The Farm Security and Rural Investment Act of 2002 (The 2002 Act) (Pub. L. 107-171) amended the Food Security Act of 1985 to authorize the Conservation Security Program (CSP). CSP is administered by USDA's Natural Resources Conservation Service (NRCS). CSP is a voluntary program that provides financial and technical assistance to promote the conservation and improvement of soil, water, air, energy, plant and animal life, and other conservation purposes on Tribal and private working lands. Working lands include cropland, grassland, prairie land, improved pasture, and range land, as well as forested land that is an incidental part of an agriculture operation.

In keeping with principles outlined in the USDA publication, “Food and Agriculture Policy—Taking Stock for the New Century”, the Secretary's vision for CSP's unique role within USDA conservation programs is:

(1) To identify and meaningfully reward those farmers and ranchers meeting the very highest standards of conservation and environmental management on their operations;

(2) To create powerful incentives for other producers to meet those same standards of conservation performance on their operations; and

(3) To provide public benefits for generations to come.

The intent of CSP is to support ongoing conservation stewardship of agricultural lands by providing assistance to producers to maintain and enhance natural resources. The program is available in all 50 States, the Caribbean Area and the Pacific Basin area. The program provides equitable access to benefits to all producers, regardless of size of operation, crops produced, or geographic location.

NRCS is seeking public comment to help the agency develop a proposed rule. The public will have the opportunity to provide additional input during the proposed rule's comment period prior to the publication of a final rule.

Under the statute, CSP is available on cropland, grassland, prairie land, improved pasture, and range land, as well as certain forested land that is an incidental part of an agriculture operation.

According to statute, an inventory will be conducted to identify resource concerns and determine the extent of conservation treatment that is being applied and maintained on their land. Authorized payments include a base payment determined by the treatment level, cost-share for applying conservation practices, maintenance payments for applied conservation practices, and enhanced payments for treatment that exceeds the minimum criteria. A three-tiered approach is used when offering payments.

If a producer desires to move to a higher tier, cost-share payments for needed structural practices are available through the CSP at up to 75 percent of the cost of the new practice, or up to 90 percent in the case of beginning farmers or ranchers. Participants may contribute to the cost of the new practice through in-kind sources, such as personal labor, use of personal equipment, donated labor or materials, and use of on-hand or approved used materials. Cost-shared practices are to be maintained for the life of the practice. All needed practices and management must be in place and maintained before a producer can move to the next tier. Similar to other United States Department of Agriculture (USDA) conservation programs, the 2002 Act requires that the Conservation Security Program (CSP) provide financial incentives to agricultural producers that undertake new conservation efforts that meet high environmental standards. However, unlike other USDA conservation programs, the 2002 Act requires that CSP provides financial assistance for maintaining conservation. A clear intent of the program is to financially reward producers for significant environmental goods and services they provide to the public through their annual and ongoing conservation efforts. CSP, therefore, raises new and important issues that have not been confronted previously for traditional conservation programs.

NRCS undertook two projects to identify and better understand those elements in the design of the program that would have the most influence on its performance. In the first project, the firm, Plexus Marketing Group, was retained to conduct nine focus groups to obtain inputs from representative agricultural and stakeholder groups regarding key elements of the CSP to assist NRCS in developing program rules. In the second project, the Soil and Water Conservation Society (SWCS) organized five workshops to obtain feedback on CSP and its implementation from producers and NRCS field staff.

The Plexus focus groups were held as follows:

Three (3) were conducted in various states with a representative cross section of groups:

Six (6) were held in Washington, DC with specific groups:

The composition of the groups were determined by the firm with assistance from NRCS. The firm facilitated the participants through a series of questions to solicit their feedback on key issues relevant to rulemaking for the new program.

The five SWCS workshops were held in the following locations:

Four NRCS field staff and 12 producers participated in each workshop. Producers were selected in an unbiased manner which assured that they were not exclusively conservation-oriented or farm program participants. Producers were interviewed to solicit their feedback on key issues relevant to rulemaking for the new program.

The results of these two projects coupled with analyses conducted by NRCS have identified several key issues in rulemaking that will have profound effects on the performance and effectiveness with which CSP can be used to meet the objectives of the statute. The SWCS workshops, for example, identified important opportunities to simultaneously streamline and enhance the conservation performance of CSP. The focus groups, on the other hand, felt it important to do the program “right” at the onset even if it meant slowing initial implementation; further the participants were concerned about flexibility and accountability. Both groups identified concerns about the potential budget implications of the program. One of the overarching issues identified was the tension between the demand for the program and the budget concerns.

NRCS is currently analyzing in detail the information gathered through the workshops and focus groups to inform its rulemaking in regard to the key issues raised in the workshops, focus groups, and agency analyses of alternatives. Given the importance of these issues to the performance and effectiveness of CSP, NRCS is seeking additional public comment. NRCS is specifically interested in receiving public input regarding how CSP can be used to meet the objectives of the statute on the following issues:

1. The law specifies that conservation security plans address one or more “significant” resource concerns. Resource concerns may be as general as soil erosion or water quality or as specific as soil erosion by water or ground water quality. Many concerns have no practical direct measurement techniques or tools. What criteria should be used to determine what is a resource concern and whether a resource concern is significant?

2. The law requires that NRCS establish minimum requirements for three tiers of conservation effort. The minimum could be as specific as a list of minimum practices or as general as bundling of conservation measures that achieve a desired resource outcome. What should be the minimum requirements for each tier? Should NRCS establish minimum requirements that apply to all contracts nationally? What could some of these requirements be?

3. The law requires NRCS to describe the particular practices to be implemented, maintained, or improved as part of the program. What criteria should be used to determine which practices and activities are eligible for payment under the program? Should specific practices or activities receive priority for payment under the program? To what extent should sets of practices and activities be accorded priority for payment under the program?

4. The law restricts the maximum base payment to a percentage of the total contract cap (i.e. 25 percent for Tier I and 30 percent for Tiers II and III). What should be the balance of the base payment, maintenance cost-share payment and enhancement payment to reward the steward and attain additional conservation benefits?

5. The law uses the extent of the agricultural operation covered by the contract as a primary distinction between Tiers I and II. Tier I covers the “enrolled portion of the agricultural operation”, while Tiers II and III cover “the entire agricultural operation.” With the variety of ownership and landowner-tenant relationships which change over time across the country, how should “agricultural operation” be defined?

6. The law specifies the eligible land for payment purposes as cropland, grassland, prairie land, and rangeland as well as forestland that is an incidental part of the agricultural operation. Should noncropped areas, such as turn rows or riparian areas, that are part of the agriculture operation be included for conservation treatment? Should farmsteads, ranch sites, barnyards, feedlots, equipment storage, material-handling facilities, and other such developed areas be considered part of the “agricultural operation”? What criteria should be used to determine those areas of a farm or ranch that might legitimately be excluded from the “agricultural operation”?

7. The law specifies that NRCS make a base payment as part of a conservation security plan using either the 2001 national rental rate for a specific land use or another appropriate rate that assures regional equity. How should NRCS determine the base payment? If an alternative to the national rental rate is used, how should it be constructed? Should the payments be determined at the national, state or local levels?

8. The law provides for an enhanced payment if an owner or operator does one or more of the following: (a) Implements or maintains practices that exceed minimum requirements; (b) addresses local conservation priorities; (c) participates in on-farm research, demonstration, or pilot projects; (d) participates in a watershed or regional resource conservation plan; or (e) carries out assessment and evaluation activities relating to practices included in a conservation security plan. Enhanced payments are meant to ensure and optimize environmental benefits. How should enhanced payments be determined and calculated?

9. The law does not limit the number of contracts held by a producer. Should there be a limitation on the total number of contracts a producer may have? If there is no limit on the number of contracts, should USDA set an individual payment limitation for producers with multiple contracts?

10. The law requires that the regulations provide for adequate safeguards to protect the interests of tenants and sharecroppers, including provisions for sharing payments, on a fair and equitable basis. Concerns have been raised over the impact of CSP provisions on owner/operator relationships including changes in rental rates or changes in operators. How can NRCS ensure that payments are shared on a fair and equitable basis?

11. The law requires a minimum contract length in CSP of five years. Many landlord-tenant relationships are short-term in nature, usually less than five years. Should the applicant be required to have control of the land for the complete CSP contract period? How should the program address the tension between the return to management versus the return to capital?

12. The law does not prescribe a funding or acreage cap for CSP. USDA estimates that there is a potential applicant pool of over two million farms and ranches covering over 900 million potential eligible acres. A primary implementation concern is the program scope. In order for this program to accomplish the Administration's goal of maximizing the conservation and improvement of natural resources, it is necessary to prioritize CSP assistance. The Department is seeking public comments on ways to focus and prioritize CSP assistance. For example, if the program would only fund the highest-priority applications, should there be an open application process with all applicants competing for a limited number of contracts? Should applications be constrained by resource concern, program funding, tier level, owner-operator relationship, geography or other constraint?

13. The law includes energy as a resource concern for CSP program purposes. The NRCS Field Office Technical Guide does not recognize energy as a natural resource concern and therefore no quality criteria or non-degradation standard exists to compare a conservation treatment against. NRCS is seeking comments on how energy use should be incorporated into the program requirements. How should the benefits be assessed?

14. The law includes payment for conservation practices described as requiring planning, implementation, management and maintenance. A concern was raised as to whether the payment would be, in fact, a return for equity in capital or for the engagement in intensive management. What should the program be paying for?

15.The law provides little guidance for monitoring quality assurance or specifics on identifying contract violations. The issue is two-fold in nature encompassing both the measurement of outcomes from a performance standpoint and assuring the Federal funds are spent wisely and that contracts are appropriately carried out. How should USDA ensure accountability?

Under Executive Order 12866 (58 FR 51735, October 4, 1993), USDA must determine whether the regulatory action is “significant” and therefore subject to review by the Office of Management and Budget (OMB) and the requirements of the Executive Order. The Order defines “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, it has been determined that this Advanced Notice of Proposed Rulemaking is a “significant regulatory action” in light of the provisions of paragraph (4) above as it raises novel legal or policy issues. As such, this action was submitted to OMB for review.

The regulations in 9 CFR part 94 (referred to below as the regulations) govern the importation into the United States of meat and other animal products, including milk and milk products, in order to prevent the introduction of various animal diseases, including rinderpest and foot-and-mouth disease (FMD). These are dangerous and destructive communicable diseases of livestock.

FMD is a severe and highly contagious viral infection affecting cattle, deer, goats, sheep, swine, and other animals. The most effective means of eradicating FMD is by the slaughter of affected animals. FMD is endemic to more than two-thirds of the world and is considered to be widespread in parts of Africa, Asia, Europe, and South America. FMD occurs in over seven different serotypes and 60 subtypes. As FMD outbreaks have occurred in foreign regions, the United States has banned the importation of live ruminants and swine, and restricted the importation of many animal products, from countries affected by FMD. In the past few years, the United States has implemented prohibitions and restrictions in response to outbreaks in South America, the European Union, and Taiwan.

Although FMD was eradicated in the United States in 1929, the virus could be reintroduced by a single infected animal, animal product, or person carrying the virus. Once introduced, FMD can spread quickly through exposure to aerosols from infected animals, direct contact with infected animals, contact with contaminated feed or equipment, or contact with humans harboring the virus or carrying the virus on their clothing. It appears that FMD is primarily spread among livestock through aerosol, direct contact, or ingestion of animal products, including milk products. FMD could be introduced into the United States if milk or milk products carrying the FMD virus that have not been properly processed are imported into the United States and are ingested by ruminants or other livestock in the United States.

Section 94.16 of the regulations contains provisions governing the importation of milk and milk products from FMD-affected countries. With certain exceptions, the current provisions in § 94.16 prohibit the importation of milk and milk products from regions in which FMD exists, unless the milk or milk product meets one of the conditions set forth in § 94.16(b). The products that are exempted from the importation conditions are butter, butteroil, and cheese, except cheese with liquid or containing any item prohibited or restricted from importation under the regulations unless such item is independently eligible for importation under part 94. Except for these exempted articles, milk and milk products may not be imported from any region designated in § 94.1(a)(1) as a region in which rinderpest or FMD exists unless the milk or milk products meet one of the following conditions:

1. They are in a concentrated liquid form and have been processed by heat by a commercial method in a container hermetically sealed promptly after filling but before such heating, so as to be shelf stable without refrigeration.

2. They are dry milk or dry milk products, including dry whole milk, nonfat dry milk, dried whey, dried buttermilk, and formulations that contain any such dry milk products, and are consigned directly to an approved establishment for further processing in a manner approved by the Administrator of the Animal and Plant Health Inspection Service (APHIS) as adequate to prevent the introduction or dissemination of livestock diseases into the United States. However, in specific cases, upon request by the importer to the Administrator, and approval by the Administrator, they may be stored for a temporary period in an approved warehouse under the supervision of an APHIS inspector pending movement to an approved establishment. Such products must be transported from the port of first arrival to an approved establishment or an approved warehouse, and from an approved warehouse to an approved establishment only under Department seals or seals of the U.S. Customs Service. Such seals may be broken only by an APHIS inspector or other person authorized to do so by the Administrator. Such products may not be removed from the approved warehouse or approved establishment unless the Administrator gives special permission and all the conditions and requirements specified by the Administrator are complied with.

3. Milk and milk products not exempted from the importation conditions and not meeting conditions 1 or 2 above may be imported if the importer first applies for and receives written permission from the Administrator authorizing such importation. Permission will be granted only when the Administrator determines that such action will not endanger the health of the livestock of the United States. Products subject to this provision include, but are not limited to, condensed milk, long-life milks such as sterilized milk, casein and caseinates, lactose, and lactalbumin. Additionally, small amounts of milk and milk products that would otherwise be prohibited from being imported into the United States may, in specific cases, be imported for examination, testing, or analysis if such importation is approved by the Administrator.

In light of recent FMD outbreaks in the European Union, South America, and elsewhere, we have reviewed the scientific literature and have determined that permitting the importation into the United States of butter, butteroil, and certain cheeses without their meeting specific importation conditions could pose an unacceptable risk of introducing the FMD virus into the United States. The literature we reviewed 1 indicates that the FMD virus could survive in those exempted products, so we believe that it is necessary to provide specific processing requirements for these products as a condition of their importation. These proposed processing methods are consistent with the Office International des Epizooties (OIE) standards. We are, therefore, proposing to remove the exemptions from importation conditions for the milk products listed in § 94.16(a) and instead would provide specific conditions (i.e., processing methods) under which those products could be imported. These processing methods could also be used for other products that are already eligible for importation under the conditions in § 94.16, including, but not limited to, condensed milk, long-life milks such as sterilized milk, cream, cheeses, whey, casein and caseinates.

Under this proposed rule, the milk products now listed as exempt in § 94.16(a) could be imported into the United States from a region affected with FMD only if they have been produced using one of the processing methods described below:

1. Milk or milk products (other than cheese) that are, or are made from, milk that has been treated at ultra-high temperature (UHT)(298.4 °F (148 °C) for 3 seconds or 284 °F (140 °C) for 5 seconds).

2. Milk or milk products (other than cheese) that are, or are made from, milk that has been treated at a high temperature for a short time (HTST) (161.6 °F (72 °C) for 15 seconds), followed by a second HTST treatment. For milk products made with added fat or added concentrates, the treatment temperature would have to be increased to 167 °F (75 °C).

3. Milk products made from milk that is HTST-treated then brought to a pH of less than 6 for 1 hour.

4. Cheese made from raw milk, aged at a temperature of greater than 35.6 of (2 °C) with a pH of less than 6 for 120 days prior to export from the country of origin.

