 35 percent limit.” The commenter maintained that the current reporting thresholds are “unnecessarily low” and that, “Any benefit Treasury derives from maintaining a low reporting threshold is outweighed by the additional bidder submission errors that result.”

Third, TBMA recommended that we discontinue requiring bidders to report a zero NLP when their bids equal or exceed the applicable reporting threshold but they have either no net long position or a net short position. The commenter advocated that such bidders be given the choice of either reporting a zero NLP or leaving the field blank. TBMA acknowledged that, “requiring bidders to report their negative NLP as zero does theoretically act as a check that a bidder realized that it was over the threshold.” However, TBMA asserted that inadvertent failures by bidders to report a zero have resulted in “serious violation letters” from Treasury, where in fact such instances are “a technical violation of the auction rules that in no way could have impacted the results of the auction.”

In addition to the modifications it favored, TBMA also advised against adopting either Alternative 2 or 3. In particular, TBMA argued against post-auction reporting of NLPs (Alternative 2), primarily because it would discourage aggressive bidding since “large bidders would have to allow themselves a substantial ‘margin for error’ with respect to the 35 percent rule.”

After considering the comment letter we received, we are modifying the NLP reporting threshold to 35 percent of the offering amount in each auction. We agree with the commenter that this change will more precisely apply only to those bidders whose bids are most likely to equal or exceed the 35 percent award limit in an auction. Accordingly, § 356.13(a) is revised to reflect that the net long position reporting threshold amount will be 35 percent of the offering amount. The NLP reporting threshold will be provided on the offering announcement for each auction.

We are not considering any other changes to the NLP reporting requirement at this time. The NLP as-of reporting time will continue to be one half-hour prior to the deadline for receiving competitive bids. We agree with TBMA that shortening this time interval could result in an increase in NLP reporting errors. Since shortening the time interval to 20 minutes would still leave a significant time period in which bidders' positions in the securities being auctioned could change significantly prior to the deadline for receiving competitive bids, we believe that the disadvantages of a likely increase in NLP reporting errors outweigh the benefits of a shorter time period for calculating and reporting NLPs.

We also have decided to maintain the requirement for bidders to report an NLP of zero when their bids equal or exceed the applicable reporting threshold but they have either no net long position or a net short position. We believe that this requirement acts as an important check to ensure that bidders with very large bids in an auction calculated their NLPs for possible reporting in the auction.

We are also making a conforming technical change to § 356.12(c)(1)(i) of the auction rules to reflect that competitive bids in all cash management bill auctions must now be expressed as a discount rate with three decimals in increments of .005 percent, for example, 3.100%, 3.105%. 7 This change will make the competitive bid format for cash management bills the same as for all other types of Treasury bills. This change will enable competitive bidders to better fine-tune their bids in cash management bill auctions.

We are deleting from § 356.12 the defined term “public offering” and adding the defined term “offering amount.” In the past, “public offering” had a different meaning from “offering amount” as used on the offering announcement because of the treatment of amounts bid by the Federal Reserve's System Open Market Account (SOMA) and by foreign and international monetary authorities (FIMA). In March 1997, Treasury announced that awards to SOMA in Treasury bill auctions would be treated as additions to the announced offering amount, the same treatment as for note and bond auctions. 8 Since February 2001, when specific noncompetitive bidding and award limitations were placed on FIMA accounts, 9 awards to FIMA accounts are made within the offering amount, as are those to the public in general. Since these changes, the treatment of FIMA and SOMA is consistent for all Treasury securities auctions. Awards to SOMA are made in addition to the offering amount; FIMA awards are within the offering amount.

The definition of “public offering” in § 356.2 is no longer accurate to the extent that the definition continues to exclude FIMA bids up to the amount of maturing securities in those accounts. Since there is no longer any difference in the meaning of “public offering” and “offering amount,” and the offering announcements use the term “offering amount,” we are deleting the term “public offering” and adding the term “offering amount” to the Uniform Offering Circular, and making conforming changes within the text. One of these conforming changes is to the definition of “bid-to-cover ratio,” which previously excluded both SOMA and FIMA bids and awards, and now only excludes SOMA bids and awards.

