Background

The Secretary of Agriculture is authorized by the Agricultural Marketing Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq. ), to provide voluntary Federal meat grading and certification services to facilitate the orderly marketing of meat and meat products and to enable consumers to obtain the quality of meat they desire. The AMA also provides for the collection of fees from users of the Federal meat grading and certification program that are approximately equal to the cost of providing service. The hourly fees are established by equitably distributing the program's projected operating costs over the estimated hours of service—revenue hours—provided to users of the service on a yearly basis. Nearly 80 percent of operating costs are derived from employee salaries and benefits. The remaining operating costs include travel, training, and administrative expenses. Revenue hours include commitment and noncommitment base hours, premium hours, and holiday hours. Periodically, the fees must be adjusted to ensure that the program remains financially self-supporting.

Despite cost reduction efforts and hourly fee increases in 1998 and 2000, the MGC Branch incurred a $667,000 operating loss in fiscal year (FY) 2001. Furthermore, AMS projects that the MGC Branch will lose an additional $8.6 million through FY 2004 and totally deplete program reserves to the point of deficit operations ( i.e., FY 2002, $1.6 million; FY 2003; $2.9 million; and FY 2004, $4.1 million).

In view of these considerations, AMS will increase hourly fees charged to users of the service. The base hourly fee for commitment applicants will increase from $45 to $55. A commitment applicant is a user of meat grading and certification services who agrees to pay for five continuous 8 hour days, Monday through Friday between the hours of 6 a.m. and 6 p.m., excluding Federal legal holidays. The base hourly fee for noncommitment applicants will increase from $52 to $64. A noncommitment applicant is a user of meat grading and certification services, who agrees to pay an hourly fee without committing to a certain number of service hours. The premium hourly fee will increase from $57 to $70. The premium hourly fee is charged to applicants when meat grading and certification services: (1) Exceed 8 hours per day; (2) are performed before 6 a.m. and after 6 p.m. Monday through Friday; or (3) are performed any time on Saturday or Sunday, except on Federal legal holidays. The holiday fee will increase from $90 to $110 and is charged to applicants for meat grading and certification services provided on Federal legal holidays.

This action has been determined to be not significant for purposes of Executive Order 12866, and has not been reviewed by the Office of Management and Budget.

Pursuant to the requirements set forth in the Regulatory Flexibility Act (5 U.S.C. 601, et seq. ), the Administrator of AMS considered the economic impact of this action on small entities and determined that it will not have a significant economic effect on a substantial number of small entities.

AMS, through its MGC Branch, provides voluntary Federal meat grading and certification services to 450 businesses, including 152 livestock slaughterers, 79 facilities that process federally donated products, 74 meat processors, 46 livestock producers and feeders, 28 brokers, 26 organic certifying companies, 25 trade associations, 17 State and Federal entities, and 3 distributors.

Seventy-two percent ( i.e., 324) of these businesses are small entities which generate approximately 17 percent of the MGC Branch's revenues. A small entity is defined for the meat packing and processing industry as a company that employs less than 500 employees. No entity, small or large, is obligated to use voluntary Federal meat grading and certification services provided under the authority of the AMA.

Voluntary Federal meat grading and certification services facilitate the orderly marketing of meat and meat products and enable consumers to obtain the quality of meat they desire. Grading services consist of the evaluation of beef, lamb, pork, veal, and calf carcasses for compliance with the grades of the appropriate official U.S. Standard. The MGC Branch grades approximately 22.1 billion pounds of meat each year. Certification services consist of the evaluation of meat and meat products for compliance with specification and contractual requirements. Certification services are regularly used by meat purchasers to ensure that the quality and yields of the products they purchase comply with their stated requirements. The MGC Branch certifies approximately 18.1 billion pounds of meat and meat products each year.

AMS regularly reviews its user-fee-financed programs to determine if the fees are adequate. The most recent review determined that the existing fee schedule for the MGC Branch would not generate sufficient revenues to recover operating costs for current and near-term periods while maintaining an adequate reserve balance. In FY 2001, the MGC Branch incurred a $657,000 operating loss; in FY 2002 operating losses were $1.6 million and, without a fee increase, FY 2003 operating losses are projected to reach $2.9 million. These combined losses will deplete MGC Branch's operating reserve and place the MGC Branch in an unstable financial position that will adversely affect its ability to provide the currently available meat grading and certification services.

Since 1993, the MGC Branch has controlled operating costs by closing three field offices, reducing mid-level supervisory staff by over 50 percent, and reducing the number of support staff by 38 percent. At the same time, the MGC Branch has utilized automated information management systems for data collection, retrieval, and dissemination, applicant billing, and disbursement of employee entitlements. The reduction in field offices, supervisory staff and support personnel and the increased use of automated systems has enabled the MGC Branch to absorb a substantial portion of the operating costs and minimize hourly fee increases over the past 9 years. However, the MGC Branch has continued to lose revenue due to the implementation of more cost-efficient audit-based and pilot certification programs. These programs, while providing an equal or higher level of assurance, require fewer personnel and generate fewer revenue hours when compared to traditional certification services. Accordingly, the overall cost of service to the industry is reduced. Consolidation within the livestock and meat industry has also contributed to a decline in MGC Branch revenue because there are fewer applicants and they are able to perform work more efficiently. Moreover, the MGC Branch operating costs increased due to expenses associated with: (1) Ongoing information system technology upgrades to remain compatible with customer and Agency systems; (2) congressionally mandated salary increases for all Federal Government employees in 2001, 2002, and 2003; (3) inflation of nonsalary operating expenses; and (4) accumulated increases in continental United States (CONUS) per diem rates, mileage rates, and office maintenance expenses.

This fee increase will raise the hourly fees charged to users of Federal meat grading and certification services. After implementation, AMS estimates that this action will provide the MGC Branch an additional $401,000 per month in FY 2003. Of this $401,000, small businesses would pay an average of $68,170 or an additional $210 per month ($2,520 per year) per applicant. This fee increase coupled with a projected increase in revenue hours will increase revenues by $4.8 million per year and offset FY 2002 operating losses of $1.6 million and projected FY 2003 losses of $2.9 million. Even with this action, the unit cost for MGC Branch service (revneue/total pounds graded and certified) will remain unchanged at approximately $0.0006 per pound.

AMS projects that, without an hourly fee increase, the MGC Branch will lose an additional $8.6 million through FY 2004 and totally deplete program reserves to the point of deficit operations. Any further reduction in MGC Branch services has the potential to substantially harm small and limited resource firms that rely on grading and certification services to help distinguish and market their products in the global marketplace.