5. Cheese made from HTST milk, aged at a temperature of greater than 35.6 of (2 °C) with a pH of less than 6 for 30 days prior to export from the country of origin.

The scientific evidence available to us indicates that each of the methods described above is sufficient to inactivate the FMD virus in milk and milk products.

We would also require that any milk or milk product imported under these proposed conditions (i.e., the butter, butteroil, and cheeses that would have to meet one of those conditions, as well as any other milk or milk product for which one of those methods was used as an alternative to meeting the existing importation conditions in § 94.16) be accompanied by an official veterinary certificate endorsed by a full-time, salaried veterinarian employed by the region of origin attesting to the completion of the appropriate processing. The certificate would help ensure that the required processing has been performed by requiring that a representative responsible for animal health in the exporting region verifies that the treatment has been carried out.

We are proposing to add ice cream and chocolate milk to the examples of milk products in current § 94.16 (b)(3) that may be eligible for importation based on written permission from the Administrator. We are proposing to specifically cite ice cream and chocolate milk as products requiring written permission to minimize the chance that these products may accidentally be diverted into the animal food chain.

We are also proposing to require that the examination, testing, and analysis of small amounts of milk and milk products allowed for importation under current § 94.16(b)(4) occur in a laboratory setting. This action would ensure that untreated samples would not enter the United States to be sold at trade shows or fairs.

This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the office of Management and Budget.

We are proposing to amend the regulations regarding the importation of animal products to establish specific processing requirements for certain cheeses, butter, and butteroil imported from regions in which FMD exists. Those processing methods could also be used for other milk and milk products that are already eligible for importation under different conditions, thus allowing their importation under a greater variety of conditions. Additionally, we are proposing to require that products imported from regions in which FMD exists and processed using one of the proposed methods be accompanied by government certification regarding their processing. We believe these actions are necessary to ensure that products containing the FMD virus are not imported into the United States.

The establishment of FMD in the United States could result in serious economic consequences, given the size of the Nation's livestock inventories and the volume of animal and animal product sales. Potential losses associated with an outbreak of FMD include production losses at affected establishments, eradication and quarantine costs, and trade restrictions.2 Production losses arise from lost production on depopulated premises and in the industries linked to the livestock sector. There would also be additional costs to be borne by producers and slaughterers, as restrictions would be imposed to prevent the spread of FMD and eradicate the disease within the United States. These restrictions and eradication measures would also mean added costs to the government for implementation and enforcement.

FMD outbreaks in the spring of 2001 in the United Kingdom illustrate these costs. Control of FMD in the United Kingdom became a nationwide undertaking, with restrictions on the movement of animals (and people), large-scale slaughter of animals on affected and neighboring farms, and disposal of carcasses through burning, rendering, or burial. The last case of FMD in the United Kingdom was found on September 30, 2001; by the time the United Kingdom declared the outbreak eradicated on January 14, 2002, 586,551 cattle, 3,466,493 sheep, 148,388 pigs, 2,482 goats, 1,021 deer, and 770 other animals had been slaughtered.3 In addition, the European Union banned the export of meat, livestock, and milk products from the United Kingdom. As is shown below, the United States is a major exporter of products whose international movement could be affected by an outbreak of FMD in the United States. In addition to a likely reduction in demand from international consumers, trading partners of the United States would likely impose restrictions on, and reduce imports of, U.S. ruminants, swine, and some of their products in the event of an FMD outbreak in the United States.

According to “Agricultural Statistics 2001,” published by National Agricultural Statistics Service (NASS), cattle in U.S. herds in 2000 were valued at $67.1 billion, with 1999 cash receipts of $36.5 billion from the sale of cattle, calves, beef, and veal. Cash receipts from the sale of milk and cream in 1999 reached $23.2 billion. U.S. hogs and pigs in 2000 were valued at $4.6 billion, with 1999 cash receipts from the sale of hogs, pork, and lard totaling $8.6 billion. Sheep and lamb inventories in 2000 were valued at $668.8 million, with 1999 cash receipts of $468.8 million from the sale of live sheep and lambs and of mutton and lamb. The value of U.S. wool production in 1999 totaled about $17.9 million.

U.S. exports of live bovines, swine, sheep, and goats were valued at $304.5 million in 2000. U.S. exports of fresh beef, pork, and sheep and goat meat totaled $4.4 billion in 2000. U.S. exports of fresh ruminant and swine products other than meat were valued at $718.4 million in 2000. U.S. exports of prepared and preserved ruminant and swine meat products such as sausages and cured, salted, and dried meats were valued at $375.5 million in 2000. U.S. exports of dairy products totaled $784.1 million in 2000. In addition, the United States exports a great number of other ruminant and swine products including germplasm, hides and skins, animal feeds, dairy products, bones, hair, guts, and glands.

In order to help prevent an outbreak of FMD in the United States, and thus protect the substantial domestic and export market described above, imports of certain cheeses, butter, and butteroil from regions affected with FMD would be subject to specific processing requirements as a result of this proposed rule. Other products, including milk, cream, casein, whey, caseinates, and ice cream, which are already eligible for importation under different conditions, could also be processed using the proposed methods as an alternative to meeting the existing requirements governing the importation of those products. Those products, as previously discussed, would need to be accompanied by an official veterinary certificate that attests to the completion of the appropriate processing. U.S. imports of these products in 2000 from regions affected with FMD and the world are shown in Table 1.

Approximately 9 percent of these imports were from regions affected with FMD. Information on the portion of butter, butteroil, and cheese imports from FMD-affected regions that do not currently meet the proposed requirements is not available. However, the impact of the proposed changes is expected to be small. Imports in total are small relative to domestic production. For example, butter imports totaled 18,059 metric tons in 1999, while domestic production of butter was 578,349 metric tons. In addition, APHIS anticipates that the majority of these imports currently meet, or could relatively easily be made to meet, the requirements described in this proposed rule, as most processors already possess and use the equipment necessary to meet the proposed standards. In addition, certain products (i.e., dry milk and dry milk products including dry whole milk, nonfat dry milk, dried whey, dried buttermilk, and formulations which contain any such dry milk products) would continue to be eligible for importation under existing regulations and would not be required to meet the specific proposed requirements.

For most types of cheese imported into the United States, this proposed rule should have little impact. At a total of 197,537 metric tons in 1999, the amount of imported cheese was equal to about 5 percent of domestic cheese production, which was about 3.6 million metric tons. In addition, most U.S. imports of cheese currently meet or should be able to meet the requirements for time, temperature, and pH level in this proposed rule. There are notable possible exceptions to this. The aging requirement in the proposed rule may affect the importation of some cheeses, as additional aging may alter the character of some cheeses made with raw milk and some cheeses with eye-formation such as Swiss cheese, thus making them less desirable or unavailable for importation. In 1999, the United States produced about 100,000 metric tons, and imported more than 34,000 metric tons, of Swiss cheese. Table 2 shows U.S. imports of Swiss type cheeses and their origin in 1998 through 2000. The extent to which imports of Swiss cheese and raw milk cheese may be altered as a result of the proposed rule is unknown. However, the effect should be exceedingly small, as more than 99 percent of U.S. Swiss cheese imports in 2000 originated in FMD-free countries.

In addition to the specific processing requirements for butter, butteroil, and certain cheeses imported from regions affected by FMD, this proposed rule would also require government certification that those requirements have been met. The cost of obtaining certification may affect the price of the product paid by U.S. importers and end users. However, the cost of obtaining such certification is expected to be low. The certification is simply a signed statement from the veterinary official of the exporting country attesting that the requirements have been met. Certification would be a new requirement for cheese (without liquid or restricted items), butter, and butteroil. Under the current regulations, these items may enter without restriction. In 2000, about 40 percent of the $530 million in milk and milk products imported from FMD-affected countries were cheese and butter.

For some other imports, the proposed rule would expand import options. For example, certain products such as condensed milk, long-life milks such as sterilized milk, casein and caseinates, lactose and lactalbumin, are currently allowed entry if written permission is given for their importation, and other products such as dry milk or dry milk products are currently allowed entry only if consigned to an approved facility for further processing. If any of these products were produced using milk processed in accordance with methods described in this proposal, those products would be eligible for importation if accompanied by the certification described in the previous paragraph. The number of producers in FMD-affected regions that might opt to use the processing methods described in this proposed rule for these products is unknown. We expect that those producers would use UHT-or HTST-treated milk in the preparation of their products if that option was viable from a production standpoint and was an economically attractive alternative to the existing requirements in § 94.16 governing the importation of these products.

The quantity of imports from FMD-affected regions that might be produced using milk treated in accordance with this proposed rule is not known, nor is the degree to which that treatment might affect the cost of those imports.

As this proposed rule would simply provide an alternative to the current importation provisions for milk and milk products other than butter, butteroil, and cheese, we expect that the effect of this proposed rule on imports of those products, which in 2000 constituted about 60 percent of milk and milk product imports from FMD-affected regions, would be small.

This proposed rule may involve added costs for importers and users of butter, butteroil, and certain cheeses, as those imports from FMD-affected regions would be required to meet new processing and certification requirements. However, because FMD-affected regions account for a small portion of all U.S. imports of these products and represent an even smaller fraction of domestic production and overall supply, the impacts on domestic prices and consumption will be small. Moreover, these costs are very small when compared to the benefits of preventing an outbreak of FMD in the United States. Such an outbreak could have serious economic consequences given the size of the nation's livestock inventories and the volume of animal and animal product sales.

The Regulatory Flexibility Act requires that Agencies specifically consider the economic impact of their rules on small entities. Those entities most likely to be affected by the proposed rule are domestic importers of milk and milk products, domestic users of these products, and dairy farms.

The Small Business Administration (SBA) has established guidelines for determining which establishments are to be considered small entities under the Regulatory Flexibility Act. According to North American Industry Classification System (NAICS) codes 422430 and 422490, import/export merchants, agents, and brokers are identified in the wholesaling trade. A firm engaged in wholesaling dairy products is considered small if it employs fewer than 100 persons. In 1997, more than 97 percent (2,460 of 2,522) of dairy products (except dried or canned) wholesalers would be considered small, and more than 95 percent (12,251 of 12,845) of other grocery and related products wholesalers, which includes dried and canned dairy products, would be considered small.4 An establishment engaged in dairy cattle and milk production (NAICS code 112111) is considered small if it has annual sales of less than $750,000. According to the 1997 Census of Agriculture, at least 79,155 of 86,022 (or 92 percent) of dairy farms would be considered small. The size standards for establishments engaged in food manufacturing range from fewer than 500 employees to fewer than 1,000 employees, depending on the type of food being manufactured. An establishment engaged in dairy product manufacturing (NAICS code 3115) is considered small if it employs fewer than 500 persons. This is also the standard for non-chocolate confectionary manufacturing, NAICS code 311340, which includes granola and other types of breakfast bars. In 1997, 25,729 of 26,302 (or more than 97 percent) of food manufacturing establishments would be considered small.5

From the above it is clear that any domestic entity affected by this proposed rule is likely to be considered small. However, for most milk products, the quantity imported is a small fraction of that produced domestically, and the quantity of imports supplied by FMD-affected regions is a smaller percentage still of domestic supply. Thus, the impact of this proposed rule on small entities is expected to be small.

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

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. If this proposed rule is adopted: (1) All State and local laws and regulations that are inconsistent with this rule will be preempted; (2) no retroactive effect will be given to this rule; and (3) administrative proceedings will not be required before parties may file suit in court challenging this rule.

In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the information collection or recordkeeping requirements included in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB). Please send written comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please state that your comments refer to Docket No. 01-040-1. Please send a copy of your comments to: (1) Docket No. 01-040-1, Regulatory Analysis and Development, PPD, APHIS, Station 3C71, 4700 River Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue, SW., Washington, DC 20250. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this proposed rule.

We are proposing to amend the regulations regarding the importation of animal products to establish new processing requirements for butter, butteroil, and certain cheeses imported from regions in which FMD exists. Additionally, we are proposing to require that those materials, as well as other milk or milk products that are processed using the new proposed methods in lieu of meeting the existing importation conditions, when imported from regions in which foot-and-mouth disease exists, be accompanied by government certification by a salaried veterinarian employed by the region of origin regarding the processing of the materials.

We are asking OMB to approve, for 3 years, our use of this information collection activity in connection with our efforts to ensure that milk and milk products imported into the United States from FMD regions do not harbor the FMD virus.

We are soliciting comments from the public (as well as affected agencies) concerning our proposed information collection and recordkeeping requirements. These comments will help us:

(1) Evaluate whether the proposed information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;

(2) Evaluate the accuracy of our estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;

(3) Enhance the quality, utility, and clarity of the information to be collected; and

(4) Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submission of responses).

Estimate of burden: Public reporting burden for this collection of information is estimated to average 0.25 hours per response.

Respondents: Exporters of milk and milk products in FMD regions; full-time, salaried veterinarians employed by the region of origin.

Estimated annual number of respondents: 200.

Estimated annual number of responses per respondent: 5.

Estimated annual number of responses: 1,000.

Estimated total annual burden on respondents: 250 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) Copies of this information collection can be obtained from Mrs. Celeste Sickles, APHIS” Information Collection Coordinator, at (301) 734-7477.

The Animal and Plant Health Inspection Service is committed to compliance with the Government Paperwork Elimination Act (GPEA), which requires government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. For information pertinent to GPEA compliance related to this proposed rule, please contact Mrs. Celeste Sickles, APHIS” Information Collection Coordinator, at (301) 734-7477.

Accordingly, we propose to amend 9 CFR part 94 as follows:

On December 26, 2002, the Commission published a Notice of Proposed Rulemaking [”NPRM”] proposing three alternative sets of rules addressing political committees that are associated with a Federal candidate or officeholder, and potential limitations to the contributions that such committees may accept and make. 67 FR 78753 (Dec. 26, 2002). The comment period for the NPRM ended on January 31, 2003. Eight sets of comments were received by the Commission in response to the NPRM. Seven commenters, who submitted six of the sets of comments, requested to testify at a public hearing if one is held.

After considering these requests and the other comments received to date in response to the NPRM, the Commission believes a public hearing would be helpful in considering the issues raised in the rulemaking. As the Commission stated in the NPRM, the hearing will be held at 9:30 a.m. on February 26, 2003.

The Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act of 1993 (Pub. L. 102-395) requires that the Drug Enforcement Administration (DEA) collect fees to ensure the recovery of the full costs of operating the Diversion Control Program. Section 111(b)(3) of the act, codified at 21 U.S.C. 886a(3), requires that “fees charged by the Drug Enforcement Administration under its diversion control program shall be set at a level that ensures the recovery of the full costs of operating the various aspects of that program.” Section 111(b)(1) of the act also requires that “there shall be deposited as offsetting receipts into that account all fees collected by the Drug Enforcement Administration, in excess of $15,000,000, for the operation of its diversion control program.”

Since 1970 the Controlled Substances Act (CSA) has authorized the Attorney General to “charge reasonable fees relating to the registration and control of the manufacture, distribution, and dispensing of controlled substances.” 21 U.S.C. 821 and 958(f). This fee is collected by the Deputy Administrator of DEA for the Attorney General and is the only fee collected by DEA to support the Diversion Control Program. DEA does collect a user fee to support its listed chemical activities. However, this fee does not fall within the scope of this notice (see below for a further discussion). The fee schedule for the CSA was established in 1971 and was adjusted in 1984 and again in 1993. The fees have remained unchanged since that time.

