This rule has been determined to be significant and was reviewed by the Office of Management and Budget under Executive Order 12866.

The Food Stamp Program is listed in the Catalog of Federal Domestic Assistance under No. 10.551. For the reasons set forth in 7 CFR Part 3015, Subpart V and related Notice (48 FR 29115), this Program is excluded from the scope of Executive Order 12372 which requires intergovernmental consultation with State and local officials.

Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments and consult with them as they develop and carry out those policy actions. The Food and Nutrition Service (FNS) has considered the impact of this rule which requires mandatory interoperability of Food Stamp Program Electronic Benefit Transfer (EBT) Systems and portability of electronically-used benefits nationwide in accordance with specific requirements set forth in the Electronic Benefit Transfer Interoperability and Portability Act of 2000. FNS is not aware of any case where any of these provisions would in fact preempt State law and no comments were made to that effect. This rule also does not impose substantial direct compliance costs on State and local governments. Some of the provisions, although not previously required by food stamp regulations, have already been implemented by State agencies and, therefore, have no incremental costs associated with them. Furthermore, the Federal government will pay 100 percent for the cost of switching and settling interstate food stamp transactions, up to an annual nationwide limit of $500,000. Under current pricing trends, there is no indication that total costs for switching and settling interstate food stamp transactions will exceed the limit. Should this occur, however, State agencies will continue to be paid at the 50 percent reimbursement rate for the amount above the limit. The provisions implemented by this rule are mandated by the Electronic Benefit Transfer Interoperability and Portability Act of 2000, Public Law No. 106-171. Therefore, a federalism summary impact statement is not necessary under Section 6 of Executive Order 13132.

This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Eric M. Bost, Under Secretary for Food, Nutrition, and Consumer Services, has certified that this rule will not have a significant economic impact on a substantial number of small entities. State welfare agencies will be the most affected to the extent that they administer or operate EBT services for Food Stamp Program benefit delivery.

This rule does not alter the reporting or recordkeeping requirements contained in the interim rule. Those requirements have been previously approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 and assigned OMB control number 0348-0004 for the SF-270 (Request for Advance or Reimbursement) and 0348-0038 for the SF-269A (Financial Status Report—Short Form).

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have a preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full implementation. This rule is not intended to have retroactive effect unless so specified in the DATES paragraph of this preamble. Prior to any judicial challenge to the provisions of this rule or the application of its provisions, all applicable administrative procedures must be followed. In the Food Stamp Program, the administrative procedures are as follows: (1) For Program benefit recipients—State administrative procedures issued pursuant to 7 U.S.C. 2020(e)(11) and 7 CFR 273.15; (2) for State agencies—administrative procedures issued pursuant to 7 U.S.C. 2023 set out at 7 CFR 276.7 (for rules related to non-quality control (QC) liabilities) or 7 CFR Part 283 (for rules related to QC liabilities); (3) for Program retailers and wholesalers—administrative procedures issued pursuant to 7 U.S.C. 2023 set out at 7 CFR 278.8.

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub.L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. Under section 202 of the UMRA, FNS generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments in the aggregate, or to the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires FNS to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective or least burdensome alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.

In this rule, the U.S. Department of Agriculture (Department), FNS finalizes revisions to the Food Stamp Program (FSP) regulations to require interoperability of all State EBT Systems and portability of all electronically-issued benefits. This requirement is in accordance with the Electronic Benefit Transfer Interoperability and Portability Act of 2000, Pub. L. 106-171, (hereinafter “Pub. L. 106-171”) which amended Section 7(k) of the Food Stamp Act of 1977, 7 U.S.C. 2016(k), to mandate nationwide interoperability of FSP EBT systems and portability of electronically issued benefits and directs the Secretary to establish standards to accomplish this. In accordance with the regulations promulgated by the Secretary, the Department will pay one hundred percent of the costs incurred by a State agency for switching and settling transactions, up to an annual limit of $500,000 nationwide. Pub. L. 106-171 required the Department to promulgate regulations to require interoperability and establish a uniform national standard of interoperability for Food Stamp EBT systems within 210 days of its enactment. In order to meet this requirement, interim regulations were published in the Federal Register on August 15, 2000 at 65 FR 49719. This final action takes the comments received in response to the interim rulemaking into account. Readers are referred to the interim regulation for a more complete understanding of this final action.

Readers should note that another EBT rule was published in the Federal Register at around the same time that the interim interoperability rule was published. That rule, EBT Provisions of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (65 FR 59105, October 4, 2000), redesignated several paragraphs in the EBT regulations. Therefore, readers should refer to the Code of Federal Regulations (CFR) for the most accurate regulatory citations of provisions implemented by the interim rule. Furthermore, this rule reinstates a paragraph from the August 15, 2000 interim Interoperability rule that was inadvertently deleted by the October 4, 2000 EBT Provisions of the PRWORA rule regarding the interoperability funding provisions.

Comments on the interim rule were solicited through November 13, 2000. Eight comment letters were received in response to the interim rule. Comments were received from 5 State agencies, one retailer association, one EBT processor, and one public interest group. This final rule makes one revision to the interim regulations, taking into consideration all comments received.

In general, the commenters supported EBT system interoperability and food stamp benefit portability. Various provisions of the interim rule mandated interoperability of FSP EBT systems and the portability of FSP benefits by requiring: The use of the EBT standard message format; the establishment of the necessary telecommunication links; the use of an Issuer Identification Number on the State's EBT card; and the use of the Retailer EBT Data Exchange (REDE) system. The rule also provides for 100 percent enhanced Federal funding for the cost of switching and settling interstate EBT food stamp transactions, up to an annual nationwide limit of $500,000. The specific provisions are discussed below.

The interim rule mandated that each State agency implement the functionality for nationwide interoperability of their EBT systems and portability of electronically-issued food stamp benefits by October 1, 2002. The interim rule provided for exemptions from the deadline for State agencies with signed contracts before October 16, 2000 until they re-negotiate or reprocure their EBT contracts. The rule also exempted Smart Card systems from the mandate until the Department determines that a practicable technological method is available for interoperability with on-line systems. We received no comments opposing the mandate. Three commenters expressed support for the interoperability and portability of FSP benefits because it ensures that food stamp recipients will be able to use their food stamp benefits at authorized retail stores across the country in the same way they were able to use paper food coupons.

The interim rule established uniform national standards of interoperability and portability based on the standards used by a majority of State agencies. Although the Departmental standards are based on the Quest Operating Rules (hereinafter “Quest”), which have already been adopted by a majority of State agencies, the Department did not adopt Quest in its entirety. Instead the Department chose to require only those components that are essential to interoperability. One commenter supported this decision because it allows the Quest standards to be modified to reflect the emerging industry practices without the burden of obtaining a change in federal regulation. However, two other commenters opposed it, believing that all State agencies should follow the Quest rules to ensure standardization and, therefore, nationwide interoperability.

The Department is aware of no other technical standards, other than those established in the rule, that are fundamental to the achievement of nationwide interoperability. Furthermore, the Quest rules contain requirements that are not essential to interoperability but that would require procedural and card modifications at an expense to the State agencies that have chosen not to adopt the Quest rules. If the Department were to require all State agencies to adopt the Quest rules in their entirety, this would impose added burdens, costs, and rigidity without strong justification. Accordingly, this rule maintains the interoperability standards established in the interim rule and does not specifically require State agencies to adopt Quest.

The interim final rule required State agencies to use the International Organization for Standards (ISO) 8583 message format, modified for EBT, in order to facilitate interstate transactions. One commenter opposed language which requires State agencies to adopt the ISO 8583 message format in “a version mutually agreed to between the authorization agent and the party connected for all transactions.” Instead, the commenter supported adoption of the ISO standard currently being developed by the American National Standards Institute (ANSI) X9A11 EBT Working Group. The Department would like to clarify that the provision requires State agencies to use the ISO 8583 message format as updated by the American National Standards Institute (ANSI). The requirement refers to the base 8583 message format in order to provide enough flexibility to ensure automatic updates of the message format by State agencies without the need to issue new regulations in the future. The Department, therefore, would expect State agencies to update the message format specifications of their respective EBT systems in accordance with the most current version of the ISO 8583 message format upon adoption by ANSI or reprocurement of a State EBT contract.

The interim final rule requires that the Primary Account Number (PAN) on the State-issued EBT card be standardized to include State routing information so that transactions can be routed to the appropriate State system for authorization, regardless of the transaction's point of origin. There were no comments opposing the requirement to include the Issuer Identification Number (IIN) in the PAN. However, one commenter requested clarification regarding the use of the term “IIN”, and opposed the requirements regarding the distribution and updating of the State IIN files.

Specifically, the commenter requested clarification as to whether an “IIN” is the same as a Bank Identification Number (BIN). We consider the two terms to be interchangeable. We chose to use the term, “IIN,” because the number is used to route transactions to the various State authorization systems and not to banking institutions as the term “BIN” implies.

The commenter also opposed language which requires each State agency to be responsible for distributing all State IINs to each retailer, processor, or acquirer that is directly connected to the State's authorization system. Instead, the commenter believes that State IIN distribution should be the responsibility of the Federal government to avoid excessive and redundant updates. We are in agreement that redundant updates of IIN information should be avoided. However, in the time since FNS published the interim rule, several State agencies implemented interoperability without any indications of redundant IIN distribution, nor was redundant IIN distribution raised as a possible issue by any of the parties involved.

Although the Department is directing the interoperability provisions to all 53 State agencies, most State agencies delegate responsibilities to their prime EBT contractor or other designated agent of the State. This results in many fewer entities involved in the IIN dissemination process. Furthermore, because FNS does not have a direct relationship with the processors or acquirers that are directly connected to the State agency's authorization system, having FNS be responsible for distributing IINs to those entities would place a greater burden on State agencies. Each State agency would be responsible for ensuring that FNS has the most current listing and contact information of such entities. State agencies would also need to inform FNS when a new processor or acquirer enters the system and necessitates the IIN information. Therefore, the requirement that each State agency be responsible for the distribution of State IINs is unchanged in this rule.

The commenter further questioned how a State agency could ensure that parties not directly connected to its system update their IIN information. Because of the several different levels of third party service providers and acquirers involved in the routing of EBT transactions, we understand the commenter's concern with getting information updated throughout the system. State agencies must, therefore, use the required third party processor (TPP) agreements to ensure that IIN files or routing tables are updated by all entities involved. These are the agreements each State agency is required to enter into with a TPP or acquirer directly connected to its authorization system. Once the agreements are in place, each TPP or acquirer has primary responsibility for having all the State IINs loaded into its system.

One comment was received regarding the third party processor interface requirements. The interim rule requires each terminal operator to interface directly with a State authorization system or with a third party service provider to obtain access to one or more State authorization systems. The commenter opposed the provision, believing that it does not allow retailers to connect directly to a State agency's EBT processor. We would like to clarify that, by referencing direct interfaces with a State's authorization systems, we are referring to interfaces with a State agency's EBT processor or transaction switching agent. The purpose of the provision is to ensure that terminal operators make the necessary accommodations that will enable them to accept EBT cards from all States without requiring a system with multiple connections. Therefore, giving terminal operators the option to directly connect with a State's authorization system or with a third party processor provides them with the flexibility to establish the required interfaces in an efficient manner.

The interim final rule requires State agencies or their designated agent to access the FNS automated REDE system to update retailer authorization information on a daily basis. The requirement ensures that State agencies' EBT systems are using the most current Federally posted information on retailer authorizations nationwide when approving in-State and out-of-State EBT transactions. The requirement also helps to improve the efficiency of retailer operations overall. One commenter considered the requirement an unnecessary, time-consuming, and unfunded mandate due to the added time needed for additional “checks.” We would like to clarify that transactions do not actually touch the national REDE file. Instead, the contractor uses the REDE file to update its own retailer database which is used to authorize transactions. While we understand that this is a new requirement, most State agencies or their vendors were already accessing REDE voluntarily prior to the publication of the interim rule because the manual process of receiving updated information via telefax or e-mail was more cumbersome. Currently, all State agencies that operate an EBT system are using the FNS automated REDE system. None of these State agencies have indicated that the system is overly burdensome. Furthermore, the requirement that State agencies access the REDE system on a daily basis is consistent with the level of importance we place on ensuring that food stamp benefits be approved only at authorized retailer locations.

The commenter also asked for clarification on State agencies' responsibility for the accuracy of the REDE file. This provision does not make State agencies responsible for the accuracy of the REDE file, but rather for downloading REDE updates on a daily basis.

Except where necessary for border store access, the interim final rule excludes manual transactions from the interoperability requirements. In general, commenters were in support of the requirement that manual transactions continue to be interoperable in border stores necessary for access, with one commenter stating that all EBT retailers should be able to process interstate manual transactions nationwide. However, two commenters opposed the requirement that any retailer be required to process interstate manual transactions because of the administrative burden to the retailer. Although we understand this concern, border store retailers are already required to have the capability to participate in the neighboring State EBT system via a manual voucher process when the system is down or if the retailer is not equipped with a POS device. The requirement is in place because border stores, by definition, are necessary for clients to be able to make food stamp purchases without having to travel excessive distances. State agencies must, therefore, ensure that there is a process in place for these clients to purchase food regardless of system availability at the time. Given the high degree of client dependence on these stores and because the interim rule does not place an additional burden on these retailers, the Department is maintaining the manual voucher requirement in the final rule.

The interim rule requires State agencies to have the capability to convert electronic benefits to paper coupons when the household relocates to a State that is not interoperable with, and where electronic benefits are not portable from, the household's current State of residence. One commenter opposed the requirement because retailers are increasingly reluctant to accept coupons from recipients and banks are refusing to redeem coupons for retailers. Although other commenters did not oppose the requirement under current EBT implementation realities, they wanted acknowledgement that coupons will soon become obsolete.

The Department is indeed preparing for the time when paper coupons will no longer be needed. The Department is also sympathetic to State agency concerns that as EBT is implemented in the remaining State agencies, coupons will become increasingly unfamiliar to both clients and retailers. Currently, there are only six State agencies that do not have a Statewide EBT system in place. Four of these State agencies are scheduled to have EBT fully implemented within the next year, at which time approximately 95 percent of all food stamp benefits will be issued electronically.

The Department is also mindful, however, of Ohio and Wyoming's indefinite off-line exemptions from the interoperability requirements. Although many third party processor stores in these two States are able to accept out-of-State EBT cards, no retailers in the other States can accept the Ohio and Wyoming EBT smartcards. Therefore, the long-term impacts of eliminating the benefit conversion requirement would affect Ohio and Wyoming clients who move to another State. Estimates indicate that one percent of a State agency's caseload moves to another State in a given year. Currently, Ohio converts to coupons approximately $92,000 in benefits a year. Wyoming converts approximately $4,000 in benefits a year.

Given the limited instances in which benefit conversion would be necessary, the Department is convinced that requiring each State agency to have a benefit conversion process in place is no longer justified. Therefore, the Department is making optional the requirement that State agencies be able to convert electronic benefits to paper coupons when a household relocates to a State that is not interoperable with the household's current State of residence. However, clients must still be able to use their remaining electronic benefits upon relocation.

State agencies that wish to rely on third party processor access when a client moves to another State will need to assist clients in finding a store where their out-of-State benefits can be used and, if necessary, work with other State EBT directors, store managers, or third party processors to get the State's IIN loaded into a store's IIN files or routing tables.

Since it is not yet technically feasible for EBT smartcards to be interoperable at this time, Ohio and Wyoming State agencies will need to continue converting benefits to coupons whenever a household moves to another State.

Pub. L. 106-171 provided one hundred percent Federal funding for the cost of switching and settling interstate food stamp transactions. The total amount of funding available annually is limited to $500,000. The $500,000 funding limit was based on a study of interoperability fees conducted by the National Automated Clearing House Association (NACHA). Four commenters opposed the funding limit stating that interoperability should be an obligation of the Federal government.

The Department does not have the discretion to change the amount of one hundred percent funding available for interoperability costs incurred by State agencies. Although only about half of all State agencies have requested interoperability funding to date, there is no indication that total interoperability costs will exceed the $500,000 limit given current pricing trends. In the event that interoperability costs do exceed the funding limit, State agencies will continue to be reimbursed at the fifty percent rate for the amount over the limit. Should such an instance occur, the Department expects the additional cost to individual State agencies to be nominal.

Other comments were raised regarding one hundred percent reimbursement for administrative fees related to interoperability that are passed onto State agencies. Public Law 106-171 (7 U.S.C. 2016(k)(6)A)) specifically states, “the Secretary shall pay 100 percent of the costs incurred by a State agency under this Act for switching and settling interstate transactions * * *.” Therefore, the legislation does not give the Department authority to provide one hundred percent Federal reimbursement for administrative costs related to interoperability. Accordingly, one hundred percent Federal funding for interoperability costs will continue to be limited to costs incurred specifically for switching and settling interstate food stamp transactions.

Two commenters expressed concern over the nature, amount and organization of billing information required to receive enhanced interoperability funding. The Department distributes to State agencies more detailed information on these requirements each fiscal year as part of the “Request for Interoperability Funding, Administrative Procedures.” This document includes specific procedures outside the regulatory process. We have worked closely with State agencies since the publication of the interim rule to make the request and payment process for interoperability funding as streamlined as possible within our regulatory constraints. As a result, we believe we have achieved a process that is agreeable to all parties involved and welcome continued input.

We received three comments regarding FNS administration and control of a national switch (Gateway). Two commenters supported the development of a national switch while one commenter opposed it. In accordance with Pub. L. 106-171, the Department employed Phoenix Maximus to examine the feasibility of developing a Federal Gateway for handling interstate food stamp transactions. Although the report did not find technical barriers to having FNS support its own EBT transaction switch, it found that such an undertaking would not be cost effective. The Benton International Study of the interoperability costs of EBT transactions estimates that nationwide interoperability fees would amount to approximately $450,000 annually using private switches. In contrast, Phoenix Maximus estimates that the annual cost of operating a Federal EBT Gateway would be approximately $17 million. Another $2.2 million would be needed for initial implementation costs. Therefore, the Department is convinced that it would not be fiscally prudent to pursue the development of a Federal EBT Gateway at this time. As EBT expands across all States as the prevailing method for issuing food stamp benefits, we will continue to look into ways to make interoperability efficient and cost effective for all parties involved.

Two commenters raised issues regarding the handling of disputes, error resolution, and adjustments across State lines. One commenter favored a specific reference to the Quest rules while the other commenter favored having FNS take the lead in facilitating standards for error resolution. The Department has chosen to define standards for error resolution within a separate rulemaking body. The EBT Benefit Adjustments Final Rule, published on July 5, 2000 at 65 FR 41321 specifically addresses the process for making retailers or clients whole when a system error occurs.

This rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, it has been reviewed by the Office of Management and Budget (OMB).

A Cost-Benefit Analysis has been completed and is available to interested persons at the Kansas City address listed above. In summary, the analysis finds that changes in the rule will have positive potential benefits for insureds who do not engage in program abuse.

Changes in prevented planting provisions will be beneficial to two groups of producers. One group is made up of those who, under current provisions, would forgo the full prevented planting payment on a first crop in order to plant a second crop. Under the final rule, such producers will receive a reduced prevented planting payment to at least partially compensate for pre-planting costs incurred on the first crop. The second group is made up of producers who change planting decisions and plant a second crop that would not have been planted under current provisions. In taking this action, these individuals will reveal they perceive a positive economic benefit relative to the options offered them by current provisions. Whether payments and costs associated with prevented planting coverage increase or decrease and the magnitude of any such change will depend on the proportion of reduced prevented planting payments made under the final rule that are taken by producers who would have taken a full versus zero payment under current provisions.

Double insurance provisions of the final rule reduce the incentive for program abuse that is perceived to have occurred under current provisions. Earlier notice required from producers who are prevented from planting should also help reduce instances in which insurance providers cannot accurately determine whether insured causes resulted in the loss. Over time, if program abuse is decreased, premium reductions may result. Such reductions would be beneficial to producers who do not abuse the program. However, because the amount of abuse that currently occurs cannot be measured with existing data, immediate rate adjustments for reduction of program abuse are not appropriate. Rather, such adjustments should be made when adequate loss experience is available to support actuarial calculations that satisfy appropriate credibility standards.

Adding provisions to allow coverage for crops produced using an organic farming practice may encourage more producers using this practice to purchase insurance than in the past. Although it is not possible to determine the number of additional producers who may participate, the premium amount charged will be adequate to cover any additional losses and the amount provided to insurance providers for administrative and operating expenses will be as determined under the SRA.

Providing a reconsideration process for determinations regarding good farming practices will reduce costs incurred by insurance providers and insured producers. Prior to this rule, arbitration or judicial review were the mechanisms used to settle disputes regarding the use of good farming practices, and both are significantly more expensive than the reconsideration process that FCIC will perform. Although it is not possible to estimate the savings because the number of cases mediated or litigated in the past is not known, savings to insurance providers and insured producers will clearly result.

Changes to the provisions regarding yield substitution when actual yields fall below 60 percent of the applicable transitional yield should have little impact on overall program costs. It is anticipated that producers will continue to elect to substitute all low yields in a data base even though they are allowed to select individual years. Therefore this change should not affect program costs. Likewise, it is not anticipated many producers will elect to cancel the yield substitution election once they have it. Therefore, new provisions allowing cancellation of the election will have little impact on program costs.

Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501), the collections of information in this rule have been approved by the Office of Management and Budget (OMB) under control number 0563-0053 through February 28, 2005.

The following comments were received regarding information collection burden: (1) A commenter stated FCIC estimates it will take producers, a loss adjuster, and an insurance agent an average of one hour to provide the requested information. The commenter believes this is incorrect for the producer, agent, company, and loss adjuster. It believes a more realistic estimate would be at least one hour for each individual listed above; and (2) Another commenter states that while the purpose of the proposed rule is to make changes and clarify existing policy provisions to better meet the needs of the insured and the insurance companies, it believes that the information FCIC collects for use in offering crop insurance coverage, determining program eligibility, establishing a production guarantee, calculating losses qualifying for a payment, and combating fraud, waste, and abuse will most likely result in a substantial increase in the number of burden hours to producers and insurance providers. In addition, it believes that it is critical the rule introduce greater clarity and common sense in the regulations that ultimately define contract terms for crop insurance polices as well as producers' responsibilities. The commenter believes it is imperative the rule be developed without imposing unnecessary, burdensome administrative requirements for crop insurance participants.

Based on the comments received, FCIC has increased the burden that FCIC estimates it will place on respondents for information collection for the entire crop insurance process to 1.1 hours per respondent for a new estimated total of 1,447,152 hours for 1,310,553 respondents with 4,017,742 responses. The information collection burden is determined based on the average amount of time taken for all crops, all producers, all required and optional notices, etc. However, the large number of producers who do not provide loss notices and do not have claims significantly reduce the average information collection. FCIC strives to limit the information collection burden and implements only those changes required to properly administer the program and keep waste, fraud, and abuse to a minimum.

RMA is committed to compliance with the GPEA, which requires Government agencies, in general, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This regulation will not have a significant impact on a substantial number of small entities. New provisions included in this rule will not impact small entities to a greater extent than large entities. The amount of work required of the insurance companies delivering and servicing these policies will not increase significantly from the amount of work currently required. Therefore, this action is determined to be exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605), and no Regulatory Flexibility Analysis was prepared.

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983.

This rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. With respect to any action taken by FCIC under the terms of the crop insurance policy, the administrative appeal provisions published at 7 CFR part 11 and 7 CFR part 400, subpart J for the informal administrative review process of good farming practices, as applicable, must be exhausted before any action against FCIC for judicial review may be brought.

This action is not expected to have a significant impact on the quality of the human environment, health, and safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

On September 18, 2002, FCIC published a notice of proposed rulemaking in the Federal Register at 67 FR 58912-58933 to amend the General Administrative Regulations, subpart T-Federal Crop Insurance Reform, Insurance Implementation, the Group Risk Plan of Insurance Regulations, and the Common Crop Insurance Regulations; Basic Provisions to implement program changes mandated by the Act, as amended by ARPA, and make other changes and clarify existing policy provisions to better meet the needs of the insured, effective for the 2003 and succeeding crop years for all crops with a contract change date of November 30, 2002, or later.

Following publication of the proposed rule on September 18, 2002, the public was afforded 30 days to submit written comments and opinions. Based on comments received and specific requests to extend the comment period, FCIC published a notice in the Federal Register at 67 FR 65732 on October 28, 2002, extending the initial 30-day comment period an additional 15 days, until November 12, 2002.

A total of 3,407 comments were received from 209 commenters. The commenters were reinsured companies, attorneys, trade organizations, commodity associations, State agricultural associations, regional agricultural associations, agents, insurance service organizations, universities, producers, USDA agencies, State Departments of Agriculture, grower associations, and other interested parties.

Significant comments were received regarding the provisions related to the implementation of ARPA. However, since these changes are statutorily mandated, FCIC has no choice but to implement these provisions as expeditiously as possible. The provisions mandated by ARPA include good farming practices and the reconsideration process, sustainable farming, organic farming, multiple benefits on the same acreage in the same crop year, prevented planting, yield substitutions, removal of references to limited coverage, and all the related provisions necessary to implement these provisions. Therefore, these changes and all related conforming changes are included in this final rule.

Further, an important program vulnerability was also raised by the Office of Inspector General (OIG) in an audit report related to the notice of loss for prevented planting acreage. Given the significance of this identified problem, FCIC has elected to also include the changes related to this vulnerability and any related conforming changes in this final rule.

A significant number of comments were received that raised issues that were not contemplated by FCIC when it proposed certain changes. These comments pertain to provisions that can generally be categorized as related to program integrity and administrative issues. Given the concerns expressed by the commenters, FCIC needs additional time to adequately consider such comments and take appropriate action. FCIC has determined that it does not have sufficient time to adequately address these comments prior to the contract change date for 2004 crop year fall planted crops.

To avoid delaying the implementation of provisions mandated by ARPA and OIG, FCIC has decided to separate those changes from the other proposed changes for which FCIC needs additional time and move forward only with the ARPA and OIG changes in this final rule. FCIC has determined that it would impose an undue burden to implement those changes for which it needs additional time to respond to comments in the middle of a crop year. Further, it would also adversely affect those producers who plant both fall and spring planted crops to have different contract terms. All comments received on the proposed provisions that are not included in this final rule will be addressed in a subsequent final rule to be effective for the 2005 crop year.

The comments received that are related to the portions of the proposed rule addressed in this final rule and FCIC's responses are as follows:

Comment: A few commenters stated that the Basic Provisions must be clear and unambiguous, and that they also should be revised only in accordance with the best analysis available from the combined experience of program administrators, approved insurance providers and active agricultural producers. The commenters stated that any of the several inclusive processes permitted by law for the material revision of such a fundamental regulation would have been preferable to RMA's unilateral pronouncement. They complain that they have difficulty defending a policy that they did not help develop.

Response: Many of the changes that were originally proposed arose from discussions with the insurance companies, producer groups, OIG, the United States Attorney's offices, and other interested parties. However, to utilize the negotiated rulemaking process that the commenter proposes would drastically delay the process and hinder efforts to make meaningful and necessary program changes in a timely manner. The defense of the policy terms is dependent on the language of the policy, not the drafter. Through notice and comment, FCIC permits the insurance providers to have input into the specific language of the policy. Further, 7 CFR part 400, subpart X permits insurance providers and any other interested party to obtain an interpretation of policy provisions.

Comment: A commenter urged FCIC to not make any changes in the Basic Provisions at this time.

Response: The provisions related to ARPA must be implemented. However, as stated above, FCIC has received such significant comments on other provisions that it is taking the additional time needed to fully evaluate the comments and take appropriate action.

Comment: Many commenters requested an extension of the comment period.

Response: In response to such comments, FCIC extended the comment period an additional fifteen days.

Comment: Many commenters expressed concerns regarding implementation of the rule in the middle of a crop year. They also expressed concerns regarding the legality of making the rule effective upon filing with the Federal Register .

Response: As stated above, FCIC has elected not to implement the rule in the middle of the crop year. With respect to the effective date, FCIC will be in compliance with the applicable laws.

Comment: Many commenters noted that the amount of work required of the insurance companies delivering and servicing these policies will increase significantly from the amount of work currently required. It claims that if more is being required of the companies, they need to be compensated accordingly. Another commenter expressed concerns regarding the increased workloads and program delivery costs.

Response: FCIC agrees some additional work will be required to administer the new provisions contained in this final rule. However, most of these changes in this final are statutorily mandated so FCIC has no choice but to implement these provisions. Further, it is also anticipated that companies will realize significant savings as a result of the new limitations on multiple crop benefits on the same acreage, which may also reduce the work the insurance providers must currently devote to adjusting these claims. Further, Congress has placed a cap on the amount of money that insurance providers can receive to pay for their administrative costs. Therefore, FCIC does not have the authority to increase the compensation paid to the insurance providers.

Comment: Many general comments were received regarding added program complexity and unclear definitions, terms and conditions.

Response: Since no specific provisions were discussed, FCIC is unable to respond directly. However, FCIC did receive similar comments regarding specific provisions and has responded to those concerns below.

Comment: A few commenters requested their comments to the Common Crop Insurance Policy, Basic Provisions be considered for the Group Risk Plan (GRP) proposed provisions where applicable.

Response: FCIC has considered all the comments to the Common Crop Insurance Policy, Basic Provisions as if they are applicable to the GRP provisions. Where applicable, in response to the comments, FCIC has made the same or similar changes in both the GRP provisions and the Basic Provisions.

Comment: A commenter stated the “first,” “second” and “double” crop provisions contained in ARPA should not apply to the GRP policy. It stated that National Agricultural Statistics Service (NASS) records are based on their own criteria, and are consistent from year to year in methodology. The commenter added that, from an administrative standpoint, including this language in the GRP policy removes much of the administrative ease that has been associated with GRP and that administrative ease has been one of GRP's biggest selling points to many insureds.

Response: Section 108 of ARPA does not make any distinction between plans of insurance. It simply requires that any loss for a first crop insured under the Act be reduced by 65 percent if a second crop is planted on the same acreage in the same crop year and suffers an insurable loss. Since ARPA does not provide an exception for GRP policies, no change has been made.

Comment: A few commenters stated beyond the definition itself, all references to “good farming practices” in the GRP policy need to reflect the provisions of section 123 of ARPA. For instance, in § 407.9, section (3)(c)(2), the statement is made that insurance will not be available if good farming practices are not followed, with the unqualified warning that if “any farming practice is not established or widely used in the area, it may not be considered a good farming practice.” In this instance, there is not even an attempt to reflect the ARPA provision in question. This sentence is clearly deficient and at odds with the statute and must be changed to comply with section 123 of ARPA.

Response: Since the definition of “good farming practices” in the GRP policy specifically references both sustainable and organic farming practices as “good farming practices,” it is not necessary to repeat these terms wherever “good farming practices” is used in this rule. FCIC agrees the reference to “widely used” should be removed and has revised section 3(c)(2) accordingly. A similar reference has also been removed from the definition of “good farming practices.” These references were removed because “common usage” is not a useful measure to determine whether a practice is acceptable. The more accurate measure is whether the practice is generally recognized as agronomically sound since generally recognized is a judicially determined objective standard.

Comment: A few commenters asked if it is intended that organic crops will be insurable under the GRP policy. If so, the commenter questioned whether they will be referred to as “organic,” or simply fall under the generic heading of that crop. The commenters states that if they will not receive “special” or distinct treatment under GRP, there is no need for separate references to “organic” in the GRP policy. The commenters also stated the definition of “good farming practices” should be the same in the GRP policy and the Basic Provisions. The commenters also asked that the Corporation include the regulatory sections in 7 CFR part 400, subpart J if it extends or re-opens the comment period on the crop insurance rules.

