Section 218(a) of the Nuclear Waste Policy Act of 1982, as amended (NWPA), requires that “[t]he Secretary [of the Department of Energy (DOE)] shall establish a demonstration program, in cooperation with the private sector, for the dry storage of spent nuclear fuel at civilian nuclear power reactor sites, with the objective of establishing one or more technologies that the [Nuclear Regulatory] Commission may, by rule, approve for use at the sites of civilian nuclear power reactors without, to the maximum extent practicable, the need for additional site-specific approvals by the Commission.” Section 133 of the NWPA states, in part, that “[t]he Commission shall, by rule, establish procedures for the licensing of any technology approved by the Commission under section 218(a) for use at the site of any civilian nuclear power reactor.”

To implement this mandate, the NRC approved dry storage of spent nuclear fuel in NRC-approved casks under a general license by publishing a final rule in 10 CFR part 72 entitled “General License for Storage of Spent Fuel at Power Reactor Sites” (55 FR 29181; July 18, 1990). This rule also established a new subpart L within 10 CFR part 72, entitled “Approval of Spent Fuel Storage Casks” containing procedures and criteria for obtaining NRC approval of spent fuel storage cask designs. The NRC subsequently issued a final rule on January 16, 2001 (66 FR 3444), that approved the FuelSolutionsTM cask design and added it to the list of NRC-approved cask designs in § 72.214 as CoC No. 1026.

On May 28, 2002, and as supplemented October 3, 2002, the certificate holder, BNFL Fuel Solutions, submitted an application to the NRC to amend CoC No. 1026 to change the W-21 canister Technical Specifications (TS) and bases to provide an alternative to returning the canister to the spent fuel building by returning it to the transfer cask. Specifically, TS 3.3.2 and TS 3.3.3 propose returning the W-21 canister to the transfer cask while restoring normal storage conditions. The amendment also includes several editorial changes to TS 3.1.1, TS 3.3.2, and TS 3.3.3. No other changes to the FuelSolutionsTM cask system design were requested in this application. The NRC staff performed a detailed safety evaluation of the proposed CoC amendment request and found that an acceptable safety margin is maintained. In addition, the NRC staff has determined that there is still reasonable assurance that public health and safety and the environment will be adequately protected.

This direct final rule revises the FuelSolutionsTM cask design listing in § 72.214 by adding Amendment No. 3 to CoC No. 1026. The amendment consists of changes to the TS to provide an alternative to returning the W-21 canister to the spent fuel building by returning it to the transfer casks. The amendment also includes several editorial changes. The particular Technical Specifications that are changed are identified in the NRC staff's SER for Amendment No. 3.

The amended FuelSolutionsTM cask system, when used under the conditions specified in the CoC, the Technical Specifications, and NRC regulations, will meet the requirements of Part 72; thus, adequate protection of public health and safety will continue to be ensured.

Certificate No. 1026 is revised by adding the effective date of Amendment Number 3.

This rule is limited to the changes contained in Amendment 3 to CoC No. 1026 and does not include other aspects of the FuelSolutionsTM cask system design. The NRC is using the “direct final rule procedure” to issue this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured. The amendment to the rule will become effective on May 7, 2003. However, if the NRC receives significant adverse comments by March 24, 2003, then the NRC will publish a document that withdraws this action and will address the comments, received in response to the proposed amendments published elsewhere in this issue of the Federal Register, in a subsequent rule. The NRC will not initiate a second comment period on this action.

A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if:

(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, in a substantive response:

(a) The comment causes the NRC staff to reevaluate (or reconsider) its position or conduct additional analysis;

(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or

(c) The comment raises a relevant issue that was not previously addressed or considered by the NRC staff.

(2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.

(3) The comment causes the NRC staff to make a change (other than editorial) to the CoC or TS.

The National Technology Transfer Act of 1995 (Pub. L. 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this direct final rule, the NRC would revise the FuelSolutionsTM cask system design listed in § 72.214 (List of NRC-approved spent fuel storage cask designs). This action does not constitute the establishment of a standard that establishes generally applicable requirements.

Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs” approved by the Commission on June 30, 1997, and published in the Federal Register on September 3, 1997 (62 FR 46517), this rule is classified as compatibility Category “NRC.” Compatibility is not required for Category “NRC” regulations. The NRC program elements in this category are those that relate directly to areas of regulation reserved to the NRC by the Atomic Energy Act of 1954, as amended (AEA) or the provisions of the title 10 of the Code of Federal Regulations. Although an Agreement State may not adopt program elements reserved to NRC, it may wish to inform its licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws, but does not confer regulatory authority on the State.

The Presidential Memorandum dated June 1, 1998, entitled “Plain Language in Government Writing” directed that the government's writing be in plain language. The NRC requests comments on this direct final rule specifically with respect to the clarity and effectiveness of the language used. Comments should be sent to the address listed under the heading ADDRESSES above.

Under the National Environmental Policy Act of 1969, as amended, and the NRC regulations in subpart A of 10 CFR part 51, the NRC has determined that this rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. The rule would amend the CoC for the FuelSolutionsTM cask system within the list of approved spent fuel storage casks that power reactor licensees can use to store spent fuel at reactor sites under a general license. Amendment No. 3 will modify the present cask system design to change the W-21 canister Technical Specifications (TS) and bases to provide an alternative to returning the canister to the spent fuel building by returning it to the transfer cask. Specifically, TS 3.3.2 and TS 3.3.3 propose returning the W-21 canister to the transfer cask while restoring normal storage conditions. The amendment also includes several editorial changes to TS 3.1.1, TS 3.3.2, and TS 3.3.3.

The environmental assessment and finding of no significant impact on which this determination is based are available for inspection at the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD. Single copies of the environmental assessment and finding of no significant impact are available from Jayne M. McCausland, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-6219, e-mail jmm2@nrc.gov.

This direct final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget, Approval Number 3150-0132.

The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.

On July 18, 1990 (55 FR 29181), the NRC issued an amendment to 10 CFR part 72 to provide for the storage of spent nuclear fuel under a general license in cask designs approved by the NRC. Any nuclear power reactor licensee can use NRC-approved cask designs to store spent nuclear fuel if it notifies the NRC in advance, spent fuel is stored under the conditions specified in the cask's CoC, and the conditions of the general license are met. A list of NRC-approved cask designs is contained in § 72.214. On January 16, 2001 (66 FR 3444), the NRC issued an amendment to part 72 that approved the FuelSolutionsTM cask design by adding it to the list of NRC-approved cask designs in § 72.214. On May 28, 2002, and as supplemented October 3, 2002, the certificate holder, BNFL Fuel Solutions Corporation, submitted an application to the NRC to modify the Technical Specifications (TS). The current TS require that if the W-21 canister is required to be removed from its storage cask, then the canister must be returned to the spent fuel building. The modified TS will provide an alternative to returning the canister to the spent fuel building by returning it to the transfer cask. Specifically, TS 3.3.2 and TS 3.3.3 propose returning the W-21 canister to the transfer cask while restoring normal storage conditions. The amendment also includes several editorial changes to TS 3.1.1, TS 3.3.2, and TS 3.3.3.

The alternative to this action is to withhold approval of this amended cask system design and issue an exemption to each general license. This alternative would cost both the NRC and the utilities more time and money because each utility would have to pursue an exemption.

Approval of the direct final rule will eliminate this problem and is consistent with previous NRC actions. Further, the direct final rule will have no adverse effect on public health and safety. This direct final rule has no significant identifiable impact or benefit on other Government agencies. Based on this discussion of the benefits and impacts of the alternatives, the NRC concludes that the requirements of the direct final rule are commensurate with the NRC's responsibilities for public health and safety and the common defense and security. No other available alternative is believed to be as satisfactory, and thus, this action is recommended.

In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the NRC certifies that this rule will not, if issued, have a significant economic impact on a substantial number of small entities. This direct final rule affects only the licensing and operation of nuclear power plants, independent spent fuel storage facilities, and BNFL Fuel Solutions Corporation. The companies that own these plants do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the Small Business Size Standards set out in regulations issued by the Small Business Administration at 13 CFR part 121.

The NRC has determined that the backfit rule (10 CFR 50.109 or 10 CFR 72.62) does not apply to this direct final rule because this amendment does not involve any provisions that would impose backfits as defined. Therefore, a backfit analysis is not required.

In accordance with the Small Business Regulatory Enforcement Fairness Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs, Office of Management and Budget.