This action has been reviewed under Executive Order 12988, Civil Justice Reform. This action is not intended to have retroactive effect and will not pre-empt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict. There are no administrative procedures which must be exhausted prior to any judicial challenge to provision of this rule.

This action will not impose any additional reporting or recordkeeping requirements on users of Federal meat grading and certification services.

On November 1, 2002, AMS published a proposed rule in the Federal Register to increase the fees for Federal meat grading and certification services and requested comments by January 1, 2003. The Agency received three comments.

The first respondent understood that normal inflation and rising operating costs affect operating expenses. However, the respondent opposed the magnitude of the proposed fee increase and called the increase twice as large as needed; indicated that the new MGC Branch staffing guidelines coupled with the proposed fee increase would negatively impact virtually all sectors of the livestock and meat industry; and said the formula used to estimate the per pound cost of providing services was outdated. This respondent also urged the MGC Branch to further streamline services by consolidating branch offices and reducing staff; explore alternative revenue sources; and focus on new technology that would decrease user costs to and improve the accuracy of the grading service.

The second respondent favored a standardized meat grading system with less staff and an automated grading system. the respondent felt that an automated grading system would result in higher grading accuracy and would provide more valuable information to cattle producers who make genetic selections based on yield and grade results.

The third respondent recognized the benefits of the recently implemented staffing guidelines, but failed to see how the proposed fee increase was justified and asked the MGC Branch to look for more ways to reduce costs rather then passing them on to customers.

The comments from all respondents can be summarized as follows: (1) Justify the necessity and magnitude of the fee increase; (2) consider the impact of total MGC Branch costs on the livestock and meat industry; (3) reevaluate the accuracy of the formula used to estimate the per pound cost of providing services; (4) streamline services through MGC Branch office consolidation and staff reduction; and (5) explore alternative revenue sources and new technology to decrease user costs and improve the accuracy and efficiency of meat grading and certification services. The Agency response to each comment is as follows:

(1) Justify the necessity and magnitude of the fee increase: The AMA provides for the collection of fees from users of the Federal meat grading and certification services that are approximately equal to the cost of providing service. The hourly fees are established by equitably distributing the program's projected operating costs over the estimated hours of service—revenue hours—provided to users of the service on a yearly basis. In FY 2001, the MGC Branch incurred a $657,000 operating loss. Without an hourly fee increase, the MGC Branch is projected to lose an additional $8.6 million through FY 2004 and totally deplete program reserves. By law, the program must recover the cost of providing grading and certification services. Since the Agency has implemented every reasonable measure to reduce expenses, a fee increase is the only avenue available to ensure revenues equal expenses on a sustaining basis.

(2) Consider the impact total MGC Branch costs on the livestock and meat industry: The MGC Branch issued recommended staffing guidelines for applicants of beef carcass grading and/or live animal/carcass schedule certification services on August 22, 2002. The recommended staffing guidelines, while increasing the number of Federal meat graders in 4 percent of firms requesting services, were designed to reduce the number of cumulative trauma disorders (CTD) associated with repetitive motions, which is the leading cause of injuries to MGC Branch employees.

Voluntary Federal meat grading and certification services are provided to 450 businesses, including 152 livestock slaughterers, 79 facilities that process federal donated products, 74 meat processors, 46 livestock producers and feeders, 28 brokers, 26 organic certifying companies, 25 trade associations, 17 State and Federal entities, and 3 distributors. Seventy-two percent ( i.e., 324) of these businesses are small entities which generate approximately 17 percent of the MGC Branch's revenues. A small entity is defined for the meat packing and processing industry as a company that employs less than 500 employees. AMS estimates that the fee increase will cost small businesses an average of $68,170 or an additional $210 per month ($2,520 per year) per applicant. AMS is very cognitive of the impact that fees charged for meat grading and certification services have over all firms.

(3) Reevaluate the accuracy of the formula used to estimate the per pound cost of providing services: In accordance with the AMA, meat grading and certification services are provided on a cost recovery basis. The cost per pound is derived by dividing the total revenue by the total pounds graded and certified within the same time frame. The formula provides an accurate and consistent comparison between the cost of providing service and the tonnage of graded and certified carcasses over time. Since 1993, the amount of product graded and certified per year has increased by 13 billion pounds. Over the same timeframe, the MGC Branch has doubled its revenue hour efficiency and maintained the overall cost per pound of service at $0.0006. We believe this method of calculating the cost per pound for providing grading and certification services is accurate and provides a meaningful way to evaluate efficiency over time.

(4) Streamline services through MGC Branch office consolidation and staff reduction: In the past 10 years, the MGC Branch has closed three area offices, reduced mid-level supervisory staff by over 50 percent, and reduced the number of support staff by 38 percent. As part of the current MGC Branch reorganization, the Branch will close the remaining four area offices, eliminate two levels of supervision, and transfer area office functions to the Office of Field Operations (OFO) in Denver, Colorado, by the end of FY 2003. The MGC Branch reorganization also includes plans to restructure the internal operations to more effectively and efficiently service specific program areas. The MGC Branch will maintain two offices: the OFO in Denver, Colorado, and the Headquarter office in Washington, DC. The Agency has determined that, upon completion of the current reorganization, MGC Branch's operations will be streamlined to the maximum extent possible.

(5) Explore alternative revenue sources and new technology to decrease user costs and improve the accuracy and efficiency of grading and certification services: By law, the Agency is required to charge fees that equal the cost of providing services. Accordingly, any “alternative revenue source,” if required as suggested by the respondent, would be conducted on a full cost recovery basis. AMS has actively participated with the National Cattlemen's Beef Association (NCBA), the beef packing industry, instrument manufacturers, and academia to develop performance standards that can potentially improve grading accuracy and repeatability thought the use of an electronic instrument augmentation system that measures the ribeyes of beef carcasses. This same concept is also being researched for lamb grading augmentations. AMS is also involved with ongoing studies to develop technology that utilizes special equipment to apply environmentally safe yet durable carcass quality and yield grade labels. Additionally, the Agency is working with additional companies to incorporate voice recognition software into this new grade application as well as for general data collection and transmission.

Process Verified Programs such as the Non Hormone Treated Cattle Program and the Pork for the European Union Program provide complete traceability from farm to plate. Additional audit based programs such as the National School Lunch Programs' Canned Meats and Ham Programs are being implemented to improve the overall selection, quality, and cost of the services provided to the industry. In addition, the MGC Branch has worked with members of the Federal purchase and further processing industry to develop several pilot programs that incorporate audit based principles. These programs, while providing the same or a higher level of assurance, require graders to monitor and verify an applicants' entire production process rather than performing an examination on the end product. These audit and audit based programs also allow greater scheduling flexibility, improve operational efficiencies, reduce costs, and provide value-adding services to applicants. The Agency believes that, to the maximum extent possible technology is being utilized to improve the accuracy and cost-effectiveness of meat grading and certification services.