Response: Although organic farming practices will be insured under the GRP policy, the organic crop will be insured using the same NASS yield and expected market price as all other crop practices. Therefore, organic crops are not insured separately from any other type of the same crop. The definitions of “good farming practices” have been made consistent to the extent possible in both the GRP policy and the Basic Provisions. The only differences are due to the fact that GRP is not a production based policy. At the time that the comment period for the proposed rule was extended, FCIC did not know that there was an issue regarding the reconsideration process published in 7 CFR part 400, subpart J. However, now that FCIC has considered all the comments, it realizes that amendments are required to subpart J as stated below. Since changes to subpart J were made only in response to comments received, an additional comment period was not required.

Comment: Several commenters recommended adding a definition of “actual production history (APH).” Some of the comments suggested the definition cross reference 7 CFR part 400, subpart G.

Response: FCIC agrees with the comments and has added a definition of “actual production history (APH).”

Comment: Several commenters recommended adding the definition of “area.” Some of these commenters stated a definition is warranted because it is possible to interpret “area” to be surrounding townships, sections, etc., and the term could mean something different depending on the region of the country where the crop is grown. Another commenter stated that a definition is needed since the term “area” is used throughout the policy. Another commenter stated it is not clear who determines the area. An additional commenter stated the use of the term “area” should be consistent throughout the policy. One commenter recommended the definition take into consideration a three-mile perimeter from the unit and consider the soil, climate, water, and topographic conditions and other circumstances substantially similar to those in the unit.

Response: FCIC agrees the term “area” should be defined. A definition has been added for “area,” which encompasses all usages of the term in the policy. The insurance provider is responsible to determine the area in accordance with the definition. The definition of “area” cannot be limited to a certain size because many usages of the term require that the area have same characteristics, which may not fit within the suggested size.

Comment: A commenter recommended adding the definition of “average yield.” A commenter stated the definition of “average yield” is verbatim with the definition of “approved yield,” although as used in the program the two terms have very different meanings. The commenter recommended revising the definition of “average yield” and to consistently use each term in a manner consistent with its respective definition. Several commenters recommended revising the definition of “average yield” by changing “* * * including any adjustments * * *” to “* * * prior to any adjustments * * *” and/or including a reference to the average yield as the “preliminary” APH yield, as used in the Crop Insurance Handbook (“CIH”). A commenter recommended reconsidering the reference to section 36 in the definition of “average yield” since “average yield” is used in rate calculations for yield floors as well.

Response: The definition of “average yield” was included in the proposed rule. FCIC agrees the definition of “average yield” should not be the same as the definition of “approved yield.” The definitions of “average yield” and “approved yield” have been revised in this final rule such that the approved yield is the yield after it has been adjusted in accordance with the policy provisions. The average yield is the yield prior to any such adjustments. A reference to “preliminary APH yield” is not included in the final rule because it is not used in the policy. If the term is used in the CIH, it should be defined there. FCIC agrees the reference to section 36 does not include all adjustments that may be made prior to calculating approved APH yields and has revised the definition of “average yield” to include other adjustments.

Comment: Several commenters indicated buffer zones cannot prevent drift and unintended contact, and, at best, can only minimize contamination. Some of the commenters recommended revising the definition of “buffer zone” by replacing the words “prevent the possibility” with “minimize the possibility.” Other commenters recommended FCIC accept any buffer zone approved by an organic farm's accredited certifier, used in any certified organic operation, or included in an organic plan.

Response: FCIC agrees buffer zones cannot always prevent contamination of organic acreage and has replaced the word “prevent” with the word “minimize” in the definition of buffer zone. FCIC agrees that buffer zones should be those included in the organic plan that have been approved in writing by an accredited certifier. However, FCIC cannot accept buffer zones that are used in any certified organic operation, unless such buffer has been approved by the certifying agent, to avoid any conflicts within the policy. FCIC has clarified the definition accordingly.

Comment: A commenter asked how a company, agent or adjuster will know if the certifying agent is “accredited by the Secretary.”

Response: The company, agent or loss adjuster can determine whether a certifying agent is accredited by the Secretary by accessing the list of accredited certifying agents on the National Organic Program Web site at http://www.ams.usda.gov/nop/CertifyingAgents/Accredited.html.

Comment: A few commenters recommended defining “commonly used.”

Response: The phrase “commonly used” has been removed from this rule, including the proposed definition of “good farming practices,” because FCIC has determined that it is not a useful measure to determine whether a practice is or is not acceptable in an area. The more accurate measure is whether the practice used is generally recognized as agronomically sound since generally recognized is a judicially determined objective standard.

Comments: Many comments were received regarding the definition of “cover crop.” The comments are as follows: (1) Several commenters recommended revising the definition to indicate the effect on coverage of haying, grazing or otherwise harvesting the cover crop. The commenters stated it is important to clarify commercial use of a cover crop can affect coverage for other crops on the same acreage; (2) A few commenters stated the definition should be consistent with the definitions of “first crop” and “second crop.” One commenter asked if the reader should be referred to the definition of “second crop;” (3) Several commenters recommended revising the definition to exclude acreage eventually used for haying or grazing, intended for harvest. Other commenters thought it would be helpful to clarify “left in place” means not haying, grazing or harvesting; (4) A commenter suggested adding “as defined by FCIC” to the proposed definition; (5) Several commenters stated the definition of “cover crop” is too restrictive and inaccurate because it requires widespread or common usage before innovative alternative practices are recognized. A few of the commenters recommended replacing “commonly used in the area” with “agronomically appropriate to;” (6) A few commenters recommended adding purposes for cover crops such as enhancing soil health and nutrient availability, controlling weeds and pests, reducing fertilizer and pesticide costs, conserving water moisture, and protecting water quality; (7) A few commenters suggested deleting the proposed language indicating cover crops are generally left in place for an entire growing season. Some of the commenters stated producers will plant more than one cover crop on the same ground at different points during the same growing season, and cover crops often bridge two growing seasons; (8) A commenter recommended using the following definition: “A crop or a succession of crops that are agronomically appropriate which are planted for green manure, erosion control, to enhance soil health and nutrient availability, control weeds and pests, reduce fertilizer and pesticide costs, conserve water moisture, and protect water quality. The crop is generally left in place for a portion of the growing season, an entire growing season, or bridging two growing seasons;” (9) A few commenters stated using the phrase “generally left in place” causes the definition of “cover crop” to be unclear and creates ambiguity. Some other commenters recommended deleting “generally left in place for one growing season;” (10) A few commenters asked if grain planted for wildlife qualifies as a cover crop;” (11) A commenter asked if “left in place” meant it cannot be hayed or grazed; (12) A commenter recommended defining “green manure;” (13) A commenter suggested inserting “surrounding” before “area” in the definition of “cover crop;” (14) A commenter stated it is unclear what constitutes or qualifies as a cover crop; and (15) A commenter stated a cover crop could be commonly planted but not meet the requirements in the Prevented Planting Loss Adjustment Manual, and the definition should be more crop specific.

Response: FCIC does not agree the definition should include the insurance coverage impacts of haying, grazing or otherwise harvesting a cover crop. Those provisions are more appropriately included in sections 15 and 17, which state the impact on insurance if a cover crop is hayed, grazed or otherwise harvested. Therefore, no change has been made in response to this recommendation. FCIC has revised the definition of “second crop” to include cover crops. FCIC agrees the definition of “cover crop” should refer to the definition of “second crop” and has revised the definition accordingly. FCIC does not believe excluding hayed or grazed acreage from being a cover crop in the definition is as clear as stating the consequences of haying or grazing the cover crop in sections 15 and 17. Therefore, the recommended change has not been made. Use of the phrase “as defined by FCIC” in a definition only creates ambiguity because FCIC can only define terms in the definitions. Therefore, no change has been made in response to this recommendation. As stated above, FCIC has removed all references to “commonly used” and instead replaced it with the requirement that the cover crop be generally recognized by agricultural experts as agronomically sound for the area. FCIC agrees to add a definition of the term “generally recognized.” “Left in place” in the proposed provision did not mean it could not be hayed or grazed. In the proposed definition, it was intended to mean the crop would remain on the acreage for one growing season. However, FCIC agrees with comments recommending deletion of provisions indicating cover crops are generally left in place for one growing season and has removed this provision. FCIC has not accepted the recommended definition of “cover crop” because it is too restrictive to list the possible uses. FCIC agrees there are many uses for cover crops and has elected to remove the specific uses, other than the most common which is erosion control, and instead has referenced the purpose of cover crops as being related to conservation or soil improvement. However, FCIC has adopted a similar standard of agronomic soundness in its definition. A crop planted for wildlife use may qualify as a cover crop if it complies with the definition of “cover crop.” Since FCIC has removed the specific uses from the definition, the term “green manure” no longer needs to be defined. FCIC has defined the term “area.” Therefore, there is no need to include the term “surrounding.” With respect to what qualifies as a cover crop, provided that the crop meets the definition, it will be considered a cover crop. FCIC has revised the definition to improve clarity and all procedures will be revised to be consistent with such definition.

Comment: A few comments were received regarding the definition of “double crop.” The comments are as follows: (1) A commenter recommended amending the definition of “double-crop” by stating “two or more different crops;” (2) A commenter recommended replacing “practice” with “cultural agronomic practice;” (3) A commenter recommended clarifying that the words “the practice of * * *” means it is routinely done by the grower, not just one time; and (4) A commenter recommended including, in the definition of “double-crop” information about a third crop on the same acreage if two crops have already been planted in the same year, even if either or both crops fail.

Response: Although not common, double cropping requirements could be met with multiple plantings of the same crop, such as tomatoes or other vegetable crops that have multiple planting periods and harvests in the same crop year. No changes have been made in response to this comment. To eliminate any ambiguity caused by the different uses of the term “practice,” it has been removed from the definition. It is not necessary for the definition to require routine performance of double cropping because the provisions in sections 15 and 17 specify the producer must have double cropped acreage in at least two of the last four crop years in which the first crop was planted or grown on it. No changes have been made in response to this comment. Since the provisions in section 9 specify how crops planted following a second crop will be handled, it is not necessary to include such a provision here. No changes have been made in response to this comment.

Comment: Several comments were received regarding the proposed definition of “first crop.” The comments are as follows: (1) A few commenters recommended defining “first insured crop” rather than “first crop;” (2) A commenter stated it is irrelevant if the first crop is insured or not; (3) A commenter stated, for the purposes of prevented planting, it should not be necessary for the “first crop” to be insured and the term should be consistent with the definitions of “cover crop” and “second crop;” (4) A few commenters recommended separate definitions for “first crop” and “first insured crop” and a review of the provisions in which the terms are used; (5) A few commenters are concerned about situations in which a first crop is planted and not insured; (6) A few commenters are concerned about making the assumption that “first crop” and “crop” are to be interpreted differently, and that there will be confusion when dealing with double-cropping or following another crop and not following another crop practices for crops such as soybeans. One of these commenters was also concerned about the extra work and confusion generated due to the necessity of explaining potential outcomes to insureds of planting a second crop and of insureds making decisions to insure only some acreage of a crop; (7) A commenter recommended revising the definition of “first crop” as follows: “The first agricultural commodity planted on any specific acreage that would reach maturity in the current crop year;” and (8) A commenter stated the example in the definition of “first crop” fails to address short-rated wheat.

Response: For the reasons stated below, FCIC agrees with the commenters that using the term “first insured crop” would be less confusing to administer than the term “first crop” and it has revised its definitions and other provisions accordingly. Section 108 of ARPA clearly requires that to qualify as the first crop, the crop must be insured. As stated above, FCIC has made the definitions of “first insured crop,” “second crop” and “cover crop” consistent with one another. If a first crop is planted and not insured, it is not considered a first crop and the subsequently planted crop, if insured, would be the first crop. FCIC cannot accept the recommended definition of “first crop” since the requirements for a first crop are specifically stated in section 108 of ARPA, which includes the requirement that the first crop be planted for harvest in the crop year, not just reach maturity in the crop year, which is reflected in the proposed definition. The definition only requires that the crop be insured and planted for harvest, not actually harvested. Since short rated wheat is planted for harvest, it would qualify as a first crop.

Comment: Several commenters recommended separating fall and spring crops when defining “first crop.” The commenters did not think that the intent of ARPA was to discourage coverage of multiple crops in different crop seasons, and instead think the intent is to limit multiple crops within the same crop season, and recommended revising the definition of “first crop” to include the crop season. The commenters further stated the first spring seeded crop should be the “first crop” even though an insurable fall-seeded crop was planted on the same acreage.

Response: FCIC disagrees with the commenters. The provisions of ARPA do not distinguish between fall and spring season crops. The definitions of first and second crops contained in ARPA specifically reference the crop year rather than crop season. Since fall and spring crops are planted for harvest in the same crop year, they cannot both be considered as first crops. Therefore, no change has been made.

Comment: There were a large number of comments regarding the definition of “good farming practices” and for the purposes of addressing these comments, FCIC has grouped them into four following categories: (a) reasons the definition is generally inadequate; (b) statements and questions regarding the definition; (c) recommended replacement definitions; and (d) concerns regarding organic and sustainable farming practices.

(a) Many commenters stated the definition of “good farming practices” is inadequate for the following reasons: (1) It fails to establish a standard which is objective, consistent or ascertainable; (2) It is confusing, poorly worded, and may open up “good farming practices” to include virtually anything due to the language included in the last sentence; (3) There is no objective standard because it is whatever FCIC says it is; (4) Producers nor insurance providers will be able to determine whether FCIC has recognized a particular practice to be necessary, and certainly not on a timely basis; (5) It instructs the producer to “contact” the company “to determine if such practice is insurable” but does not tell how the company is to establish whether FCIC recognizes a particular practice as necessary; (6) It lacks recognition of the thousands of permutations of seed, seeding rate, row spacing, tillage practices, fertilization, irrigation, chemical application, herbicide application, harvesting procedures, and the timing of each that are currently loosely defined as “good farming practices;” (7) The word “should” used in a statutory or contractual context always invites problems (the commenter stated “should” denotes an aspirational goal and aspirational goals are for preambles and political speeches, not contractual or statutory terms; (8) Use of the words “area,” “commonly,” and “widely” (also used in sections 3 and 8) creates ambiguity; (9) It does not address whether a common practice is an insurable practice, e.g., it is a “common” practice in Iowa and Missouri to plant Roundup-ready seed into established grass, then burn it down; however, this is not an insurable practice; (10) Inclusion of “agronomic and weather conditions in the area” implies a temporal dimension that may invalidate certain practices that would normally be considered good; (11) The term “farming practice” is not defined; (12) It is unclear who makes the determination of good farming practices (FCIC, NRCS, and private insurers are all referenced or cross-referenced in the definition); (13) It infers that only sustainable conventional practices are recognized as being good farming practices; and (14) Farmers will miss planting windows because FCIC will not be able to provide determinations quickly when they are needed. One of these commenters asked what was meant by “recognized.”

Response: FCIC agrees that the definition of “good farming practices” should have an ascertainable standard and has revised the definition to include production methods generally recognized by the agricultural experts for the area. Further, as stated above FCIC has added a definition of “generally recognized” to add objectivity to the definition. FCIC agrees it is not reasonable to expect FCIC to know all good farming practices for all crops. The definition has also been revised to indicate the insurance provider will continue to make the determination of whether the production method is a good farming practice and FCIC will only assist in making such determinations if asked. If asked, FCIC will consult with agricultural experts familiar with a specific area for assistance in determining good farming practices in these cases. FCIC will also provide procedures informing insurance providers or insureds where to send requests for a determination of good farming practices. FCIC agrees with the commenter regarding the term “should” and for this and other reasons stated above, FCIC has removed the entire sentence from the definition. FCIC has defined the term “area” for the purposes of clarity and has removed the references to “commonly” and “widely.” FCIC does not agree the definition should address whether or not a farming practice is insurable. Insurable practices are designated in other parts of the policy. FCIC does not agree with the comment regarding temporal and agronomic conditions. Climatic and agronomic conditions such as soil type and annual rainfall are not temporal. Further, even localized weather conditions should be considered in determining whether a production method is a good farming practice because they have an impact on the growth of the crop. References to weather and agronomic conditions have been removed from the definition of “good farming practices” and placed in the definition of “area.” FCIC agrees what constitutes “farming practices” should be included in the definition and has revised the definition to explain they are productions methods utilized to produce the insured crop. The comment regarding the inference that only sustainable conventional practices are recognized as good farming practices has been clarified to distinguish between conventional, sustainable, and organic agricultural practices. Since insurance providers will be making these determinations, the timing should be no different than under the previous definition under most circumstances.

Comment: Many commenters had the following statements and questions regarding the definition of “good farming practices:” (1) Substituting FCIC and NRCS as arbiters in place of Extension does little to rectify the problem, and they recommend greater clarity about how good farming practice decisions will be made and by whom, and how they will be communicated to all parties; (2) Recommend clarifying what “recognized by FCIC” means; (3) The definition of “good farming practices” does not include the “common usage” test, but looks for practices that are compatible with the agronomic and weather conditions in the area—it is too vague to be meaningful to producers; (4) The definition misapprehends the role of accrediting agencies under the National Organic Program because they do not “recommend” farming practices; (5) The most effective means of enhancing the integrity of the Federal crop insurance program and reducing producer fraud and abuse would be to establish a totally objective “good farming practices” standard, and one that can be ascertained very quickly in all circumstances; (6) A question was asked regarding whether FCIC is changing what practices are insurable with the new definition; (7) A listing of “good farming practices” is necessary and producers must know where to find the listing since the insured has the right to know which practices are recognized by FCIC; (8) A question was asked whether FCIC will publish a listing of “good farming practices” and will the information be contained in the Special Provisions; (9) It will be a huge task to list the thousands of good farming practices and there is no provision for producers to request an appeal if a certain practice is not listed; (10) The reference to “produce at least the yield used to determine the production guarantee” may cause confusion in replant situations since planting after the final planting date results in yield reductions; (11) It is necessary to establish a procedure for quick turn around time for the many questions companies will receive from policyholders; (12) A question was asked what process will be used to obtain approval of a farming practice from FCIC and is it the obligation of the insured, as opposed to the insurance provider, to obtain a decision; (13) A question was asked how will the insured and insurance provider know, in advance, what FCIC considers to be good farming practices for a given county; (14) It is necessary for producers to know, up front, which practices FCIC will accept and it is necessary for FCIC to publish something by crop, state and county by a certain date; (15) FCIC should not have the ability to second-guess after the fact, rather its determinations must be made known up front at the same time growers are faced with the situations that cause disputes; (16) Add a review process for “good farming practices” determinations that requires the producer to be given an opportunity to review and respond to the evidence available to or considered by the agency staff person who made the original adverse determination; (17) FCIC does not have sufficient knowledge to know what sustainable and organic practices should be considered good farming practices; (18) FCIC failed to capture the intent of Congress to reduce discrimination against producers using sustainable and organic farming practices;” and (19) “Common usage” is a poor proxy for “scientific soundness,” the criteria set by Congress and indicated reference to common usage recurs throughout the rule, including §§ 407.9(3)(c)(2) and 457.8(b)(2).

Response: FCIC has revised the provision and now the insurance providers will be making the determinations based on what agricultural experts determine are generally recognized production methods. FCIC has clarified that it will only make such determinations if asked to do so. FCIC has deleted the reference to “recognized by FCIC” so no clarification is needed. FCIC has clarified the provisions by using weather, agronomic and other conditions to define the area. With respect to good farming practices, FCIC has clarified that the key is whether the crop will make normal progress toward maturity and produce the specified yield. Such determinations are made by agricultural experts based on generally recognized production methods. FCIC agrees that the accrediting agency may not recommend farming practices. However, in the organic plan, the accrediting agency must approve the production methods to be used by the producer. FCIC has revised the definition to add objectivity and allow determinations to be made as expeditiously as possible. FCIC has not changed the practices that are insurable with the new definition. It has simply clarified what constitutes a good farming practice. Insurable practices are designated in other parts of the policy. Since FCIC will no longer be making the determinations of good farming practices, it does not intend to develop or provide a listing of good farming practices. As pointed out by commenters, the large number of farming practices in use would make such a list extremely difficult, if not impossible to produce and maintain. Determinations must be made on a case by case basis based on individual farming operations. FCIC has revised the definition to account for late planted acreage. Since insurance providers will be making the determinations, the turn around time should be no different than under the current provisions. Since the definition has been revised, comments regarding decisions made by FCIC are no longer applicable for a majority of the producers. FCIC intends to issue procedures for those situations where FCIC is asked to render a determination. The reconsideration process requires FCIC to review any initial determination made by the insurance provider if it is disputed by the producer. However, initial determinations will be made by the insurance provider and can be made up front at the request of the producer. In the reconsideration process, the producer will have an opportunity to review and respond to the information upon which the initial determination of good farming practices has been made. Decisions made by FCIC in the reconsideration process will not be subject to further administrative appeal. FCIC agrees neither it nor the insurance providers have all the knowledge necessary to determine good sustainable or organic farming practices and, therefore, has deferred such determinations to agricultural experts who do have the knowledge to determine good farming practices. FCIC does not believe the definition contained in this final rule discriminates against any producer. The definition allows sustainable practices to include those generally recognized by the agricultural experts and good organic farming practices to include those generally recognized by the organic agricultural industry, or contained in the organic plan. Further, since the expectation is that crops produced under a sustainable practice will produce the same yields as a crop produced under a conventional practice, the definition should not discriminate between these practices. In response to previous comments, the term “common usage” has been removed from the definition.

Comment: Commenters recommended replacing the proposed definition of “good farming practices” with the following: (1) “Farming practices, including sustainable farming practices, generally recognized and used by agricultural producers in soil, climate, water, topographic and other circumstances substantially similar to yours to assure the insured crop makes normal progress toward maturity and produces at least the yield used to determine the production guarantee or amount of insurance.” The commenter stated “Generally recognized” is a phrase venerated in accounting, engineering, legal and other contexts, and which has been widely interpreted by courts to mean just what it says; in this proposed definition, “good farming practices” would be what good farmers do, an objective and ascertainable standard, not what academics theorize or the Agency decrees; (2) “Those farming practices recognized and required by RMA for the crop to be insured. Good farming practices are those necessary to enable the crop to make normal progress toward maturity and produce at least the guaranteed insurable yield. For crops that have not previously been insured or insurable under the Act, RMA will determine guidelines for acceptable good farming practices for each crop in each area and post that information on the RMA Web site. Otherwise, acceptable good farming practices are those farming practices commonly used in the area, compatible with the agronomic and weather conditions in the area, and that have proven to successfully produce at least the guaranteed insurable yield of the particular crop in the area. It is your responsibility to find out what the good farming practices for your crop in your area are and to follow those practices in order to produce an insurable crop. We suggest you contact your nearest Cooperative State Research, Education, and Extension Service (CSREES) office to obtain this information and recommendations for growing your crop. You should contact us if you have any questions regarding good farming practices, especially if you intend to use a farming practice not commonly used in the area or that differs from the recommendations obtained from CSREES;” and (3) “Farming practices used by the majority of growers in the county and proven to be sufficient to establish the crop and produce a yield equal to at least the yield used to establish your guarantee.”

Response: FCIC agrees in principle with the comment recommending good farming practices being generally recognized in the area. However, such a determination should be made by agricultural experts and FCIC has revised the final definition accordingly. FCIC has also improved the definition of “good farming practices” by adding a definition for “area” and “generally recognized,” clarifying the late planting issues, and that it is insurance providers that make determinations and FCIC will only make a determination if asked. The recommendation that would have required FCIC to recognize all good farming practices, post information on the website regarding determination of good farming practices for new crops, and otherwise provides for a “common usage” test, is cumbersome and does not eliminate deficiencies noted by other commenters. The recommendation requiring a majority of producers in the county to use the practice would be difficult to administer, does not address concerns regarding sustainable or organic practices, and also does not eliminate deficiencies noted in the comments received.

Comment: Commenters recommended revising the definition of “good farming practices” to: (1) Distinguish between sustainable and organic farming practices and address both in each reference to good farming practices; (2) Clearly place sustainable and organic practices on an equal footing with conventional practices; (3) Include a statement of non-discrimination against sustainable and organic practices and systems; (4) Not require sustainable or organic farming systems to be commonly in use in a given geographic area in order for producers using those systems to be eligible; (5) Make the definition in the Basic Provisions consistent with that in the GRP by including references to organic farming practices, and to add “* * * organic farming practices will be considered to be good farming practices if they are those specified in the organic plan,” (found in section 37 of the proposed Basic Provisions) to the definition in both policies; (6) Remove any suggestion the burden of proof lies with the producer or that private insurers will be the final arbiters of what constitutes good farming practices; (7) Replace “area” with “county;” (8) State farming practices not commonly used in the area would not be insurable unless approved by written agreement; and (9) Include organic systems in the definition of “good farming practices” by adding “For crops grown under an organic practice, the farming practices included in an approved organic farm plan and those practices approved by a private organization or government agency that certifies organic products in accordance with 7 CFR part 205 and is accredited in accordance with the requirements of the National Organic Food Production Act of 1990. Commenters suggested this addition would include those who have the knowledge and expertise necessary to make experience based determinations, and that FCIC, NRCS, and private insurers have an insufficient knowledge base and training to make appropriate determinations.

Response: FCIC agrees the definition should distinguish between sustainable and organic farming practices and has revised the definition accordingly. Further, the definition has been revised to treat sustainable, organic, and conventional practices equally. In response to previous comments, the term “common usage” has been removed from the definition. The definitions in the Group Risk Policy and in the Basic Provisions have been made consistent in this final rule to the extent possible and since reference to organic farming practices has been added to the definition, FCIC has removed the proposed section 37(f). The producer is required to be in compliance with the policy terms. The insurance provider is supposed to verify that such compliance has occurred, which includes a determination of whether good farming practices have been followed, and ultimately FCIC will make the determination of good farming practices in the reconsideration process. The term “area” has been retained in the definition and has been defined. The term “county” was considered but not used because it is too restrictive in many instances because the area is defined by characteristics of the acreage, not a political subdivision. Requiring the use of written agreements would be discriminatory against producers who use good farming practices that are not commonly used in the area, such as some sustainable practices. Therefore, this change has not been made. FCIC has revised the definition of “good farming practices” to include similar language to the recommended language regarding organic farming.

Comment: Several commenters stated the definition of “prohibited substance” is incomplete because it does not specify what list will be used to determine “prohibited substances.” The commenters recommended clarifying if the listing of prohibited synthetic substances and the list of acceptable natural substances attached to the National Organic Program (NOP) will be used or if other lists will be used. Some commenters recommended clarifying that the list of prohibited synthetic substances and the list of acceptable natural substances of the NOP are the lists to be used.

Response: FCIC has revised the definition to include a reference to the lists of prohibited and acceptable substances published at 7 CFR part 205.

Comment: A commenter asked what the difference is between “certified organic,” “organic” and “transitional organic” acreage, and recommended either defining “organic acreage” or removing it from the definition of “prohibited substance.”

Response: The proposed provisions define “certified organic acreage” and “transitional acreage.” The term “transitional organic acreage” is not used nor defined in the provisions. The difference between transitional acreage and certified organic acreage is that transitional acreage may have organic practices used but it has not met the requirements to be considered certified organic acreage by the certifying agent. FCIC agrees with the commenter that reference to “organic acreage” should be removed from the definition of “prohibited substance” because the term “organic acreage” could be misleading and is not defined or used elsewhere in the provisions. Therefore, FCIC has revised the definition of “prohibited substance” to remove the reference to “organic acreage.”

Comment: Several comments were received regarding the proposed definition of “second crop.” The comments are as follows: (1) A commenter suggested the defined term state the significance of summer fallow and continuous cropping practices; (2) A commenter stated the concluding sentence should be eliminated because a cover crop planted after a first crop should not be considered a second crop when it is hayed, grazed or otherwise harvested; (3) A commenter stated the definition needs to be made consistent with the definition of “cover crop” and “first crop;” (4) Several commenters stated the word “immediately” in the first sentence should be deleted as it suggests a specific time to plant the second crop and is ambiguous; (5) Another commenter recommended defining the term “immediately;” (6) A commenter suggested clarifying multiple crops on the same acreage are approved provided the actuarial table allows for more than one crop on the same acreage in the same year; (7) Several commenters stated the policy does not take into account an initial crop that is not insured removes moisture and nutrients from the soil, which increases the yield risk of any following crop; (8) A few commenters stated the phrase “hayed, grazed, or otherwise harvested” should be used to be consistent with other areas in the policy; (9) A few commenters stated the definition encroaches on the definition of “cover crop” by implying a cover crop can be hayed, grazed or harvested (not remain “in place”); (10) A commenter stated “will be” is an errant change in tense; (11) A commenter suggested clarifying how a second crop can be the same crop as a first crop and if the second crop has to be insured or not; (12) A few commenters stated the definitions would allow two uninsured crops and then a “first crop” which might not meet the requirements of the definition of “good farming practice;” (13) A commenter suggested clarifying how crops with multiple planting periods will be handled; and (14) A commenter stated the definition may not be clear to a layman.

Response: FCIC does not agree it is necessary to state the significance of summerfallow or continuous cropping practices in the definition of “second crop.” Section 108 of ARPA does not make any distinction with respect to the farming practice used. All that is material is whether the second crop was planted for harvest. For the purpose of section 108 of ARPA, FCIC has determined that harvest is the removal of crop from the acreage by any means. Since haying and grazing removes the crop from the acreage, it is considered harvested. However, FCIC has clarified that for the purpose of determining the end of the insurance period, harvest of the crop will be as defined in the Crop Provisions, not as determined in the definition of “second crop.” FCIC has revised these definitions to ensure that they are not in conflict with one another. FCIC agrees the word “immediately” could be misinterpreted and has replaced it with the “next occurrence of planting.” Since the second crop is not required to be insured, there should be no reference to its insurability. Section 108 of ARPA does not consider the effect of the first crop on the acreage in determining whether the next crop planted is considered a second crop. As stated above, if the initial crop planted is not insured, it is not a first crop. If the initial crop is insured, the only determinant is whether the next crop was planted for harvest. However, removal of moisture and nutrients from the soil by the first crop or any previously planted uninsured crop, or whether the producer used good farming practices must still be considered in determining whether the crop is insurable. There are several provisions that limit insurance on multiple crops and, if planting multiple crops on the same acreage is considered to be a poor farming practice, then no insurance would be provided for any crop that is planted using a poor farming practice. FCIC has revised the provisions to consistently use the phrase “hayed, grazed or otherwise harvested” throughout the Basic Provisions. However, the definition has been revised to make it clear that for the purposes of determining the end of the insurance period, the definition of “harvest” in the Crop Provisions controls. As stated above, FCIC has revised the definitions of “second crop” and “cover crop” to ensure that they are consistent with each other. However, a producer may still elect to hay, graze or otherwise harvest a cover crop. The definition of second crop is intended to provide the conditions under which a cover crop will be considered to be a second crop. The definition has been revised to make it clearer that planting of the same crop twice on the same acreage in the same crop year may be considered as both a first and second crop if replanting is not required by the policy. FCIC agrees the definition should be modified to indicate the second crop does not have to be insured to be considered a second crop and has modified the definition accordingly. The revisions made in response to the comments clarify the definition. Crops with multiple planting periods may qualify as first and second crops and will be administered accordingly. For example, if a crop is planted in one planting period and the same acreage is subsequently planted to the same crop in the next planting period, and replanting is not required under the policy, the first and second crop provisions of the policy would be applicable.

