The Direction Generale De L'Aviation Civile (DGAC), the airworthiness authority for France, notified the FAA that an unsafe condition may exist on Eurocopter Model SA341G and SA342J helicopters with a 300 lb. hoist manufactured by Breeze. The helicopter is fitted with a hoist junction box, part number (P/N) 341A63-1103-00. The DGAC advises of the discovery of an anomaly affecting the current-limiting resistor located in the junction box, which results in insufficient current intensity and can cause failure of the emergency jettison control squib percussion to operate. The unmodified hoist electric junction box is designed to generate 2 amperes for the hoist cable cut percussion squib. The Breeze 300 lb. hoist requires a minimum of 10 amperes to activate the cable cut percussion squib. This AD will modify the limiting resistor in the hoist electric junction box and result in a percussion squib activation current of 18 amperes.

Eurocopter has issued Alert Telex No. 45.05, dated July 8, 2002, which specifies modifying the control unit of the hoist. The DGAC classified this alert telex as mandatory and issued AD 2002-370-043(A), dated July 24, 2002, to ensure the continued airworthiness of these helicopters in France.

These helicopter models are manufactured in France and are type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral agreement. Pursuant to the applicable bilateral agreement, the DGAC has kept the FAA informed of the situation described above. The FAA has examined the findings of the DGAC, reviewed all available information, and determined that AD action is necessary for products of these type designs that are certificated for operation in the United States. The DGAC recommended modifying the junction box for helicopters with Breeze or TRW (or Lucas or Air Equipment) hoists installed. However, the unmodified junction box functions properly with the TRW (Lucas or Air Equipment) hoists and the FAA does not propose to modify the junction box for helicopters with TRW hoists installed. Helicopters with the Breeze hoist, P/N BL 16-600, BL 16-600-11 or BL 16-600-12, installed require this junction box modification.

This unsafe condition is likely to exist or develop on other helicopters of the same type designs registered in the United States. Therefore, this AD is being issued to prevent failure of the hoist emergency load jettison switch, resulting in an inability of the pilot to cut the rescue hoist cable in the event of cable entanglement or other emergency and subsequent loss of control of the helicopter. This AD requires modifying the limiting resistor in the junction box. The actions must be accomplished in accordance with the alert telex described previously. The modification is terminating action for the requirements of this AD. The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the controllability of the helicopter. Therefore, the modification is required before the next hoist operation and this AD must be issued immediately.

Since a situation exists that requires the immediate adoption of this regulation, it is found that notice and opportunity for prior public comment hereon are impracticable, and that good cause exists for making this amendment effective in less than 30 days.

The FAA estimates that 2 helicopters will be affected by this AD, that it will take approximately 1 work hour to accomplish the modification, and that the average labor rate is $60 per work hour. Required parts will cost approximately $20 per helicopter. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $160.

Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified under the caption ADDRESSES. All communications received on or before the closing date for comments will be considered, and this rule may be amended in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of the AD action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 2002-SW-47-AD.” The postcard will be date stamped and returned to the commenter.

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

The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and that it is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

On October 17, 2002, the FAA issued AD 2002-17-51 (67 FR 67510, November 6, 2002), that superseded Emergency AD 2002-14-51, issued on July 9, 2002. AD 2002-17-51 imposed a Vne of 140 KIAS. That AD also required visually checking the T/R blades on both sides for a crack before each start of the helicopter engines; visually inspecting the T/R blades with a 5x or higher magnifying glass at 25 hour time-in-service (TIS) intervals and any time an increase in vibration occurs; and conducting a dye-penetrant inspection, if necessary; and replacing any cracked T/R blade with an airworthy T/R blade. Since issuing that AD, analysis and tests have shown that the fatigue failure of the T/R blades was caused by unanticipated loads on the T/R blades. The manufacturer has redesigned the T/R grip bushings to reduce these loads; therefore, on December 17, 2002, the FAA issued EAD 2002-25-51 to required modifying the T/R hub and grip assembly with the new bushings by May 31, 2003. Until the T/R grip assembly is modified, the life limit of the T/R blades is reduced to 200 hours TIS. That action was prompted by the failure of a T/R blade that resulted in a forced autorotative landing. The failure, which occurred on June 12, 2002, was determined to be caused by fatigue. This significant reduction in the service life of the T/R blades creates an unsafe condition. This condition, if not corrected, could result in fatigue failure of the T/R blade and subsequent loss of control of the helicopter.

The FAA has reviewed Agusta Alert Bollettino Tecnico 109EP-30, Revision B, dated November 27, 2002 (ABT), which maintains the visual check for cracks, the 5-hour TIS inspections with a magnifying glass, establishes a new life limit for the T/R blades, clarifies the Vne restrictions, modifies the T/R inspection intervals, and describes procedures for modifying and re-identifying the T/R hub and grip assembly by replacing T/R grip bushings (bushings), part number (P/N) 109-8131-29-101. Modifying and re-identifying the T/R hub and grip assembly restores the T/R blade life limits and cancels the Vne limitations.

Since the unsafe condition described is likely to exist or develop on other Agusta Model A109E helicopters of the same type design, the FAA issued EAD 2002-25-51 to prevent fatigue failure of the T/R blade and subsequent loss of control of the helicopter. The AD requires the following:

Applicability A: Agusta Model A109E helicopters with T/R hub and blade assembly, P/N 109-8131-02-151.

• Before further flight, placarding the helicopter and marking the airspeed indicator to reduce the helicopter Vne by 28 KIAS in addition to any reduction in Vne caused by optional equipment installation.

• Before each start of aircraft engines, visually checking each T/R blade for a crack.

• Within 5 hours TIS, and thereafter at intervals not to exceed 5 hours TIS, visually inspecting the T/R blade for a crack using a 5x or higher magnifying glass. If in doubt as to the existence of a crack, dye-penetrant inspect the T/R blades for a crack.

• Before further flight, replacing any unairworthy T/R blade with an airworthy T/R blade.

• Establishing a new life limit on the T/R blade, P/N 109-8132-01-111, of 200 hours TIS.

• Within 10 hours TIS, for helicopters having T/R blades with 190 hours TIS or more, replacing the blades.

• On or before May 31, 2003, modifying the T/R hub and grip assembly. Modifying and re-identifying the T/R hub assembly removes the Vne restrictions imposed, restores the T/R blades life limit to 1,000 hours TIS, and changes the AD requirements for the helicopter from Applicability A to Applicability B.

Applicability B: Agusta Model A109E helicopters, with T/R hub and blade assembly, P/N 109-8131-02-157.

• Before each start of the helicopter engines, visually checking the T/R blade for a crack.

• Within 25 hours TIS, and thereafter at intervals not to exceed 25 hours TIS, visually inspecting the T/R blade for a crack using a 5x or higher magnifying glass. If in doubt as to the existence of a crack, dye-penetrant inspect the T/R blades for a crack.

• Before further flight, replace any unairworthy T/R blade with an airworthy T/R blade.

• Before accumulating 150 hours TIS on the T/R hub assembly, P/N 109-8131-02-159, and thereafter at intervals not to exceed 150 hours TIS, inspect the bushings, P/N 109-8131-30-109. Replace any unairworthy bushing with an airworthy bushing.

The actions must be accomplished in accordance with the ABT described previously. The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the controllability and structural integrity of the helicopter. Therefore, the previously stated actions are required before further flight and at the specified time intervals, and this AD must be issued immediately.

Since it was found that immediate corrective action was required, notice and opportunity for prior public comment thereon were impracticable and contrary to the public interest, and good cause existed to make the AD effective immediately by individual letters issued on December 17, 2002, to all known U.S. owners and operators of Agusta Model A109E helicopters. These conditions still exist, and the AD is hereby published in the Federal Register as an amendment to 14 CFR 39.13 to make it effective to all persons.

The FAA estimates that 48 helicopters of U.S. registry will be affected by this AD, that it will take approximately:

• 1 work hour to placard each helicopter;

• 0.5 work hour to visually inspect the T/R blades;

• 1.0 work hour to dye-penetrant inspect the T/R blades;

• 7 work hours to inspect the T/R grip bushing;

• 2.0 work hours to replace each set of T/R blades; and

• 16 work hours to modify the T/R grips.

The average labor rate is $60 per work hour. Required parts will cost approximately $58,690 per helicopter. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $3,005,760, assuming for each helicopter, five T/R blade visual inspections, five dye-penetrant inspections, and five bushing inspections.

Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified under the caption ADDRESSES. All communications received on or before the closing date for comments will be considered, and this rule may be amended in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of the AD action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 2002-SW-55-AD.” The postcard will be date stamped and returned to the commenter.

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

The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and that it is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that is applicable to Hartzell Propeller Inc. model HC-B3TN-5( ) propellers, with blades P/N T10176H(B,K)-5 or T10178H(B)-11(R) that are installed on Mitsubishi Heavy Industries, Ltd, MU-2 series airplanes was published in the Federal Register on October 18, 2002, (67 FR 64321). That action proposed to require replacement of those blades with blades of the latest design in accordance with Hartzell Propeller Inc. SB HC-SB-61-250, Revision 1, dated April 8, 2002. The FAA has received a report of in-flight propeller blade separation that caused a severe out-of-balance condition, damage to the airplane, and resulted in engine shutdown and a safe landing, on a Mitsubishi MU-2 series airplane. Analysis revealed that the blade, made of (hard alloy) 7076 aluminum alloy, separated due to fatigue failure caused by intergranular corrosion. The service difficulty history to date indicates that this condition is limited to Hartzell propellers installed on Mitsubishi MU-2 series airplanes. This condition, if not corrected, could result in propeller blade separation, damage to the airplane, and possible loss of the airplane.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comment received.

One commenter states that the proposed AD should be expanded to remove all Hartzell “hard alloy” propeller blades from service regardless of the type of aircraft they are installed on.

The FAA does not agree. As stated in the NPRM, the service history indicates that the intergranular corrosion condition found on the affected Hartzell propellers is limited to Hartzell propellers installed on Mitsubishi MU-2 series airplanes. The commenter did not provide any new service history to indicate that this condition exists on other airplanes with the affected Hartzell propellers. Therefore, the AD will not be changed. If in the future, intergranular corrosion conditions are reported to the FAA and are occurring on Hartzell propellers installed on airplanes other than the Mitsubishi MU-2 series airplanes, the FAA will review the need to expand the AD.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

There are approximately 250 Hartzell Propeller Inc. model HC-B3TN-5( ) propellers of the affected design in the worldwide fleet. The FAA estimates that 200 propellers installed on airplanes of U.S. registry will be affected by this AD, that it will take approximately 10 work hours per propeller to perform the required actions, and that the average labor rate is $60 per work hour. Required parts will cost approximately $10,000 per propeller. Based on these figures, the total cost of the AD to U.S. operators is estimated to be $ 2,120,000.

This final rule does not have federalism implications, as defined in Executive Order 13132, because it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the FAA has not consulted with state authorities prior to publication of this final rule.

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Bombardier Model CL-600-2B19 (Regional Jet Series 440) series airplanes was published in the Federal Register on August 7, 2002 (67 FR 51147). That action proposed to require replacement of the overwing emergency exit placards, door weight placards, and no baggage placards with new placards.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received.

Two commenters request that the FAA revise the notice of proposed rulemaking (NPRM) to specify that replacement accomplished before the effective date of this AD per Bombardier Alert Service Bulletin A601R-11-077, dated July 12, 2001, is considered acceptable for compliance with the replacement specified in paragraph (a) of the NPRM. One commenter states that, with the exception of the pre-modification location of placards for certain airplanes, the changes embodied in Revision “A” of the service bulletin are not significant for the proper execution of the bulletin and, therefore, result in the same level of safety. Another commenter states that Canadian airworthiness directive CF-2002-12, dated February 4, 2002, allows credit for airplanes modified per the original service bulletin.

We agree. We have added a new paragraph (b) in the final rule to provide operators with credit for previously accomplishing Bombardier Alert Service Bulletin A601R-11-077, dated July 12, 2001, and have redesignated the subsequent paragraphs.

One commenter requests clarification about the attachments specified in paragraph (a) of the NPRM. The commenter states that Bombardier Alert Service Bulletin A601R-11-077, Revision “A,” does not reference “Attachments” within its text. However, the commenter notes that, following page 46 of 46 of the service bulletin, there are two pages—a comment sheet and a compliance sheet. The commenter recommends calling those pages by their given names.

We agree and have revised the names of those sheets in the final rule accordingly. In addition, for clarification purposes, we have changed the service bulletin citation throughout this final rule to exclude those sheets. As stated in the NPRM, this AD does not require operators to complete the comment and compliance sheets.

We have revised the applicability of the final rule to identify model designations as published in the most recent type certificate data sheet for the affected models.

After careful review of the available data, including the comments noted above, we have determined that air safety and the public interest require the adoption of the rule with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

We estimate that 284 Model CL-600-2B19 (Regional Jet Series 440) series airplanes of U.S. registry will be affected by this AD, that it will take approximately between 1 and 2 hours per airplane depending on the airplane configuration to accomplish the required actions, and that the average labor rate is $60 per work hour. Required parts will cost approximately between $47 and $195 per airplane depending on the configuration of the airplane. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be between $30,388 and $89,460, or $107 and $315 per airplane depending on the configuration of the airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions. However, for affected airplanes within the period under the warranty agreement, we have been advised that the manufacturer has committed previously to its customers that it will bear the cost of the placard kits.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to all Fokker Model F.28 Mark 0070 and 0100 series airplanes was published in the Federal Register on March 28, 2002 (67 FR 14891). That action proposed to require a one-time general visual inspection to detect any missing attachment bolts in the replaceable frame struts, and corrective actions, if necessary.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received.

One commenter supports the proposed rule.

One commenter requests that Revision 1 to Fokker Service Bulletin SBF100-53-096 be cited as an acceptable source of service information for compliance with the proposed AD. That revision adds two figures to the service bulletin that are applicable to the operator's fleet.

The commenter also states that it notified the manufacturer of typographical errors in Figures 2 and 17 of the service bulletin. The manufacturer informed the commenter that a Service Bulletin Change Notification (SBCN) to correct the typographical errors would be issued. The commenter requests that a statement allowing the use of future service bulletin revisions and SBCNs be included in the proposed AD.

The FAA concurs with the commenter's request to reference Revision 1 of the service bulletin and the applicable SBCN. Since the issuance of the proposed AD, the manufacturer has issued Fokker Service Bulletin SBF100-53-096, Revision 1, dated November 22, 2001; and Fokker SBCN SBF100-53-096/02, dated January 28, 2002. The proposed rule references the original issue of the service bulletin, dated April 11, 2001, as the appropriate source of service information for accomplishment of the proposed inspection. The actions in Revision 1 are essentially similar to those in the original issue of the service bulletin. The SBCN corrects typographical errors to part numbers in Figures 2 and 17 of the service bulletin. Part number NAS694V6 in Figure 2 has been changed to NAS674V6. Part number NAS695V10 in Figure 17 has been changed to NAS675V10. The manufacturer notified the FAA that bolts having part numbers NAS694V6 and NAS695V10 do not exist.

We have revised paragraph (a) of the final rule to reference Revision 1 of the service bulletin, including SBCN SBF100-53-096/02 as the appropriate source of service information. We have also included new paragraphs (b) and (d) in this final rule (and re-lettered other paragraphs accordingly) to give credit for inspections and corrective actions accomplished before the effective date of this AD per the original issue of the service bulletin.

One commenter requests that the proposed AD include a statement allowing the use of alternate and interchangeable fasteners approved by Fokker. The commenter states that Fokker Message TS01.60550, dated November 29, 2001, indicates approval from Fokker Services to use interchangeable parts. In regard to the commenter's fleet, the service bulletin lists parts that are inactive and have an interchangeable list or an alternate parts list.

The FAA does not concur with this comment. Paragraph (c)(2) of the final rule allows operators to make repairs per a method approved by either the FAA or the Civil Aviation Authority—The Netherlands (CAA-NL) (or its delegated agent). If an operator wants to make a repair using a part other than the one specified in the service bulletin, that paragraph allows the operator to contact the FAA or CAA-NL (or its delegated agent) for approval.

One commenter states that it has begun inspections of the affected aircraft in accordance with Fokker Service Bulletin SBF100-53-096, Revision 1, dated November 22, 2001. Based on this commenter's experience, 12 work hours per airplane are required to accomplish the inspections.

From this comment the FAA infers that the commenter is requesting that the Cost Impact section of the proposed AD be revised. The FAA does not concur. The cost impact information describes only the “direct” costs of the general one-time visual inspection required by the proposed AD. The number of work hours necessary to accomplish the required general visual inspection, specified as 1 work hour in the cost impact information, was provided to the FAA by the manufacturer based on the best data available to date. The economic analysis of the AD is limited only to the cost of actions actually required by the rule. It does not consider the costs of “on condition” actions required if, during the one-time general visual inspection required by the proposed AD, any attachment bolts are found missing. The “on condition” actions include additional general visual inspections to detect deformations or cracks in the affected floor beams and the fuselage frame C-channels at the strut attachment. Such “on-condition” corrective actions would be required to be accomplished, regardless of AD direction, in order to correct an unsafe condition identified in an airplane and to ensure operation of the airplane in an airworthy condition, as required by the Federal Aviation Regulations.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule with the changes described previously. The FAA has determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

The FAA estimates that 139 airplanes of U.S. registry will be affected by this AD, that it will take approximately 1 work hour per airplane to accomplish the required inspection, and that the average labor rate is $60 per work hour. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be $8,340, or $60 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain McDonnell Douglas Model MD-90-30 airplanes was published in the Federal Register on August 30, 2002 (67 FR 55735). That action proposed to require a one-time general visual inspection to find wire chafing damage and to determine adequate clearance between the disconnect panel structure and the wires above the aft left lavatory; and corrective actions, if necessary.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received.

One commenter disagrees with the need for an AD to require accomplishment of Boeing Alert Service Bulletin MD90-24A074, Revision 01, dated August 8, 2001. The commenter notes that the incident that prompted the proposed AD occurred on a McDonnell Douglas Model MD-88 airplane, not an MD-90-30 airplane. The commenter notes that the affected wire bundle on the incident airplane chafed on a disconnect bracket on an extruded angle. The commenter states that, after considering the design of the disconnect panel on Model MD-90-30 airplanes, it is confident that no wire chafing will be found on Model MD-90-30 airplanes. The commenter points out that the design of the subject disconnect bracket on the Model MD-90-30 airplane is significantly different, especially in length, from that on the Model MD-88 airplane. The bracket on the Model MD-90-30 airplane does not extend to the area where the wire bundle chafing occurred on the Model MD-88 airplane. The commenter requests that the proposed AD, if issued, include information about inspection findings on Model MD-90-30 airplanes.

The FAA infers that the commenter is requesting that we withdraw the proposed AD. We do not agree. The airplane manufacturer has reviewed the installation drawings and has confirmed that the same disconnect bracket (i.e., same part number) is installed in the same location on both Model MD-88 and Model MD-90-30 airplanes. Therefore, Model MD-90-30 airplanes may be subject to the same unsafe condition revealed on the Model MD-88 airplanes, even though no wire chafing damage has been found to date on Model MD-90-30 airplanes. No change to the final rule is necessary in this regard.

The same commenter requests that, if we deem it necessary to issue an AD, we extend the compliance time from 4 months after the effective date of the AD, as proposed, to 12 months after the effective date of the AD. Aside from its comments regarding the appropriateness of the AD, discussed previously, the commenter provides no further justification for its request.

We concur that the compliance time of this AD may be extended. We have determined that a compliance time of 12 months will ensure that the identified unsafe condition is addressed in a timely manner, while allowing the majority of affected operators to complete the required actions during a scheduled maintenance visit. We have revised paragraph (a) of the final rule accordingly.

In the NPRM, we stated that the proposed actions were to be accomplished “per the Accomplishment Instructions of Boeing Alert Service Bulletin MD90-24A074, Revision 01, including Appendix A, dated August 8, 2001.” However, the service bulletin's appendix contains a form for reporting inspection findings. This AD does not include such a requirement. Therefore, we have changed the service bulletin citation throughout this final rule to exclude the appendix of the service bulletin.

Also, we have changed the service bulletin citation throughout this final rule to exclude the Evaluation Form. The form is intended to be completed by operators and submitted to the airplane manufacturer to provide input on the quality of the service bulletin; however, this AD does not include such a requirement.

Also, the Cost Impact section of the NPRM did not include information about warranty remedies that may be available. We have revised the Cost Impact section of this final rule to refer to warranty remedies.

After careful review of the available data, including the comments noted above, we have determined that air safety and the public interest require the adoption of the rule with the changes previously described. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 113 Model MD-90-30 airplanes of the affected design in the worldwide fleet. We estimate that 21 airplanes of U.S. registry will be affected by this AD, that it will take approximately 1 work hour per airplane to accomplish the required inspection, and that the average labor rate is $60 per work hour. Based on these figures, the cost impact of inspection required by this AD on U.S. operators is estimated to be $1,260, or $60 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions. Manufacturer warranty remedies may be available for labor costs associated with this AD. As a result, the costs attributable to this AD may be less than stated above.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain McDonnell Douglas Model MD-90-30 airplanes was published in the Federal Register on September 4, 2002 (67 FR 56506). That action proposed to require measuring the length of the wear indicator on the brake stack of the main landing gear (MLG) brake assembly to determine the degree of wear, and follow-on actions. That action also proposed to require eventual replacement of the existing MLG brake assembly with a new, improved or modified assembly, which would constitute terminating action for any repetitive actions being performed per the proposed AD.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were submitted in response to the proposal or the FAA's determination of the cost to the public.

We have changed the service bulletin citation throughout this final rule to exclude the Evaluation Form. The form is intended to be completed by operators and submitted to the manufacturer to provide input on the quality of the service bulletin; however, this AD does not include such a requirement.

After careful review of the available data, the FAA has determined that air safety and the public interest require the adoption of the rule with the change previously described. The FAA has determined that this change will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 115 airplanes of the affected design in the worldwide fleet. The FAA estimates that 21 airplanes of U.S. registry will be affected by this AD.

It will take approximately 1 work hour per airplane to accomplish the measurement of the brake stack wear indicator, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of this action on U.S. operators is estimated to be $1,260, or $60 per airplane, per measurement cycle.

It will also take approximately 1 work hour per airplane to accomplish the inspection for discrepancies of the pressure plate of the MLG brake, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of this action on U.S. operators is estimated to be $1,260, or $60 per airplane, per inspection cycle.

It will take approximately 6 work hours per airplane to accomplish the replacement of the MLG brake assembly, at an average labor rate of $60 per work hour. Required parts will cost approximately $55,000. Based on these figures, the cost impact of this action on U.S. operators is estimated to be $1,162,560, or $55,360 per airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that is applicable to Hartzell Propeller Inc. model HD-E6C-3B/E13890K propellers with certain serial numbers of model D-1199-2 PCU's installed was published in the Federal Register on October 18, 2002 (67 FR 64322). That action proposed to require initial and repetitive inspections for below-limit propeller flight idle blade angles, and, as a terminating action, removal of the affected PCU's from service and performance of a complete Major Periodic Inspection (overhaul) when the applicable time-since-new or time-since-overhaul limit is reached, or when any flight idle blade angle is below limits in accordance with Hartzell Service Bulletin No. (SB) HD-SB-61-025, dated November 7, 2002, or SB No. HD-SB-61-025, Revision 1, dated December 20, 2000.