Following publication in the Federal Register of the fee adjustment in 1993, the American Medical Association (AMA) and others filed a complaint in the United States District Court for the District of Columbia objecting to the new fees. The district court issued its final order granting the government's motion for summary judgment and disposing of all claims on July 5, 1994. AMA v. Reno, 857 F. Supp. 80 (D.D.C. 1994). The AMA appealed, and on July 27, 1995 the United States Court of Appeals for the District of Columbia Circuit remanded, without vacating, the rule to DEA. Specifically, the court required DEA “to identify the components of the fee-funded diversion control program and provide a brief explanation of why it deemed each component to be a part of that program.” AMA v. Reno, 57 F.3d 1129, 1135 (D.C. Cir. 1995).

DEA responded to the remand requirement through a notice in the Federal Register on December 30, 1996, describing the fee-funded components and activities of the DCP with an explanation of how each satisfies the statutory requirements for fee-funding. 61 FR 68624-32. DEA accepted comments on this final rule and, based on these comments, published its final rule on the Drug Diversion Control Fee Account (DDCFA) in the Federal Register on August 9, 2002. This rule contains information on the Specific DCP activities funded by the DDCFA. Copies of both the December 30, 1996 and August 9, 2002 rulemakings may be found on the Diversion Control Program Web site: http://www.deadiversion.usdoj.gov.

This announcement establishes the fee structure under the existing registration system to fully support the operations of the Diversion Control Program for Fiscal Year 2004 through Fiscal Year 2006. Since the last published rule in 1993, the Diversion Control Program has experienced significant growth without any associated increase in registrant fees to support the growth and increased funding needs. DEA is required by law (see below) to collect the full costs of the Diversion Control Program. The amount to be recovered is established by the Congressional appropriations process. The projected amount required to be recovered for Fiscal Year 2004, based on the President's Budget Request, will be $133.6 million; the estimated amount required to be recovered for Fiscal Year 2005 will be $157.3 million. The estimated amount required to be recovered for Fiscal Year 2006 will be $160.3 million. These figures include required program growth and the mandatory annual $15 million transfer to the U.S. Treasury.

DEA's authority to collect registration fees derives from three statutory provisions. DEA is authorized by 21 U.S.C. 821 to collect “reasonable fees relating to the registration and control of the manufacture, distribution and dispensing of controlled substances and to the registration and control of regulated persons and of regulated transactions.” Secondly, 21 U.S.C. 958(f) permits DEA to collect “reasonable fees relating to the registration of importers and exporters of controlled substances or List I chemicals.” Lastly, the 1993 Appropriations Act added a provision requiring DEA to set a fee schedule “that ensures the recovery of the full costs of operating the various aspects of that program.” 21 U.S.C. 886a(3). The United States Court of Appeals for the District of Columbia Circuit noted that in establishing the DDCFA, Congress left intact the fee collection requirements of 21 U.S.C. 821, confirming boundaries of the DCP that DEA can fund by registration fees. AMA v. Reno, 57 F.3d 1129, 1135 (D.C. Cir. 1995). Although the court made no specific mention of 21 U.S.C. 958(f), those same boundaries remain intact as well. The court found that the current statutory scheme thus requires DEA to set registration fees to recover the full costs of the DCP, while requiring DEA to charge “reasonable” fees relating to the registration and control of the manufacture, distribution and dispensing of controlled substances and the registration and control of regulated persons and of regulated transactions.

DEA, therefore, must examine DCP activities in conjunction with the nexus requirements of 21 U.S.C. 821 and 958(f) to determine whether it can properly fee-fund them while setting fees that recover the full cost of these activities.

DEA's mission with respect to licit controlled pharmaceuticals is to prevent, detect and eliminate the diversion of controlled pharmaceuticals from legitimate channels to illegal use, while at the same time ensuring their availability for legitimate medical and scientific purposes. To facilitate these goals, Congress, through the CSA, established a closed system of controlled substance distribution encompassing manufacturers, distributors, pharmacies and practitioners; that is, within this closed system a controlled substance can be traced from the time it is manufactured to the time it is dispensed to the ultimate user. This system has proven effective in reducing the diversion of these substances from legitimate channels to the illicit market. Components of this closed system include scheduling of all controlled substances, registration of all controlled substance handlers, recordkeeping for accountability, security, and manufacturing quotas, all under DEA DCP oversight. (The DCP also possesses similar chemical control responsibilities pursuant to the Chemical Diversion and Trafficking Act (CDTA) and subsequent legislation.)

The plain language of the 1993 Appropriations Act requires DEA to set and collect registration fees to cover the full costs of operating its Diversion Control Program. In its 1993 final rule publication setting new registration fees, DEA examined all activities that relate to the registration and control of the manufacture, distribution and dispensing of controlled substances and to the registration (and control) of importers and exporters. DEA determined that “activities contained in the [diversion] program which give rise to the fees consist of diversion investigators, analysts, technicians, and clerical personnel salaries and expenses; and travel, rent, utilities, supplies, equipment and services associated with these positions for the registration and control of the manufacture, distribution and dispensing of controlled substances.” 58 FR 15273. DEA determined that it would not fee-fund costs associated with chemical control efforts (see below), clandestine laboratory efforts, overseas staff (specifically diversion investigators assigned to foreign posts), DEA's Office of Chief Counsel or executive direction. 58 FR 15273. DEA concluded that these activities were excluded from the Attorney General's budget delineation for the category of “Diversion Control” and thus not included in the determination of the fees. Id.

At the time this initial rule was published on March 22, 1993, 21 U.S.C. 821 did not extend to chemical control activities (“regulated transactions”). Accordingly, there were no registration or fee requirements for handlers of List I chemicals, and chemical control activities were not included among those to be supported by the DDCFA. Congress amended 21 U.S.C. 821 on December 17, 1993 to require reasonable fees relating to “the registration and control of regulated persons and of regulated transactions.” Domestic Chemical Diversion Control Act of 1993, 3(a), Pub. L. 103-200, 107 Stat. 2333. Despite this amendment, to date DEA's chemical control activities have continued to be supported by appropriated funds and not by the DDCFA.

In its December 1996 Federal Register notice, DEA further excluded from fee-funding those activities that incidentally support the DCP but are funded elsewhere in the DEA Salaries Budget (and thus not fee-funded). Specific examples listed in the notice include “support provided by the Attorneys in DEA's office of Chief Counsel Division Regulatory Section; certain laboratory service support; DEA Automated Data Processing Systems support (except ARCOS and CSA); Office of Training staff; DEA Management and Administrative Support; Office of Congressional and Public Affairs; Intelligence Support and Diversion Investigators assigned overseas.” 61 FR 68631.

In summary, to date fee-fundable DCP activities have included: scheduling, registration, investigation, inspection, data collection and analysis, training, establishing production quotas, cooperative efforts with state, local and other federal agencies, cooperative efforts with the regulated industry, international activities relating to the registration and control of the manufacture, distribution and dispensing of controlled substances, and attendant management, personnel, administrative and clerical oversight for the DCP because they too relate to the fee-funding criteria of 21 U.S.C. 821 and 958(f). Fee-fundable activities also have included travel, rent, utilities, supplies, equipment and services associated with the above-listed activities. Fee-fundable activities also have included activities related to the control of licit controlled substances in the United States in which the initial source is foreign. For example, smuggling a controlled substance into or introducing it into the United States is importation, albeit illegal, and constitutes an activity for which DEA registration and controls are required under the CSA and its implementing regulations; therefore activities to prevent smuggling fall under the purview of the DCP. Foreign-source substances potentially threaten the integrity of the closed system of distribution and undermine other diversion control efforts by DEA. They also may pose a public health threat and/or unlawful competition to legal, registered U.S. manufacturers and suppliers. The advance of the Internet in particular has made foreign-source substances more accessible in the United States and the diversion of these substances a greater problem. The DCP now will address the activities that will be funded by the DDCFA as part of its programmatic responsibilities.

A more detailed description of the activities funded through the DDCFA is included in DEA's 1996 final rule (61 FR 68631) and amended final rule published on August 9, 2002 (67 FR 51988).

Since the last published rule in 1993, the Budget Authority for the Diversion Control Program has doubled without any associated increase in registrant fees. Currently, the fees established in 1993 are no longer adequate to recover the “full costs” of operating the DCP as required by law.

The Congressional appropriation for the DCP for Fiscal Year 1994 was $57.1 million. For Fiscal Year 2004, the expected Budget Authority will be $118,561,000 (this figure does not include the mandatory $15 million transfer to the U.S. Treasury). The growth in the DCP has been driven by a number of factors some of which have been reflected in DEA budget submissions such as the creation of Tactical Diversion Squads in Fiscal Year 1997. Other DCP expansions include DEA's response to the diversion of OxyContin®, involving the opening of 247 cases from October 1999 through March 2002 (including 159 cases in Fiscal Year 2001 alone, a 270 percent increase from Fiscal Year 2000). These cases have led to a total of 328 arrests. DEA is also expending increasing time and resources on implementing its initial response to internet-based drug diversion, for which it has opened a number of cases leading to arrests and convictions. DEA has also seen an increase in the number of drug diversion cases leading to arrests. (The number of diversion arrests more than doubled in just five years, from 444 arrests in Fiscal Year 1995 to 941 diversion arrests relating to drug cases alone in Fiscal Year 2000. DEA made 871 diversion arrests relating to drug cases in Fiscal Year 2001, and 341 arrests in the first six months of Fiscal Year 2002. The slight decrease in arrests in Fiscal Year 2001 and the first half of Fiscal Year 2002 is attributable to a greater emphasis on chemical investigative activities.) These additional programmatic needs and responsibilities have required additional investigators, headquarters staff and increased financial resources to support these staff and their efforts to prevent the diversion of licit controlled substances

The following table shows the annual growth in Budget Authority for the DCP from Fiscal Year 1994 through Fiscal Year 2006 (expected Budget Authority for FY03 and estimated Budget Authority for FY04, FY05, and FY06). The Budget Authority is based on the President's Budget Request. Note, these figures do not include the required annual $15 million transfer to the U.S. Treasury.

In reviewing the activities currently supported by the DDCFA and the relevant legislation and regulatory actions governing the DCP and fee funding, DEA identified several elements of DEA operations that, though not part of the DCP, incidentally support the activities of the DCP and which to date have been funded through Congressional appropriations rather than through the DDCFA. Examples of such elements include two sections within the Office of Chief Counsel that (a) litigate administrative actions related to DEA registrants and (b) provide legal support on regulatory policy matters; a section within the Office of Training that is specifically dedicated to the DCP; a portion of the Office of Forensic Sciences Special Testing Laboratory that supports authentic sample analyses for licit drugs; and a portion of the budget for DEA's agency-wide computer network, “Firebird”, related to the work of the DCP. As was discussed more fully in previous rulemakings regarding the DDCFA, while these elements incidentally support diversion control efforts, because their overall function is not primarily devoted to diversion control, they have been included elsewhere in the DEA budget and not as part of fee-fundable activities. In the absence of specific guidance in the 1993 Appropriations Act as to which activities were encompassed within the DCP and thus fee-fundable, DEA has followed the plain language of the act and used the budget categories that had historically been included in the DCP budget request of the Attorney General. As described in DEA's 1996 Federal Register notice, for the purposes of budget formulation and appropriation, DEA historically has identified only those resources (with their overhead costs) that were specifically devoted to diversion control efforts as part of the DCP in its annual budget submission to Congress. Other resources which support a broad range of DEA activities, including diversion control, therefore have been included in the budget formulation and appropriation process and not funded through the DDCFA. 61 FR 68631. At this time these activities will continue to be funded through appropriated funds as DEA considers how to better comply with the applicable laws in the future.

DEA set the current fee schedule for the Diversion Control Program (DCP) through publication in the Federal Register on March 22, 1993. This announcement outlined the general categories of cost to be borne by the resulting Drug Diversion Control Fee Account (DDCFA) and delineated the fee categories indicated below:

Since this announcement, the fees, which as required by law support the full cost of the Diversion Control Program, have not changed despite growth in the program and additional costs borne by the program (see the previous section). To recover the full costs of the DCP as required by law, DEA plans to incrementally raise the fees in accordance with its existing fee structure as follows:

These increases in fees will go into effect 30 days after the publication of the final rule.

The determination of fees for the Fiscal Year 2004-2006 period covered by this notice is based on the expected Budget Authority for Fiscal Year 2004 (based on the President's Budget Request) and the estimated budget request and appropriation for each subsequent year plus the annual $15 million transfer to the U.S. Treasury. In addition to covering with fee funds all program elements and activities related to the registration and control of the manufacture, distribution and dispensing of controlled substances, DEA must transfer the first $15 million of fee revenue to the General Fund of the Treasury each year. 21 U.S.C. 886a(1). For each fiscal year between Fiscal Year 1993 through Fiscal Year 1998, Congress appropriated an additional $15 million to offset this requirement (a total infusion to the DDCFA of $90 million). However, beginning in Fiscal Year 1999, Congress discontinued this additional appropriation.

The expected Budget Authority for Fiscal Year 2004 is $118,561,000, which accounts for increases in program costs due to inflation, increases in federal staff salaries, and additional funds to undertake a number of new initiatives to prevent, detect and eliminate the diversion of controlled substances while ensuring an adequate supply for legitimate medical and scientific purposes. Funds include $12,518,000 for diversion investigation (for 93 positions), including OxyContin® diversion control and implementation of a system to detect Internet sites that may divert controlled substances and investigation of those sites, as warranted. This will permit DEA to conduct additional and more complex investigations into the diversion of pharmaceutical controlled substances. Other funds accounted for include $12,098,000 (for 40 positions) to develop a system to permit the electronic transmission of controlled substances prescriptions from prescriber to pharmacy and to develop an electronic order form for Schedule I and II controlled substances. These electronic alternatives will provide a similar or higher degree of security/integrity than current paper-based systems and will help DEA to meet its legal mandates under the Government Paperwork Elimination Act. The total cost of program enhancements for Fiscal Year 2004 is $24,873,000. Including the mandatory transfer to Treasury of $15 million, the total amount required to be recovered for Fiscal Year 2004 is $133,561,000.

The anticipated President's Budget Request for Fiscal Year 2005 is $142,265,000. This figure accounts for increases in program costs due to inflation (including such items as postage rate increase, increases in cost of employee health benefits, increases in GSA rent, etc.), costs of federal staff pay increases, and an additional $20,578,000 (for 39 positions). This figure includes costs to support the systems to permit the electronic transmission of controlled substances prescriptions and electronic orders of Schedule I and II controlled substances, the support and operation of DEA's Internet investigations, a major upgrade to the Automation of Reports and Consolidated Orders System (ARCOS), and significant improvements to registration customer/forms service. Other funds accounted for include liaison, policy, regulatory, and analytical activities of the Diversion Control Program. Including the mandatory transfer to Treasury of $15 million, the total amount required to be recovered for Fiscal Year 2005 is $157,265,000.

The anticipated President's Budget Request for Fiscal Year 2006 is $145,307,000 which accounts for inflationary growth from the previous fiscal year estimate and increases in Federal staff salaries. Including the mandatory transfer to Treasury of $15 million, the total amount required to be recovered for Fiscal Year 2006 is $160,307,000.

To calculate inflationary growth, DEA used inflation figures of 1.5 percent for Fiscal Year 2004, 1.6 percent for Fiscal Year 2005 and 1.7 percent for Fiscal Year 2006 and salary increase assumptions of 2.0 percent for Fiscal Year 2004 and 3.4 percent for both Fiscal Year 2005 and Fiscal Year 2006, based on the President's Economic Assumptions. The total amount necessary to collect through fee funds for the Fiscal Year 2004-2006 period is $451,133,000. Based on the amounts required to be collected for the 2004-2006 period to comply with the law, DEA developed the specific fee levels for each registrant category reflected in the previous table. To calculate these fees, DEA first estimated the number of paying registrants for this period and then used this figure combined with the amount required to be collected to set the new fee rate. To calculate the number of paying registrants, DEA used logarithmic regression analysis to project the yearly registrant figures based on historical registrant data for the period of Fiscal Year 1994 through Fiscal Year 2001.