The Commission issued the Appliance Labeling Rule in 1979, 44 FR 66466 (Nov. 19, 1979), in response to a directive in the Energy Policy and Conservation Act of 1975 (“EPCA”).1 The Rule covers, among other things, eight categories of major household appliances: refrigerators and refrigerator-freezers, freezers, dishwashers, clothes washers, water heaters, room air conditioners, furnaces, and central air conditioners.

The Rule requires manufacturers of all covered appliances to disclose specific energy consumption or efficiency information (derived from the Department of Energy (“DOE”) test procedures) at the point of sale in the form of an “EnergyGuide” label and in catalogs. The Rule requires manufacturers to include, on labels, an energy consumption or efficiency figure and a “range of comparability.” This range shows the highest and lowest energy consumption or efficiencies for all comparable appliance models so consumers can compare the energy consumption or efficiency of other models similar to the labeled model.

The Rule requires manufacturers, after filing an initial report, to report annually the estimated annual energy consumption or energy efficiency ratings for the appliances derived from tests performed pursuant to the DOE test procedures. 16 CFR 305.8(b). Because manufacturers regularly add new models to their lines, improve existing models, and drop others, the data base from which the ranges of comparability are calculated is constantly changing. Under Section 305.10 of the Rule, to keep the required information on labels consistent with these changes, the Commission publishes new ranges (but not more often than annually) if an analysis of the new information indicates that the upper or lower limits of the ranges have changed by more than 15%. Otherwise, the Commission publishes a statement that the prior ranges remain in effect for the next year.

In a February 7, 2003 letter to Commission staff, the Association of Home Appliance Manufacturers (AHAM) requested that the Commission amend the reporting date for clothes washer data from March 1 to October 1 of each year. This change will ensure that FTC's submission deadline is consistent with the Canadian reporting period for clothes washers. The Canadian program, administered by Natural Resources Canada, provides manufacturers with a three month period to submit data, which usually begins sometime in September of each year. This amendment will allow manufacturers to compile and submit their annual reports to both agencies in the same time period.

For this year, the change in reporting date will also allow manufacturers to provide the FTC with new energy information based on the most recent DOE test procedure for these products. A new DOE test procedure for clothes washers (see 10 CFR Part 430, Subpt. B, App. J1) and a new energy standard for clothes washers will become effective on January 1, 2004.2 For any particular model, the application of the new test procedure is likely to produce energy consumption figures different from those yielded by the existing DOE test. The current ranges of comparability for clothes washers are based on data for models that have been tested under the current DOE test. AHAM has indicated that it plans to submit data in October 2003 for clothes washers that comply with the 2004 standard and have been tested under the new procedure. This will allow the Commission to review this data and, if appropriate, publish new ranges that reflect new 2004 compliant models tested under the new procedure. Clothes washer labels printed in early 2004 would then provide energy consumption figures and ranges of comparability that reflect the new procedure. By publishing the new ranges as early as possible, the Commission hopes to reduce any confusion that may result from the transition from the old test procedure to the new one.

In its February 7, 2003 letter, AHAM also requested that the Commission allow its members to use the new test results for EnergyGuide labels printed before January 1, 2004. AHAM also proposed clarifying changes to the clothes washer label. The Commission will address these additional issues separately.

The Commission is also amending the language in the Rule in §§ 305.8(b) and 305.10(a) to eliminate obsolete language related to the publication of ranges and the submission of data for dishwashers in 2002 (see 67 FR 35008 (May 17, 2002)).

The amendments published in this notice involve minor, procedural changes to the submission date for data already required by the Rule. These technical amendments merely alter the dates on which compliance is required and do not affect the requirements of the Rule nor do the amendments alter the frequency with which regulated entities must comply with these requirements. Accordingly, the Commission finds for good cause that public comment and a 30-day effective date for these technical, procedural amendments are unnecessary (5 U.S.C. 553(b)(A)(B) and (d)).

The provisions of the Regulatory Flexibility Act relating to a Regulatory Flexibility Act analysis (5 U.S.C. 603-604) are not applicable to this proceeding because the amendments do not impose any new obligations on entities regulated by the Appliance Labeling Rule. The amendments merely alter the dates on which compliance is required and do not affect the requirements of the rule nor do the amendments alter the frequency with which regulated entities must comply with these requirements. Thus, the amendments will not have a “significant economic impact on a substantial number of small entities.” 5 U.S.C. 605. The Commission has concluded, therefore, that a regulatory flexibility analysis is not necessary, and certifies, under Section 605 of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that the amendments announced today will not have a significant economic impact on a substantial number of small entities.

In a 1988 notice (53 FR 22113), the Commission stated that the Rule contains disclosure and reporting requirements that constitute “information collection requirements” as defined by 5 CFR 1320.7(c), the regulation that implements the Paperwork Reduction Act.3 The Commission noted that the Rule had been reviewed and approved in 1984 by the Office of Management and Budget (“OMB”) and assigned OMB Control No. 3084-0068. OMB has again reviewed the Rule and extended its approval for its recordkeeping and reporting requirements until September 30, 2004. The amendments now being adopted do not change the substance or frequency of the recordkeeping, disclosure, or reporting requirements and, therefore, do not require further OMB clearance.

This interim rule adds a new DFARS subpart and a contract clause to implement section 1008 of the National Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398). The rule—

• Requires contractors to submit electronically, and DOD to process electronically, requests for payment under DOD contracts;

• Requires DOD to transmit any supporting documentation electronically within DOD;

• Identifies three acceptable electronic forms for transmission of payment requests; and

• Identifies six specific situations where using electronic payment methods is unduly burdensome.

DOD published a proposed DFARS rule in the Federal Register on May 31, 2002 (67 FR 38057). Seventeen respondents submitted comments on the rule. Based on an analysis of these comments, DOD has made substantive changes to the rule, and, therefore, has published an interim rule with another request for comments. The main difference between the proposed and interim rules is that one of the six exemption categories has changed. In the proposed rule, at DFARS 232.7002(a)(6), an exemption applied to cases where the Secretary of Defense determines that the requirement for using electronic means is unduly burdensome. In the interim rule, the exemption has been revised to apply in those cases where the contractor is unable to submit, or DOD is unable to receive, a payment request in electronic form, and the contracting officer, the payment office, and the contractor mutually agree to an alternative method. This revised exemption provides contracting officers the flexibility to work solutions to unique payment situations to ensure that contractors are paid on time for work they have performed. In addition, the interim rule revises the clause at DFARS 252.246-7000, Material Inspection and Receiving Report, to state that contractor submission of material inspection and receiving information by using the Wide Area WorkFlow-Receipt and Acceptance (WAWF-RA) electronic form fulfills the requirement for a material inspection and receiving report (DD Form 250).

A discussion of the comments on the proposed rule is provided below.

1. Comment: Completely support the rule as it will reduce administrative cost, time, and effort, and will further speed payment to the contractor. DOD Response: Concur.

2. Comment: Does the requirement to submit payment requests in electronic form apply to contracts without solicitations? DOD Response: Yes. “Solicitation” means any request to submit offers or quotations to the government, and, therefore, would cover the great majority of procurements. As indicated at DFARS 201.304(6), “The Director of Defense Procurement and Acquisition Policy publishes changes to the DFARS in the Federal Register and electronically via the World Wide Web. Each change includes an effective date. Unless guidance accompanying a change states otherwise, contracting officers must include any new or revised clauses, provisions, or forms in solicitations issued on or after the effective date of the change.” If no solicitation is issued, the rule applies to contracts issued after the effective date.

3. Comment: Recommend clarification in DFARS 232.7004 that the contract clause is only to be used in solicitations and contracts resulting from solicitations first issued after October 1, 2002. DOD Response: Do not concur. The normal practice is to cite the effective date in the DATES section of the Federal Register notice, and not in the regulations. This eliminates the need to revise the regulations later to remove obsolete dates. The effective date for this interim rule is March 1, 2003, to allow payment systems to complete the latest upgrades and provide military departments and defense agencies sufficient time to finalize implementation plans with contractors.

4. Comment: There are many problems with the WAWF-RA software application, such as—

a. The current version of WAWF-RA does not process Foreign Military Sales (FMS);

b. If a mistake is made when processing the electronic DD Form 250 (Material Inspection and Receiving Report), the program will not allow changes and the submitter has to initiate a completely new DD Form 250. If a change has to be made after the DD Form 250 is accepted, the payment request must be processed manually; and

c. Construction contracts should be exempt, because the percentage of completion progress payments under construction contracts require so much paperwork, and because the contracting officer needs to approve the invoice and make sure the progress payments are correct.