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

There are approximately 78 Hartzell Propeller Inc. model D-1199-2 PCU's of the affected design in the worldwide fleet. The FAA estimates that 50 PCU's installed on airplanes of U.S. registry would be affected by this AD. The FAA also estimates that it would take approximately 1.5 work hours per propeller to perform the initial inspections, 25 work hours per propeller to perform the PCU replacements, and that the average labor rate is $60 per work hour. Required parts would cost approximately $7,321 per propeller. Based on these figures, the total cost of initial inspections of this AD to U.S. operators is estimated to be $4,500, and the total cost of replacement of the affected PCU's to U.S. operators is estimated to be $441,050.

This final rule does not have federalism implications, as defined in Executive Order 13132, because it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the FAA has not consulted with state authorities prior to publication of this final rule.

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

A proposal to amend 14 CFR part 39 to include an AD for Bell Model 427 helicopters was published in the Federal Register on October 18, 2002 (67 FR 64325). That action proposed to require replacing tee fittings, part number (P/N) AS1003W060404, and tubes, P/Ns 427-080-058-101 and 427-080-003-101, with union, P/N AS5230W0606, tee fitting, P/N NAS1763W060404, and tubes, P/Ns 427-080-069-101 and 427-080-068-101.

Transport Canada, the airworthiness authority for Canada, notified the FAA that an unsafe condition may exist on Bell Model 427 helicopters. Transport Canada advises that there is a possibility of installing the existing tee fitting in such a way that the hydraulic fluid flow will be significantly restricted. To preclude this possibility, Bell has designed a new tee fitting installation.

Bell has issued Bell Helicopter Textron Alert Service Bulletin No. 427-01-02, dated August 20, 2001, which specifies replacing the tee fitting. Transport Canada classified this alert service bulletin as mandatory and issued AD No. CF-2002-11, dated January 31, 2002, to ensure the continued airworthiness of these helicopters in Canada.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on the proposal or the FAA's determination of the cost to the public. The FAA has determined that air safety and the public interest require the adoption of the rule with one editorial change. The manufacturer's legal name has changed since the issuance of the proposed AD, and the new name is reflected in this AD; this change will neither increase the economic burden on any operator nor increase the scope of the AD.

The FAA estimates that 31 helicopters of U.S. registry will be affected by this AD, that it will take approximately 1 work hour per helicopter to replace the tee fitting and tubes, and that the average labor rate is $60 per work hour. Required parts will cost approximately $527 per helicopter. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $18,197 to replace the tee fitting and tubes in the entire fleet.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) by superseding AD 2001-17-26 R1, amendment 39-12619 (67 FR 4171, January 29, 2002), which is applicable to certain Raytheon Model DH.125, HS.125, BH.125, and BAe.125 (U-125 and C-29A) series airplanes; and Model Hawker 800, Hawker 800 (including variant U-125A), Hawker 800XP, and Hawker 1000 airplanes; was published in the Federal Register on August 30, 2002 (67 FR 55742). The action proposed to continue to require an inspection for cracking or corrosion of the cylinder head lugs of the main landing gear (MLG) actuator, and follow-on/corrective actions. The action also proposed to expand and clarify the applicability of the existing AD per the referenced service bulletin and type certificate data sheet, and, for certain airplanes, to clarify the compliance time for the inspection requirements in paragraph (b)(3) of this AD.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were submitted in response to the proposal or the FAA's determination of the cost to the public.

For clarification purposes, we have revised the wording in the parentheses for Model Hawker 800 airplanes in the applicability throughout this AD to read “(including variant U-125A).”

After careful review of the available data, we have determined that air safety and the public interest require the adoption of the rule with the changes previously described. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 1,000 airplanes of the affected design in the worldwide fleet. We estimate that 650 airplanes of U.S. registry will be affected by this AD.

The actions that are currently required by AD 2001-17-26 R1, and retained in this AD, take approximately 20 work hours per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the currently required actions on U.S. operators is estimated to be $780,000, or $1,200 per airplane.

This AD does not add any new actions or requirements, and only revises the applicability of the AD by adding an airplane model, clarifying the model designations, and clarifying the compliance time for the inspection requirements for certain airplanes. Therefore, the estimated cost impact for this proposed AD is unchanged from the existing AD.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions. However, for affected airplanes within the period under the warranty agreement, we have been advised that the manufacturer has committed previously to its customers that it will bear the cost of replacement parts. We also have been advised that manufacturer warranty remedies are available for labor costs associated with accomplishing the actions required by this AD. Therefore, the future economic cost impact of this AD may be less than the cost impact figure indicated above.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to add an AD for Bell Model 427 helicopters was published in the Federal Register on November 28, 2001 (66 FR 59377). That NPRM would have required modifying the fins, part number (P/N) 427-035-836-101 and 427-035-836-102, to relocate the weights, P/N 407-023-003-145. That proposal recognized that relocating the tuning weights was an interim action and anticipated that contact between the main rotor blades and the top portion of the fins would be addressed in a separate AD. However, prior to publishing the final rule based on that NPRM, the manufacturer published service information about reducing the height of the fins. Further, Transport Canada issued a revised AD requiring the height reduction in Canada. Hence, reducing the height of the fins made the relocation of the tuning weights unnecessary, therefore a supplemental proposal was published in the Federal Register on October 18, 2002 (67 FR 64326). That action proposed to require modifying the auxiliary fin assemblies to reduce the height and revising the Limitations section of the RFM to reduce the Vne for a tail rotor pedal stop failure from 80 knots indicated airspeed (KIAS) to 60 KIAS.

Transport Canada, the airworthiness authority for Canada, notified the FAA that an unsafe condition may exist on Bell Model 427 helicopters. Transport Canada advises of several ground incidents of main rotor blades contacting the top portion of a fin. Such incidents occurred on helicopters with an internal gross weight capability of 6,350 lbs. and the larger auxiliary fin assemblies.

Bell has issued Alert Service Bulletin 427-01-7, dated November 16, 2001 (ASB), which specifies reducing the height of the auxiliary fin assembly, part number (P/N) 427-035-836-101, -102, -105, and -106 within 300 hours time-in-service (TIS). Transport Canada classified this ASB as mandatory and issued AD No. CF-2001-05R1, dated February 13, 2002, to ensure the continued airworthiness of these helicopters in Canada.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on the proposal or the FAA's determination of the cost to the public. The FAA has determined that air safety and the public interest require the adoption of the rule as proposed with the exception of minor non-substantive changes and updating the Rotorcraft Flight Manual from Revision 3 to Revision 5, which is referenced in Note 2 of the AD.

The FAA estimates that 30 helicopters of U.S. registry will be affected by this AD, that it will take approximately 12 work hours per helicopter to accomplish the actions, and that the average labor rate is $60 per work hour. Required parts will cost approximately $1,685 per helicopter. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $72,150 to perform the modifications and revisions for the entire fleet.

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

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

The FAA has received reports indicating that cracking has been found on a support fitting assembly for the main spoiler actuators on several McDonnell Douglas Model 717-200 airplanes. On one airplane, a crack completely separated a forward attachment lug from the support fitting. This allowed the lug to move forward and contact and damage the rear spar of the wing, which resulted in cracking of the spar and fuel seepage. On another airplane, the support fitting cracked laterally across the center of the fitting. Investigation revealed that the stop pad had been broken off at the pad's aft attachment hole, and contact occurred between the spoiler actuator and fitting. While the root-cause of these cracks is unknown, one possibility is improper rigging of the spoiler hold-down actuator, which could cause additional loading and fatigue in the support fitting. Cracking of a support fitting assembly for a main spoiler actuator, if not corrected, could result in damage of adjacent structure such as the rear spar or upper skin panel, and consequent reduced structural integrity of the airplane.

The FAA has reviewed and approved Boeing Alert Service Bulletin 717-57A0013, dated December 20, 2002. That service bulletin describes procedures for a one-time visual inspection for cracking of the support fitting assemblies and stop pads of the main spoiler actuators. For support fitting assemblies on which no cracking is found, the service bulletin describes procedures for a follow-on test of the rigging of the spoiler hold-down actuators to ensure that the actuators are rigged correctly. For cracked support fitting assemblies or stop pads, the service bulletin specifies to contact Boeing for instructions for repair and additional inspections.

Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design, this AD is being issued to find and fix cracking of the support fitting assemblies of the main spoiler actuator, which could result in damage of adjacent structure such as the rear spar or upper skin panel, and consequent reduced structural integrity of the airplane. This AD requires accomplishment of the actions specified in the service bulletin described previously, except as discussed under the heading “Differences Between This AD and the Service Bulletin.” This AD also requires that operators report results of inspection findings to the FAA and to Boeing.

This is considered to be interim action. The inspection reports that are required by this AD will enable the manufacturer to obtain better insight into the nature, cause, and extent of the cracking, and eventually to develop final action to address the unsafe condition. Once final action has been identified, the FAA may consider further rulemaking.

The service bulletin identifies the inspection for cracking or other discrepancy as a “visual” inspection. We have determined that the inspection described in the service bulletin constitutes a “detailed” inspection. Note 2 of this AD defines such an inspection.

Operators should note that, although the service bulletin specifies that the manufacturer may be contacted for disposition of cracking conditions, this AD would require the repair of those conditions to be accomplished per a method approved by the FAA, or per data meeting the type certification basis of the airplane approved by a Boeing Company Designated Engineering Representative who has been authorized by the FAA to make such findings.

Operators also should note that, if no cracking of any spoiler support fitting or stop pad is found, the service bulletin specifies to test the rigging of the spoiler hold-down actuators. However, the service bulletin does not specify any corrective action if a spoiler hold-down actuator is incorrectly rigged. If any spoiler hold-down actuator is not rigged correctly, this AD specifies to correct the rigging per McDonnell Douglas Model 717 Aircraft Maintenance Manual, Chapter 27-67-06, Revision 15, dated January 1, 2003.

Operators may note that certain portions of the service bulletin specify that, if no cracks are found, inspection findings must be submitted to Boeing. However, the Accomplishment Instructions of the service bulletin do not contain such an instruction, and this AD does not require operators to submit inspection findings if no cracking is found.

Operators also may note that note (e) in Figures 1 and 2 of the service bulletin refers to inspecting for cracking or “evidence of riding conditions on the support fitting.” We have confirmed with Boeing that the references to “riding conditions” were included inadvertently. It is only necessary to inspect the support fitting assembly and stop pads for cracks, not for evidence of riding conditions. Note 3 of this AD clarifies our intent.

Since a situation exists that requires the immediate adoption of this regulation, it is found that notice and opportunity for prior public comment hereon are impracticable, and that good cause exists for making this amendment effective in less than 30 days.

Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified under the caption ADDRESSES. All communications received on or before the closing date for comments will be considered, and this rule may be amended in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of the AD action and determining whether additional rulemaking action would be needed.

Submit comments using the following format:

• Organize comments issue-by-issue. For example, discuss a request to change the compliance time and a request to change the service bulletin reference as two separate issues.

• For each issue, state what specific change to the AD is being requested.

• Include justification (e.g., reasons or data) for each request.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2002-NM-353-AD.” The postcard will be date stamped and returned to the commenter.

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

The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and that it is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

This amendment to 14 CFR 71 modifies the Class E airspace area extending upward from 700 feet or more above the surface at Denison, IA. It incorporates the current location of the Denison NDB and brings the legal description of this airspace area into compliance with FAA Order 7400.2E, Procedures for Handling Airspace Matters. The area will be depicted on appropriate aeronautical charts. Class E airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005 of FAA Order 7400.9K, dated August 30, 2002, and effective September 16, 2002, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

The FAA anticipates that this regulation will not result in adverse or negative comment and, therefore, is issuing it as a direct final rule. Previous actions of this nature have not been controversial and have not resulted in adverse comments or objections. Unless a written adverse or negative comment, or a written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified above. After the close of the comment period, the FAA will publish a document in the Federal Register indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of intent to submit such a comment, a document withdrawing the direct final rule will be published in the Federal Register, and a notice of proposed rulemaking may be published with a new comment period.

Interested parties are invited to participate in this rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2003-14462/Airspace Docket No. 03-ACE-15” The postcard will be date/time stamped and returned to the commenter.

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

The FAA has determined that this regulation is noncontroversial and unlikely to result in adverse or negative comments. For the reasons discussed in the preamble, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

AMDUCA (Public Law 103-396) was signed into law on October 22, 1994. It amended the Federal Food, Drug, and Cosmetic Act (the act) to permit licensed veterinarians to prescribe extralabel uses of approved animal and human drugs in animals. However, section 512(a)(4)(D) of the act (21 U.S.C. 360b(a)(4)(D)) gives us authority to prohibit an extralabel drug use in animals if, after affording an opportunity for public comment, we find that such use presents a risk to the public health.

In the Federal Register of November 7, 1996 (61 FR 57732), we published the implementing regulations (codified at part 530 (21 CFR part 530)) for AMDUCA. The sections regarding prohibition of extralabel use of drugs in food-producing animals are found at §§ 530.21 and 530.25. These sections describe the basis for issuing an order prohibiting an extralabel drug use in food-producing animals and the procedure to be followed in issuing an order of prohibition.

We may issue a prohibition order if we find that extralabel use in animals presents a risk to the public health. Under § 530.3(e), this means that we have evidence that demonstrates that the use of the drug has caused or likely will cause an adverse event.

Section 530.25 provides for a public comment period of not less than 60 days. It also provides that the order of prohibition will become effective 90 days after the date of publication, unless we revoke the order, modify it, or extend the period of public comment. The list of drugs prohibited from extralabel use is found in § 530.41.

Phenylbutazone became available for use in humans for the treatment of rheumatoid arthritis and gout in 1949 (Ref. 1), but is no longer approved, and thus not marketed, for any human use in the United States. This is because some patients treated with phenylbutazone have experienced severe toxic reactions, and other effective, less toxic drugs are available to treat the same conditions (Refs. 1 and 2).

Phenylbutazone is known for its ulcerogenic, nephrotoxic, and hemotoxic effects in horses, dogs, rats, and humans (Refs. 2, 4, 5, 6, 7, and 8). It is known to induce blood dyscrasias, including aplastic anemia, leukopenia, agranulocytosis, thrombocytopenia, and deaths (Refs. 7 and 8). The reported adverse reactions were associated with the human clinical use of 200 to 800 milligrams phenylbutazone per day (Refs. 7 and 8). Hypersensitivity reactions of the serum-sickness type have also been reported in patients with phenylbutazone. The threshold for this effect has not been defined. Therefore, it is unclear what level of exposure would be required to trigger such reactions in sensitive people. Moreover, phenylbutazone is a carcinogen, as determined by the National Toxicology Program (NTP) based on positive results in genotoxicity tests and some evidence of carcinogenicity seen in the rat and mouse in carcinogenicity bioassays NTP conducted (Ref. 3).

For animals, phenylbutazone is currently approved only for oral and injectable use in dogs and horses. Use in horses is limited to use in horses not intended for food. There are currently no approved uses of phenylbutazone in food-producing animals.

Investigation by FDA and state regulatory counterparts has recently found phenylbutazone on farms and identified tissue residues in culled dairy cattle. In addition, the U.S. Department of Agriculture's (USDA's) Food Safety Inspection Service has reported phenylbutazone residues in culled cattle presented for slaughter for human food throughout the United States in the past 2 calendar years. This evidence indicates that the extralabel use of phenylbutazone in female dairy cattle 20 months of age or older will likely result in the presence, at slaughter, of residues that are toxic to humans, including being carcinogenic, at levels that have not been shown to be safe. Because of the likelihood of this adverse event, we are issuing an order prohibiting the extralabel use of phenylbutazone drugs in female dairy cattle 20 months of age or older.

We will continue to monitor the extralabel use of phenylbutazone and will adjust the scope of this prohibition should we find that extralabel use in other species or classes of animals presents a risk to public health.

We are providing 60 days from the date of this publication for you to comment. The order will become effective May 29, 2003, unless we revoke or modify the order, or extend the comment period. You may send written or electronic comments to the Dockets Management Branch (see ADDRESSES) by April 29, 2003. Submit a single copy of electronic comments to http://www.fda.gov/dockets/ecomments or two hard copies of any written comments, except that individuals may submit one hard copy. Please identify your comments with the docket number found in brackets in the heading of this document. You may read any comments that we receive at our Dockets Management Branch reading room (see ADDRESSES). The reading room is open from 9 a.m. to 4 p.m., Monday through Friday, except for Federal holidays.

Therefore, I hereby issue the following order under section 512(a)(4)(D) of the act and 21 CFR 530.21 and 530.25. We find that extralabel use of phenylbutazone animal drugs and human drugs in female dairy cattle 20 months of age or older likely will cause an adverse event which constitutes a finding under section 512(a)(4)(D) of the act that extralabel use of this drug presents a risk to the public health. Therefore, we are prohibiting the extralabel use of this drug in female dairy cattle 20 months of age or older.

The following references have been placed on display in the Dockets Management Branch (see ADDRESSES). You may view them between 9 a.m. and 4 p.m., Monday through Friday.

1. Insel, P. A., “Analgesic-Antipyretics and Anti-inflammatory Agents, and Drugs Employed in the Treatment of Gout,” Goodman and Gilman, The Pharmacological Basis of Therapeutics, 9th ed., edited by J. G. Hardman, L. E. Limbird, P. B. Molinoff, R. W. Ruddon, and A. G. Gilman, McGraw-Hill, pp. 642-643, 1996.

2. McEvoy, G. K., “American Hospital Formulary Service B Drug Information 93,” American Society of Hospital Pharmacists, Inc., Bethesda, MD, p. 1194, 1993.

3. National Toxicology Program, “Toxicology and Carcinogenesis Studies of Phenylbutazone in F344/N rats and B6C3F1 Mice (gavage studies)” National Toxicology Program Technical Report number 367, NIH publication number 90-2822, 1990.

4. Edited by R. J Anderson, J. G. Gambertoglio, and R. W. Schrier, “Clinical Use of Drugs in Renal Failure,” Charles C. Thomas, Springfield, IL, p. 6, 1976.

5. Carpenter, S. L., and W. M. McDonnell, “Misuses of Veterinary Phenylbutazone,” Archives of Internal Medicine, vol. 155, pp. 1229-1231, 1995.

6. Council on Drugs, “Registry on Blood Dyscrasias,” Report to the Council, Journal of the American Medical Association, vol. 179(11), pp. 888-890, 1962.

7. Hazardous Substances Data Bank, 2000. http://www.csi.micromedex.com/DATA/HS/HS3159F.htm

8. Humphreys, D. J., Veterinary Toxicology, Bailliére Tindall, p. 92, 1988.

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

Under section 513(f)(1) of the act, devices that were not in commercial distribution before May 28, 1976, the date of enactment of the 1976 amendments, generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval, unless and until the device is reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, under section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to previously offered devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and 21 CFR part 807.

Under section 513(f)(3) of the act, FDA may initiate the reclassification of a device classified into class III under section 513(f)(1), or the manufacturer or importer of a device may petition the Secretary of Health and Human Services for the issuance of an order classifying the device in class I or class II. FDA's regulations in § 860.134 (21 CFR 860.134) set forth the procedures for the filing and review of a petition for reclassification of such class III devices. In order to change the classification of the device, it is necessary that the proposed new class have sufficient regulatory controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use.

The AUTOPHERESIS-C SYSTEM, an ABCS, intended for the routine collection of blood and blood components, is a postamendments device classified into class III under section 513(f)(1) of the act. Therefore, the device cannot be placed in commercial distribution for the routine collection of blood and blood components unless it is reclassified under section 513(f)(3) of the act, or subject to an approved premarket approval application (PMA) under section 515 of the act (21 USC 360e). FDA is taking this action under section 513(f)(3) of the act and § 860.134, based on information submitted in a petition by Baxter Healthcare Corp. (Baxter) on June 17, 1996, requesting reclassification of the AUTOPHERESIS-C SYSTEM, intended for routine collection of blood and blood components, from class III to class II (Ref. 1). Although Baxter submitted its petition for reclassification under section 513(e) of the act, the request should have been submitted under section 513(f)(3), and therefore FDA has considered the petition filed under section 513(f)(3). Consistent with section 513(f)(3) of the act and § 860.134, FDA referred the petition to the Blood Products Advisory Committee, Medical Devices Panel (the Panel) for its recommendation on the requested change in classification. The Panel met on September 26, 1996, at a public meeting (Ref. 2).

The AUTOPHERESIS-C SYSTEM, intended for routine collection of blood and blood components, is an automated plasmapheresis system. It utilizes a spinning membrane separation device to achieve rapid and gentle separation by filtration of whole blood into concentrated cellular components for reinfusion and into plasma for collection.

The instrument uses a system of pumps and sensors controlled by a microprocessor and it incorporates a variety of safety and alarm system functions. It uses a fully automated processing program to collect a preset volume of plasma from a donor. Plasma collection in the AUTOPHERESIS-C SYSTEM involves sequential phases of collection of plasma from the donor and reinfusion of the residual red blood cell concentrate back to the donor.

The AUTOPHERESIS-C SYSTEM is currently employed in plasma centers where it is used to collect Source Plasma, and it is also found in blood centers and hospital blood banks where it is used for the collection of plasma for preparation of fresh frozen plasma.

Any change in the indication for use, i.e., for therapeutic use, would require a PMA because devices for therapeutic use are not included in this reclassification action.

FDA has identified the following risks associated with apheresis blood donation and processing: (1) The potential loss of blood due to leaks; (2) thrombosis due to activation of factors by foreign surfaces; (3) toxic reaction to citrate or heparin anticoagulant; (4) damage to red cells, activation of complement, and denaturation of proteins; (5) potential for sepsis and fever due to bacterial contamination of the donor's blood returned to the donor; (6) infectious disease risk to the donor or to the operator due to leaks; (7) electrical shock hazard; (8) donor stress reaction due to removal or loss of blood; and (9) reservoir rupture.

Some of the reported adverse donor reactions are: (1) Allergic reaction; (2) vasovagal or synocopal reaction; (3) citrate toxicity; (4) hematoma; (5) hematuria or hemoglobinuria; (6) hypovolemic reaction; (6) myocardial infarct in three cases unrelated to the donation procedure; (7) mesenteric thrombosis unrelated to the donation procedure; (8) chest pains; (9) high blood pressure; (10) blood clotting; (11) nonresponsive donor during or after the donation procedure; (12) death of a donor several days following an apheresis unrelated to the procedure; (13) blood spray; and (14) tubing separation.

In addition to the potential risks of the AUTOPHERESIS-C SYSTEM and subsequent generic types of filtration-based blood cell separators, there is sufficient information about the benefits of the device. Specifically, the AUTOPHERESIS-C SYSTEM has been used since 1986, and the data presented by Baxter show no evidence of cellular or protein damage to the donor blood; the procedure is well tolerated by the donor; and the instrument is safe and effective for plasma collection. The period from 1986 to 1996 showed that a 0.03 percent of donations were associated with some type of potential adverse event that were reported to Baxter.

The Panel reviewed the data and information contained in the petition and provided by FDA, and considered the open discussions during the Panel meeting. The Panel consisted of members with personal knowledge of and clinical experience with the device. At a public meeting on September 27, 1996, the Panel unanimously recommended that the AUTOPHERESIS-C SYSTEM and subsequent membrane-based blood cell separators substantially equivalent to this device, intended for routine collection of blood and blood components, be reclassified from class III to class II. The Panel believed that class II with the special controls of a periodic report filed annually for a minimum of 3 years with emphasis on adverse reactions would provide reasonable assurance of the safety and effectiveness of the device.

FDA believes that, in addition to general controls, the special controls described below address these risks and provide reasonable assurance of the safety and effectiveness of the device. FDA described the special controls in the Federal Register of May 29, 2001 (66 FR 29149 at 29151), and provided an opportunity for public comment. FDA did not receive any comments on the special controls. Therefore, on September 5, 2001, FDA issued an order to the petitioner reclassifying the AUTOPHERESIS-C SYSTEM, and substantially equivalent devices of this generic type, from class III to class II subject to the special controls described below (Ref. 3). Through this final rule, FDA is codifying the reclassification of this device by revising 21 CFR 864.9245. By listing the contents of the special controls, new manufacturers of substantially equivalent devices can comply with the same special controls.