Finally, this amendment incorporates technical changes in §§ 356.20 and 356.21 to conform to our policy for prorating competitive bids at the highest accepted yield or discount rate. In the weekly bill auctions of April 30, 2001, we changed the rounding convention for the allocation percentage from rounding up to the next whole percentage point to rounding up to the next hundredth of a whole percentage point.

This final rule is not a significant regulatory action for purposes of Executive Order 12866. Although we issued an Advance Notice of Proposed Rulemaking on April 29, 2002, to benefit from public comment, the notice and public procedures requirements of the Administrative Procedure Act do not apply, under 5 U.S.C. 553(a)(2).

Since no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) do not apply.

The collections of information in this final rule amendment have been previously approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995. This final rule is technical in nature and imposes no additional burdens on auction bidders.

Regulatory Information

On July 8, 2002, we published a notice of proposed rulemaking (NPRM) entitled Anchorage Grounds; Frenchman Bay, Bar Harbor, ME in the Federal Register (67 FR 45071). We received one letter commenting on the proposed rule. No public hearing was requested, and none was held.

In November 1999, the Maine Department of Transportation contracted with a local firm to produce a cruise ship traffic demand management study for the Town of Bar Harbor, Maine. One of the purposes was to develop a scheduling and reservation system for arriving cruise ships so that Town facilities would not be overburdened. The study included basic research into the history and outcomes of past cruise ship visits, observation of present cruise ship operations and anchorages. Based on the findings and recommendations of this study, the Penobscot Bay and River Pilots Association requested that the Coast Guard establish two federal anchorage grounds in Frenchman Bay near Bar Harbor, Maine.

Presently, there are no designated anchorage grounds in this area. However, large vessels calling on Bar Harbor have traditionally anchored both north and south of Bar Island. These new anchorage areas coincide with the traditional areas used for large ship anchorage. The size and shape of the anchorage areas are minimal and the purpose is to conform to the changing use of the harbor and to make best use of available water.

The Coast Guard has defined the anchorage areas contained herein with the advice and consent of the Army Corps of Engineers, New England District, located at 696 Virginia Rd., Concord, MA 01742.

This regulation does not intend to exclude fishing activity or the transit of vessels in the anchorage areas. The Coast Guard anticipates minimal transit interference through the proposed anchorages by way of increased vessel anchorage.

We received one letter from the Army Corps of Engineers commenting on the proposed rule. They recommended that no seasonal mooring buoys be established in these anchorages. Their concerns were addressed in the NPRM. The final rule has not been changed from the NPRM language except to correct two typographical errors to the latitude and longitude as follows:

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT)(44 FR 11040, February 26, 1979). We expect the economic impact of this proposed rule to be so minimal that a full regulatory evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary.

This conclusion is based upon the fact that there are no fees, permits, or specialized requirements for the maritime industry to utilize these anchorage areas. The regulation is solely for the purpose of advancing safety of maritime commerce.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will have minimal economic impact on vessels operated by small entities. This conclusion is based upon the fact that there are no restrictions for entry or use of the anchorage targeting small entities. This regulation creates only two new anchorage areas; it does not govern its usage.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact John J. Mauro at the address listed in ADDRESSES above.

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

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

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

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

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

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

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

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

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

This rule creates two new anchorage areas to the east of Bar Harbor. These designated anchorages will enhance the safety in the waters of Frenchman Bay, Maine by relieving vessel congestion within the bay. Thus, these two designated anchorages will provide a safer approach for deep draft vessels.

The Union Pacific Railroad has requested a temporary deviation in order to replace the hydraulic rail locking mechanism and signal components that affect the opening and closing of the swing span bridge across the San Bernard River at mile 20.7 near Brazoria, Brazoria County, Texas. This maintenance is essential for the continued operation of the bridge. This temporary deviation will allow the bridge to remain in the closed-to-navigation position from 8 a.m. on Monday, November 11, 2002, until 8 p.m. on Thursday, November 14, 2002.