The Board's Regulation Y currently authorizes bank holding companies (“BHCs”) to engage as principal in forward contracts, options, futures, options on futures, swaps, and similar contracts, whether traded on exchanges or not, based on a rate, price, financial asset, nonfinancial asset, or group of assets (other than a bank-ineligible security) (“Commodity Contracts”). A BHC's authority to enter into Commodity Contracts is subject to certain restrictions that are designed to limit the BHC's activity to trading and investing in financial instruments rather than dealing directly in commodities. In particular, Regulation Y provides that a BHC may enter into a Commodity Contract only if (i) the commodity underlying the contract is eligible for investment by a state member bank; or (ii) the contract requires cash settlement; or (iii) the contract allows for assignment, termination, or offset prior to delivery or expiration (the “Contractual Offset Requirement”), and the BHC makes every reasonable effort to avoid taking or making delivery of the underlying commodity (the “Delivery Avoidance Requirement”). 1

The effect of these restrictions is to allow a BHC to engage as principal in cash-settled derivative contracts involving any type of commodity (other than certain derivative contracts involving bank-ineligible securities) but to limit the authority of a BHC to engage in physically settled derivative contracts. Under these restrictions, a BHC may take and make delivery on physically settled derivatives involving commodities that a state member bank is permitted to own. 2 For all other types of physically settled derivatives, 3 a BHC must make reasonable efforts to avoid delivery, and the contract must have assignment, termination, or offset provisions.

The Bank Holding Company Act (“BHC Act”), as amended by the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113 Stat. 1338 (1999)) (“GLB Act”), permits a BHC to engage in activities that the Board had determined were closely related to banking, by regulation or order, prior to November 12, 1999. A BHC must conduct these activities in accordance with the terms and conditions contained in such regulations and orders, unless modified by the Board.

In response to requests by Citigroup Inc., New York, New York (“Citigroup”), and UBS AG, Zurich, Switzerland (“UBS”), the Board issued a proposal in March 2003 that would modify the restrictions in Regulation Y to allow BHCs to enter into derivative contracts that typically result in taking and making delivery of title to, but not physical possession of, commodities on an instantaneous, pass-through basis (regardless of whether the contracts contain specific assignment, termination, or offset provisions). 4 The Board received six public comments on the proposal: two from banking organizations, three from financial services trade associations, and one from an individual. The five financial services commenters supported the proposal and offered no general or specific criticisms of the proposal. These commenters believed that the Board's proposal would enhance the ability of banking organizations to serve as financial intermediaries and satisfy customer needs and would improve liquidity and competition in a number of commodity markets.

The individual commenter expressed opposition to the proposal. The commenter asserted that the proposal would reduce the stability of the financial system by permitting banking organizations to engage in risky activities. The commenter also contended that permitting banking organizations to participate in a wider variety of derivatives markets would increase the scope of potential conflicts of interest for banking organizations.

After carefully reviewing the public comments on the proposal, the Board has determined to modify the conditions that the Board imposed in Regulation Y on the permissible derivatives activities of BHCs to permit BHCs to enter into Commodity Contracts that are settled by the BHC receiving and transferring title to the underlying commodity instantaneously, by operation of contract, and without taking physical possession of the commodity. The final rule also modifies the existing condition in Regulation Y that generally prevents BHCs from engaging as principal in a physically settled Commodity Contract unless the contract specifically provides for assignment, termination, or offset prior to delivery.

The Board adopted the restrictions in Regulation Y on the types of Commodity Contracts that a BHC may enter into as principal to reduce the potential that BHCs would become involved in and bear the risks of physical possession, transport, storage, delivery, and sale of bank-ineligible commodities. The restrictions ensure that the commodity derivatives business of a BHC is largely limited to acting as a financial intermediary that facilitates transactions for customers who use or produce commodities or are otherwise exposed to commodity price risk as part of their regular business.

The Regulation Y derivatives restrictions, however, have impeded the ability of BHCs to participate substantially in certain derivatives markets. Notably, in some over-the-counter forward markets (U.S. energy markets, for example), the physically settled derivative contracts traded by market participants do not specifically provide for assignment, termination, or offset prior to delivery and, thus, do not conform to the Contractual Offset Requirement of Regulation Y. Moreover, participants in these markets generally settle contracts by temporarily taking and making delivery of title to the underlying commodities and, thus, do not comply with the Delivery Avoidance Requirement of Regulation Y.

Financial intermediary participants in these markets generally enter into back-to-back derivative contracts with third parties that effectively offset each other. That is, financial intermediaries in these markets that enter into a contract to buy, for example, a certain number of barrels of oil from a certain counterparty in a certain future month generally also will enter into another contract, prior to the expiration of the original contract, to sell the same number of barrels of oil to another counterparty in the same future month on substantially identical delivery terms. These market practices typically result in the creation of a chain of contractual relationships that begins with a commodity producer, passes through a number of intermediaries who have entered into matched contracts both to buy and sell the same commodity at the same future time, and ends with a purchaser that intends to take physical delivery of the commodity. On the maturity date of the derivative contracts, the producer will be responsible for making physical delivery and the ultimate buyer will be responsible for accepting physical delivery, while each intermediate participant in the chain will be deemed, by operation of contract, to have instantaneously received and transferred legal title to the commodity.

The Board believes that a BHC that takes title to a commodity on an instantaneous, pass-through basis takes no risk that is greater than or different in kind from the risk that the BHC has as a holder of a commodity derivative contract that meets the current requirements of Regulation Y. Instantaneous receipt and transfer of title to (but not physical possession of) commodities does not appear to involve the usual activities relating to, or risks attendant on, commodity ownership. Instead, such transactions involve the routine operations functions of passing notices, documents, and payments—functions that BHCs regularly perform in their role as financial intermediaries in other markets. Moreover, although BHCs that receive and transfer title to commodities on an instantaneous, pass-through basis face default risks, they are not significantly different than the default risks associated with cash-settled derivative contracts or derivative contracts that include the assignment, termination, or offset provisions currently required by Regulation Y. 5

The final rule's modifications to Regulation Y will enable BHCs that participate in commodity derivatives markets to provide their customers with a more comprehensive range of financial intermediation and risk management services. In addition, the final rule should enhance the ability of BHCs to compete effectively with non-BHC participants in the commodity derivatives markets (who currently are able to engage in physically settled derivative transactions with customers). Moreover, by expanding the types of derivative transactions in which BHCs may engage, the final rule should augment the capacity of BHCs to understand commodity markets and to diversify the market, credit, and other risks involved in derivatives trading.