Comment: Several commenters stated that if the term “Secretary” is used only in the definition of “certifying agent” it might be better to refer to the “Secretary of Agriculture” in that definition rather than adding a new definition.

Response: FCIC agrees with the commenters and has deleted the definition of “Secretary” and amended the definition of “certifying agent” as suggested.

Comment: Commenters stated the following regarding the definition of “sustainable farming practice:” (1) The proposed definition is narrow and makes “sustainable farming practice” synonymous with conservation practice standards in the local NRCS Field Office Technical Guide; (2) Merely cross referencing another agency's criteria for conservation practices without some critical analysis to determine the adequacy of those standards for crop insurance purposes is insufficient and a more accurate definition is needed; (3) The definition should, at the very least, reflect the existing statutory definition of sustainable agriculture (7 U.S.C. 3103(17)) and incorporate an “including” clause to reference the NRCS or university extension approved practices and systems; (4) Producers and reinsured companies should not be shunted off to NRCS to find out what counts as a “sustainable farming practice;” (5) RMA should consult with USDA's Agricultural Research Service (ARS) and the Organic Farming Research Foundation in developing a framework for a good sustainable and organic farming practices definition that recognizes current practices as well as providing provisions for the kind of experimentation—for instance, in varied and complex crop rotations—that may be unfamiliar to RMA but have made organic farming the successful and reliable practice it is today; (6) The definition could be deleted since the term is not used anywhere except in the definition of “good farming practices;” and (7) NRCS is not defined as part of the USDA.

Response: FCIC agrees the definition should be broadened and has revised the definition to remove the reference to NRCS and incorporate those practices generally recognized agricultural experts for the area to conserve or enhance the environment. This revision allows experts to determine whether the practice used is appropriate for the area. Although NRCS and others may have guidelines or regulations regarding sustainable farming practices it should not be necessary to reference them in this policy. It is inappropriate to incorporate the definition of “sustainable agriculture” from 7 U.S.C. 3103(17) because it includes provisions that are not suitable for an insurance policy such as sustaining and enhancing economic viability and quality of life. FCIC has incorporated those provisions regarding enhancing and conserving natural resources. FCIC has included provisions that would be permit consultation with ARS and the Organic Farming Research Foundation to determine whether the farming practice used or to be used qualifies as a sustainable farming practice. Just because a term is only used once, it must still be defined if there could be any confusion as to its meaning. Since the term “NRCS” is removed from the definition, it is not necessary to define it.

Comment: Several commenters thought the provisions in section 3(f) would encourage producers to make a decision to plant or not plant based on the effect planting has on the APH.

Response: Due to other revisions, the applicable provision is now section 3(e). Producers must make their decisions based on what is best for their farming operations. However, sometimes those decisions have consequences. Under this provision, if the producer elects to plant after a crop has been prevented from being planted, the consequence is that the producer will receive a yield for the purposes of APH. Since this is statutorily mandated, FCIC has no choice but to include the provision even though it may affect the producer's decision. Additionally, FCIC has revised section 3(e) to clarify that the provisions contained therein do not apply if the double cropping requirements have been met, because section 108 of ARPA specifies that if the producer meets the double cropping requirements, the assigned yield will not be included in the APH for the first insured crop that was prevented from being planted.

Comment: A few commenters acknowledged the provisions in section 3(f) are mandated by ARPA, but stated there will be a number of underwriting and data processing questions to be resolved in order to be able to implement this in the APH process. For example, separate yield descriptors may be needed to identify prevented planting yields and blended yields and the addition of prevented planting data to the Policy Holder Tracking System. In this case, there may be more detail in section (3)(f)(1)-(3) than is needed in the basic policy language. As written, it will require data processing changes to at least three APH entries (total production, acres and per-acre yield) when, if not mandated by the policy language, it might be possible to achieve the same result while only affecting the per-acre yield entry.

Response: Even though it may affect several APH entries and some systems may be impacted, it is important that the information be in the policy so the producer can determine how planting a second crop will affect his or her yield. No change has been made.

Comment: A commenter suggested changing “APH yield” to “approved yield” in section 3(f).

Response: FCIC agrees with the comment and has changed the provision accordingly.

Comment: A commenter stated section 3(f) applies only to APH crops and that non-APH crops should be addressed.

Response: Section 108 of ARPA only refers to adjustments to the APH that are to be used to determine the subsequent years' APH. There are no references to other plans of insurance. No change has been made.

Comment: A few commenters recommended deleting section 3(f) because, in prevented planting situations, there is no actual production history.

Response: FCIC cannot delete redesignated section 3(e) because section 108 of ARPA now requires a yield be determined for prevented planting acreage to be used in the actual production history. No change has been made.

Comment: A commenter stated section 3(f) is confusing and recommended calculating the APH based on the harvested acreage in the unit when at least 35 percent of the acreage in the unit is harvested.

Response: Section 108 of ARPA mandated that 60 percent of the APH yield will be included in the APH database for the first crop whenever the first crop is prevented from being planted and a second crop is planted. This section did not provide for any exceptions based on the amount of acreage that is prevented from being planted. No change can be made.

Comment: A commenter suggested changing the phrase “its respective yield determined in accordance with this subsection” to “60 percent of the approved yield” in section 3(f)(1).

Response: FCIC agrees and has revised the provision accordingly.

Comment: Many commenters commented on the provisions proposed in section 9(a)(8) that allow a producer to elect not to insure second crop acreage when there is an insurable loss for planted acreage of a first crop. The comments are as follows: (1) Several commenters stated the term “elect” implies a new form is required, and this process would also require the completion of a new or revised acreage report, which does not seem to be addressed; (2) Several commenters asked who would record the election and what procedures would be used; (3) A commenter stated the provisions should be revised so it is clear to the producer how the election is to be communicated and documented; (4) A commenter stated a new form or guideline for the second crop will be needed. They believe it is unclear if a box to check or a new form will need to be used by the adjuster when appraising and releasing the first crop. The commenter added this will be a training issue for all involved; (5) Some commenters stated the provisions will be difficult to administer; (6) Some commenters asked why the sentence is in parentheses. They stated the election is required at time of appraisal, which will require agent involvement in the loss process, which is prohibited by the SRA and this language needs to be coordinated with SRA requirements; (7) A commenter stated the provisions need to be clarified as to when a company releases the acreage, who is responsible or able to accept the insured's request to insure the second crop acreage, the agent or the company; (8) Some commenters stated FCIC should consider whether this would be more appropriate under section 8—Insured Crop; and (9) A commenter believes a cleaner approach would have been to simply include language stipulating insurance for a second crop planted after the failure of an initial crop lost due to non-emergence of seed would not become effective until the second crop emerges. They believe such language would prevent payment of a second indemnity for drought in the same crop year on the same acreage, but still allow a producer who is lucky enough to establish a second crop to pay for and receive coverage for the remainder of the insurance period. The commenter further recommended RMA rescind a 2002 change in the Agency's Loss Adjustment Manual (LAM) that requires a 15-day waiting period after the end of the late planting period before a crop can be appraised for non-emergence. They stated RMA's oft-stated reasoning behind this rule was it prevents a producer from waiting until the last day of the late planting period and then being able to get an adjustment one day later. They suggest if RMA is truly worried about producers waiting to plant until the end of the late planting period (and taking a significant reduction of coverage without any reduction in the associated premium) to get a quick non-emergence appraisal that they instead create rules to apply directly to those very few individuals. The commenter believes for instance, RMA could require a report of the planting date for each insured unit planted during the late planting period and not allow an appraisal until the end of the late planting period or at least 7-10 days from the actual date of planting if planting occurred with less than seven days remaining in the late planting period. They stated this would allow producers who planted by the final planting date to get an appraisal at the end of the late planting period (after their crop has been in the ground at least 15 days) and establish a minimum 7-10 day emergence window for crops planted toward the end of the late planting period. The commenter has in the past been very critical of the addition of the additional 15-day waiting period due to the fact there is no evidence they have been able to discover supporting the need for this rule to address a real problem. Instead, they believe the rule was developed only to be used as a stop gap method for preventing a producer from gaining the release of non-emerged acreage and planting a second crop of grain sorghum before the final planting date. The commenter believes with the development and implementation of the proposed first crop and second crop rule, RMA should remove the additional 15-day waiting period to allow for the timely planting of an uninsured second crop. They suggested if RMA determines a sufficient number of producers are taking advantage of the late planting period, RMA should look into a revised rule similar to the one suggested above to deal specifically with acreage planted during the late planting period.

Response: Due to other revisions, the applicable provision is now section 9(a)(7). For GRP policies, the producer will make the election not to insure the second crop acreage on the acreage report if it insured under GRP. For policies other than GRP, the provision has been revised to require that producers provide written notice of the election at the time the first insured crop acreage is released. The format of such written notice is up to the insurance provider. FCIC does not require any specific forms. Under the notice provisions of the policy, it would be the producer's responsibility to provide written notice to the agent. As revised, FCIC no longer believes that the provision will be difficult to administer. Just because a notice is provided to an agent regarding an election at loss time, this does not mean that the agent is to be involved in the loss adjustment. The prohibitions in the SRA continue to apply in these situations. The agent's role is merely ministerial. The parenthesis have been removed. FCIC disagrees this provision would be more appropriate in section 8 since this is an insurable acreage issue that only applies to acreage where a second crop has been planted and is not dependent on the crop planted. FCIC cannot consider the “non-emergence of seed” approach recommended to resolve multiple benefit issues addressed by ARPA because section 108 of ARPA specifies that it is applicable whenever the crop is planted for harvest and there is no requirement that the crop actually emerge. Since the Basic Provisions do not address the time a crop may or may not be released, the recommendation to remove LAM procedures cannot be made in this rule. However, all LAM procedures will be made consistent with the provisions of this rule. FCIC has also restructured section 9(a)(7) for clarity.

Comment: Some commenters recommended that section 9(a)(9)(i)(A) be deleted, and that alternately, if (A) is not deleted, they recommended it be revised to require all 3 crops to be harvested, not just the 3rd crop. They also suggested that if (A) is not deleted, the “or” be changed to “and.” A commenter asked if this is trying to address a previous operator on the land, and if not, what it is addressing. They believe the entirety of sections 9(a)(8) and(9) are very difficult to administer, and asked whose problem it ultimately is to properly administer. The commenter stated the agent is saddled with tremendous errors and omission exposure, and that typically agents enter what the insured reports. They added this language would require the agent to ask questions on a hypothetical basis of every insured in an attempt to determine if a situation might possibly exist, which would be an impossible situation, and one they believe will only be administered on a “gotcha” basis by RMA.

Response: Due to other revisions, the applicable provision is now section 9(a)(8). FCIC does not agree the provision can be deleted. Section 108 of ARPA allows both sections 9(a)(8)(i)(A) and (B) to be conditions upon which the third crop planted on the acreage in the same crop year can be insured. FCIC cannot restrict the ability of the producer to qualify for insurance beyond that specified in ARPA. FCIC agrees the producer should have evidence that three crops have been harvested and has revised the provision accordingly. The suggestion to change the word “or” to “and” cannot be made because ARPA allows either the producer to prove that they themselves met the requirement or that previous producers met the requirement on the applicable acreage. Since it is a condition of insurability, it is the insurance providers responsibility to determine whether the crops planted in any crop year are the first, second or third. FCIC understands the provisions are somewhat complex and may require some additional work. FCIC will assist the insurance providers in any way it can to facilitate the process. However, since the provisions are required by ARPA, no change can be made.

Comment: A few commenters asked which crops section 9(a)(9) is applicable to (for example, row crops or vegetable crops.) Some of the commenters asked how it would be determined whether or not it is “an established practice in the area to plant three or more crops for harvest on the same acreage in the same crop year” and what kind of documentation would be needed.

Response: The provisions of redesignated section 9(a)(8) are applicable to all crops, including row and vegetable crops. Whether or not it is a generally recognized practice in the area to plant and harvest three crops will be determined by the insurance providers. No specific documentation is required in the policy. However, if the insurance provider believes the practice is questionable, it should obtain a written opinion from agricultural experts, the organic agricultural industry, or request a determination be made by FCIC.

Comment: A commenter would like to see winter wheat, whether intended for harvest or not, considered a first crop with regard to insurability of “third” and subsequent crops.

Response: ARPA requires the first crop to be an insured crop and planted for harvest. Therefore, winter wheat that is not insured or it is not planted for harvest cannot be considered a first crop when determining the third or more crops. No changes have been made.

Comment: Numerous commenters expressed concern with the proposed language in section 14(d)(1) (Your Duties). The comments are as follows: (1) A commenter objected to the proposed provisions stating it is unrealistic to expect an insured to maintain separate production records within the same unit. The commenter also believes the proposed change would unfairly discriminate against any insured who typically double crops; (2) A commenter stated the proposed provisions create a new geographic area or “subunit” previously unknown to the federal crop insurance program. The commenter stated in addition to the substantially increased administrative burden on the producer, companies will have to find some way to describe, identify and keep records about such sub-units, which can be infinite in number and change their boundaries from year to year. They believe the proposed provision is simply a bad idea incapable of resuscitation through improved drafting; (3) A commenter stated the proposed requirements should only be at the request of the company, otherwise it is burdensome for both the insured and the company. The commenter stated the proposed provisions require records by acreage, not unit, which they feel is probably not practical; (4) A commenter stated the proposed requirements are too burdensome. The commenter does not believe it should be necessary to keep records separate between first and second crops, since all production is aggregated to the unit; (5) Several commenters stated the proposed requirements are very confusing. They stated the proposed change creates additional record-keeping burdens on the insured, especially if portions of a field or unit were planted to a crop that failed and a second crop is planted on the entire acreage in the field or unit. The commenters believe keeping records for the acreage of the second crop where the first crop failed will be difficult to verify; (6) A commenter stated while the proposed provisions are necessary, the example of keeping production records from 10 acres of wheat may not look practical; (7) A commenter stated the proposed provisions should specifically reference section 15(e)(2) and not just 15(e); (8) Several commenters stated the provisions are confusing and should be clarified. They suggested the parenthetical sentences might be better as a separate item since they provide additional requirements beyond those in the first sentence of the paragraph; and (9) A commenter recommended the last sentence be clarified and specifically state if it is intended to allocate all of the production from a field or if production will be pro-rated on a per acre basis.

Response: FCIC agrees the provisions proposed in section 14 (Your Duties) (d)(1) may require additional burdens on the insured and insurance provider. However, ARPA requires that insurance benefits for a first crop be limited when a second crop is planted on the same acreage in the same year if the producer suffers an insurable loss on the second crop, except in the case of double-cropping. Therefore, separate production records are necessary for acreage planted to a first and second crop to determine the appropriate indemnity reduction. FCIC cannot eliminate this requirement and still be in compliance with ARPA. No change has been made. However, if the producer fails to maintain separate records, provisions are also included in section 14 that allow insurance providers to allocate production. FCIC disagrees with the comment that the provisions unfairly discriminate against an insured who typically double crops. Since double cropped acreage is exempt from the indemnity reduction applicable when a second crop is planted for harvest, the additional record keeping requirements would not apply. FCIC agrees that additional records must be maintained for claim audit purposes. However, no specific subunit is created and APH records for the subunit would not need to be maintained for future years. No change has been made. FCIC agrees the reference to section 15 should be changed to reference section 15(e)(2) and FCIC has revised the provision accordingly. FCIC agrees the parentheses in the proposed language are not necessary and has removed them and added language to help clarify this section. FCIC cannot use the per acre basis because there may be circumstances where the yield guarantee is different and using the proportion to liability method takes into account these yield differences. Therefore, no change has been made in response to the comment. However, FCIC has determined it is necessary to state the consequences of failure to provide any production records for the second crop and has revised the provisions to specify that the reduction will continue to apply if such production records are not provided.

Comment: Several commenters commented on the provisions proposed in section 14(f) (Your Duties) that require earlier notice of prevented planting. The comments are as follows: (1) A commenter stated the proposed provisions would be beneficial if the prevented planting determination was made at the time of notice. The commenter added that as it is now, there is nothing to encourage the company to make a prevented planting determination until late in the season; (2) A commenter stated the proposed provisions requiring the prevented planting acreage report/notice of loss to be reported earlier than the “normal” acreage report create additional reporting and burden. The commenter questions what is wrong with the current process. They stated this change could result in multiple prevented planting acreage reports and increase loss adjustment expense cost. The commenter stated the company still has to wait to pay prevented planting losses if the crop is insured under a revenue plan of insurance, plus has to wait to see what the producer does get planted, so they do not see any advantage to the earlier reporting requirement for prevented planting; and (3) Several commenters disagreed with the proposed provisions. Some of the commenters do not believe it is feasible for most producers to be documenting prevented planting losses within 72 hours. They stated many crops have different final planting dates, the producer would still be busy trying to plant other crops and that time is critical during spring planting. The commenters recommended the current provisions be retained that allow producers to report prevented planting acres by the acreage reporting date. A commenter stated the proposed provisions are far too strict. The commenter believes notification of prevented planting should be given when producers provide their acreage reports.

Response: The insurance providers can certainly make the determinations of the prevented planting at the time notice is given and no longer have to wait until after the acreage reporting date. Under current provisions, the insured is not required to give notice of prevented planting acreage until the acreage reporting date, which is well after the time the insured cause of loss prevented the producer from planting, making it extremely difficult for the insurance company to verify an insured cause of loss existed and prevented planting. The proposed provisions were added to improve program integrity by requiring insureds to report notice of prevented planting within 72 hours of prevented planting, thus allowing the insurance company an earlier opportunity to verify the cause of prevented planting. FCIC agrees the proposed change may create additional reporting requirements for insureds. However, this change is necessary to improve program integrity. FCIC does not agree the proposed provisions create additional loss adjustment expenses or multiple prevented planting acreage reports. The proposed earlier notice of prevented planting is not required to be made on an acreage report, therefore multiple prevented planting acreage reports would not be necessary. Under both the current and proposed provisions, insurance companies are required to verify the producer was prevented from planting due to an insured cause of loss that occurred within the insurance period and adjust the prevented planting claims. Therefore, the burden on the insurance provider remains the same, it is only the timing that is different. Therefore, no change has been made.

Comment: A commenter stated the provisions proposed in section 14(f) (Your Duties) conflict with current language in section 33 that specifies notice of loss must be reported to the crop insurance agent and not the company.

Response: FCIC does not believe the proposed provision conflicts with provisions in section 33. Throughout section 14, the language for notice requirements references “us.” This just means that notice to the insurance provider is provided through the agent, as specified in section 33. Therefore, no change has been made.

Comment: Several commenters stated that section 14(f) (Your Duties) should be revised to require the insured must be prevented from planting by the final planting date. A commenter suggested the following language: “(f) In the event you are prevented from planting an insured crop which has prevented planting coverage, you must notify us within 72 hours after: (1) The final planting date; and (2) If applicable, you determine you will not be able to plant the insured crop within any applicable late planting period.” A few commenters stated the insured must be prevented from planting by the final planting date, therefore the phrase “if you do not intend to plant the insured crop during the late planting period or if a late planting period is not applicable” should be deleted in section 14(f)(1) (Your Duties). Another commenter suggested the following language: “(f) In the event you are prevented from planting an insured crop which has prevented planting coverage, you must notify us within 72 hours after: (1) The final planting date. (2) You determine you will not be able to plant the insured crop within any applicable late planting period. (3) If you do plant during the late planting period, you must revise the acreage report to reflect the correct planting 72 hours after the end of the late planting period for the crop.” A commenter suggested inserting the words “due to an insurable cause occurring prior to the final planting date” after the word “crop” in section 14(f) (Your Duties).

Response: The first suggested change would require two notices and this would be an unnecessary burden on the producer. Therefore, no change has been made. The second suggestion cannot be adopted because it would conflict with the definition of “prevented planting” contained in section 1 and provisions contained in section 17, which specify when a producer must be prevented from planting. No change has been made. The third suggestion is not adopted because the producer is already required to report all planted acreage on the acreage report. Therefore, no revision or additional requirements are needed. No change has been made. The last suggestion is not adopted because the purpose of the notice is to allow the insurance provider the best opportunity to determine whether the producer was prevented from planting due to an insurable cause. Therefore, whether the cause is insurable cannot be made a condition of when the notice must be provided. No change has been made.

Comment: A commenter stated the change proposed in section 14(f) (Your Duties) will require losses to be reported for each field with prevented planting acreage. The commenter states this will be a major training issue.

Response: FCIC does not agree the proposed change will require losses to be reported for each field with prevented planting acreage. Section 14(f) requires notice when the insured crop is prevented from being planted. Notice on a field-by-field basis is not required. Therefore, no change has been made.

Comment: A commenter recommended the last part of section 14(f)(1) and all of (2) (Your Duties) be deleted, so it will simply read “In the event you are prevented from planting an insured crop which has prevented planting coverage, you must notify us within 72 hours after the final planting date.” The commenter believes the language they recommend be deleted is confusing and can be handled in procedure.

Response: FCIC disagrees with the comment. Prevented planting can occur during the late planting period and the producer must be made aware of the reporting requirements under such circumstances. This cannot be done in procedures because the producer does not receive them. Therefore, no change has been made.

Comment: A commenter recommended that FCIC amend section 14(f)(1) (Your Duties) to require the insured to provide notice within 72 hours of the late planting period, rather than of the final planting date. They believe an insured that must report notice within 72 hours of the final planting date is more likely to claim a prevented planting loss, and that the additional planting time may persuade the insured to plant a crop. The commenter stated the purpose of the program is to encourage, not discourage, agricultural production. They stated this change will obviate the need for subsection (f)(2). Another commenter suggested that section 14(f)(1) (Your Duties) should read as follows: “The final planting date; or”, and strike out all other wording in the proposed subsection (f)(1).

Response: Requiring a later notice when the producer never intended to plant the crop during the late planting period inhibits the insurance provider's ability to verify the cause of loss. Additionally, the recommended change does not address when notice of prevented planting would be required for crops that do not have a late planting period. Therefore, no change has been made.

Comment: A commenter recommended section 14 (Our Duties) be revised to state that both the government and reinsured companies have the duty to participate in reconsideration, mediation and NAD appeals.

Response: FCIC does not agree with the recommended change. Provisions contained in section 14 (Our Duties) referencing arbitration, reconsideration, and appeals are intended to specify when losses will be paid, and not how the appeals process will operate or who will participate. Other provisions contained in section 20, 7 CFR part 11 and 7 CFR part 400, subpart J specify how, and by whom, arbitrations, reconsiderations, mediations and NAD appeals will be conducted. Therefore, no change has been made.

Comment: A commenter provided the following comments on the provisions contained in section 14(a) (Our Duties) that require if the insured has complied with all policy provisions, “we will pay your loss within 30 days after” agreement, completion of arbitration/appeal/court adjudication. The commenter stated exceptions include the inability to pay and a deferral period. The commenter believes a deferral period in which information may be gathered may be an acceptable delay; however, they believe acceptable reasons for an inability to pay a loss should be clarified. The commenter stated producers have found payment delays to be common and the 30-day rule easily avoided. The commenter believes if payment is not possible within the 30-day requirement, an insured should be compensated for the late indemnity payment.

Response: Since no changes were proposed to provisions regarding the insurers inability to determine the amount of the loss contained in section 14(b) (Our Duties) or the provisions regarding deferral of loss adjustment until the amount of loss can be accurately determined contained in section 14(c) (Our Duties), the public was not provided an opportunity to comment on the recommended changes. Therefore, the recommendations cannot be incorporated in the final rule.

Comment: A few commenters recommended the words “the later of” be added at the end of the text in section 14(a) (Our Duties) so that it reads as follows: “within 30 days after the later of:'

Response: FCIC agrees with the recommendation and has revised the provision accordingly.

Comment: A commenter suggested the current language in section 14(a)(1) (Our Duties) be retained because they believe the added portion does not change anything and is not necessary.

Response: FCIC agrees with the comment and has revised the provision accordingly.

Comment: Several commenters recommended changing the colon at the end of section 14(a)(1) (Our Duties) to a semi-colon.

Response: FCIC agrees and the change to section 14(a)(1) (Our Duties) has been made accordingly.

Comment: A few commenters suggested the word “or” be added at the end of section 14(a)(1) (Our Duties) and at the end of section 14(a)(2) (Our Duties).

Response: Under proper drafting procedures, the use of “or” before the last paragraph implies that there is an “or” between each of the paragraphs in the subsection. Therefore, FCIC has added “or” only at the end of (a)(2).

Comment: A commenter suggested retaining the current language in section 14(a)(2) (Our Duties).

Response: FCIC does not agree. Since reconsideration of determinations regarding good farming practices are used to determine whether claims should be paid or the amount of the claim, there must be a delay in the payment of such claims until the process is complete. Therefore, no change has been made.

Comment: Many commenters stated that inclusion of the word “arbitration” in section 14(a)(2) (Our Duties) is inconsistent with removal of the arbitration clause proposed in section 20.

Response: Since FCIC will address the proposal to remove arbitration and the public comments regarding that proposal in a subsequent rule, no change is necessary.

Comment: A commenter believes an adverse selection issue could arise if the “first crop” and “second crop” are not insured by the same company. They stated for example, in Texas a wheat grower could buy wheat coverage by the sales closing date, then only report his so-called “for grain” acreage on the acreage reporting date, which would then drive whether wheat became the “first crop.”

Response: In the scenario presented in the comment, the insured producer would have little indication of growing conditions for a second crop when reporting the wheat acreage in the fall. Therefore, if adverse selection does exist, it would not matter whether or not the first and second crops were insured with the same insurance provider. However, FCIC has revised the reporting requirements in section 9(a)(7) to ensure that both insurance providers know that there is a second crop. No change has been made.

Comment: Several comments were received regarding proposed provisions contained in sections 15(e) through (g). The comments are as follows: (1) A few commenters believed the producers rights and responsibilities for a partial loss on the first crop needed more clarification; (2) A few commenters asked, if one insurance company covers the first crop and a different company covers the second crop, who has responsibility and liability for paperwork and premiums; (3) A commenter questioned insuring only the first crop, and leaving the 2nd crop uninsured; (4) A few commenters wanted clarification regarding coverage and premium cost for second crop acreage and what happens when the second crop suffers an insurable loss; (5) A few commenters felt the 35% and 65% breakdown is confusing and one commenter did not feel the 35% is fair since most input costs could be incurred by the time the first crop is lost; (6) A few commenters were concerned with the extra work, burden and costs companies would bear to implement these rules because the rules may require adjusting the crop several times as well as making trips to help decide if the first crop is a total loss or partial loss; and (7) A few commenters felt sections 15(f) and (g) (which FCIC believes should be correctly cited as 15(e) and (f)) will increase loss adjustment expense (due to more paperwork and extra trips to the farm), and one of these stated the producer may ask for two calculations on loss adjustment and select the “best deal.”

Response: Section 15 only pertains to the manner in which payments are made. FCIC has clarified sections 9 and 14 regarding the notice requirements, record keeping for any acreage subject to indemnity reduction when a second crop is planted, and timing of payments. When more than one insurance company is involved, and the insured elects to insure a second crop, it would be the responsibility of the company insuring the first crop to pay the reduced indemnity and collect the reduced premium for the first crop and to revise the indemnity and premium if there is no loss to the second crop. The proposed provisions allow a producer to elect whether or not they want insurance on second crop acreage because a full payment for a first crop can often exceed the total of a reduced indemnity payment on the first crop and a full indemnity payment on the second crop. For example, a producer who loses a cotton crop and would receive an indemnity of $1,000 but elects to plant grain sorghum on the same acreage, with a liability of $500, would only collect $350 for the cotton and even if there was a total loss to the grain sorghum, the producer would only collect $850 for the crop year, instead of $1000 they could have collected if they had not planted or insured the second crop. FCIC has clarified sections 15(e) and (f) to specify that there is no impact on the premium or indemnity for second crop acreage even when the second crop suffers a loss or a subsequent crop is planted on the same acreage. Section 108 of ARPA requires the 35 percent payment, which equates to a 65 percent reduction. Therefore, both percentages are used to determine the indemnities for the first crop when the second crop is planted and does not sustain an insurable loss. No change can be made in these percentages. FCIC agrees administration of the new rules may require some extra work when adjustments to the claim are needed because a second crop is planted. FCIC also agrees that for prevented planting acreage, an additional loss adjustment is needed when a second crop is planted. FCIC agrees that additional work is required to determine the effects of planting a second crop. However, since ARPA requires these provisions, no changes can be made.

Comment: A commenter suggested the provisions proposed in section 15(f) be modified to treat prevented planting claims in a similar manner as non-emergence claims. The commenter stated knowing weather related situations can change, they believe a producer who files a prevented planting claim should be able to keep 100 percent of the indemnity if the situation changes and the producer is later able to plant a second crop on the acreage that they be allowed to keep the prevented planting indemnity if they elect not to insure the second crop. They believe the so-called “black dirt” policy currently in place prevents growers from making good management decisions and capitalizing on what can often be rapidly changed growing conditions, even when they are willing to take the risk on themselves. The commenter recommended the proposed rules be stricken until such time as a comprehensive review of prevented planting rules can be completed and a coherent set of recommendations in this regard can be put forth.

Response: FCIC not accept these suggestions. Section 108 of ARPA mandates a reduction in prevented planting payments for first crops anytime a second crop is planted on the same acreage, except in the case of double-cropping. Unlike the provisions regarding a second crop planted on acreage planted to a first crop on the same acreage, which only requires the reduction when the second crop is insured and suffers and insurable loss, ARPA mandates such reduction to the prevented planting payment regardless of whether the second crop is insured. Therefore, no change can be made.

Comment: A commenter stated the provisions proposed in section 15(h) seem to conflict with the definition of “cover crop.”

Response: The double-cropping requirements cannot be met if a cover crop is a second crop and is hayed, grazed or otherwise harvested. ARPA requires, for the purpose of proving double-cropping, that both crops be insurable. Cover crops are not insurable. Therefore, no changes can be made.

Comment: A commenter asked what is meant by “insurance offered under the authority of the Act” in section 15(h)(3). In other words, does the insurance simply have to be offered for the two crops, or do the specific crop types, practices, etc., have to be included in the actuarial table for the county.

Response: “Insurance offered under the authority of the Act” means that the policy is reinsured by FCIC. Private hail policies or other types of crop insurance policies that are not reinsured by FCIC are not offered under the authority of the Act. Further, insurance must be offered for the specific crop types, practices, etc., in order to meet double-cropping requirements. If the actuarial documents do not include the specific crop types, practices, etc., insurance is not offered under the authority of the Act, unless insurance was provided by a written agreement approved by FCIC.

Comment: A commenter stated that the provisions proposed in section 17(c) may present computer systems problems.

Response: FCIC agrees and appropriate changes will be made in data systems to accommodate situations in which premium reductions are required. No change has been made.

Comment: A few commenters thought the language in section 17(f)(4) is confusing, in part due to the use of like terms in different ways than they have been used in other sections. They asked whether they should interpret the language proposed to remove the requirement that the same acreage be prevented. One of the commenters suggested language be added to identify the second crop and require that records must be on the same physical location.

Response: FCIC incorporated the double cropping provisions from ARPA. However, for the purposes of readability, FCIC simply changed the wording to fit within the existing text. Therefore, the terms are being used in the same manner as stated in other policy provisions. Section 108 of ARPA allows a producer to rotate the acreage they double crop and does not restrict the producer from qualifying for benefits associated with double cropping on specific acreage they have not double cropped in the past. Therefore, the provisions do not require the same physical acreage to be prevented from being planted as has been double cropped in the past. No change has been made.