In addition to general controls of the act, automated blood cell separator devices operating by filtration principle are subject to the following special controls in order to provide reasonable assurance of the safety and effectiveness of the device. The manufacturer must file an annual report with FDA on the anniversary date of reclassification for 3 consecutive years. A manufacturer of a device determined to be substantially equivalent to the AUTOPHERESIS-C SYSTEM, intended for routine collection of blood and blood components, also is required to comply with the same general and special controls. Any subsequent change to the device requiring the submission of a premarket notification in accordance with section 510(k) of the act should be included in the annual report.

Each annual report (special control) must include:

1. A summary of adverse donor reactions reported by the users to the manufacturer that do not meet the threshold for medical device reporting under 21 CFR part 803;

2. Any change to the device, including but not limited to:

• new indications for use of the device;

• labeling changes, including operation manual changes;

• computer software changes, hardware changes, and disposable item changes, e.g., collection bags, tubing, filters;

3. Equipment failures, including software, hardware, and disposable item failures, e.g., collection bags, tubing, filters.

The agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA has examined the impacts of the final rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 et seq.). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this final rule is consistent with the regulatory philosophy and principles identified in the Executive order. In addition, the final rule is not a significant regulatory action as defined by the Executive order and so is not subject to review under the Executive order.

Under the Regulatory Flexibility Act, if a rule has a significant economic impact on a substantial number of small entities, an agency must consider alternatives that would minimize the economic impact of the rule on small entities. Reclassification of the affected devices from class III to class II will relieve manufacturers of the cost of complying with the premarket approval requirements of section 515 of the act, and may permit small potential competitors to enter the marketplace by lowering their costs. Although the final rule requires manufacturers of these devices to file an annual report with FDA for 3 consecutive years, this is less burdensome than the current premarket approval requirement that annual reports be submitted to FDA on an ongoing basis. The agency, therefore, certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Therefore, under the Regulatory Flexibility Act, no further analysis is required. In addition, the Unfunded Mandates Reform Act does not require FDA to prepare a statement of costs and benefits for the final rule because the rule will not impose costs of $100 million or more on State, local, and tribal governments in the aggregate, or the private sector, in any one year (adjusted annually for inflation).

This final rule contains no collections of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilites among the various levels of government. Accordingly, the agency has concluded that the rule does not contain policies that have federalism implications as defined in the Executive order, and, consequently, a federalism summary impact statement is not required.

The following references have been placed on display in the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday.

The final regulations that are the subject of this corrections are under section 72 of Internal Revenue Code.

As published, the final regulations (TD 9021) contains errors that may prove to be misleading and are in need of clarification.

Accordingly, the publication of the final regulations (TD 9021), which is the subject of FR. Doc. 02-29204, is corrected as follows:

We did not publish a notice of proposed rulemaking (NPRM) for this rule. The rule consists entirely of agency organization, procedure and practice revisions to various regulations in titles 33 (Navigation and Navigable Waters) and 46 (Shipping) of the Code of Federal Regulations (CFR) in response to enactment of the Homeland Security Act of 2002 (HLSA), Public Law 107-296, 116 Stat. 2135 (2002). Congress has established the Department of Homeland Security (DHS) (section 101 of HLSA) and directed the transfer of the Coast Guard (sections 888 and 1512 of HLSA) from the Department of Transportation to DHS. As indicated in the Department of Homeland Security Reorganization Plan submitted on November 25, 2002, by the President to Congress (under section 1502 of the HLSA), the Coast Guard is scheduled to move to DHS on March 1, 2003.

Because it is technical in nature and relates only to agency organization, procedure and practice, under 5 U.S.C. 553(b)(A), the Coast Guard finds that this rule is exempt from notice and comment rulemaking requirements. These changes will have no substantive effect on the public; therefore, it is not necessary for us to publish an NPRM and provide an opportunity for public comment. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that, for the same reasons, good cause exists for making this rule effective less than 30 days after publication in the Federal Register.

In this rule, we are changing “Department of Transportation” to the “Department of Homeland Security” in specified sections in 33 CFR Chapter I and 46 CFR Chapter I. We have also eliminated references to Department of Transportation delegation regulations (i.e., 49 CFR 1.45 and 1.46) in the text of Coast Guard regulations. And we have updated our rulemaking regulations (33 CFR part 1, subpart 1.05) not only to reflect our transition to DHS but to reflect current agency practice and procedure.

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

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

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

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

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

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

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

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

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

We have considered the environmental impact of this rule and concluded that, under figure 2-1, paragraphs (34)(a) and (b) of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation. These regulations are editorial or procedural and concern internal agency functions and organization. A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES.

The Board of Commissioners of the Port of New Orleans has requested a temporary deviation in order to replace the bronze babbitt bearing on the riverside main motor gear drive of the bridge. This repair is necessary for the continued operation of the bridge. This deviation allows the draw of the Norfolk Southern Railroad bascule bridge to remain closed to navigation from 7 a.m. on Wednesday, March 19 through 7 a.m. on Thursday, March 20, 2003.

The bascule bridge has a vertical clearance of one foot above mean high water in the closed-to-navigation position and unlimited clearance in the open-to-navigation position. The bridge is maintained in the open-to-navigation position and is closed to allow for trains to cross the bridge. In accordance with 33 CFR 117.5, the draw is required to open on signal for the passage of vessels. The bridge will not be able to open for emergencies during the closure period. Navigation on the waterway consists mainly of recreational and fishing vessels and some tugs with tows. Alternate routes are available to any vessel by transiting through the Chef Menteur Pass or the Rigolets Pass.

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

The SR 127 Bridge, at mile 0.0, across the Annisquam River, Blynman Canal, has a vertical clearance of 7 feet at mean high water, and 16 feet at mean low water in the closed position. The existing regulations are listed at 33 CFR 117.586.

The bridge owner, Massachusetts Highway Department, requested a temporary deviation from the drawbridge operating regulations to facilitate necessary structural repairs, the replacement of the tread plates and segmental castings, at the bridge.

This deviation to the operating regulations allows the SR 127 Bridge to remain in the closed position from 6 a.m. on March 9, 2003 through 11:59 p.m. on March 15, 2003.

This deviation from the operating regulations is authorized under 33 CFR 117.35 and will be performed with all due speed in order to return the bridge to normal operation as soon as possible.

CSX Transportation has requested a temporary deviation in order to lift the girder off the pivot pedestal in order to replace a worn disc that affects the opening and closing of the swing span bridge across Three Mile Creek at mile 0.3 at Mobile, Baldwin County, Alabama. This maintenance is essential for the continued operation of the bridge and is expected to eliminate frequent breakdowns resulting in emergency bridge closures. This temporary deviation will allow the bridge to remain in the closed-to-navigation position from 7 a.m. through 3 p.m. on Thursday, March 20, 2003.

The swing span bridge has a vertical clearance of 10 feet above mean high water and 12 feet above mean low water in the closed-to-navigation position. Navigation on the waterway is primarily commercial, consisting of tugs with tows and fishing vessels. There is no recreational boat traffic at the bridge site. The only known commercial users of the waterway, D. R. Jordan Pile Driving, Inc. and Mobile Ship Yard, were both contacted and have no objection to the closure. The bridge normally opens to pass navigation on an average of 3 times per day. In accordance with 33 CFR 117.5, the draw of the bridge opens on signal. The bridge will not be able to open for emergencies during the closure period. No alternate routes are available.

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

The Louisiana Department of Transportation and Development has requested a temporary deviation from 33 CFR 117.444 in order to replace a defective main pivot pier bearing housing. This deviation allows the draw of the SR 315 drawbridge to remain closed to navigation from 8 a.m. on Tuesday, March 18, 2003 until 4 p.m. on Thursday, March 20, 2003.

The bridge has a vertical clearance of 3.5 feet above mean high water in the closed-to-navigation position and unlimited in the open-to-navigation position. In accordance with 33 CFR 117.444, the draw is required to open on signal; except that, from 15 August to 5 June, the draw need not be opened from 7 a.m. to 8 a.m. and from 3 p.m. to 4 p.m., Monday through Friday except holidays. The draw shall open on signal at any time for an emergency aboard a vessel.

During the closure period, the bridge will not be able to open for the passage of vessels. No alternate routes are available; however, the bridge owner will attempt to contact all waterway users to keep them abreast of the repair work. Navigation on the waterway consists of small tugs with tows, fishing vessels, and other recreational craft. The bridge opens an average of 426 times per month for the passage of vessels.

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

On October 4, 2001, we published a temporary final rule entitled “Temporary Requirements for Notification of Arrival in U.S. Ports” in the Federal Register (66 FR 50565). Subsequently, we published two corrections in the Federal Register (November 19, 2001 (66 FR 57877) and January 18, 2002 (67 FR 2571)). The temporary rule increased the submission time for a Notice of Arrival (NOA) from 24 to 96 hours prior to arriving at a U.S. port; required centralized submissions; temporarily suspended exemptions from reporting requirements for some groups of vessels; and required submission of passenger, crew, and cargo information. The effective period of the temporary rule was extended twice, first until September 30, 2002 (May 30, 2002 (67 FR 37682)), and then again through March 31, 2003 (August 28, 2002 (67 FR 55115)). The second extension allowed us to complete the rulemaking for permanent changes.

On June 19, 2002, we published a notice of proposed rulemaking in the Federal Register entitled “Notification of Arrival in U.S. Ports” (67 FR 41659). We received 21 comments addressing our proposal to permanently change the NOA requirements. No public hearing was requested and none was held.

This rule permanently changes the NOA requirements in 33 CFR part 160. It replaces the temporary rule issued in response to the attacks on September 11, 2001, and contains most of the same NOA requirements that have been in place since October 4, 2001.

Currently, owners, agents, masters, operators, or persons in charge of vessels bound for U.S. ports must file an NOA before they enter port. (Persons required to submit reports will hereafter in this preamble be called “submitters.”) In our notice of proposed rulemaking (NPRM) we proposed the following:

• Requiring additional information items in NOA reports;

• Requiring electronic submissions of cargo manifest information to the United States Customs Service (USCS);

• Requiring earlier submission times for NOAs;

• Revising requirements for reporting changes to submitted information;

• Merging the Notice of Departure (NOD) requirements with the NOA requirements;

• Allowing consolidated NOA reports for multiple port arrivals;

• Requiring centralized NOA submissions;

• Revising exemptions from NOA requirements; and

• Updating definitions.

Each of these issues is discussed in more detail in the remainder of the preamble.

We received 21 comments on the proposed rule. Generally, the comments recognized our need to increase the amount and type of information required in an NOA and the need for earlier submission of that information. Comments focused generally on:

• Format and readability of the regulation;

• Specific exemptions from NOA requirements;

• Suggestions for reporting requirements for “certain dangerous cargo;”

• Recommendations for a single submission of information to meet the needs of multiple agencies;

• Electronic submissions;

• Questions about the proposed requirement for submission of the cargo manifest to USCS;

• Requests for additional definitions in part 160; and

• Suggestions for changes to information required in an NOA.

Each of these groups of comments is discussed in more detail in the following paragraphs.

Format of regulation. A number of comments said the NPRM was difficult to read and understand. We agree. For ease of understanding, we have reformatted the requirements and renumbered the sections for this final rule. Many of the information requirements are also now provided in table format.

The current codification of part 160 contains both permanent and temporary sections, which are being changed by this rule. We are, therefore, republishing subpart C in its entirety for the public's convenience until the next CFR recodification.

Exemptions. We received nine comments related to exemption from NOA reporting. Six comments recommended exempting towing vessels that are in domestic service and not carrying CDC. We agree. This rule exempts towing vessels and barges not carrying CDC or controlling another vessel carrying CDC that are operating solely between ports or places in the continental U.S. from NOA reporting requirements.

One comment requested that Mobile Offshore Drilling Units (MODUs) moving between operating locations under U.S. jurisdiction be exempt from the NOA requirements. The comment suggested that the report required by 33 CFR 146.202, which notifies the Captain of the Port (COTP) 14 days before a MODU arrives or changes its location on the Outer Continental Shelf (OCS), should be used to meet the NOA requirements. The Coast Guard disagrees and has not exempted MODUs from the NOA requirements in this rule. The NOA information is different from that required by § 146.202. The MODU's arrival or change of location on the OCS does not require submission of an NOA, only the notification to the District Commander required by § 146.202. If a MODU is leaving the OCS to arrive at a U.S. port the MODU must comply with the NOA submission requirement in this rule.

One comment recommended exempting Aleutian Trade Act fish tenders. The comment explained that these fish tenders operate in the remote reaches of Alaska and their movements are unpredictable; it also explained that these fish tenders sail only between U.S. Ports, are U.S. owned, and that 98% of the crew are American citizens. The comment also stated that they do not carry bulk hazardous cargo. Because this issue is specific to Alaska, it can appropriately be addressed by the local COTP who, under § 160.214, may waive provisions of this subpart.

One comment recommended eliminating the exemption for passenger and supply vessels when they are employed in continental shelf resource exploration or extraction. The comment stated, “Logic would dictate that the offshore rigs could be used as a vehicle to aid in terrorism. Passenger and supply vessels often carry a myriad of hazardous materials including explosives.” Two comments responded, disagreeing and urging Coast Guard to keep the exemption. The Coast Guard is not changing the exemption for these vessels.

One comment asked us to clarify who is required to report above or below mile 235 on the Mississippi River. Specifically, the comment asked if domestic barges not carrying CDC were required to report on this body of water.

We have revised the proposed regulatory text to more clearly state that all vessels are exempt when operating on the Mississippi River above mile 235, Above Head of Passes, including the tributaries and the Atchafalaya River above its junction with the Plaquemine-Morgan City alternate waterway and the Red River, the Tennessee River from its confluence with the Ohio River to mile zero on the Mobile River and all other tributaries between those two. NOA requirements for vessels operating below mile 235 on the Mississippi River are the same as any other location in the U.S. covered by this rule.

Certain Dangerous Cargo. We received three (3) comments regarding the definition of Certain Dangerous Cargo (CDC). The comments state that the list of CDCs included in the requirement for NOA submission is too broad and that it impedes the collection of information on cargoes that pose the greatest risk to maritime safety and security. The comments suggest the Coast Guard limit the CDC definition to include only those cargoes that pose the greatest risk to maritime safety and security. They also recommend the Coast Guard use the list of high consequence cargoes in the AWO Security Plan (a list developed with input from the towing industry and Coast Guard representatives) to define CDC for this rule.

The Coast Guard agrees that the definition of CDC should be limited to those cargoes that pose the greatest risk to maritime safety and security. The Coast Guard conducted a comprehensive review of cargoes, which included a review of the CDC list in the NPRM and the high consequence cargo list in the AWO Security Plan. As a result of the review we revised the list of CDCs described in the NPRM to include only those cargoes that currently pose the greatest risk to maritime safety and security.

Duplicate Reporting. Several comments said they were submitting the same information to different federal agencies and recommended a single submission of information. Many remarked that they would welcome the submission of an electronic data file to a central depository, where submissions could then be accessed by or forwarded to each agency needing the information.

We agree and we are currently working to integrate information and data requirements with other government agencies. Once we have this capability, we will revise our reporting requirements.

We also received a comment that COTPs were still asking companies to send their NOA to the COTP, even though it had already been submitted to the National Vessel Movement Center (NVMC). This final rule requires the submission of an NOA to the COTP only for vessels 300 gross tons or less entering a port or place in the Seventh Coast Guard District. Questions about requests from COTPs for duplicate submissions should be referred to LTJG Kimberly Andersen at the phone number in FOR FURTHER INFORMATION CONTACT.

National Vessel Movement Center. Four comments asked about the methods for submitting information to the NVMC. The NPRM proposed three methods for submitting NOAs to the NVMC: telephone (1-800-708-9823), fax (1-800-547-8724), and e-mail. Two comments stated that vessels calling or faxing through INMARSAT are unable to use 1-800 numbers. An alternate phone number (304) 264-2502 and fax number (304) 264-2684 have been added for vessels using INMARSAT.

Another comment requested that e-mail be a submission method. E-mail has always been an option for submitting NOAs and remains an option in this final rule. General information about the NVMC and methods for submission are available on the NVMC Web site at http://www.nvmc.uscg.gov/.

Electronic Submissions. This rule will not mandate electronic submissions of NOA reports. You may, however, continue to choose to use the voluntary electronic format available on the NVMC website. As mentioned under duplicate reporting, we will continue to work with other government agencies on a common format for electronic data submissions.

In our NPRM, we asked six questions related to electronic submission and we received four comments answering some, or all of, these questions. The six questions and corresponding answers are as follows:

1. “What are your information security concerns regarding electronic submissions of NOA?” Of the two comments that responded to this question, both stated there were no security concerns. One of the comments stated that their ships already have known, published schedules. The other comment stated that their member lines already submit NOAs electronically and they assumed the electronic transmissions were being sent to and via a secure website.

2. “Would you allow the Coast Guard to forward all or parts of your NOA information to entities such as marine exchanges or port authorities as a value added service to facilitate information sharing at the port level?” Of the three comments that responded to this question, one encouraged the forwarding of NOA information to other entities and one objected. The comment objecting to sharing information stated that it was not apparent what added security benefits it would provide and that it might lead to greater security risks. The comment also stated that they would want to know “exactly what kind of information would lend itself to such information sharing.” The third comment stated that they would not object to forwarding this information if the Coast Guard determined sharing this information was absolutely necessary and under the condition that “all such information would not be shared with the general public.”

3. “If the Coast Guard produced a desktop application that allowed you to create, manage, and automatically submit NOA via email, would you use it?” Of the three comments that responded to this question, one said they already submit their NOA via email and that the current formats should continue to be allowed alongside future desktop applications. The second said they “would most likely utilize a CG desktop application.” They also said it would have to be deployable on board ship and be compatible with INMARSAT, along with a capability to be transmitted in a compressed format to reduce transmission costs. The third comment stated that the “cost passed on to those purchasing the program would outweigh any benefit derived by industry.”

4. “Which electronic means for submitting NOAs would you prefer? (e.g.: HTML, SMTP, FTP)” Each of the four comments responded to this question with different answers. One gave no preference. The second also gave no preference but acknowledged that some are more secure than others. This same comment recommended we ensure “one set of standards for all government agencies or the government agencies should have the capability to receive all protocols and programs.” A third comment stated they “do not regard these means to be mutually exclusive, and would encourage that as many options be made available to submitters as technically feasible.” The final comment rank ordered their preferences beginning with SMTP, then FTP, and finally HTTP. This comment also recommended that vessels without these capabilities be allowed to continue to use fax and e-mail.

5. “What are your information security concerns if the Coast Guard allowed you to send your NOA to an FTP (File Transfer Protocol) server or web server in the public domain?” None of the questions listed any security concerns related to FTP servers or web servers, but one suggested “Encryption: PKI scheme based encryption (PGP).”

6. “If the Coast Guard provided an XML (Extensible markup language) data specification for NOA, would you be able to generate XML documents and submit them via email or other means?” Of the three comments responding to this question, one stated that they believe they could install an XML plug-in; the second said the format method should be XML; and the third stated, “* * * relatively few shipping companies today have the capability of generating XML documents for NOA submissions.” The third comment also reemphasized that no single electronic means should become the exclusive method for submission.

Several comments also requested that in the future we continue to maintain the phone and fax options for NOA submission. Although we are not requiring electronic submission of NOA information to the NVMC in this rule, we are working on electronic submission issues and considering the responses to these questions.

Who May Submit. In the NPRM, we asked whether we should accept NOA submissions from only the vessel owner and operator, or from only the owner, operator and authorized agent (including shipping agents and marine exchanges) of the vessel. We specifically requested comments on how either of these changes would affect the method of NOA submission used by the submitter.

Five comments responded to this issue. All of them recommended that no change be made and that we continue to accept NOA submissions from “...the owner, agent, master, operator, or person in charge of a vessel...”. The Coast Guard agrees and this provision remains unchanged in this final rule.

Cargo Manifest (Cargo Declaration—Customs Form 1302). We received several comments stating that the Coast Guard should not require electronic submission of the cargo manifest to USCS. The comments stated that the cargo manifest submission is already required by USCS and the Coast Guard requirements were different.

We disagree. This requirement is not redundant—a single submission of the Cargo Manifest meets the requirements of both Coast Guard and USCS. The Coast Guard and USCS are working together to obtain vessel arrival information in an automated format that will meet the requirements of both agencies. Including this requirement in the Coast Guard's final rule is one step toward this end.

Definitions. Several comments requested additional definitions for “domestic voyage,” and “barge.” This final rule adds definitions for “barge,” “crewmember,” “nationality,” and “persons in addition to crewmembers.” We are also revising the definition for “certain dangerous cargo,” as discussed previously in this preamble. The term domestic voyage is no longer used in this subpart, and therefore, no definition is required.

Another comment asked for a clarification of the definition of crewmember because it was unclear as to what category company personnel, contractors, or other supernumerary persons belonged. The comment stated these persons would be included on the list of “persons in addition to the crew”. The Coast Guard agrees that these persons are considered “persons in addition to the crew”. The comment requested a clarification because it would be important for purposes of mandatory training required by STCW for crewmembers; requirements of Passenger Services Act; and legal benefits tendered to crewmembers under maritime law. However, the definition of “crewmember” in this rule applies only to 33 CFR part 160, subpart C. It does not affect regulations concerning these other issues. Therefore, the Coast Guard is not changing the definition of “crewmember” in this final rule.

Information Required in an NOA. Six comments discussed specific information items in the NOA. These items included “crewmember information,” “operational condition,” “any other name by which each individual has been known,” “last five ports or places visited,” and “24-hour Point of Contact (POC).”

One comment stated that the reporting requirements for crewmembers were excessive and unjustified. This information is necessary for safety and security purposes and we will continue to require it. However, the Coast Guard recognizes the fact that crewmembers may change positions frequently. For this reason, we have added a provision to § 160.208 that states that a notice of change need not be submitted when a change occurs to a crewmember's position or duty on the vessel.

One comment questioned the need for a barge to report the operational condition of the equipment under 33 CFR 164.35. This operational condition report applies to self-propelled vessels of 1600 or more gross tons and would not, therefore, be applicable to a barge. Further, barges operating solely between ports and places in the continental U.S. are exempt from the NOA requirements, unless they are carrying CDC. If they are carrying CDC, we require a consolidated NOA from the towing vessel on both the towing vessel and the barge(s) it is controlling.

Five comments questioned the necessity for reporting any other name including alias, nickname, maiden name, professional or stage name by which an individual has been known. Comments stated that this information is not required on INS Form I-418; it is difficult to produce and/or verify; and the Coast Guard should not require it. We agree, and we have removed it from this final rule.

Several comments questioned the need for requiring the last five ports of call from all vessels. Comments stated that cruise ships and domestic inland barge traffic should be exempt from providing the last five ports of call. We agree that vessels operating solely between ports or places in the continental U.S. should only be required to provide the destination(s) and last port of call. Vessels that have arrived from or have stopped in foreign ports, however, are required to provide their last five ports of call.

We received one comment asking for clarification on the meaning of “Name and telephone number of a 24-hour point of contact (POC) for each port included in the notice of arrival.” A new POC need not be provided for each port, nor must the POC be located at that port. We have changed the regulatory text to read as follows: “name and telephone number of a 24-hour point of contact.”