The swing span bridge has a vertical clearance of 2 feet above high water in the closed-to-navigation position. Navigation on the waterway consists primarily of small recreational vessels and tugs with tows transporting petroleum products. The bridge normally opens to pass navigation on an average of 3 times per day. In accordance with 33 CFR 117.984, the draw of the bridge opens on signal; except that, from 10 a.m. to 2 p.m. and 10 p.m. to 2 a.m. the draw shall open on signal if at least three hours notice is given. Through the month of November, the San Bernard River, at the site of the bridge, is expected to remain at a stage at which as much as 17 feet of vertical clearance will be available while the swing span is in the closed-to-navigation position. Thus, average recreational vessels, as well as petroleum barges, can pass under the bridge during the closure period. The Union Pacific Railroad contacted Phillips Petroleum Company, principal user of the waterway, and advised them of the closure. Phillips Petroleum Company has made plans to shuttle barges under the bridge while it remains in the closed-to-navigation position. The bridge will not be able to open for emergencies during the closure period. No alternate routes are available.

In accordance with 33 CFR 117.35(c), this work will be performed with all due speed in order to return the bridge to normal operation as soon as possible. This deviation from the operating regulations is authorized under 33 CFR 117.35.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds good cause exists for not publishing an NPRM. Public comment is not necessary since the purpose of the affected regulation is to control the opening and closing of a bridge that is no longer in service and is in the process of being completely removed.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds good cause exists for making this rule effective less than 30 days after publication in the Federal Register . The bridge for which the special operation regulation was created is no longer in service and the need for the regulation is no longer necessary.

A new bobtailed swing bridge across the Milhomme Bayou, mile 12.0 (Landside Route), at Stephensville, Louisiana was opened to traffic in August of 2002. The existing pontoon bridge which had previously serviced the area is in the process of being removed and no longer affects navigation. The regulation governing the operation of the pontoon bridge is found in 33 CFR 117.481. The purpose of this rule is to remove 33 CFR 117.481 from the Code of Federal Regulations since it governs a bridge that is no longer in service and is being removed.

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

This rule removes a regulation that is being made obsolete by the removal of the bridge that it governs. Therefore, a cost/benefit analysis is unnecessary.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will have no impact on any small entities because the regulation being removed applies to a bridge that is being removed.

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

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

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

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

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

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

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

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

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

We have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph (32)(e), of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation. This final rule only involves removal of the drawbridge operation regulation for a drawbridge that has been removed from service. It will not have any impact on the environment. A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES.

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

Under the Clean Air Act (Act), EPA may redesignate areas to attainment if sufficient data are available to warrant such changes and the area meets the criteria contained in section 107(d)(3) of the Act. This includes full approval of a maintenance plan which meets the requirements of section 175A. On August 17, 2001, the Commonwealth of Pennsylvania submitted a redesignation request and section 175A maintenance plan for the Allegheny County CO nonattainment area. When approved, the section 175A maintenance plan will become a Federally enforceable part of the SIP for these areas.

On November 12, 1992, the Commonwealth of Pennsylvania submitted a 1990 Base Year Emissions Inventory for Allegheny County, including CO data. The August 17, 2001, submittal revised some of the figures in the 1990 Base Year Inventory.

The following is a detailed analysis of the Redesignation Request and section 175A Maintenance Plan SIP submittal.