DEA then estimated the number of registrants for each registrant category since different registrant categories pay different fees. Because there were insufficient data for some activities to perform regression analysis, DEA used the percentage for each category using data from the corresponding cycle years in the past.

Finally, based on the analyses conducted, DEA developed the fees for each registrant category consistent with its current fee structure. In doing so, DEA opted to set the fee level for a three-year period (FY 2004-2006) to avoid the heavy burden on registrants and the additional administrative expenses to DEA that resetting the fee each year would impose. Accordingly, the fees above reflect the total amount necessary to be collected for the full three-year period (FY 2004-2006) divided by projected registrants and accounting for projected registrant growth by category for each fiscal year. Because different categories of registrants pay different amounts, DEA weighted the number of registrants in each category to ensure the appropriate reflection in the fee schedule. Because the fees reflect the total amount necessary to be collected for the Fiscal Year 2004-2006 period, DEA may accumulate additional funds beyond those necessary for actual program operations in the initial year (Fiscal Year 2004), but in the final year of the period (Fiscal Year 2006) fee collections are anticipated to fall short of the amount necessary to cover expenditures in that year, so DEA will then draw down the previously collected surplus. The alternatives to this approach would be to reset the fee each year or to set a different fee for each fiscal year; both of these options would cause unnecessary confusion and would impose greater administrative burdens on DEA and registrants.

The Deputy Administrator hereby certifies that this rulemaking has been drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation, and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small entities. While DEA recognizes that this regulation will have a financial effect on registrants with the increase in fees, the change in fees is not significant. Moreover, the fees have not been changed in nine years, and DEA is legally mandated to collect fees to cover the full costs of the Diversion Control Program. The appropriations process was used to determine the budget on which the fees are based. The increase in fees after nine years covers both inflation and enhancements to address additional responsibilities assumed by the Diversion Control Program.

In considering options for collecting the full costs of the Diversion Control Program as mandated by law (21 U.S.C. 886a(3)), DEA considered several alternatives to the approach proposed in this regulation. One alternative would be to reset the fee each year for each category of registrant according to the Budget Authority. Another alternative would be to set a different fee for each fiscal year. DEA determined that both of these options would cause unnecessary confusion with fee changes each year and would impose greater administrative and financial burdens on DEA and registrants than the approach proposed in this regulation.

The Deputy Administrator further certifies that this rulemaking has been drafted in accordance with the principles in Executive Order 12866 Section 1(b). DEA has determined that this is not a significant regulatory action, but this action has been reviewed by the Office of Management and Budget.

This regulation meets the applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform.

This rulemaking does not preempt or modify any provision of state law; nor does it impose enforcement responsibilities on any state; nor does it diminish the power of any state to enforce its own laws. Accordingly, this rulemaking does not have federalism implications warranting the application of Executive Order 13132.

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate of $100,000,000 or more in any one year, and will not significantly or uniquely affect small governments. While it will affect the private sector in excess of $100,000,000 per year, the effect on individual entities and practitioners is minimal. The majority of the affected entities will pay $131 per year (or $391 for a three year registration period). Moreover, this rule is promulgated in compliance with Congressional mandate that the full cost of operating the DCP be collected through registrant fees as stipulated in the 1993 Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act (Pub. L. 102-395) and codified in 21 U.S.C. 886a(3). Detailed estimates and analyses, including specific fee amounts for individual registrants, are included in the text of the proposed rule.

This rule is not a major rule as defined by Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. While this rule will result in an annual effect on the economy of $100,000,000 or more, it will not result in a major increase in costs or prices or cause significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets. This rule is not a discretionary action but rather responds to the Congressional mandate that the full operating costs of the DCP be collected through registrant fees as described above. The individual effect on small business registrants is minimal ranging from $131 to $1,605 per year with the majority of affected registrants paying an annual fee of $131 (or $391 for three years).

The regulations at 36 CFR part 242 and 50 CFR part 100 (referred to below as “the regulations”), authorized by Title VIII of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3101-3126), implement the Federal Subsistence Management Program on public lands in Alaska.

On May 7, 2002, we published in the Federal Register (67 FR 30559-30571) a final rule that made certain changes to the regulations. In that final rule, we clarified how old a person must be to receive a Federal Subsistence Registration Permit or Federal Designated Harvester Permit, and we retained, without change, a long-held requirement that Regional Councils must have an odd number of members.

At the request of other agencies, in the final rule, we added language to § ___.6(b) of the regulations to clarify that, “In order to receive a Federal Subsistence Registration Permit or Federal Designated Harvester Permit or designate someone to harvest fish or wildlife for you under a Federal Designated Harvester Permit, you must be old enough to have reasonably harvested that species yourself (or under the guidance of an adult).” Since the publication of the final rule, we have determined that this language could be misleading and should be further clarified. Therefore, we are proposing editorial changes to this paragraph to make it easier to understand.

In addition, in the final rule, we retained, without change, a long-held requirement in § ___.11(b)(1) stating, “The number of members for each Regional Council shall be established by the Board, and shall be an odd number.” We retained the requirement that Regional Councils have an odd number of members to prevent the possibility of a tie during Council votes. Since the publication of the final rule, however, the Deputy Secretary of the Department of the Interior approved a Federal Subsistence Board recommendation to increase the size of Regional Councils to 10 or 13 members. These increases will help achieve better balance, as required by the Federal Advisory Committee Act (5 U.S.C. App.1), in Regional Councils. Further, we have learned that in Regional Council meetings, if a vote count is tied, that motion fails; therefore, our reason for requiring an odd number of members does not apply. In light of this new information, we are proposing to revise § ___.11(b)(1) to remove the requirement that Regional Councils must have an odd number of members. This change would bring this paragraph into accord with current policies.

Elsewhere in today's Federal Register, we have published a direct final rule to promulgate the same regulatory changes to 36 CFR 242 and 50 CFR 100 proposed here. We published the direct final rule because we believe these changes are noncontroversial and anticipate no adverse public comment on them. If we receive no adverse comments regarding these amendments within 45 days, then these changes become effective 60 days from today, and we will withdraw this proposed rule. If we do receive adverse comments, then this proposed rule initiates the normal notice-and-comment rulemaking proceedings. We are opening this comment period for 45 days instead of 60 days because we need this regulatory change in place prior to the councils' recruitment and appointment process for the winter 2004 meeting cycle. This entire process normally takes a year to complete.

An economic analysis is not necessary, as this proposed rule would not have an economic impact on any entities, large or small. The Office of Management and Budget (OMB) has determined that this proposed rule is not a significant rule under E.O. 12866, and, therefore, OMB has not reviewed this proposed rule.

In accordance with the Unfunded Mandates Reform Act:

(a) This proposed rule would not “significantly or uniquely” affect small governments. A Small Government Agency Plan is not required.

(b) This proposed rule would not produce a Federal mandate of $100 million or greater in any year, that is, it is not a “significant regulatory action” under the Unfunded Mandates Reform Act.

In accordance with Executive Order 12630, this proposed rule would not have significant takings implications. A takings implication assessment is not required.

In accordance with Executive Order 13132, the proposed rule would not have significant Federalism effects. A Federalism assessment is not required.

In accordance with Executive Order 12988, the Office of the Solicitor has determined that the proposed rule would not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.

This proposed rule does not contain any new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995.

We have determined that an Environmental Assessment and/or an Environmental Impact Statement as defined by the National Environmental Policy Act of 1969 need not be prepared for this proposed rule. This proposal does not constitute a major Federal action significantly affecting the quality of the human environment.

For the reasons set out in the preamble, the Departments propose to amend Title 36, Part 242, and Title 50, Part 100, of the Code of Federal Regulations, as set forth below.

Regulated Entities. Categories and entities potentially regulated by this action are kraft, soda, sulfite, and stand-alone semichemical pulp mills with chemical recovery processes that involve the combustion of spent pulping liquor. 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 this action. To determine whether your facility is regulated by this action, you should carefully examine the applicability criteria in § 63.860 of the national emission standards. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section of this document. Docket. The EPA has established an official public docket for this action under Docket ID No. OAR-2002-0045. The official public docket is the collection of materials that is available for public viewing at the EPA Docket Center (Air Docket), EPA West, Room B-108, 1301 Constitution Avenue, NW, Washington, DC 20460. The Docket Center is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742.

Electronic Access. An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public comments, access the index of the contents of the official public docket, and access those documents in the public docket that are available electronically. Once in the system, select “search” and key in the appropriate docket identification number.

Certain types of information will not be placed in the EPA Dockets. Information claimed as confidential business information (CBI) and other information whose disclosure is restricted by statute, which are not included in the official public docket, will not be available for public viewing in EPA's electronic public docket. The EPA's policy is that copyrighted material will not be placed in EPA's electronic public docket but will be available only in printed paper form in the official public docket. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in this document.

For public commenters, it is important to note that EPA's policy is that public comments, whether submitted electronically or on paper, will be made available for public viewing in EPA's electronic public docket as EPA receives them and without change, unless the comment contains copyrighted material, CBI, or other information whose disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in EPA's electronic public docket. The entire printed comment, including the copyrighted material, will be available in the public docket.

Public comments submitted on computer disks that are mailed or delivered to the docket will be transferred to EPA's electronic public docket. Public comments that are mailed or delivered to the docket will be scanned and placed in EPA's electronic public docket. Where practical, physical objects will be photographed, and the photograph will be placed in EPA's electronic public docket along with a brief description written by the docket staff.

Comments. You may submit comments electronically, by mail, by facsimile, or through hand delivery/courier. To ensure proper receipt by EPA, identify the appropriate docket identification number in the subject line on the first page of your comment. Please ensure that your comments are submitted within the specified comment period. Comments submitted after the close of the comment period will be marked “late.” The EPA is not required to consider these late comments.

Electronically. If you submit an electronic comment as prescribed below, EPA recommends that you include your name, mailing address, and an electronic mail (e-mail) address or other contact information in the body of your comment. Also include this contact information on the outside of any disk or CD ROM you submit and in any cover letter accompanying the disk or CD ROM. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. The EPA's policy is that EPA will not edit your comment, and any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket and made available in EPA's electronic public docket. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.

Your use of EPA's electronic public docket to submit comments to EPA electronically is EPA's preferred method for receiving comments. Go directly to EPA Dockets at http://www.epa.gov/edocket and follow the online instructions for submitting comments. Once in the system, select “search” and key in Docket ID No. OAR-2002-0045. The system is an “anonymous access” system, which means EPA will not know your identity, e-mail address, or other contact information unless you provide it in the body of your comment.

Comments may be sent by e-mail to air-and-r-docket@epa.gov, Attention Docket ID No. OAR-2002-0045. In contrast to EPA's electronic public docket, EPA's e-mail system is not an “anonymous access” system. If you send an e-mail comment directly to the docket without going through EPA's electronic public docket, EPA's e-mail system automatically captures your e-mail address. E-mail addresses that are automatically captured by EPA's e-mail system are included as part of the comment that is placed in the official public docket and made available in EPA's electronic public docket.

You may submit comments on a disk or CD ROM that you mail to the mailing address identified in this document. These electronic submissions will be accepted in WordPerfect or ASCII file format. Avoid the use of special characters and any form of encryption.

By Mail. Send your comments (in duplicate, if possible) to: EPA West (Air Docket), U.S. EPA, Room B-108 (MD-6102T), 1200 Pennsylvania Avenue, NW., Washington, DC 20460, Attention Docket ID No. OAR-2002-0045.

By Hand Delivery or Courier. Deliver your comments (in duplicate, if possible) to: EPA Docket Center (Air Docket), U.S. EPA, Room B-108 (MD-6102T), 1301 Constitution Avenue, NW., Washington, DC 20460, Attention Docket ID No. OAR-2002-0045. Such deliveries are only accepted during the Docket Center's normal hours of operation as identified in this document.

By Facsimile. Fax your comments to: (202) 566-1741, Attention Docket ID OAR-2002-0045.

CBI. Do not submit information that you consider to be CBI through EPA's electronic public docket or by e-mail. Send or deliver information identified as CBI only to the following address: Jeff Telander, c/o OAQPS Document Control Officer (MD-C404-02), U.S. EPA, Research Triangle Park, NC 27711, Attention Docket ID No. OAR-2002-0045. You may claim information that you submit to EPA as CBI by marking any part or all of that information as CBI (if you submit CBI on disk or CD ROM, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is CBI). Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

Worldwide Web (WWW). In addition to being available in the docket, an electronic copy of today's proposal will also be available on the WWW through EPA's Technology Transfer Network (TTN). Following the Administrator's signature, a copy of this action will be posted on the TTN's policy and guidance page for newly proposed 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.

For information regarding other administrative requirements for this action, please see the direct final rule action that is located in the Rules and Regulations section of this Federal Register.

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of today's proposed rule on small entities, small entity is defined as: (1) A small business that has fewer than 750 employees for NAICS codes 32211, 32212, and 32213 (pulp, paper, and paperboard mills); (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives which minimize any significant economic impact of the proposed rule on small entities (5 U.S.C. 603-604). Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive effect on the small entities subject to the rule. The amendments in today's rule make improvements to the emission standards, primarily by clarifying issues in the areas of testing and monitoring and add a new compliance option. We have, therefore, concluded that today's proposed rule will have no adverse impacts on any small entities and may relieve burden in some cases.

This is a summary of the Media Bureau's Notice of Proposed Rule Making (“NPRM”) MB Docket No. 03-15; FCC 03-8, adopted January 15, 2003, and released January 27, 2003. The complete text of this NPRM is available for inspection and copying during normal business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC and may also be purchased from the Commission's copy contractor, Qualex International, Portals II, 445 12th Street SW., Room CY-B-402, Washington, DC 20554, telephone (202) 863-2893, facsimile (202) 863-2898, or via email qualexint@aol.com. Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415 and 1.419 comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings (63 FR 24121, May 1, 1998). This document is available in alternative formats (computer diskette, large print, audio record, and Braille). Persons with disabilities who need documents in these formats may contact Brian Millin at (202) 418-7426 (voice), (202) 418-7365 (TTY), or via email at bmillin@fcc.gov. Parties may submit their comments using the Commission's Electronic Comment Filing System (“ECFS”) or by filing paper copies. Comments may be filed as an electronic file via the Internet at http://www.fcc.gov/e-file/ecfs.html. Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking numbers appear in the caption of this proceeding commenters must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To obtain filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and should include the following words in the body of the message: “get form <your e-mail address>.” A sample form and directions will be sent in reply. Additional information on ECFS is available at http://www.fcc.gov/e-file/ecfs.html.

Filings may also be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although we continue to experience delays in receiving U.S. Postal Service mail). Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, commenters must submit two additional copies for each additional docket or rulemaking number. The Commission's contractor, Histrionics, Inc., will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class mail, Express Mail, and Priority Mail should be addressed to 445 12th Street, SW., Washington, DC 20554. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

1. In the DTV Sixth Memorandum Opinion and Order (“6th MO&O”), (63 FR 15774, April 1, 1998), we determined that, after the transition, DTV service would be limited to a “core spectrum” consisting of current television channels 2 through 51 (54-698 MHz). Although some stations received transition channels out of the core, and a few have both their NTSC and DTV channels outside the core, we believe that there will be sufficient spectrum to accommodate all DTV stations within the core by the end of the transition. Having stations with two in-core channels decide which one of the channels would be most suitable for use in digital broadcasting will assist us in determining what channels will be available for stations with two out-of-core channels and in clearing the out-of-core spectrum.