Submission Timeframe. One comment asked the Coast Guard to reconsider requiring estimated departure date and time, as well as updates to these times, if the change was more than six hours for vessels not carrying CDC. The comment stated it places undue burden on the industry and results in an unmanageable amount of update filings to the NVMC. Coast Guard COTPs need this information for safety and security reasons. We will continue to require NOA information on estimated departure date and time, as well as updates to those times, when the arrival or departure time has changed by six hours or more.

Required elements in NOA reports. This rule requires the following information be submitted in an NOA: vessel, cargo, and persons on board. Submitters are to identify each of their destinations by listing the names of the receiving facility, the port or place in the U.S., the city, and the state, as well as indicate the location or position of the vessel at the time of reporting. Submitters also must provide a general description of cargo aboard the vessel. The description will inform the Coast Guard if the vessel is carrying items such as grain, oil, containers, etc. Submitters will also identify where each crewmember and each person in addition to crewmembers embarked.

Based on experience with the temporary rule, we have removed the reporting information on the stowage location. We feel this information is adequately covered by the cargo manifest requirements in entry 8 of Table 160.206.

Cargo Manifest Information. The Coast Guard is requiring the vessel's cargo manifest information as described in 19 CFR 4.7(a). This requirement is in addition to entry (3)(i) in table 160.206, “general description of the cargo”, and will consist of the information contained in the cargo declaration (Customs Form 1302). Cargo manifest information is necessary to assess vessels entering U.S. ports for potential threats to the national security and to appropriately respond to those threats.

The Coast Guard does not have the capability at NVMC to receive and process the cargo manifest information. The USCS, however, does have an existing capability to receive, process, and share the information with the Coast Guard. The cargo manifest information is to be submitted electronically to USCS through the Sea Automated Manifest System (AMS) at least 96 hours before the vessel arrives at a U.S. port, while all other required NOA information is to be submitted to the NVMC. A single electronic submission of the cargo manifest information (Customs Form 1302) to USCS will satisfy the requirements of both agencies for submission of that data.

To transmit information electronically to USCS, a submitter must be able to use Sea AMS. To enroll in Sea AMS, a submitter must first call the USCS at 703-921-7500 or send a letter to the following address requesting participation in the Sea AMS program: U.S. Customs Service, Client Representative Branch, 7501 Boston Blvd. Rm. 211, Springfield, VA 22153. Upon receiving an inquiry, a USCS client representative will be assigned to work with the submitter. This representative will serve as a technical advisor establishing a Sea AMS interface. Establishing an interface for participation can require as little as two weeks or up to several months, depending on the particular method chosen. This rule, therefore, provides a 90-day delay in implementation of the requirement to submit the cargo information to USCS. This 90-day period should provide sufficient time for submitters to either enroll in Sea AMS or find a submission agent who is already able to use Sea AMS.

AMS will allow participants to transmit manifest information electronically 96 hours prior to vessel arrival. There are four methods of transmitting data to AMS: (1) Establish a direct connection with USCS; (2) use a service provider; (3) use a port authority; and (4) purchase software from a vendor. For general information related to AMS, visit the USCS Automated Commercial System Web site at http://www.customs.gov/xp/cgov/import/operations_support/automated_systems/ams/sea_features.xml.

Of vessels already required to submit a “cargo manifest” to USCS, approximately 95 percent submit the manifest information electronically. The new Coast Guard requirement only affects vessels not currently submitting electronically to Customs. The requirement to submit the cargo manifest information electronically will not apply to vessels on a domestic voyage in the United States.

Submission times for NOA. In the temporary rule, we increased the times for submitting an NOA. This rule requires most vessels to submit NOAs at least 96 hours before arrival in the United States. Towing vessels, when in control of a barge or barges carrying CDC and operating solely between ports or places in the continental United States, must submit an NOA before departure but at least 12 hours before entering the port or place of destination. Except for these vessels, this rule contains the same submission times established in our temporary rule.

Submission times for Cargo Declaration (Customs Form 1302). To align USCS and Coast Guard cargo declaration requirements, we have created two new exceptions to the submission times for Cargo Declaration. Except for vessels carrying containerized cargo or break bulk cargo, vessels carrying bulk cargo may submit the Cargo Declaration before departure but at least 24 hours before entering the U.S. port or place of destination. Vessels carrying break bulk cargo operating under a USCS exemption granted under 19 CFR 4.7(b)(4)(ii) may, during the effective period of the USCS exemption, submit the Cargo Declaration before departure but at least 24 hours before entering the U.S. port or place of destination.

Exemptions in this rule from submitting NOAs or particular items in an NOA apply only to the provisions of this subpart. No exemption in this subpart affects USCS or other agency requirements to submit arrival information, particularly the USCS requirement to submit the Cargo Declaration 24 hours prior to lading in a foreign port. In these instances, however, the Coast Guard expects that if a vessel complies with the USCS requirements for submitting 24 hours before lading, that it will also meet the times for submission of that information under this subpart. Thus, one submission will meet the separate requirements of two agencies for the same information.

Reporting changes to submitted NOA information. Changes to NOAs must be reported as soon as practical but not less than 6, 12, or 24 hours prior to entering port depending on vessel and voyage characteristics. When reporting changes, a complete resubmission of an entire report is not necessary.

Notice of Departure. The Coast Guard has combined all of the information elements of a NOD and an NOA into a single NOA report. Both notices contained duplicate reporting elements, although the NOD required the submission of one additional element. The additional element (the estimated date and time of departure) is now included in the NOA, thereby eliminating reporting the same information twice and reducing the reporting burden.

Consolidated NOA Submission. Submitters are allowed to file a single NOA listing all consecutive U.S. destinations during the voyage, along with estimated arrival and departure dates and times for each port.

Towing vessels controlling a barge that is required to submit an NOA under this subpart must submit only one NOA containing the information required for the towing vessel and each barge under its control.

Require centralized submissions. All NOA reports will continue to go to the NVMC instead of to individual COTPs. Vessels of 300 gross tons or less operating in the Seventh Coast Guard District will continue to submit NOA reports to cognizant COTPs.

Vessels transiting inbound on the Saint Lawrence Seaway are able to meet the NOA reporting requirements by continuing to fax their NOA submissions to the Saint Lawrence Seaway Development Corporation (SLSDC) and the Saint Lawrence Seaway Management Corporation of Canada. The SLSDC will forward each vessel's NOA report to the Coast Guard. The cargo manifest must be submitted electronically to USCS.

Exemptions from NOA reporting. The temporary final rule suspended reporting exemptions for vessels complying with Automated Mutual Assistance Vessel Rescue System (AMVER), certain vessels operating solely on the Great Lakes, and vessels operating on a regularly scheduled route. As proposed in our NPRM, these exemptions have been permanently removed.

Under this rule, U.S. vessels, except tank vessels, operating solely between U.S. ports on the Great Lakes are exempt from reporting. Canadian vessels, U.S. tank vessels coming from a foreign port, and vessels complying with AMVER are required to submit an NOA report. Vessels operating on a regularly scheduled route are required to submit an NOA report.

Charterers. We have added a NOA requirement to submit the name of the vessel charterer. This change will continue the requirement (August 19, 2002 (67 FR 53735)) contained in the temporary rule.

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

We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary. We present this Regulatory Evaluation for the purposes of information. A more detailed analysis can be found in the public docket under ADDRESSES.

Evaluation. The regulatory baseline for this rule is the NOA and NOD reporting requirements in 33 CFR part 160 that are to be amended by this rulemaking. At the present, the requirements of part 160 that we are amending are temporarily suspended. During the suspension period of these requirements there has been a temporary final rule in place since October 4, 2001. The temporary reporting requirements are not addressed in this analysis. This means that the cost of the rule is estimated as the incremental expenditure required to meet the provisions of the rule in absence of the temporary rule published October 4, 2001.

The cost for complying with the rule will differ depending on the type of vessel submitting the report. Owners and operators of non-AMVER/non-Great Lakes vessels will have to submit lists of the crew and persons in addition to the crew (information they already have to submit to INS). Additionally, these vessels must provide detail on the persons aboard the vessel (e.g., port where embarked). Owners and operators of AMVER and Great Lakes vessels may complete the INS forms (which they did not have to provide previously), the crew lists, and the crew detail.

The cost of the rule to industry is presented below based on the average number of annual arrivals for 1998 and 1999.

As shown, the rule is estimated to cost $6.7 million annually. Over the next 10 years, the Present Value (PV) cost of the rule is $50.4 million (2003-2012, 7 percent discount rate, 2003 dollars).

The non-quantifiable benefit of the rule is—

• Providing relevant information about an applicable vessel's cargo, crewmembers, and passengers as well as a threat it may pose; and

• Providing more time to evaluate, analyze, and respond to the information collected.

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

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

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

This rule calls for a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). It modifies an existing OMB-approved collection—2115-0557. A summary of the revised collection follows.

Title: Advance Notice of Vessel Arrival and Departure.

OMB Control Number: 2115-0557.

Summary of the Collection of Information: The Coast Guard requires pre-arrival messages from any vessel entering a port or place in the United States. This rule will amend 33 CFR part 160 to permanently require:

• Earlier receipt of the notice of arrival—96 hours instead of 24 hours—from vessels currently required to provide advance notification of arrival;

• Submission of NOA reports to a central clearinghouse, the National Vessel Movement Center;

• Removal of the current exemption from notice of arrival reporting requirements for vessels operating in compliance with the Automated Mutual Assistance Vessel Rescue System, some vessels operating on the Great Lakes, and vessels on scheduled routes; and

• Additional information about crewmembers, passengers, cargoes on board the vessel to be provided as items in the notice of arrival report.

Need for Information: To ensure port safety and security and to ensure the uninterrupted flow of commerce, the Coast Guard must permanently change regulations relating to the notifications of arrival requirements.

Proposed Use of Information: This information is required to control vessel traffic, develop contingency plans, enforce regulations, and enhance maritime security.

Description of the Respondents: Respondents are owners and operators of vessels that arrive at or depart from a port or place in the United States after departing from foreign ports.

Number of Respondents: The existing OMB-approved collection number of respondents is 10,367 (respondents are owners/operators of the vessels calling on U.S. ports annually). This rule will not increase the number of respondents.

Frequency of Response: Owners/operators of vessels making calls in U.S. ports will submit NOA reports as necessary. The existing OMB-approved collection number of responses is 68,139 (responses are arrivals at and departures from U.S. ports). This rule will not increase the number of responses.

Burden of Response: The existing OMB-approved collection burden of response is approximately 15 minutes (0.250 hours) (burden of response is the time required to complete the paperwork requirements of the rule for a single response). This rule will increase the burden of response by an average of 60 minutes (1.000 hour) and decrease the burden of response by 1 minute (0.017 hours) for a net total of 74 minutes (1.233 hours).

Estimate of Total Annual Burden: The existing OMB-approved collection total annual burden is 39,037 hours (total annual burden is the time required to complete the paperwork requirements of the rule for all responses). This rule will increase the total annual burden by 136,278 hours and decrease total annual burden by 1,136 hours for a net total of 174,179 hours.

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), we submitted a copy of this rule to OMB for its review and approval of the revised collection of information. The existing OMB-approved collection (2115-0557) expires on March 31, 2003.

You need not respond to a collection of information unless it displays a currently valid control number from OMB. If OMB does not approve this revised collection of information, we will publish a notice in the Federal Register of OMB's decision.

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and will either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined, that to the extent states have a current requirement in effect for notices of vessel arrivals to a state agency, e.g., notices to pilot authorities for pilot services, we do not intend to preempt those requirements with this rule.

However, we reserve our position with respect to preemption of any prospective new state rule or legal requirement for an advance notice of arrival or submission of information requirements that are similar to those set forth in this rule. The U.S. Supreme Court in United States v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000), held that pursuant to title I of the Ports and Waterways Safety Act (the authority for this rule), the Coast Guard can preempt conflicting or similar State requirements on vessel operation. The Court held also that Congress had preempted the field of marine casualty reporting. Accordingly, based on the Supreme Court's holding in the Locke case, we believe that any prospective state requirement for a notice of arrival or information gathering requirement directed at vessel owners, or operators, that is similar to that contained in this rule is inconsistent with the federalism principles enunciated in that case, and is preempted.”

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

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

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

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

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

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

We have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph (34)(a), of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation. This rule changes the requirements in the notification of arrival regulations. They are procedural in nature and therefore are categorically excluded. A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES.

Regulatory Information

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a NPRM, and under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Publishing an NPRM and delaying its effective date would be contrary to public interest since immediate action is needed to respond to the safety hazards associated with unprecedented low water levels on the Upper Mississippi River.

The hazardous condition requiring this regulation is significant reductions in river levels on the Upper Mississippi River. A safety zone is needed to protect vessels transiting the area from the safety hazards associated with the unprecedented low water. Entry into or operation in this zone is prohibited to all vessels unless authorized by the Coast Guard Captain of the Port Paducah or his on-scene representative.

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

The Coast Guard expects the economic impact of this rule to be so minimal that a full regulatory evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary. The Inland River Contingency Action Plan provides guidance for marine operations and transportation emergencies on the Upper Mississippi River. The goal of the plan is to serve as a guide for officials of the USCG, U.S. Army Corps of Engineers, and the marine industry to facilitate the safe and orderly movement of barge traffic during a navigational crisis. In accordance with the Mississippi River Contingency Action Plan, members of the USCG, U.S. Army Corps of Engineers, and the marine industry met. Representatives of towing companies that operate in this affected area agreed that in order to protect the vessel traffic transiting the area they will halt all operations until river levels have improved and safe vessel navigation can resume.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit the Upper Mississippi River, from Mile Marker 14.5 to 16.0 from 4 p.m., January 30, 2003, until 8 a.m., March 1, 2003. This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons:

1. This rule will be in effect on a temporary basis until conditions improve.

2. This particular area of the Upper Mississippi River does have a significant number of small entity operations.

If you are a small business entity and are significantly affected by this regulation please contact, LTJG Patrick Mounsey, Marine Safety Office Paducah representative, at (270) 442-1621 ext. 350.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

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

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

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

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

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

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

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

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

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

We have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph 34(g), of Commandant Instruction M16475.1D, this rule is categorically excluded from further environmental documentation because this rule is not expected to result in any significant environmental impact as described in the National Environmental Policy Act of 1969 (NEPA).

The Saint Lawrence Seaway Development Corporation (SLSDC) and the St. Lawrence Seaway Management Corporation (SLSMC) of Canada, under international agreement, jointly publish and presently administer the St. Lawrence Seaway Regulations and Rules (Practices and Procedures in Canada) in their respective jurisdictions. Under agreement with the SLSMC, the SLSDC is amending the joint regulations to make use of Automatic Identification System (AIS) in Seaway waters from St. Lambert, Quebec to Long Point, mid-Lake Erie mandatory effective at the beginning of the 2003 navigation season, which is scheduled for March 25, 2003.

Since the opening of the Saint Lawrence Seaway in 1959, the Saint Lawrence Seaway Development Corporation and the St. Lawrence Seaway Management Corporation Vessel Traffic Services (VTS) system has been responsible for monitoring the progress of commercial traffic to ensure the safe and expeditious passage of vessels operating in Seaway sectors under their control. Procedures in use today include limits on vessel speed and requirements for all commercial traffic to report by voice on marine VHF radio to the Vessel Control (VTC) centers. These reports are made at designated “call-in-points” along the river. Traffic managers at VTC centers use the vessel reports to monitor traffic patterns, including one-way vessel traffic restricted areas and project the estimated times of arrival (ETA) of vessels at locks in the Seaway.

SLSDC and SLSMC sponsored successful prototype demonstrations and evaluations of a Global Positioning System based VTS system in the fall of 1994 and during the 1995 shipping season. The demonstrations established that a VTS using AIS technology was both feasible and cost effective and can improve the efficiency and safety of operations. In the 1999 shipping season, SLSDC and SLSMC deployed a modernized vessel Traffic Management System (TMS). Now, for the first time, all vessel control centers in the Saint Lawrence Seaway share a common vessel information database. Presently, vessel positions, derived from simulations based on transit histories of vessels, are entered manually into the TMS system by traffic controllers and then updated by voice reports from the vessels during actual transits.

AIS is a broadcast system, operating in the VHF maritime mobile band. It is capable of sending and receiving ship information such as identification, position, course, speed and more, to and from other ships and to and from shore. The Seaway TMS will send pertinent navigation information such as local wind speed and direction, water levels, ice conditions, availability of next lockage, and safety-related messages to vessels.

With the capabilities of ship-to-ship, ship-to-shore and shore-to-ship communications, AIS will greatly enhance the safety, improve the efficiency of the traffic management and increase the vessel security and emergency response capabilities. Specifically, the potential benefits of AIS for the Seaway entities include providing a more efficient vessel traffic management as a result of knowing accurate location and speed of the vessels, monitoring vessel speeds especially for hazardous cargo and deeper draft vessels and faster response time to vessels in case of security concerns and vessel accidents or incidents. The potential benefits to the carrier users include the reduction of overall transit time as a result of better scheduling of lockages and other services timely dispatching of pilots. It also provides real-time position, speed, heading and other pertinent information of the vessel, which will allow master or pilot to better coordinate on the meeting or overtaking in critical reaches of the Seaway.

On November 27, 2002, the SLSDC published a Notice of Proposed Rulemaking asking for public comment. The SLSDC received three comments. All three noted that the joint SLSDC-SLSMC rule would require use of AIS in the Seaway System in advance of the dates set by the International Maritime Organization (IMO) for certain commercial vessels to be permanently equipped with AIS units. One commenter also noted that the joint SLSDC-SLSMC requirement would also be in advance of the same requirement for the navigable waters of the United States under the “Maritime Transportation Security Act of 2002” (Pub. L. 107-295) (U.S. Act). The same commenter voiced concern that production of integrated AIS equipment would not be sufficient to ensure installation within the rule's timeframe. Another commenter also recommended that, since the SLSDC-SLSMC requirement would precede the IMO and the Act's effective dates, portable equipment be made available and its use allowed. The St. Lawrence Seaway is jointly operated under an International Agreement between the United States and Canada. It is an inland waterway to which the IMO requirements do not apply. Furthermore, the U.S. Act's does not apply in the navigable waters of Canada, transit through which is inextricably necessary for passage through the Seaway System. Thus, even if the requirement were not to apply in the navigable waters of the United States, ships would still be required to use it in Canadian waters. Entry into the Seaway System in either direction is only through Canada. Thus, making the rule applicable only in Canadian waters would be impractical. Moreover, the Shipping Federation of Canada, representing approximately 95% of the commercial oceangoing vessels using the Seaway, has actively supported the Seaway AIS initiative. In addition, according to the SLSMC, the Canadian Shipowners Association, representing the commercial non-oceangoing vessels (lakers) using the Seaway, expects 100% AIS equipage among its members. Notwithstanding, the SLSDC-SLSMC rule does not require permanent installation of integrated AIS equipment as required by the IMO and the U.S. Act before the effective dates of those two requirements. The rule will allow the use of temporary or, in some cases, portable equipment, for those vessels not permanently equipped at considerably less cost. The SLSDC and SLSMC have been working with private navigation equipment and service vendors in Montreal to ensure that rental, temporary AIS units will be available for vessels that do not have permanent shipboard AIS installation. Thus, even if permanent, integrated units were not available as alleged, these temporary units would be. Temporary AIS installation will meet all carriage requirements as specified for vessels required to be fitted with a gyro compass under the Seaway Regulations and Rules. In this regard, subparagraph (b)(6) of the rule has been changed to require “temporary” units meeting the requirements of subparagraphs (b)(1) through (5) for these vessels, as opposed to “portable units,” since portable units do not have the gyro compass connection. For vessels that do not have to meet the gyro compass requirement, use of portable units compatible to the requirements of subparagraphs (b)(1) though (3) and (b)(5) still will be allowed under a new subparagraph (b)(7). In addition, to be consistent with the IMO and U.S. Act requirements, subparagraph (a)(1) has been changed to apply only to “commercial” vessels that require pre-clearance and have a 300 gross tonnage or greater, have a Length Over All (LOA) over 20 meters, or carry more than 50 passengers for hire. Another comment was concerned about a possible lack of type approved AIS equipment. There are at least six major AIS transponder manufacturers in the world that have already obtained type approved certificates for AIS equipment from the IMO recognized testing houses such as BSH of Germany and Qinetiq of the United Kingdom. Finally, the reference in paragraph (b)(4) to the “International Maritime Organization (IMO) Guidelines for Installation of Shipborne Automatic Identification System (AIS), NAV 48/18, 2 April 2002, as amended” has been changed to reflect the final version of “6 January 2003.”

The SLSDC and the SLSMC are promulgating a new § 401.20 that requires mandatory use of AIS in Seaway waters from St. Lambert, Quebec to Long Point, mid-Lake Erie effective at the beginning of the 2003 navigation season, which is scheduled for March 25, 2003. All commercial vessels that require pre-clearance and have a 300 gross tonnage or greater, have Length Over All (LOA) over 20 meters, or carry more than 50 passengers for hire, will have to use an AIS transponder to transit the Saint Lawrence Seaway. Dredges and floating plants and towing vessels over 8 meters in length will also be required to use AIS, except only each lead unit of combined and multiple units (tugs and tows) will have to use it. Each vessel will have to meet the following international recommendations, standards, and guidelines:

1. International Maritime Organization (IMO) Resolution MSC.74(69), Annex 3, Recommendation on Performance Standards for a Universal Shipborne AIS, as amended;

2. International Telecommunication Union, ITU-R Recommendation M.1371-1: 2000, Technical Characteristics For A Universal Shipborne AIS Using Time Division Multiple Access In The VHF Maritime Mobile Band, as amended;

3. International Electrotechnical Commission, IEC 61993-2 Ed.1, Maritime Navigation and Radio Communication Equipment and Systems—AIS—Part 2: Class A Shipborne Equipment of the Universal AIS—Operational and Performance Requirements, Methods of Test and Required Test Results, as amended;

4. International Maritime Organization (IMO) Guidelines for Installation of Shipborne Automatic Identification System (AIS), NAV 48/18, 6 January 2003, as amended, and for ocean vessels only, with a pilot plug, as specified in Section 3.2 of those Guidelines, installed close to the primary conning position in the navigation bridge and a standard 120 Volt, AC, 3-prong power receptacle accessible for the pilot's laptop computer; and

5. Computation of AIS position reports using differential GPS corrections from the U.S. and Canadian Coast Guards' maritime Differential Global Positioning System radiobeacon services.

6. The use of a temporary AIS unit in compliance with Class A AIS transponder specifications and standards, as specified in 1 through 5 above, is permissible.

7. For each vessel less with LOA than 30 meters, the use of portable AIS unit compatible with AIS transponder specifications and standards, as specified in 1, 2, 3 and 5 above, is permissible.

This regulation involves a foreign affairs function of the United States and therefore Executive Order 12866 does not apply and evaluation under the Department of Transportation's Regulatory Policies and Procedures is not required.

The Saint Lawrence Seaway Development Corporation certifies that this regulation will not have a significant economic impact on a substantial number of small entities. The St. Lawrence Seaway Tariff of Tolls primarily relates to commercial users of the Seaway, the vast majority of whom are foreign vessel operators. Therefore, any resulting costs will be borne mostly by foreign vessels.

This regulation does not require an environmental impact statement under the National Environmental Policy Act (49 U.S.C. 4321, et reg.) because it is not a major federal action significantly affecting the quality of human environment. All nine AIS shore base stations (three in U.S. and six in Canada) are co-located with the existing Seaway VHF radio or private telephone towers.

The Corporation has analyzed this rule under the principles and criteria in Executive Order 13132, Dated August 4, 1999, and has determined that it does not have sufficient federalism implications to warrant a Federalism Assessment.