In addition, the Board does not believe that the final rule will materially increase the conflicts of interest faced by BHCs that participate in the commodity derivatives markets or result in any other material adverse effects. Although the final rule will enable derivatives affiliates of BHCs to use a wider variety of transaction formats, the rule will not expand the types of commodities that may serve as the basis for derivative transactions engaged in by BHCs. Importantly, banking organizations are subject to a number of Federal banking laws designed to prevent conflicts of interest, including sections 23A and 23B of the Federal Reserve Act and section 106 of the Bank Holding Company Act Amendments of 1970. 6 Moreover, banking organizations that engage in derivatives activities, including the commodity derivatives activities newly authorized by the final rule, would remain subject to the general securities, commodities, and energy laws and the rules and regulations of the Securities and Exchange Commission, the Commodity Futures Trading Commission (“CFTC”), and the Federal Energy Regulatory Commission. 7

For these reasons, the Board's final rule modifies Regulation Y by changing the Delivery Avoidance Requirement to allow BHCs to take or make delivery of title to commodities underlying commodity derivative transactions on an instantaneous, pass-through basis. A BHC takes and makes delivery of title to a commodity on an instantaneous, pass-through basis for purposes of the final rule only if the BHC takes delivery of title to the commodity from a seller and immediately thereafter makes delivery of title to the commodity to a buyer. Accordingly, the revised Delivery Avoidance Requirement would not provide authority for a BHC to take physical delivery of commodities for use or investment or to make physical delivery of commodities out of the inventory of the BHC. In other words, the BHC must not be the original seller of the commodity in the initial position in the delivery chain or the ultimate buyer of the commodity in the last position in the delivery chain.

The Board's final rule also modifies Regulation Y by changing the Contractual Offset Requirement to permit BHCs to participate in physically settled derivative markets where the standard industry documentation does not allow for assignment, termination, or offset. In particular, the rule would allow BHCs to enter into Commodity Contracts that do not require cash settlement or specifically provide for assignment, termination, or offset prior to delivery so long as the contracts involve commodities for which futures contracts have been approved for trading on a U.S. futures exchange by the CFTC (and the BHC complies with the revised Delivery Avoidance Requirement). 8

A number of commenters expressed specific support for this modification of the Contractual Offset Requirement. Because derivative contracts based on commodities approved for exchange trading are more likely to have reasonably liquid markets than derivatives based on non-approved commodities, this modified requirement should continue to provide some assurance that BHCs would be able to avoid physical delivery of commodities underlying derivative contracts. This requirement would, therefore, serve the same purpose as the current Contractual Offset Requirement, which facilitates the financial settlement of Commodity Contracts by requiring BHCs to have contractual rights to avoid taking or making delivery of the underlying commodities. 9

I. Background

Effective March 20, 2000, responsibility for administering the Finance Board's FOIA program was transferred to the Office of General Counsel and an OGC staff member began acting as the Finance Board's FOIA Officer. In order to provide a requester with the maximum amount of information available under the law, the Finance Board processes some requests for records under both the FOIA and the Privacy Act. To minimize response time and to ensure consistent and appropriate analysis of agency records, the Finance Board has determined that responsibility and authority for both the FOIA and Privacy Act programs should reside in one agency office. Accordingly, the Finance Board has transferred responsibility for administering the Finance Board's Privacy Act program to the OGC, the office already responsible for running the agency's FOIA program. As part of the transfer, an OGC staff member is acting as the Finance Board's Privacy Act Official. The Privacy Act Official is authorized to make all initial denial determinations under the Finance Board's Privacy Act regulation.

The Finance Board is amending its Privacy Act regulation to reflect the reassignment of responsibility and authority. More specifically, the Finance Board is replacing the term “Executive Secretary” and the term “Finance Board” with the term “Privacy Act Official” where appropriate. The Finance Board also is taking this opportunity to make the rule more “user-friendly” by rewriting the rule in plain language and using a question-and-answer format where appropriate.

Elsewhere in this issue of the Federal Register , the Finance Board is publishing a notice that makes corresponding changes to the agency's Privacy Act systems of records. Since the Privacy Act rule includes an exemption for Office of Inspector General (OIG) investigative files, the notice adds a new system of records covering OIG investigative records.

The interim final rule revises the Finance Board rule implementing the Privacy Act of 1974, as amended (5 U.S.C. 552a), to reflect a reorganization in which responsibility and authority for running the agency's Privacy Act program was transferred to the OGC. The Finance Board also is revising the rule to make it more “user-friendly” by using plain language. A more detailed description of the provisions of part 913, as revised, follows.

Section 913.2 restates the purpose and scope of part 913, which currently are found in § 913.1. The rule now makes clear that the Finance Board automatically processes a Privacy Act request for access to records under both the Privacy Act and the FOIA to provide a requester with the maximum amount of information available under the law.

Section 913.3 sets forth the procedures an individual must follow when making a request under the Privacy Act. It covers requests for access to records, for amendment or correction of records, and for an accounting of disclosures by the Finance Board. Section 913.3 includes provisions found currently in §§ 913.3(a)-(c), 913.4, and 913.6(a)-(b). The provision in current § 913.3(d) concerning disclosure of medical records has been deleted.

Section 913.4 explains how and when the Finance Board will respond to a Privacy Act request. The revised rule authorizes the Privacy Act Official to make all initial agency determinations, including adverse determinations. Section 913.4 restates provisions found currently in §§ 913.3(e)-(f), 913.5, and 913.6(d)-(e) without other substantive changes.

Section 913.5 prescribes the procedures individuals must follow if they are dissatisfied with the Privacy Act Official's response to their Privacy Act request. It restates provisions found currently in §§ 913.3(g) and 913.6(f)-(g) with no substantive changes.

Section 913.6 concerns the fees the Finance Board charges to fulfill Privacy Act requests. The fee provision currently is found in § 913.7. The rule makes clear that the Finance Board considers a request to be an agreement to pay all applicable fees unless the requester expressly limits the amount he or she is willing to pay. The Finance Board, which charges only for duplication of records, determines the amount of the fee in accordance with the fee provisions of the agency's FOIA rule, which is codified at 12 CFR 910.9.