EPA originally designated part of Allegheny County as a CO nonattainment area under section 107 of the Act on September 12, 1978 (43 FR 40513). The area defined as CO nonattainment included high traffic density areas within the Central Business District (CBD) and certain other high traffic density areas. In 1990, Congress amended the act (1990 Act) and added a provision which authorizes EPA to classify nonattainment areas according to the degree of severity of the nonattainment problem. In 1991, EPA designated and classified all areas. The CBD of the city of Pittsburgh in Allegheny County was designated as nonattainment and not classified for CO (40 CFR 81.339). The area was not classified because at the time of the designation and classification in 1991, air quality monitoring data recorded in the area did not show violations of the CO NAAQS. However, the Commonwealth had not completed a redesignation request showing that it had complied with all of the requirements of section 107 of the Act. As a result, EPA designated the area as nonattainment, but did not establish a nonattainment classification. The preamble to the Federal Register document for the 1991 designation contains more details on this action (56 FR 56694). Since the EPA's 1991 designation, monitors in the area have not recorded a violation of the CO NAAQS. As a result, the area is eligible for redesignation to attainment consistent with the 1990 Act. On August 17, 2001, Pennsylvania submitted a SIP revision to the EPA, containing a redesignation request, maintenance plan, and updates to the CO emissions inventory. The Commonwealth held public hearings on the SIP revision on March 16, 2001. Public comments were not received on this proposed redesignation at the state level.

The CO nonattainment area in the Allegheny County was defined under 43 FR 40517 as “the high traffic density areas within the Central Business District and certain other high traffic density areas.” (In its SIP revision, the Commonwealth notes that “the CBD is generally the downtown triangle bounded by the Allegheny River, the Monongahela River and I-579.” Adding that the phrase “other high traffic density areas,” “describes what is considered the Oakland neighborhood of Pittsburgh.”).

The 1990 Act revised section 107(d)(3)(E), which specifies five requirements that an area must meet to be redesignated from nonattainment to attainment.

These requirements are:

1. The area has attained the applicable NAAQS;

2. The area has a fully approved SIP under section 110(k) of the Act;

3. The air quality improvement is permanent and enforceable;

4. The area has a fully approved maintenance plan pursuant to section 175A of the Act; and

5. The area has met all relevant requirements under sect9ion 110 and part D of the Act.

The EPA has reviewed the Pennsylvania redesignation request for the Allegheny County area and finds that the requests meets the five requirements of section 107(d)(3)(E).

Pennsylvania has quality-assured CO ambient air monitoring data showing that Allegheny County has met the CO NAAQS. The request is based upon an analysis of quality-assured CO air monitoring data that is relevant to the maintenance plan and the redesignation request. To attain the CO NAAQS, an area must have complete quality-assured CO air monitoring data showing no more than one exceedance of the standard per year over at least three consecutive years.

Between 1988 and 1999, the Allegheny County Health Department continuously operated two monitors in the county, and one additional monitor from 1997. The design value for the latest two years of quality assured data (1998 and 1999) is 3.9 ppm, measured at the Forbes Avenue and Grant Street monitoring site in 1999. Air quality data for the three CO monitoring sites shows that from 1988 through 1999, there were no violations of the 8-hour CO NAAQS in the nonattainment area, the last violation have occurred in 1987. The 1-hour CO standard is also being met at these monitoring sites, the last violation having occurred in 1980. Additional historic data are included in the Commonwealth's request. Pennsylvania's request is based on an analysis of quality-assured CO air quality data. This data was compiled in an EPA-approved, quality assured, National Air Monitoring System monitoring network. As a result, the area meets the first statutory criterion for redesignation to attainment of the CO NAAQS.

The Commonwealth has committed to continue monitoring in these areas in accordance with 40 CFR part 58. As discussed further below, the design value for Allegheny County, 3.9 ppm, meets the test for the limited maintenance plan option since the design values are well below the 7.8 ppm level.