DOD Response: The WAWF-RA software is an evolving application and will mature over time. Various software modules/versions are currently in development that will process additional types of invoices in the future, such as FMS, construction contracts, and discounts. For example, the FMS module will be added to the WAWF-RA system in the spring of 2003. It is noted that, until such time as WAWF-RA processes the above mentioned types of invoices, the contracting officer may authorize a contractor to submit a payment request in other than electronic form (see DFARS 232.7002(a)(6)).

5. Comment: The respondent inquired about using WAWF-RA for a contract with the Defense Contract Management Agency (DCMA), but was advised that WAWF-RA was still being tested. DOD Response: The various versions of WAWF-RA go through a number of tests before deployment. For example, WAWF-RA, Version 3.0, currently is being tested, with full deployment anticipated in the spring of 2003. The respondent needs to contact DCMA again for further guidance.

6. Comment: DOD has not yet put into place fully functional electronic commerce systems that interface with all DOD payment systems for all invoice types. For example, the WAWF-RA system will not currently accept the electronic submission of the following invoice types: performance-based payments, commercial financing requests, invoices containing withholds, corrected invoices, credit invoices, and classified invoices. DOD Response: Classified invoices are exempt from the electronic submission requirement in accordance with DFARS 232.7002(a)(3). The other types of invoices and financing requests will be addressed in a future version of WAWF-RA.

7. Comment: The benefits of DOD's successful “Direct Submittal” initiative needs to be retained. If invoices must be routed through WAWF-RA rather than directly to the payment systems, WAWF-RA functionally should enable “Direct Submittal” approved contracts to route automatically through to the payment office without any DCMA or Defense Contract Audit Agency (DCAA) manual intervention. To facilitate the electronic payment of invoice requests, government payment practices should be evaluated, and DCMA, DCAA, and the Defense Finance and Accounting Service (DFAS) should issue clear guidance to eliminate, wherever possible, invoice backup documentation and administrative contracting officer (ACO) approvals. DOD Response: Submission of invoices under “Direct Submittal” approved contracts will be addressed in a future WAWF-RA version, which is currently being tested.

8. Comment: The WAWF-RA system has a major problem, namely, it only allows for 1 MG of attachments. DOD Response: WAWF-RA is being modified to accept attachments up to 5 MG.

9. Comment: The respondent tried in the past to sign up for Web invoicing, but could not use the application because of a restriction on its use if the DD Form 250 (Material Inspection and Receiving Report) had to be signed by an ACO. Is the restriction still in effect, or is there another form of transmission that can accommodate a signed DD Form 250? DOD Response: DFARS 252.246-7000, Material Inspection and Receiving Report, has been revised to state that using WAWF-RA to submit material inspection and receiving information fulfills the requirement for a DD Form 250. WAWF-RA will support ACOs electronically signing material inspection and receiving information when they are accepting supplies or services or when they are approving service invoices.

10. Comment: There is a conflict between the proposed DFARS coverage and the existing DFARS concerning the use of DD Form 250, which can be used as a receiving report and/or invoice. Suggest that the language in existing DFARS 246.370 or DFARS Appendix F, Material Inspection and Receiving Report, be revised to conform to the objectives of the WAWF-RA program. DOD Response: Concur. Each delivery of supplies or services (except deliveries under Fast Payment Procedures—FAR subpart 13.4) requires evidence of acceptance, which is normally documented by a DD Form 250. Prior to implementation of this rule, DFARS 252.246-7000 required the contractor to prepare and submit the DD Form 250 by following the instructions in DFARS Appendix F. The conflict arose because the DFARS required contractors to submit a paper copy of DD Form 250, whereas the proposed DFARS rule required contractors to submit payment requests, including material inspection and receiving reports, in electronic form. To eliminate the conflict, the rule has been revised at DFARS 252.246-7000 to state that contractor submission of material inspection and receiving information by using the WAWF-RA electronic form fulfills the requirement for a material inspection and receiving report.

11. Comment: Exclude DD Form 250 from initial coverage under DFARS 232.7002(b). It will be more cost-effective at the outset to allocate scarce resources to comply first with the statutory requirement for electronic submission of invoices and then focus on developing an electronic solution for processing the DD Form 250 receiving reports and other supporting documentation. DOD Response: Section 1008(a) Public Law 106-398, as implemented by DFARS 232.7002(b), directs DOD officials to process payment requests and “any additional documentation necessary to support the determination and payment” of the payment requests (e.g., material inspection and receiving information) electronically. The legislation does not permit exclusion of the information on the DD Form 250 from the electronic processing requirement, unless the contractor is not required to submit the payment request electronically.

12. Comment: October 1, 2002, is premature for implementation of this requirement:

a. Recommend that DOD not require electronic payment in solicitations until after June 30, 2003; this will give more time for the process to mature and for problems to be worked out.

b. The proposed implementation date of October 1, 2002, is not possible for several reasons, including that the WAWF-RA system is not sufficiently programmed to accept all contract invoices, and training will take time.

c. To avoid a huge influx of vendors on October 1, 2002, new solicitations over $100,000 should be implemented on October 1, 2002, and solicitations under $100,000 should be phased in over the next year.

d. For the past several years, the respondent's company has been in the process of converting to another electronic system, which will go live in the first quarter of 2003. The company intends to wait to switch to the government electronic data interchange (EDI) electronic invoicing system until it transitions to its new system.

e. Not all of DFAS Columbus Commercial Pay Services' entitlement systems will be capable of receiving and processing invoices and receiving reports electronically by the October 2002 implementation date.

f. DFAS Columbus systems will not be able to accommodate the variety of supporting documentation currently required to be submitted with invoices, e.g., the 591 Report on contracts issued by the Defense Reutilization and Marketing Service, and non-standard supporting documentation required for Public Vouchers (SF 1034).

g. Is the date of June 30, 2001, referred to in the Federal Register Background SUPPLEMENTARY INFORMATION correct, or should it be June 30, 2002?

DOD Response: The original applicability date for compliance with the electronic invoicing legislative requirement was June 30, 2001; however, the legislation also permitted DOD to delay implementation of section 1008 to no later than October 1, 2002. Accordingly, DOD published a notice in the Federal Register (66 FR 43841) on August 21, 2001, which announced a delay in implementation until October 1, 2002. Because DOD's automated payment systems were limited to certain types of payment requests, DOD was unable to meet the October 1, 2002, statutory implementation date. By March 1, 2003, the systems will be capable of processing nearly 100 percent of payment requests. For those systems that are not ready, the interim rule provides the contracting officer the flexibility to work solutions to unique payment situations to ensure that contractors are paid on time for work they have performed.

13. Comment: Recommend that DOD establish reasonable and flexible grace periods to enable contractors to convert from paper invoices to electronic submissions as either new DOD payment systems or invoice types are incorporated into the WAWF-RA or other electronic systems. This flexibility should also specifically include permitting a contractor to use only one payment request system for all of its covered contracts. DOD Response: Partially concur. Use of an electronic form other than one of the forms listed at DFARS 232.7003(a) was already permitted by DFARS 232.7003(b)(1) of the proposed rule (now DFARS 232.7003(b)). The DFARS language does not prohibit the contractor from using one payment request system for all of its covered contracts. However, DOD has revised the rule at DFARS 252.232-7003(c) to permit, either before or after contract award, the contractor (with the agreement of the contracting officer and the payment office) to use a nonelectronic method in certain circumstances.

14. Comment: There has not been any word about WAWF-RA in several years. DOD Response: Information on DOD's WAWF-RA is readily available from numerous sources on the Internet, including: http://www.wawftraining.com/ for online WAWF training; https://rmb.ogden.disa.mil for general information on WAWF or to register; www.dcma.mil (click on Electronic Invoicing) for DCMA; www.dfas.mil/ecedi for DFAS; www.disa.mil and wawf-ra@ncr.disa.mil for the Defense Information Systems Agency; and www.peoards.navy.mil (click on Initiatives, WAWF) for the Department of the Navy.

15. Comment: Training information and other assistance should be made available, particularly to small businesses, to assist in complying with the interim DFARS rule. It would also be beneficial for DOD to schedule public meetings to discuss important implementation actions required of both DOD activities and contractors. DOD Response: Information and training are readily available for contractors and DOD personnel via the Internet addresses identified in DOD Response to Comment #14. Computer-based training is also available on compact disk. DOD military departments and defense agencies also may provide supplemental training.