Comment: A commenter asked, regarding the provisions proposed in section 17(f)(4)(i), whether the insurance provider, FCIC or some other entity would determine whether or not a practice is an “established practice.” The commenter further asked whether FCIC is the determining agency, and what procedures must the insured or the insurance provider follow to obtain such a determination.

Response: It is the insurance providers responsibility to determine whether it is an established practice to plant the second crop for harvest following harvest of the first insured crop based upon whether such practice is generally recognized by agricultural experts or the organic agricultural industry for the area. FCIC will not be determining whether the practice is established in the area. However, there may still be issues regarding whether the practice qualifies as a good farming practice even if it is established in the area. In such cases, FCIC may be requested to make a determination. But this is only after the initial determination of whether the practice is established has been made. To make that determination, insurance providers must consult with agricultural experts or organic agricultural industry.

Comment: A commenter suggested the word “the” be inserted after the word “double-cropped” and before the word “acreage” in section 17(f)(4)(ii).

Response: FCIC disagrees with the recommended change because the addition would lead a reader to believe specific acreage had to be double cropped in the past. As stated above, this is not required. Therefore, no change has been made.

Comment: A few comments were received regarding section 17(f)(5). The comments are as follows: (1) A few commenters believe the proposed language is unclear, and they are not sure what is intended; (2) A commenter recommended the word “crop” be replaced with the words “agricultural commodity” in the first sentence of section 17(f)(5). The commenter also asked how a company would know if another crop had been planted on the acreage; and (3) A commenter suggested deleting the comma after the words “if any crop” in the first sentence of section 17(f)(5). The commenter also recommended the words “or other authorization by USDA allows haying/grazing” (similar to opening of the Conservation Reserve Program (CRP) acreage) be inserted at the end of the paragraph.

Response: FCIC is not sure where the ambiguity is. The provision is intended to preclude the payment of a prevented planting payment if the acreage is planted or a volunteer crop is harvested within the time frame specified. The provision does not distinguish between who plants the crop or harvests the volunteer crop. If it occurs on the acreage, no prevented planting payment is made. FCIC disagrees that the word “crop” should be replaced with “agricultural commodity” because it would make this provision inconsistent with other related provisions in the policy. FCIC will consider the appropriateness of such a change in the future. To properly administer these provisions, insurance providers must ask the producer if another crop has been on the acreage in the same crop year. FCIC agrees the comma should be deleted after the phrase “if any crop” in the first sentence and has revised the provision accordingly. FCIC disagrees with the comment recommending the addition of language that would allow emergency haying or grazing. ARPA does not allow exceptions from the reductions in premium and indemnity when the crop was planted for harvest. If the provision were added, it would be impossible to determine whether or not the insured intended to plant the crop for harvest. To ease administration, there is now an assumption that if the crop was harvested, it was planted for harvest. Therefore, no change has been made.

Comment: A commenter believes the provisions proposed in section 17(f)(5)(ii) seem inconsistent with the provisions of section 15(g).

Response: FCIC agrees that a conflict exists. As proposed, section 15 indicated a prevented planting payment would be reduced when a cover crop was hayed, grazed or otherwise harvested, while section 17 indicated no prevented planting payment would be made in this case. The provisions in section 15(g)(3) have been revised to indicate the prevented planting payment for a first crop is reduced when a cover crop is hayed, grazed or otherwise harvested after the end of the late planting period, or after the final planting date if a late planting period is not applicable. Section 17(f)(5) has also been revised to indicate the prevented planting payment for a first crop cannot be made when a cover crop is hayed, grazed or otherwise harvested within or prior to the late planting period, or on or prior to the final planting date if no late planting period is applicable. FCIC has also restructured section 17(f)(5) for clarification. Both sections 15(g)(3) and 17(f)(5) have also been revised to clarify the impact of haying or grazing a volunteer crop.

Comment: A commenter stated the proposed rule admittedly liberalizes the prevented planting provisions for two groups of producers, which will mean additional indemnities, costs and other outlays of money by SRA holders. The commenter stated despite admitting the Proposed Rule liberalizes the prevented planting provisions, the agency states that it will not adjust premium rates to reflect the changes in the prevented planting provisions, in fact, the agency states adjusting rates would be “inappropriate.” The commenter believes the agency's refusal to adjust rates to account for the liberalization of the prevented planting provisions is arbitrary and capricious, in violation of the custom, practice and course of dealings between the agency and the SRA holders, contrary to the agency's interpretation of its own duties and obligations under the SRA, the Federal Crop Insurance Act (Act) and regulations, in breach of the current and prior SRAs, in violation of the Act, and contrary to the principles espoused in the recent Supreme Court cases of Mobil Oil Exploration & Producing Southeast, Inc. v. United States, 2000 WL 807187 U.S. (June 26, 2000) and United States v. Winstar Corp., 518 U.S. 839 (1996). The commenter stated any and all rules increasing the outlay of money by SRA holders must be appropriately rated in an actuarially sound manner. They added moreover, if adequate loss experience is unavailable to support the necessary actuarial calculations, the provisions cannot, and should not, be liberalized. The commenter hereby reserves, and specifically does not waive, any and all claims that the SRA holders they represent and their Managing General Agents may have against the agency or the FCIC arising out of the liberalization of the prevented planning rules, or any other rules or policy provisions, contemplated in the Proposed Rule.

Response: The commenter misinterprets the cost benefit analysis (CBA) for the proposed rule. The CBA does state prevented planting provisions are liberalized. This is because insureds now have the additional choice of planting a second crop and receiving a prevented planting payment. However, the CBA indicates changes made to the provisions may require either decreases or increases in the premium rate associated with prevented planting. The CBA specifies several scenarios could exist with the new provisions and examines each with respect to the impact on program costs. Whether or not the rate for prevented planting coverage is increased or decreased depends, in part, on the number of people who had a full prevented planting payment in the past who now will elect to receive the reduced preventing planting payment and plant a second crop. In addition, the number of people who did not receive a prevented planting payment in the past, who would now receive a reduced (35 percent) prevented planting payment must be considered. FCIC will consider all of the possible scenarios resulting in increased and decreased prevented planting payment amounts when establishing premium rates for the new provisions and will make appropriate adjustments in premium rates to ensure that they are actuarially sound.

Comment: Several commenters commented on the provisions proposed in section 20 that allow producers to request a reconsideration of any loss determination regarding “good farming practices.” The comments are as follows: (1) A commenter stated although they believe the proposed language is effective and clear, they question why there is a separate reconsideration procedure specifically for determinations regarding good farming practices; (2) A few commenters were concerned about producers ability to resolve disputes regarding good farming practices with the proposed elimination of arbitration; (3) A commenter stated the appeal and review provisions proposed are difficult to follow and should be rewritten, if to be maintained at all, and should read as follows: “Only the FCIC may make a determination regarding good farming practices. If you do not agree with any loss determination made by it regarding good farming practices, you may request reconsideration of its determination in accordance with the review process established for this specific purpose and published at 7 CFR part 400, subpart J.” The commenter added there is no reason to refer to appeal of other determinations through application of the procedures specified at 7 CFR part 11, subpart A, since FCIC is not a party to the insurance policy and has no role for making determinations other than those with respect to good farming practices; (4) A few commenters stated the proposed provisions are not needed because only FCIC can render a determination of “good farming practices;” (5) A few commenters stated there is a fine line in many cases between whether a farmer failed to exercise “good farming practices” with respect to a crop or “abandoned” the crop. Therefore, the commenters believe “abandonment” cases should likewise be subject to the reconsideration process; (6) A few commenters asked if mediation might be a part of the “informal administrative process” to be established by the Corporation in an adverse determination of “good farming practices.” The commenters believe mediation provides a vital opportunity for producers to speak with FCIC decision-makers face to face. One of the commenters stated the subjective nature of determining “good farming practices” and getting a clear understanding from the producer of what was done and the other factors at play, makes mediation an ideal way to sort those facts out in a confidential and non-adversarial setting. One of the commenters stated FCIC should solicit public input on a review process for determinations of “good farming practices.” The commenter stated that while there are bare references to the review process published at 7 CFR part 400, subpart J in the proposed provisions, there is no proposal for an administrative process in the proposed rule. The commenter realizes the Corporation published a final rule on the appeal procedures under USDA's general administrative regulations, (67 FR 13249 (2002)). The commenter added the proposed rule was published in 1999, prior to enactment of the ARPA, and the prefatory comments to the final rule state that, “After the proposed rule was published and the comments received, Congress enacted ARPA, which created specific limitations on the appeals of determinations of good farming practices made by FCIC. Since these limitations are statutorily mandated, they are incorporated into the final rule.” The commenter was disappointed the Corporation has taken this approach to its rule-making responsibilities. They added while ARPA clearly states good farming practice determinations will not be considered adverse decisions for purposes of the National Appeals Division, it is silent on whether mediation might be a part of the “informal administrative process” to be established by the Corporation. The commenter believes, especially in the absence of clear standards under which “good farming practices” will be determined, mediation may be a vital opportunity for producers to speak with FCIC decision-makers face to face. They stated the review process for good farming practice determinations should require the producer be given an opportunity to review and respond to the evidence available to or considered by the person who made the original determination. The commenter suggested the Corporation include the regulatory sections in 7 CFR part 400, subpart J if it extends or re-opens the comment period on the crop insurance rules; (7) A commenter suggested the CFR sections be referenced by number not letter, for easy reference and consistency with the rest of the policy; (8) A commenter stated some of the cited regulations do not appear to exist, but rather are “reserved” sections. The commenter also asked if these regulations will be finalized prior to the effective date of this policy, and if it is appropriate to reference “reserved” sections; and (9) A commenter suggested provisions regarding appeals and administrative reviews be removed from section 20 and incorporated in a separate section 21, since they appear to deal with determinations made only by FCIC or RMA.

Response: Section 123 of ARPA requires FCIC to establish an informal administrative process that allows a producer the right to a review of a determination regarding good farming practices. Even if the arbitration provisions remain, they will be inapplicable to determinations of good farming practices. The only dispute resolution mechanism available is the reconsideration process to FCIC. FCIC does not agree the provisions should be revised to specify only FCIC may make good farming practice determinations. FCIC has revised the definition of “good farming practices” to specify insurance companies make the determination based on consultation with experts and that insurance providers, or insureds through their insurance provider, may contact FCIC to determine whether or not production methods will be considered to be “good farming practices.” FCIC disagrees reference to an appeal in accordance with 7 CFR part 11 is unnecessary. FCIC still makes certain determinations, such as approval of written agreements and some yields. FCIC has established the reconsideration process for good farming practices because it is required by ARPA. FCIC does not have the resources to reconsider other insurance provider decisions, such as abandonment. In addition, since a determination of abandonment is a factual determination made by the insurance company, any dispute regarding a determination of abandonment could be resolved through arbitration. Mediation cannot be a part of the reconsideration process. The purpose of mediation is to reach a compromise. However, determinations of good farming practices involve questions of fact based on whether the farming practices are generally recognized by experts for the area. The definition of “generally recognized” has been added to make the definition of “good farming practices” more objective and states that if there is a genuine dispute between experts, the practice is not generally recognized. Therefore, either the practice is or is not a good farming practice so there is no middle ground that could be achieved through mediation.

Since the reconsideration process was already codified prior to the proposed rule and FCIC did not propose any changes to the reconsideration process, there was no ability to solicit comments in the proposed rule. Any changes in the reconsideration process made in this final rule are in response to comments received to the proposed rule. If FCIC makes any other changes to the reconsideration process, it will solicit comments. Since determinations of good farming practices are based on the opinion of designated experts, the insured should be able to obtain the opinion upon which the determination was based and respond to the opinion in the reconsideration process. The determinations of lettering or numbering in the CFR is dictated by the Office of Federal Register and FCIC has no authority to change such references. A final rule was published in the Federal Register on March 22, 2002, to amend the appeal regulations found in 7 CFR part 400, subpart J, to include the administrative reviews for determinations of good farming practices. Therefore, all of the regulations referenced within the proposed rule do exist and do not reference “reserved” sections. FCIC is also publishing a technical correction, concurrently with this final rule, to amend the appeal procedure regulations found in 7 CFR part 400, subpart J, to clarify determinations of good farming practices made by either the Agency or private insurance companies are subject to administrative review and to make other changes required in response to comments to the proposed rule. One such change is to put all the good farming practice reconsideration requirements in one section. FCIC has clarified section 20 to specify those provisions that are applicable to decisions made by the insurance provider and those made by FCIC. FCIC has added provisions to clarify that decisions with respect to good farming practices do not include determinations of the amount of assigned production for failure to use good farming practices.

Comment: A commenter asked why organic is a different unit when it is just a different practice in section 34(c).

Response: Farming methods used in organic operations are subject to specific criteria, separate from conventional practices. For example, organic producers are prohibited from using certain substances for the control of weeds, disease or insects and fertilizers that conventional producers may use. Additionally, organic production must be kept separate from conventional production to avoid losing its organic status. Since producers maintain records of planted acreage and harvested production for crops grown under an organic practice separate from crops grown conventionally, FCIC believes separate optional units are appropriate for organic acreage.

Comment: One commenter stated the language in section 36 does not conform to the language of ARPA. Another commenter stated that this language will supersede major portions of the Crop Insurance Handbook and current Actual Production History procedures.

Response: ARPA only specifies that FCIC allow such election and what the election consists of. These provisions in the rule are consistent with ARPA. However, ARPA does not specify the manner or timing for such election. Therefore, the manner and timing needed to be included in the policy. Minor revisions will be required to the existing yield adjustment procedures (yield substitution) contained in the Crop Insurance Handbook to conform with the new language in the Basic Provisions.

Comment: Several commenters stated the reference in section 36(a) to “* * * actual yields in your production history that, due to insured causes of loss, are less than 60 percent of the applicable transitional yield* * *” indicates this applies to ANY insured cause of loss, while section 13 of the 2003 Crop Insurance Handbook specifies “* * *caused by drought, flood, or other natural disasters.” The commenters stated that while the end result may be the same, they believe the difference in wording may lead to different interpretations, therefore, they suggest this be clarified.

Response: FCIC agrees that the provisions should be the same and will amend the Crop Insurance Handbook to be consistent.

Comment: Several commenters commented on the ending phrase in section 36(a) which states, “* * * you may elect to exclude one or more of any such yields”. Several of the commenters believe the language leads to confusion. They feel the word “excludes” suggests these low actual yields are simply dropped from the Actual Production History (APH) calculation rather than having substitute yields used in their place. The commenters stated this is subsequently explained in subsection (c), but they feel it might be preferable to eliminate any confusion in the first paragraph. They recommended combining subsections (a) and (c).

One of the commenters recommended that FCIC amend the language to read: “you may elect to exclude any of such actual or appraised yields.”

Response: FCIC agrees that section 36(a) should also refer to the replacement of yields and has modified the provision accordingly. FCIC has added a definition of “actual yields” that includes both actual and appraised yields. Therefore, no change is made.

Comment: A few commenters stated that while reference to “one or more” of these low actual yields may be technically correct, they believe it could be misunderstood. They believe that once yield adjustment is elected, all qualifying low actual yields are eligible for substitution, but actual implementation is on a database basis (at production reporting time, depending on which of the various possible yield adjustment methods result in the best approved Actual Production History yield), not on an individual yield basis. The commenter stated for example, one database for a crop/county policy may implement substitute yields while other databases use “cups” or yield floors, however within that first database, substitute yields would replace ALL qualifying low actual yields, not just some.

Response: Section 105 of ARPA authorizes the exclusion and substitution of any actual yield that was less than 60 percent of the applicable transitional yield. The insured will now have the option of excluding and replacing any individual qualifying actual yield within a database instead of replacing all such yields within a database. The provision has been revised for clarity.

Comment: Several commenters stated the language in section 36(b) sounds as though once the yield substitution is elected it can never be canceled, which is contrary to procedures contained in section 13A(4) and 13B of the 2003 Crop Insurance Handbook. They recommended adding “* * * unless canceled by the applicable cancellation date.”

Response: Since yield substitution election can be made on an individual actual yield basis, FCIC agrees that the insured should be able to cancel each election in the database. If an election is cancelled, the actual yield will be used in the database. For example, if the insured elected to substitute yields in its database for the 1998 and 2000 crop year, for any subsequent crop year, the insured can elect to cancel the substitution for either or both years. The proposed language was so modified and requires the election to be cancelled by the applicable cancellation date.

Comment: A few commenters suggested the language in section 36(c) that states, “* * * a yield equal to 60 percent of the T-yield that is applicable in the county * * *” could be understood as always meaning the published county “T” Yield from the actuarial documents. They suggested replacing the language with the following: “* * * a yield equal to 60 percent of the applicable T-yield. * * *” The commenters believe this revision would be consistent with current procedural references to the “applicable “T” Yield” since other Actual Production History procedures may result in other types of “T” Yields, sometimes on a database basis, such as the simple average “T” Yield for added land, weighted average “T” Yields for perennials, etc. They also suggested referring to “T” Yields rather than T-yields to be consistent with the format used throughout the Crop Insurance Handbook.

Response: FCIC agrees the provision should reference the applicable T-yields and has revised sections 36(a) and (c) accordingly. With respect to the reference to T-yields, the Crop Insurance Handbook will be modified to conform with the Basic Provisions.

Comment: A few commenters suggested the parenthetical example in section 36(c) be rewritten to make the intended point that the substitute yields may vary by year. They believe as written, the language suggests the election of substitute yields is by year (rather than by crop/county with actual implementation by database).

Response: Section 36(a) and (c) clearly state that the producer may elect to exclude any individual qualifying actual yield for a crop year in the database. However, appropriate changes have been made to clarify that a crop year's individual actual yield is replaced with a percentage of the corresponding crop year's applicable T-yield.

Comment: Several commenters commented on section 36(d). A few of the commenters stated the language indicates the yield substitution election is not reversible. They believe this is contrary to current procedure, which allows the continuous Yield Adjustment Election to be elected and canceled on a crop/county basis, and also provides for the insured to decide whether to implement yield substitution by database each year the election is in place. The commenters stated an individual database under the election may have the best approved Actual Production History yield using substitute yields one year, but then might be better with a yield floor the following year, however as written, this now-irreversible election would preempt any subsequent use of yield floors (and “cupped” yields, which currently are preempted only the year following a year when substitute yields were used) until all substituted yields have dropped off the database. They believe an already complicated procedure for policyholders and agents would become even more difficult as policyholders would have to try to guess the long-term advantages and disadvantages of choosing this election. They recommended this policy language be revised to reflect current Crop Insurance Handbook procedure (without too much detail). The commenters believe if this change really is intended, it may explain why sections 36(a) and (c) are written to suggest that substitute yields are elected by year instead of implemented by database. They stated if that is the case, presumably carryover policyholders who had the yield substitution election the year before these new Basic Provisions become effective would be given the opportunity to cancel that election rather than being bound by these new rules that did not apply when they made the initial decision.

Response: FCIC agrees the election should be reversible and has added language to 36(b) to allow the cancellation of each election, if done not later than the applicable cancellation date.

Comment: One commenter asked for clarification of language in section 36(e) that references “* * * such other basis as determined appropriate by FCIC to cover increased risk * * *”

Response: FCIC has not previously included its rating methodology in the policy because such methodology is always subject to adjustment to ensure actuarial soundness. Therefore, FCIC has revised the provision to require that the premium adjustment reflect the risk associated with the yield adjustment as mandated by ARPA.

Comment: A commenter stated there must be risk management tools and policies to reflect the changing risks inherent in a different (organic vs. conventional) agro-ecological system of management. The commenter also believes many farmers do not understand the complexities of the crop insurance programs. They stated although some new risk management tools have recently become available, USDA needs to do more to help support risk management tools for organic agriculture.

Response: FCIC has clarified the provisions to maximum extent practicable. Further, RMA has established comprehensive risk management education and outreach opportunities by providing on-going training to producers in the use of futures, options, crop insurance, and other risk management tools through which producers can manage their own risks. New risk management tools are continuously being developed and if anyone would like to submit a new policy for organic crops, they can do so under section 508(h) of the Act.

Comment: A commenter stated that sustainable and organic are two very different systems, one being natural continuous regeneration (sustainable), while the other, is unnatural, managed and manmade (organic). The commenter stated they had no idea what they are meant to identify, as sustainable in an independent perspective, which is not also organic, and that this should be clarified.

Response: FCIC agrees sustainable and organic farming practices are two distinctly different farming methods and has defined the two terms separately. Under the final provisions, organic farming practices will be insured as a separate practice, while sustainable farming practices will be insured under current conventional farming practices. FCIC does not believe further clarification is necessary.

Comment: Several commenters stated they assume FCIC reviewed procedure contained in the Organic Practice Handbook to ensure no conflicts exist between that procedure and the proposed provisions.

Response: FCIC assumes the commenters are referencing the procedures contained in the 2001 Organic Crop Insurance Underwriting Guide. The procedures contained in the underwriting guide will be revised to be consistent with the organic provisions and definitions contained in this final rule.

Comment: A commenter stated any loss of production caused by failure to follow “all” good farming practices, including necessary pesticide applications to control insects, disease, or weeds will result in an appraisal for uninsured causes. The commenter added organic producers are not allowed by regulation to use pesticides and they have better control of all three problems than many conventional producers. The commenter stated it is a well-known fact at Land Grant Universities that crop rotation is a solution to these problems.

Response: FCIC has revised the definition of “good farming practices” to include production methods generally recognized by the organic agricultural industry or contained in the organic plan for organic practices. Therefore, failure of the organic methods that meet the definition of good farming practice would not result in the assessment of production for uninsured causes of loss.

Comment: A commenter urged FCIC to ensure data for organic practices is included in all actuarial tables in all counties so individual written agreements would not be necessary. Another commenter stated FCIC should make affirmative efforts to expand the actuarial tables by adding information from reputable, contemporary studies of yields and expected market prices for organic and sustainably produced crops. The commenter added under the proposal, insurance coverage will only be available for sustainable and organic crops if there is enough information specified in the actuarial table to determine the premium rate.

Response: Separate organic practices cannot be listed in all actuarial tables until sufficient organic data for all crops and counties is available. RMA has contracted independent studies to determine what reputable organic data, including yields and pricing information, is available that could be used to include separate organic practices in the Special Provisions. Under the proposed provisions, sustainable farming practices will be insured under the current conventional practices. Therefore, separate data will not be required to establish a separate sustainable farming practice in the Special Provisions. The proposed rule allows organic practices to be approved by written agreement if separate organic practices are not included in the Special Provisions.

Comment: Several commenters provided the following comments regarding the use of written agreements to insure crops grown using organic practices: (1) A few commenters asked why organic producers have to sign a written agreement; (2) A commenter recommended provisions be added allowing organic farming coverage without the need for written agreements; (3) Some commenters objected to the organic premium surcharge which they state is based on a perception of additional risk in organic production systems. The commenters asked if FCIC can come up with a scientific basis for the organic premium surcharge. They do not believe FCIC's perception is backed by any scientific evidence and, in fact, is directly contradicted by independent research on the agronomic and economic benefits of organic production systems; (4) Several of the commenters believe the extra charge to organic farmers is discriminatory. They stated they are paying more and receiving less coverage; (5) A commenter asked why a producer can insure an organically grown crop under a Group Risk Plan (GRP) policy without a written agreement, yet a written agreement is required to insure an organically grown crop under all other policies except Adjusted Gross Revenue (AGR); (6) A commenter stated separate (100%) T-Yields used to establish APH yields for certified organic or transitional acreage will be provided on the written agreement and asked who will be setting these yields and on what information the yields will be based; and (7) A few commenters stated while the proposed rule does add the possibility of organic insurance based on actuarial information in the future, in the meantime organic producers will have to rely on written agreements in a biased and economically discriminatory process ( i.e. , insure without any written agreements, or go without insurance). They believe the proposed rule does little to alleviate that position, despite the attempt by Congress to eliminate such discrimination.

Response: Written agreements are needed where there is insufficient data to include organic practices in the actuarial tables. Organic practices cannot be insured under conventional practices because higher yield variability may exist, particularly in catastrophic events. FCIC has data that suggests that there is greater yield variability. Therefore, it may be necessary to include a premium load because premium rates are greatly dependent on the variability of yields and the premium rate must be reflective of the risk involved to be actuarially sound. The premium load will be based on the data FCIC has for organic crops. If the commenters have independent data that proves otherwise, FCIC recommends they provide the data to RMA for review. FCIC does not agree that the premium charged for an organic practice is discriminatory because it is based on the risk associated with the practice as required by section 508(d) of the Act. The GRP and AGR insurance programs differ significantly from the insurance provided under the Common Crop Insurance Policy Basic Provisions. Indemnities are paid to producers insured under GRP when a county loss is triggered, regardless of whether or not the individual producer suffered a loss. The AGR program provides insurance coverage based on the producer's historical adjusted gross revenue for the farm. Since neither of these insurance products provide coverage based on individual crop losses, as crops under the Common Crop Insurance Policy Basic Provisions do, organic crop practices do not materially alter the risk or coverage provided under either AGR or GRP policies. FCIC will be setting the T-yields for all practices based on the available data for the practice. FCIC has eliminated the bias and discrimination by considering whether the specific organic practice is a good farming practice. If sufficient and credible data is available, organic practices will be added to the actual documents. The organic industry is encouraged to provide data regarding organic practices.

Comment: Many commenters stated the final rule should add a clear statement that organic crop insurance coverage will not include insurance premium surcharges.

Response: FCIC cannot make such a statement because, as previously stated, the premium must be based on the risk associated with the practice and in some cases, may result in higher premiums. Therefore, no change has been made.

Comment: Some commenters stated if organic farmers need to keep and submit four years of records, maybe all farmers should have to supply four years of records.

Response: The record keeping requirements for written agreements will be the same for all producers regardless of whether the producer uses a conventional or organic practice. Further, the record keeping requirements will be the same for producers of conventional and organic practices in counties where conventional and organic practices are provided in the actuarial documents. Therefore, organic producers are not treated any differently than any other.

Comment: A commenter supported expansion of the AGR program to include all states in order to ensure fair prices are paid to certified organic growers and those using sustainable agricultural practices.

Response: FCIC cannot expand the AGR program in this rule. FCIC will consider this request when deciding whether to expand the AGR program in the future.

Comment: Many commenters were concerned about how organic prices will be established. The comments are as follows: (1) Many commenters stated the final rule should add a clear statement that organic crop insurance coverage will include full recognition of organic price premiums when making indemnity payments; (2) A commenter urged FCIC to ensure data on organic premiums is included in all actuarial tables in all counties so that fair returns for losses are paid to growers. They also stated fair prices should take into consideration market premiums for a given certified organic product; (3) Some commenters asked how the actuarial organic pricing tables will be set and if the organic industry will be given the opportunity to comment on the process and sources used to set actuarial pricing information for organic commodities; (4) Some commenters stated they are restricted to conventional market prices. They understand the market values will be changed in a couple of years, however until that time, they are asked to accept the conventional prices. The commenters were concerned as to who will establish the organic prices and how they will be determined; (5) A few commenters recommended until actuarial information for organic pricing is established, organic price premiums be based upon individual crop pricing histories or in the absence of an individual history, upon a county average or the averages of multiple counties (to reach a critical mass, if necessary). They stated this system is used for establishing a basis for yields and could be used in the interim as actuarials are being developed; and (6) A commenter recommended a system of county averages be used for producers transitioning into organic production.

Response: FCIC cannot provide a statement that organic practices will include a price premium because the price is determined based on the projected market price at the time of harvest and there is no guarantee that the projected price at harvest for organic crops will be significantly different. If the projected market price at harvest for an organic crop is higher, such price will be provided on the actuarial table. FCIC will set organic prices in the same manner that prices are set for all crops. FCIC does not allow an opportunity to comment on the process or the sources of data used for setting any crop price. FCIC has contracted studies to research pricing data throughout the organic industry to determine if sufficient reliable pricing information is available that could be used to establish organic prices separate from conventional prices in the future. Until sufficient price data is available, FCIC has no choice but to offer conventional prices for organic crops. FCIC does not use individual crop pricing histories to set the expected market price because it is an inaccurate measure of such price. County averages may be used in the establishment of expected market prices for organic crops if they provide an accurate measure of the projected market price at the time of harvest. Therefore, no change has been made.

Comment: Several commenters believe the organic premium surcharge, coupled with the lack of insurance coverage based on organic prices, creates bias against organic producers. The comments are as follows: (1) A commenter stated the organic premium factor of 1.05 is not right unless producers are paid the price premium they are receiving; (2) Several commenters stated the crop insurance program is irrelevant to organic producers because of the organic premium surcharge and the lack of organic price premium; and (3) Several commenters stated over a year ago the organic community raised two major issues, the organic premium surcharge they feel is unreasonable and which they believe is based on a perception of risk not backed by evidence, and the lack of organic price premium, both of which are still not addressed in the proposed rule. They added that although the proposed rule does add the possibility of organic insurance based on actuarial information in the future, the likelihood of organic policies based on anything but written agreements in the near term is small. They stated most producers are left with the unenviable choice of insuring under biased and economically untenable written agreements, or insuring without written agreement and facing continued bias against organic farming practices despite the attempt by Congress to eliminate such discrimination, or doing without insurance. They do not believe organic producers should be expected to agree to insurance by written agreement if they are forced to pay more than other producers and receive no benefit from their price premium on claims. One of the commenters stated they, as an organization, would continue to recommend organic producers not agree to insurance by written agreement under these conditions.

Response: The organic premium factor is not dependent on the price received. Premium rates are greatly dependent on yield variability. As stated above, a higher yield variability exists for organic practices than for conventional practices, particularly in catastrophic events. The 1.05 premium adjustment factor currently used for organic practice written agreements reflects the data regarding the yield variability risk for organic farming practices. FCIC is providing the maximum coverage available based on the data it has. As stated above, the premium is based on the risk determined from the data provided to FCIC. Further, FCIC cannot provide separate organic prices until adequate organic price data is obtained. FCIC has contracted studies to help obtain such price data. FCIC sympathizes with the problems faced by organic producers. However, without actuarially sufficient data, FCIC cannot make the suggested changes. FCIC is working as expeditiously as possible to collect this data and hopes to have separate prices for organic crops in the actuarial in the near future. Therefore, no change has been made.

Comment: A commenter stated for certified organic acreage, the provisions in section 37(c) may be a problem for crops like alfalfa, since reporting and crop insurance is different than for a grain crop. The commenter stated producers carry the insurance through the winter for winter kill. They believe provisions for alfalfa and forage crops are needed.

Response: FCIC fails to see why the requirement to have documentation proving the crop is grown organically when it is reported as an organic practice should be a problem for perennial crop producers. Producers of all insured crops must report their practice and provide any necessary documentation, such as contracts, by the acreage reporting date. The commenter failed to provide any information upon which FCIC could make an exception to this requirement for organic crops. No change has been made.

Comment: A commenter stated they had a problem with the provisions in section 37(c) requiring the use of certifying agents for transitional acreage, because many times a decision by a soil consultant is in place until the end of the season (sometimes winter) until certifying agents finally get time to review.

Response: To be insured as an organic practice, there must be evidence that such practice is used. Such evidence is provided by the certifying agent in the organic plan. If the transitional acreage is not included in the organic plan, it would be difficult to verify that an organic practice was used on the transitional acreage. Therefore, no change has been made.