The Corporation has analyzed this rule under title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48) and determined that it does not impose unfunded mandates on State, local, and tribal governments and the private sector requiring a written statement of economic and regulatory alternatives.

This regulation has been analyzed under the Paperwork Reduction Act of 1995 and does not contain new or modified information collection requirements subject to the Office of Management and Budget review.

An interim final rule and request for comments was published in the Federal Register (65 FR 3127) on January 20, 2000. That interim rule implemented regulations 37 CFR part 4, concerning complaints regarding invention promoters.

Three (3) individuals, three (3) law firms, and two (2) organizations submitted written comments regarding the proposal to implement Part 4.

With regard to the definition of “invention promoter” in § 4.2(a), Commentator wants to know whether the Act is being interpreted to end protection once a regular application is filed under the exclusion in § 4.2(a)(3). Commentator believes any business that collects compensation for doing “an evaluation to determine commercial potential of * * * patent application” should be included within the scope of the Act.

Response: The rule and the Act contain an identical definition of “invention promoter.”

With regard to § 4.2(d), Commentator believes the use of the term “procurement” could be confusing because it is often used as a synonym for “acquire” and suggests replacing the term with “locate or identify” or “procurement of an arrangement or contract.”

Response: This definition of “invention promotion services” is identical to that contained in the Act. The definition is unambiguous.

Since § 4.3(b)(5) 1 requires that the complaint identify the name of the mass media in which the invention promoter advertises, Commentators believe that the address of the mass media entity should also be included in the complaint so that complainant or USPTO could send a copy of the complaint and reply to the media entity.

Response: This is an additional requirement beyond the requirements of the Act. See additional comment below under section 4.5.

Commentator suggests a “Sunset provision” which provides that complaints will not be “made public after three years from the date first received.” Commentator believes this is necessary in order to preclude stale complaints and complaints that do not take into account a company's modified and improved current practices.

Response: It is the USPTO's intent that complaints will be removed from its Internet home page three (3) years from the date of their publication. However, to the extent that the USPTO is required to make such documents publicly available under other statutory authority, the documents shall be retained.

Commentator suggests extending the proposed thirty (30) day response time to sixty (60) days to allow invention promoters sufficient time to investigate and respond to a complaint.

Response: Presently invention promoters respond to letters of complaint within the thirty (30) day time frame and additional time does not appear to be necessary. A response can include a statement that further investigation into the complaint is being done by the invention promoter. A second response will be accepted and published upon receipt as is provided in this section of the proposed rule. Furthermore, the USPTO will publish an invention promoter's response, even if it is received after the 30-day response period.

Commentator feels that the word “complaint” at the end of the sentence, “The invention promoter will be given 30 days from such notice to submit a reply to the complaint” should read “notice which reply includes name and address information where the complaint can be served by mail.”

Response: The final rule is modified because only a “Notice of Complaint” will have been reviewed by the invention promoter.

Commentators believe the Office's Internet home page should be the primary source of publication of the Notice of Complaint because inventors and the public at large do not have access to the Official Gazette or Federal Register.

Response: Change will be made in the final rule to specify that Notice of Complaints will be posted on the USPTO Internet home page only: http://www.uspto.gov.

In Commentator's experience only a small percentage of inventors use the Internet and, thus, publication of complaint and reply should be by paper publication, i.e., the Official Gazette or Federal Register.

Response: With today's knowledge-based economy and the move toward e-business it would be ineffective to use the print media to publish the complaints. By using USPTO's Internet web page, no further change to the rules would be needed in the future.

Commentators believe that the Office should forward a copy of a Notice of Complaint to the Federal Communications Commission (“FCC”) since the complaint discloses the name of the mass media entity that ran the advertisement for the invention promoter.

Response: Name of mass media may not reflect actual vendor or station where advertisements were placed. The FCC may access the Notice of Complaints through publicly available means.

With regard to the language: “If the Office does not receive a reply from the invention promoter within 30 days, the complaint alone will become publicly available.” Commentators believe that publicly available should include (1) publication on the Office's Internet home page, (2) sending a copy of the complaint and reply to the mass media entity, and (3) sending a copy of the complaint to the FCC. Commentators assert that mass media entities cannot do anything unless complaints are brought to their attention, and if so, these entities will take steps to check the credibility of the invention promoters.

Response: For reasons discussed above, complaints will be published on the USPTO Internet home page.

Commentator believes that to require invention promoters to monitor the Official Gazette, Federal Register, or Office's Internet home page for notice of complaints places an unfair burden on invention promoters in situations where a complaint has been returned undeliverable. Commentator does not, however, offer an alternative notice scheme.

Response: The source of publication will be the USPTO's Internet home page, thereby making the Notices of Complaint searchable and available at the earliest possible date.

Commentator believes that § 4.6 (in conjunction with § 4.3(c)) should be modified so that complaints are not required or permitted to include information about patent attorneys, unless the attorneys are engaged in invention promotion services, and these services are the basis for the complaint. Without this modification, commentator believes the Office is soliciting complaints concerning attorneys, regardless of whether the attorney's work is the basis for complaint. Commentator asserts that it is not improper or unethical for attorneys to accept referrals from invention promoters and that attorney complaints should be handled by the Office of Enrollment and Discipline (OED).

Response: The Act provides which attorneys or agents may be identified in a complaint. Any other complaint specifically addressing an attorney or agent is forwarded to OED or returned to complainant. A preliminary review of the complaint is conducted to determine the proper place for the complaint prior to any complaints being forwarded to an invention promoter, OED or returned to the complainant.

Commentators state that if their suggestions were adopted, they would “enhance the quality, utility, and clarity of information to be collected.”

Response: See above comments.

As prior notice and opportunity for public comment were not required pursuant to 5 U.S.C. 553(b)(3)(A), or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are inapplicable.

This rule does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132.

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

This rule contains a collection of information requirement subject to the Paperwork Reduction Act (PRA) and which OMB has approved under control number 0651-0044. Public reporting burden for this collection is estimated to average 15 minutes per response, including the time for reviewing instructions, gathering information, and completing and reviewing the collection of information.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

The SIP is a living document which the State can revise as necessary to address the unique air pollution problems in the state. Therefore, EPA from time to time must take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997, (62 FR 27968) EPA revised the procedures for incorporating by reference Federally-approved SIPs, as a result of consultations between EPA and OFR. The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997, Federal Register document. On June 16, 1999, EPA published a document in the Federal Register (64 FR 32348) beginning the new IBR procedure for Florida. In this document EPA is doing the update to the material being IBRed.

EPA has determined that today's rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). Today's rule simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by updating citations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves State law as meeting Federal requirements and imposes no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under State law and does not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 29, 2003. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

On January 13, 2000 (65 FR 2042), EPA published a final rule notice (FRN) regarding West Virginia's minor new source review and existing stationary source operating permit program. The FRN approved in part, and disapproved in part, changes to West Virginia's minor new source review permit program as a revision to the West Virginia SIP. With the exception of the two separate provisions included in West Virginia's submission, the FRN approved West Virginia's minor new source review and existing stationary source operating permit program under section 110 of the Act as meeting the criteria set forth in a June 28, 1989 Federal Register document (54 FR 27274) for state permit programs that can limit a source's potential to emit criteria pollutants. The FRN also approved West Virginia's minor new source review and existing stationary source operating permit program under section 112(l) of the Act as meeting the statutory criteria for state permit programs that can limit a source's potential to emit hazardous air pollutants (HAPs).

Concurrently, the FRN disapproved two separate provisions included in West Virginia's minor new source review and existing stationary source operating permit program. Specifically, the FRN disapproved an exemption from minor new source review for sources that have been issued permits under the State's Federally approved major source operating permit program (developed pursuant to Title V of the Clean Air Act) as such exemption did not comport with the federal requirements of 40 CFR 51.160 regarding the scope of the program. In addition, the FRN disapproved provisions governing the issuance of temporary construction or modification permits with only a 15-day public comment period as such provisions did not satisfy the Federal requirements for a 30-day comment period required by 40 CFR 51.161(b).

To address the deficiencies of West Virginia Regulation CSR13 described in the January 13, 2000 rulemaking action, the State of West Virginia submitted on September 21, 2000, a formal revision to its SIP. The submitted SIP, which consists of changes to West Virginia Regulation CSR13, applies statewide and corrects the deficiencies that formed the basis for the partial disapproval of West Virginia's minor new source review and existing stationary source operating permit program. In order to correct the deficiencies, the exemption from minor new source review for sources that have been issued permits under the State's Federally-approved major source operating permit program was removed. In addition, the provision governing the issuance of temporary construction or modification permits with a 15-day public comment period was revised to provide for a 30-day public comment period in order to be consistent with the federal requirements for public participation found at 40 CFR 51.161(b).

As part of its September 21, 2000 SIP revision, West Virginia also submitted a number of additional revisions intended to, among other things, streamline the permitting process. Those revisions include changes to the construction and modification thresholds; creation of a “de-minimis” source list; changes in the definitions of volatile organic compounds (VOCs) and HAPs; and, clarification of the definition of when “construction” commences. Also, West Virginia Regulation CSR13 was revised to incorporate an administrative process for making relatively minor permit revisions. The revised Regulation CSR13 contains modified public notice procedures, such as: eliminating the two-step notice from the previous regulation; establishing a 30-day notice for certain actions and a 45-day notice for the remainder; and, additional notice methods which may be required by the State. The revised regulation also provides further clarification regarding HAPs and toxic air pollutants and revised procedures for temporary permits. EPA has reviewed these revisions to West Virginia Regulation CSR13 and find that they are at least as stringent as the corresponding requirements of the Clean Air Act.

EPA is approving this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment from either the public or the regulated community. However, in the “Proposed Rules” section of today's Federal Register, EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective on April 29, 2003 without further notice unless EPA receives adverse comment by March 31, 2003. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action, to approve the West Virginia minor new source review and existing stationary source operating permit program, must be filed in the United States Court of Appeals for the appropriate circuit by April 29, 2003. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Throughout this document, “we,” “us” and “our” refer to EPA.

On June 24, 2002, we proposed to approve certain District rules into the California SIP. 67 FR 42516. We are finalizing that action today by approving the following District rules into the SIP:

We proposed to approve the District rules because we determined that they complied with the relevant CAA requirements, namely part D of title I and section 110(k) of the CAA. In the proposed action, we found that the District had corrected all of the deficiencies initially identified in our limited approval and limited disapproval published in the Federal Register on December 7, 2000. 65 FR 76567. The California Air Resources Board (“CARB”) submitted the District's revised rules addressing our identified deficiencies on May 20, 2002. In our proposed approval, we found that the District had corrected the following deficiencies: (1) Lack of a requirement for relocating sources to obtain an authority to construct (“ATC”) permit, (2) failure to require that emission reduction credits (“ERCs”) used as NSR emission offsets be surplus at the time of use, (3) failure to provide for denial of permits for sources in violation of Prevention of Significant Deterioration (“PSD”) increments, and (4) improper reliance on the California Environmental Quality Act (“CEQA”) analysis for the alternatives analysis required by section 173(a)(5) of the CAA. We received no comments on deficiency numbers 1, 3 and 4 or how the District corrected them. As such, for the complete discussion on these deficiencies and the corrections, please review our proposed approval and the TSD for that proposed action. We discuss the correction for deficiency number 2 in greater detail in this notice.

As part of the its revised NSR rules, the District created an annual equivalency demonstration program to correct the deficiency that ERCs used for NSR offset purposes are not required by the District to be surplus at the time of use.1 The basis for the approval of the annual equivalency demonstration program is contained in CAA section 173(a)(1)(A)'s mandate that new and modified stationary sources seeking to commence operating in a nonattainment area must be required by the state permitting program to obtain sufficient offsetting emission reductions (“offsets”) such that “the total allowable emissions from existing sources in the region, from new or modified sources which are not major emitting facilities, and from the proposed source will be sufficiently less than total emissions from existing sources * * * so as to represent reasonable further progress * * *.” This statutory focus on total regional emissions supports the approval of a District offset program that ensures equivalency with the federal NSR offset requirements on an annual aggregate basis. EPA is also working with other California Districts to help them craft approvable annual equivalency demonstration programs.2

The goal of the District's offset equivalency tracking system and annual reports, therefore, is to show that the District's rules are requiring appropriately discounted 3 ERCs that are, in the aggregate, equivalent to the credits that would be required under the federal major source NSR offset requirements. To show equivalency, pursuant to District Rule 26.11, the District intends to rely upon ERCs used in minor source permitting actions 4 to make up for any loss in the creditable amount of ERCs provided by a permit applicant for major source NSR permits due to surplus adjustment.

To ensure appropriate District implementation and EPA oversight of the annual equivalency program, the District and EPA entered into a memorandum of understanding (“MOU”) on February 18, 2003 describing in detail how the District will implement the annual equivalency program. Generally, the MOU sets forth the records to be maintained by the District, the information the District must include in each annual report submitted to EPA, and the necessary surplus analysis to be performed by the District at the time of permitting. The MOU also describes the proper use of the hammer provision, District Rule 26.11.C.6., which requires that the District discontinue the use of the equivalency program once an annual report demonstrates a deficit of creditable ERCs compared to the amount of reductions necessary to offset emissions for new or modified major NSR sources. As of the time the report demonstrates a deficit, the District rules require that sources provide enough surplus-adjusted ERCs to cover any required NSR offsets at the time of permitting. A copy of the MOU is in the Docket and is available to the public from the Region IX contact listed in this notice.

EPA's proposed action provided a 30-day public comment period. During this period, we received comments from the following parties:

• CARB; 5

• California Council for Environment and Economic Benefit (“CCEEB”);

• The District; and

• Pillsbury Winthrop on behalf of Western States Petroleum Association (“WSPA”).

The commentors generally supported our action to approve the District rules into the SIP and the creation of the annual equivalency demonstration program. The majority of substantive comments focused on our interpretation of what emission reductions are considered non-surplus under Section 173(c)(2). This interpretation is important since the NSR District rules being approved closely track the language of section 173(c)(2), which explicitly excludes emission reductions that are “otherwise required by” the CAA from use as an NSR offset. As section 173(c)(2) does not specifically delineate the type of requirements included within its scope, EPA's interpretation of the application of the provision is very important for proper implementation of the NSR program.

In our proposed approval, we described six categories of emission reductions that we consider non-surplus for NSR offset purposes. Emission reductions falling under any of these categories are therefore not available for use as NSR offsets, whether directly in a permitting action or through their use in an annual equivalency demonstration. In response to comments received on the proposed approval and after further consideration, we are slightly revising item numbers 2 and 5 to be more consistent with the CAA.6 Since this list of non-surplus reductions is only EPA's interpretation of section 173(c)(2) and District Rule 26.1.28.b. and does not require any change to the District's rules being approved today, the revision of the list does not affect the approvability of the District's rules. Moreover, the finalized list has been incorporated into the MOU between the District and EPA, which further ensures that the annual equivalency demonstration program, including surplus adjustment of ERCs, will be properly implemented.

The following is the revised and final list of what we consider to be non-surplus emission reduction categories:

(1) Any emission reduction required by a stand-alone federal requirement or regulation, including, but not limited to, Acid Rain, New Source Performance Standard, Reasonably Available Control Technology, and Maximum Achievable Control Technology, whether or not the requirements are part of the State Implementation Plan (“SIP”) or a local attainment plan.

(2) Any emission reduction relied upon by a permitting authority for attainment purposes, or contained in an approved attainment plan, including emission reductions relied upon for Reasonable Further Progress calculations. Reference 51.165(a)(3)(ii)(G).

(3) Any emission reduction whose original emission is not included in the District's emission inventory. Reference 51.165(a)(3)(ii)(C)(1).

(4) Any emission reduction based on a source-specific or source category-specific SIP provision used to comply with CAA requirements.

(5) Any emission reduction required by a condition of a permit issued to comply with CAA new source review requirements. Any emission reduction required by a permit condition placed on a permit solely: 1) to make the reduction federally enforceable to meet federal creditability criteria for use of the reduction as an offset for new source review purposes, or 2) to assure compliance with a state or local requirement that is not federally enforceable shall not be included in this class. Reference 51.165(a)(3)(ii)(G).

(6) Any emission reduction based on a source-specific emission limitation resulting from an Environmental Protection Agency enforcement case.

The specific comments and EPA responses are summarized below:

Comment 1: CCEEB commented that “Section 173(c)(2) * * * does not provide that banked emission reductions, which were not required when banked, must be adjusted again to reflect later-adopted emission reduction requirements. Further, EPA has not promulgated any regulation to require such discounting.” WSPA provided an almost identical comment.

Response 1: We disagree with CCEEB's and WSPA's comments. The requirement for discounting at the time of use derives from the statutory requirement that emission reductions be surplus of CAA requirements. CAA section 173(c)(2). In a 1994 memorandum, EPA set forth its policy that banked ERCs used as NSR offsets must be adjusted at the time of permit issuance to ensure that they are surplus as required by section 173(c)(2). Memo from John S. Seitz, Dir., OAQPS to David Howekamp, Dir., Region IX Air and Toxics Div. (Aug. 26, 1994) (“1994 Seitz Memo”). This is important to ensure that emission reductions are not “double-counted” for CAA purposes, something prohibited by the CAA. Double counting can occur where emission reductions are the result of, or would have been achieved by, controls expressly required by the Act or controls used to satisfy requirements of the Act. For example, a source may voluntarily reduce its emission of hazardous air pollutants (“HAPs”) and bank those credits at the time of reduction. Some time after these reductions are achieved, EPA promulgates a Maximum Achievable Control Technology (“MACT”) standard that applies to the source. Though these credits may be permanent, real, quantifiable, and enforceable, the promulgation of the new MACT standard would render the portion of the banked ERC that would have been required by the new MACT standard unavailable for NSR offset purposes because it is no longer in excess of requirements under the Act. This is important since many HAPs are also considered volatile organic compounds (“VOCs”). Without a requirement to discount ERCs at the time of use, sources could be relying upon emission reductions that were otherwise required by the CAA. Moreover, the SIP may take credit for the reductions achieved by this MACT rule, raising the further possibility that the reductions would be double-counted for attainment purposes if not surplus adjusted at the time of use.

More than just preventing possible double counting, however, adjusting at the time of use is important to generally ensure proper implementation of the NSR program. The CAA does not require or provide for ERC banking programs, which means that there are no federal requirements ensuring the quality of banks or banked credits for federal offset purposes. Because of this, a surplus at the time of use analysis and appropriate adjustment provides an important first and only review of the proposed ERC's consistency with NSR CAA offset requirements. Without such a review, EPA could not assure that sources were complying with NSR offset requirements of the CAA since most ERCs were banked without EPA review and many without supporting documentation or information.

Despite the necessity for surplus adjustment at the time of use, EPA has worked with the District to create a system where sources may be able to rely on banked ERCs while at the same time maintaining the integrity and legality of the District's NSR program. Through the use of the annual equivalency demonstration program, EPA is allowing the District to give full credit to ERCs provided by major sources for NSR permitting activities as long as the District can identify other retired or used creditable emission reductions that make up for the difference within the year accounting period.

Comment 2: Item number 3 in the list of categories of non-surplus emission reductions in the proposed approval reads “any emission reduction whose original emission reduction is not included in the District's emission inventory. See 40 CFR 51.165(a)(3)(ii)(C)(1).” The District commented that “[t]he citation [40 CFR § 51.165(a)(3)(ii)(C)(1)] refers * * * only to ‘(e)missions reductions achieved by shutting down an existing source or curtailing production or operating hours below baseline levels’. There is not a requirement in the Code of Federal Regulations to include an emission reduction resulting from a source employing emission reduction techniques, not otherwise required by the federal CAA, in the District's emission inventory.”

Response 2: 40 CFR 51.165 describes the minimum regulatory requirements for an approvable state NSR permitting program. 40 CFR 51.165(a)(3)(ii)(C)(1), which deals with offsets, states that reductions achieved by shutting down an existing source or curtailing production or operating hours below baseline levels may generally be credited in NSR permitting actions if such reductions are permanent, quantifiable, and federally enforceable, and if the area has an EPA-approved attainment plan. In contrast to the meaning given to it in the District's comment, the provision serves the narrow purpose of stating that ERCs generated by shutting down a source or curtailing production or operating hours can only be used if there is an EPA-approved attainment plan and if the item is “explicitly” included in the most recent emissions inventory. The provision is essentially a safeguard to make sure that emissions from defunct sources are not replaced with new emissions without appropriate review to ensure that such replacements are consistent with attainment purposes for the area. The provision in no way limits or changes the necessity that all emission reductions used for NSR offsetting purposes be incorporated into the area's emission inventory, either explicitly or implicitly. The use of emission reductions for NSR purposes whose original emissions are not included in the emissions inventory, and therefore not considered in the planning process, would be adding new unaccounted emissions into the area thus potentially jeopardizing attainment goals. As such, EPA has maintained the definition for this category as originally proposed.

Comment 3: CCEEB commented that “if an air district includes banked ERCs as a line item in its portion of the SIP, the ERCs are accounted for as emissions in the air and are mitigated by measures in the plan. To discount such ERCs at the time of use would result in a “double mitigation.” CCEEB requests that EPA clarify in the future related notices that EPA does not require discounting of ERCs at time of use where the use of ERCs has been mitigated by other specific measures for rate of progress or attainment demonstration purposes.”

Response 3: EPA disagrees with CCEEB on its comment. CCEEB's approach would essentially allow any emission reduction to be used for NSR offset purposes even if it was required by a provision of the CAA as long as it was incorporated into the area's emissions inventory and accounted for in the area's attainment plan. CCEEB justifies this proposition by the fact that the ERC “has been mitigated by other specific measures for rate of progress or attainment demonstration purposes,” and therefore should be allowed as an NSR offset. Allowing the use of such an ERC as an NSR offset, however, would be counter to section 173(c)(2)'s prohibition against use of emission reductions that are otherwise required by the CAA. The mere fact that an ERC is recognized in the inventory and accounted for in the attainment plan and rate of progress in no way “mitigates” the fact that the reduction was elsewhere required under the CAA.7

Comment 4: Item number 5 in the list of categories of non-surplus emission reductions in the proposed approval reads “any emission reduction required by a condition of a permit issued to comply with NSR CAA requirements.” CCEEB commented that “[t]his item is of concern because air permits in California will typically include requirements that are not required under Federal law. Such requirements are not required by the federal Clean Air Act and should be considered surplus to Federal requirements. This item should not be listed in its current form as an emission reduction that is required by the Act.” WSPA provided an almost identical comment.

Response 4: We agree with CCEEB and WSPA, and modified item number 5 accordingly. Specifically, in the updated interpretation provided in this final action and embodied in the MOU, we recognize that the following requirements contained in a federally enforceable NSR permit should not automatically disqualify the emission reduction from use as an NSR offset: (1) Requirements to make the reduction federally enforceable to meet Federal creditability criteria for use of the reduction as an offset for new source review purposes, or (2) requirements to assure compliance with a state or local requirement that is not federally enforceable. This change addresses the commentors' concerns.

No comments were submitted that change our assessment that the submitted rules comply with the relevant CAA requirements. Therefore, as authorized in section 110(k)(3) of the Act, EPA is approving these rules into the California SIP.8

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 29, 2003. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

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

On October 7, 2002 (67 FR 62432), EPA published a notice of proposed rulemaking (NPR) for the State of North Dakota. The NPR proposed approval of revisions to the State Implementation Plan (SIP) submitted by the Governor of North Dakota with a letter dated June 21, 2001. The revisions affect air pollution control rules regarding general provisions, emissions of particulate matter and fugitives, exclusions from Title V permit to operate requirements, and prevention of significant deterioration. As indicated in the NPR, the submittal also included direct delegation requests for emission standards for hazardous air pollutants for source categories and the State's Acid Rain Program, which we will handle separately.