The Finance Board is amending the FOIA fee schedule, 12 CFR 910.9(g), to take into account changes in salary and operating costs. More specifically, the hourly search charge for clerical staff has increased from $17.00 to $28.00, for supervisory/professional staff from $34.00 to $53.00, and for computer operators from $34.00 to $48.00. The hourly charge to review records has increased from $34.00 to $53.00. With regard to duplication costs, the Finance Board has eliminated obsolete charges for computer output and microfiche, decreased the cost for diskettes from $5.00 to $.50, and added a $1.00 charge for CD-ROMs. The Finance Board also is making clear that a requester's failure to timely pay FOIA fees assessed by this or any other federal agency may result in a requirement for the requester to pay future fees in advance or the administrative closing of a request.

Section 913.7 restates current § 913.8, which describes the records that are exempt from disclosure under the Privacy Act. Finance Board records that are exempt include the following: (1) Certain law enforcement files and files used to determine suitability, eligibility or qualifications for federal civilian employment or federal contracts that are contained in the OIG Investigative Records system of records (FHFB-7); and (2) materials contained in the system of records titled “Agency Personnel Investigative Records” (FHFB-6) that would reveal the identity of a source who furnished information to the government under an express promise that his or her identity would be held in confidence. Since no Finance Board office performs as its principal function activities pertaining to the enforcement of criminal laws, the Finance Board has eliminated references to exemptions provided under paragraph (j)(2) of the Privacy Act. See 5 U.S.C. 552a(j)(2).

The Finance Board is promulgating these technical, procedural changes as an interim final rule because it is in the public interest to conform the Finance Board's Privacy Act regulation to an agency reorganization that already has taken effect. Accordingly, the Finance Board for good cause finds that the notice and publication requirements of the Administrative Procedure Act are unnecessary. See 5 U.S.C. 553(b)(3)(B). However, because this type of rulemaking generally requires notice and receipt of public comment, the Finance Board will accept written comments on the interim final rule on or before September 2, 2003.

For the reasons stated in part III above, the Finance Board for good cause finds that the interim final rule should become effective on July 3, 2003. See 5 U.S.C. 553(d)(3).

The Finance Board is adopting the amendments to parts 910 and 913 in the form of an interim final rule and not as a proposed rule. Therefore, the provisions of the Regulatory Flexibility Act do not apply. See 5 U.S.C. 601(2), 603(a).

The interim final rule does not contain any collections of information under the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et seq. Consequently, the Finance Board has not submitted any information to the Office of Management and Budget for review.

This AD applies to certain Hartzell Propeller, Inc., McCauley Propeller Systems, Sensenich Propeller Manufacturing Company, Inc., and Raytheon Aircraft Company (formerly Beech Aircraft Corporation) propellers returned to service by T and W Propellers, Inc of Chino, CA. This AD requires maintenance actions that amount to an overhaul of the affected propellers. This AD is prompted by the results of an NTSB investigation into the separation of a propeller blade on a Beech 95 Travel Air airplane and subsequent inspections of various propeller models returned to service by T and W Propellers, Inc. The NTSB metallurgical analysis of the failed blade showed that the fracture was approximately 4 inches from the butt end of the propeller blade. Several corrosion pits were found in the propeller inner blade bearing bore at and around the site of crack initiation. While the fatigue failure appeared to have corrosion pits as its initiation site, the size of the crack was approximately 4 inches in the outer surface of the blade shank. A crack of that size is visually detectable. However, the time-since-overhaul (TSO) of the propeller was reported as being zero hours. Documentation from T and W Propellers, Inc. propeller repair station of Chino, CA, indicated that they had complied with Hartzell service documents. However, inspection of the propellers on the airplane involved showed that T and W Propellers, Inc. had not complied with Hartzell service documents. The FAA participated in several subsequent teardowns of other propellers returned to service by T and W Propellers, Inc. We conducted these teardowns on other Hartzell and McCauley propeller models that the public provided voluntarily. The cumulative teardown information provided enough information to substantiate that T and W Propellers, Inc. had introduced unsafe conditions on propellers they had returned to service. These inspections uncovered the following unsafe conditions:

• Extensive corrosion in the internal bearing bore of the blade.

• Absence of corrosion protection (chemical conversion coating and paint) in the internal bearing bore area of the blade.

• Cadmium plating on top of deep corrosion pits.

• Poor cadmium plating and corrosion in the hub.

• Extra phenolic washers that are not approved for use in Hartzell propellers.

• A deteriorated O-ring that was not replaced during the overhaul.

• Failure to properly shot peen propeller parts.

The unsafe condition described previously is likely to exist or develop on other propellers that T and W Propellers Inc., propeller repair station of Chino, CA, returned to service. We are issuing this AD to detect unsafe conditions that could result in separation of a propeller blade and loss of control of the airplane. This AD requires maintenance actions that amount to an overhaul of certain Hartzell Propeller, Inc., McCauley Propeller Systems, Sensenich Propeller Manufacturing Company, Inc., and Raytheon Aircraft Company propellers returned to service T and W Propellers, Inc., and that are listed by serial number (SN) in this AD.

This AD currently affects all propellers that we have identified by propeller hub SN from 434 T and W Propellers, Inc. shop work order records. The records range in date from January 8, 2000 to December 30, 2002. This range of dates represents a portion of propellers returned to service by T and W Propellers, Inc. since January 22, 1997, when the FAA issued a repair station certificate to T and W Propellers, Inc. The NTSB and the FAA have conducted inspections on propellers returned to service by T and W Propellers, Inc. as far back as December 1997 and found unairworthy conditions similar to those in propellers identified by serial number in this AD. The FAA has alerted the public of this through Unapproved Parts Notification No. 2003-00142 issued on March 31, 2003. The FAA recommends that any propeller not in the applicability list for this AD returned to service by T and W Propellers, Inc. comply with paragraph (h) of this AD.

Since an unsafe condition exists that requires the immediate adoption of this AD, we have found that notice and opportunity for public comment before issuing this amendment is impracticable, and that good cause exists for making this amendment effective in less than 30 days.

On July 10, 2002, we issued a new version of 14 CFR part 39 (67 FR 47997, July 22, 2002), which governs our AD system. This regulation now includes material that relates to special flight permits, alternative methods of compliance, and altered products. This material previously was included in each individual AD. Since this material is included in 14 CFR part 39, we will not include it in future AD actions.

This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any written relevant data, views, or arguments regarding this AD. Send your comments to an address listed under ADDRESSES. Include “AD Docket No. 2003-NE-13-AD” in the subject line of your comments. If you want us to acknowledge receipt of your mailed comments, send us a self-addressed, stamped postcard with the docket number written on it; we will date-stamp your postcard and mail it back to you. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify it. If a person contacts us verbally, and that contact relates to a substantive part of this AD, we will summarize the contact and place the summary in the docket. We will consider all comments received by the closing date and may amend the AD in light of those comments.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications with you. You may get more information about plain language at http://www.plainlanguage.gov .