Comment: Many commenters commented on the provisions proposed in section 37(g). Most of the commenters believe the crop insurance policy should provide coverage for contamination by unintentional application or drift of prohibited substances. The commenters provided the following comments and questions: (1) A commenter stated pesticide and genetic drift are among the most pervasive threats faced by sustainable and organic farmers, yet the proposed rule specifically excludes coverage for these risks for organic producers. The commenter believes crop insurance is the only reliable means to spread the risk of pesticide and genetic drift for sustainable and organic farmers, and that spreading the risk is an essential function of crop insurance. The commenter stated section 107 of ARPA requires the Corporation to offer quality loss adjustment coverage for “identity preserved” crops on a smaller than unit basis. The commenter stated the most relevant quality loss for many identity preserved crops would be the loss of identity due to the introduction of foreign genetic and chemical materials. The commenter asked if this coverage is currently available, and if not, when it will be made available; (2) A commenter asked what the rationale is behind excluding coverage for contamination and asked if that position is defensible in light of the purposes of the Federal crop insurance program; (3) A commenter was concerned with the directive that organic farmers establish buffer areas to prevent contamination. The commenter has spent much time working in the area of biotechnology and is aware of the lack of scientific understanding of the mechanisms of drift and how to prevent it; (4) A commenter stated RMA should responsibly address liability issues regarding contamination of organic crops by genetically engineered crops. The commenter stated it is a new concern, with far-reaching consequences for all involved in the production, distribution, marketing and consumption of food. They asked what insurance is available to organic growers in the event of contamination of their crops and from whom it would be available; (5) A few commenters stated over a year ago, the organic community raised the issue of the need for insurance against risks of drift and GMO contamination, which are still not addressed in the proposed rule; (6) A commenter stated failure to insure against a major price risk (drift and GMO contamination) is unfortunate. The commenter understands coverage of this type of loss could be difficult in terms of premium structure and affordability; however, they believe the U.S. government needs to continue to pursue ways to protect certified organic growers from the economic risks of genetic contamination from genetically modified varieties. They believe contamination of a crop in spite of the presence of a buffer zone should be a covered loss under Federal Crop Insurance regulations; (7) A commenter believes failure to cover these perils is discriminatory and indefensible in light of the purposes of the Federal crop insurance program; (8) A few commenters stated the proposed rule specifically excludes insurance for the risks of drift and contamination, despite their growing damage to organic products. They stated this failure to insure against a major price risk is expected, though unfortunate; and (9) A commenter believes the crop insurance policy should provide this coverage for organic producers if it is the result of a natural disaster, the same as it does for conventional producers, because the producers cannot control it if it happens. The commenter added yield loss should be exempted when establishing the crop yield.

Response: FCIC agrees the risk of contamination by application or drift of prohibited substances is a major risk to organic producers and has significant economic implications. Unfortunately, under section 508(a) of the Act, FCIC can only insure losses due to natural causes. It does not have authority under the Act to provide crop insurance coverage for any loss of production directly caused by contamination of prohibited substances because the contamination is the cause that damages the crop and it is not a natural cause, even if the contamination is spread by a natural cause. Section 107 of ARPA states that all the conditions must be must be met for such additional quality adjustment coverage to be provided. While they may meet the condition of identity preserved, organic producers have not demonstrated that they meet all the conditions. If all conditions can be met, the quality loss adjustment will be applicable. In order to qualify for an organic practice, the producer must have an organic plan. If the buffer zone is required in the organic plan, FCIC does not have the authority to change the requirement in the plan. Therefore, concerns with the buffer zone should be directed to the certifying agency. For the reasons stated above, FCIC cannot cover contamination from genetically engineered crops. Such losses are not due to a natural cause. FCIC is unaware of any insurance coverage currently available to cover contamination from genetically engineered crops. While FCIC sympathizes with the organic producers, unless the Act is revised, FCIC is unable to provide coverage for this peril. FCIC cannot exempt yield loss caused by contamination when establishing the crop yield. The Act requires the APH yield be based on the actual production history for the crop, if the crop was produced. Therefore no change has been made.

In addition to the changes described above, FCIC has made the following changes:

1. Amended the definition of “second crop” to add provisions that allow a replanting of the first crop to be considered a replanted crop if replanting is required or it is specifically made optional in the policy, and the insured elects to replant and insure as the first insured crop. Policies, such as the small grains policy, state that replanting of wheat after the failure of a winter wheat crop is optional, not required. In these circumstances, FCIC does not want to require replanting because the producer paid for a separate endorsement to have the option to replant and continue insurance on a winter wheat basis, replant and insure as a separate spring wheat crop, or continue to care for the damaged winter wheat crop. If the producer elects to replant and insure the crop under the first insured crop policy, such replanting should not be considered as a second crop because the producer does not get an indemnity for the first crop. If the producer elects to replant and insures the replanted crop as a separate spring wheat crop, the replanted crop would be considered a second crop. The definition is also amended to include cover crops planted with the intention of haying, grazing or otherwise harvesting at a later time. The proposed definition included only those cover crops actually hayed, grazed or otherwise harvested. This change will require cover crops that are destroyed prior to being hayed, grazed or otherwise harvested but that are covered under FSA's noninsured crop disaster assistance program (NAP) or receive other USDA benefits associated with forage crops, to be considered a second crop; and

2. Section 15(g) is revised to clarify indemnity payments, prevented planting payments, and premium calculations in other parts of the policy do not conflict with the reductions specified in section 15. This section is also revised to remove the requirement to reduce an indemnity when a volunteer or cover crop is harvested from acreage on which a first crop was planted. Since the volunteer crop or cover crop is not insurable, it could never sustain an insurable loss, which is a prerequisite for an indemnity reduction for the first insured crop. This section is also revised to require the prevented planting payment reduction when a volunteer crop is harvested after the late planting period (or after the final planting date if a late planting period is not applicable) for the first insured crop.

3. Section 15(g)(3)(ii) is revised to clarify that a prevented planting payment reduction will apply if the insured cash rents to another person the acreage for which a prevented planting payment was received. This addition is made to be consistent with the current prevented planting provisions that specify that an insured is not eligible for a prevented planting payment if the insured cash rents the acreage that was prevented from being planted.

Good cause is shown to make this rule effective upon filing for public inspection at the Office of the Federal Register. Good cause to make the rule effective upon filing at the Office of the Federal Register exists when the 30 day delay in the effective date is impracticable, unnecessary, or contrary to the public interest. The changes that remain in this rule are statutorily mandated.

With respect to the provisions of this rule, it would be contrary to the public interest to delay its implementation. Further, such changes regarding the inclusion of an informal reconsideration process for determinations of good farming practices and making determinations of good farming practices more objective are in the public interest. This is because these changes provide the producer with a less expensive mechanism to adjudicate disputes regarding good farming practices and benefits both producers and the insurance providers by providing more flexibility in the entities that can evaluate the farming practices used, and setting a standard that reduces the problems caused by a disagreement among experts.

Further, it is in the public interest because the changes regarding the limitation on providing multiple benefits on the same acreage in the same crop year will reduce program costs because producers will no longer be able to collect numerous indemnity payments on the same acreage in cases such as a continuing drought.

The public interest will also be served because this final rule also provides the basis for extending and clarifying coverage for crops produced under organic or sustainable farming practices. This provides producers with more meaningful coverage by eliminating the denial of coverage for failure to use the same good farming practices as used by producers under conventional practices.

In addition, the public interest is served because insurance providers will now be able to verify the cause of loss for prevented planted acreage in a timely manner and ensure that claims are properly paid. This should eliminate a significant program vulnerability and reduce program costs.

The public interest is further served by allowing producer the flexibility to determine which yields will be substituted on an annual basis because it will allow such producers to tailor their coverage to their individual risk management needs, which may change every year.

If FCIC is required to delay the implementation of this rule 30 days after the date it is published, the provisions of this rule could not be implemented until the next crop year for those crops having a contract change date of June 30, 2003. This would mean that the affected producers and insurance providers would be without the benefits described above for an additional year.

For the reasons stated above, good cause exists to make these policy changes effective upon filing with the Office of the Federal Register.

This final rule is issued under Marketing Agreement and Order No. 930 (7 CFR part 930), regulating the handling of tart cherries grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin, hereinafter referred to as the “order.” The marketing agreement and order are effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (USDA) is issuing this final rule in conformance with Executive Order 12866.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, tart cherry handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein would be applicable to all assessable tart cherries beginning July 1, 2002, and continue until amended, suspended, or terminated. This final rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this final rule.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This final rule increases the assessment rate established for the Board for the 2002-2003 and subsequent fiscal periods for cherries that are utilized in the production of tart cherry products other than juice, juice concentrate, or puree from $0.00175 to $0.0019 per pound of cherries. The assessment rate for cherries utilized for juice, juice concentrate, or puree would also be increased from $0.000875 to $0.0019 per pound.

The tart cherry marketing order provides authority for the Board, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Board are producers and handlers of tart cherries. They are familiar with the Board's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate or rates as appropriate. Assessment rates are formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2001-2002 fiscal period, the Board recommended, and USDA approved, assessment rates that will continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by the USDA upon recommendation and information submitted by the Board or other information available to USDA.

Section 930.42(a) of the order authorizes a reserve sufficient to cover one year's operating expenses. The increased uniform rate is expected to generate enough income to meet the Board's operating expenses in 2002-2003.

The Board met on January 24, 2002, and unanimously recommended 2002-2003 expenditures of $522,500. The Board also recommended that an assessment rate of $0.0019 be established for all tart cherry products if an amendment to do so passed in a May 2002 referendum of producers and processors. The amendment passed and was finalized by USDA on August 8, 2002 (67 FR 51698). The provisions requiring the establishment of different assessment rates for different products were removed. In their place, the Board is required to consider the volume of cherries used in making various products and the relative market value of those products in deciding whether the assessment rate should be a single, uniform rate applicable to all cherries or whether varying rates should be recommended for cherries manufactured into different products. Prior to the amendment passing in referendum, USDA issued a proposed rule on June 10, 2002 (67 FR 39637) proposing a dual assessment rate at higher amounts ($0.0021 and $0.00105, respectively, for high and low value cherry products) since the authority for a uniform assessment rate amendment was not yet effective. A rule withdrawing that proposal was published on April 2, 2003 (68 FR 15971). This proposal reflects the amended provisions and the Board's January 24, 2002, recommendation.

The amended assessment provisions allow the Board to recommend a uniform single assessment rate for all assessable tart cherries handled, or variable rates depending on the quantities and values of the cherries used in the various products. A two-tiered assessment rate scheme may be appropriate in some years, but it may not be in others.

The amended order specifically provides that under § 930.41(f)(1) and (2) the established assessment rates may be uniform, or may vary depending on the product the cherries are used to manufacture. The Board may consider the differences in the number of pounds of cherries utilized for various cherry products and the relative market values of such cherry products. The Board considered the above items and decided that one assessment rate should be recommended for all assessable tart cherries for the 2002-2003 fiscal period.

According to the Board, processors have developed a strong market for juice and concentrate products over the past few years. There is considerable belief that juice will be one of the growth outlets for tart cherries. This derives from the industry's promotional efforts being undertaken for juice and concentrate products, the segmentation of the market into retail and industrial components and the nutritional/nutraceutical profile of the product. As a result, there has been an increase in consumer recognition, acceptance, purchases, and the value of tart cherry juice and concentrate. According to the Board, prices received for tart cherry juice concentrate are now $25.00 per gallon or more. This is derived by using the fairly common conversion ratio of 100 pounds to the gallon for mid-west production, which has a raw product value of $0.25 per pound. Using a 50 gallon conversion for the product, as has been used on the west coast, this represents a per pound value of $0.50. The difference in the west and mid-west conversion factors is that tart cherries produced in the western United States generally have a higher sugar content and larger fruit size, thus fewer raw product is needed. The average grower price received ranges between $0.17 to $0.20 per pound.

According to the Board, puree products are as valuable and comparable to juice and juice concentrate products. The Board reported that the spot price for single strength puree for 2001-02 was about $0.60 cents per pound. The raw product equivalent (RPE) volume of pureed fruit was 539,504 pounds which is about 0.15 percent of all processed fruit. The Board also reported for 2001-02 that the price for five plus one product was $0.67 cents per pound. Five plus one is a product of cherries and sugar which is manufactured by many processors (25 pounds of cherries and five pounds of sugar to make a 30 pound commercial container). It is the main product that handlers produce. Five plus one cherries are primarily sold and remanufactured into assorted bakery items, canned pie fill, and dried cherries. Since juice, juice concentrate, and puree are not considered to be low value products at this time, the Board considers one assessment to be appropriate. It is important to understand that product is moved around between production areas and may be converted into puree or concentrate at a later date. The market drives the processing of these various products each season.

In comparing the prices of juice, juice concentrate, and puree with the 5 plus 1 product, the Board determined that current prices for these products are similar. The information received from the Board indicates that puree products are becoming a viable market and should be assessed at a higher assessment rate.

As a result of this season's 2002-2003 short crop, much of the tart cherry products released from inventory were in the form of tart cherry juice and/or juice concentrate. There is not much, if any, of this product available on the market today. The Board contends that given these factors, it is hard to suggest that juice/concentrate, or puree, are of lesser value than are the more traditional products such as pie-fill or individually quick frozen tart cherries. Thus, the Board determined that one assessment rate is appropriate for the 2002-03 fiscal period.

Last year's budgeted expenditures were $442,500. The recommended assessment rate of $0.0019 is higher than the current rates of $0.00175 for cherries used in the production of other than juice, juice concentrate, or puree products, and $0.000875 for cherries used for juice, juice concentrate or puree products.

The major expenditures recommended by the Board for the 2002-2003 fiscal period include $85,000 for meetings, $170,000 for compliance, $185,000 for personnel, $80,000 for office expenses, and $2,500 for industry educational efforts. Budgeted expenses for those items in 2001-2002 were $80,000 for meetings, $100,000 for compliance, $185,000 for personnel, $75,000 for office expenses, and $2,500 for industry educational efforts, respectively. As discussed below, the Board's staff has taken steps to reduce actual expenditures for 2002-03 due to the assessment revenue shortfall. The recommended assessment rate of $0.0019 is higher than the current rates of $0.00175 and $0.000875, respectively. The Board recommended an increased assessment rate to generate larger revenue to meet its expenses and keep its reserves at an acceptable level.

In deriving the recommended assessment rate, the Board determined assessable tart cherry production for the fiscal period at 260 million pounds. However, the tart cherry industry experienced a severe frost, mainly in Michigan, which significantly reduced the crop. The tart cherry industry is expected to only produce 60 million pounds. The Board staff has responded to this decrease in funds by reducing staff and Committee travel for meetings and used reserve funds to continue administrative operations this season. Therefore, total assessment income for 2002-2003 is estimated at $114,000. This amount plus adequate funds in the reserve and interest income would be adequate to cover budgeted expenses. Funds in the reserve (approximately $233,000) would be kept within the approximately six months' operating expenses as recommended by the Board consistent with § 930.42(a).

The assessment rate established in this final rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and other information submitted by the Board or other available information.

Although the assessment rate is effective for an indefinite period, the Board will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Board meetings are available from the Board or the USDA. Board meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Board recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Board's 2002-2003 budget and those for subsequent fiscal periods would be reviewed and, as appropriate, approved by the USDA.

A minor change is made to the provisions of § 930.200 as proposed for clarification purposes.

The Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities and has prepared this final regulatory flexibility analysis. The Regulatory Flexibility Act (RFA) allows AMS to certify that regulations do not have a significant economic impact on a substantial number of small entities. However, as a matter of general policy, AMS's Fruit and Vegetable Programs (Programs) no longer opts for such certification, but rather performs regulatory flexibility analyses for any rulemaking that would generate the interest of a significant number of small entities. Performing such analyses shifts the Programs' efforts from determining whether regulatory flexibility analyses are required to the consideration of regulatory options and economic or regulatory impacts.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility.

There are approximately 40 handlers of tart cherries who are subject to regulation under the order and approximately 900 producers of tart cherries in the regulated area. Small agricultural service firms have been defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts less than $5,000,000, and small agricultural producers are those whose annual receipts are less than $750,000. A majority of the tart cherry handlers and producers may be classified as small entities.

The Board unanimously recommended 2002-2003 expenditures of $522,500 and assessment rate increases from $0.00175 to $0.0019 per pound for cherries that are utilized in the production of tart cherry products other than juice, juice concentrate, or puree, and from $0.000875 to $0.0019 per pound for cherries utilized for juice, juice concentrate, or puree.

This final rule increases the assessment rate established for the Board and collected from handlers for the 2002-2003 and subsequent fiscal periods for cherries that are utilized in the production of tart cherry products to $0.0019 per pound. The quantity of assessable tart cherries expected to be produced during the 2002-2003 crop year was estimated at 260 million pounds. However, the tart cherry industry experienced a severe frost, mainly in Michigan, which has significantly reduced the crop. The tart cherry industry is expecting to only produce 60 million pounds during 2002-03. The Board staff has responded to this decrease in funds by reducing staff and Committee travel for meetings and is expected to use reserve funds to continue administrative operations this season. Assessment income, based on this crop, along with interest income and reserves, would be adequate to cover budgeted expenses.

The major expenditures recommended by the Board for the 2002-2003 fiscal period include $85,000 for meetings, $170,000 for compliance, $185,000 for personnel, $80,000 for office expenses, and $2,500 for industry educational efforts. Budgeted expenses for those items in 2001-2002 were $80,000 for meetings, $100,000 for compliance, $185,000 for personnel, $75,000 for office expenses, and $2,500 for industry educational efforts, respectively.

The Board discussed the alternative of continuing the existing assessment rates, but concluded that would cause the amount in the operating reserve to be reduced to an unacceptable level. It also determined that a single uniform assessment rate for assessable tart cherries was appropriate.

The principal demand for tart cherries is in the form of processed products. Tart cherries are dried, frozen, canned, juiced, and pureed. Data from the National Agricultural Statistics Service (NASS) states that during the period 1995/96 through 2002/03, approximately 92 percent of the U.S. tart cherry crop, or 285.7 million pounds, was processed annually. Of the 285.7 million pounds of tart cherries processed, 58 percent was frozen, 30 percent was canned, and 12 percent was utilized for juice.

Based on NASS data, acreage in the United States devoted to tart cherry production has been trending downward. Since 1987/88 tart cherry bearing acres have decreased from 50,050 acres, to 36,900 acres in the 2002/03 crop year. In 2002/03, 93 percent of domestic tart cherry acreage was located in four States: Michigan, New York, Utah, and Wisconsin. Michigan leads the nation in tart cherry acreage with 74 percent of the total production. Michigan produces about 75 percent of the U.S. tart cherry crop each year. Tart cherry acreage in Michigan decreased from 28,500 acres in 2000-2001, to 27,400 acres in 2002-2003.

A review of historical information and preliminary information pertaining to the 2002-2003 fiscal period indicates that the grower price could range between $0.448 and $0.45 cents per pound of tart cherries. This is a high price due to the short crop this year. Therefore, the estimated assessment revenue for the 2002-2003 fiscal period as a percentage of total grower revenue could be less than one-half of one percent.

While this action will impose additional costs on handlers, the costs are in the form of assessments which are applied uniformly. Some of the costs may also be passed on to producers. However, these costs are offset by the benefits derived from the operation of the marketing order. The Board's meeting was widely publicized throughout the tart cherry industry and all interested persons were invited to attend the meeting and participate in Board deliberations on all issues. Like all Board meetings, the January 24, 2002, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

Finally, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses and no comments were received.

This action will impose no additional reporting or recordkeeping requirements on either small or large tart cherry handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

A proposed rule concerning this action was published in the Federal Register on May 22, 2003 (68 FR 27943). Copies of the rule were mailed or sent via facsimile to all Board members and tart cherry handlers. In addition, the rule was made available through the Internet by the Office of the Federal Register and USDA. A 10-day comment period ending June 2, 2003, was provided to allow interested persons to respond to the proposal. No comments were received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant matters presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C. 553) because the 2002-2003 fiscal period began on July 1, 2002, and ends on June 30, 2003, and the marketing order requires that the rate of assessment for each fiscal period apply to all assessable tart cherries handled during such fiscal period. Further, handlers are aware of this action which was unanimously recommended by the Board at a public meeting. Also, a 10-day comment period was provided in the proposed rule and no comments were received.

In a direct final rule published in the Federal Register on May 19, 2003 (68 FR 26990-26991, Docket No. 02-127-1), we notified the public of our intention to amend the “Inspection and Handling of Livestock for Exportation” regulations by designating Portland International Airport in Portland, OR, as a port of embarkation and B Bar C Ranch, in Gervais, OR, and Pony World Farm in Portland, OR, as export inspection facilities for that port.

We solicited comments concerning the direct final rule for 30 days ending June 18, 2003. We stated that the effective date of the direct final rule would be 60 days after publication of the direct final rule in the Federal Register , unless we received a written adverse comment or a written notice of intent to submit an adverse comment. We also stated that if we received any written adverse comment or any written notice of intent to submit an adverse comment, we would publish a notice in the Federal Register withdrawing the direct final rule before the scheduled effective date and would publish a proposed rule for public comment.

We received one written adverse comment. Therefore, we are withdrawing the direct final rule and, at a later date, we will publish a proposed rule in the Federal Register .

In 1967, the Federal Meat Inspection Act (FMIA) was amended to add section 202 (21 U.S.C. 642), which requires that certain parties keep records that fully and correctly disclose all transactions involved in their businesses related to cattle, sheep, swine, goats, horses, mules, or other equines, their carcasses, parts or products of such animal carcasses for use as human or animal food. Similarly, in 1968, the Poultry Products Inspection Act (PPIA) was amended, including section 11(b) (21 U.S.C. 460(b)), which requires that certain parties keep such records as are properly necessary for the effective enforcement of the PPIA, in order to protect the American consumer against adulterated or misbranded poultry and poultry products. These provisions of the FMIA and PPIA require that the following parties keep business records: Any persons, firms, or corporations that engage in the business of slaughtering any livestock (as enumerated above) or poultry, or preparing or processing, freezing, packaging, or labeling any carcasses, or parts or products of carcasses, of any such animals, for use as human food or animal food; any persons, firms, or corporations that engage in the business of buying or selling (as meat brokers or poultry products brokers, wholesalers, or otherwise), or transporting, or storing, or importing any livestock or poultry carcasses or parts or products of these carcasses; and any persons, firms, or corporations that engage in business as renderers, or engage in the business of buying, selling, or transporting, or importing any dead, dying, disabled, or diseased (referred to as 4-D) livestock or poultry or parts of the carcasses of such livestock or poultry that have died otherwise than by slaughter.

In addition, those sections of the FMIA and PPIA require that, at all reasonable times, upon notice by a duly authorized representative of the Secretary of Agriculture (for example, an FSIS employee), these parties must afford the USDA representative access to their places of business and the opportunity to examine the facilities, inventory, and records and to copy all their records.

Section 11(b) of the PPIA further requires that the businesses listed above which are subject to it retain such records for the period of time prescribed by the poultry products inspection regulations, not to exceed two years, unless otherwise directed by Secretary of Agriculture for good cause shown. Similarly, section 202 of the FMIA provides that required records must be maintained for the period of time prescribed by the meat inspection regulations.

Regulations implementing these recordkeeping requirements were first published in 1970. The current regulations (9 CFR 320.1(b) and 381.175(b)) list the types of records, including, among other records, the bills of sale, invoices, bills of lading, and receiving and shipping papers, that must be maintained; the types of transactions for which records must be maintained, including purchasing, selling, shipping, receiving, transporting, or otherwise handling any livestock, livestock carcass or part thereof, meat or meat food product, poultry, or poultry carcass or part or product thereof; and the information about the transaction that the records must include.

Consistent with the provisions of the FMIA and the PPIA, §§ 320.4 and 381.178 of the FSIS' regulations provide that, upon presentation of official credentials by an FSIS employee (or any authorized USDA representative) during ordinary business hours, businesses that are required to maintain records must permit the FSIS employee to enter their place of business and examine and copy the records that are required to be kept pursuant to these regulations.

Under sections 320.3 and 381.177 of the regulations, records required to be kept must be retained for at least two years after December 31 of the year in which the transaction to which they relate occurred. The regulations also require that records be retained for longer periods if the Administrator of FSIS requires their retention for purposes of any investigation or litigation under the FMIA or PPIA. In these situations, the Administrator is to provide written notice of a longer retention period to the person required to keep these records.

Sections 320.2 and 381.176 of the regulations require that the parties that are required to maintain the records at the place they conduct business that is subject to the FMIA or PPIA, unless they conduct their business in multiple locations. If they conduct their business in multiple locations, businesses can maintain their records at their headquarters' office. When records are not in use, the regulations require that they be kept in a safe place at the required location.

Section 11 (21 U.S.C. 1040) of the Egg Products Inspection Act requires that persons engaged in the business of transporting, shipping, or receiving any eggs or egg products in commerce or holding such articles so received, and all egg handlers, maintain records concerning their receipt, delivery, sale, movement, and disposition of all eggs and egg products handled by them. FSIS' implementing regulations are in 9 CFR 590.200. During its continuous inspection at official plants processing egg products, FSIS ensures that these plants comply with the recordkeeping requirements. FSIS is also responsible for enforcing the recordkeeping requirements for other businesses engaged in transporting, shipping, or receiving egg products in commerce or businesses engaged in holding these products. In this notice, FSIS is not focusing on egg products businesses because the recordkeeping requirements in the egg products inspection regulations are different from those in the meat and poultry products inspection regulations. In addition, unlike certain businesses subject to the FMIA and PPIA, egg products businesses are not required to register with FSIS. Furthermore, FSIS is developing a proposed rule on shell eggs and egg products that will specifically address recordkeeping requirements.

Congress passed the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (“the Bioterrorism Act”) (Pub. L. 107-188), which was signed into law on June 12, 2002. The Bioterrorism Act provides that the Secretary of Health and Human Services (HHS) may require the establishment and maintenance of records by persons who manufacture, process, pack, transport, distribute, receive hold, or import food for human or animal consumption in the United States. On May 9, 2003, the Food and Drug Administration (FDA) proposed regulations that would implement these recordkeeping requirements (68 FR 25188). The recordkeeping requirements that will apply under the Bioterrorism Act will not affect the recordkeeping requirements in FSIS” regulations. Therefore, even after the Bioterrorism Act's recordkeeping requirements take effect, the recordkeeping requirements in FSIS” regulations will continue to apply to the parties listed above.

The FMIA and PPIA were also amended in 1967 and 1968, respectively, to add sections 203 (21 U.S.C. 643) and 11(c) (21 U.S.C. 460(c)). These provisions prohibit any person, firm, or corporation from engaging in commerce as a meat or poultry products broker, renderer, animal food manufacturer, wholesaler, or public warehouseman, or from buying, selling, or transporting, or importing any dead, dying, disabled or diseased livestock or poultry or parts of the carcasses of livestock or poultry that died otherwise than by slaughter unless they have registered their business as required by the regulations.

Regulations implementing registration requirements were first published in 1970. Sections 320.5 and 381.179 of the current regulations require that the parties listed in the preceding paragraph register with FSIS, unless these parties conduct business only at an official establishment where meat or poultry inspection is maintained.

According to the regulations, parties required to register with FSIS must do so by filing out a form and must provide current and correct information to FSIS, including their name, the address of all locations at which they conduct the businesses that require them to register, and all trade or business names under which they conduct these businesses.

FSIS has developed a new registration form. In addition to requiring the name and addresses of locations at which registrants conduct business, the form requires that parties disclose the form of their organization ( e.g. , individually owned or partnership), the nature of their business ( e.g. , meat or meat products or poultry or poultry products), and the type of business they are engaged in ( e.g. , domestic broker, import broker, warehouseman, etc). The form also requires that registrants provide their phone number and e-mail address and the hours of operation of any of their subsidiaries, branches, or divisions that conduct the businesses that require them to register. According to the regulations, parties required to register with FSIS must do so within 90 days after they begin to engage in any of the businesses that require them to register.

FSIS' new registration form will be available for use by December 22, 2003. Because this form requires that registrants provide certain information that was not required on the previous form, including e-mail address, phone number, and subsidiaries” hours of operation, all parties required to register, including those that are currently registered, must complete the new form and submit it to FSIS. Parties must submit the form to FSIS by March 22, 2004.

The registration form can be obtained over the Internet at: http://www.fsis.usda.gov/fsisforms/. To obtain the form, parties can also write to USDA, FSIS, Program Evaluation, Enforcement and Review (PEER), Evaluation and Enforcement Division (EED), 300 West End Court Building, 1255 22nd Street, NW., Room 300, Washington, DC 20250-3700. The FSIS regulations provide a different mailing address for obtaining the registration form, and state that the registration form can be obtained from “Compliance Programs, Regulatory Programs” (§§ 320.5(a) and 381.179(a)). FSIS intends to update this information in a future rule. The form will also be available from FSIS personnel that visit businesses required to register. Once parties complete the form, they should mail it to USDA, FSIS, Program Evaluation, Enforcement and Review (PEER), Evaluation and Enforcement Division (EED), 300 West End Court Building, 1255 22nd Street, NW., Room 300, Washington, DC 20250-3700 (the same address as for obtaining forms) or fax it to Director, Evaluation and Enforcement Division (EED) at (202) 418-8941.

The regulations require that, whenever any change is made in the registrant's name, business address, or any trade or business name under which it conducts its business, the registrant must report such change in writing to the Administrator within 15 days after making the change.

The Bioterrorism Act includes a provision that requires the Secretary of HHS to develop regulations mandating domestic and foreign facilities that manufacture, process, pack or hold food for human or animal consumption in the United States to register with the FDA by December 12, 2003. On February 3, 2003, FDA proposed regulations that would implement these registration requirements (68 FR 5378). The registration requirements that will apply under the Bioterrorism Act will not replace the registration requirements in FSIS' regulations. Therefore, even after the Bioterrorism Act's registration requirements take effect, the registration requirements in FSIS' regulations will continue to apply to the parties listed above.

Bovine Spongiform Encephalopathy (BSE), commonly referred to as “Mad Cow Disease,” is a slowly progressive degenerative disease that affects the central nervous system (CNS) of adult cattle. BSE belongs to the family of diseases known as the transmissible spongiform encephalopathies (TSEs). Other TSEs include scrapie in sheep and goats, transmissible mink encephalopathy, feline spongiform encephalopathy, chronic wasting disease (CWD) in deer and elk, and in humans, kuru, classic Creutzfeldt-Jakob Disease (CJD), Gerstmann-Straussler-Scheinker syndrome, fatal familial insomnia, and variant Creutzfeldt-Jakob Disease (vCJD).

The agent that causes BSE and other TSEs has yet to be fully characterized. There are three main theories on the nature of the BSE agent: (1) The agent is a virus with unusual characteristics; (2) the agent is a prion—an abnormal form of a normal protein known as cellular prion protein; and (3) the agent is a virino—an “incomplete” virus composed of nucleic acid protected by host proteins. The BSE agent is highly resistant to heat, ultraviolet light, ionizing radiation, and common disinfectants that normally inactivate viruses or bacteria. Scientific experts believe that prions most likely cause BSE and other TSEs.

BSE was first diagnosed in 1986 in the United Kingdom (U.K.) and since then has been confirmed in native-born cattle in many other European countries and several countries outside Europe. This animal disease is most likely spread by feeding the rendered parts of cattle infected with the BSE agent to other cattle in the form of meat and bone meal. No cases of BSE have been detected in the U.S. despite active surveillance for the disease since May 1990.

In 1996, a newly recognized form of the human disease CJD, called variant CJD (vCJD), was reported in 10 patients in the U.K. vCJD is a chronic, neurodegenerative disease that affects humans. Scientific and epidemiological studies have linked vCJD to exposure to BSE, probably through human consumption of beef products contaminated with the agent that causes BSE.