16. Comment: Field activities are not provided additional manning to implement electronic invoicing. Learning to use WAWF-RA is very time consuming, but easy to use after you learn how to use it. There are insufficient travel funds to train vendors in remote Alaskan locations. DOD Response: Refer to DOD responses to Comments #14 and #15.

17. Comment: Many small businesses will be unable to submit invoices electronically on their own. There is concern about small business contractors that are not on line yet. Some small businesses do not own a computer, and the rule may deter them from doing business with the government. The government's new e-payment requirement may alienate many small businesses. There will be a great deal of difficulty for DOD contractors, particularly small businesses, to comply with the rule. DOD Response: DOD invited small businesses to submit comments on the proposed DFARS rule; however, none were received. There is no indication from small business concerns that they will be unable to comply with the rule. In addition, the interim rule removes the higher-level waiver request provision of the proposed rule. The new paragraph (a)(6) of DFARS 232.7002 provides authority for the contracting officer to permit the contractor to submit a payment request using an alternative method, if the contracting officer, the payment office, and the contractor mutually agree.

18. Comment: Recommend including a definition of “unduly burdensome” and to whom it applies (contractor or payment office). DOD Response: The interim rule removed the term “unduly burdensome.” Therefore, a definition is unnecessary.

19. Comment: DOD should acknowledge the implementation challenges and address enforcement accordingly. Initially, broad waiver polices should be issued, including requiring clear documentation as part of the contract file without the need for higher-level approvals. DOD Response: DOD agrees that higher-level approval of waiver requests is unnecessary. Accordingly, as indicated in DOD Response to Comment #17, the interim rule has been revised to provide authority to the contracting officer.

20. Comment: The following types of low volume invoices should be specifically enumerated in DFARS 232.7002(a)(6) (regarding SECDEF waiver if unduly burdensome): alternate liquidation rate billing adjustments, short payment refund requests, retroactive contract price change billings, etc. DOD Response: It is inappropriate to waive low volume type invoices, e.g., short payment refund requests, retroactive contract price change billings, etc. (Alternate liquidation rate billing adjustments are not invoices but adjustments to prior billings.) Although current systems may not be able to accommodate electronic processing of them, it is anticipated that future editions of WAWF-RA, Web Invoicing System (WInS), or American National Standards Institute (ANSI) X.12 EDI formats will. If the government is unable to receive such payment requests in electronic form, DFARS 252.232-7003(c) permits the contractor, with the agreement of the contracting officer and the payment office, to use another method.

21. Comment: Recommend adding public voucher billings (SF 1034) for cost-reimbursement and time-and-materials contracts to the list of types of payment requests that the contractor must submit in electronic form. DOD Response: DFARS 252.232-7003(a)(3) defines payment requests as including both contract financing payments and invoice payments. DFARS 252.232-7003(a)(1) states that contract financing payments and invoice payments have the meanings given in FAR 32.001. Since public vouchers are a type of invoice payment, no change is needed to the rule.

22. Comment: Recommend adding a new paragraph (c) to DFARS 232.7002 to make it clear that, while submissions using electronic forms are required, the contracting officer and the contractor may authorize any individual payment request (or group of payment requests) otherwise required to use electronic forms to be submitted using other than electronic forms without constituting a violation of paragraph (b) or paragraph (d) of the 252.232-7003 contract clause. DOD Response: DOD agrees that the contracting officer should have discretion on whether to authorize the use of a method other than electronic form. However, rather than adding a new paragraph (c), the interim rule revises the exception at DFARS 232.7002(a)(6) to permit the contractor to submit the payment request in other than electronic form with the agreement of the contracting officer and the payment office.

23. Comment: Recommend adding to DFARS 232.7003(b), a description of an acceptable type of concurrence between the payment and contract administration offices, for example, MOU/MOA, or verbal. DOD Response: DOD believes it is preferable to provide sufficient flexibility to permit the parties (contracting officer, payment office, and contract administration office) to use any method of documentation that the parties deem appropriate.

24. Comment: Recommend adding a new paragraph (7) to DFARS 232.7002(a) to exempt from the inclusion of the clause those situations where the contracting officer knows in advance of the release of the solicitation that, by the time of contract award, contractors will be unable to submit, or the Government will be unable to receive, payment requests using any of the electronic forms, or that there are invoice types for which no cost-effective electronic solution is available. In addition, recommend including a provision (identical to 252.232-7003(b)(4)) to DFARS 232.7003(a) that permits the contracting officer to authorize the use of another electronic form. This authority is particularly critical during the solicitation stage of a procurement. If used, the contracting officer must disclose in the appropriate place in the solicitation the alternatives to the electronic forms designated under 252.232-7003(b)(1) through (b)(3). Paragraph 232.7003(b) is insufficient because it only operates after contract award. DOD Response: DOD agrees that it is inappropriate to restrict the contracting officer's exemption authority to only those situations that occur after contract award, and that the exemption authority should apply to both solicitations (pre-award) and contracts (post-award). Accordingly, the interim rule has removed the phrase “after contract award,” and provides the contracting officer the authority, either pre-award or post-award, to permit the contractor to use—

a. An electronic form other than one of the forms listed at DFARS 232.7003(a) (see DFARS 232.7003(b) and 252.232-7003(b)(4)); or

b. A nonelectronic method (see DFARS 232.7002(a)(6) and 252.232-7003(c)).

25. Comment: Recommend substituting the word “Government” for the word “DOD” in DFARS 232.7003(b)(2) to be more accurate in assessing capabilities and to be consistent with the use of the phrase in paragraph (c) of 252.232-7003. DOD Response: For consistency and because the DFARS only applies to DOD, the term “Government” has been changed to “DOD” in paragraph (c) of 252.232-7003.

26. Comment: Recommend adding “as designated by the contracting officer” at the end of the first sentence of 252.232-7003(b), because the contracting officer needs to designate the acceptable format for various reasons, such as standardization at a command, and not all current forms are processed by WAWF-RA and WInS. DOD Response: DFARS 232.7003(a) identifies three acceptable electronic forms for the transmission of payment requests, namely, WAWF-RA, WInS, and the ANSI X.12 EDI formats. DOD believes that utilization of these standardized systems will result in more timely and efficient submission and processing of invoices, and will also facilitate timely and accurate payment. However, the proposed and the interim rules do authorize the contracting officer to permit another electronic format (e.g., a locally developed electronic format) if the payment office and the contract administration office concur (see DFARS 232.7003(b)).

27. Comment: Is there a need to include the agreement of the payment office (as in DFARS 232.7003(b)) in 252.232-7003(c) in order to permit the contractor to use another method of submission of payment requests? In contrast, one respondent recommends adding “and concurred with by the payment office” at the end of DFARS 252.232-7003(b)(4), and another recommends adding “and the payment office” at the end of DFARS 252.232-7003(c). DOD Response: Although the contracting officer does have to obtain agreement from the DOD payment office prior to authorizing the contractor to submit a payment request using a different electronic form, this action need not be stipulated in the contract clause at DFARS 252.232-7003. Provisions contained in the contract clause apply to the parties of the contract, namely, the contractor and the contracting officer. Internal DOD procedures need only be included in the text at DFARS subpart 232.70.

28. Comment: Recommend adding to DFARS 232.7003(b)(1) a description of electronic forms other than those listed. Need clarification of the description of “electronic form” in DFARS 252.232-7003(a)(2). Interpretation of the current wording could lead to the submission of faxed, e-mailed, or scanned documents that are not automatically uploaded into the respective entitlement system. These forms may not have the necessary internal controls associated with receiving these forms. DOD Response: The acceptable electronic forms for transmission are WAWF-RA, WInS, and ANSI X.12 EDI formats, as identified in DFARS 232.7003(a) and DFARS 252.232-7003(b). It is not practicable to attempt to list all other acceptable electronic forms of transmission that the contracting office may authorize. However, DOD agrees that faxed, e-mail, and scanned documents are not considered acceptable electronic means of submission. Therefore, the interim rule revises the definition of “electronic form” at DFARS 252.232-7003(a)(2) by adding the following new sentence: “Facsimile, e-mail, and scanned documents are not acceptable electronic forms.”