Since the area's 1990 design value for CO was 8.0 ppm, supplemental air quality modeling is not needed to support this request. 1

Pennsylvania CO SIP was fully approved by EPA as meeting all the requirements of section 110(a)(2)(I) of the Act, including the requirements of part D (relating to nonattainment), which were due prior to the date of Pennsylvania's redesignation request. The 1982 CO SIP, except for the Inspection and Maintenance (I/M) portion was fully approved by EPA on February 26, 1985, 40 CFR 52.2020(c)(63), (50 FR 772). The I/M portion of the SIP was approved by EPA on April 8, 1987, at 40 CFR 52.2020(c)(66), (52 FR 11259), and revised to an enhanced program by EPA's approval on June 17, 1999, at 40 CFR 52.2020(c)(139), (64 FR 32411). The Clean Air Act Amendments of 1990 and part D also added emission reduction requirements for CO areas which were classified as moderate and serious nonattainment. Areas such as the portion of Allegheny County classified as nonattainment, not classified, did not have additional emission reduction requirements.

Part D contains general provisions that apply to all nonattainment plans and certain sections that apply to specific pollutants. Before EPA may redesignate the Allegheny County CO nonattainment areas to attainment, the SIP must have fulfilled the applicable requirements of part D. Under part D, an area's classification indicates the requirements to which it is subject. Subpart 1 to part D sets forth the basic nonattainment requirements applicable to all nonattainment areas, classified as well as not classified. EPA designated the Allegheny County areas as a “not classified” CO nonattainment area on November 15, 1990, codified at 40 CFR 81.339. Therefore, to be redesignated to attainment, the Commonwealth must meet the applicable requirements of subpart 1 of part D—specifically sections 172(c) and 176. The subpart 3 requirements of part D do not apply to unclassified areas.

Subpart 1 of part D addresses nonattainment areas in general. Section 172(c) describes the nonattainment plan provisions specifically. The requirements of section 172(c)(1) are met by the CO SIP, approval dates as given above. The Federal requirements for new source review (NSR) in nonattainment area are contained in section 172(c)(5). EPA guidance indicates the requirements of part D NSR program will be replaced by the prevention of significant deterioration (PSD) program when an area has reached attainment and been redesignated, provided there are assurances that PSD will become fully effective immediately upon redesignation. To that end, Allegheny County has been delegated the Federal PSD program and has adopted the PSD requirements promulgated in 40 CFR 52.21, incorporating them by reference in its regulations as provided in article XXI, section 2102.07.

The remaining requirements under section 172(c), except for Conformity provisions discussed below, are not applicable, since attainment has already been measured, or will be satisfied as part of the maintenance plan included as part of the redesignation request.

Part D, section 176(c)(4)(C) requires each state to have submitted to EPA by November 15, 1992, a SIP revision establishing a conformity process. This date was extended to November 25, 1994, as EPA did not promulgate its conformity rule until November 15, 1993. The Commonwealth submitted its SIP revision on November 21, 1994, and EPA found it administratively and technically complete. However, due to continuing amendments to EPA rulemaking on state-specific revisions was deferred. In 1998, the Commonwealth submitted a updated Conformity SIP revision, however, EPA has placed rulemaking for this plan on hold, pending the results of legal action related to the new ozone and particulate matter standards. Since the Commonwealth has fulfilled its requirement to submit a Conformity SIP revision, and the delay on rulemaking is a result of EPA policy, EPA will not hold up approval of the CO redesignation due to lack of an approved Conformity SIP revision.

Section 1871 of the Act, “Plan Submission and Requirements,” which is a part of subpart 3, Additional Provisions for CO Nonattainment Areas, does not need to be satisfied for this redesignation request. Section 187 requirements do not apply to areas “not classified” for CO.

In order to redesignate an area, EPA must determine that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable implementation plan and applicable Federal air pollutant control regulations and other permanent and enforceable reductions.

The Commonwealth's 1982 CO SIP for Southwestern PA, approved by EPA in 1985, identified Federal, state and local measures to bring the area into attainment. These measures are: the Federal Motor Vehicle Control Program, the Commonwealth's I/M program (since revised to an enhanced program), and other transportation control measures.

As discussed above, Allegheny County has measured attainment of the CO NAAQS since 1988, indicative of improvements due to permanent and enforceable measures contained in the 1982 CO SIP.