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the regulation:

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.

We prepared a summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under ADDRESSES. Include “AD Docket No. 2003-NE-13-AD” in your request.

In the Federal Register of December 2, 2002 (67 FR 71461), the agency published an interim final rule to amend the regulation in part 101 (21 CFR part 101) that authorizes a health claim on the relationship between sugar alcohols and dental caries (§ 101.80) to include the sugar D-tagatose, a novel food ingredient. Under section 403(r)(3)(B)(i) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 343(r)(3)(B)(i)), FDA issued this interim final rule in response to a petition filed under section 403(r)(4) of the act. Section 403(r)(3)(B)(i) of the act states that the Secretary of Health and Human Services (and, by delegation, FDA) shall issue a regulation authorizing a health claim only if he or she determines, based on the totality of publicly available scientific evidence (including evidence from well-designed studies conducted in a manner which is consistent with generally recognized scientific procedures and principles), that there is significant scientific agreement, among experts qualified by scientific training and experience to evaluate such claims, that the claim is supported by such evidence (see also § 101.14(c)). Section 403(r)(4) of the act sets out the procedures that FDA is to follow upon receiving a health claim petition.

On January 9, 2002, Arla Foods Ingredients amba, DK-8260 Viby, Denmark (the petitioner) filed a petition requesting that the agency: (1) Amend § 101.80 to include the sugar D-tagatose as one of the substances eligible to bear the dental caries health claim; (2) amend § 101.9, the nutrition labeling regulation, to exclude D-tagatose from the definition of “sugars” (§ 101.9(c)(6)(ii)), thereby allowing a “sugar free” nutrient content claim; and (3) modify the text of § 101.80 because D-tagatose is not a sugar alcohol (Ref. 1). FDA filed the petition for comprehensive review in accordance with section 403(r)(4) of the act on April 19, 2002.

FDA considered the scientific evidence presented in the petition as part of its review of the scientific literature on D-tagatose and dental caries, as well as information previously considered by the agency on the etiology of dental caries and the effects of slowly fermentable carbohydrates. The agency summarized this evidence in the interim final rule (67 FR 71461 at 71463). Based on the available evidence, FDA concluded that dental caries is a disease for which the U.S. population is at risk; D-tagatose is a food, because it contributes taste and other technical effects listed in 21 CFR 170.3(o) to food; the use of D-tagatose in food is safe and lawful; and there is significant scientific agreement among qualified experts that D-tagatose does not promote dental caries (67 FR 71461 at 71462 through 71464). Consequently, FDA published an interim final rule amending § 101.80 to authorize a dental caries health claim for D-tagatose.

As discussed in the interim final rule, the agency believes that it would be false and misleading for D-tagatose containing foods to bear a “sugar free” claim because D-tagatose is a sugar (67 FR 71461 at 71466). Consequently, rather than exempting D-tagatose from the definition of “sugars” as requested by the petitioner, the agency instead exempted D-tagatose from the “sugar free” requirement of § 101.80. To address the incongruity of a sugar-containing food bearing the dental caries health claim and to inform consumers about the uniqueness of D-tagatose as a noncariogenic sugar, we added the requirement that the claim identify D-tagatose as a sugar that, unlike other sugars, does not promote the development of dental caries. Accordingly, although products containing D-tagatose are not permitted to be labeled as “sugar-free,” they are authorized to state that D-tagatose sugar does not promote, or may reduce the risk of, tooth decay.

The agency received one comment in support of the petition from a manufacturer prior to publication of the interim final rule. Comments from seven consumers were sent to this docket during the comment period, none of which were relevant to this rulemaking.

Given the absence of contrary evidence on the agency's decisions announced in the interim final rule, FDA is adopting as a final rule, without change, the interim final rule that amended § 101.80 to include D-tagatose as a substance eligible for the dental caries health claim.

The agency has determined under 21 CFR 25.32(p) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

We have examined the economic implications of this final rule as required by Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity).

With this final rule, FDA is adopting without change the provisions of the interim final rule published in the Federal Register of December 2, 2002. The interim final rule amended the regulation authorizing a health claim on the relationship between sugar alcohols and dental caries to include the sugar D-tagatose as a substance eligible for the health claim. We assessed the costs and benefits of the interim final rule in that Federal Register document (67 FR 71461 at 71468 and 71469). By now reaffirming that interim final rule, FDA has not imposed any new requirements. There are, therefore, no additional costs and benefits associated with this final rule.

We have examined the economic implications of this final rule as required by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a rule has a significant impact on a substantial number of small entities, the Regulatory Flexibility Act requires the agency to analyze regulatory options that would minimize the economic impact of the rule on small entities.

Because this final rule does not impose any new costs on firms, we certify that this final rule will not have a significant impact on a substantial number of small entities. Therefore, under the Regulatory Flexibility Act, no further analysis is required.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires that agencies prepare a written statement of anticipated costs and benefits before issuing any final rule that may result in an expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 in any one year (adjusted annually for inflation). The Unfunded Mandates Reform Act does not require FDA to prepare a statement of costs and benefits for this rule, because the rule is not expected to result in any 1-year expenditure that would exceed $100 million adjusted for inflation. The current inflation-adjusted statutory threshold is $113 million.

FDA concludes that the labeling provisions of this final rule are not subject to review by the Office of Management and Budget because they do not constitute a “collection of information” under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Rather, the food labeling health claim on the association between D-tagatose and the nonpromotion of dental caries is a “public disclosure of information originally supplied by the Federal Government to the recipient for the purpose of disclosure to the public.” (5 CFR 1320.3(c)(2)).

FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule has a preemptive effect on State law. Section 4(a) of the Executive order requires agencies to “construe * * * a Federal Statute to preempt State law only where the statute contains an express preemption provision, there is some other clear evidence that the Congress intended preemption of State law, or where the exercise of State authority conflicts with the exercise of Federal authority under the Federal statute.” Section 403A of the act (21 U.S.C. 343-1) is an express preemption provision. That section provides that “no State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce” certain food labeling requirements, unless an exemption is provided by the Secretary of Health and Human Services (and by delegation, FDA). Relevant to this final rule, one such requirement that States and political subdivisions may not adopt is “any requirement respecting any claim of the type described in section 403(r)(1) of the act made in the label or labeling of food that is not identical to the requirement of section 403(r) * * *” (section 403A(a)(5) of the act (21 U.S.C. 343-1(a)(5)). Prior to the effective date of this final rule and the interim rule that preceded it, this provision operated to preempt States from imposing health claim labeling requirements concerning D-tagatose and reduced risk of dental caries because no such requirement had been imposed by FDA under section 403(r) of the act. Under this final rule and the interim rule that preceded it, States are preempted from imposing any health claim labeling requirements for D-tagatose and reduced risk of dental cares that are not identical to those required by this rule. Section 403A(a)(5) of the act displaces both State legislative requirements and State common-law duties. Medtronic v. Lohr , 518 U.S. 470, 503 (1996) (Breyer, J., concurring in part and concurring in judgment); id . at 510 (O'Connor, J., joined by Rehnquist, C. J., Scalia, J., and Thomas, J., concurring in part and dissenting in part); Cipollone v. Liggett Group, Inc., 505 U.S. 504, 521 (1992) (plurality opinion); id . at 548-49 (Scalia, J., joined by Thomas, J., concurring in judgment in part and dissenting in part). Although this rule has preemptive effect in that it would preclude States from issuing regulations or adopting or enforcing any requirements, including state tort-law imposed requirements, for health claims about D-tagatose and reduced risk of dental caries that are not identical to the requirements of the interim final rule as adopted by this final rule, this preemptive effect is consistent with what Congress set forth in section 403A of the act.

Section 4(e) of the Executive order provides that “when an agency proposes to act through adjudication or rulemaking to preempt State law, the agency shall provide all affected State and local officials notice and an opportunity for appropriate participation in the proceedings.” Similarly, section 6(c) of the Executive order states that “to the extent practicable and permitted by law, no agency shall promulgate any regulation that has federalism implications and that preempts state law, unless the agency, prior to the formal promulgation of the regulation * * * consulted with State and local officials early in the process of developing the proposed regulation.” This requirement, that FDA provide the States with an opportunity for appropriate participation in this rulemaking, has been met. FDA sought input from all stakeholders through publication of the interim final rule in the Federal Register . No comments from State or local government entities were received.

In conclusion, the agency believes that it has complied with all of the applicable requirements under the Executive order and has determined that the preemptive effects of this rule are consistent with Executive Order 13132.

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

The Federal Alcohol Administration Act (FAA Act) at 27 U.S.C. 205(e) requires that alcohol beverage labels provide the consumer with adequate information regarding a product's identity and prohibits the use of deceptive information on such labels. The FAA Act also authorizes the Secretary of the Treasury to issue regulations to carry out the Act's provisions.

Regulations in 27 CFR part 4, Labeling and Advertising of Wine, allow the establishment of definitive viticultural areas. The regulations allow the name of an approved viticultural area to be used as an appellation of origin on wine labels and in wine advertisements. Title 27 CFR Part 9, American Viticultural Areas, contains the list of approved viticultural areas.

Section 4.25a(e)(1), title 27 CFR, defines an American viticultural area as a delimited grape-growing region distinguishable by geographical features, the boundaries of which have been delineated in subpart C of part 9. The establishment of viticultural areas allows the identification of regions where a given quality, reputation, or other characteristics of the wine is essentially attributable to its geographic origin. The establishment of viticultural areas is intended to help wineries to accurately describe the origin of their wines to consumers and to help consumers identify the wines they purchase. Establishment of a viticultural area is neither an approval nor endorsement of the wine produced there.

Section 4.25a(e)(2) outlines the procedure for proposing an American viticultural area. Any interested person may petition TTB to establish a grape-growing region as a viticultural area. The petition must include:

• Evidence that the proposed viticultural area is locally and/or nationally known by the name specified in the petition;

• Historical or current evidence that the boundaries of the proposed viticultural area are as specified in the petition;

• Evidence that the proposed area's growing conditions, such as climate, soils, elevation, physical features, etc., distinguish it from surrounding areas;

• A description of the proposed viticultural area's specific boundaries, based on features found on United States Geological Survey (USGS)-approved maps; and

• A copy of the appropriate USGS-approved map(s) with the boundaries prominently marked.

With the establishment of this viticultural area, bottlers who use brand names like Seneca Lake may be affected. If you fall in this category, you must ensure that your existing products are eligible to use the name of the viticultural area as an appellation of origin. For a wine to be eligible, at least 85 percent of the grapes in the wine must have been grown within the viticultural area.

If the wine is not eligible for the appellation, you must change the brand name and obtain approval of a new label. Different rules apply if you label a wine in this category with a label approved prior to July 7, 1986. See 27 CFR 4.39(i) for details. Additionally, if you use the viticultural area name on a wine label in a context other than appellation of origin, the general prohibitions against misleading representation in part 4 of the regulations apply.

Effective January 24, 2003, the Homeland Security Act of 2002 divided the Bureau of Alcohol, Tobacco and Firearms (ATF) into two new agencies, the Alcohol and Tobacco Tax and Trade Bureau (TTB) in the Department of the Treasury and the Bureau of Alcohol, Tobacco, Firearms, and Explosives in the Department of Justice. The regulation and taxation of alcohol beverages remains a function of the Department of the Treasury and is the responsibility of TTB. References to the former ATF and the new TTB in this document reflect the time frame, before or after January 24, 2003.

ATF received a petition from Ms. Beverly Stamp of Lakewood Vineyards in Watkins Glen, New York, proposing to establish the “Seneca Lake” viticultural area. The petitioned area included portions of Schuyler, Yates, Ontario, and Seneca counties in upstate New York and covers approximately 204,600 acres of primarily rural agricultural and forestland. Of that total, 3,756 acres are planted to grapes. There are currently 33 wineries on or near Seneca Lake, one of New York's eleven Finger Lakes. The Cayuga Lake viticultural area lies to the east of the area, and both are entirely within the established Finger Lakes viticultural area.

ATF published a notice of proposed rulemaking regarding the Seneca Lake viticultural area in the October 21, 2002, Federal Register as Notice No. 957 (67 FR 64575). In that notice, ATF requested comments by December 21, 2002, from all interested persons concerning the establishment of this viticultural area. ATF received one comment regarding Notice No. 957 from Representative Amo Houghton of New York's 31st Congressional District. Representative Houghton supported the establishment of the Seneca Lake viticultural area and commented, “It is the largest, most diverse community of wine producers in the Eastern United States. The twenty-one wineries along the shores of Seneca Lake offer individual and unique expressions from one of America's finest wine districts * * *. Carved by glaciers, and surrounded by vineyards since the mid 1800's—a Seneca Lake viticultural area has already been created through geologic and human history.” Additionally, Representative Houghton mentioned benefits to the viticultural area's establishment. “This unique area's recognition by the ATF would perfectly complement an existing regional framework of tourism, research and economic development, and promotion of the Seneca Lake identity and all that it represents. This would be of great benefit to consumers who seek products that allow them [to] capture, in a bottle, the essence of places and regions that enthrall them.”