2. In the First DTV Periodic Review Memorandum Opinion and Order, (“1st MO&O”), (66 FR 65122, December 18, 2001), we temporarily deferred channel election deadlines until this next periodic review. Accordingly, we now request comment on the new channel election deadline. We propose that commercial and noncommercial broadcast licensees with two in-core assigned channels make their final channel election by May 1, 2005. This date provides three years for commercial broadcasters and two years for noncommercial broadcasters after the applicable digital construction deadline to make the channel election. A May 1, 2005, channel election deadline also provides licensees that will have to move into the core time to plan for their move before December 31, 2006. We seek comment on this proposal.

3. As an alternative, we seek comment on whether establishing the same deadline(s) for channel election as for replication and maximization protection, would be more effective in speeding the transition. As our proposed replication and maximization protection deadlines are later than May 1, 2005, aligning the channel election deadline with these deadlines would give broadcasters more time to increase to full power before they determine which channel is preferable for digital broadcasting. We seek comment on whether we should align the channel election deadline(s) with the replication and maximization protection deadlines we establish herein and, if so, what the deadline(s) should be.

4. As we stated in the First DTV Periodic Review Report and Order (“1st R&O”), (MM 00-39, 66 FR 09973, February 13, 2001), in all cases, including stations with both channels in-core, we reserve the right to select the final channel of operation in order to minimize interference and maximize the efficiency of broadcast allotments in the public interest. We intend to review the channel elected to ensure that its use furthers these goals.

5. Some stations with two in-core channels have already determined that they prefer to use their current analog NTSC channel for DTV operations and want to commence digital operations on the new channel before the end of the transition. Currently a station with in-core DTV and NTSC channels can swap those channels only through a dual rulemaking proceeding to change both the DTV and NTSC Tables of Allotments. As the DTV transition proceeds, it is possible that many stations will want to explore this swap option. Accordingly, we seek comment on whether we should allow such channel swaps through an application process.

6. In the 1st MO&O we stated that we would establish in this second DTV periodic review a date by which broadcasters must either replicate their NTSC service areas or lose DTV service protection to the unreplicated areas, and by which broadcasters with authorizations for maximized digital facilities must either provide service to the associated coverage area or lose DTV service protection to the uncovered portions of those areas. We stated that these replication and maximization protection deadlines may be earlier than, but will in no event be later than, the latest of either the end of 2006 or the date by which 85% of the television households in a licensee's market are capable of receiving the signals of digital broadcast stations. We now seek comment on establishing new dates for maintaining interference protection for the unserved portions of both the replication and maximization service areas of DTV stations on channels 2-51.

7. For DTV channels within the core spectrum, we propose to set new replication and maximization protection dates close to the end of the transition: for the top-four network affiliates (i.e., ABC, CBS, Fox and NBC) in markets 1-100—July 1, 2005; and for all other commercial DTV licensees as well as noncommercial DTV licensees—July 1, 2006.

8. We seek comment generally on the appropriateness of these dates. We also invite commenters to propose alternative approaches for establishing interference protection deadlines, such as giving stations a certain amount of time (e.g., 24 months) after the station commences digital service or after adoption of the Report and Order (“R&O”) in this proceeding, whichever is later, to fully replicate or maximize, or establishing a replication/maximization deadline for each market based on when that market reaches a specified digital service penetration level.

9. If a station fails to construct and operate facilities that fully replicate its NTSC service area or provide signal coverage over an authorized maximized service area by the interference protection deadline(s) we will establish in this proceeding, we seek comment on how the Commission should dispose of any construction permits or applications for replication or maximization facilities at that time. Should applications for facilities in excess of those in actual operation by the station be dismissed? How should the Commission treat authorizations for facilities not being fully used by the station? For example, a station has a construction permit for facilities that would serve a larger area than facilities it is operating pursuant to Special Temporary Authority. Should such a construction permit be modified to specify the facilities in actual operation? In addition, we invite comment on how the Commission should treat the spectrum use opportunity that would be created after the interference protection deadline(s). Who should be permitted to file an application for this spectrum? Should any applications for this spectrum be subject to competing applications? Our inclination is to restrict any station that has failed to fully replicate or construct its authorized maximization facilities by the applicable deadline from filing an application to expand coverage for a certain period of time in order to allow other existing or new stations, including Class A eligible LPTV stations on out-of-core channels, to apply to use this spectrum. If we were to adopt this approach, how long should the restriction on the filing of expansion applications by stations that did not fully replicate or maximize by the deadline last? Any decision we reach in this proceeding regarding future licensing of this spectrum will be consistent with 47 U.S.C. 309(j).

10. Finally, we seek comment on whether we should adopt an intermediate signal coverage requirement beyond a broadcaster's current obligation to cover its community of license and in addition to the ultimate “use-or-lose” deadline for full replication or maximization. In the 1st MO&O, the Commission predicted that the “requirement that broadcasters serve their community of license will ensure that, for most stations, the majority of their analog service populations will receive initial digital service.” We seek comment on whether this predictive judgment has been borne out in practice. For instance, we seek comment on whether some of the larger cities in which stations can operate under low-power STAs have large suburban populations that may not be served by a signal that only covers a station's community of license. If there are significant numbers of consumers not being served by stations operating under low-power STAs, we seek comment on what actions, if any, the Commission should take. Should the Commission establish a deadline by which time stations must provide DTV service within the entire area of their analog “city-grade” coverage contour or their Grade A coverage? Yet another alternative would be to require broadcast stations to deploy transmission equipment that is capable of being upgraded to serve broader coverage areas (e.g., their analog Grade “B” coverage), but permit the stations themselves to determine when any intermediate power increases occur prior to the full replication “use-or-lose” date. In general, our goal is to ensure that the maximum number of consumers is able to receive digital television as quickly as possible while providing broadcasters a realistic timetable for increasing to full power.

11. In the 1st MO&O, we temporarily deferred the deadline for loss of interference protection for unserved areas for broadcasters involved in a band-clearing arrangement that are left with a DTV single-channel allotment. We stated that we will continue to protect throughout the course of the transition the analog TV service area of stations that do not have a paired DTV channel, either because they were not assigned a paired DTV channel or because they elect voluntarily to relinquish their paired DTV channel and convert to single channel analog operation as part of the 700 MHz band clearing, as long as the stations continue to operate in an analog mode.

12. We stated that our intention was to provide broadcasters involved in band-clearing with the same treatment as other broadcasters in terms of our DTV replication policy. We also said that, in our next periodic review, we would establish a new replication protection deadline for these broadcasters within the same timeframe as that established for replication and maximization for other broadcasters. We hereby seek comment on the timeframe needed and appropriate for broadcasters involved in band-clearing proposals to replicate their service area once commencing digital operation.

13. We seek comment on whether we should adopt the same or different replication and maximization interference protection deadlines for stations operating on TV channels 52-69 (698-806 MHz, also referred to as the “700 MHz band”) as for stations operating on core channels. In order to reclaim and relicense channels 52-69 in accordance with statutory mandate, the Commission is relocating television operations in this spectrum to the core spectrum (TV channels 2-51), and has reallocated the 698-806 MHz band to other services. During the transition to digital broadcasting, incumbent broadcasters are permitted to continue to operate in the 698-806 MHz band. Licensees of new public safety, commercial wireless, and other services are permitted to operate in the band prior to the end of the transition, provided they do not interfere with incumbent analog and digital broadcasters.

14. A number of the interference protection issues raised herein with respect to the 698-806 MHz band relate to the interpretation of the alternative protection criteria for wireless operators set forth in §§ 90.545(c) and 27.60(b) of the rules, and whether those provisions require protection of broadcast authorizations and allotments. In particular, do these provisions require protection of broadcast authorizations and allotments when the station's operating parameters are less than the parameters described in an existing authorization or allotment?

15. Sections 90.545(c) and 27.60(b) describe alternative methods for a wireless applicant or licensee in the 700 MHz band to move its stations closer to an analog TV or DTV antenna while still complying with the interference protection requirements in the rules. Pursuant to one of these alternatives, the applicant or licensee may submit an engineering study that considers the “actual,” rather than “hypothetical,” parameters of the analog TV or DTV station and that demonstrates that intervening terrain or other factors permit the land mobile stations and these facilities to be more closely spaced. In the Order adopting this alternative, we stated that applicants should be allowed to submit engineering studies showing how they propose to meet the appropriate desired/undesired (“D/U”) signal strength ratio at the existing TV station's “authorized or applied for” Grade B service contour or equivalent contour for DTV stations instead of the hypothetical Grade B contour.

16. We tentatively conclude that §§ 90.545(c)(1)(ii) and 27.60(b)(1)(iii) should be amended to make clear that the interference protection specified in those provisions should be afforded to authorized and/or applied for NTSC and DTV facilities, including the facilities specified on the broadcast station's license or construction permit or both when a station has both a license and a construction permit. We invite comment on this approach. If we do not protect all authorized and/or applied for facilities, what facilities should be protected?

17. We invite comment on the extent to which facilities defined in the DTV Table of Allotments on channels 52-69 should be protected by wireless operators and other services in those bands. In other words, in addition to protecting authorized and/or applied for facilities, should we interpret the requirement that wireless operators and other services protect the “actual” parameters of existing TV stations to require protection of full replication facilities, regardless of whether the DTV station is currently operating, or has filed an application to operate, pursuant to those facilities? If so, how long should this interference protection last?

18. We tentatively conclude that DTV full replication facilities should be protected as “actual.” We seek comment on this view and on whether we should establish the same interference protection deadline for replication facilities for stations on channels 52-69 as we will establish in this proceeding for stations on in-core channels.

19. We invite comment on whether we should establish an earlier deadline for loss of interference protection to the unserved areas described in existing maximization authorizations on channels 52-69 than the deadline we establish for maximization facilities on in-core channels. We also invite comment on whether we should establish the same maximization interference protection deadline for the entire 700 MHz band, or treat the upper and lower bands differently. If we were to establish a different deadline for all or part of channels 52-69, what should that deadline be?

20. In June 2002, the Media Bureau adopted a freeze on the filing of analog TV and DTV “maximization” applications in channels 52-59. The Bureau announced that it would not accept for filing television modification applications that would increase a station's analog or DTV service area in channels 52-59 in one or more directions beyond the combined area resulting from the station's parameters as defined in the following: (1) The DTV Table of Allotments; (2) Commission authorizations (license and/or construction permit); and (3) applications on file with the Commission prior to release of the Public Notice. The Bureau will consider, on a case-by-case basis, requests for waiver of the freeze on new maximization applications in channels 52-59 where the application would permit co-location of transmitter sites or is otherwise necessary to maintain quality service to the public. The freeze was adopted to assist participants in Auction No. 44, consisting of spectrum licenses in the Lower 700 MHz Band, to determine the areas potentially available in the band for the provision of service by auction winners before the channels are cleared of broadcast stations. That auction was scheduled to begin June 19, 2002, but was postponed in compliance with the Auction Reform Act of 2002.

21. The Media Bureau recently adopted a similar freeze on the filing of analog TV and DTV “maximization” applications in channels 60-69. As with the freeze on maximization in channels 52-59, the Bureau will consider requests for waiver of the freeze on channels 60-69 on a case-by-case basis for stations that propose an increase or shift in coverage under certain circumstances, including to permit co-location at a common antenna site or to resolve certain technical difficulties. We intend to protect applications for waiver under these maximization filing freezes in the same manner that we protect other pending applications. Absent a waiver, future applications for maximization of facilities on channels 52-69 now are foreclosed.

22. With respect to the Lower 700 MHz Band, digital service in the band could be proposed after the auction by a station with an existing DTV allotment on a channel outside the 52-58 band seeking to move to a channel inside this band or by a DTV station inside this band seeking to move to another channel inside the band. We invite comment on whether and how we should protect such proposed digital service on channels 52-58. We also seek comment on whether 47 CFR 73.622 should be amended to require that a broadcaster proposing a channel change that would cause harmful interference to a new entrant on channels 52-59 demonstrate that no other suitable channels are available on 2-58 that would avoid such interference.

23. Finally, we seek comment on the interference protection that should be afforded by wireless entities and other new service providers to future analog TV and DTV facilities on channel 51 that are authorized or requested after the auction of the spectrum comprising channel 52.

24. A number of television licensees have not yet been granted an initial construction permit (CP) for a DTV facility. Almost all of these licensees have filed an application for a digital CP, but grant of these applications has been delayed for a variety of reasons including delays in international coordination with Canada and Mexico and unresolved interference issues. While the Commission has successfully resolved a number of obstacles to grant of outstanding digital CP applications, and the number of licensees without an initial digital CP has been significantly reduced, approximately 140 commercial and noncommercial television licensees still have not yet been granted an initial DTV CP. To date, these applicants have not been required to construct DTV facilities pending action on their outstanding DTV applications.

25. To ensure that all licensees that have been awarded digital spectrum begin to provide digital service, we propose to require that all such television licensees that have filed an application for a digital CP with the Commission that has not yet been granted must commence digital service pursuant to special temporary authority (“STA”) within one year from adoption of the R&O in this proceeding. Within this time frame, these applicants would be required to request an STA from the Commission and to construct at least the minimum initial facilities required to serve their community of license, as specified in the policy outlined in the 1st MO&O. We request comment on this proposal. We also request comment on whether the channel election and interference protection deadlines adopted in this proceeding should apply to these licensees and, if not, what other deadlines would be appropriate.

26. Noncommercial television broadcasters are scheduled to complete construction of their digital stations and commence digital service by May 1, 2003. We invite comment on whether noncommercial broadcasters that are not already airing a digital signal anticipate they will meet the May 1, 2003 construction deadline. For any station that does not anticipate meeting the deadline, what obstacles are preventing completion of construction? We also invite comment generally on what steps, if any, the Commission should take to assist noncommercial stations in the transition to DTV. For example, should the financial hardship standard for grant of an extension of time to construct a digital television station be applied differently to noncommercial licensees?

27. In the DTV 5th R&O, we adopted rules requiring DTV licensees to simulcast 50% of the video programming of their analog channel on their DTV channel by April 1, 2003. This requirement increases to a 75% simulcast requirement in April 2004, and a 100% requirement in April 2005. We seek comment on whether we should retain, revise or remove the simulcast requirement, how to define simulcasting, and whether the existing dates are appropriate. What extent of program duplication should be required to fulfill simulcasting obligations? Does the ultimate requirement of 100% simulcasting other than at the very end of the transition create disincentives for broadcasters to innovate? If broadcasters have a market-based incentive to simulcast and currently are simulcasting 100% of their analog programming on their digital channel, is a regulatory requirement to simulcast necessary? Is the simulcasting requirement causing broadcasters to forego creative uses of digital technology? Would something less than a 100% simulcast requirement be sufficient to protect analog viewers while allowing for innovation on the DTV channels? If maintaining some simulcast obligation is appropriate, we seek comment on whether we should revise the current dates for the phase-in of simulcast requirements.

28. We propose a definition of simulcasting in the DTV context as follows: Within a 24-hour period, the broadcast on a digital channel of the same programming broadcast on the analog channel, excluding commercials and promotions and allowing for enhanced features and services.

We request comment on this proposed definition. We also seek comment on how simulcast requirements and the definition of “simulcasting” relate to the substantial duplication decisions in the must carry portions of the Act.