The Commonwealth has demonstrated that actual enforceable emission reductions are responsible for the air quality improvement and that the CO emissions in the base year are not artificially low due to local economic downturn. EPA finds that the combination of certain existing EPA-approved SIP and Federal measures contribute to the permanence and enforceability or reduction in ambient CO levels that have allowed the area to attain the NAAQS.

Section 175A of the Act sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. The plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after the EPA approves a redesignation to attainment. Eight years after the redesignation, that State must submit a revised maintenance plan which demonstrates attainment for the 10 years following the initial 10-year period. To address potential future NAAQS violations, the maintenance plan must contain contingency measures, with a schedule for implementation adequate to assure prompt correction of any air quality problems.

Under section 175A(d) contingency provisions must include a requirement that the State will implement all control measures that were in the SIP prior to redesignation as an attainment area. In this section, EPA is approving the Allegheny County maintenance plan because EPA finds that submittal meets the requirements of section 175A. The details of the maintenance plan requirements and how the submittal meets these requirements are detailed below.

The EPA issued guidance on October 6, 1995, titled “Limited Maintenance Plan Option for Nonclassifiable CO Nonattainment Areas.” This option is only available to CO nonattainment areas with design values at or below 7.65 ppm (85 percent of exceedance levels of the CO ambient air quality standard). The limited maintenance plan option allows areas that are well below the NAAQS ambient air quality standard to submit a less rigorous maintenance plan than was formerly required. The design value for CO in Allegheny County for the years 1998 and 1999 was 3.9 ppm, qualifying the area for use of a limited maintenance plan option.

The limited maintenance plan must meet certain core requirements. These requirements are:

a. The State must submit an attainment emissions inventory based on actual “typical winter day” emissions of CO in the monitored attainment years.

b. The maintenance demonstration does not need to project emissions over the maintenance period. The design value criteria are expected to provided adequate assurance of maintenance over the initial 10-year period.

c. The State must continue operating an approved air quality monitoring network.

d. The State must have a contingency plan and specific indicators or triggers for implementation of the contingency plan.

e. The conformity determination under a limited maintenance plan can consider the emissions budget as essentially not constraining for the length of the initial maintenance plan.

EPA is approving the 1990 Base Year CO Emissions Inventory for CO, submitted to EPA in November 1992, and approving the “typical winter day” emissions for highway on-road sources in Allegheny County submitted to EPA on August 17, 2001, along with the redesignation request. The 1990 Base Year Inventory submittal contains the detailed inventory data and summaries by source category, prepared in accordance with EPA guidance. Table 1 summarizes the 1990 Base Year Inventory for the seven county Pittsburgh area Metropolitan Statistical Area.

For purposes of demonstrating compliance with an attainment inventory, typical of a winter day (when CO concentrations are of concern), the Commonwealth prepared and submitted an updated CO emissions inventory for the highway source category in Allegheny County. The 1990 CO emissions inventory for highway, or on-road sources, was updated by Allegheny County and the Commonwealth for the CO redesignation request, using winter-time inputs in MOBILE 5b. This inventory identifies the level of emissions in the area sufficient to attain the NAAQS, since the 1990 design value was 8.1 ppm. The 1999 emissions inventory reflects the impact of the Federal Motor Vehicle Control Program Tier 1 standards, and Pennsylvania's Enhanced Inspection and Maintenance program. The Commonwealth and Allegheny County point out in their submittal that while CO emissions are also a result of point, area, and off-road sources, their submittal's attainment inventory only includes emissions from highway, on-road sources, since motor vehicles are the primary source of CO emissions in the nonattainment area, the Pittsburgh Central Business District. EPA concurs with this assessment of the inventory needs and is approving the typical winter day CO emissions inventory for highway sources as detailed in Table 2.

As previously stated, Allegheny County has adequately demonstrated continued attainment of the CO NAAQS.

In accordance with the limited maintenance plan option, Allegheny County is not required to project emissions over the maintenance period.