Until recently, vCJD had not been detected in the U.S. In April 2002, the Florida Department of Health and the Centers for Disease Control and Prevention (CDC) began investigating a likely case of vCJD in a citizen of the U.K. living in Florida. In October 2002, CDC reported the investigation of this case and stated that it represents the first probable vCJD case in a U.S. resident (CDC, Morbidity and Mortality Weekly Report, 51(41): 927-929, 2002). CDC believes, however, that the patient was exposed to the BSE agent while living in the U.K. This is likely to be the case, as the disease is thought to have a long incubation period and the appearance of symptoms does not mean that exposure was recent.

Surveillance data from European countries in which BSE has been detected indicate that cattle with clinical signs of a central nervous system (CNS) disorder, “dead” cattle ( i.e. , died otherwise than by slaughter), and cattle that cannot rise from a recumbent position ( i.e. , nonambulatory, cattle commonly referred to as “downer” cattle in the U.S.), have a greater incidence of having BSE than other cattle. The FSIS regulations prohibit for use as human food cattle with clinical signs of a CNS disorder or certain infectious or parasitic diseases, or that are in a dying condition or that died otherwise than by slaughter (§§ 309.3, 309.4). All seriously crippled cattle and cattle commonly termed “downers” presented for slaughter are automatically suspected of being affected with a disease or condition that may require condemnation of the animal, in whole or in part, and are identified as “U.S. Suspects” (§ 309.2(b)). Such cattle are examined at ante-mortem inspection by an FSIS veterinarian, and a record of the veterinarian's clinical findings accompanies the carcass to post-mortem inspection if the animal is not condemned on ante-mortem inspection. Post-mortem inspections on the carcasses of U.S. Suspects cattle are performed by a veterinarian rather than a food inspector, and the results of this inspection are recorded. U.S. Suspects, unless otherwise released pursuant to § 309.2(p), must be set apart and slaughtered separately (§ 309.2(n)). If, on post-mortem inspection, the meat and meat food products from such cattle are found to be otherwise not adulterated, such products may be used for human food (§ 311.1).

Surveillance for BSE in Europe has shown that the typical clinical signs associated with BSE cannot always be observed in nonambulatory (downer) cattle infected with BSE because the signs of BSE often cannot be differentiated from the typical clinical signs of the many other diseases and conditions affecting downer cattle. Thus, if BSE were present in the U.S., it is possible that downer cattle infected with BSE could be presented for slaughter, and, if the clinical signs of the disease were not obvious, pass ante-mortem inspection. These cattle could then be slaughtered, and, if they pass post-mortem inspection, the meat and meat food products from such cattle could be used for human food. However, the BSE agent has not been detected in muscle tissue of infected cattle. Tissues that have been found to contain high levels of the agent that causes BSE in BSE-infected cattle—such as the brain tissue, the spinal cord, and the retina of the eye—could possibly cross-contaminate muscle tissues with the BSE agent during slaughter and processing.

The U.S. government has implemented a number of measures to prevent BSE from entering the U.S. and to prevent the spread of the disease should it be introduced in the U.S. For example, since 1989, the USDA's Animal and Plant Health Inspection Service (APHIS) has prohibited the importation of live cattle and certain cattle products, including rendered protein products, from countries where BSE is known to exist. In 1997, because of concerns about widespread risk factors and inadequate surveillance for BSE in many European countries, these importation restrictions were extended to include all of the countries in Europe. On December 7, 2000, APHIS prohibited all imports of rendered animal protein products, regardless of species, from BSE-restricted countries because of concern that feed intended for cattle may have been cross-contaminated with the BSE agent.

In addition, APHIS leads an ongoing, comprehensive, interagency surveillance system for BSE in the U.S. and, in cooperation with FSIS, has drafted an emergency response plan to be used in the event that BSE is identified in the U.S. Other Federal agencies also have contingency plans that work in concert with the USDA plan.

In 1997, the Food and Drug Administration (FDA) prohibited the use of most mammalian protein in the manufacture of animal feeds given to cattle and other ruminants (21 CFR 589.2000). Firms must keep specified records on the manufacture of their feed, must have processes in place to prohibit co-mingling of ruminant feed with non-ruminant feed, which may contain materials prohibited in ruminant feed, and must ensure that non-ruminant feed containing materials prohibited in ruminant feed is labeled conspicuously with the statement, “ Do not feed to cattle and other ruminants. ” These regulations are intended to prevent the introduction and spread of BSE in U.S. cattle through feed contaminated with the BSE agent.

In addition, the CDC monitors the incidence of CJD in the U.S. by analyzing death certificate information from multiple-cause-of-death data compiled by the National Center for Health Statistics. This information is also used to search for possible cases of vCJD in the U.S.

In 1998, USDA entered into a cooperative agreement with Harvard University's School of Public Health to conduct an analysis and evaluation of the current measures implemented by the U.S. government to prevent the entry and spread of BSE in U.S. cattle herds and to reduce the potential for exposure of Americans to the BSE agent. The Harvard study identifies three pathways or practices that could contribute the most to the spread of BSE and the amount of potentially dangerous tissue in the human food supply: (1) Noncompliance with the FDA feed ban, including misfeeding on the farm and the mislabeling of feed and feed products prohibited for consumption by cattle; (2) unsafe disposition of cattle that die on the farm; and (3) inclusion of high-risk tissue, such as brain and spinal cord, in edible products. With regard to the second pathway listed, a potential use for cattle that die on the farm otherwise than by slaughter would be for rendering as non-ruminant animal feed since rendered product from animals that die otherwise than by slaughter is prohibited for use as human food but may be used to produce animal feed.

On January 17, 2002, FSIS announced the availability of a paper on its current thinking on possible actions to minimize human exposure to meat products from cattle that could contain the infective agent that causes BSE (67 FR 2399). This paper is available on the FSIS web site at http://www.fsis.usda.gov/oa/topics/BSE_Thinking.pdf and http://www.fsis.usda.gov/oa/topics/BSE_thinking.htm.

In this paper, FSIS stated that it planned to increase its enforcement of recordkeeping and registration requirements for renderers and persons who engage in the business of buying, selling, and transporting 4-D livestock or parts of the carcasses of any such livestock that died otherwise than by slaughter. In considering measures to minimize human exposure to bovine tissue and products that could contain the agent that causes BSE, FSIS determined that registration information and records from renderers and persons who engage in the business of buying, selling, and transporting 4-D livestock, or parts of the carcasses of any such livestock that died otherwise than by slaughter, would support FDA in enforcing its regulations that prohibit most mammalian protein in ruminant feed.

Parts of carcasses of 4-D livestock are often used in rendering. Renderers produce meat and bonemeal and similar products used in livestock and poultry feed. If any ruminant feed is suspected of containing mammalian protein, FSIS will need and will be able to obtain registration information from the renderers that supplied rendered ruminant product to the animal feed manufacturers and from the producers or businesses that supplied the renderers with 4-D livestock or parts of carcasses of 4-D livestock. FSIS will also require and will have access to their related business records. FSIS will work collaboratively with FDA to locate these producers and businesses and obtain their records.

Should BSE be introduced into the United States, registration information and business records will be crucial in quickly determining and tracking the source of BSE so as to prevent its spread. Registration information and business records would be crucial in tracking transactions involving cattle that are suspected of being, or confirmed to be, infected with BSE and carcasses and products that are suspected of being, or confirmed to be, contaminated with the agent that causes BSE.

FSIS is reminding businesses subject to the PPIA that are required to register or maintain records that they must do so because the registration and recordkeeping requirements in the poultry products inspection regulations are almost identical to those in the meat inspection regulations. Also, FSIS needs to make sure that its information on registrants is accurate, complete, and current. Therefore, it is important that all businesses required to register under the FMIA or PPIA do so and keep their registrations current. As stated above, in this notice, FSIS is not focusing on egg products businesses because the recordkeeping requirements in the egg products inspection regulations are different from those in the meat and poultry products inspection regulations, because egg products businesses are not required to register with FSIS, and because FSIS is developing a proposed rule on shell eggs and egg products that will address recordkeeping requirements.

As FSIS previously stated in its BSE current thinking paper, FSIS intends to increase enforcement of the registration and recordkeeping requirements discussed above. If FSIS determines that a party required to register, or a party required to maintain records, has not done so, FSIS program employees will first remind the party to register immediately or to maintain current and accurate records. If the party continues to violate the registration or recordkeeping requirements, FSIS will then issue a letter of warning. If any party continues to violate the registration or recordkeeping requirements after receiving a letter of warning, FSIS will consider pursuing criminal or other legal action against the violating party.

For violations of the statute such as failure to register with FSIS or to maintain required records, section 406(a) of the FMIA (21 U.S.C. 676(a)) provides that the penalties may be imprisonment for not more than one year, or a fine of not more than $1,000, or both such imprisonment and fine. The PPIA provides that the same penalties may be imposed for certain violations of the statute, including violation of registration and recordkeeping requirements (21 U.S.C. 461(a)). In addition, both statutes provide that if such violations involve intent to defraud, or any distribution or attempted distribution of an article that is adulterated (except when the product is adulterated for certain reasons, mostly concerning product quality), the penalty can be imprisonment for not more than three years or a fine of not more than $10,000, or both.

Section 406(a) of the FMIA (21 U.S.C. 676(a)) also provides that persons, firms, or corporations would not be subject to the above penalties for receiving for transportation any article or animal in violation of the FMIA, if the receipt was made in good faith, unless the person, firm, or corporation refuses to furnish at the request of an FSIS employee the name and address of the person from whom it received such article or animal and copies of any documents pertaining to the delivery of the article or animal to them. Similarly, section 12(b) of the PPIA (21 U.S.C. 461(b)) provides that carriers are not subject to penalties under the PPIA (except for violations of regulations concerning the buying, selling, or transporting of poultry carcasses or parts or products of poultry that are not intended for use as human food) for receiving, carrying, holding or delivering poultry or poultry products owned by another person, in carriers' usual course of business, unless they have knowledge or are in possession of facts that would indicate that the poultry or poultry products were not inspected or marked in accordance with the provisions of the PPIA or were otherwise not eligible for transportation under the PPIA. Carriers are liable, however, if they refuse to furnish at the request of an FSIS employee the name and address of the person from whom they received such poultry or poultry products, and copies of any documents pertaining to the delivery of the poultry or poultry products. These statutory provisions emphasize the importance of carriers' maintaining records of business transactions subject to the FMIA and PPIA and making these records available to FSIS employees.

Under section 404 of the FMIA (21 U.S.C. 674) and section 21 of the PPIA (21 U.S.C. 467c), the United States district courts, the District Court of Guam, the District Court of the Virgin Islands, the highest court of American Samoa, and the United States courts of the other Territories, are vested with jurisdiction specifically to enforce, and to prevent and restrain violations of, the FMIA and PPIA (including violations of the registration and recordkeeping requirements).

Title: Registration requirements under the FMIA and PPIA.

Type of Collection: New.

Abstract: FSIS has developed a new registration form and has reviewed the paperwork and recordkeeping requirements associated with this form in accordance with the Paperwork Reduction Act. Existing regulations require that certain parties register with FSIS. See “respondents” below for a list of the parties required to register.

According to the regulations, parties required to register with FSIS must do so by filing a form and must provide current and correct information to FSIS, including their name, the address of all locations at which they conduct the businesses that require them to register, and all trade or business names under which they conduct these businesses. These parties must register with FSIS within 90 days after they begin to engage in any of the businesses that require them to register. Because FSIS has developed a new registration form that requires that registrants disclose certain information that was not required on the previous form, all parties required to register with FSIS, including those currently registered, must complete the new form and submit it to FSIS.

Estimate of burden: FSIS estimates that completing the form will take an average of 10 minutes.

Respondents: Meat brokers; poultry products brokers; renderers; animal food manufacturers; wholesalers; warehousemen; and persons that engage in the business of buying, selling, transporting in commerce, or importing, any dead, dying, disabled, or diseased livestock or poultry, or parts of the carcasses of livestock or poultry that have died otherwise than by slaughter.

Estimated number of respondents: 9125 per year.

Estimated number of responses per respondent: 1.

Estimated total annual burden on respondents: 1,521 hours.

Copies of this information collection assessment can be obtained from John OConnell, Paperwork Reduction Act Coordinator, Food Safety and Inspection Service, USDA, 112 Annex, 300 12th St., Washington, DC 20250.

Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; (b) the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

Comments may be sent to John O'Connell, see address above, and the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20253. Comments are requested by August 25, 2003. To be most effective, comments should be sent to OMB within 30 days of the publication date.

Public awareness of all segments of rulemaking and policy development is important. Consequently, in an effort to ensure that minorities, women, and persons with disabilities are aware of this notice, FSIS will announce it and make copies of this Federal Register publication available in the FSIS Constituent Update, which is communicated via Listserv, a free e-mail subscription service. In addition, the update is available on-line through the FSIS web page located at http://www.fsis.usda.gov. The update is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, recalls, and any other types of information that could affect or would be of interest to our constituents and stakeholders. The constituent Listserv consists of industry, trade, and farm groups, consumer interest groups, allied health professionals, scientific professionals, and other individuals who have requested to be included. Through the Listserv and web page, FSIS is able to provide information to a much broader, more diverse audience.

For more information, contact the Congressional and Public Affairs Office at (202) 720-9113. To be added to the free e-mail subscription service (Listserv), go to the “Constituent Update” page on the FSIS web site at http://www.fsis.usda.gov/oa/update/update.htm. Click on the “Subscribe to the Constituent Update Listserv” link, then fill out and submit the form.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that is applicable to Rolls-Royce (RR) plc RB211-535E4-37, RB211-535E4-B-37, and RB211-535E4-B-75 series turbofan engines was published in the Federal Register on August 9, 2001 (66 FR 41808). That proposal was revised by a supplemental notice of proposed rulemaking (SNPRM) to amend part 39 of the Federal Aviation Regulations (14 CFR part 39). That SNPRM was published in the Federal Register on February 20, 2003 (68 FR 8157). That action proposed to introduce an alternative technique to ultrasonically inspect installed fan blades on-wing using a surface wave ultrasonic probe and also to add the application of Metco 58 blade root coating as an optional terminating action in accordance with Rolls-Royce plc mandatory service bulletin RB.211-72-C879, Revision 3, dated October 9, 2002.

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.

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.

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 an NPRM. This rule consists only of corrections and editorial, organizational, and conforming amendments to title 33 of the Code of Federal Regulations (CFR). These changes will have no substantive effect on the public; therefore, it is not necessary for us to publish an NPRM and providing 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 .

Each year title 33 of the Code of Federal Regulations is updated on July 1. This rule, which becomes effective June 30, 2003, corrects organization names and addresses, adds gender-neutral language, revises authority citations for certain parts to reflect our move to the Department of Homeland Security (DHS) in March 2003, and makes other technical and editorial corrections throughout title 33. This rule does not change any substantive requirements of existing regulations.

In the following three paragraphs, we have described revisions that are not self-explanatory name, address or spelling corrections, or gender-neutral changes.

Coast Guard Auxiliary. Unnecessary §§ 5.51 (Damaged equipment or facilities) and 5.53 (Constructive or actual loss) are being removed and § 5.49 (Reimbursement for expenses) is being revised to remove wording that merely reflects current internal procedures but that is not intended to govern those procedures.

National Preparedness for Response Exercise Program (PREP) Guidelines. In §§ 154.1055 and 155.1060, we have provided a Landover, MD address where you can obtain a copy of the Preparedness for Exercise Program (PREP) Guidelines. In addition, we have added a website address in notes to these sections where you may view these guidelines on the Internet. We have also clarified that these guidelines are just one option for complying with facility and vessel response plan exercise requirements in §§ 154.1060 and 155.1065, respectively.

Geographic coordinates. In § 3.40-15, we are revising a segment of the boundary for the New Orleans Marine Inspection Zone and Captain of the Port Zone. That segment, which was written before 1996, referenced the Coast Guard District 8 boundary that was subsequently changed when Districts 2 and 8 merged (61 FR 29958, June 13, 1996). We are also correcting two erroneous references to latitudes. In § 162.117, we corrected a geographic coordinate for a stated location, the De Tour Reef Light. In § 165.151, we converted erroneous minutes symbols to seconds symbols. And in § 165.1181, we eliminated a line containing a duplicate geographic coordinate.

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 Homeland Security (DHS). We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. As this rule involves internal agency practices and procedures and non-substantive changes, it will not impose any costs on the public.

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. This rule does not require a general NPRM and, therefore, is exempt from the requirements of the Regulatory Flexibility Act. Although this rule is exempt, we have reviewed it for potential economic impact on small entities.

This rule will have no substantive effect on the regulated public. Therefore, 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 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. 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 analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraphs (34)(a) and (b), of the Instruction from further environmental documentation because this rule involves editorial, procedural, and internal agency functions. An “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are available in the docket where indicated under ADDRESSES .

We encourage you to participate in this rulemaking by submitting comments or related material. If you do so, please include your name and address, identify the docket number for this rulemaking (CGD01-03-044), indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying. If you would like to know if they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. Comments must be received by September 5, 2003.

The Meadowbrook State Parkway Bridge has a vertical clearance of 22 feet at mean high water and 25 feet at mean low water in the closed position, unlimited vertical clearance in the full open position. The existing regulations are listed at 33 CFR 117.799(h).

The bridge owner, the New York State Office of Parks, Recreation and Historic Preservation, requested that the bridge be allowed to remain closed from 9 p.m. to midnight, during the annual Fourth of July fireworks event at the Jones Beach State Park. Allowing the bridge to remain closed is expected to enhance public safety by allowing the large volume of vehicular and pedestrian traffic to safely enter and exit Jones Beach during this annual public event.

Under this temporary deviation the Meadowbrook State Parkway Bridge may remain in the closed position from 9 p.m. through midnight on July 4, 2003.

The Coast Guard coordinated this closure with the mariners who normally use this waterway to help facilitate this public event and to minimize any disruption to the marine transportation system.

This deviation from the operating regulations is authorized under 33 CFR 117.43, and comments and information gathered during the comment period will assist the Coast Guard in determining if this test operating schedule is reasonable and should be made a permanent addition to the drawbridge operation regulations.

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

Indiana revised the long-term PM limits in State Implementation Plan (SIP) rule 326 IAC 6-1-14 for the two RPL boilers in order to make them consistent with the SIP's short-term limits. For boiler no. 1, the new limit is 320 TPY; for boiler no. 2, the new limit is 700 TPY. The previous limits were 71.6 TPY and 233.3 TPY, respectively. RPL's short-term limits remain at 0.19 pounds per million British Thermal Units (lb/MMBTU) and 0.22 lb/MMBTU, respectively. The combined short-term emissions limit for both boilers stays at 0.22 lb/MMBTU.

Indiana submitted a PM modeling analysis for RPL on August 8, 1995 as part of the SIP revision request approved by EPA on April 9, 1996 (61 FR 15704). This modeling analysis applies to both the short-term limits approved in 1996 and to the new long-term limits. The maximum modeled annual PM concentration was 42.5 micrograms per meter cubed (μg/m 3 ). This is 1.7 μg/m 3 above the measured background concentration of 40.8 μg/m 3 . The annual National Ambient Air Quality Standard (NAAQS) for PM is 50 μg/m 3 . As the modeled concentration is below the NAAQS, the air quality of Wayne County, Indiana should be protected.

EPA did not receive any public comments on the proposed rulemaking. The comment period closed on May 9, 2003.

EPA is approving revisions to 326 IAC 6-1-14, the PM emission limits for Wayne County, Indiana. EPA proposed approval of these revisions on April 9, 2003 (68 FR 17331) and received no comments during the 30-day comment period. These revisions change the long-term (annual) PM emission limits for both boilers at the RPL facility to make them consistent with short-term limits for these sources. EPA approved revisions to the short-term limits for RPL on April 9, 1996. The PM modeling analysis show concentrations below the NAAQS level, demonstrating that the air quality of Wayne County, Indiana should be protected.

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.

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. ).

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 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 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 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.

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).

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.

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. Section 804 exempts from section 801 the following types of rules: (1) Rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3). EPA is not required to submit a rule report regarding this action under section 801 because this is a rule of particular applicability.

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 August 25, 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 March 25, 2003 (68 FR 14379), EPA published a notice of proposed rulemaking (NPR) for the State of Utah. The NPR proposed approval of State Implementation Plan (SIP) revisions submitted by the Governor of Utah on June 27, 1994 and April 28, 2000. The NPR also proposed approval of Supplemental Administrative Documentation submitted on December 31, 2002. The June 27, 1994 submittal revises the numbering and format of Utah's State Implementation Plan (SIP). The April 28, 2000 submittal contains non-substantive changes to correct minor errors in the June 27, 1994 submittal. The December 31, 2002 submittal also contains non-substantive changes to the June 27, 1994 submittal. In addition, we proposed to take no action on parts of these submittals or to act on parts of these submittals at a later date.

The following table cross references the renumbered and prior numbered SIP sections. The table identifies the renumbered SIP sections we are approving as replacing the prior numbered SIP sections.

We received no comments on the March 25, 2003 notice of proposed rulemaking. As proposed, we are approving State Implementation Plan (SIP) revisions submitted by the Governor of Utah on June 27, 1994 and April 28, 2000, except for provisions we are not acting on or provisions which we will act on at a later date. We are also approving Supplemental Administrative Documentation submitted by the State on December 31, 2002, except for provisions we are not acting on or provisions which we will act on at a later date.

The following identifies the renumbered SIP sections we are approving as replacing the prior numbered SIP sections: Section I and Section II, effective 11/12/93; Section III, effective 11/12/93, except III.C, effective 1/1/2003; Section IV, Section V and Section VI, effective 11/12/93; Section VII, effective 11/12/93, except VII.D, effective 1/1/2003; Section VIII, effective January 1, 2003; Section IX, Part B, effective 11/12/93, except the title and IX.B.3.d, effective 2/25/2000, and IX.B.3.a, IX.B.3.e, and IX.B.4, effective 1/1/2003; Section IX, Parts C, E, F and G, effective 11/12/93, except the titles, effective 2/25/2000; Section IX, Part D.1, effective 11/12/93, except for the title, effective 2/25/2000 and IX.D.1.d, effective 1/1/2003; Section XI, Appendix 1 and Appendix 2, effective 11/12/93; Section XII and Section XIII, effective 11/12/93; Section XIV, effective 11/12/93, except Table XIV.9, effective 2/25/2000; Section XV and Section XVI, effective 11/12/93; Section XVII, effective 11/12/93, except XVII.A, XVII.D and XVII.E, effective 2/25/2000; Section XVIII, effective 11/12/93, except XVIII.B, effective 2/25/2000; and Section XIX, effective 11/12/93.

We are also approving non-substantive changes to Section IX, Part C.7 and C.8, Section IX, Part D.2 and Section XXII, effective January 1, 2003.

In addition, we are taking no action on certain portions of the submittals because they have never been part of the SIP or they have been superseded by other submittals approved by the EPA into the SIP. The portions of the submittals that we are taking no action on are Section XX, Section X and Section XI.

Also, we will act on portions of the submittals in separate documents. We are taking action on Section IX, Part A and Part H and non-substantive changes to Section IX, Parts C.1-C.6 and Section XXI in separate documents.

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 NAAQS or any other applicable requirements of the Act. We believe the Utah SIP revisions that are the subject of this document will not interfere with any applicable requirement concerning attainment and reasonable further progress towards attainment of the NAAQS or any other applicable requirements of the Act because the State is merely renumbering its SIP and the State's revisions are as no less stringent than requirements currently contained in their SIP.

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 August 25, 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.

CAA section 110(k)(5) provides that whenever EPA finds the applicable implementation plan “is substantially inadequate to attain or maintain the relevant national ambient air quality standard, * * * or to otherwise comply with any requirement of this Act, the Administrator shall require the State to revise the plan as necessary to correct such inadequacies.” EPA did not receive any comments on our February 13, 2003 proposed finding of inadequacy. Today we are finalizing our finding that the approved California SIP is substantially inadequate. The SIP cannot provide “necessary assurances” that the State or districts have the authority to issue permits under their PSD and nonattainment NSR SIPs to all major sources because Health & Safety Code section 42310(e) exempts major agricultural stationary sources from these permitting requirements.

Specifically, sections 110(a)(2)(C) and (I) and 172 of the Act require the applicable implementation plan to contain a program for issuing permits to major stationary sources of air pollution pursuant to parts C and D of title I of the Act. In addition, section 110(a)(2)(E) requires that each SIP provide necessary assurances that the State or districts have adequate authority to carry out the SIP and that no State law prohibits the State or districts from carrying out any portion of the SIP. The California SIP does not meet these requirements because California Health & Safety Code section 42310(e) exempts “equipment used in agricultural operations in the growing of crops or the raising of fowl or animals” from all permitting, including PSD and NSR permitting otherwise required by parts C and D of title I of the Act. As a result, the State and districts cannot issue permits to these agricultural sources, even if they are major stationary sources under the Act. The CAA NSR and PSD permitting requirements do not provide for this exemption.

To correct the deficiency, EPA recommends that the State legislature amend Health & Safety Code section 42310(e) to remove the exemption as it applies to major agricultural sources. The State is already subject to a sanctions clock based on the Notice of Deficiency (NOD) that EPA issued on May 22, 2002, 67 FR 35990, with respect to the State's title V operating permits program. In that NOD, EPA explained that California Health & Safety Code section 42310(e) improperly exempted major agricultural sources from CAA title V permitting. The NOD stated: “EPA has determined that significant action in this instance means the revision or removal of Health and Safety Code 42310(e) so that local air pollution control districts have the required authority to issue title V permits to stationary agricultural sources that are major sources of air pollution.” A similar correction with respect to NSR and PSD permitting is necessary by November 23, 2003 to comply with this final action, i.e. remove the agricultural exemption for major sources. We are setting this deadline to be consistent with the deadline established in the May 22, 2002 NOD for making the revision for Title V purposes.

Our proposal listed several districts that have New Source Review exemptions that may pose problems for permitting major agricultural stationary sources, but did not call for specific revisions at this time. We believe it is reasonable to wait for the State legislature to correct Health and Safety Code section 42310(e) before we determine whether any such exemptions at the district level represent authority problems under section 110(a)(2)(E). 1 EPA, nonetheless, encourages districts to evaluate their SIP-approved rules to ensure that exemptions do not create potential authority problems. Once the State acts to address Health and Safety Code section 42310(e), EPA will work with the districts to determine if further rulemaking is necessary to address specific local deficiencies that remain after the State law change.

As noted earlier, California must adopt and submit to EPA a revision to State law that will provide the necessary assurances that it (or the districts) can fully implement the required NSR and PSD programs for all major sources, including agricultural sources, within the State. If EPA determines that the State has failed to amend State law by November 23, 2003, or if EPA subsequently finds the correction does not adequately provide such assurances, EPA will make a finding under section 179 of the Act that will start a sanctions clock as specified under 40 CFR 52.31. 2 There are two types of sanctions: highway funding sanctions (section 179(b)(1)) and offset sanctions (section 179(b)(2)). Pursuant to our regulations at 40 CFR 52.31, offset sanctions will apply 18 months following a finding by EPA under section 179(a); highway funding sanctions would apply six months later. However, we expect that the State will make the necessary corrections to avoid sanctions.

The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

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 Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions.

Today's SIP call does not establish requirements applicable to small entities. Instead, it requires the State of California to develop, adopt, and submit SIP revisions that would provide the necessary assurances that the applicable NSR and PSD programs do not exempt major agricultural sources.

This rule will not have a significant impact on a substantial number of small entities because the rule does not establish requirements applicable to small entities. Therefore, the Administrator certifies that this action will not have a significant impact on a substantial number of small entities.

Under sections 202 of the Unfunded Mandates Reform Act of 1995 (UMRA), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to State, local, or tribal governments in the aggregate, or to the private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that this final action does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This action will require the State of California to revise laws and regulations governing exemptions for agricultural sources. This requirement, even if considered a Federal mandate, 3 would not result in aggregate costs over $100 million to either the state or local districts. In addition, this final action will not significantly or uniquely impact small governments.

Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it does not impose a new enforceable duty on the State, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This final rule does not have tribal implications, as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments, 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. Thus, Executive Order 13175 does not apply to this rule.

Protection of Children From Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This rule is not subject to Executive Order 13045 because it does not involve decisions intended to mitigate environmental health or safety risks.

This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

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). This rule will be effective July 25, 2003.

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 August 25, 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).)

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to:

• Crop production (NAICS 111)

• Animal production (NAICS 112)

•  Food manufacturing (NAICS 311)

• Pesticide manufacturing (NAICS 32532)

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

1. Docket . EPA has established an official public docket for this action under docket identification (ID) number OPP-2003-0181. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA. This docket facility is open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The docket telephone number is (703) 305-5805.

2. Electronic access . You may access this Federal Register document electronically through the EPA Internet under the“ Federal Register ” listings at http://www.epa.gov/fedrgstr/ . A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_(_00.html , a beta site currently under development. To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at http://www.epa.gov/opptsfrs/home/guidelin.htm .

An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in Unit I.B.1. Once in the system, select “search,” then key in the appropriate docket ID number.

In the Federal Register of March 20, 2003 (68 FR 13703) (FRL-7296-5), EPA issued a notice pursuant to section 408 of FFDCA, 21 U.S.C. 346a, as amended by FQPA (Public Law 104-170), announcing the filing of pesticide petitions (PP 6F4631 and 0F6095) by BayerCropScience, P.O. Box 12014, 2 T. W. Alexander Drive, Research Triangle Park, NC 27709. That notice included a summary of the petitions prepared by BayerCropScience, the registrant. One comment was received in response to this notice of filing by B. Sachau, 15 Elm Str., Florham Park, NJ 07932. Mr. Sachau objected generally to the presence of pesticides in food and specifically to the presence of flufenacet.

Bayer requested in petition 6F4631 that 40 CFR 180.527 (a) be amended by making the currently time-limited tolerances for combined residues of the herbicide flufenacet, N -(4-fluorophenyl)- N -(1-methylethyl)-2-[[5-(trifluoromethyl)-1,3,4-thiadiazol-2-yl]oxy]acetamide and its metabolites containing the 4-fluoro- N -methylethyl benzenamine moiety] permanent in or on the following agricultural commodities: Corn, field, forage at 0.4 ppm; corn, field, grain at 0.05 ppm; corn, field, stover at 0.4 ppm; and soybean, seed at 0.1 ppm.

Bayer requested in petition 0F6095 that the section 18 tolerances listed below in 40 CFR 180.527 (b) for combined residues of the herbicide flufenacet, N -(4-fluorophenyl)- N -(1-methylethyl)-2-[[5-(trifluoromethyl)-1,3,4-thiadiazol-2-yl]oxy]acetamide and it's metabolites containing 4-fluoro- N -methylethyl benzenamine moiety] be made permanent and moved to 40 CFR 180.527 (a), cattle, fat at 0.05 ppm; cattle, kidney at 0.5 ppm; cattle, meat at 0.05 ppm; cattle, meat byproducts at 0.1 ppm; goat, fat at 0.05 ppm; goat, kidney at 0.5 ppm; goat, meat at 0.05 ppm; goat, meat byproducts at 0.1 ppm; hog, fat at 0.05 ppm; hog, kidney at 0.5 ppm; hog, meat at 0.05 ppm; hog, meat, byproducts at 0.1 ppm; horse, fat at 0.05 ppm; horse, kidney at 0.5 ppm; horse, meat at 0.05 ppm; horse, meat byproducts at 0.1 ppm; sheep, fat at 0.05 ppm; sheep, kidney at 0.5 ppm; sheep, meat at 0.05 ppm; sheep, meat byproducts at 0.1 ppm; wheat, forage at 10.0 ppm; wheat, grain at 1.0 ppm; wheat, hay at 2.0 ppm; and wheat, straw at 0.50 ppm.