The revisions being addressed in this document involve the following chapters of the North Dakota Administrative Code (N.D.A.C.): 33-15-01 General Provisions; 33-15-05 Emissions of Particulate Matter Restricted; 33-15-14 Designated Air Contaminant Sources, Permit to Construct, Minor Source Permit to Operate, Title V Permit to Operate (subsection specific to exclusions from Title V permit to operate requirements only); 33-15-15 Prevention of Significant Deterioration; and 33-15-17 Restriction of Fugitive Emissions. For a detailed description of the revisions, please refer to our October 7, 2002 NPR (62 FR 62432).

A brief summary of the revisions is as follows. In the General Provisions chapter, the definition for “public nuisance” was removed and changes were made to clarify reporting requirements when stack testing for air contaminant emissions. In the Emissions of Particulate Matter Restricted chapter, the State incorporated reference information from the Federal rules. Also, the State repealed its requirements for existing infectious waste incinerators because these requirements are now addressed in the State's plan for the control of emissions from existing hospital/medical/infectious waste incinerators, which was approved by EPA in a May 13, 1999 Federal Register document (64 FR 25831). In the Restriction of Fugitive Emissions chapter, the State deleted a reference to nuisances and replaced it with a requirement that a source cannot cause air pollution as defined in the general provisions chapter (the State believes that its definition of “air pollution” covers nuisances). The above changes are consistent with Federal requirements and, therefore, are approvable.

In the Designated Air Contaminant Sources, Permit to Construct, Minor Source Permit to Operate, Title V Permit to Operate chapter, a new subsection entitled “Source Exclusions from Title V Permit to Operate Requirements” was added to provide an exemption from the Title V permitting requirements for certain gasoline service stations, bulk gasoline plants, coating sources, printing, publishing and packaging operations, degreasers using volatile organic solvents, and hot mix asphalt plants. This exclusionary rule creates generic potential-to-emit (PTE) limits for specific source categories, and thereby clarifies which of the sources within the specific categories are minor with respect to the Title V operating permit requirements. The rule does not exclude these certain sources from North Dakota's construction or minor source operating permit programs. We are approving this new subsection, 33-15-14-07, under section 110 of the Clean Air Act, which allows us to approve preconstruction permit programs and rules and non-title V operating permit programs and rules.

In the Prevention of Significant Deterioration (PSD) chapter, the definition of “significant” was updated to match the Federal definition. In addition, a provision was removed that required the North Dakota Department of Health (NDDH) to consult with an impacted state prior to approving a PSD source permit application that will consume more than half of the available increment in the other state. These revisions are consistent with Federal requirements and, therefore, are approvable.

We received adverse comments from the Dakota Resource Council, submitted in a letter dated November 6, 2002, regarding our proposed approval of the revisions to the North Dakota PSD rule (NDAC 33-15-15). Specifically, the commenter disagrees with our approval of the repeal of the provision that required NDDH to consult with an impacted state prior to approving a PSD source permit application that will consume more than half of the available increment in the other state. It is the commenter's belief that removal of this provision relaxes the SIP and is in conflict with section 110(a)(2)(D)(i)(II) of the Clean Air Act, which requires SIPs to include provisions prohibiting any source within a state from emitting any air pollutant which will interfere with measures to prevent significant deterioration of air quality in any other state's applicable implementation plan. The commenter believes that we must not approve the removal of this provision without the State demonstrating that there are other provisions in the North Dakota SIP that ensure that sources in North Dakota will not interfere with other states' plans to prevent significant deterioration of air quality.

We agree with the need for such a demonstration from the State and specifically requested it during our review of these revisions in draft form. In a November 28, 2000, letter from Jeffrey L. Burgess, NDDH, to Dick Long, EPA Region VIII, the State provided such assurances. Specifically, the State indicated that its PSD rules contain all of the notification requirements in the Federal rules (see 40 CFR 51.166 and 40 CFR 52.21), including notification during the public comment period to an affected state (see North Dakota Administrative Code (NDAC) 33-15-15-01.5.b.). Although there is no longer a consultation requirement, there are still requirements under North Dakota's PSD program for the NDDH to provide notice to any state, Federal Land Manager, or Indian governing body whose lands may be significantly affected by emissions from a proposed source or modification (see NDAC 33-15-15-01.5.b(4)). This notification usually takes the form of a copy of the public notice, a copy of the related analyses, and a copy of the draft permit. The affected parties then have the opportunity during the public comment period to provide comments to the NDDH. The deletion of the language regarding consultation with an affected state was made to make the State rules more consistent with Federal requirements (40 CFR 51.166 and 40 CFR 52.21 do not include this requirement).

Since the revisions to this chapter are consistent with Federal requirements, and the State has demonstrated that there are other provisions in the SIP to ensure that sources in North Dakota will not interfere with other states' plans to prevent significant deterioration of air quality, we believe the revisions are approvable.

Section 110(l) of the Clean Air Act states that a SIP revision cannot be approved if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress towards attainment of the National Ambient Air Quality Standards (NAAQS) or any other applicable requirements of the Act. The North Dakota SIP revisions that are the subject of this document do not interfere with the maintenance of the NAAQS or any other applicable requirements of the Act. The SIP revision amends the State's General Provisions and Methods of Measurement and these changes are consistent with Federal requirements and rules. The repeal of requirements for existing infectious waste incinerators does not interfere with the maintenance of the NAAQS or any other applicable requirements of the Act because these requirements are addressed in the State's plan for the control of emissions from existing hospital/medical/ infectious waste incinerators, which was approved by EPA in a May 13, 1999 Federal Register document (64 FR 25831). The new rules that provide for source exclusions from the title V permit to operate requirements are consistent with EPA's authority to approve exclusionary rules under section 110 of the Clean Air Act and the rules do not interfere with the maintenance of the NAAQS or any other applicable requirements of the Act because they are consistent with the April 14, 1998, EPA guidance from John Seitz, Director of the Office of Air Quality Planning and Standards, entitled “Potential to Emit (PTE) Guidance for Specific Source Categories.” The update to the State's PSD rules mirror the Federal rules. Finally, the State's removal of the term “nuisance” does not interfere with the maintenance of the NAAQS or any other applicable requirements of the Act since nuisances can still be addressed under the State's definition of “air pollution.”

EPA is approving North Dakota's SIP revision, as submitted by the Governor with a letter dated June 21, 2001. The revisions in the June 21, 2001 submittal which are being approved in this document involve sections of the following chapters of the North Dakota Administrative Code: 33-15-01 General Provisions; 33-15-05 Emissions of Particulate Matter Restricted; 33-15-14 Designated Air Contaminant Sources, Permit to Construct, Minor Source Permit to Operate, Title V Permit to Operate (specifically, subsection 33-15-14-07, Source Exclusions from Title V Permit to Operate Requirements); 33-15-15 Prevention of Significant Deterioration; and 33-15-17 Restriction of Fugitive Emissions. The June 21, 2001 submittal also included requests for direct delegation of Chapter 33-15-21, Acid Rain Program and Chapter 33-15-22, Emission Standards for Hazardous Air Pollutants for Source Categories, which are being handled separately.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 29, 2003. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

In the physician fee schedule final rule with comment period published on December 31, 2002 (67 FR 80018), following notice and comment, we announced a 4.4 percent reduction in the physician fee schedule conversion factor (CF) for 2003. As explained in the December 31, 2002, final rule, we determined the 4.4 percent reduction to the CF using the formula specified in statute. We explained that the statute did not allow us to use later, after the fact, data to revise estimates that were used to determine the sustainable growth rates (SGRs) for fiscal year (FY) 1998 and FY 1999 for the purposes of determining future updates to the physician fee schedule. We further indicated our preference for revising these estimates and establishing a positive update to CY 2003 physician fee schedule rates, if the Congress changed the law to permit these revisions, and we requested comments on how physician fee schedule rates could and should be recalculated prospectively in the event that the Congress provided the Department with legal authority to revise estimates used to establish the SGRs for FY 1998 and FY 1999 and the MVPS for 1990 through 1996.

On February 13, 2003, the Congress enacted the Consolidated Appropriations Resolution of 2003 (CAR), (Pub. L. 108-7) that was signed into law by the President on February 20, 2003. Before enactment of section 402(a) of the CAR, section 1848(i)(1)(C) of the Social Security Act (the Act) precluded judicial review of “the determination of conversion factors under subsection (d).” Section 402(a) of the CAR amended section 1848(i)(1)(C) of the Act to preclude judicial review of “the determination of conversion factors under subsection (d), including without limitation a prospective redetermination of the sustainable growth rates for any or all previous fiscal years.” We believe that with this amendment, section 1848, read as a whole, now permits revision of all earlier fiscal year SGRs for the purposes of allowing prospective application of those revisions to future physician fee schedule updates (that is, to the CY 2003 physician fee schedule update). Thus, we are now revising the FY 1998 and FY 1999 SGRs for the purposes of determining future updates to the physician fee schedule including a new physician fee schedule update that will apply from March 1 to December 31, 2003.

As we noted in our final rule of December 31, 2002, CMS believes the estimates used to set the SGRs for FY 1998 and FY 1999 were 6.4 percent lower than if after-the-fact, actual data could have been used, with the greatest differences arising from fee-for-service enrollment in Medicare and real per capita growth in the gross domestic product (GDP). The reasons for the differences between these estimates and later, after-the-fact actual data for 1998 and 1999 are described in more detail below. We noted in our December 31, 2002, final rule that as a result of using estimates in determining the SGRs for FY 1998 and FY 1999, physicians would receive lower payments for their services than if the SGRs and allowed expenditures for those fiscal years were recalculated to reflect later, after-the-fact actual data.

Although the estimates used to set the SGRs for 1998 and 1999 may have been different from later, after-the-fact actual data, before the enactment of section 402(a) of the CAR, section 1848 of the Act did not permit the SGRs for these two fiscal years (1998 and 1999) to be revised later, once “actual” data, or better estimated data became available.

In addition to our final rule of December 31, 2002, we set forth this position in several of our annual notices in previous years in which we announced the CF for the coming year. (“We will not be able to make adjustments to the [1998 and 1999] SGRs based on later data.” 64 FR 53394. See also 63 FR 69188.) These notices indicated that section 1848 of the Act did not provide the necessary authority to revise the original estimates used to establish the SGRs for FY 1998 and FY 1999 for the purposes of establishing physician fee schedule updates for future years. We believe that as amended by the recently enacted CAR, section 1848 as a whole now permits the prospective redetermination of SGRs for these two previous years.

Section 402(a) of the CAR added language to the “non-reviewability” provisions of section 1848(i) of the Act. Section 402(a) added the phrase “including without limitation a prospective redetermination of the sustainable growth rate for any or all previous fiscal years” to a non-reviewability provision that already existed at section 1848(i)(1)(c). Use of the word “including” in statutory language is typically constructed to mean “including but not limited to.” In other words, we believe that the Congress added the new language as a new, non-exclusive example of the instances of non-reviewability that already exist. The example in the added phrase refers to a “prospective redetermination of the sustainable growth rate for any or all fiscal years.” (Emphasis added). Prior to the enactment of section 402(a) of the CAR, the substantive provisions of section 1848 of the Act provided only for the prospective redetermination of the SGR for one “fiscal year,” that “fiscal year” being FY 2000. The Balanced Budget Refinement Act of 1999 (BBRA) amended section 1848(f)(3) of the Act to change the physician fee schedule to a calendar year system of calculating the SGR beginning in “calendar year” 2000. Thus, we believe that section 402(a) demonstrates the Congress's intent that section 1848 as a whole be read to permit a prospective redetermination of the SGRs for “any or all” “fiscal” years in the plural, to wit, fiscal years 1998 and 1999, in addition to fiscal year 2000. Section 402(a) of the CAR calls for a change in the agency's prior interpretation of section 1848 of the Act as precluding any revision of the SGRs for fiscal years 1998 and 1999 to permit prospective redetermination of SGRs for these “fiscal years” in addition to existing authority for fiscal year 2000. This reading of section 402(a) of the CAR is consistent with the congressional intent behind section 402(a). The Conference Report for the CAR notes that section 402(a) is intended to “[provide] legal protection for the Administration should they make corrections to data errors in the physician payment formula for past fiscal years.” (House Rpt. 108-10).

These prospective redeterminations will not have, and are not intended to have, any effect on physician fee schedule payment rates for previous years. (We are making no further revisions to the FY 2000 SGR because section 1848(f)(3) of the Act expressly specifies that we were to make the final revisions to the FY 2000 SGR on the basis of the best data available to the Secretary as of September 1, 2001. Accordingly, we made our final revisions to the FY 2000 SGR in a final rule published in the Federal Register on November 1, 2001 (66 FR 55319).)

In this final rule, we are announcing that for the purposes of determining future physician fee schedule updates, including the update for 2003, the SGR was 3.2 percent for FY 1998 and 4.2 percent for FY 1999. This is a change of 1.7 percentage points for FY 1998 and 4.5 percentage points for FY 1999. We will make no further revisions to the SGRs for these years. We are also announcing a 1.6 percent increase to the physician fee schedule CF that will apply from March 1 to December 31, 2003. Therefore, the physician fee schedule CF from March 1 to December 31, 2003, will be $36.7856, an increase of 1.6 percent from the 2002 CF. The anesthesia CF for this period will be $17.05, an increase of 2.7 percent from the 2002 anesthesia CF. In our December 31, 2002 final rule (67 FR 80032), we described our calculation of the 2003 physician fee schedule and anesthesia fee schedule CFs. Any information contained in this final rule related to the 2003 physician or anesthesia fee schedule CFs replaces the information contained in the December 31, 2002, final rule. Further, we are making one revision to our estimate of the CY 2002 SGR. As described below, we are increasing our estimate of the 2002 SGR by 0.2 percentage points to reflect the costs of the new diabetes self-management training benefit. All other provisions of the December 31, 2002, final rule are unchanged by this final rule.

In the December 31, 2002, final rule, we specifically requested comments on the revision of estimates used to establish the Medicare Volume Performance Standard from 1990 through 1996 and the SGRs from FY 1998 and FY 1999. We will respond to any comments received on these issues in a future Federal Register publication.

The physician fee schedule update is determined under a methodology specified by statute. Under section 1848(d)(4) of the Act, the update is equal to the product of 1 plus the percentage increase in the Medicare Economic Index (MEI) (divided by 100) and 1 plus the update adjustment factor. For CY 2003, the MEI is equal to 3.0 percent (1.030). The update adjustment factor is now equal to −1.1 percent (0.989). Section 1848(d)(4)(F) of the Act requires an additional −0.2 percent (0.998) reduction to the update for 2003. Thus, the product of the MEI (1.030), the update adjustment factor (0.989), and the statutory adjustment factor (0.998) equals the CY 2003 update of 1.66 percent (1.0166). As described below, we are also making an adjustment of −0.04 percent to maintain budget neutrality for the increase in anesthesia work. With the budget-neutrality adjustment, the increase in the physician fee schedule CF will be 1.62 percent (1.0162).

Section 1848(d) of the Act provides that the physician fee schedule update is equal to the product of the MEI and an “update adjustment factor.” The update adjustment factor is applied to make actual and target expenditures (referred to in the law as “allowed expenditures”) equal. Allowed expenditures are equal to actual expenditures in a base period updated each year by the SGR. The SGR sets the annual rate of growth in allowed expenditures and is determined by a formula specified in section 1848(f) of the Act.

Under section 1848(d)(4)(A) of the Act, the physician fee schedule update for a year is equal to the product of— (1) 1 plus the Secretary's estimate of the percentage increase in the MEI for the year, divided by 100 and (2) 1 plus the Secretary's estimate of the update adjustment factor for the year. Under section 1848(d)(4)(B) of the Act, the update adjustment factor is equal to the sum of the following—

i. Prior Year Adjustment Component. An amount determined by—

• Computing the difference (which may be positive or negative) between the amount of the allowed expenditures for physicians' services for the prior year (the year prior to the year for which the update is being determined) and the amount of the actual expenditures for such services for that year;

• Dividing that difference by the amount of the actual expenditures for such services for that year; and

• Multiplying that quotient by 0.75.

ii. Cumulative Adjustment Component. An amount determined by—

• Computing the difference (which may be positive or negative) between the amount of the allowed expenditures for physicians' services from April 1, 1996, through the end of the prior year and the amount of the actual expenditures for such services during that period;

• Dividing that difference by actual expenditures for such services for the prior year as increased by the sustainable growth rate for the year for which the update adjustment factor is to be determined; and

• Multiplying that quotient by 0.33.

As explained above, we are making final prospective redeterminations to the FY 1998 and FY 1999 SGRs in this final rule for the purposes of determining future physician fee schedule updates. We are also making prospective redeterminations to allowed expenditures for the period from April 1, 1997, to March 31, 1999, because allowed expenditures during this period are affected by revisions to the FY 1998 and FY 1999 SGRs. Further, allowed expenditures in all subsequent periods are based on allowed expenditures from this period and are also being prospectively redetermined. Table 1 shows annual and cumulative allowed expenditures for physicians' services from April 1, 1996, through the end of the current CY, including the transition period to a CY system that occurred in 1999, incorporating the redeterminations we are making to the SGRs for FY 1998 and FY 1999.

Consistent with section 1848(d)(4)(E) of the Act, Table 1 includes our final revision of allowed expenditures for 2001 and prior periods, a recalculation of allowed expenditures for 2002, and our initial estimate of allowed expenditures for 2003. We will be making further revisions to the 2002 and 2003 SGRs and allowed expenditures later this year through the normal rulemaking process. To determine the update adjustment factor for March 1 to December 31, 2003, we are using cumulative allowed expenditures from April 1, 1996, through December 31, 2002, actual expenditures through December 31, 2002, and the SGR for 2003, as well as annual allowed and actual expenditures for 2002. We are using estimates of allowed expenditures for 2002 and 2003 that will subsequently be revised consistent with section 1848(d)(4)(E) of the Act. Because we are continuing to receive expenditure data for 2002, we are using an estimate for this period. Any differences between current estimates and final figures will be taken into account in determining the update adjustment factor for future years.

We are using figures from Table 1 in the statutory formula illustrated below:

Actual02 = Estimated Actual Expenditures for 2002 = $69.1 billion

Section 1848(d)(4)(A)(ii) of the Act indicates that 1 should be added to the update adjustment factor determined under section 1848(d)(4)(B) of the Act. Thus, adding 1 to −0.011 makes the update adjustment factor equal to 0.989.

As discussed above, the SGR is an annual growth rate that applies to physicians' services paid for by Medicare. The use of the SGR is intended to control growth in aggregate Medicare expenditures for physicians' services. Payments for services are not withheld if the percentage increase in actual expenditures exceeds the SGR. Rather, the physician fee schedule update, as specified in section 1848(d)(4) of the Act, is adjusted based on a comparison of allowed expenditures (determined using the SGR) and actual expenditures. If actual expenditures exceed allowed expenditures, the update is reduced. If actual expenditures are less than allowed expenditures, the update is increased.

Section 1848(f)(2) of the Act specifies that the SGR is equal to the product of the following four factors:

(1) The estimated change in fees for physicians' services.

(2) The estimated change in the average number of Medicare fee-for-service beneficiaries.

(3) The estimated projected growth in real GDP per capita.

(4) The estimated change in expenditures due to changes in law or regulations.

In this final rule, we are making prospective redeterminations of the SGRs for FY 1998 and FY 1999 for the purposes of determining future physician fee schedule updates, including the update for 2003. We are also making a minor revision to the SGR for 2002.

The revised FY 1998 SGR is 3.2 percent. Table 2 shows the estimated figures that we used to determine the FY 1998 SGR from the October 31, 1997, Federal Register (62 FR 59263), and the revised final figures.

This factor was calculated as a weighted average of the FY 1998 fee increases for the different types of services included in the definition of physicians' services for the SGR that applied in FY 1998. Medical and other health services paid using the physician fee schedule accounted for approximately 91.5 percent of total allowed charges included in the SGR in FY 1998 and are updated using the MEI. The weighted average of the MEI that applied for the calendar years included in FY 1998 was 2.2 percent. (“Incident to” drugs, which are also included in the SGR, are paid using the average wholesale price methodology. Consistent with the methodology used prior to 2003, we used the MEI as a proxy for growth in “incident to” drug prices for both the FY 1998 and FY 1999 SGRs). Diagnostic laboratory tests represent approximately 8.5 percent of Medicare allowed charges included in the SGR in FY 1998. The costs of these tests are typically updated by the CPI-U. Although section 1833(h)(2)(A)(ii)(IV) of the Act required a 0.0 percent update for laboratory services for 1998 to 2002, we used a 3.0 percent update for laboratory services in 1998 to determine the estimated SGR. We are now using a 0.0 percent update for laboratory services for the 9 months of calendar year 1998 that are included in FY 1998. The weighted average of the laboratory update applied in the calendar years included in FY 1998 was 0.8 percent. We determined a weighted average of the MEI and the laboratory updates that applied in FY 1998 using the following information:

After taking into account the elements described in table 3, we now estimate that the weighted-average increase in fees for physicians' services in FY 1998 under the SGR (before applying any legislative adjustments) was 2.0 percent. This figure is 0.3 percentage points lower than the estimate we made of this factor in the October 31, 1997, Federal Register (62 FR 59265) because of the revision we have made to the update for laboratory services.

This factor is our estimate of the percent change in the average number of fee-for-service enrollees from FY 1997 to FY 1998. Services provided to Medicare+Choice (M+C) plan enrollees are outside the scope of the SGR and are excluded from this estimate. Our actuaries have now determined that the average number of Medicare Part B fee-for-service enrollees actually decreased by 2.3 percent from FY 1997 to FY 1998. Table 4 illustrates how this figure was determined:

As we have stated repeatedly, an important factor affecting fee-for-service enrollment is beneficiary enrollment in M+C plans. Because it is difficult to estimate the size of the M+C enrollee population before the start of a calendar year, we cannot predict how actual enrollment in M+C plans during the year will compare to our Actuary's estimates. Despite the difficulty in predicting these figures, the actual decrease in Medicare fee-for-service enrollment of 2.3 percent was almost identical to the Actuary's estimate in 1997 (−2.4 percent).

Actual growth in real per capita GDP from FY 1997 to FY 1998 was 3.2 percent or 2.1 percentage points higher than the 1.1 percent estimate we made in 1997. The large difference between our estimate and the actual growth in real per capita GDP reflects the difficulty in predicting economic growth before the beginning of a year.

The Balanced Budget Act (BBA) of 1997 established or changed coverage for screening mammography, colorectal cancer screening, and screening PAP smears. The BBA also included payment provisions related to nurse practitioners, clinical nurse specialists and physician assistants, Medicare secondary payer, and clinical diagnostic laboratory services. In 1997, we estimated that the net cost of these provisions would increase the FY 1998 SGR by 0.6 percent. Based on the lower than anticipated expenditures for screening mammography and nurse practitioners, clinical nurse specialists and physician assistants, we now estimate that the net cost of these provisions increased the FY 1998 SGR by 0.3 percent.

The revised SGR for FY 1999 is 4.2 percent for the purposes of determining future physician fee schedule updates. Table 5 shows the estimated figures that we used to determine the FY 1999 SGR from the November 2, 1998, Federal Register (63 FR 59188), and the revised final figures.