In the submittal the Commonwealth commits to continue to operate and maintain the network of ambient CO monitoring stations in accordance with provisions of 40 CFR parts 53 and 58 to demonstrate ongoing compliance with the CO NAAQS. The submittal presents the tracking plan for the maintenance period which consists of continued CO monitoring. The Commonwealth will continue to monitor CO levels in the Allegheny County Central Business District to demonstrate ongoing compliance with the CO NAAQS.

As required by section 175A of the Act, Pennsylvania has provided contingency measures with a schedule for implementation if a future CO air quality problem occurs. Contingency measures in the plan include restrictions on vehicle idling in the central business district during winter months (November through February), to be implemented within 12-15 months after a recorded violation of the CO standard.

The limited maintenance plan option allows the Commonwealth to consider the emissions budget as essentially not constraining for the length of the initial maintenance plan.

A new maintenance plan must be submitted to EPA within eight years of the redesignation of the nonattainment area, as required by section 175(A)(b). This subsequent maintenance plan must constitute a SIP revision and provide for the maintenance of the CO NAAQS for a period of 10 years after the expiration of the initial 10 year maintenance period.

As noted above, because the area is a “not classified” nonattainment area, the 1990 Act did not establish additional requirements under subpart 3. Prior to the 1990 Amendments, EPA had fully approved the State's CO SIP. Since the area is not subject to the subpart 3 requirements, no additional requirements exist under section 110(k) which the State must address prior to redesignation.

EPA is approving, the Allegheny County redesignation request for CO because the County and the Commonwealth have complied with the requirements of section 107(d)(3)(E) of the Act. In addition, EPA is approving the Allegheny County CO maintenance plans as a SIP revision meeting the requirements of section 175A.

EPA is publishing this action without prior proposal because EPA views this as a noncontroversial revision and anticipates no adverse comments. However, in the “Proposed Rules” section of today's Federal Register , EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective on January 13, 2003, without further notice unless EPA receives adverse comment. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCSs. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 13, 2003. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action, the redesignation of the Allegheny County CO nonattainment area to attainment and approval of the area's maintenance plan and the 1990 base year CO emissions inventory may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

For information concerning applicability and rule determinations, contact the appropriate regional representative:

Comments. All public comments will be addressed in a subsequent final rule based on the proposed amendments. If we receive any significant adverse comments, we will publish a timely withdrawal in the Federal Register before the effective date of the amendments. If an adverse comment applies to a specific amendment, and that provision can be addressed separately from the remainder of the direct final rule, we will withdraw only that provision on which we received adverse comments. In the Proposed Rules section of today's Federal Register , we are publishing a separate action that will serve as the proposal for any provisions in the direct final rule if we receive adverse comments. If all or part of the direct final rule is withdrawn, all public comments received will be addressed in a subsequent final rule based on the proposal. We will not institute a second comment period on the subsequent final rule. If you are interested in commenting, you must do so at this time.

Comments and data may be submitted by electronic mail (e-mail) to “ a-and-r-docket@epa.gov ”. Electronic comments must be submitted as an ASCII file to avoid the use of special characters and encryption problems. Comments will also be accepted on disks in WordPerfect® file format. All comments and data submitted in electronic form must note the docket number: A-2001-23. No confidential business information (CBI) should be submitted by e-mail. Electronic comments may be filed online at many Federal Depository libraries.

Commenters wishing to submit proprietary information for consideration must clearly distinguish such information from other comments and label it as CBI. Send submissions containing such proprietary information directly to the following address, and not to the public docket, to ensure that proprietary information is not inadvertently placed in the docket: Attention: Mr. Robert Lucas, c/o OAQPS Document Control Officer (C404-02), U.S. EPA, Research Triangle Park, NC 27711.

The EPA will disclose information identified as CBI only to the extent allowed by the procedures set forth in 40 CFR part 2. If no claim of confidentiality accompanies a submission when it is received by EPA, the information may be made available, without further notice, to the public.