29. Comment: Recommend inserting the phrase “except as provided in 232.7002(a)” at the end of the sentence in DFARS 252.232-7003(a)(3) (i.e., definition of payment request) to recognize that, even though the basic contract payment requests are subject to the standard requirements for using electronic formats, there may be certain specific transactions permitted under the contract where electronic payments would not be feasible or desirable. DOD Response: Paragraph (a)(3) of DFARS 252.232-7003 simply defines “payment request.” Since it does not address the electronic submission requirement, it would be inappropriate to include a reference to the exceptions in this definition.

30. Comment: The respondent is receiving modifications where line items have been established for incremental funding with inspection and acceptance requirements and delivery dates cited. There will not be anything delivered for this funding CLIN. The rule should specify that this type of CLIN should not be established as it impedes the closeout process, and reflects CLINs in the database that will never be satisfied and show up as delinquent line items. DOD Response: The comment is outside the scope of this case.

31. Comment: Some large businesses indicate that there will be costs for the government to pay for them to switch their method of invoicing. DOD Response: The costs to implement a revised method of invoicing is considered a normal cost of doing business and is usually recovered by the contractor as an indirect expense allocable to all contracts. DOD believes that the costs to implement electronic invoicing will be outweighed by the benefits received, such as reduced administrative cost, time, and effort; less payment errors; and more timely payments to contractors.

32. Comment: Recommend the use of a program called DESTRAP, which was developed by a local company to process Quality Deficient Reports Form 202. The government owns the rights to this program and it could be modified to use DD Form 250. DOD Response: Paragraph (b)(4) of DFARS 252.232-7003 permits the contracting officer to authorize the use of another electronic form.

33. Comment: Recommend adding the commercial item financing, FAR clauses 52.232-29 through 52.232-31, to the table in the Federal Register. DOD Response: The table in the Federal Register (67 FR 38057) listed five FAR clauses, currently approved by OMB, that require contractors to collect information in order to provide nonelectronic payment requests. DOD has added the commercial item financing FAR clauses at FAR 52.232-29, Terms for Financing of Purchases of Commercial Items, and FAR 52.232-30, Installment Payments for Commercial Items, to the table since these clauses include the requirement for the contractor to submit payment requests. FAR 52.232-31, Invitation to Propose Financing Terms, invites the offeror to propose terms under which the government will make performance-based contract financing payments during contract performance, but does not include the actual requirement for the contractor to submit payment requests, i.e., performance-based financing payments. Therefore, FAR 52.232-31 has not been added to the table in paragraph C. (Paperwork Reduction Act) of the Federal Register notice.

34. Comment: Concerned that—

(a) DFAS cannot consistently process government purchase card electronic certifications for payment. How will they be consistent with contractors/vendors?

(b) DFAS's current system for receipt of RPR's, invoices, contracts (if not available through the standard procurement system-I) is not consistent; information must be sent multiple times before action/payment is made;

(c) 99 percent of payments made by the respondent's office utilize the government purchase card (an exception). Interest payments have been made to Citibank because of DFAS errors, loss of documents, etc.

DOD Response: The respondent's concerns apply to the government's internal operating procedures, not the proposed DFARS rule, and therefore are outside the scope of this case. However, results from the use of WAWF-RA so far indicate that its use substantially reduces interest payments. For example, DCMA has processed invoices valued at over $700 million using WAWF-RA, with less than $100 in interest penalties.

35. Comment: Prompt Payment Act implications regarding invoice receipt dates and the electronic return of improper invoices are not addressed. DOD Response: The provisions of the Prompt Payment Act apply to payment requests processed electronically. The Prompt Payment Act is addressed in FAR subpart 32.9 and DFARS subpart 232.9; therefore, it need not be addressed in this DFARS rule.

36. Comment: Recommend that DOD describe the interface(s) it will use to accommodate existing contractor systems and quickly publish a detailed implementation schedule for each invoice type, electronic solution, and DOD payment office. DOD Response: It is inappropriate to describe electronic interfaces in DFARS; the issue is beyond the scope of the subject case. The respondent's concern will be forwarded to the WAWF-RA Program Office for appropriate action.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DOD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because any start-up costs that contractors will incur to comply with the rule are expected to be minimal, and should be offset by the reduced administrative costs that are expected to result from the electronic submission and processing of invoices. In addition, the rule provides for an exemption to the requirement for electronic submission in cases where the contractor is unable to submit a payment request in electronic form. Therefore, DOD has not performed an initial regulatory flexibility analysis. DOD invites comments from small businesses and other interested parties. DOD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2002-D001.

The rule does not impose any additional information collection requirements that require the approval of the Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq. The information collection requirements for contractors to provide nonelectronic payment requests already have been approved by OMB as indicated below.

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This action is necessary to implement section 1008 of the National Defense Authorization Act for Fiscal Year 2001 (Pub. L. 106-398), which requires contractors to submit, and DOD to process, payment requests in electronic form. The statutory date for implementation of the electronic invoicing requirement was October 1, 2002. However, because DOD's automated payment systems were limited to certain types of payment requests, DOD was unable to meet the October 1, 2002, implementation date. By March 1, 2003, DOD's automated systems will be capable of processing nearly 100 percent of payment requests. Comments received in response to the publication of this interim rule will be considered in the formation of the final rule.

All sea turtles that occur in U.S. waters are listed as either endangered or threatened under the Endangered Species Act of 1973 (ESA). The Kemp's ridley (Lepidochelys kempii), leatherback (Dermochelys coriacea), and hawksbill (Eretmochelys imbricata) turtles are listed as endangered. The loggerhead (Caretta caretta) and green (Chelonia mydas) turtles are listed as threatened, except for breeding populations of green turtles in Florida and on the Pacific coast of Mexico, which are listed as endangered.

The incidental take and mortality of sea turtles as a result of trawling activities have been documented in the Gulf of Mexico and along the Atlantic Ocean seaboard. Under the ESA and its implementing regulations, taking sea turtles is prohibited, with exceptions identified in 50 CFR 223.206 and 50 CFR 224.104. The regulations require most shrimp trawlers and summer flounder trawlers operating in the southeastern United States (Atlantic Area, Gulf Area, and summer flounder sea turtle protection area, all as defined in 50 CFR 222.102) to have a NMFS-approved TED installed in each net that is rigged for fishing to provide for the escape of sea turtles. TEDs currently approved by NMFS include single-grid hard TEDs and hooped hard TEDs conforming to a generic description, two types of special hard TEDs (the flounder TED and the Jones TED), and one type of soft TED (the Parker soft TED).

The TEDs incorporate an escape opening, usually covered by a webbing flap, that allows sea turtles to escape from trawl nets. To be approved by NMFS, a TED design must be shown to be at least 97 percent effective in excluding sea turtles during experimental TED testing (50 CFR 223.207(e)). The TED must meet generic criteria based upon certain parameters of TED design, configuration, and installation, including height and width dimensions of the TED opening through which the turtles escape. In the Atlantic Area, these requirements are currently ≥35 inches (≥89 cm) in width and ≥12 inches (gteqt;30 cm) in height. In the Gulf Area, the requirements are ≥32 inches (81 cm) in width and ≥10 inches (≥25 cm) in height (these measurements are taken simultaneously).

The use of TEDs has contributed to population increases documented for Kemp's ridley turtles. Kemp's ridleys are the smallest sea turtle species, and adults can easily pass through the current TED opening dimensions. Once the most critically endangered sea turtle, Kemp's ridley nesting levels have increased from 700-800 per year in the mid-1980's to over 6,000 nests in 2000. Since 1990, corresponding with the more widespread use of TEDs in U.S. waters, the total annual mortality of Kemp's ridley turtles has been reduced by 44-50 percent (TEWG, 2000). NMFS believes that the use of TEDs has had a significant beneficial impact on the survival and recovery of sea turtle species.

NMFS is concerned that TEDs are not adequately protecting all species and size classes of turtles. There is new information showing that 33-47 percent of stranded loggerheads and 1-7 percent of stranded green turtles are too large to fit through the current TED openings. Comprehensive scientific data on the body depths of these turtles were not available when the original TED sizes were specified. The original TED sizes were also much too small to allow leatherback sea turtles the largest species to escape. Instead, NMFS has attempted to address the incidental catch of leatherbacks through a regime of reactive closures that has proven ineffective. There is also concern about the status of loggerhead and leatherback turtle populations: the northern nesting population of loggerheads appears to be stable or declining (TEWG, 2000) and nesting of leatherbacks is declining on several main nesting beaches in the western North Atlantic (NMFS SEFSC, 2001).