Bayer requested in petition 0F6095 that the currently time limited tolerances in 40 CFR 180.527 (d) be amended by establishing permanent tolerances for indirect or inadvertent residues of the herbicide flufenacet; N -(4-fluorophenyl)- N -(1-methylethyl)-2- [[5-(trifluoromethyl)-1,3,4- thiadiazol-2-yl]oxy]acetamide and its metabolites containing the 4-fluoro- N -methylethyl benzenamine moiety in or on the following raw agricultural commodities from the application of this herbicide to the raw agricultural commodities listed in 40 CFR 180.527 (a) and (b) at the levels listed below Table 1:

The Agency's current review did not include the data submitted with petition 0F6095. Therefore, the Agency is leaving the section 18 time limited tolerances listed in 40 CFR 180.527 (b) unchanged. The time limited tolerances listed in 40 CFR 180.527 (b) were issued in connection with a section 18 and were extended to July, 2005 on January 16, 2003 (68 FR 2242)(FRL-7284-8). The section 18 tolerances are not being modified in this notice but are included in the risk assessments discussed below. In addition, since the Agency's current review did not include the data submitted with petition 0F6095 and the risk assessment outlined below indicated that the risk cup was full, the tolerances for indirect or inadvertent residues listed in 40 CFR 180.527(d) will be made permanent but the levels will remain unchanged.

Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of the FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information..” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of the FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue....”

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 of the FFDCA and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997) (FRL-5754-7).

Consistent with section 408(b)(2)(D) of the FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2) of the FFDCA, for tolerances for combined residues of flufenacet, ( N -(4-fluorophenyl)- N -(1-methylethyl)-2-[[5-(trifluoromethyl)-1,3,4-thiadiazol-2-yl]oxy]acetamide) and its metabolites containing the 4-fluoro- N -methylethyl benzenamine moiety on corn, field, forage at 0.4 ppm; corn, field, grain at 0.05 ppm; corn, field, stover at 0.4 ppm; soybean, seed at 0.1 ppm by establishing permanent tolerances for indirect or inadvertent residues of the herbicide flufenacet, ( N -(4-fluorophenyl)- N -(1-methylethyl)-2-[[5-(trifluoromethyl)-1,3,4- thiadiazol-2-yl]oxy]acetamide) and metabolites containing the 4-fluoro- N -methylethyl benzenamine moiety in or on the following raw agricultural commodities from the application of this herbicide to the raw agricultural commodities, listed in 40 CFR 180.527 (a) and (b), alfalfa, forage at 0.1 ppm; alfalfa, hay at 0.1 ppm; alfalfa, seed at 0.1 ppm; clover, forage at 0.1 ppm; clover, hay at 0.1 ppm; grain, cereal, group 15, except rice at 0.1 ppm; grain, cereal, forage, fodder, and straw, group 16, except rice at 0.1 ppm; and grass, forage, fodder, and hay, group 17 at 0.1 ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by flufenacet are discussed in Table 2 of this unit as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies reviewed.

The dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. An UF of 100 is routinely used, 10X to account for interspecies differences and 10X for intraspecies differences.

The Agency imposed an additional 10X safety factor to account for uncertainties arising because available data support the possibility of decreases in thyroid hormones at dose levels similar to those used in the submitted rat developmental neurotoxicity study (DNT) as well as the lack of a NOAEL in the rat developmental neurotoxicity study. To address these concerns the Agency will require a special comparative assay on thyroid hormone levels in neonatal and adult rats as a condition of registration. The Agency also had a concern for a lack of a NOAEL in the rat developmental neurotoxicity study and for the decrease in morphometric measurements in adult females which were not measured at the lowest dose. The doses and endpoints for various risk assessments and the uncertainty factors applied are expected to adequately address uncertainties arising from the missing data and a lack of a NOEL in the DNT study.

For dietary risk assessment (other than cancer) the Agency uses the UF to calculate an acute or chronic reference dose (acute RfD or chronic RfD) where the RfD is equal to the NOAEL divided by the appropriate UF (RfD = NOAEL/UF). Where an additional safety factor (SF) is retained due to concerns unique to the FQPA, this additional factor is applied to the RfD by dividing the RfD by such additional factor. The acute or chronic Population Adjusted Dose (aPAD or cPAD) is a modification of the RfD to accommodate this type of FQPA SF. For flufenacet, the Agency concluded that the Special FQPA Safety Factor could be reduced to 1X, based on the low degree of concern and lack of residual uncertainties for pre- and post-natal toxicity as outlined in Unit III.D.

For non-dietary risk assessments (other than cancer) the UF is used to determine the LOC. For example, when 100 is the appropriate UF (10X to account for interspecies differences and 10X for intraspecies differences) the LOC is 100. To estimate risk, a ratio of the NOAEL to exposures (margin of exposure (MOE) = NOAEL/exposure) is calculated and compared to the LOC.

The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify carcinogenic risk. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk. A Q* is calculated and used to estimate risk which represents a probability of occurrence of additional cancer cases (e.g., risk is expressed as 1 x 10 - 6 or one in a million). Under certain specific circumstances, MOE calculations will be used for the carcinogenicity risk assessment. In this non-linear approach, a “point of departure” is identified below which carcinogenic effects are not expected. The point of departure is typically a NOAEL based on an endpoint related to cancer effects though it may be a different value derived from the dose response curve. To estimate risk, a ratio of the point of departure to exposure (MOE cancer = point of departure/exposures) is calculated.

A summary of the toxicological endpoints for flufenacet used for human risk assessment is shown in Table 3 of this unit:

1. Dietary exposure from food and feed uses . Tolerances have been established (40 CFR 180.527) for the combined residues of flufenacet, N -(4-fluorophenyl)- N -(1-methylethyl)-2-[[5-(trifluoromethyl)-1,3,4-thiadiazol-2-yl]oxy]acetamide] and its metabolites containing the 4-fluoro- N -methylethyl benzenamine moiety, in or on a variety of raw agricultural commodities. Tolerances have been established on meat, fat, kidney, and meat byproducts of cattle, goats, hogs, horses, and sheep, wheat grain, forage, hay, and straw in connection with a section 18. These tolerances expire July, 2005 and have been included in the risk assessments. Risk assessments were conducted by EPA to assess dietary exposures from flufenacet in food as follows:

i. Acute exposure . Acute dietary risk assessments are performed for a food-use pesticide if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a one day or single exposure. The Dietary Exposure Evaluation Model (DEEM ) analysis evaluated the individual food consumption as reported by respondents in the USDA [1994-1996 and 1998] nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and accumulated expoure to the chemical for each commodity. The following assumptions were made for the acute exposure assessments:

a. Anticipated-residue estimates were assumed for some commodities (field corn, soybeans, and wheat);

b. Tolerance-level residues were assumed for some crops (cereal grains); and

c. Percent crop-treated estimates were utilized for all crops.

ii. Chronic exposure . In conducting this chronic dietary risk assessment the Dietary Exposure Evaluation Model (DEEM ) analysis evaluated the individual food consumption as reported by respondents in the USDA [- 1994--1996 and 1998] nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and accumulated exposure to the chemical for each commodity. The following assumptions were made for the chronic exposure assessments:

a. Anticipated-residue estimates were assumed for some commodities (field corn, soybeans, and wheat);

b. Tolerance-level residues were assumed for some crops (cereal grains); and

c. Percent crop-treated estimates were utilized for all crops.

iii. Cancer . Flufenacet is not carcinogenic, therefore a quantitative cancer risk assessment was not performed.

iv. Anticipated residue and percent crop treated (PCT) information . Section 408(b)(2)(E) of the FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide chemicals that have been measured in food. If EPA relies on such information, EPA must require that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. Following the initial data submission, EPA is authorized to require similar data on a time frame it deems appropriate. As required by section 408(b)(2)(E) of the FFDCA, EPA will issue a data call-in for information relating to anticipated residues to be submitted no later than 5 years from the date of issuance of this tolerance.

Section 408(b)(2)(F) of the FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if the Agency can make the following findings: Condition 1, that the data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain such pesticide residue; Condition 2, that the exposure estimate does not underestimate exposure for any significant subpopulation group; and Condition 3, if data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area. In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by section 408(b)(2)(F) of the FFDCA, EPA may require registrants to submit data on PCT.

The Agency used PCT information as follows.

Based on current use, the Agency used the following percent crop treated estimates: Field corn 2%, soybeans1%, and wheat 1%,. For crops planted in rotation (cereal grains), 2% crop treated was assumed as this is the highest estimate for the primary crops. For livestock commodities, a percent crop treated estimate of 1%, corresponding to the use on wheat, was utilized. The Agency has previously concluded that secondary residues of flufenacet in livestock commodities would not result from the use of flufenacet on corn or soybeans but would result from the section 18 use on wheat.

The Agency believes that the three conditions listed above have been met. With respect to Condition 1, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. EPA uses a weighted average PCT for chronic dietary exposure estimates. This weighted average PCT figure is derived by averaging State-level data for a period of up to 10 years, and weighting for the more robust and recent data. A weighted average of the PCT reasonably represents a person's dietary exposure over a lifetime, and is unlikely to underestimate exposure to an individual because of the fact that pesticide use patterns (both regionally and nationally) tend to change continuously over time, such that an individual is unlikely to be exposed to more than the average PCT over a lifetime. For acute dietary exposure estimates, EPA uses an estimated maximum PCT. The exposure estimates resulting from this approach reasonably represent the highest levels to which an individual could be exposed, and are unlikely to underestimate an individual's acute dietary exposure. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions 2 and 3, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available information on the regional consumption of food to which flufenacet may be applied in a particular area.

2. Dietary exposure from drinking water . The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for flufenacet in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the physical characteristics of flufenacet.

The Agency uses the First Index Reservoir Screening Tool (FIRST) or the Pesticide Root Zone/Exposure Analysis Modeling System (PRZM/EXAMS), to produce estimates of pesticide concentrations in an index reservoir. The SCI-GROW model is used to predict pesticide concentrations in shallow groundwater. For a screening-level assessment for surface water EPA will use FIRST (a tier 1 model) before using PRZM/EXAMS (a tier 2 model). The FIRST model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. While both FIRST and PRZM/EXAMS incorporate an index reservoir environment, the PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.

None of these models include consideration of the impact processing (mixing, dilution, or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a coarse screen for sorting out pesticides for which it is highly unlikely that drinking water concentrations would ever exceed human health levels of concern.

Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or %PAD. Instead drinking water levels of comparison (DWLOCs) are calculated and used as a point of comparison against the model estimates of a pesticide's concentration in water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food, and from residential uses. Since DWLOCs address total aggregate exposure to flufenacet they are further discussed in the aggregate risk section in Unit III.E.

Based on the PRZM/EXAMS and SCI-GROW models the estimated environmental concentrations (EECs) of flufenacet for acute exposures are estimated to be 9.9 parts per billion (ppb) for surface water and 0.21 ppb for ground water. The EECs for chronic exposures are estimated to be 1.3 ppb for surface water and 0.21 ppb for ground water.

3. From non-dietary exposure . The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Flufenacet is not registered for use on any sites that would result in residential exposure.

4. Cumulative exposure to substances with a common mechanism of toxicity . Section 408(b)(2)(D)(v) of the FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA does not have, at this time, available data to determine whether flufenacet has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, flufenacet does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that flufenacet has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the final rule for Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997).

1. In general . Section 408 of the FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base on toxicity and exposure unless EPA determines that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a MOE analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans.

2. Prenatal and postnatal sensitivity . No increase in susceptibility was seen in rat and rabbit developmental studies, but qualitative and/or quantitative increases in susceptibility were seen in the rat reproduction study and in the rat developmental neurotoxicity studies.

3. Conclusion . The toxicology data base for flufenacet is complete except for a special comparative assay on thyroid hormone levels in neonatal and adult rats and a 28-day inhalation toxicity study in rats. The exposure data are complete or are estimated based on data that reasonably accounts for potential exposures.

The Agency evaluated the potential for increased susceptibility of infants and children from exposure to flufenacet. The Agency concluded that there is a low degree of concern and lack of residual uncertainties for pre- and post-natal toxicity in the rat reproduction study and the rat and rabbit developmental toxicity studies. The Agency determined that the concern is also low for susceptibility seen in the developmental neurotoxicity (DNT) study. Multiple offspring effects were seen at the mid- and high doses, and no adverse maternal effects were seen at any dose. However, the only effect seen at the lowest dose in offspring was a transient decrease in body weight. The concern for the decrease in the offspring weights was reduced because no decrease in body weight was seen in the offspring in the reproduction study .

The Agency considered the lack of comparative data for thyroid hormone levels in adult and neonatal animals. Available data support the possibility of decreases in thyroid hormones in adult animals (decreases were observed in several studies conducted in rats, mice, rabbits, and dogs) at dose levels similar to those used in the submitted DNT study. Because of the above concern, a special comparative study on thyroid hormone levels in neonatal and adult rats is being requested by the Agency as a condition of registration. The Agency also noted that morphometric measurements could be incorporated into the comparative thyroid assay to confirm the findings observed in adult female offspring in the DNT (data for this endpoint were not available at the low dose).

Due to the concerns regarding the possibility of decreases in thyroid hormones and the need for comparative susceptibility data on this issue as well as the lack of a NOAEL in the DNT, EPA found no basis to remove the 10X FQPA safety for the protection of infants and children. EPA considers this additional 10X factor to be an uncertainty factor to address the deficiencies in the database.

To estimate total aggregate exposure to a pesticide from food, drinking water, and residential uses, the Agency calculates DWLOCs which are used as a point of comparison against the model estimates of a pesticide's concentration in water (EECs). DWLOC values are not regulatory standards for drinking water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food and residential uses. In calculating a DWLOC, the Agency determines how much of the acceptable exposure (i.e., the PAD) is available for exposure through drinking water [e.g., allowable chronic water exposure (mg/kg/day) = cPAD - (average food + residential exposure)]. This allowable exposure through drinking water is used to calculate a DWLOC.

A DWLOC will vary depending on the toxic endpoint, drinking water consumption, and body weights. Default body weights and consumption values as used by the USEPA Office of Water are used to calculate DWLOCs: 2 liter (L)/70 kg (adult male), 2L/60 kg (adult female), and 1L/10 kg (child). Default body weights and drinking water consumption values vary on an individual basis. This variation will be taken into account in more refined screening-level and quantitative drinking water exposure assessments. Different populations will have different DWLOCs. Generally, a DWLOC is calculated for each type of risk assessment used: Acute, short-term, intermediate-term, chronic, and cancer.

When EECs for surface water and groundwater are less than the calculated DWLOCs, OPP concludes with reasonable certainty that exposures to the pesticide in drinking water (when considered along with other sources of exposure for which OPP has reliable data) would not result in unacceptable levels of aggregate human health risk at this time. Because OPP considers the aggregate risk resulting from multiple exposure pathways associated with a pesticide's uses, levels of comparison in drinking water may vary as those uses change. If new uses are added in the future, OPP will reassess the potential impacts of residues of the pesticide in drinking water as a part of the aggregate risk assessment process.

1. Acute risk . Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food to flufenacet will occupy 23% of the aPAD for the U.S. population, 17 % of the aPAD for females 13 years and older, 23% of the aPAD for all infants and 48% of the aPAD for children 1-2 years. In addition, there is potential for acute dietary exposure to flufenacet in drinking water. Table 4 of this unit presents the EECs and DWLOCs for the major populations subgroups.

The EECs are less than calculated DWLOCs for acute exposure to flufenacet in drinking water, except for the population subgroup, children 1-2 years old, where the EEC marginally exceeds the DWLOC.

In evaluating the acceptability of these estimated risks, EPA has taken into account that the risk assessment was performed by estimating exposure at the 99.9th percentile of exposure. As EPA has explained in its policy regarding use of population percentiles in estimating exposure, EPA generally uses the 95th percentile when conducting an exposure assessment with unrefined residue values (i.e. assuming all covered food contains tolerance level residues) and the 99.9th percentile when using highly refined residue values (i.e. monitoring values). See U.S. EPA, Office of Pesticide Programs, Choosing A Percentile of Acute Dietary Exposure as a Threshold of Regulatory Concern 17 (March 16, 2000) ( http://www.epa.gov/pesticides/trac/science/trac2b054.pdf ). The residue values used in the flufenacet risk assessment fall somewhere between highly refined and unrefined. Although the Agency did use data bearing on percent crop treated, three other aspects of the assessment made it not particularly refined, and therefore, somewhat conservative (i.e. tending to overstate exposure). First, EPA assumed tolerance level residues for all crops covered by tolerances designed to address the possibility of flufenacet residues being present in crops grown at a later date in the same field as the treated crop. These rotational crop tolerances include rice and sorghum. Further, compounding this conservative assumption, EPA assumed that two percent of all of the crops covered by rotational crop tolerances would contain flufenacet residues even though the treatment rate for wheat and soybeans was at a one percent level (only corn was at the two percent level) and it is unlikely, in any event, that the crops covered by the rotational crop tolerances would, in their entirety, be grown in a rotational program.

Second, and probably most important, for those crops for which EPA did not assume tolerance level residues (corn, wheat, and soybeans) EPA did not use monitoring data (i.e. data collected from food as it moves in the channels of trade) but data from crop field trials. Crop field trials are studies conducted to determine the maximum residue levels that can occur under the limits imposed by the pesticide's label. Accordingly, such studies involve applying the pesticide, pursuant to its label, the maximum number of times at the maximum application rate and harvesting the crop as promptly as soon as permitted following the last pesticide treatment. These studies overstate the residue levels that consumers are exposed to for two reasons. First, in crop field studies, residue levels are measured at harvest and thus do not reflect the degradation that generally occurs during the production, shipping, and storage of food prior to sale to the consumer. Second, farmers are not required to apply pesticides in the manner used in crop field trials but generally may use lower amounts than those specified on the label, apply the pesticide less frequently than the number of applications permitted by the label, and wait longer to harvest the crop than the minimum pre-harvest interval prescribed by the label. See 7 U.S.C. 136a(ee). Such practices reduce residue values, normally by significant amounts. With flufenacet, the decrease will be even more significant than usual because some of the field trial data are based upon an application rate of 0.9 lbs. a.i. acre per season v.s. the label rate of 0.79 lbs. a.i. acre per season for field corn and 0.9 lbs. a.i. acre per season v.s. the label rate of 0.45 lbs. a.i. per acre per season for soybeans.

A third aspect of the flufenacet exposure assessment that overstated residue levels was the fact that EPA did not use processing reduction factors. Processing studies are performed in order to show whether or not residues concentrate in processed commodities of the RAC. For example wheat grain, may be processed into bran, flour, middlings, shorts and germ. Processing studies frequently show residues decreasing in the processed commodities. If the residues decrease in the processed commodity, we may be able to determine a reduction factor. The concentration and/or reduction factors are directly applied to the residue level used in the dietary exposure assessment for that commodity. The processing studies for flufenacet treated corn and soybeans showed no detectable residues. However, the Agency for this risk assessment assumed the residues in the raw agricultural commodity were carried through undiminished to the processed commodities.

As EPA has made clear, even when an exposure assessment is based on highly refined data, an indication that exposure at the 99.9th percentile poses a risk of concern is merely the starting point for assessing the ultimate safety of the pesticide. EPA has detailed a number of steps that are important to assess the accuracy of any 99.9th percentile estimate including sensitivity analyses and scrutiny of data inputs. When an assessment does not rely on highly refined exposure data there is an even greater need for close examination of any risk estimates. As outlined above, there are several aspects of the flufenacet exposure assessment that are likely to significantly inflate exposure, and thus risk, estimates. Taking this into account as well as the fact that a risk analysis using a 99.8th population percentile raises the DWLOC for children between 1 and 2 years old to 12 ppb and thus above the EEC of 9.9 ppb, EPA concludes that flufenacet does not show a acute risk of concern.

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to flufenacet from food will utilize < 1 % of the cPAD for the U.S. population, < 1 % of the cPAD for all infants and 1.0 % of the cPAD for children (1-2 yrs). In addition, there is potential for chronic dietary exposure to flufenacet in drinking water. There are no residential uses for flufenacet and therefore, no chronic residential exposure to flufenacet. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect the aggregate exposure to exceed 100% of the cPAD, as shown in Table 5 of this unit:

3. Short-term risk . Short-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Flufenacet is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risk from food and water, which do not exceed the Agency's level of concern.

4. Intermediate-term risk . Intermediate-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Flufenacet is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risk from food and water, which do not exceed the Agency's level of concern.

5. Aggregate cancer risk for U.S. population . Flufenacet is not carcinogenic, therefore no aggregate cancer risk is expected.

6. Determination of safety . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, and to infants and children from aggregate exposure to flufenacet residues.

Adequate enforcement methodology (gas chromotography /mass spectrometry with selected ion monitoring) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; e-mail address: residuemethods@epa.gov .

There are no Codex, Canadian, or Mexican tolerances for flufenacet on corn, soybeans, wheat or livestock commodities.

The following studies are required as a condition of registration.

1. A special comparative sensitivity study on thyroid hormone levels in neonatal and adult rats.

2. 28-day inhalation toxicity study in rats.

One comment was received in response to the notice of filing from B. Sachau, 15 Elm St., Florham Park, NJ 07932. Mr. Sachau objected generally to the presence of pesticides in food and specifically to the presence of flufenacet. Mr. Sachau also proposed that the U.S. establish testing on humans instead of dogs and rats.

Mr. Sachau comment contained no scientific data or evidence to rebut the Agency's conclusion that there is a reasonable certainty that no harm will result from aggregate exposure to flufenacet, including all anticipated dietary exposures and all other exposures for which there is reliable information.

Therefore, the tolerance is established for combined residues of flufenacet, ( N -(4-fluorophenyl)- N -(1-methylethyl)-2-[[5-(trifluoromethyl)-1,3,4-thiadiazol-2-yl]oxy]acetamide) and its metabolites containing the 4-fluoro- N -methylethyl benzenamine moiety] on corn, field, forage at 0.4 ppm; corn, field, grain at 0.05 ppm; corn, field, stover at 0.4 ppm; soybean, seed at 0.1 ppm by establishing permanent tolerances for indirect or inadvertent residues of the herbicide flufenacet, ( N -(4-fluorophenyl)- N -(1-methylethyl)-2- [[5-(trifluoromethyl)-1,3,4- thiadiazol-2-yl]oxy]acetamide) and its metabolites containing the 4-fluoro- N -methylethyl benzenamine moiety in or on the following raw agricultural commodities from the application of this herbicide to the raw agricultural commodities, listed in 40 CFR 180.527 (a) and (b), alfalfa, forage at 0.1 ppm; alfalfa, hay at 0.1 ppm; alfalfa, seed at 0.1 ppm; clover, forage at 0.1 ppm; clover, hay at 0.1 ppm; grain, cereal, group 15, except rice at 0.1 ppm; grain, cereal, forage, fodder, and straw, group 16, except rice, at 0.1 ppm; and grass, forage, fodder and hay, group 17 at 0.1 ppm. These tolerances replaced currently expiring tolerances in § 180.527 (a) and (d).

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) of the FFDCA provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d) of FFDCA, as was provided in the old sections 408 and 409 of the FFDCA. However, the period for filing objections is now 60 days, rather than 30 days.

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number OPP-2003-0181 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before August 25, 2003.

1. Filing the request . Your objection must specify the specific provisions in the regulation that you object to, and the grounds for the objections (40 CFR 178.25). If a hearing is requested, the objections must include a statement of the factual issues(s) on which a hearing is requested, the requestor's contentions on such issues, and a summary of any evidence relied upon by the objector (40 CFR 178.27). Information submitted in connection with an objection or hearing request may be claimed confidential by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the information that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice.

Mail your written request to: Office of the Hearing Clerk (1900C), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. You may also deliver your request to the Office of the Hearing Clerk in Rm.104, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (703) 603-0061.

2. Tolerance fee payment . If you file an objection or request a hearing, you must also pay the fee prescribed by 40 CFR 180.33(i) or request a waiver of that fee pursuant to 40 CFR 180.33(m). You must mail the fee to: EPA Headquarters Accounting Operations Branch, Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. Please identify the fee submission by labeling it “Tolerance Petition Fees.”

EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov , or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VII.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.1. Mail your copies, identified by docket ID number OPP-2003-0181, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.1. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov . Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).

This final rule establishes a tolerance under section 408(d) of the FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of the FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of the FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, 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 in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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 this final rule in the Federal Register . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

You may be potentially affected by this action if you are a Federal or State Government Agency involved in administration of environmental quality programs (i.e., Departments of Agriculture, Environment, etc). Potentially affected entities may include, but are not limited to:

• Federal or State Government Entity, (NAICS 9241), i.e., Departments of Agriculture, Environment, etc.

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

1. Docket . EPA has established an official public docket for this action under docket identification ID number OPP-2003-0179. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA. This docket facility is open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The docket telephone number is (703) 305-5805.

2. Electronic access . You may access this Federal Register document electronically through the EPA Internet under the “ Federal Register ” listings at http://www.epa.gov/fedrgstr/ . A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html , a beta site currently under development.

An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in Unit I.B.1. Once in the system, select “search,” then key in the appropriate docket ID number.

EPA published a final rule in the Federal Register for each chemical/commodity listed below. The initial issuance of these final rules announced that EPA, on its own initiative, under section 408 of the FFDCA, 21 U.S.C. 346a, as amended by the Food Quality Protection Act of 1996 (FQPA) (Public Law 104-170) was establishing time-limited tolerances.

EPA established the tolerances because section 408(l)(6) of the FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under FIFRA section 18. Such tolerances can be established without providing notice or time for public comment.

EPA received requests to extend the use of these chemicals for this year's growing season. After having reviewed these submissions, EPA concurs that emergency conditions exist. EPA assessed the potential risks presented by residues for each chemical/commodity. In doing so, EPA considered the safety standard in section 408(b)(2) of the FFDCA, and decided that the necessary tolerance under section 408(l)(6) of the FFDCA would be consistent with the safety standard and with FIFRA section 18.

The data and other relevant material were evaluated and discussed in the final rule originally published to support these uses. Based on that data and information considered, the Agency reaffirms that extension of these time-limited tolerances will continue to meet the requirements of section 408(l)(6) of the FFDCA. Therefore, the time-limited tolerances are extended until the date listed. EPA will publish a document in the Federal Register to remove the revoked tolerances from the Code of Federal Regulations (CFR). Although these tolerances will expire and are revoked on the date listed, under section 408(l)(5) of the FFDCA, residues of the pesticide not in excess of the amounts specified in the tolerance remaining in or on the commodity after that date will not be unlawful, provided the residue is present as a result of an application or use of a pesticide at a time and in a manner that was lawful under FIFRA, the tolerance was in place at the time of the application, and the residue does not exceed the level that was authorized by the tolerance. EPA will take action to revoke these tolerances earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.

Tolerances for the use of the following pesticide chemicals on specific commodities are being extended:

1. Carfentrazone-ethyl . EPA has authorized under FIFRA section 18 the use of carfentrazone-ethyl on hops for control of hops sucker growth to indirectly control powdery mildew in Idaho, Oregon, and Washington. This regulation extends a time-limited tolerance for combined residues of the herbicide carfentrazone-ethyl, (ethyl-α-2-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1H-1,2,4-triazol-1-yl]-4-fluorobenzenepropanoate) and its metabolite carfentrazone-chloropropionic acid (α,2-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1H-1,2,4-triazol-1-yl]-4-fluorobenzenepropanoic acid) in or on hop, dried cone at 0.30 ppm for an additional 2-year period. This tolerance will expire and is revoked on June 30, 2005. A time-limited tolerance was originally published in the Federal Register of August 1, 2001 (66 FR 39640) (FRL-6792 -2)

2. Desmedipham . EPA has authorized under FIFRA section 18 the use of desmidipham on garden beets for control of various weed pests in New York. This regulation extends a time-limited tolerance for residues of the herbicide desmedipham in or on red beet roots at 0.2 ppm and red beet tops at 15 ppm for an additional 18-month period. These tolerances will expire and are revoked on June 30, 2005. Time-limited tolerances were originally published in the Federal Register on August 29, 1997 (62 FR 45741) (FRL-5738-5).

3. Difenoconazole . EPA has authorized under FIFRA section 18 the use of difenoconazole on sweet corn seed for control of damping off and die-back diseases in Idaho and Colorado. This regulation extends time-limited tolerances for residues of the fungicide difenoconazole (1-((2-(2-chloro-4-(4-chlorophenoxy)phenyl)-4-methyl-1,3-dioxolan-2-yl)methyl)-1H-1,2,4-triazole) in or on corn, sweet (kernel + corn with husk removed); corn, sweet, forage; and corn, sweet, stover at 0.1 ppm for an additional 2-year period. These tolerances will expire and are revoked on December 31, 2005. The time-limited tolerances were originally published in the Federal Register of September 1, 1999 (64 FR 47680) (FRL-6094-3).

4. Fenbuconazole . EPA has authorized under FIFRA section 18 the use of fenbuconazole on grapefruit for control of greasy spot disease in Florida. This regulation extends time-limited tolerances for combined residues of the fungicide fenbuconazole, (α-[2-4-chlorophenyl)-ethyl]α-phenyl-3-(1H-1,2,4-triazole)-1-propanenitrile] and its metabolites cis-5-(4-chlorophenyl)-dihydro-3-phenyl-3-(1H-1,2,4-triazole-1-ylmethyl)-2-3H-furanone and trans-5(4-chlorophenyl)dihydro-3-phenyl-3-(1H1,2,4-triazole-1-ylmethyl-2-3H-furanone in or on fat, meat, and meat byproducts of cattle, goats, hogs, horses, and sheep at 0.01 ppm; grapefruit at 0.5 ppm; grapefruit oil at 35 ppm; and grapefruit dried pulp at 4 ppm for an additional 2-year period. These tolerances will expire and are revoked on December 31, 2005. The time-limited tolerances were originally published in the Federal Register of January 29, 1999 (64 FR 4577) (FRL-6054-3).

5. Fludioxonil . EPA has authorized under FIFRA section 18 the use of fludioxonil on pomegranates for control of gray mold in California. This regulation extends a time-limited tolerance for combined residues of the fungicide fludioxonil, 4-(2,2-difluoro-1,3-benzodioxol-4-yl)-1H-pyrrole-3-carbonitrile), in or on pomegranates at 5.0 ppm for an addtionional 3-year period. This tolerance will expire and is revoked on June 30, 2006. The time-limited tolerance was originally published in the Federal Register of September 12, 2001 (66 FR 47403) (FRL-6797-5).

6. Hydramethylnon . EPA has authorized under FIFRA section 18 the use of hydramethylnon on pineapple for control of big-headed and Argentine ants in Hawaii. This regulation extends a time-limited tolerance for residues of the insecticide hydramethylnon; tetrahydro-5,5-dimethyl-2-(1H)-pyrimidinoine (3-(4-trifluoromethyl)phenyl)-1-[2-[4(trifluoromethyl)phenyl]ethenyl)-2-propenylidene) hydrazone] in or on pineapple at 0.05 ppm for an additional 2-year period. This tolerance will expire and is revoked on June 30, 2005. A time-limited tolerance was originally published in the Federal Register of March 4, 1998 (63 FR 10537) (FR -5767-1).