29. If we decide to eliminate or change the simulcasting requirements, we must adjust the digital broadcast schedule requirements that are currently pegged to the simulcast requirements. We propose that, if we eliminate or reduce the simulcasting requirements in § 73.624(f), we amend § 73.624(b)(1) to require DTV stations subject to the May 1, 2002, or May 1, 2003, construction deadlines to air, by April 1, 2003, a digital signal for an amount of time equivalent to 50% of the amount of time they provide an analog signal. The digital signal must be aired during prime time hours. This minimum digital operation requirement would increase to 75% on April 1, 2004 (requiring airing of a digital signal for an amount of time equivalent to at least 75% of the amount of time the station airs an analog signal), and to 100% on April 1, 2005. We seek comment on this proposal and invite alternatives as well.

30. Section 309(j)(14)(A) of the Communications Act requires the Commission to reclaim the 6 MHz each broadcaster uses for transmission of analog television service by December 31, 2006. Congress recognized, however, that not all stations will convert to DTV at the same time. Thus, “to ensure that a significant number of consumers in any given market are not left without broadcast television service as of January 1, 2007,” Congress required the Commission in section 309(j)(14)(B) to grant extensions to any station in any television market if one or more of three conditions exist. We review the language of section 309(j)(14) and invite comment on how we should interpret certain portions of that statutory provision. We also seek comment on establishing rules and filing deadlines governing how and when extension requests will be made.

31. Section 309(j)(14)(B) provides that the Commission shall extend the date by which stations must cease analog service for qualifying stations that request an extension. We intend to develop a form to be used by stations to request an extension under this provision. We invite comment on when stations seeking an extension should be required to file their extension request. We invite comment on the period of time for which extensions should be granted. We also invite comment on whether the Commission may grant a blanket extension under section 309(j)(14)(B) to all stations in a market or nationally if the Commission finds that the criteria for return of analog spectrum have not been met. What findings would the Commission need to make in order to grant a blanket extension?

32. Under section 309(j)(14)(B), the Commission must consider whether any one of the three conditions for an extension exist in the requesting station's “television market.” For purposes of applying section 309(j)(14)(B), we invite comment on how we should define “television market.” One option would be to define “television market” as the designated market area or DMA, as defined by Nielsen Media Research, in which the television station requesting the extension is located. Another option would be to define “television market” as the requesting station's Grade B contour.

33. Use of DMAs to define the applicable market may be more consistent with the language of section 309(j)(14), which requires the Commission to grant an extension to “any station that requests such an extension in any television market.” This language seems to contemplate that each market will contain more than one television station, as is generally true of DMAs. The Grade B contour of any station requesting an extension, in contrast, is generally unique for each station, and therefore contains only one station. A Grade B test may also be more difficult to administer as market data, including information about digital-to-analog converter technology and the number of television households with digital television reception capability, would have to be compiled for the area within each requesting station's Grade B contour, rather than DMA-wide.

34. Use of DMAs to define the applicable market for purposes of section 309(j)(14)(B) would ensure that transition progress throughout the DMA is considered in determining whether the criteria for extension have been met. As parts of the United States, particularly in rural areas, do not lie within the Grade B contour of any full-power television station, a Grade B test would not consider transition progress in these areas before cessation of analog service.

35. If we define the applicable market by reference to a station's Grade B contour, we invite comment on whether we should refer to the station's analog Grade B or the equivalent digital contour. In addition, does the market of a station requesting an extension under section 309(j)(14) include only the requesting station's Grade B contour, or also the Grade B contour of any TV translator retransmitting the requesting station's signal?

36. The Grade B contour of many stations reaches more than one DMA. Under a DMA-only market test, a station could be denied an extension of its analog license without consideration of the status of the transition in a neighboring DMA where the station may have a significant number of viewers. To address this situation, another option would be to adopt a modified DMA market test that considers viewers in adjacent DMAs in situations where stations have a significant number of viewers in those DMAs. For example, where a station requesting a transition extension has a significant number of viewers in a DMA other than its designated DMA (“home DMA”), we could require that both DMAs meet the statutory criteria for the transition in section 309(j)(14)(B). We request comment on this approach.

37. How we define the “market” is important in applying each of the conditions for an extension under section 309(j)(14)(B). We request comment on the impact of a DMA, modified DMA, or Grade B market definition on the availability of extensions under each of these conditions.

38. Under the first ground for an extension under section 309(j)(14)(B), the Commission must grant an extension if one or more of the stations in the market that are licensed to or affiliated with one of the four largest national television networks is not “broadcasting a digital television service signal, and the Commission finds that each such station has exercised due diligence and satisfies the conditions for an extension of the Commission's applicable construction deadlines for digital television service in that market.” We invite comment on how we should interpret this provision. We read the language of section 309(j)(14)(B)(i) to require that all stations in a market licensed to or affiliated with a top-four network must be broadcasting in digital before analog service is required to cease in the market, even if a top-four network has more than one affiliate in the market. We request comment on this view. Should we consider a station that is broadcasting a digital signal pursuant to a DTV STA, and providing service in compliance with the Commission's minimum initial digital television construction requirements, to be “broadcasting a digital television service signal” for purposes of this provision? We propose that a station not meeting such minimum initial DTV operating requirements would not be considered to be “broadcasting a digital television signal” within the meaning of this provision. Thus, extensions would be available under section 309(j)(14)(B)(i) in any market where a top four network affiliate is not providing digital service in accordance with at least the Commission's minimum requirements for coverage of the community of license and hours of operation. We request comment on this proposal.

39. Alternatively, we could require that a station be providing service to the entire area encompassed within the station's DTV allotment in order to be considered “broadcasting a digital television service signal” in the market under section 309(j)(14)(B)(i). To ensure that stations not postpone replication to delay return of analog spectrum, we propose that if we require service to the full replication area under section 309(j)(14)(B)(i), we would not consider lack of replication to constitute lack of service after the replication protection deadline adopted in this proceeding.

40. Under the second ground for an extension under section 309(j)(14)(B), the Commission must grant an extension to a requesting station if the Commission finds that digital-to-analog converter technology is not “generally available” in the market. For purposes of section 309(j)(14)(B)(ii), we propose to define as a “digital-to-analog converter” units that are capable of converting a digital television broadcast signal to a signal that can be displayed on an analog television set. We invite comment on this definition. Should we consider as a “digital-to-analog converter” a unit that is not capable of displaying in analog format signals originally broadcast in all digital formats? We also request comment on how we should interpret the phrase “generally available” under section 309(j)(14)(B)(ii). For example, should we require only that digital-to-analog converter boxes be available for sale at retail outlets in the market or for sale or lease from cable operators or satellite providers? How widespread must the availability be to be considered “generally available?'

41. Section 309(j)(14)(B)(iii) provides for a third ground for extension for markets that do not qualify under section 309(j)(14)(B)(i) or (ii). Section 309(j)(14)(B)(iii) sets forth a two-part test. The first prong of the test, described in section 309(j)(14)(B)(iii)(I), is met where 15 percent or more of the television households in the market do not subscribe to an MVPD (as defined in 47 U.S.C. 602) that “carries one of the digital television service programming channels of each of the television stations broadcasting such a channel in such a market.”

42. Read literally, section 309(j)(14)(B)(iii)(I) appears to require that an MVPD, such as a cable system, must be carrying all of the television stations broadcasting a digital channel as a first step to satisfy this prong of the test. Read thus, if one or two digital television stations in a market are not carried by a cable or satellite provider (e.g, because the station is not carried voluntarily and is not eligible for mandatory carriage), then the criterion is not met. In almost all DMAs, there are stations that are not entitled to must-carry on cable systems in the DMA and that are not carried by the systems voluntarily. Did Congress intend that this prong would be very rarely satisfied in a market?

43. We invite comment on whether there is a more flexible interpretation of the language in the statute. How should this language influence our definition of “market?” Can we conclude that only television broadcast stations that provide a good quality digital signal to the MVPD headend or local receive facility are contemplated by this language? If we interpret section 309(j)(14)(B)(iii)(I) as requiring carriage of only those digital stations in the market entitled to must-carry, the availability of extensions under this provision will be more limited, and the market is likely to transition to digital more quickly. On the other hand, if we interpret section 309(j)(14)(B)(iii)(I) as requiring that all stations broadcasting digital signals be carried regardless of the station's must-carry rights and signal delivery capability, this prong may be satisfied less often. Moreover, a station could refuse to grant retransmission consent, and prevent carriage, which would in turn prevent the MVPD from counting towards the market transition. As a result, the analog licenses would be extended in every market in which the 15% criteria is not met by households possessing over-the-air digital or down-conversion equipment. Is this the result that Congress intended or that is compelled by the language in the statute?

44. We also invite comment on whether, under section 309(j)(14)(B)(iii), MVPDs must carry only primary, full power television stations in the market, or also Class A LPTV stations or other secondary non-Class A LPTV stations and TV translators. If section 309(j)(14)(B)(iii) is read to require carriage of all of these facilities in the market, and “market” is defined as DMA, then this prong of the transition criteria will be satisfied less often. If the market is defined as the station's Grade B contour or service area, then it may be more likely that cable systems within the station's Grade B area would carry that station (e.g., the signal quality issue is less likely to arise). How does this result influence our decision on the proper definition of market?”

45. Under the second part of the 15% test, an extension should be granted if 15 percent or more of the television households in the market do not have either “(a) at least one television receiver capable of receiving the digital television service signals of the television stations licensed in such market; or (b) at least one television receiver of analog television service signals equipped with digital-to-analog converter technology capable of receiving the digital television service signals of the television stations licensed in such market.”

46. We invite comment on how we should interpret the phrase “capable of receiving the digital television service signals of the television stations licensed in such market.” Does this phrase require that a household be capable of over-the-air reception of all television stations licensed in the market in order not to be counted toward the 15 percent threshold for an extension? Under this interpretation, any household outside the service contour of any digital station in the market would be counted toward the 15 percent threshold under these provisions (recognizing that such households could be excluded from counting toward the 15 percent under section 309(j)(14)(B)(iii)(I) if they are MVPD subscribers as defined in that provision). What if a household receives a parent station's signal rebroadcast in analog format via TV translator (e.g., the parent station originally broadcast the signal in digital format and the signal was downconverted to analog format by a TV translator)? We note that § 74.701 of the Commission's rules requires that TV translators retransmit the signals of the parent station “without significantly altering any characteristic of the original signal other than its frequency and amplitude.” Should our rules permit TV translators to downconvert to analog format a signal originally broadcast by the parent station in digital format? As a separate issue, we propose to define television receivers “capable of receiving” DTV signals under section 309(j)(14)(B)(iii)(II)(a) as television sets equipped with either integrated or separate (e.g., set-top box) DTV tuners, and request comment on this definition.

47. For purposes of calculating households in the market to determine whether the 15 percent test is met under both prongs of section 309(j)(14)(iii), we propose to interpret that provision as requiring grant of an extension where 15 percent or more of the television households in the market neither subscribe to an MVPD that carries local DTV signals (section 309(j)(14)(B)(iii)(I)), nor have equipment capable of displaying signals originated in DTV (section 309(j)(14)(B)(iii)(II)). In other words, for a household to be counted in the 15 percent, that household must both be a non-subscriber (“non-subscriber” may include subscribers to MVPDs that carry the required DTV stations but who lack equipment to view such signals in either analog or digital format) and lack the capability to receive DTV signals over-the-air, either through a set with an integrated DTV tuner, via a DTV set-top box, or via a digital-to-analog downconverter. We believe that this interpretation best reflects the intent of Congress that “a significant number of consumers in any given market are not left without broadcast television service” as we transition from analog to digital. Accordingly, we propose to grant extensions under section 309(j)(14)(B)(iii) only where the requisite number of television households (15 percent or more) in the market are not capable of receiving digital signals either over the air or via an MVPD. We request comment on this view.

48. We request comment on the extent to which the Commission is required to conduct consumer surveys or otherwise obtain information to determine whether an extension is required under section 309(j)(14)(B). In addition, we invite comment on the nature of any survey that must be performed, the type of questions that should be included, and the percent of the television households in the market that must be included in the sample. Is it necessary to survey each market separately, or would a more wide-spread survey suffice to establish that a market meets one or more of the criteria for grant of an extension request? If the first survey conducted demonstrates that an extension is warranted, when should a new survey be performed to see if there has been further transition progress in the market?

49. As part of our commitment to continue monitoring the marketplace, we seek further comment on whether manufacturers are producing or plan to produce digital television receivers that can receive digital format transmissions via cable or satellite but that cannot receive digital broadcast signals over the air. We also seek information on the number of “pure monitors” (without any tuner) intended for use in display of signals from video service providers that are currently produced or planned for production. Do equipment manufacturers plan to label such equipment to describe the reception limitations or need for additional receiving equipment? What is the potential for consumer confusion in connection with these devices? Should we require labeling on pure monitors that can be used to display video services, which neither receive off-air signals, nor are designed to be “digital cable ready,” to advise consumers that the monitor cannot function to receive programming unless it is attached to an off-air tuner, or cable, or satellite receiver? Should we require labeling on digital television receivers that are not “digital cable ready” to indicate that the set “will not receive cable or satellite programming without the use of a converter”? We seek comment on these and other labeling options, as well as the need for and costs of such required disclosures.

50. In addition, we seek comment on whether the Commission should require a disclosure label on analog-only sets to inform consumers that a converter or external DTV tuner will be needed to ensure reception of television broadcast signals after stations in the consumer's market complete conversion to digital-only broadcasting.

51. In the 1st R&O, we addressed comments requesting that the Commission adopt rules for on-channel DTV boosters, including an allowance for a distributed transmission system, but deferred consideration of distributed transmission techniques until we could address the issue in a more comprehensive manner. Commenters have defined distributed transmission as being similar to a cellular telephone system in that a service area is divided into a number of cells, each served by its own transmitter. DTV boosters retransmit the primary DTV station's programming on the same channel.

52. Primary vs. secondary status. We have received comments suggesting that the Commission should grant primary status to the multiple transmitters in distributed transmission systems and license them under part 73 of the rules, as opposed to treating them similarly to LPTV, translator, and booster stations. We seek comment on the implications of granting primary status to DTV boosters in distributed transmission systems, and on whether we should license some categories of such stations with primary status.

53. Location and service area. Currently, all analog TV boosters must be located and must have a service area contained within the Grade B contour of the associated full service station. Should an equivalent requirement be established for DTV boosters used as part of a distributed transmission system?

54. Power, antenna height and emission mask. If multiple DTV booster stations can be used to replace, or significantly augment, a single central transmitter in a distributed transmission system, what maximum or minimum limitations, if any, should be placed on the power and/or antenna height used at each DTV booster?

55. Interference protection. What standards are needed to protect distributed transmission systems from interference and how should those standards be calculated and applied?

56. Technical standards. What standards would be appropriate for boosters in distributed transmission systems with respect to specific technical requirements, such as frequency tolerance, type certification of transmitters, control circuitry and performance measurements?

57. We seek comment generally on whether the Commission should permit the deployment of distributed transmission systems. We ask commenters to specifically address the relevant rules and policies that would have to be put in place to permit distributed transmission systems, and any new or amended forms, policies and/or procedures that would be needed with respect to the Commission's current system for filing, processing and granting television station licenses.