NMFS completed a biological opinion (Opinion) in December 2002, on Shrimp Trawling in the Southeastern United States, under the Sea Turtle Conservation Regulations and as managed by the Fishery Management Plans for Shrimp in the South Atlantic and Gulf of Mexico. Based on information in a NOAA technical memorandum completed in November 2002, (NOAA Technical Memorandum NMFS-SEFSC-490) the Opinion estimated that 62,000 loggerhead turtles and 2,300 leatherback turtles are killed as a result of an interaction with a shrimp trawl. Information in this Opinion also indicate that up to 75 percent of the loggerhead turtles in the Gulf of Mexico and about 2.5 percent of the loggerheads in the Atlantic that encounter a shrimp trawl are too large to escape the current minimum openings. The implementation of this rule, however, is expected to allow all size classes of loggerhead and leatherback turtles to escape. The Opinion estimated that implementation of this rule will decrease shrimp trawl related mortality by 94 percent for loggerheads and 96 percent for leatherbacks.

To protect large green, loggerhead and leatherback turtles NMFS proposed modifying the TED regulations to ensure that TEDs are capable of releasing these large turtles (66 FR 17852, April 5, 2000; 66 FR 50148, October 2, 2001). The proposed changes would have been applicable in all inshore and offshore waters of the Southeast United States as follows: (1) Require all hard TEDs to have a grid with a minimum inside measurement of 32 inch (81 cm) by 32 inch (81 cm); (2) require the use of either the double cover flap TED, a TED with a minimum opening of 71-inch (180-cm) straight-line stretched mesh, or the Parker soft TED with a 96- inch (244-cm) opening; (3) disallow the use of the hooped hard TED; (4) disallow the use of weedless TEDs and the Jones TED; (5) disallow the use of accelerator funnels; (6) require bait shrimpers to use TEDs in states where a state-issued bait shrimp license holder can also fish for food shrimp from the same vessel; and (7) require the use of tow times on small try nets.

The measures in this final rule are based, in part, on comments received on the Advanced Notice of Proposed Rule Making (ANPR) (65 FR 17852, April 5, 2000), the proposed rule (66 FR 50148, October 2, 2001) and eight public hearings held throughout the southeastern United States. NMFS received 23 comments as a result of the ANPR and 8,273 comments as a result of the proposed rule and public hearings; of the 8,273 responses, 7,714 were letters from the public which were similar in content. NMFS reviewed all of the comments received. Where appropriate, comments are grouped according to general subject matter, and references are made only to some groups or individuals, and not to all groups or individuals who may have made similar comments.

Comment 1: Some fishermen believe that the economic analysis that NMFS completed for the proposed rule is flawed in the following ways: (1) The cost to retrofit TEDs is far too low; (2) the 20 percent profit margin used is too high; (3) the cumulative loss of shrimp as a result of the proposed changes in addition to existing requirements is not considered; (4) an analysis of possible shrimp loss due to the prohibition of accelerator funnels is lacking; (5) the analysis of the economic impact to small businesses is inadequate; (6) the percentage of shrimp loss is too low and should be 15 to 20 percent; (7) information on gear replacement frequency is inaccurate; and (8) the economic analysis does not consider the effects the rule will have on fishermen in combination with depressed shrimp prices.

Response: NMFS has completed a Final Regulatory Flexibility Analysis (FRFA) and Regulatory Impact Review (RIR), in conjunction with an environmental assessment, on this final rule's effects in accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) and Executive Order (E.O.) 12866. This EA/RIR/FRFA analyzes this final rule's effects on the shrimp fishery in combination with past TED and Bycatch Reduction Devices (BRD) rules. It also analyzes this final rule's effects on the shrimp fishery in light of current shrimp price information as well as the best available information from existing databases on profit margins, gear costs, and the durability of and cost to replace equipment. The average replacement cost for a leatherback TED was assumed to be $220, 4 TEDS were assumed necessary for small vessels and 8-10 TEDs for large vessels, and the average useful life of a TED was assumed to be 3 years. In the assessment of the proposed rule NOAA Fisheries assumed a 1-year life span for the equipment and used a cost of $45 dollars for replacement. Because the equipment was only expected to last 1 year NOAA Fisheries felt that replacement costs would be low because the fishermen would have to replace the gear anyway so the only actual cost increase would be from the difference in cost of a leatherback TED verses the current TEDs. The assumption of a 20-percent profit margin was eliminated and, instead, vessel profits were internally calculated based on expected revenues and variable costs. Shrimp loss under current regulations as well as the proposed regulations was considered and discussed in the analysis. Estimates of shrimp loss under different TED requirements were derived from test data and provided by the NMFS Southeast Fisheries Science Center (SEFSC). Testing methods are described in the responses to comments 11 and 12 of this section. The tests used currently authorized TEDs which include the use of accelerator funnels.

To incorporate the effects of the depressed shrimp prices, 2001 prices were utilized throughout the assessment. The results of the analysis indicate that, under status quo conditions including depressed shrimp prices, while profits (defined as average revenue minus average variable costs) per vessel in the Southeast shrimp trawl fishery, are expected to increase over the next 5 years, this will be accomplished due to contraction of the fishery in terms of total effort, which is expected to decline by approximately 5.4 percent. The effort contraction is comprised of growth in the small vessel fleet, coupled with reductions in the large vessel fleet. Since large vessels are more costly to operate, the resultant physical profile of the fleet is, on average, smaller with lower variable costs. The net effect is that shrimp landings per vessel increase, while variable costs per vessel decline, resulting in an increase in profits, as defined, per vessel. Revenues remain, however, on the average, insufficient to cover both operating and fixed costs. The net impact of the proposed rule is not expected to significantly adversely affect this outcome, with the change in average profits per vessel ranging from a gain of 0.5 percent to a loss of 2.4 percent from the status quo.

Comment 2: Some fishermen believe that the shrimp fishery is bearing the majority of the burden for the recovery of sea turtles. They feel the government should help them out by implementing such things as: (1) a TED buy-back program; (2) tax incentives for using TEDs; and (3) price controls and subsidies on shrimp, similar to what corn, soybean, and wheat farmers receive. Fishermen also believe that the government should provide better enforcement of Public Law 101-162 section 609(b). Response: Only Congress can authorize programs such as equipment buy-backs, tax incentives, and price controls and subsidies.

Public Law 101-162 section 609(b) prohibits the importation of shrimp harvested with fishing technology that may adversely affect such species of sea turtles. Under section 609, shrimp may be imported from a harvesting nation for which the U.S. government has certified that the nation has demonstrated that its regulatory program governing the incidental taking of sea turtles is comparable to that of the United States. The Court of Appeals for the Federal Circuit recently upheld the government's interpretation of section 609 allowing import of shrimp from countries that are not certified if the exporter and an official of the harvesting nation attest that the individual shipment of shrimp was harvested under conditions that do not adversely affect sea turtles. Turtle Island Restoration Network v. Evans, 284 F.3d 1282 (Fed. Cir. March 21, 2002).

NMFS has been actively engaged with the Department of State (DOS) in enforcing section 609 of Public Law 101-162, since it was enacted in 1990. Nations with shrimp fisheries in the Atlantic, Pacific and Indian Oceans, the Caribbean Sea, and the Gulf of Mexico have faced trade restrictions on their commercially harvested shrimp exports to the United States. In most cases, these embargoes remained in place until the national government implemented a sea turtle protection program comparable in effectiveness to that of the United States. Embargoes on wild caught shrimp from nations with ineffective enforcement regimes have also been enacted. NMFS and DOS visit participating countries regularly to observe the performance of the foreign TED programs and ensure that certifications made pursuant to section 609 are based on the best information available. DOS has determined that section 609's embargo provision only applies to wild-harvested shrimp and not to aquacultured shrimp which make up the majority of U. S. imports.

Comment 3: Some fishermen commented that the larger TEDs could not be pulled by boats with small trawls and that large turtles would be unable to pass through the neck of the trawl to reach the grid. Also, a 71-inch (180-cm) opening installed in a small trawl will not properly support the TED. The TED would become wobbly, lose its angle, and may rip away from the trawl.

Response: During their June 2002, TED testing trip to Panama City, FL, NMFS gear technicians tested the 71-inch (180- cm) opening in a small trawl and found that it could be effectively used in a trawl with a 120-mesh extension. The gear technicians used a model leatherback turtle to determine if it could move through the trawl neck and reach the grid. The model turtle is an aluminum pipe frame that is made to resemble a leatherback turtle that is 40 inches wide (102 cm) by 21 inches deep (53 cm). These dimensions are based on the average measurements taken of 15 nesting leatherback turtles. The gear technicians were able to pass the model through the trawl with a 120 mesh extension to the grid and out the 71 inch (180 cm) opening. NMFS believes that the use of a 71 inch (180 cm) TED or the double cover flap TED in a small trawl will be effective for large turtle release and fishing efficiency.