Docket. The docket is an organized and complete file of all the information considered by EPA in the development of the amendments. The docket is a dynamic file because information is added throughout the rulemaking process. The docketing system is intended to allow members of the public and industries involved to readily identify and locate documents so they can effectively participate in the rulemaking process. Along with the proposed and promulgated standards and their preambles, the contents of the docket will serve as the record in the case of judicial review. (See section 307(d)(7)(A) of the Clean Air Act (CAA).) The regulatory text and other materials related to the direct final rule are available for review in the docket or copies may be mailed on request from the Air Docket by calling (202) 260-7548. A reasonable fee may be charged for copying docket materials.

Worldwide Web (WWW). In addition to being available in the docket, an electronic copy of today's direct final rule will also be available on the WWW through the Technology Transfer Network (TTN). Following signature, a copy of the direct final rule will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules at http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. If more information regarding the TTN is needed, call the TTN HELP line at (919) 541-5384.

Regulated Entities. Categories and entities potentially regulated by this action include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by the direct final rule. To determine whether your facility is regulated by the direct final rule, you should examine the applicability criteria in 40 CFR 61.340 of the NESHAP for benzene waste operations. If you have any questions regarding the applicability of this action to a particular entity, consult the appropriate person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

Judicial Review. Under section 307(b)(1) of the CAA, judicial review of the direct final rule is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia by January 13, 2002. Under section 307(d)(7)(B) of the CAA, only an objection to the direct final rule raised with reasonable specificity during the period for public comment can be raised during judicial review. Moreover, section 307(b)(2) of the CAA, the requirements that are the subject of the direct final rule may not be challenged later in civil or criminal proceedings brought by the EPA to enforce the requirements.

Outline. The information in this preamble is organized as follows:

Executive Order 13149, “Greening the Government through Federal Fleet and Transportation Efficiency” requires, inter alia, that each agency operating 20 or more motor vehicles within the United States reduce its entire vehicle fleet's annual petroleum consumption by at least 20 percent by the end of FY 2005, compared with FY 1999 petroleum consumption levels. In order to achieve this goal, more centralized management and reporting is required. This change requires concurrence by installation transportation officers prior to contracting officer authorization of contractor requests to obtain IFMS vehicles. This change will assure transportation management participation in the contract authorization process. Additionally, this final rule revises section designations within part 1808 as a result of changes made by FAC 01-09.

This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This final rule in not a major rule under 5 U.S.C. 804.

This final rule does not constitute a significant revision within the meaning of FAR 1.501 and Pub. L. 98-577, and publication for public comment is not required. However, NASA will consider comments from small entities concerning the affected NFS parts 1808 and 1851 in accordance with 5 U.S.C. 610.

The Paperwork Reduction Act does not apply because the changes do not impose recordkeeping or information collection requirements which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

NASA must account for and report assets in accordance with 31 U.S.C. 3515, Federal Accounting Standards, and Office of Management and Budget (OMB) Bulletin No. 01-09, Form and Content of Agency Financial Statements. Since contractors maintain NASA's official records for NASA-owned assets in contractors' possession, NASA must obtain annual data from those records in order to facilitate proper accounting and control over the assets. This interim rule provide policies and procedures for proper reporting of heritage assets by providing a definition and directing that these assets be reported within appropriate property classifications. This interim rule also clarifies other property classifications and provides cross references to the FAR to insure proper reporting of these assets.

NASA certifies that this interim rule will not have a significant economic impact on a substantial number of small businesses within the meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) because it clarifies existing property reporting policies and procedures contractors must follow when accounting for and reporting assets.

The Paperwork Reduction Act does not apply because the changes to the NFS do not impose new recordkeeping or information collection requirements which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

In accordance with 41 U.S.C. 418(d), NASA has determined that urgent and compelling reasons exist to promulgate this interim rule. The basis for this determination is that the clarifications contained in this interim rule are needed to ensure consistent reporting of NASA assets in contractor annual reports to be submitted by October 31, 2002. Public comments received in response to this interim rule will be considered in the formation of the final rule.