7. Maneb . EPA has authorized under FIFRA section 18 the use of maneb on walnuts for control of bacterial blight in California. This regulation extends a time-limited tolerance for combined residues of the fungicide maneb (manganous ethylenebisdithiocarbamate) calculated as zinc ethylenebisdithiocarbamate, and its metabolite ethylenethiourea in or on walnuts at 0.05 ppm for an additional 2-year period. This tolerance will expire and is revoked on December 31, 2005. A time-limited tolerance was originally published in the Federal Register of March 17, 1999 (64 FR 13097) (FRL-6067-9)

8. Methoxyfenozide . EPA has authorized under FIFRA section 18 the use of methoxyfenozide on soybeans for control of soybean loopers and salt marsh catepillars in Mississippi. This regulation extends a time-limited tolerance for residues of the insecticide methoxyfenozide, benzoic acid, 3-methoxy-2-methyl-2-(3,5-dimethylbenzoyl)-2-(1,1-dimethylethyl)hydrazide in or on soybean aspirated grain fractions at 20 ppm, soybean seed at 0.04 ppm, soybean forage at 10 ppm, soybean hay at 75 ppm and soybean oil at 1.0 ppm for an additional 2-year period. These tolerances will expire and are revoked on December 31, 2005. A time-limited tolerance was originally published in the Federal Register of November 2, 2001 (66 FR 55585) (FRL-6806-4)

9. Myclobutanil . EPA has authorized under FIFRA section 18 the use of myclobutanil on hops for control of powdery mildew in Idaho, Oregon, and Washington. This regulation extends a time-limited tolerance for combined residues of the fungicide myclobutanil, α-butyl-α-(4-chlorophenyl)-1H-1,2,4-triazole-1-propanenitrile and its alcohol metabolite α-(3-hydroxybutyl)-α-(4-chlorophenyl)-1H-1,2,4-triazole-1-propanenitrile (free and bound) in or on hops at 5.0 ppm for an additional 2-year period. This tolerance will expire and is revoked on December 31, 2005. A time- limited tolerance was originally published in the Federal Register of July 10, 1998 (63 FR 37289) (FRL-5798-6).

10. Myclobutanil . EPA has authorized under FIFRA section 18 the use of myclobutanil on peppers for control of powdery mildew in California. This regulation extends a time-limited tolerance for combined residues of the fungicide myclobutanil α-butyl-α-(4-chlorophenyl)-1H-1,2,4-triazole-1-propanenitrile and its alcohol metabolite (α-(3-hydroxybutyl)-α-(4-chlorophenyl)-1H-1,2,4-triazole-1-propanenitrile (free and bound) in or on pepper at 1.0 ppm for an additional 2-year period. This tolerance will expire and is revoked on June 30, 2005. A time-limited tolerance was originally published in the Federal Register of September 16, 1998 (63 FR 49472) (FRL-6025-1).

11. Propiconazole . EPA has authorized under FIFRA section 18 the use of propiconazole on dry beans for control of rust in Colorado, Kansas, Minnesota, Nebraska, and North Dakota. This regulation extends a time-limited tolerances for combined residues of the fungicide propiconazole 1-[[2-(2,4-dichlorophenyl)-4-propyl-1,3-dioxolan-2-yl]methyl]-1H-1,2,4-triazole and its metabolite determined as 2,4-dichlorobenzoic acid in or on dry beans at 0.5 ppm, dry bean forage at 8 ppm, and dry bean hay at 8 ppm for an additional 2-year period. These tolerances will expire and are revoked on December 31, 2005. The time-limited tolerances for dry bean commodities were originally published in the Federal Register of June 13, 1997 (62 FR 32224) (FRL-5718-8).

12. Propiconazole . EPA has authorized under FIFRA section 18 the use of propiconazole on cranberry for control of cottonball disease in Wisconsin. This regulation extends a time-limited tolerance for combined residues of the fungicide propiconazole, 1-[[2-(2,4-dichlorophenyl)-4-propyl-1,3-dioxolan-2-yl] methyl]-1H-1,2,4-triazole and its metabolites determined as 2,4-dichlorobenzoic acid and expressed as parent compound in or on cranberry at 1.0 ppm for an additional 2-year period. This tolerance will expire and is revoked on December 31, 2005. A time-limited tolerance was originally published in the Federal Register of April 11, 1997 (62 FR 17710) (FRL-5600-5).

13. Propiconazole . EPA has authorized under FIFRA section 18 the use of propiconazole on grain sorghum for control of sorghum ergot in Kansas, New Mexico and Texas. This regulation extends a time-limited tolerance for combined residues of the fungicide propiconazole, 1-[[2-(2,4-dichlorophenyl)-4-propyl-1,3-dioxolan-2-yl] methyl]-1H-1,2,4-triazole and its metabolites determined as 2,4-dichlorobenzoic acid and expressed as parent compound in or on grain sorghum, grain at 0.2 ppm; grain sorghum, stover at 1.5 ppm; and sorghum aspirated grain fractions at 20 ppm for an additional 18-month period. These tolerances will expire and are revoked on June 30, 2005. Time-limited tolerances were originally published in the Federal Register of August 13, 1997 (62 FR 43284) (FRL-5735-2)

EPA has received objections to tolerances it established for propiconazole on different food commodities. The objections were filed by the Natural Resources Defense Council (NRDC) and raised several issues regarding aggregate exposure estimates and the additional safety factor for the protection of infants and children. Although these objections concern separate rulemaking proceedings under the FFDCA, EPA has considered whether it is appropriate to extend the emergency exemption tolerances for propiconazole while the objections are still pending.

Factors taken into account by EPA included how close the Agency is to concluding the proceedings on the objections, the nature of the current action, whether NRDC's objections raised frivolous issues, and extent to which the issues raised by NRDC had already been considered by EPA. Although NRDC's objections are not frivolous, the other factors all support extending these tolerances at this time. First, the objections proceeding is unlikely to conclude prior to when action is necessary on this petition. NRDC's objections raise complex legal, scientific, policy, and factual matters and EPA initiated a 60 day public comment period on them in the Federal Register of June 19, 2002 (67 FR 41628) (FRL-7167-7). That comment period was extended until October 16, 2002 (September 17, 2002 (67 FR 58536) (FRL-7275-3)), and EPA is now examining the extensive comments received. Second, the nature of the current actions are extremely time-sensitive as they address emergency situations. Third, the issues raised by NRDC are not new matters but questions that have been the subject of considerable study by EPA and comment by stakeholders. Accordingly, EPA is proceeding with extending the tolerances for propiconazole.

14. Pyriproxyfen . EPA has authorized under FIFRA section 18 the use of pyriproxyfen on beans for control of whiteflies in Florida. This regulation extends a time-limited tolerance for residues of the insecticide pyriproxyfen, 2-[1-methyl-2-(4-phenoxyphenoxy)ethoxypyridine in or on bean, succulent at 0.1 ppm for an additional 2-year period. This tolerance will expire and is revoked on June 30, 2005. A time-limited tolerance was originally published in the Federal Register of September 5, 2001 (66 FR 46390) (FRL-6798-6).

15. Tebuconazole . EPA has authorized under FIFRA section 18 the use of tebuconazole on garlic for control of rust in California. This regulation extends a time-limited tolerance for residues of the fungicide tebuconazole, (α-[2-(4-chlorophenyl)-ethyl]-α-(1,1-dimethylethyl)-1H-1,2,4-triazole-1-ethanol) in or on garlic at 0.1 ppm for an additional 2-year period. This tolerance will expire and is revoked on December 31, 2005. A time-limited tolerance was originally published in the Federal Register of May 26, 1999 (64 FR 28377) (FRL-6079-1).

16. Tebuconazole . EPA has authorized under FIFRA section 18 the use of tebuconazole on wheat for control of fusarium head blight in Michigan, Minnesota, North Dakota, and South Dakota. This regulation extends a time-limited tolerance for residues of the fungicide tebuconazole (α-[2-(4-chlorophenyl)-ethyl]-α(1,1-dimethylethyl)-1H-1,2,4-triazole-1-ethanol) in or on wheat hay at 15.0 ppm and wheat straw at 2.0 ppm for an additional 18-month period. These tolerances will expire and are revoked on June 30, 2005. Time-limited tolerances were originally published in the Federal Register of June 20, 1997 (62 FR 33550) (FRL-5725-7).

17. Tebuconazole . EPA has authorized under FIFRA section 18 the use of tebuconazole on barley for control of fusarium head blight in Minnesota, North Dakota, and South Dakota. This regulation extends time-limited tolerances for residues of the fungicide tebuconazole (α-[2-(4-chlorophenyl)-ethyl]-α-(1,1-dimethylethyl)-1H-1,2,4-triazole-1-ethanol) in or on barley grain at 2.0 ppm, barley hay at 20.0 ppm, and barley straw at 20.0 ppm for an additional 18-month period. These tolerances will expire and are revoked on June 30, 2005. Time-limited tolerance were originally published in the Federal Register of June 20, 1997 (62 FR 33550) (FRL-5725-7).

18. Terbacil . EPA has authorized under FIFRA section 18 the use of terbacil on watermelon for control of morningglory and other annual broadleaf weeds in Virginia. This regulation extends a time-limited tolerance for combined residues of the herbicide terbacil (3-tert-Butyl-5-chloro-6-methyluracil and its three metabolites 3-tert-butyl-5-chloro-6-hydroxymethyluracil, 6-chloro-2,3-dihydro-7-hydroxymethyl-3,3-dimethyl-5H-oxazolo (3,2-a) pyrimidin-5-one, and 6-chloro-2,3-dihydro-3,3,7-trimethyl-5H-oxazolo (3,2-a) pyrimidin-5-one) which are calculated as terbacil in or on watermelon at 4.0 ppm for an additional 2-year period. This tolerance will expire and is revoked on June 30, 2005. A time-limited tolerance was originally published in the Federal Register of June 20, 1997 (62 FR 33557) (FRL-5718-7)

19. Tetraconazole . EPA has authorized under FIFRA section 18 the use of tetraconazole on sugar beets for control of cercospora leaf spot in Colorado, Montana, Nebraska, and Wyoming. This regulation extends time-limited tolerances for residues of the fungicide tetraconazole, [(+/-)-2-(2,4-dichlorophenyl)-3-(1H-1,2,4-triazol-1-yl) propyl 1, 1,2,2-tetrafluoroethyl ether] in or on sugarbeets, and sugarbeet-related commodities, and for secondary residues of triazole on animal commodities from livestock fed sugarbeet by-products] at 0.10 part per million in/on sugarbeet, 6.0 ppm in/on sugarbeet top, 0.20 ppm in/on sugarbeet dried pulp, 0.30 ppm in/on sugarbeet molasses, 0.050 ppm in milk, 0.030 ppm in cattle, meat and meat byproducts except kidney and liver, 0.20 ppm in kidney, 6.0 ppm in liver, and 0.60 ppm in fat for an additional 2-year period. These tolerances will expire and are revoked on December 31, 2005. The time-limited tolerances were originally published in the Federal Register of December 6, 1999 (64 FR 68046) (FRL-6384-1).

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) of the FFDCA provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d) of the FFDCA, as was provided in the old sections 408 and 409 of the FFDCA. However, the period for filing objections is now 60 days, rather than 30 days.

You must file your objection or request a hearing on this regulation in accordance with the instruction provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number OPP-2003-0179 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before July 25, 2003.

1. Filing the request . Your objection must specify the specific provisions in the regulation that you object to, and the grounds for the objections (40 CFR 178.25). If a hearing is requested, the objections must include a statement of the factual issues(s) on which a hearing is requested, the requestor's contentions on such issues, and a summary of any evidence relied upon by the objector (40 CFR 178.27). Information submitted in connection with an objection or hearing request may be claimed confidential by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the information that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice.

Mail your written request to: Office of the Hearing Clerk (1900C), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. You may also deliver your request to the Office of the Hearing Clerk in Rm.104, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (703) 603-0061.

2. Tolerance fee payment . If you file an objection or request a hearing, you must also pay the fee prescribed by 40 CFR 180.33(i) or request a waiver of that fee pursuant to 40 CFR 180.33(m). You must mail the fee to: EPA Headquarters Accounting Operations Branch, Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. Please identify the fee submission by labeling it “Tolerance Petition Fees.”

EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov , or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit III.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.1. Mail your copies, identified by docket ID number OPP-2003-0179, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.1. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov . Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 file format or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).

This final rule establishes time-limited tolerances under section 408 of the FFDCA. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104 -113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established under section 408(l)(6) of the FFDCA in response to an exemption under FIFRA section 18, such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of the FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications ” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, 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 in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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 this final rule in the Federal Register . This final rule is not a “major rule ” as defined by 5 U.S.C. 804(2).

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, and pesticide manufacturer. Potentially affected entities may include, but are not limited to:

• Crop production (NAICS 111)

• Animal production (NAICS 112)

• Food manufacturing (NAICS 311)

• Pesticide manufacturing (NAICS 32532)

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

1. Docket . EPA has established an official public docket for this action under docket identification ID number OPP-2003-0136. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA. This docket facility is open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The docket telephone number is (703) 305-5805.

2. Electronic access . You may access this Federal Register document electronically through the EPA Internet under the “ Federal Register ” listings at http://www.epa.gov/fedrgstr/. A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html, a beta site currently under development.

An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in Unit I.B.1. Once in the system, select “search,” then key in the appropriate docket ID number.

In the Federal Register of March 26, 2003 (68 FR 14619) (FRL-7295-8), EPA issued a notice pursuant to section 408 of FFDCA, 21 U.S.C. 346a, as amended by FQPA (Public Law 104-170), announcing the filing of pesticide petitions (2E6369, 2E6455, and 2E6493) by IR-4, 681 U.S. Highway #1 South, New Brunswick, NJ 08902-3390. That notice included a summary of the petition prepared by Nichino American Inc., the registrant.

The petition requested that 40 CFR 180.511 be amended by establishing tolerances for residues of the insecticide buprofezin, buprofezin (2-[(1,1- dimethylethyl)imino]tetrahydro-3(1-methylethyl)-5-phenyl-4H-1,3,5-thiadiazin-4-one), in or on bean, snap, succulent at 0.02 parts per million (ppm); logan at 0.30 ppm; lychee at 0.30 ppm; pistachio at 0.05 ppm; pulasan at 0.30 ppm; rambutan at 0.30 ppm; and spanish lime at 0.30 ppm.

Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of the FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of the FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 of the FFDCA and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances November 26, 1997 (62 FR 62961) (FRL-5754-7).

Consistent with section 408(b)(2)(D) of the FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2) of the FFDCA, for tolerances for residues of buprofezin on bean, snap, succulent at 0.02 ppm; logan at 0.30 ppm; lychee at 0.30 ppm; pistachio at 0.05 ppm; pulasan at 0.30 ppm; rambutan at 0.30 ppm;, and spanish lime at 0.30 ppm. EPA's assessment of exposures and risks associated with establishing these tolerances follow.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by buprofezin is discussed in Unit III.A. of the Final Rule on Buprofezin Pesticide Tolerance published in the Federal Register on September 5, 2001 (66 FR 46381) (FRL-6796-6).

The dose at which no observed adverse effects (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose observed at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. An UF of 100 is routinely used, 10X to account for interspecies differences and 10X for intraspecies differences.

For dietary risk assessment (other than cancer) the Agency uses the UF to calculate an acute or chronic reference dose (aRfD or cRfD) where the RfD is equal to the NOAEL divided by the appropriate UF (RfD = NOAEL/UF). Where an additional safety factors (SF) is retained due to concerns unique to the FQPA, this additional factor is applied to the RfD by dividing the RfD by such additional factor. The acute or chronic Population Adjusted Dose (aPAD or cPAD) is a modification of the RfD to accommodate this type of FQPA SF.

For non-dietary risk assessments (other than cancer) the UF is used to determine the LOC. For example, when 100 is the appropriate UF (10X to account for interspecies differences and 10X for intraspecies differences) the LOC is 100. To estimate risk, a ratio of the NOAEL to exposures (margin of exposure (MOE) = NOAEL/exposure) is calculated and compared to the LOC.

The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify carcinogenic risk. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk. A Q* is calculated and used to estimate risk which represents a probability of occurrence of additional cancer cases (e.g., risk is expressed as 1 x 10 -6 or one in a million). Under certain specific circumstances, MOE calculations will be used for the carcinogenic risk assessment. In this non-linear approach, a “point of departure” is identified below which carcinogenic effects are not expected. The point of departure is typically a NOAEL based on an endpoint related to cancer effects though it may be a different value derived from the dose response curve. To estimate risk, a ratio of the point of departure to exposure (MOE cancer = point of departure/exposures) is calculated. A summary of the toxicological endpoints for buprofezin used for human risk assessment is shown in the following Table 2:

1. Dietary exposure from food and feed uses . Tolerances have been established (40 CFR 180.511 for the residues of buprofezin, in or on the following raw agricultural commodities: Almond, banana, citrus fruits, cotton, cucumber, grape, lettuce (head and leaf), tomato, melon (cantaloupe, honeydew, watermelon, muskmelon), pumpkin, and squash with tolerances for residues of buprofezin ranging from 0.05 to 60 ppm. Tolerances have also been established for residues of buprofezin in/on ruminant fat, liver, and meat byproducts at 0.05 ppm. Risk assessments were conducted by EPA to assess dietary exposures from buprofezin in food as follows:

i. Acute exposure . Acute dietary risk assessments are performed for a food-use pesticide if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. The Dietary Exposure Evaluation Model (DEEM TM ) analysis evaluated the individual food consumption as reported by respondents in the United States Department of Agriculture (USDA) 1989-1992 nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and accumulated exposure to the chemical for each commodity. The following assumptions were made for the acute exposure assessments: The acute dietary analysis assumed tolerance level residues, DEEM TM (ver. 7.76) default processing factors, and 100% crop treated for all registered and proposed commodities (Tier I).

ii. Chronic exposure . In conducting this chronic dietary risk assessment, the (DEEM TM -FCID) analysis evaluated the individual food consumption as reported by respondents in the USDA 1994-1996, 1998 nationwide CSFII and accumulated exposure to the chemical for each commodity. The following assumptions were made for the chronic exposure assessments: The chronic dietary exposure assumed 100% crop treated and DEEM TM -FCID (ver. 1.30) default processing factors for all registered/proposed commodities and tolerance level residues for all registered/proposed commodities excluding banana, orange, and tomato processed and unprocessed commodities where average field trial residues were assumed (Tier II).

2. Dietary exposure from drinking water . The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for buprofezin in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the physical characteristics of buprofezin.

The Agency uses the FQPA Index Reservoir Screening Tool or the Pesticide Root Zone Model/Exposure Analysis Modeling System (PRZM/EXAMS), to produce estimates of pesticide concentrations in an index reservoir. The Screening Concentration in Ground Water (SCI-GROW) model is used to predict pesticide concentrations in shallow ground water. For a screening-level assessment for surface water, EPA will use FIRST (a Tier I model) before using PRZM/EXAMS (a Tier II model). The FIRST model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. FIRST and PRZM/EXAMS incorporate an index reservoir environment, and include a percent crop (PC) area factor as an adjustment to account for the maximum PC coverage within a watershed or drainage basin.

None of these models include consideration of the impact processing (mixing, dilution, or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a coarse screen for sorting out pesticides for which it is highly unlikely that drinking water concentrations would ever exceed human health levels of concern.

Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or population adjusted dose (%PAD). Instead drinking water levels of comparison (DWLOCs) are calculated and used as a point of comparison against the model estimates of a pesticide's concentration in water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food, and from residential uses. Since DWLOCs address total aggregate exposure to buprofezin, they are further discussed in the aggregate risk section under Unit III.E.

Based on the FIRST and SCI-GROW models, the EECs of buprofezin for acute exposures are estimated to be 102 parts per billion (ppb) for surface water and 0.08 ppb for ground water. The EECs for chronic surface water and ground water exposures are estimated to be 34 ppb, and 0.08 ppb, respectively.

3. From non-dietary exposure . The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Buprofezin is not registered for use on any sites that would result in residential exposure.

4. Cumulative exposure to substances with a common mechanism of toxicity . Section 408(b)(2)(D)(v) of the FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA does not have, at this time, available data to determine whether buprofezin has a common mechanism of toxicity with other substances. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to buprofezin and any other substances and buprofezin does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that buprofezin has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the policy statements released by EPA's Office of Pesticide Programs concerning common mechanism determinations and procedures for cumulating effects from substances found to have a common mechanism on EPA's website at http://www.epa.gov/pesticides/cumulative/.

1. In general . Section 408 of the FFDCA provides that EPA shall apply an additional tenfold MOS for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base on toxicity and exposure unless EPA determines that a different MOS will be safe for infants and children. MOS are incorporated into EPA risk assessments either directly through use of a MOE analysis or through using UF (safety) in calculating a dose level that poses no appreciable risk to humans.

2. Prenatal and postnatal sensitivity . The Agency concluded that the available studies provided no indication of increased susceptibility of rats or rabbits following in utero exposure or of rats following prenatal/postnatal exposure to buprofezin.

3. Conclusion . There is a complete toxicity data base for buprofezin and exposure data are complete or are estimated based on data that reasonably accounts for potential exposures. EPA determined that the 10X SF to protect infants and children should be reduced. The FQPA factor is reduced to 1X based on toxicological considerations and based on the conservative residue assumptions used in the dietary risk assessment (currently no residential exposures) and the completeness of the toxicity, residue chemistry and environmental fate data base (evaluated by EPA).

To estimate total aggregate exposure to a pesticide from food, drinking water, and residential uses, the Agency calculates DWLOCs which are used as a point of comparison against the model estimates of a pesticide's concentration in water (EECs). DWLOC values are not regulatory standards for drinking water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food and residential uses. In calculating a DWLOC, the Agency determines how much of the acceptable exposure (i.e., the PAD) is available for exposure through drinking water e.g., allowable water exposure (mg/kg/day) = PAD - (food + residential exposure). This allowable exposure through drinking water is used to calculate a DWLOC.

A DWLOC will vary depending on the toxic endpoint, drinking water consumption, and body weights. Default body weights and consumption values as used by the EPA's Office of Water are used to calculate DWLOCs: 2 liter (L)/70 kg (adult male), 2L/60 kg (adult female and youth), and 1L/10 kg (child). Default body weights and drinking water consumption values vary on an individual basis. This variation will be taken into account in more refined screening-level and quantitative drinking water exposure assessments. Different populations will have different DWLOCs. Generally, a DWLOC is calculated for each type of risk assessment used: Acute, short-term, intermediate-term, chronic, and cancer.

When EECs for surface water and ground water are less than the calculated DWLOCs, EPA concludes with reasonable certainty that exposures to the pesticide in drinking water (when considered along with other sources of exposure for which EPA has reliable data) would not result in unacceptable levels of aggregate human health risk at this time. Because EPA considers the aggregate risk resulting from multiple exposure pathways associated with a pesticide's uses, levels of comparison in drinking water may vary as those uses change. If new uses are added in the future, EPA will reassess the potential impacts of residues of the pesticide in drinking water as a part of the aggregate risk assessment process.

1. Acute risk . Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food to buprofezin will occupy 1% of the aPAD for the females 13-49 years old. No effect that could be attributed to a single exposure was observed, (no endpoint was chosen) for the general U.S. population (including infants and children). In addition, there is potential for acute dietary exposure to buprofezin in drinking water. After calculating DWLOCs and comparing them to the EECs for surface water and ground water, EPA does not expect the aggregate exposure to exceed 100% of the aPAD, as shown in the following Table 2:

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to buprofezin from food will utilize 32% of the cPAD for the U.S. population, 18% of the cPAD for infants < 1 year old, and 63% of the cPAD for children 1-2 years old. There are no residential uses for buprofezin that result in chronic residential exposure to buprofezin. In addition, there is potential for chronic dietary exposure to buprofezin in drinking water. After calculating DWLOCs and comparing them to the EECs for surface water and ground water, EPA does not expect the aggregate exposure to exceed 100% of the cPAD, as shown in the following Table 3:

3. Aggregate cancer risk for U.S. population . In accordance with the EPA Guidelines for Carcinogen Risk Assessment, the Carcinogen Assessment Review Commission classified buprofezin as having “suggestive evidence of carcinogenicity, but not sufficient to assess human carcinogenic potential” based on liver tumors in female mice. The Committee further recommended no quantification of cancer risk.

4. Determination of safety . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, and to infants and children from aggregate exposure to buprofezin residues.

Adequate enforcement methodology gas chromotography using nitrogen phosphorus detection is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755- 5350; telephone number: (410) 305-2905; e-mail address: residuemethods@epa.gov.

Canada, Codex, and Mexico do not have maximum residue limits for residues of buprofezin in/on the proposed crops. Therefore, harmonization is not an issue.

Therefore, the tolerances are established for residues of buprofezin, [(2-[(1,1- dimethylethyl)imino]tetrahydro-3(1-methylethyl)-5-phenyl-4H-1,3,5- thiadiazin-4-one)], in or on bean, snap, succulent at 0.02 ppm; logan at 0.30 ppm; lychee at 0.30 ppm; pistachio at 0.05 ppm; pulasan at 0.30 ppm; rambutan at 0.30 ppm; spanish lime at 0.30 ppm

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) of the FFDCA provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d) of FFDCA, as was provided in the old sections 408 and 409 of the FFDCA. However, the period for filing objections is now 60 days, rather than 30 days.

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number OPP-2003-0136 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before August 25, 2003.

1. Filing the request . Your objection must specify the specific provisions in the regulation that you object to, and the grounds for the objections (40 CFR 178.25). If a hearing is requested, the objections must include a statement of the factual issues(s) on which a hearing is requested, the requestor's contentions on such issues, and a summary of any evidence relied upon by the objector (40 CFR 178.27). Information submitted in connection with an objection or hearing request may be claimed confidential by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the information that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice.

Mail your written request to: Office of the Hearing Clerk (1900C), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. You may also deliver your request to the Office of the Hearing Clerk in Rm.104, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (703) 603-0061.

2. Tolerance fee payment . If you file an objection or request a hearing, you must also pay the fee prescribed by 40 CFR 180.33(i) or request a waiver of that fee pursuant to 40 CFR 180.33(m). You must mail the fee to: EPA Headquarters Accounting Operations Branch, Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. Please identify the fee submission by labeling it “Tolerance Petition Fees.”

EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov, or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VI.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.1. Mail your copies, identified by docket ID number OPP-2003-0136, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.1. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).

This final rule establishes a tolerance under section 408(d) of the FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of the FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of the FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, 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 in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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 this final rule in the Federal Register . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

(a) * * *

The final rule document published on Wednesday, August 7, 2002 publishes 47 CFR 25.114 by adding paragraph (c)(22) instead of paragraph (c)(23).

As published, the final regulations contain an error which may prove to be misleading and are in need of clarification.

On May 28, 1999, NMFS issued a regulation (64 FR 29090) codified at 50 CFR 635.69(a), requiring all commercial pelagic longline vessels fishing for Atlantic HMS to install a NMFS-approved VMS unit. Due to litigation, the requirement was stayed indefinitely on October 1, 2000 (66 FR 1907, January 10, 2001). On October 15, 2002, the U.S. District Court for the District of Columbia issued a final order upholding the VMS regulation. Following the favorable court ruling, NMFS began working to reinstate the VMS requirement.

On March 11, 2003, NMFS published a notice in the Federal Register (68 FR 11534) and corrected it on March 27, 2003 (68 FR 14949), to provide a list of the NMFS-approved VMS units for use by pelagic longline vessels in the Atlantic Highly Migratory Species (HMS) Fisheries and set forth relevant features of each VMS. The notification was issued to update and replace the approval notice published on September 9, 1999. An additional type approval notice was published on May 1, 2003 (68 FR 23285).

NMFS also submitted a request to the Office of Management and Budget (OMB) to reinstate approval for VMS information collection under the provisions of the Paperwork Reduction Act. A notice regarding this collection was published in the Federal Register on November 18, 2002 (67 FR 69506). The second notice of OMB review was published in the Federal Register on March 19, 2003 (68 FR 13280). OMB approved the VMS information collection request on May 10, 2003.

The placement of VMS units on fishing vessels in this fishery will enable NMFS to determine vessel locations and will complement the Agency's efforts to monitor and enforce compliance with applicable regulations. Because fishermen need time to purchase and install VMS, the VMS rule will be effective September 1, 2003, which provides approximately 60 days for affected fishermen to come into compliance.

This action is published under the authority of the Magnuson-Stevens Fishery Conservation and Management Act. The Assistant Administrator (AA) has determined that implementation of a VMS program in the pelagic longline fishery is necessary to monitor and enforce closed areas implemented to reduce bycatch. The AA finds that good cause exists to waive the requirement to provide prior notice and the opportunity for comment, pursuant to authority set forth at 5 U.S.C. 553(b)(B), as such procedures would be unnecessary and contrary to the public interest. This amendment establishes a new effective date for the HMS VMS rule, which had been suspended due to litigation. NMFS provided for prior notice and comment before promulgating the HMS VMS rule in 1999, then provided for additional public comment pursuant to a court order. The court upheld the rule on all counts and issued a final order in October, 2002. Subsequently, NMFS renewed its Paperwork Reduction Act (PRA) approval, which included additional public comment on the information collection under the rule, and completed type approvals for VMS units for the fishery. This amendment does not change any substantive provisions of the HMS VMS rule, but provides a new effective date, as the original date was suspended because of the court case. Further delay of this rule to provide additional opportunity for public comment is contrary to the public interest because fishing is currently underway, and VMS would facilitate efficient allocation of limited enforcement resources to meet management objectives, including time and area closures established to protect juvenile fish and protected species. U.S. Atlantic pelagic longline vessels operate in fishing areas in the Atlantic Ocean, Caribbean Sea, and Gulf of Mexico, and given increased commitments to homeland security, VMS will play an important role in determining deployment of at-sea resources.

This rule refers to collection-of-information requirements subject to the PRA and which have been approved by OMB under control number 0648-0372. Public reporting burden for these requirements is estimated to average 4 hours for installation of equipment, 2 hours for annual maintenance of the equipment (beginning in the second year), 0.3 seconds per automated position report from the automated equipment, and 5 minutes to complete and return a one-time installation checklist. These estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate, or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see FOR FURTHER INFORMATION CONTACT ) and OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC. 20503 (Attention: NOAA Desk Officer).

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.

In a final rule published on January 7, 2003, (68 FR 711), an amendment to § 635.5(c) inadvertently contained an incorrect reference in the last sentence. The sentence indicated that HMS tournament landings must be reported to NMFS as specified under § 635.5(c) of the section. HMS tournament landing reports are actually specified and described under § 635.5(d) of the section. This amendment to the final rule removes the incorrect reference to tournament reporting at § 635.5(c) and replaces it with the correct reference to tournament reporting as specified at § 635.5(d).

This rule is published under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and the Atlantic Tunas Convention Act. The Assistant Administrator for Fisheries, NOAA (AA), has determined that this rule is consistent with the Magnuson-Stevens Act and other applicable laws.

The AA finds that good cause exists to waive the requirement to provide prior notice and the opportunity for comment, pursuant to authority set forth at 5 U.S.C. 553(b)(B), as such procedures would be unnecessary. This rule makes a minor, non-substantive change to correct an incorrect reference to another regulation. Because this rule makes non-substantive or de minimus changes to the existing regulations, the AA also finds good cause, under 5 U.S.C. 553(d), not to delay for 30 days the effective date of this action. NMFS has the ability to rapidly communicate the amendments in this rule to fishery participants through its FAX network and HMS Information Line.

Because prior notice and opportunity for public comment are not required for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. , are inapplicable.

This action is not significant under the meaning of Executive Order 12866.