Gear technicians also tested the use of a 140-mesh extension in a small trawl. The trawl's performance was not altered by the use of the larger extension. The larger extension also made the installation of the large TED easier and the extra webbing made for a stronger installation and allowed the TED to maintain its angle better. The model leatherback also passed through the trawl to the grid and out the opening more easily than it did through the trawl with the 120 mesh extension. NMFS believes that fishermen who use small trawls may want to use a 140 mesh extension with the new, larger TED to provide better fishing and turtle release performance.

Comment 4: Some fishermen and the Georgia Department of Natural Resources (GA DNR) believe that the grid size should be 32 inches (81 cm) measured from the outside of the TED frame, not the inside. This is the grid size many fishermen use.

Response: NMFS is requiring a minimum grid size of 32 inches (81 cm) by 32 inches (81 cm) outside measurement, rather than the inside measurement originally proposed. TEDs of this size can be used effectively with the larger escape opening dimensions. This change may eliminate gear replacement costs for many fishermen.

Comment 5: The GA DNR believes that the dimensions of the cuts for the new opening should be the same dimensions as those for the current leatherback TED, not the dimensions that were proposed. GA DNR reports that only 9 out of 61 captains who use the current leatherback TED claim that the TED loses shape faster than the 35 inch (89 cm) by 12 inch (30 cm) TED. They also suggest that to reduce stress in the trawl, the grid should be oval with dimensions of at least 31 inches (79 cm) by 42 inches (107 cm).

Response: NMFS disagrees that the dimensions of the new opening should be those currently required for the leatherback opening. However, NMFS agrees that the dimensions should be altered from the opening specified in the proposed rule. Based on further information from fishermen who use the current leatherback TED and additional testing of the new opening, the cuts for the new 71-inch (181-cm) TED will be as follows: Two 26 inch (66 cm) cuts forward of the TED frame and one 71-inch (181- cm) cut across the top of the opening. NOAA gear technicians tested the 71-inch (181-cm) TED with three different cuts, to determine which cut would be most capable of releasing a leatherback turtle. This testing was conducted by using the model leatherback described in the response to comment 3. The model leatherback passed through the 71-inch (181-cm) TED with an opening made with a 71-inch (181-cm) by 26-inch (66-cm) cut more easily than it did through the 71-inch TED with an opening made with a 71-inch (181 cm) by 20-inch (51-cm) cut; however, there was little to no difference between an opening made with a 71- inch (181-cm) by 26-inch (66-cm) cut and an opening made with an 83-inch (211-cm) by 26-inch (66-cm) cut (the dimensions of the current leatherback TED). NMFS believes that the 71-inch (181- cm) by 26-inch (66-cm) cut results in a stronger TED than the 83- inch (211-cm) by 26-inch (66-cm) cut because the former cut takes out less webbing.

Although an oval grid with measurements of 31 inches (79 cm) by 42 inches (107 cm) may work well with the new opening sizes, NMFS believes that other size and shaped grids will also work well. Allowing different grid sizes and shapes will allow fishermen greater flexibility in customizing their gear to help meet the demands of the different areas in which they fish.

Comment 6: Net makers, fishermen, and various state agencies are concerned with the elimination of gear that works well in their areas such as the Coulon TED, weedless TED, and accelerator funnels. Fishermen believe that the new TED requirements will minimize options to choose gear that will optimize shrimp catch while still protecting turtles.

Response: NMFS agrees and is allowing the weedless TED, hooped hard TED (of which the Coulon TED is one type), and accelerator funnels to be used in certain areas and with certain conditions. These areas and conditions are described in detail in the codified language below, and are only briefly described here. Hooped hard TEDs, of which the Coulon TED is a variety, can be modified to release large loggerhead turtles but cannot be modified to release leatherback turtles; therefore, NMFS believes that this TED, with the modifications to release large loggerheads, can be used in those inshore areas where leatherbacks are uncommon. The weedless TED can be strengthened through the use of a brace bar which will reinforce the grid bars to keep them from bending toward the back of the TED. This will eliminate the problem which caused NMFS to propose banning the weedless TED. Recent testing by gear technicians has shown that accelerator funnels with increased dimensions to allow the escape of large loggerhead and leatherback turtles can work effectively.

Comment 7: Louisiana fishermen encounter a large number of objects and debris that force open the TED flap causing shrimp loss. They claim that contrary to NMFS statements that larger openings will allow debris to escape, the shrimp losses will be compounded with the larger opening as water pressure forces these items to stay against the grid and the same water pressure opens the flap.

Response: The experiences of fishermen on the east coast who have used the leatherback TED extensively indicate that if this TED is properly maintained it will expel debris better than TEDs with smaller openings. NMFS realizes that fishing conditions in the Atlantic may differ from the Gulf; however, NMFS believes that there is a greater chance of debris blocking the grid and holding open the flap in TEDs with smaller openings which may result in greater shrimp loss. Larger openings would prevent the debris from accummulating in front of the TED thereby allowing the flap to close.

Comment 8: Environmental organizations state that the proposed rule allows the use of the Parker soft TED which should be eliminated as an approved TED. They claim soft TEDs stretch over time and are less effective than hard grid TEDs in excluding turtles.

Response: NMFS looked at many aspects of the Parker soft TED's performance over a 30-month period in both the Gulf of Mexico and the Atlantic Ocean. Observer data show a favorable comparison between the efficiency of the Parker TED and approved hard TEDs. Information from NOAA enforcement indicates that the Parker TED is used more in the Atlantic than in the Gulf, but even in the Atlantic the use is low (<50 boats). NOAA enforcement has found that the compliance rate is good on the boats that do use the Parker TED. NMFS' gear specialists provided training to net shop owners, net manufacturers, and fishermen in the proper installation and use of the Parker TED. For these reasons, NMFS believes that this TED can be used effectively to protect turtles. However, as with all TEDs, maintenance is important. For example, netting can stretch over time which can cause a Parker soft TED to lose its shape. Similar maintenance (e.g. to maintain TED angle) is also required for hard TEDs.

Comment 9: Fishing organizations believe the Andrews-style soft TED should be re-certified for use as an approved TED.

Response: NMFS disapproved the use of the Andrews soft TED (61 FR 66933, December 19, 1996) after extensive testing demonstrated that this TED did not exclude turtles effectively. Modifications to the Andrews soft TED were tested by NMFS with direction from an industry-led TED testing advisory panel in 1996, 1997, and 1998. Most design versions of this TED did not pass the small turtle protocol with the exception of two designs tested in 1998. Following the 1997 tests, members of the industry-led soft TED advisory panel evaluated shrimp retention with the modified Andrews TED aboard a commercial shrimp trawler. The panel reported that the modified Andrews TED had an estimated shrimp loss of 20 percent when compared to a hard TED. The TED testing review committee (which is made up of representatives from the shrimp industry, environmental groups and NMFS) recommended that before pursuing final certification of the designs tested in 1998, industry should test these designs for shrimp retention. To NMFS' knowledge, these designs have not been tested for shrimp retention by industry.

Comment 10: Fishermen, environmental organizations, and state agencies believe that the double cover flap TED needs further testing to determine its ability to exclude sea turtles.

Response: Results from NMFS' testing indicate the double cover flap TED design was effective at excluding the model leatherback described in the response to comment 3. During TED testing in 2000, 2001, and 2002, a total of 71 loggerhead turtles (captive-reared 2- and 3-year olds) were exposed to the double cover flap TED under test protocols (5 minute exposure). Of the 71 turtles, 69 escaped and 2 were captured which equates to a 97 percent escape success rate. The model leatherback was sent through the double cover flap a total of 10 times, 5 times in a bottom opening version and 5 times in a top opening version. The test was performed by a diver swimming through the trawl with the model and pushing it through the TED opening. During this test, the diver was able to push the model through either opening with ease. When the model was inverted (simulating the dorsal surface of the turtle being against the TED frame) the diver was still able to push the model through the opening with ease. During offshore testing of the double cover flap TED, aboard the R/V GEORGIA BULLDOG in May 2002, a total of 7 wild turtles were videotaped escaping (all turtles were hard shell turtles and appeared to be loggerheads). The time it took for turtles to escape, once encountering the TED, ranged from 12 seconds to 1 minute and 11 seconds. Based on estimation of carapace length, NMFS believes that both adult and sub-adult turtles were represented in the sample.