58. Both Congress and the Commission have recognized that digital television broadcasters have an obligation to serve the public interest. Congress established the statutory framework for the transition to digital television in the 1996 Act, making it clear that public interest obligations would continue for broadcasters in the new digital world. In section 336 of the Act, Congress stated that “[n]othing in this section shall be construed as relieving a television broadcasting station from its obligation to serve the public interest, convenience, and necessity.” The Commission also reaffirmed that “digital broadcasters remain public trustees with a responsibility to serve the public interest,” and stated that “existing public interest requirements continue to apply to all broadcast licensees.” Under our current rules, commercial television broadcast station licensees must provide coverage of issues facing their communities, and place lists of programming used in providing significant treatment of those issues (issues/programs lists) in the station's public inspection files on a quarterly basis. Licensees must also maintain in their station's public inspection files records that substantiate certification of compliance with the commercial limits on children's programming and quarterly Children's Television Programming Reports (FCC Form 398) reflecting the licensee's efforts to serve the educational and informational needs of children.

59. It is thus clear that DTV broadcasters must air programming responsive to their communities of license, comply with the statutory requirements concerning political advertising and candidate access, and provide children's educational and informational programming, among other things. What remains unresolved is how these obligations will apply in the digital environment, and whether they should be applied differently or otherwise adapted to reflect the enhancements available in digital broadcasting.

60. The Commission issued a formal Notice of Inquiry (“NOI”), (MM 99-360, 65 FR 4211, January 26, 2000), on DTV public interest obligations in December 1999, followed by two NPRMs in September, 2000 (65 FR 66951, November 8, 2000, 65 FR 62683, October 19,2000). In the NOI, the Commission sought comment on several issues related to how broadcasters might best serve the public interest during and after the transition from analog to digital television. Among the areas of inquiry in the NOI were questions regarding how broadcasters might make information about how they serve the public interest more accessible to the public.

61. The DTV Public Interest Form NPRM proposed that the Commission adopt rules regarding the disclosure of broadcasters' activities in the public interest, essentially putting the contents of the public file on the Internet to make it more accessible to viewers. In light of the concerns about disclosure expressed in the record of the NOI, the NPRM proposed to replace the issues/programs list with a standardized form and to enhance the public's ability to access information on a station's public interest obligations by requiring broadcasters to make their public inspection files available on the Internet.

62. The Children's DTV Public Interest NPRM (65 FR 66951, November 8, 2000), proposed clarifying broadcaster obligations under the Children's Television Act and related Commission guidelines in a digital television environment. This NPRM focused primarily on two areas: the obligation of television broadcast licensees to provide educational and informational programming for children, and the requirement that television broadcast licensees limit the amount of advertising in children's programs. It sought comment on how the current three-hour children's core educational programming processing guideline should be applied in light of the many possible ways broadcasters may choose to use their DTV spectrum; whether the current preemption rules for core educational programming should be revised or adapted for the digital environment; and whether steps should be taken to ensure that programs designed for children or families do not contain age-inappropriate product promotions that are unsuitable for children to watch.

63. To date, the Commission has not issued any decisions in the DTV Public Interest Form NPRM, the Children's DTV Public Interest NPRM, or the NOI. Given the significant time that has passed since the comment periods in these proceedings were closed, we invite additional comment in those dockets in order to reflect more recent developments. We are particularly interested in those issues relating to the application of public interest obligations to broadcasters that choose to multicast (e.g., the application of our children's television rules or the statutory political broadcasting rules in a multicast environment). We are also interested in whether our approach to multicast public interest obligations should vary with the scope of whatever final digital must-carry obligation the Commission adopts. Our goal is to bring these proceedings concerning the public interest obligations of broadcasters in the digital environment to conclusion promptly in order to provide certainty to broadcasters and the public as the digital television transition continues.

64. We hereby seek comment on whether our rules should be further changed to reflect any revisions to the ATSC DTV standard A/53B since the August 7, 2001, version.

65. We seek comment on both whether to require use of PSIP and which aspects of PSIP should be adopted into our rules. If we decide not to require use of PSIP, it is, nevertheless, important to decide if some or all of the PSIP information set forth in ATSC A/65A must be used by those who voluntarily use PSIP. Likewise, are there certain aspects of the PSIP standard that should not be used or required?

66. We seek comment on whether there are additional actions the Commission should take to ensure the accessibility and functioning of closed captioning service for digital television.

67. We seek comment on whether the Commission needs to do more to ensure that v-chip functionality is available in the digital world. We seek comment on whether the Commission should adopt the provisions of the ATSC A/65A standard that requires all digital television broadcasters to place v-chip rating information in the PSIP.

68. We request comment on how the proper PSIP information is to be provided on TV translator rebroadcasts and who will be responsible for ensuring that that information is so provided. We also request comment regarding the costs of providing PSIP information on TV translators as well as any other concerns that translator operators might have in implementing PSIP on their DTV operations.

69. In general, we propose to require digital television stations to follow the same rules for station identification as analog television stations. Recognizing that channel number identification is not currently required for all television stations by our rules, we ask whether channel identification should be required for DTV stations? If station identification announcements include channel numbers, we request comment on whether our rules should specify which channel number stations should use: the major (analog) channel number, minor (digital) channel number, or over-the-air channel number. Stations considering multicasting have raised concerns about separate identification of their separate digital programming streams for purposes of obtaining audience ratings. While we are not inclined to assign separate call signs for additional program streams for stations that choose to multicast, we propose to permit such stations to include additional information in their station announcements identifying each program stream.

70. Because satellite stations, by definition, operate in small or sparsely populated areas which have insufficient economic bases to support full-service operations, we seek comment on whether the public interest would be served by allowing such stations to turn in their digital authorization and “flash-cut” to DTV transmission at the end of the transition period. We request comment on the advantages and disadvantages of granting this special designated status to satellite stations, specifically whether it will hinder the overall transition to digital television and harm viewers by delaying their access to digital signals, or whether disallowing such status will overly burden satellite stations financially.

71. We also invite comment on whether allowing satellite stations to “flash-cut” to digital would present legal impediments to satisfying section 309(j)(14).

72. Ex Parte Rules. This is a permit-but-disclose notice and comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided that they are disclosed as provided in the Commission's rules. See 47 CFR 1.1202, 1.1203, and 1.1206(a).

73. Comment Information. Pursuant to § 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415 and 1.419, interested parties may file comments on or before April 14, 2003, and reply comments on or before May 14, 2003. Comments filed addressing issues in the DTV Public Interest Form NPRM, Children's DTV Public Interest NPRM, and NOI proceedings should also be filed by these dates and should reference the docket numbers in those proceedings, not the docket number of this DTV periodic review proceeding. Commenters wishing to address both public interest issues and other issues raised in the DTV periodic review should put their public interest comments in a separate document to be filed in the appropriate public interest docket(s) and file their comments on other issues raised in the periodic review in the docket number of this proceeding (MB 03-15; RM 9832).

74. Initial Paperwork Reduction Act Analysis. This NPRM may contain proposed information collections subject to the Paperwork Reduction Act of 1995. As part of our continuing effort to reduce paperwork burdens, we invite OMB, the general public, and other federal agencies to take this opportunity to comment on the information collections contained in this NPRM, as required by the Paperwork Reduction Act of 1995. Public and agency comments are due at the same time as other comments on the NPRM. Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) ways to enhance the quality, utility, and clarity of the information collected; and (c) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Judy Boley, Federal Communications Commission, 445 Twelfth Street, SW., Room C-1804, Washington, DC 20554, or via the Internet to jboley@fcc.gov and to Kim Johnson, OMB Desk Officer, 10236 NEOB, 725 17th Street, NW., Washington, DC 20503 or via the Internet to Kim A. Johnson@omb.eop.gov.

75. Regulatory Flexibility Act. As required by the Regulatory Flexibility Act, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities of the proposals addressed in this NPRM. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines for comments on the NPRM, and they should have a separate and distinct heading designating them as responses to the IRFA.

76. As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”), the Commission has prepared this Initial Regulatory Flexibility Analysis (“IRFA”) of the possible significant economic impact on small entities by the policies and rules proposed in this NPRM written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register.

77. As described in the NPRM, the proposed rules are required to ensure a smooth transition of the nation's television system to digital television.

78. The authority for the action proposed in this rulemaking is contained in sections 4(i) and (j), 303, 307, 309 and 336 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i) and (j), 303, 307, 309 and 336.

79. The RFA directs the Commission to provide a description of and, where feasible, an estimate of the number of small entities that will be affected by the proposed rules. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental entity.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (“SBA”).

80. In this context, the application of the statutory definition to television stations is of concern. An element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimates that follow of small businesses to which rules may apply do not exclude any television station from the definition of a small business on this basis and therefore might be over-inclusive.

81. An additional element of the definition of “small business” is that the entity must be independently owned and operated. It is difficult at times to assess these criteria in the context of media entities and our estimates of small businesses might therefore be over inclusive.

82. The proposed rules and policies could apply to television broadcasting licensees, and potential licensees of television service. There were 1,509 television stations operating in the nation in 1992. The majority of firms can be considered small.

83. This category includes, among others, cable operators, direct broadcast satellite (“DBS”) services, home satellite dish (“HSD”) services, multipoint distribution services (“MDS”), multichannel multipoint distribution service (“MMDS”), Instructional Television Fixed Service (“ITFS”), local multipoint distribution service (“LMDS”), satellite master antenna television (“SMATV”) systems, and open video systems (“OVS”). According to Census Bureau data, there are 1,311 total cable and other pay television service firms that operate throughout the year of which 1,180 have less than $10 million in revenue. We address each service individually to provide a more precise estimate of small entities.

Cable Operators. We estimate that there are fewer than 1,439 small entity cable system operators that may be affected by the decisions and rules proposed in this NPRM.

84. There are four licensees of DBS services under part 100 of the Commission's Rules. We will assume all four licensees are small, for the purpose of this analysis.

85. HSD users include: (1) Viewers who subscribe to a packaged programming service, which affords them access to most of the same programming provided to subscribers of other MVPDs; (2) viewers who receive only non-subscription programming; and (3) viewers who receive satellite programming services illegally without subscribing. Because scrambled packages of programming are most specifically intended for retail consumers, these are the services most relevant to this discussion. Most of providers of these services are considered small.

86. MMDS systems, often referred to as “wireless cable,” transmit video programming to subscribers using the microwave frequencies of the MDS and ITFS. LMDS is a fixed broadband point-to-multipoint microwave service that provides for two-way video telecommunications.

87. We find that there are approximately 850 small MDS providers.

88. We tentatively conclude that at least 1,932 ITFS licensees are small businesses.

89. We conclude that there are a total of 133 small entity LMDS providers.

90. Industry sources estimate that approximately 5,200 SMATV operators were providing service as of December 1995. Most providers of these services are considered small.

91. The Commission has certified 25 OVS operators with some now providing service. We conclude that at least some of the OVS operators qualify as small entities.

92. Rules adopted in this proceeding could apply to manufacturers of DTV receiving equipment and other types of consumer electronics equipment. We conclude that there are no more than 542 small manufacturers of audio and visual electronics equipment and no more than 1,150 small manufacturers of radio and television broadcasting and wireless communications equipment for consumer/household use.

93. We conclude that there are approximately 544 small computer manufacturers.

94. At this time, we do not expect that the proposed rules would impose any significant additional recordkeeping or recordkeeping requirements. While the requirements proposed in the NPRM could have an impact on consumer electronics manufacturers and broadcasters, such impact would be similarly costly for both large and small entities. We seek comment on whether others perceive a need for more extensive recordkeeping and, if so, whether the burden would fall on large and small entities differently.

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

96. The deadlines we proposed for replication and maximization for in-core channels would give the largest commercial stations in the largest markets on in-core channels three years to acquire necessary financing, develop business plans, and expand their digital service areas. Taking into consideration smaller-market commercial stations, smaller commercial stations in larger markets, and noncommercial DTV licensees, which may face greater obstacles in moving towards full replication or service maximization, we proposed alternative replication and maximization deadlines allowing close to the maximum time under the current statutory transition period to complete their replication and maximization facilities. We welcome comment on modifications of the proposals if such modifications might assist small entities and especially if such are based on evidence of potential differential impact.

97. None.

98. Pursuant to the authority contained in sections 4(i) and (j), 303, 307, 309 and 336 of the Communications Act of 1934 as amended, 47 U.S.C. 154(i) and (j), 303, 307, 309 and 336, this NPRM is adopted.

99. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, will send a copy of this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with the Regulatory Flexibility Act.

On January 25, 2000, Mr. Ronald J. Slaughter submitted a petition for rulemaking requesting that NHTSA consider requiring motor vehicle manufacturers to equip new vehicles with lights inside and outside the vehicle that would continuously burn and be visible to the driver and to those outside the vehicle as long as all vehicle occupants are belted. Mr. Slaughter believes that continuously burning lights on the instrument panel would give the driver more control over his or her passengers, reminding them to “buckle up.” Further, Mr. Slaughter suggested that lights visible outside the vehicle would help police officers enforce mandatory seat belt use laws. He believes that such lights would increase safety belt use, assist in the identification of drunk or otherwise impaired drivers, and reduce traffic crash injuries and fatalities. Mr. Slaughter did not provide any data or other information relating to the cost of such devices or any studies performed regarding the effectiveness or feasibility of such a system.

NHTSA is very supportive of efforts to increase safety belt use and agrees that the failure of many motor vehicle occupants to use safety belts is a significant concern. The agency has expended considerable effort and resources to improve the rate of safety belt use in the United States. NHTSA has prepared and distributed numerous legislative fact sheets, position papers, success stories, model laws for both seat belts and child passenger safety, and other materials on the benefits of mandatory seat belt use and child passenger safety laws. Agency employees have testified, when invited by state officials, at state legislative hearings for states considering the enactment of the belt use laws.

Recently, at the invitation of state officials, NHTSA employees have testified in support of attempts within various states to change secondary enforcement laws, under which police officers must observe a separate and distinct violation before stopping a vehicle where occupants are not using belts, to primary enforcement laws. Primary enforcement laws allow police officers to make stops and issue citations for the failure to wear a seat belt without first observing another violation unrelated to seat belt use. Presently, 18 states and the District of Columbia have enacted such laws.

NHTSA has also established cooperative agreements with numerous states to demonstrate that publicized enforcement of a mandatory seat belt use law can increase seat belt use and formed formal partnerships with many national organizations for the purpose of mobilizing their membership to promote traffic safety in general, and seat belt and child safety seat use in particular. The agency has produced brochures, posters, videos, print ads, billboards, public service announcements, and a host of other media resource materials to educate the public on the safety benefits of seat belts. Other activities pursued by the agency to improve belt use include programs to improve the training of law enforcement officers, the use of child safety seat checkpoints, and other measures designed to improve belt use and enforcement of mandatory belt use laws.

Despite the agency's on-going efforts and interest in encouraging full use of vehicle safety belts, NHTSA has considered and rejected two proposals similar to Mr. Slaughter's in recent years. In both cases, the agency reluctantly concluded that the potential safety benefits of the proposed requirements were outweighed by other factors. On February 24, 1999 (64 FR 9118), the agency published a denial of a petition from Mr. Les Boyd requesting that the agency consider requiring motor vehicle manufacturers to equip new vehicles with instrumentation sufficient to alert nearby police whenever the vehicles were being operated with an unbelted occupant. In denying the Boyd petition, the agency expressed three major concerns about the general use of instrumentation to alert police. First, NHTSA explained that implementation of the requested amendment would have been costly because it would have necessitated the installation of sensors in each seating position to identify unbelted occupants as well as a transmitter in each vehicle to alert nearby police.