This factor was calculated as a weighted average of the FY 1999 fee increases for the different types of services included in the definition of physicians' services for the SGR that applied in FY 1999. Medical and other health services paid using the physician fee schedule accounted for approximately 92 percent of total allowed charges included in the SGR in FY 1999 and are updated using the MEI. The weighted average of the MEI that applied for the calendar years included in FY 1999 was 2.3 percent. Diagnostic laboratory tests represent approximately 8.0 percent of Medicare allowed charges included in the SGR in FY 1999. During FY 1999, section 1833(h)(2)(A)(ii)(IV) of the Act required a 0.0 percent update for laboratory services. We determined a weighted average of the MEI and the laboratory updates that applied in FY 1999 using the following information:

After taking into account the elements described in table 6, we now estimate that the weighted-average increase in fees for physicians' services in FY 1999 under the SGR (before applying any legislative adjustments) was 2.1 percent. This figure is unchanged from our original estimate of the weighted-average increase in fees for physicians' services in FY 1999.

This factor is our estimate of the percent change in the average number of fee-for-service enrollees from FY 1998 to FY 1999. Our actuaries have now determined that the average number of Medicare Part B fee-for-service enrollees (net of M+C enrollees) actually decreased by 1.1 percent. Table 7 illustrates how this figure was determined:

As indicated above, the difficulty in predicting growth in M+C enrollment before the beginning of the year explains the 3.2 percentage point difference between our 1998 estimate of this factor (^4.3 percent) and the actual measured decrease.

Actual growth in real per capita GDP from FY 1998 to FY 1999 was 3.3 percent or 2.0 percentage points higher than the 1.3 percent estimate we made in 1997. The large difference between our estimate and the actual growth in real per capita GDP reflects the difficulty predicting economic growth before the beginning of a year.

In the November 2, 1998, Federal Register (63 FR 59189) we increased the SGR by 0.7 percentage points to reflect the effects of the BBA on expenditures for physicians' services included in the SGR. However, we are now reducing the SGR by 0.1 percent for savings associated with BBA provisions. These savings are largely associated with the residual effects of the BBA's Medicare secondary payer provisions. We are also removing the costs associated with diabetes self-management training from the FY 1999 SGR because Medicare coverage associated with this service did not become effective until 2001.

Based on Medicare data from 2001, we have observed very little utilization of diabetes self-management training services. However, we believe it is likely that utilization of this new benefit increased in 2002 and are including an adjustment to the 2002 SGR for this factor. This adjustment will increase the law and regulation factor and the total SGR for 2002 by 0.2 percentage points relative to the figures included in the December 31, 2002, final rule (67 FR 80028). All other factors included in the 2002 SGR are unchanged at this time. As indicated earlier, we expect to make revisions to all figures included in the 2002 SGR for the final time later this year.

The 2003 physician fee schedule CF will be $36.7856. The 2003 national average anesthesia CF will be $17.05.

The specific calculations to determine the physician fee schedule and anesthesia CFs for 2003 are explained below.

• Physician Fee Schedule Conversion Factor.

Under section 1848(d)(1)(A) of the Act, the physician fee schedule CF is equal to the CF for the previous year multiplied by the update determined under section 1848(d)(4) of the Act. In addition, section 1848(c)(2)(B)(ii)(II) of the Act requires that changes to relative value units (RVUs) cannot cause the amount of expenditures to increase or decrease by more than $20 million from the amount of expenditures that would have been made if such adjustments had not been made. We implement this requirement through a uniform budget neutrality adjustment to the CF. There is one change that will require us to make an adjustment to the CF to comply with the budget neutrality requirement in section 1848(c)(2)(B)(ii)(II) of the Act. We are making a 0.04 percent reduction (0.9996) in the CF to account for the increase in anesthesia work resulting from the 5-year review.

We illustrate the calculation for the 2003 physician fee schedule CF in table 8:

• Anesthesia Fee Schedule Conversion Factor.

As described in the December 31, 2002, final rule (67 FR 80032), anesthesia services do not have RVUs like other physician fee schedule services. For this reason, we are accounting for the changes to anesthesia work and practice expenses through a 1.6 percent (1.016) adjustment to the anesthesia fee schedule CF. In addition, we are also applying the physician fee schedule update and the budget neutrality adjustment for the increase in anesthesia work that also apply to the physician fee schedule CF. To determine the anesthesia fee schedule CF for 2003, we used the following figures:

We ordinarily publish a notice of proposed rulemaking in the Federal Register and invite public comment on a proposed rule. The notice of proposed rulemaking includes a reference to the legal authority under which the rule is proposed, and the terms and substances of the proposed rule or a description of the subjects and issues involved. This procedure can be waived, however, if an agency finds good cause that a notice-and-comment procedure is impracticable, unnecessary, or contrary to the public interest and incorporates a statement of the finding and its reasons in the rule issued. In addition, the Administrative Procedure Act (APA) normally requires a 30-day delay in the effective date of a final rule. Furthermore, the Congressional Review Act (CRA) generally requires an agency to delay the effective date of a major rule by 60 days in order to allow for congressional review of the agency action.

We find it unnecessary to undertake notice-and-comment rulemaking prior to implementation of the revisions contained in this final rule. The revisions in this final rule constitute technical corrections to the final rule published on December 31, 2002, which are necessary in order to implement the Congress's decision to confer authority for CMS to make prospective redeterminations of the SGRs for the FY 1998 and FY 1999 but do not otherwise change the policies announced in the final rule. In the December 31, 2002, final rule we expressly indicated that we would make these changes in the event that the Congress conferred the requisite authority upon the agency prior to the March 1, 2003, effective date of the rule. Accordingly, because this final rule simply makes technical modifications to a final rule that has previously gone through notice-and-comment rulemaking, we do not believe that this final rule is subject to notice-and-comment or the 30-day delay in the effective date under the APA. Even if this rule were something other than a technical correction or amendment to the final rule published on December 31, 2002, we believe good cause would exist under the APA to waive the requirements of notice-and-comment rulemaking and the 30-day delay in the effective date.

As indicated above, on December 31, 2002, we announced that, effective March 1, 2003, Medicare physician fee schedule rates would be reduced by an average of 4.4 percent. We indicated in our December 31, 2002, final rule (67 FR 79966) that the 4.4 percent reduction would be inappropriate because it would occur under a statutory methodology that did not allow us to reflect actual, after-the-fact data from earlier years in the determination of the SGR and allowed expenditures. We stated the Department was unable to revise those estimates without further congressional action. (“The Department intends to work closely with Congress to develop legislation that could permit a positive update, and hopes that such legislation can be passed before the negative update takes effect.” Since we published the December 31, 2002, final rule, as described above, the Congress has taken action that evinces the Congress's intent to permit revisions of all prior FY SGRs for the purposes of allowing for prospective application of those revisions to future physician fee schedule updates (that is, to the 2003 physician fee schedule update.)

To go through further notice-and-comment rulemaking at this time would be unnecessary, impracticable, and contrary to the public interest because, in our December 31, 2002, final rule we unequivocally expressed our intent to prospectively redetermine the SGRs for FYs 1998 and 1999 in order to establish the 2003 CF. “Because the Department would adopt a change in the formula that determines the physician update if the law permitted it, we have examined how proper adjustments to past data could result in a positive update.” To go through notice-and-comment rulemaking at this point, when we have already stated unequivocally our intent to recompute the CF for 2003 if the Congress were to act to permit a prospective redetermination of the SGRs for fiscal years 1998 and 1999, would be unnecessary and contrary to the public interest.

Because the Department wished to make changes to the physician fee schedule update promptly in the event that the Congress acted legislatively, our December 31, 2002, final rule specifically requested public comment on revisions to the estimates that were used to establish the FY 1998 and FY 1999 SGRs, if the statute were to be amended to provide us with this authority. Because we have already requested public comments on the issues included in this final rule, we believe it is unnecessary and contrary to the public interest to engage in further notice-and-comment rulemaking.

The comment period for the December 31, 2002, rule has not yet closed, but in the event we receive any comments in response to our December 31, 2002, final rule, we will address them in a subsequent publication in the Federal Register. No comments have been received to date.

Further, we believe engaging in notice-and-comment rulemaking and delaying the effective date of this final rule would be contrary to the public interest because the Congress specifically sought to avert the negative update to the physician fee schedule for 2003 that we announced on December 31, 2002, by enacting a law conferring upon CMS the authority to reflect actual, after-the-fact data from earlier fiscal years in the determination and allowed expenditures for the purposes of determining future physician fee schedule updates: the very authority, as previously stated in the Federal Register, that we would need to revise our prior estimates of the FY 1998 and FY 1999 SGRs to avoid the 4.4 percent reduction in rates on March 1 and establish a 1.6 percent increase in the physician fee schedule CF. Any delay in implementation of this 1.6 percent increase would be contrary to the public interest of the CAR and would run precisely counter to the intent of the Congress in enacting section 402(a) of the CAR to enable CMS to “make corrections to data errors in the physician payment formula for past fiscal years.” (See House Rpt, 108-10). Moreover a delay in enacting this final rule could adversely affect the provision of services to Medicare beneficiaries because any delay in implementation of the payment increases for physician services provided under the Medicare program may have an adverse impact on Medicare beneficiaries' access to important healthcare services.

Finally, we also note that notice-and-comment rulemaking is not required in this instance because section 1871(b)(2) of the Act provides that when an effective date is within 150 days of enactment of a law, the notice-and-comment requirement does not apply.

With respect to the requirement of a 60-day delay in the effective date of any final rule pursuant to the CRA, see 5 U.S.C. section 801, the CRA provides that the 60-day delayed effective date shall not apply to any rule “which an agency for good cause finds * * * that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest” (5 U.S.C. section 808(2)). For the reasons set forth above, we believe that additional notice-and-comment rulemaking on this subject would be impracticable, unnecessary, or contrary to the public interest. Therefore, we do not believe that the CRA requires a 60-day delay in the effective date of this final rule. Moreover, the Congress had 60 days to review the December 31, 2002, final rule. The Congress responded to that final rule by enacting a law to clarify the fee schedule update mechanism described and set forth in the December 31, 2002, final rule. Because we are incorporating this very statutory clarification as the basis for this new final rule, we believe it would be contrary to the CRA and the public interest to provide yet another 60-day review period under the CRA.

This document does not impose information collection and record keeping requirements. Consequently, it does not need review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995.

We have examined the impact of this final rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.

Executive Order 12866 (as amended by Executive Order 13258, which reassigns responsibility of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis must be prepared for final rules with economically significant effects (that is, a final rule that would have an annual effect on the economy of $100 million or more in any 1 year, or would 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). We estimate that the changes to the physician fee schedule update will increase Medicare expenditures for physicians' services by $1.1 billion in FY 2003, $2.0 billion in FY 2004 and $2.8 billion in FY 2005 or an estimated $15.7 billion over 5 years and $49.6 billion over ten years. Therefore, this rule is considered to be a major rule because it is economically significant, and, thus, we have prepared a regulatory impact analysis.

The RFA requires that we analyze regulatory options for small businesses and other entities. We prepare a Regulatory Flexibility Analysis unless we certify that a rule would not have a significant economic impact on a substantial number of small entities. The analysis must include a statement in support of the objectives underlying the action being taken, the kinds and number of small entities the rule affects, and an explanation of any meaningful options that achieve the objectives with less significant adverse economic impact on the small entities.

Section 1102(b) of the Act requires us to prepare a regulatory impact analysis for any final rule that may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. With the exception of hospitals located in certain New England counties, for purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside a Metropolitan Statistical Area or New England County Metropolitan Area (NECMA) and has fewer than 100 beds.

For purposes of the RFA, physicians, non-physician practitioners, and suppliers, are considered small businesses if they generate revenues of $8.5 million or less. Approximately 96 percent of physicians are considered to be small entities. There are about 700,000 physicians, other practitioners and medical suppliers that receive Medicare payment under the physician fee schedule.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditure in any 1 year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. This final rule will not result in any unfunded mandates for State, local or tribal governments or the private sector, as defined by section 202.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. We have examined this final rule in accordance with Executive Order 13132 and have determined that this regulation would not have any significant impact on the rights, roles, or responsibilities of State, local, or tribal governments.

We have prepared the following analysis, which together with the rest of this preamble meets all assessment requirements. It explains the rationale for, and purposes of, the rule, details the costs and benefits of the rule, analyzes alternatives, and presents the measures we are using to minimize the burden on small entities. As indicated elsewhere, we are increasing the physician fee schedule CF for March 1 to December 31, 2003, by 1.6 percent. The provisions of this rule are changing only Medicare payment rates for physician fee schedule services, and are not imposing any new regulatory requirements that will impose a burden on small entities.

Table 10 shows the average change in Medicare payment by specialty. It shows the impact of changes in RVUs, the physician fee schedule update, the combined impact, and includes the effect of corrections made to the RVUs for several procedure codes. The table is analogous to Table 24 in the December 31, 2002, final rule (67 FR 80037) but includes the revised physician fee schedule update. The tables reflect application of the revised CF for the full calendar year. However, because the increased CF is only in effect from March 1 to December 31, 2003, the actual impacts will be somewhat less than those shown here.

Table 11 shows the difference between 2002 and 2003 payment rates (March 1 to December 31) for selected high volume procedures. This table shows the combined impact of changes in RVUs and the physician fee schedule update on total payment for each procedure. The table is analogous to Table 25 in the December 31, 2002, final rule (67 FR 80037) with the revised physician fee schedule update. There are separate columns that show the change in the facility rates and the nonfacility rates. For an explanation of facility and non-facility practice expense refer to § 414.22(b)(5)(i).

We do not believe that any problems regarding beneficiary access to care will result from changes in this rule. Moreover, it is possible that potential problems regarding beneficiary access to care that could have resulted from the 4.4 percent reduction contained in the December 31, 2002, final rule (67 FR 79966) will be alleviated by the increase in payment being announced in this rule. Nevertheless, we believe it remains important to continue our efforts to monitor beneficiary access to care.

Any change in Medicare payments will have an impact on beneficiary cost-sharing. If the 4.4 percent reduction were to go into effect and beneficiary access to care were reduced, it is possible that beneficiaries would have lower coinsurance costs but might have problems with access to services (for example, whether physicians continue to see existing or new Medicare beneficiaries). Because we do not know the impact of the 4.4 percent reduction on beneficiary access to care, it is difficult to estimate the effect on out-of-pocket costs. Assuming beneficiary access to care were unaffected, we estimate that the increase in the 1.6 percent increase in the CF compared to a 4.4 percent reduction would increase beneficiary coinsurance liabilities by approximately $300 million in FY 2003 or about $80 million more than if the rates applied in 2002 remained in effect for the remainder of 2003. Some of the increased costs of beneficiary coinsurance may be incurred by the many policies that supplement Medicare. We would note that the 1.6 percent increase will only marginally increase out-of-pocket costs for beneficiaries that do not have any insurance other than Medicare.

In accordance with the provisions of Executive Order 12866, the Office of Management and Budget reviewed this regulation.

This final rule is issued under the authority of sections 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).

On September 12, 2002, the Council adopted Framework 15 to the FMP, which includes annual management measures for the 2003 fishing year (March 1, 2003, through February 29, 2004). On January 16, 2003, NMFS published a proposed rule for Framework 15 (68 FR 2303). Framework 15 increases the annual DAS allocation and extends the Area Access Program in the Hudson Canyon and Virginia Beach Access Areas (Access Areas) for 2003. The only modification to the measures that have been in effect for the 2002 fishing year is an increase in the possession limit allowed to vessels participating in the Area Access Program. Framework 15 was developed during the latter stages of development of Amendment 10 to the FMP (Amendment 10) because it was clear that Amendment 10 would not be implemented by the start of the 2003 fishing year and, therefore, Framework 15 is considered to be an action of limited scope, which is intended to be a stop-gap measure until Amendment 10 is implemented. Additional details concerning the justification for and development of Framework 15 and the implementing regulations were provided in the preamble to the proposed rule and are not repeated here.

Framework 15 increases the annual DAS allocation from the DAS allocations scheduled to take effect in 2003 under Amendment 7 to the FMP. Framework 15 implements 120 full-time, 48 part-time, and 10 occasional DAS, which is an increase from the scheduled DAS of 45, 18, and 4 DAS allocations for full-time, part-time, and occasional vessels, respectively. These DAS allocations in Framework 15 are the same as the DAS that have been implemented since 1999. Framework 15 also extends the Area Access Program in the Access Areas for 2003.

The DAS allocations in Framework 15 are intended to achieve a fishing mortality rate (F) that is consistent with the F target in the FMP. The DAS allocations in Framework 15 are expected to achieve an F of approximately 0.155 for the resource overall. Although this F is still well below the F target, it reduces the potential for more damaging effects on the scallop resource and for impacts on the physical environment that may be associated with higher DAS allocations.

The increase in the Area Access Program possession limit is intended to create an incentive for vessels to fish within the Area Access Program and is consistent with increasing catch rates in the areas. Due to stock abundance in the Areas, a higher level of F can occur in the Areas. This higher F allows for more trips and a higher trip limit, thereby creating more opportunity for vessels to fish in the Areas. The increased opportunity to fish in the Areas should create an incentive for vessels to utilize the Area Access Program where the scallop resource can be harvested at higher rates, thereby removing fishing pressure from other areas that may be more sensitive to fishing pressure.

This action implements an annual DAS allocation of 120, 48, and 10 DAS for full-time, part-time, and occasional scallop vessels, respectively, for the 2003 fishing year. This represents an increase over the DAS allocations that would otherwise have become effective March 1, 2003, under Amendment 7 to the FMP (i.e., 45 full-time, 18 part-time, and 4 occasional). The 120, 48, and 10 DAS allocations have been in place each year since 1999, due to better conditions in the scallop resource than were anticipated in Amendment 7.

This final rule continues the Area Access Program that was implemented in the 2001 and 2002 fishing years. The Area Access Program allows controlled scallop fishing in the Hudson Canyon and Virginia Beach Sea Scallop Access Areas. Vessels are prohibited from fishing for scallops in the Sea Scallop Access Areas unless they are fishing under the Area Access Program. The intent of the Area Access Program is to prevent the uncontrolled harvest of a sensitive portion of the scallop resource while increasing the social benefits by allowing all limited access vessels the opportunity to fish in the Areas without creating a derby fishery, thereby increasing economic benefits by promoting an orderly fishery.

The 2003 Area Access Program begins on March 1, 2003. The 2003 Area Access Program will end when the total allowable catch (TAC) allocated to the Area Access Program is caught, or when vessels have used up their allocated number of trips.

The Area Access Program includes a TAC of 17.06 million lb (7,740 mt) and 0.23 million lb (105 mt) for the Hudson Canyon and Virginia Beach Sea Scallop Access Areas, respectively. These TACs include set-asides of 2 percent and 1 percent to defray the costs of observers and research, respectively. The TACs are expected to achieve an F of 0.32 in each of the two areas. Although this F exceeds the target F of 0.22 for the scallop fishery, it is not expected to jeopardize the rebuilding potential for the Mid-Atlantic stock. Rather, it is anticipated that the higher F for the Access Areas will allow greater levels of effort and catch within the Access Areas, thereby reducing effort and catch in other areas of the Mid-Atlantic. Therefore, overall F for sea scallops in the 2003 fishing year is expected to be 0.155. This anticipated impact on the distribution of fishing effort is expected to continue to provide for rebuilding of the Mid-Atlantic scallop stock and the scallop resource as a whole.

All limited access scallop vessels, including vessels that replace vessels that hold a scallop Confirmation of Permit History, are eligible to fish for the sea scallop TAC under the Area Access Program. Full-time and part-time scallop vessels are restricted to a total of three annual trips into the Hudson Canyon and Virginia Beach Sea Scallop Access Areas. A trip into either of the Areas will count as one of the allowed trips. Vessels participating in the Area Access Program are allowed to take only one of the three allocated trips before May 1, and only two of the three allocated trips before June 1. This measure is meant to prevent a derby style fishery from occurring and may reduce the potential for bycatch by limiting trips in late spring when bycatch, particularly of summer flounder, could be problematic. Vessels in the occasional permit category are allowed to conduct only one trip into the Area of their choice. Participating scallop vessels are allowed to possess and land from the Areas up to 21,000 lb (9,525.4 kg) of scallop meats per trip.

After taking into account data on the number of eligible vessels participating, and on the total number of trips taken, the Regional Administrator will consider adjusting the sea scallop possession limit for the Hudson Canyon and Virginia Beach Sea Scallop Access Areas any time during the season and, on or after October 1, 2003, will consider allocating one or more additional trips for full-time and part-time vessels. In order for additional trips to be allocated, a sufficient amount of the sea scallop TAC must remain to warrant such an adjustment or allocation. In order for a vessel to participate in any additional Area Access Program trips that may be allocated on or after October 1, 2003, that vessel must have started at least one Area Access Program trip prior to September 1, 2003. Vessels with occasional permits will not be allocated any additional trips.

Any trip of 10 DAS or less by a vessel fishing in the Area Access Program will be counted as 10 DAS. Any trip of over 10 DAS will be counted as the actual DAS used (e.g., if a vessel used 12 DAS, 12 DAS would be deducted from its annual DAS allocation). The purpose of the minimum 10 DAS count is to reduce the number of DAS that are available for use by vessels to fish in other areas, thereby reducing fishing mortality on the scallop resource overall by potentially reducing the number of scallops caught under DAS.

Vessels are allowed to use dredges or trawls when fishing in the Area Access Program. Dredge gear is required to be outfitted with a twine top with a minimum mesh size of 10 inches (25.40 cm). The purpose of increasing the minimum twine top mesh size measurement from 8 inches (20.32 cm) to 10 inches (25.40 cm) for the Area Access Program is to reduce bycatch of groundfish and other finfish. Research and experience from the Georges Bank and Southern New England Closed Area Sea Scallop Exemption Program demonstrate that the 10-inch (25.40-cm) mesh size may significantly reduce bycatch of certain species, especially flatfish species.

All scallop vessels fishing in the Area Access Program are required to have installed on board an operational vessel monitoring system (VMS) unit that meets the minimum performance criteria as specified at § 648.9(b). Vessels with occasional permits are the only limited access scallop vessels not currently required to have a VMS unit and would, therefore, be required to install an approved VMS unit in order to participate in the Area Access Program. Scallop vessels planning to fish in the Area Access Program are required to so declare by notifying the Regional Administrator through the VMS as described below.

Each vessel operator is required to inform NMFS of his/her intention to fish in the Sea Scallop Access Areas prior to the 25th day of the month preceding the month in question through the VMS e-mail system (e.g., if the vessel plans to fish in these areas in July, it would need to notify the Regional Administrator by June 25). This notification requirement facilitates placement of observers and provides for an estimate of the number of potential Area Access Program participating vessels in order to make preliminary projections of potential TAC harvest rates.

Vessel operators are required to report the following information to the Regional Administrator prior to the 25th day of the month preceding the month in question: Vessel name and permit number, owner and operator's name, owner and operator's phone numbers, the area to be fished, and the anticipated number of trips to be taken in the area in question.

In addition, for the purpose of selecting vessels for observer deployment, a vessel's operator is required to provide notice to NMFS of the time, port of departure, and specific Access Area to be fished, at least 5 working days prior to the beginning of any trip on which it declares into the Area Access Program.

On the day the vessel leaves port to fish under the Area Access Program, the vessel owner or operator must declare into the Program through the VMS. Declaration into the fishery allows for more accurate and timely monitoring of the catch in the fishery.

The operator of each vessel participating in the Area Access Program is required to report specific information on a daily basis through the VMS. For each day of an Area Access Program trip, a vessel's operator is required to report the daily pounds (kg) of scallop meats kept, the area fished that day, and the Fishing Vessel Trip Report page numbers corresponding to the respective Sea Scallop Access Area trip. In addition, vessel operators on vessels carrying an observer are required to provide a separate report of the daily pounds (kg) of scallop meats kept on tows that were observed on that trip.