Comment 11: Some shrimp fishermen believe that the shrimp loss data gathered by NMFS on the double cover flap TED are flawed in many respects, including: (1) the tests were not conducted in areas representative of where they fish; (2) sample sizes were too small to be statistically valid; (3) the tests were done outside the shrimping season with low catch rates and low loads in the bag end. Higher loads would cause more water to back up and force open the flap and cause additional shrimp loss.

Response: Since publication of the proposed rule, NMFS conducted further testing of the double cover flap TED. From January through August, 2002, the double cover flap TED has been tested against current commercially available TEDs for shrimp loss aboard 12 commercial shrimp trawlers in the Gulf Area, and one trawler in the Atlantic Area. In the Gulf Area, 7 vessels fished in inshore and near shore areas (2 in Texas, 2 in Louisiana, 1 in Mississippi, 1 in Alabama and 1 in Florida). Offshore testing was conducted along the northeast coast of Florida by one vessel, the pink shrimp grounds of southwest Florida by two vessels, Louisiana by two vessels and Texas by one vessel. In order to obtain statistically valid data, a minimum of 20 comparative tows were conducted during each trip. Testing has included the shrimp season openings in Texas, Louisiana, and Mississippi. A total of 305 comparative tows were conducted. The double cover flap TED experienced a 0.1 percent shrimp gain when compared to current commercially available TEDs, which is not statistically different from zero.

Excessive shrimp loss due to back washing and large catch loads were not experienced during the tests to date. Additionally, several vessel captains have remarked that the double cover flap appears to work better in excluding debris such as sticks, grass, and jellyfish.

Comment 12: Fishermen were concerned about missing data on shrimp loss estimates used in the proposed rule. They allege the NMFS report on shrimp loss data did not contain information from 58 tows comparing shrimp loss between the modfication and standard TEDs and that the lack of providing data from all observed tows may reflect selective reporting. They also believe the report lacked information on trawl sizes used during the tests and the size of the shrimp that were caught.

Response: The data set in question resulted from testing conducted in 2000. That data set did not include unsuccessful tows. Unsuccessful tows are those that include problems which would bias the data in a manner unrelated to the TED, i.e., fouled tickler chain, torn nets, and catches dumped together. As a result, data gathered from such tows can not be used to make a judgment on the functioning of the TED. The 58 tows referenced in this comment had one or more of these problems and were therefore not included in the data set. However, all tows are recorded by the observer and any problems are noted. These records are archived and are available upon request.

Shrimp size is not always recorded by the observer. The database may provide shrimp size for selected trips and can be queried upon request. Trawl sizes varied depending on the captain of the vessel; however, during comparative tows, the size and type of each trawl used during a tow were the same for the control TED and the experimental TED.

Comment 13: Various state agencies and fishermen indicate that large turtles are not found in their state waters. Since 1968, three turtles were recorded caught in shrimp trawl nets during independent fishery trawl surveys conducted in state waters by Alabama, Mississippi, Louisiana and Texas.

Response: NMFS does not agree that the lack of sea turtle captures in state waters during fishery independent sampling represents an absence of sea turtles. Stranding information, observed captures, and survey data indicate that large loggerhead and leatherback turtles can be found in Alabama, Mississippi, Louisiana, and Texas state waters.

The fishery independent sampling that is the subject of these comments is conducted mostly with small trawls of 16 ft. (5 m) or less (although a small percentage were conducted with 40- ft. (12-m) trawls), with short tow times (10 to 15 minutes) which reduce the probability that the trawls would catch sea turtles. The purpose of these sampling programs is generally to record target catch and finfish bycatch and, therefore, are not necessarily representative of shrimp fishing effort and/or areas fished. However, NMFS did consider this information and researched the possibility of allowing the use of smaller TED sizes in all Gulf state waters. Based on the information below, leatherbacks occur in all offshore waters which warrants the use of a TED capable of releasing them.

Strandings in inshore waters likely are underestimated due to the difficulty in surveying areas that generally are marshlands or do not have sandy beaches. For the same reasons, offshore strandings on much of the coastline of Louisiana are underestimated.

The greatest proportion of loggerheads stranding that are too large to fit through current TED openings is in the Gulf Area, where the current minimum height opening is 10 inches (25 cm) (compared to 12 inches (31 cm) in the Atlantic Area). In the western Gulf of Mexico, an annual average of 63 percent of stranded loggerheads offshore and 48 percent of stranded loggerheads inshore were larger than the dimensions of the current minimum TED opening. In the eastern Gulf of Mexico, the values are 89 percent offshore and 80 percent inshore. The proportions are less in the Atlantic Area: 27 percent offshore and 17 percent inshore, but because the number of turtles stranding in the Atlantic Area is higher, the actual number of animals too large to fit through the openings is comparable to the number of strandings that are too large in the Gulf Area. Based on 1995-99 data, each year approximately 250 loggerheads that are too large to fit through existing TED openings strand in each area; approximately 13 percent of these occur in inshore waters. Based on strandings, reported incidental captures, NMFS Beaufort project, Cooperative Marine Turtle Tagging, N.C. public sightings, observer data (Gulf and South Atlantic Fisheries Development Foundation and NMFS), aerial surveys (SETS, Pascagoula Oil Platform Association data, GOM red drum surveys of 1987, 1995, and 1999, NEFSC 1995 and 1998 surveys, CETAP, SEAS92 and SECAS95, MATS95, GulfCet I, GulfCet II, and GoMex surveys), and telemetry tracks, loggerheads are distributed ubiquitously in the Southeast United States, generally occurring in all areas, inshore and offshore, and at all times when shrimp trawling activity is likely to occur.

Leatherback turtles are distributed throughout the Southeast United States, but are not as abundant as loggerheads. Leatherbacks are predominantly found in offshore waters but infrequently enter inshore waters. In the Gulf Area, 8 percent of leatherbacks stranding were found on inshore beaches and in the Atlantic Area 11 percent were reported from inshore waters. The actual number of turtles stranding in inshore waters, however, is small: seven in the Gulf Area from 1995-1999 and 21 in the Atlantic Area for the same time period, for an average of six leatherback turtles stranding annually in southeast inshore waters. Based on the same information used for loggerhead turtles above, leatherbacks occur offshore during all seasons when shrimp trawling activity is expected to occur. The number of strandings on offshore beaches is significantly more than in inshore waters: the average is 56 animals per year in the Atlantic and Gulf Areas offshore beaches combined.

This information is discussed in greater detail in Appendix A of the environmental assessment prepared for this final rule, which can be obtained from NMFS (see ADDRESSES).

Comment 14: Fishermen believe that better abundance and distribution data on sea turtles are needed, and that NMFS should identify an acceptable level of strandings. They have observed more turtles today than ever before and anticipate an increase in interactions.

Response: NMFS agrees that increases in stranding levels may be related to increases in certain turtle populations, but the populations of particular concern for this final rule -leatherbacks and northern subpopulation loggerheads- are not increasing. In addition, there are many other factors that could cause strandings to increase including a change in fishing practices. NMFS is unable to identify a stranding level that would trigger an adjustment to management measures. In their 1998 report to NMFS, the Turtle Expert Working Group (TEWG) analyzed existing data on the population status and trends of the loggerhead and Kemp's ridley turtles. The TEWG concluded that an estimation, derived from stranding data, of the maximum number of individual loggerheads or Kemp's ridleys that can be taken incidentally to commercial fishing could not be made. The TEWG determined that strandings were an underestimate of nearshore mortality and were inadequate for determining the population's actual status. Recovery goals for the Atlantic populations are identified in the joint NMFS and U.S. Fish and Wildlife ESA Recovery Plans completed in the early 1990s (see ADDRESSES for copies or visit http://www.nmfs.noaa.gov/endangered.htm). NMFS agrees that data on abundance and distribution can be improved. NMFS is currently supporting in-water population studies in Florida and North Carolina. NMFS also conducted a pilot aerial survey for loggerhead and leatherback turtles in the coastal waters of the Mid-Atlantic in July 2000, to investigate whether line transect methodology can be used to produce precise estimates of marine turtle abundance. NMFS intends to revise the existing recovery plans in the near future. These revisions will likely include additional research recommendations to improve our understanding of turtle abundance and distribution.