Second, the agency stated that it anticipated that adopting the requested requirements would lead to only a modest increase in safety belt usage in the majority of states with secondary seat belt use laws because those states only permit officers to stop a vehicle or issue a citation for an occupant's failure to use a safety belt if the officers also observe a separate, concurrent violation. The agency further stated that it did not anticipate that granting Mr. Boyd's petition would lead to a substantial increase in seat belt use even in those states whose mandatory seat belt use laws permit officers to enforce those laws without first observing a separate, concurrent violation. Third, NHTSA expressed reservations about the amount of identifying information that would need to be transmitted in order for police to determine which vehicles were being operated with unbelted occupants, stating that the transmission of such detailed information raised significant privacy concerns.

On November 5, 1999 (64 FR 60625), the agency denied a petition from Carl Nash and Donald Friedman. The petitioners proposed requiring certain inducements to fasten all occupant safety belts, such as continuous visual reminders, audible suggestions, or interruption of non-essential accessories such as air conditioning. In denying the petition, the agency expressed concerns about the effectiveness of continuous visual reminders, pointing to a lack of “information indicating that such a reminder would likely result in additional safety benefits over the existing warning systems.” The agency also stated its opinion that NHTSA lacks the statutory authority to require audible suggestions or system interruption. The agency reconfirmed this opinion in the preamble to the Advanced Air Bag final rule, published on May 12, 2000 (65 FR at 30734), as well as in a letter to Dr. Nash on June 6, 2000.

In evaluating Mr. Slaughter's petition, we believe that there is no apparent reason to require continuously burning lights to indicate that all occupants are belted. First and foremost, there are no data relating to the costs of such a system or any studies indicating its effectiveness or feasibility. With respect to the petitioner's proposal to require a continuously burning light positioned outside the vehicle, the agency believes that doing so would be unlikely to enhance appreciably the ability of police officers to determine whether occupants are wearing their safety belts. In many cases, officers can already see whether an occupant's shoulder belt is being worn by looking through the vehicle's windows. We acknowledge that an illuminated, external light would be more effective than plain visual inspection in certain circumstances, however, such as at night, during periods of inclement weather, or in other situations when visibility is severely limited.

As to Mr. Slaughter's proposal to require a continuously burning light inside the vehicle, on the dashboard, we note that the agency presently requires vehicles to be equipped with an internal light and an audible warning to remind the vehicle's driver to fasten his or her safety belt. (See Federal Motor Vehicle Safety Standard No. 208, paragraph S7.3.) This light normally remains illuminated when the driver's safety belt is not being worn. The agency believes that the combined effect of requiring an audible warning system and dashboard light inside the vehicle keyed to the driver's seating position, coupled with the ability of police offers to observe (in normal driving conditions) from outside the vehicle, whether shoulder belts are being worn already provides many of the “reminder” and enforcement benefits the petitioner contends would be realized by his proposal.

Not only would the benefits from adopting the petitioner's proposal appear to be minimal, but also the costs of requiring manufacturers to install continuously burning lights inside and outside the vehicle would likely be high. To work in the manner suggested by the petitioner, each seating position would not only need a belt-use sensor in every safety buckle, but every seating position other than the driver's seat would also have to have some form of seat sensor to indicate whether the seat was occupied. Each vehicle would also need to be equipped with a wiring harness and internal and external lights, designed to illuminate only when the safety belts in all “occupied” seats registered as fastened. Based on the comparatively simpler weight sensors and wiring harnesses used in the BMW advanced air bag system, the agency estimates that the minimum cost for a vehicle with five seating positions would be at least $50 per vehicle. Substantially greater costs would be incurred in vehicles with more seating positions and/or vehicles with readily removable seats.

In addition to the potentially high cost of the petitioner's proposal, the agency is also concerned about consumer acceptance of such a system. Vehicle seats, especially rear seats, are frequently used to transport cargo such as groceries, luggage, pets, and other heavy objects. If the system were to work as envisioned by the petitioner, the mere placement of such items on a vehicle's seat coupled with a failure to fasten the associated belt would prevent the continuously burning lights from illuminating, thus indicating falsely to police officers that the vehicle was being operated with unbelted “occupants.” Such “false alarms” would likely lead to widespread consumer backlash and disapproval. Other “false alarms” could occur when the light bulbs burn out and need to be replaced by the consumer. Occupants who do not want to wear their seat belts can also easily circumvent the system by placing the seat belt behind them or modifying the light to stay on all the time.

Finally, we note that Congress has requested that NHTSA conduct a study to consider whether unobtrusive technologies could increase belt use. In response, NHTSA has contracted with the Transportation Research Board of the National Academy of Sciences to conduct a study on the benefits and acceptability of these technologies, as well as any legislative or regulatory actions that may be necessary to enable installation of devices to encourage seat belt use in passenger vehicles. In conjunction with this study, NHTSA is also conducting research to determine what levels of intrusiveness would induce non-belt users to wear their seat belt, without causing adverse reactions from current belt users.

For the reasons stated above, NHTSA concludes that it is unlikely that a rulemaking proceeding to require continuously burning lights inside and outside the vehicle tied to safety belt usage as suggested by the petitioner would result in the issuance of a rule requiring such a device. Accordingly, the petition is denied. Upon completion of the National Academy of Sciences' and our own studies, we will consider what future action the agency will take on this issue.

The management unit is all Atlantic spiny dogfish (Squalus acanthias) in U.S. waters in the western Atlantic Ocean.

Currently, there is no rebuilding target for the spiny dogfish stock because the rebuilding target established in the original FMP was disapproved. It will be necessary to establish a new target that will identify the stock size that corresponds to a recovered spiny dogfish stock as defined under the MSFCMA. Examples of rebuilding targets are BMSY (population biomass (B) that supports Maximum Sustainable Yield (MSY)) and SSBmax (female Spawning Stock Biomass (SSB) that maximizes recruitment). Additionally, identification of a target age structure for the rebuilt stock has been suggested. Target age compositions proposed thus far include those corresponding to (1) the average from 1980-88 and (2) the average from 1989-93.

The National Standards Guidelines of the MSFCMA provide minimum and maximum time limits for rebuilding fish stocks that are classified as overfished. The lower limit of the specified time period for rebuilding is the amount of time that would be required for rebuilding if fishing mortality were eliminated (50 CFR 600.310(e)(4)(ii)(B)(3)). The longest amount of time allowed for rebuilding is the amount of time required to rebuild the stock with no fishing mortality plus one mean generation time. Other potential rebuilding time frames include those consistent with a constant fishing mortality rate of F = 0.03, a constant harvest strategy of 8.8 million pounds, and one mean generation time.

The Dogfish Monitoring Committee concluded at its September 2002 meeting that discard mortality may be compromising the fishery's ability to achieve the FMP objective of rebuilding female spawning stock biomass. The Committee strongly recommended increased observer coverage to allow reliable estimation of discards and additional studies to estimate discard mortality rate by gear type. The mortality of dogfish discarded in other fisheries could be greater than that which will allow stock rebuilding. If this is the case, additional constraints on the fisheries which land and discard dogfish should be considered (e.g., time-area closures).

The current quota allocation scheme designates 57.9 percent of the annual quota to period 1 (May-October) and 42.1 percent to period 2 (November-April). This scheme may be modified in order to simplify the allocation process and/or distribute harvest more evenly over the course of the year. Alternatives to the current scheme include but are not limited to a 50:50 split between quota periods 1 and 2, alternative seasons (i.e., monthly, bimonthly, quarters), changing the fishing year to be consistent with the calendar year, and adding a provision for overages.

A number of additional management measure changes could be considered in the development of Amendment 1. These modifications could include changing the specification of management measures from an annual to a multiple year approach, adding quota set-asides for biological supply and/or biomedical research, limited access options, establishing a percentage of the quota for research set-asides, allocating the quota regionally or state-by-state, establishing a maximum size or slot sizes, and managing the Northwest Atlantic spiny dogfish resource in cooperation with Canada.

Possible management measures for the commercial fishery include:

Possible management measures for the spiny dogfish recreational fishery include:

A scoping meeting will be held as follows:

7:00 PM March 17, 2003 at Sheraton Oceanfront Hotel, 36th Street & Atlantic Ave. Virginia Beach, VA 23451 Tel: 757-425-9000

This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Joanna Davis at the Mid-Atlantic Council, telephone (302) 674-2331, at least 5 days prior to the scoping meeting.

NMFS manages the domestic groundfish fisheries of the GOA under the FMP. The North Pacific Fishery Management Council (Council) prepared the FMP under the Magnuson-Stevens Act. Regulations governing the groundfish fisheries of the GOA appear at 50 CFR parts 600 and 679.

At its October 2001 meeting, the Council recommended Steller sea lion (SSL) protection measures for 2002 and beyond. These measures were developed by a Council-appointed committee (hereafter referred to as the SSL Committee but was formerly called the “RPA Committee”). In developing its recommendations, the SSL Committee first assessed the needs of Steller sea lions to avoid jeopardy to their continued existence or destruction or adverse modification of their critical habitat based on the best scientific information available. The SSL Committee then crafted groundfish fisheries management measures that provided adequate protection for Steller sea lions in compliance with the Endangered Species Act (ESA).

These recommendations included a revised harvest control rule for pollock, Pacific cod, and Atka mackerel; closed areas and seasons based on the location, fishery, and gear type; critical habitat harvest limits for the pollock and Atka mackerel fisheries in certain areas of critical habitat; and requirements to allow for monitoring of pollock, Pacific cod, and Atka mackerel directed fishing. The recommendations of the SSL Committee were further modified by the Council. The complete set of recommendations by the Council is detailed in the preamble to the emergency interim rule implementing Steller sea lion protection measures and groundfish harvest specifications in 2002 (67 FR 956, January 8, 2002).

NMFS formally consulted under section 7 of the ESA on the Steller sea lion protection measures. A biological opinion (2001 BiOp) was appended to the Steller sea lion SEIS which evaluated the effects of the preferred alternative on ESA listed species (see ADDRESSES). The agency determined in the 2001 BiOp that the protection measures proposed by the Council were not likely to jeopardize the continued existence of the western distinct population segment (DPS) of Steller sea lions or result in the destruction or adverse modification of its critical habitat. Based on the 2001 BiOp and the environmental impacts disclosed in the Steller sea lion SEIS, the Council adopted the preferred alternative (with modifications) and forwarded it to NMFS for approval and implementation. NMFS implemented the preferred alternative by emergency interim rule prior to the start of the 2002 fishing year (67 FR 956, January 8, 2002, amended 67 FR 21600, May 1, 2002, 67 FR 45671, July 10, 2002, 67 FR 47472, July 19, 2002, and extended 67 FR 34860, May 16, 2002). These protection measures were published as a proposed rule for 2003 and beyond (67 FR 56692, September 4, 2002) and the final rule became effective January 1, 2003 (68 FR 204, January 2, 2003).On December 18, 2002, the United States District Court for the Western District of Washington remanded to NMFS the biological opinion (“2001 BiOp”) NMFS prepared for the groundfish fisheries managed pursuant to the Stellar sea lion protection measures published on January 2, 2003 (68 FR 204). Greenpeace, et al. V. National Marine Fisheries Service, No. C98-492Z (W.D. Wash.). The Court held that the biological opinion's findings of no jeopardy to the continued existence of endangered Stellar sea lions and no adverse modification of their critical habitat were arbitrary and capricious. On December 30, 2002, the Court issued an Order declaring that the 2001 BiOp “shall remain effective until June 30, 2003,” while NMFS complies with the remand.

In order for the Steller sea lion protection measures to be fully implemented, in November 2001, the State of Alaska Board of Fisheries (BOF) adopted parallel regulations providing for an extension of Steller sea lion protection measures in State waters (0-3 nm) during the State parallel fishery. The parallel groundfish fishery is defined as the Pacific cod, walleye pollock, and Atka mackerel fisheries in State waters opened by the Commissioner of the Alaska Department of Fish and Game (ADF&G). The opening was effected under emergency order authority to correspond with the times, area, and, unless otherwise specified, the gear of the Federal season in adjacent Federal waters (Alaska Administrative Code 5 AAC 28.087(c), January 3, 2002).

As part of its November 2001 action, the BOF adopted a series of fishery closure areas that almost mirrored those areas requested by the Council under the Steller sea lion protection measures. The Federal regulations (implementing the Council's preferred alternative) contained closures for Pacific cod fisheries using pot gear at Caton Island (King Cove area) and Cape Barnabas (Kodiak) within 3 nm of those ESA listed haulouts. However, the BOF action did not contain these closures for the parallel fishery, and this allowed vessels without a Federal fishing permit to fish in those areas under Alaska State law. This resulted in conflicting Federal and State regulations. In November 2001, NMFS informally consulted on allowing Pacific cod fisheries using pot gear at Caton Island and Cape Barnabas within 3 nm of those ESA listed haulouts and determined that these changes to the Steller sea lion protection measures were not of sufficient extent to re-initiate formal ESA consultation.

In October 2002, the Council recommended proposed regulations to remove Pacific cod pot fishing restrictions in waters within 3 nm of Cape Barnabas and Caton Island for federally permitted vessels. These proposed regulations remove the restrictions from Table 5 of part 679 for these two locations.

NMFS has determined that the opening of closed Pacific cod pot fishing within 3 nm miles of Caton Island and Cape Barnabas is consistent with the national standards of the Magnuson-Stevens Act and other applicable laws.

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

Under Executive Order 12612, this proposed rule does not contain policies with federalism implications sufficient to warrant preparation of a federalism assessment. Because no federalism issues are implicated with this action, the mandatory requirements contained in Executive Order 13132 for consultation on federalism issues among Federal, State, and local governments are not triggered.

Nothing in this action results in any changes in reporting or recordkeeping requirements.

Species listed under the Endangered Species Act (ESA) are present in the action area. This action is not expected to result in increases of Pacific cod harvest beyond those experienced with the opening of the State parallel fishery in these areas. With no additional removals of Pacific cod expected, informal ESA consultation concluded that this action is not likely to adversely affect listed species.

The analysis for this action did not reveal any existing Federal rules that duplicate, overlap, or conflict with this action.

NMFS prepared an IRFA that describes the impact this action may have on small entities. Earlier sections of this preamble describe the reasons why action by the agency is being considered and provide a succinct statement of the objectives of, and the legal basis for, the proposed rule. This action is expected to affect six regulated small entities by removing a fishing restriction. These entities are the pot vessels fishing for Pacific cod in the waters within 3 nm of the two haulouts. This action does not impose new reporting, recordkeeping or other compliance requirements on regulated small entities. No Federal rules exist that duplicate, overlap or conflict with the proposed rule. This action does not have any adverse impacts on regulated small entities. No significant alternatives to the proposed rule exist that would have lower economic impacts on these entities.

Two alternatives were considered for the Caton Island and Cape Barnabas pot fishing vessels: (1) No exemption for these vessels (status quo) and (2) exempt pot fishing vessels from SSL closures from 0 to 3 nm around Caton Island and Cape Barnabas.

Alternative 1 is the baseline alternative, and federally permitted vessels using pot gear for Pacific cod directed fishing would continue to be prohibited from fishing within 3 nm of the Caton Island and Cape Barnabas haulouts. Also, the status quo would not provide consistency between Federal and State regulations governing fishing restrictions within Steller sea lion protection areas. The preferred alternative would allow federally permitted vessels used to participate in the GOA Pacific cod pot fishery to fish within 3 nm of the haulouts at Caton Island and Cape Barnabas. This would reduce the Pacific cod revenues placed “at risk” by the restrictions of the status quo alternative by up to $63,000. The areas in question are small parts of larger fishing areas, and fishermen may currently be making up a large part of the harvest foreclosed by the restrictions by fishing elsewhere. This alternative is not believed to create jeopardy for the Steller sea lions or adversely modify its critical habitat. This alternative would not trigger Executive Order 12866 significance criteria since the maximum revenue impact is likely to be $63,000 at the outside.