Vessels that have declared a trip into the Area Access Program are prohibited from possessing more than 50 U.S. bu (17.62 hl) shell-stock or 400 lb (181.4 kg) of meats of shell stock when outside the Access Areas. This limit for shell stock is considered part of the overall Area Access Program possession limit. A limit on the amount of sea scallops landed in the shell is necessary to monitor and enforce the overall meat weight possession limit requirement. Allowing vessels to retain a relatively minor amount of shell stock helps satisfy a market for large, whole scallops, without compromising the enforceability of the possession limit.

General category permitted vessels and limited access scallop vessels fishing outside a scallop DAS are allowed to fish in the Access Areas throughout the year, provided that no more than 100 lb (45.36 kg) of scallop meats are possessed on board the vessel when the vessel is in the Access Areas. These vessels are prohibited from possessing in-shell scallops while inside the Access Areas, except they are allowed to possess an equivalent of in-shell scallops that are necessary to provide 100 lb (45.36 kg) of scallop meats. Vessels not fishing under the Area Access Program are allowed to transit the Access Areas with more than these possession limits on board, provided their gear is properly stowed according to § 648.23(b). This measure is intended to allow an incidental catch of scallops for scallop vessels that fish for other species outside the Access Areas and to allow for more direct transiting to and from other fishing areas.

To improve the enforceability of the Area Access Program, all limited access scallop vessels equipped with a VMS unit will be polled twice per hour, regardless of whether the vessel is enrolled in the Area Access Program or not. Also, vessels are required to stow all dredge or trawl gear while transiting to and from the Access Areas pursuant to the applicable gear stowage requirements specified in § 648.23. A new dredge gear stowage requirement included in this rule improves safety on board vessels transiting to and from the Access Areas. Finally, to ensure effective enforcement of the Area Access Program measures, vessels participating in the Area Access Program must land their scallop catch at one location for each trip.

Vessels are required to carry observers when requested. The Council has recommended 10-percent observer coverage for the Hudson Canyon Access Area and 20-percent observer coverage for the Virginia Beach Access Area. Observers will obtain information on catch, catch rates, and bycatch and may obtain information on gear efficiency and selectivity and on other characteristics of the fishery. The vessel owner is responsible for paying for the cost of the observer, regardless of whether any scallops are caught on the trip. At the discretion of the Regional Administrator, scallop vessels may be allocated an additional amount of sea scallops, not to exceed a cumulative total of 155 mt or 2 mt for the Hudson Canyon and Virginia Beach Access Areas, respectively, for each trip on which an observer is taken, to help defray the cost of the observer. Additional scallops to fund observers may not exceed a value equal to 2 percent of the overall scallop TAC. One percent of the scallop TAC for both the Hudson Canyon and Virginia Beach Access Areas has been set aside to pay for observers. Similarly, a value equal to 1 percent of the overall TAC has been added on to the amount of observer TAC, also to help vessels pay for the cost of observers. The allocation of 1 percent set-aside and 1 percent additional observer TAC is consistent with the Area Access Program in 2001 and 2002, as well as the Georges Bank Closed Area Exemption Program. A TAC set-aside of 1 percent to fund research is also included as part of the Area Access Program. Amounts over the trip limits for sea scallop meats to be allocated for defraying research costs are limited, by area, up to 77 mt or 1 mt for the Hudson Canyon and Virginia Beach Access Areas, respectively. This research program for the Access Areas is modeled after the research program in the 2000 Georges Bank Sea Scallop Exemption Program. A Request for Proposals notice published in the Federal Register on January 17, 2003 (68 FR 2527), provides information on the submission process, eligibility criteria, proposal requirements and priorities, project evaluation, application deadlines and other requirements.

Finally, this final rule codifies a scallop dredge gear stowage provision that was established by the Regional Administrator in 2001. The new provision eliminates the need for vessel operators to disconnect towing wires and reel them fully onto the winch in order for the gear to be considered properly stowed. Reconnecting the wires at sea was determined to be dangerous, particularly in rough seas. The Regional Administrator has the authority to establish new gear stowage provisions through notification through a permit holder letter. Subsequent codification of the provision ensures proper implementation of the requirement.

A discussion of comments received in response to the proposed rule for Framework 15, and their responses, follows.

Two comments were received on the proposed rule for Framework 15. While one comment was generally in support of the action, the other opposed it. Many of the specific issues raised in each comment highlight issues that were analyzed in Framework 15. Many of the issues and analyses included in Framework 15 are summarized in the following responses and the commenters and other interested members of the public should refer to the Framework 15 document for a more detailed discussion of the analyses (See ADDRESSES for a copy of Framework 15).

Comment 1: The Fisheries Survival Fund (FSF) commented in support of the measures contained in Framework 15, and urged timely implementation in order to avoid “economically devastating” default DAS reductions. The FSF urged NMFS to give more emphasis in the final rule to the habitat and bycatch benefits of the 120-DAS allocation compared to the higher DAS allocation of 140 DAS that was calculated to be more consistent with the FMP's target F.

Response: NMFS acknowledges FSF's comments in support of Framework 15. With respect to the benefits of implementing 120 full-time DAS versus other DAS alternatives, NMFS has relied on the comparisons of costs and benefits of the various alternatives included in Framework 15. The habitat and bycatch benefits cannot be precisely determined because it is not possible to predict fully the behavior of the fishing fleet in response to these regulations. The amount of habitat and bycatch impact depends not only on the total fleet activity, but also on the distribution of fishing activity relative to the distribution of vulnerable habitats and bycatch. While less fishing usually means fewer impacts, and distribution of habitat or bycatch is known at a broad scale, the response of the fleet to changes in resource distribution and different DAS allocations is not well known. If reductions in DAS allocations were to cause industry to concentrate effort in less remote but more sensitive areas with respect to habitat and bycatch, then the benefits of lower DAS would be reduced. The Council recommended, and NMFS concurs, that the 120 full-time DAS allocation (48 part-time and 10 occasional DAS), combined with the Area Access Program, as a 1-year action, complies best with the goals and objectives of the Scallop FMP. Given the uncertainties of the fleet response to this action, the action is intended to balance conservation of the scallop resource and the economic benefits derived from fishing while minimizing, to the extent practicable, the known adverse effects on the environment, including habitat and species caught as bycatch, in the scallop fishery.

Comment 2: The FSF urged NMFS to reconsider industry recommendations for measures to address the issue of trips into the Area Access Program that are terminated unexpectedly. They advocate more flexibility in determining if such “broken” trips should be charged fewer DAS than the 10 DAS that are automatically charged under the Area Access Program. The FSF believes this is required by National Standard 10 of the Magnuson-Stevens Act, concerning safety at sea.

Response: NMFS understands the problems that arise as a result of the automatic deduction of 10 DAS for Area Access trips, but the Council, working within the short-term context of this action, was unable to develop measures necessary to address broken trips that are clearly understood and can be effectively administered. There are alternatives being developed in Amendment 10 to address this concern. In the meantime, NMFS has determined that this concern can be addressed sufficiently through ad hoc determinations for each instance of a broken trip.

Comment 3: Oceana and the Conservation Law Foundation (Oceana/CLF) commented that Framework 15 allows overfishing in the open areas on Georges Bank and in the Mid-Atlantic. Oceana/CLF contends that the DAS alternative selected (120 full-time, 48 part-time, and 10 occasional DAS) does not constitute a sustainable management strategy for the sea scallop resource and is, therefore, inconsistent with the Magnuson-Stevens Act requirements to prevent overfishing. In addition, Oceana/CLF commented that overfishing in the Mid-Atlantic continues, despite actions under previous Frameworks that were intended to redirect effort into controlled access programs, but failed to do so. Oceana/CLF asserts that NMFS should adequately justify its support of the 120 DAS (“risk-prone”) alternative and better elaborate on the long-term effects of the action in the environmental analyses.

Response: The FMP and overfishing definition do not consider the open and closed areas separately (with the exception of the special program for the Area Access Program). While projections indicate that the DAS allocations, if analyzed according to discrete areas, may result in overexploitation of scallops in some areas, Framework 15 is based on analyzing fishing mortality on the resource as a whole. Under this analysis, the fishery overall would not exceed the F target of 0.22, due in part to continued large concentrations of scallops that cannot be fished in the Georges Bank and Southern New England groundfish closed areas.

The analyses in Framework 15 indicate that the 120-DAS alternative complies with the Magnuson-Stevens Act and achieves the goals and objectives of the FMP. Framework 15 clearly demonstrates that overfishing will not occur on the resource as a whole and that F will likely be less than Amendment 7 targets. The current condition of the scallop resource is rebuilt for both the Georges Bank and Mid-Atlantic stocks. To fish at the DAS level scheduled in Amendment 7 would cause the fishing level to fall unnecessarily well below OY and cause substantial adverse economic and social effects on the scallop industry under rebuilt resource conditions.

The F in the Mid-Atlantic continues to be high, despite efforts in recent years to reduce the effective F through the Area Access Program. However, the FMP does not prescribe different management measures for each stock, consistent with National Standard 3. To enhance the incentive to fish in the Access Areas, Framework 15 allows for an increase in the F for the Area Access Program, which results in an increase in the possession limit. It is expected that this enhanced incentive will reduce fishing pressure in the Mid-Atlantic region outside of the Access Areas.

Comment 4: Oceana/CLF commented that the 100 DAS alternative has greater environmental, biological, and economic benefits than the 120-DAS alternative. Oceana/CLF commented that it is unclear what rationale NMFS is using to justify its proposed action of 120 DAS, when the analyses in Framework 15 clearly support the 100-DAS allocation alternative, touting the following environmental, biological and economic benefits: (1) Reduced unsustainable fishing mortality in the open fishing areas; (2) higher long-term net benefit ($38 - $42 million); (3) likely increase in future landings, rather than the sharp decline predicted under the proposed action; (4) reduced area affected by scallop dredging; and (5) reduced operational costs, and increased producer surplus and net benefits.

Response: Oceana/CLF has focused on the long-term effects of the DAS to be implemented through Framework 15. Framework 15 is intended as a short-term action while the comprehensive Amendment 10 is developed and implemented. In light of the short-term context of Framework 15, NMFS disagrees that Framework 15 clearly supports the 100 DAS alternative, since short-term losses associated with the alternative are not clearly outweighed by the benefits of the reduced DAS. The analysis demonstrates that the 120-DAS alternative, combined with the Area Access Program, has noticeably higher economic and social benefits with only marginal loss of benefits to the scallop resource overall and the environment in the short-term. NMFS believes that the short-term effects of the action are more relevant, because Framework 15 does not contemplate continuation of these measures alone for more than 1 year, despite the analyses that project the effects of the action over as many as 10 years.

Comment 5: Oceana/CLF commented that Framework 15 does not contain measures adequate to minimize adverse fishing impacts on known gravel habitats and sensitive EFH in open areas on Georges Bank. Oceana/CLF asserts that the 120-DAS alternative in Framework 15 “dramatically increases” the amount of EFH impacted by scallop dredging by 60 to 80 percent. Oceana/CLF also commented that the increase in EFH affected by scallop dredging under the 120-DAS alternative is exacerbated by a lack of management measures specifically designed to protect EFH. Oceana/CLF contends that prior scallop amendments modified the framework process ”...so that habitat conservation measures may be approved by the Council in a more timely manner than the plan amendment process.” Oceana/CLF commented that NMFS and the Council cannot rely on future amendments in the Scallop and Northeast Multispecies FMPs to implement appropriate measures to minimize the impacts on EFH. Finally, Oceana/CLF urged NMFS to take immediate action under Framework 15 to minimize fishing impacts on known gravel habitats and sensitive juvenile cod EFH and other groundfish EFH in the open areas on Georges Bank.

Response: NMFS disagrees that Framework 15 dramatically increases the amount of EFH impacted by scallop dredging. To draw that conclusion, Oceana/CLF compares the action in Framework 15 to the default measures that would otherwise become effective March 1, 2003. These measures include 45 full-time, 18 part-time, and 4 occasional DAS allocations that are well below any level of fishing effort that has occurred in the scallop fishery under recent management and recent historical scallop fishing activity. This conclusion ignores the practicability standard for analyzing the appropriateness of habitat mitigating measures. The 120-DAS alternative maintains the DAS allocations that have been in place since 1999. Therefore, the Framework 15 DAS allocation does not actually increase impacts on EFH at all, when compared to the status quo of current fishing activities.

Frameworks are required to comply with the Magnuson-Stevens Act and minimize the adverse effects of fishing on EFH to the extent practicable. In light of the drastic DAS reductions that would occur under Amendment 7, Framework 15 implements a more appropriate DAS allocation and takes practicable steps to minimize the impacts of the scallop fishery on EFH in order to comply with the Magnuson-Stevens Act and to meet the goals and objectives of the FMP. It is not correct that framework actions must necessarily include a full reconsideration of EFH, or of any of the other 21 frameworkable measures included in the FMP.

Framework 15 was developed during the latter stages of development of Amendment 10 because it was clear that Amendment 10 would not be implemented by the start of the 2003 fishing year and, therefore, Framework 15 is considered to be an action of limited scope, which is intended to be a stop-gap measure until Amendment 10 is implemented. The Council is required to adjust management measures on an annual basis in order to make measures consistent with the condition of the resource and the status of the fishery. The Council and NMFS are maintaining extensive closures of areas of high scallop abundance and potential prime scallop fishing areas on Georges Bank and in Southern New England waters, which provide substantial protection of habitat. The Council is carrying out a full reconsideration of measures to address EFH through the more extensive public process associated with Amendment 10. NMFS notes that the measures have been highly controversial and complex and have been the subject of lengthy debate.

Taking into account the short-term context of Framework 15, the OY calculations, the areas closed to scallop fishing, and other measures already in place that provide extensive EFH protection, Framework 15 minimizes the impacts on EFH to the extent practicable.

Comment 6: Oceana/CLF commented that Framework 15 does not contain measures adequate to accurately report or minimize bycatch of overfished groundfish, skates and other marine life. Specifically, Oceana/CLF commented that high levels of bycatch of fish and other marine life continue in the scallop fishery--most of it unaccounted for due to a lack of observer coverage and unreliable vessel trip report data. Oceana/CLF urged NMFS to improve its compliance with the Endangered Species Act (ESA) with regard to the scallop fishery and to complete a Biological Opinion (BO) for Framework 15 prior to its approval and implementation. Oceana/CLF concluded by requesting that NMFS not approve Framework 15 until it contains adequate measures to: (1) protect sensitive juvenile cod and other sensitive groundfish EFH; (2) increase levels of observer coverage throughout the entire scallop fishery; and (3) stop all illegal takes of threatened and endangered sea turtles and minimize bycatch of other overfished and at-risk species (e.g., barndoor skate, monkfish, and other skates).

Response: National Standard 9 requires that FMPs minimize, to the extent practicable, bycatch and bycatch mortality. Measures currently in place in the scallop fishery, and the measures included in Framework 15, take practicable steps to reduce bycatch in the sea scallop fishery. Gear restrictions, i.e. increasing the minimum twine top mesh size to 10 inches (25.40 cm), in the Area Access Program are intended to reduce bycatch in scallop dredge gear. NMFS is attempting to improve observer coverage in this and other fisheries, i.e. increased percentage coverage in access areas (10-20 percent) although a large increase in observer coverage is limited by Agency resources. Limiting the number of trips by month in the Area Access Program is also designed to reduce bycatch. In addition, maintaining groundfish closed areas will reduce bycatch of such species as yellowtail flounder and skates in the scallop fishery overall. Oceana/CLF specifically noted that much bycatch is unaccounted for due to lack of observer coverage. The lack of more specific information about bycatch and how to avoid it complicates efforts to develop specific management measures to reduce it. In light of the limited scope and context of Framework 15, NMFS has determined that Framework 15 complies with the Magnuson-Stevens Act concerning bycatch requirements. The specific concerns raised by Oceana/CLF have been addressed in Framework 15.

In response to reports of sea turtle takes in the sea scallop fishery, NMFS reinitiated consultation under section 7 of the ESA on December 21, 2001. NMFS completed a BO for the scallop fishery as a whole, including the measures included in Framework 15, on [insert date BO completed]. The BO concluded that the continued implementation of the scallop fishery and the proposed activity may adversely affect but is not likely to jeopardize the continued existence of loggerhead, Kemp's ridley, green, and leatherback sea turtles. In the BO, NMFS provides an incidental take statement allowing the annual take of 88 loggerhead (up to 25 lethal), 7 Kemp's ridley (2 lethal), and 1 green (lethal or non-lethal) sea turtles in the sea scallop dredge fishery. In addition, the incidental take statement allows the lethal or non-lethal observed annual take of one loggerhead, Kemp's ridley, green, or leatherback sea turtles in the scallop trawl fishery.

One change to the regulatory text in the proposed rule has been made. In § 648.58, paragraph (c)(6) is revised to more clearly address the intent of the prohibition to prevent vessels participating in the Area Access Program from loading up on shell-stock and then shucking the scallops inside the VMS demarcation line.

The Administrator, Northeast Region, NMFS, determined that Framework 15 is necessary for the conservation and management of the Atlantic sea scallop fishery and that it is consistent with the Magnuson-Stevens Act and other applicable laws.

For the reasons stated below, the Assistant Administrator for NOAA (AA) waives the 30-day delay in effectiveness for the Framework 15 measures under 5 U.S.C. 553(d)(1) because this rule relieves a restriction.

This action implements DAS allocations of 120, 48, and 10 DAS for full-time, part-time, and occasional scallop vessels, respectively, and continues the Hudson Canyon and Mid-Atlantic Area Access Program with an increase in the possession limit for vessels participating in the Area Access Program. Scallop vessels are precluded from: exceeding the DAS that are allocated to the vessel based on its permit category; fishing in the Hudson Canyon or Virginia Beach Access Areas unless they are participating in the Area Access Program; fishing for more than three trips in the Area Access Program; possessing more than the sea scallop possession limit in the Area Access Program; and violating any provisions of the regulations of the Northeastern United States that are not modified by this action.

The annual DAS allocations implemented in this final rule are less restrictive than the DAS allocations that would otherwise go into effect on March 1, 2003. The DAS scheduled to take effect on March 1, 2003, would have considerable negative economic and social impacts because limited access scallop vessels would only be able to fish 45 full-time, 18 part-time, and 4 occasional DAS, as compared to 120 full-time, 48 part-time and 10 occasional DAS under the preferred alternative. Further, the DAS allocation under Framework 15 would be the same as the allocation last year and therefore would be no more restrictive. In addition, the Area Access Program is a continuation of the program that has been in place for the last 2 years. The only change to the program is an increase in the possession limit. The Council prepared an environmental assessment (EA) for this framework and the Assistant Administrator for Fisheries, NMFS, concluded that there will be no significant impact on the human environment as a result of this rule. This action will result in a minor increase in fishing mortality on sea scallops and will allow continued economic viability of the fishery. The Area Access Program will provide an incentive for vessels to direct fishing effort away from more sensitive open areas in the Mid-Atlantic. A copy of the EA is available from the Council (see ADDRESSES).

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

Pursuant to 5 U.S.C. 604(a) of the Regulatory Flexibility Act, NMFS prepared an FRFA for Framework 15, which consists of the IRFA, comments and responses contained in this final rule, and a summary of the analyses prepared in support of this final rule. A copy of the FRFA is available from the Regional Administrator (see ADDRESSES). The preamble to the proposed rule included a detailed summary of the analyses contained in the IRFA, and that discussion is not repeated in its entirety here. A copy of the IRFA is available from the Council (see ADDRESSES).

The reasons why action by the agency is being considered and the objectives of the action are explained in the preambles to the proposed rule and this final rule and are not repeated here. This action does not contain reporting and recordkeeping requirements. It will not duplicate, overlap, or conflict with any other Federal rules. This action is taken under authority of the Magnuson-Stevens Fishery Conservation and Management Act and regulations at 50 CFR part 648.

Two sets of comments were received on the proposed rule and are responded to in this rule. One comment addressed indirectly the results of the IRFA and the second set of comments related to issues other than economic impacts. In this comment, the FSF urged timely implementation of the Framework 15 measures in order to avoid “economically devastating” default DAS reductions. NMFS agrees with the FSF that the DAS reductions included in Amendment 7 to the FMP and scheduled to take effect on March 1, 2003, under the no action alternative will have substantially negative economic impacts for vessels participating in the sea scallop fishery and would not be necessary, given the condition of the scallop resource. This “no action” alternative would be inconsistent with National Standard 1 because it would fail to achieve OY in the scallop fishery. It may also cause safety at sea concerns, as vessels may push crews and trip lengths to hazardous levels.

This action and its alternatives could affect any commercial vessel holding an active Federal permit for sea scallops. Data from the 2001 Northeast permit database show that 310 commercial vessels were permitted with limited access scallop permits, and 2,293 commercial vessels were permitted with general category (open access) scallop permits. Information from the 2002 fishery remains incomplete. The majority, if not all, of the federally permitted vessels readily fall within the Small Business Administration's (SBA) definition of small business and the Regulatory Flexibility Act's definition of “small entity.” The management measures included in this final rule propose to increase DAS allocations in the same proportion for each category of the limited access scallop permit. The resulting increase in profits, costs and net revenues are not expected to be disproportional for small versus large entities.

Framework 15 contains six alternatives, including no action and status quo alternatives. Each alternative, with the exception of the no action alternative, consists of DAS allocations for full-time, part-time, and occasional scallop vessels and a TAC and possession limit derived from a target F for the Access Areas. The alternatives are described in this discussion as the full-time DAS allocation and the target F rate in the Area Access Program. The no action alternative would implement 45 full-time, 18 part-time, and 4 occasional DAS and would open the Hudson Canyon and Virginia Beach Access Areas to general scallop fishery management. The status quo alternative includes 120 full-time DAS and an Area Access Program F of 0.2.

This final rule will implement the 120 full-time DAS with an Area Access Program F = 0.32, which minimizes economic impacts on small entities. The impacts of the proposed alternatives on revenues, costs, and profits of an average vessel were analyzed. The increase in the days-at-sea allocations to 100, 120 or 140 full-time DAS allocations from the 45 full-time DAS allocation scheduled for the 2003 fishing year under Amendment 7 and the Area Access Program will have positive economic impacts on the vessels. The revenues per full-time vessel in 2003 are expected to increase by 56 percent for the preferred action (120 DAS, F=0.22), and by 38 percent (100 DAS, F=0.2) to 58 percent (140 DAS, F=0.32) for non-preferred alternatives compared to the no action (45 full-time DAS, no Area Access Program). The no action alternative would represent a 15-percent decline in revenues from actual revenues in 2002. The profits are expected to more than double under all alternatives including the preferred action relative to the no action alternative. Although the analysis in this section is conducted for an average full-time vessel in the scallop fishery, the results are expected to be positive for all full-time, part-time and occasional vessels as well since their DAS allocations will also be adjusted upwards and they will be able to participate in the Area Access Program.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a small entity compliance guide was prepared. The guide will be sent to all holders of permits issued for the Atlantic sea scallop fishery. In addition, copies of this final rule and guide (i.e., permit holder letter) are available from the Regional Administrator (see ADDRESSES) and are also available at the following web site: http://www.nmfs.gov/ro/doc/nero.html.

A formal section 7 consultation under the ESA was initiated for the scallop fishery, including the measures contained in Framework 15. In a BO dated [insert date of BO], the AA determined that fishing activities conducted in the scallop fishery, including activities under Framework 15 and their implementing regulations, are not likely to jeopardize the continued existence of any endangered or threatened species under the jurisdiction of NMFS, or result in the destruction or adverse modification of critical habitat.

Fisheries, Fishing, Reporting and recordkeeping requirements.