According to the petitioner, Seneca Lake was named after the Seneca people of the Iroquois Nation who lived along its shores hundreds of years ago. Many local places and geographic features are named after the Seneca people. These include, for example, Seneca Lake, Seneca County, the Seneca River, Seneca Castle, Seneca Army Depot, and Seneca Lake State Park. Additionally, the organization known as the Seneca Lake Winery Association includes many of the area's wineries.

To demonstrate that the area is locally and nationally known as “Seneca Lake,” the petitioner included several newspaper and magazine articles as evidence of the name's use. In an article from the Rochester, New York Democrat and Chronicle newspaper of November 15, 1999, entitled “Your Land, Our Land: Finger Lakes in the Fast Lane,” Ray Spencer, vice president of operations of Glenora Wine Cellars, stated that many “already refer to Seneca Lake as ‘the Napa Valley of the East.’ ” In the February 1997 issue of Wines & Vines, a California based magazine, author Philip Hiaring described his visit to the Seneca Lake region and his interviews with winery owners and winemakers.

In addition, Seneca Lake is mentioned in “The Oxford Companion to the Wines of North America.” The book states that Seneca Lake is surrounded by more than two-dozen wineries, is one of the two largest Finger Lakes, and is the deepest “with the greatest heat storing capacity, offering the surrounding hillsides the strongest mesoclimatic benefit.” While the lake's first winery was built in 1866, the book notes that the emergence of vinifera varieties resulted in an increase of winery openings in the 1980's that brought new momentum to the region's grape-growing industry.

The boundaries of the Seneca Lake viticultural area encompass about 204,600 acres of largely rural land surrounding Seneca Lake, the largest of upstate New York's eleven Finger Lakes. While some of the road names used in the boundary description do not appear on the submitted USGS maps, the petitioner provided the locally known names of these roads, as well as a more detailed map of the town of Watkins Glen indicating minor roads.

Using roads and streams, the petitioner drew the Seneca Lake viticultural area's boundaries to contain the vineyards influenced by the lake's climatic effect. In addition, the petitioner noted that distinct ridges divide Seneca Lake from its closest neighbor, Cayuga Lake, and the nearly 800-foot elevation change within the 7.5 miles between them gives the two lakes their own microclimates.

The “lake effect” weather phenomenon makes the Seneca Lake viticultural area a “unique and superb” wine-growing region, according to the petitioner. The “Oxford Companion to Wine”, published by the Oxford University Press, Inc., New York, describes lake effect as “the year-round influence on vineyards from nearby large lakes which permits vine-growing in the northeast United States and Ontario in Canada despite their high latitude.”

The “Oxford Companion” also notes that the lake effect influence on grape vines changes with the seasons. It states that:

The petitioner also provided an extract from Richard Figiel's book “Culture in a Glass,” that describes how the lake effect phenomenon affects the Finger Lakes region. Noting that both Seneca and Cayuga Lakes drop well below sea level, Figiel states that since the lakes are “(n)arrow slices of water with relatively little surface area, they tend to maintain a stable temperature throughout the year.” Figiel notes that the depth and heat storing capacity of the lakes act as a large radiator for the surrounding area during the winter months. “Not only do the lakes take the edge off frigid upstate winters, often keeping vineyards 10-15° warmer than locations just a half mile away,” the book adds, “but they also cushion the transitions of spring and fall.” Figiel also points out that the “(d)istinct microclimates along the hillsides rising from the lakeshores make it possible to reliably ripen grapes in a region that is generally too cold for viticulture * * *.”

The petitioner stated that it is the size and depth of Seneca Lake that gives the lake its ability to influence the local climate. Additionally, a report provided by the petitioner, entitled “Viticultural Distinction of Seneca Lake in the New York Finger Lakes”, includes a physical description of Seneca Lake. The report states that, “Seneca Lake is the largest of the Finger Lakes covering 67.7 square miles. The lake is 35.1 miles long and is an average of 1.9 miles wide with a shoreline of 75.4 miles. It has a volume of 4.2 trillion gallons with a maximum depth of 634 feet. At 150 feet, the water temperature remains at 39°F (4°C) year around. Above that level, the water temperature varies seasonally, but the surface temperature generally does not go below 39.5°F (4°C).” While Seneca Lake chills down, the petition adds, it rarely freezes during the winter months. The petition also noted that the Seneca region has the longest frost-free period in the Finger Lakes, with a growing season of about 190 days. In contrast, neighboring Cayuga Lake's growing season is only 165 to 170 days long.

Seneca Lake's latent heat storage capacity alters the local climate to such an extent, the petition stated, that grapes can be grown in an area where they otherwise would not survive the cold temperatures of early spring, or the late autumn frosts. Together with the good air drainage offered by the slopes leading to its shore, the lake's water temperature provides cool breezes in the spring, preventing early bud break in the fruit. In the fall, the lake's warmth delays early frosts, and in the winter it raises temperatures so that bud damage is lessened.

According to the petitioner, it is this ability to protect a crop from extreme temperatures during both the growing and dormant seasons that distinguishes the Seneca Lake viticultural area from the surrounding areas. This lake effect is strongest within about one-half mile of Seneca Lake. For this reason, the more tender vinifera varieties are planted within this zone, while hardier American varieties and hybrids can be planted higher on the slopes. The petitioner added that smaller lakes, even those the size of Cayuga Lake, do not have the same level of latent heat capacity and, therefore, do not modify the local climate to the same extent as Seneca Lake.

TTB has determined that this regulation is not a significant regulatory action as defined in Executive Order 12866. Accordingly, this proposal is not subject to the analysis required by this Executive Order.

TTB certifies that the regulations will not have a significant economic impact on a substantial number of small entities. This regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name is the result of a proprietor's own efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

The Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35, and its implementing regulations, 5 CFR part 1320, do not apply to this final rule because there are no new or revised record keeping or reporting requirements.

The principal author of this document is Kristy Colo n, Regulations and Procedures Division, Alcohol and Tobacco Tax and Trade Bureau.

Section 102.19(a) of the National Labor Relations Board's rules provides that if a Regional Director declines to issue complaint, or after withdrawing a complaint refuses to reissue it, the person making the charge may obtain review of the action by filing an appeal (or seeking an extension of time in which to file an appeal) within 14 days of being notified in writing by the Regional Director of the reasons for the decision. Significantly, Section 102.19(a) instructed that the appeal “shall” contain a complete statement setting forth the facts and reasons upon which it is based.

Despite the seemingly mandatory language of Section 102.19(a), the Office of Appeals has, for many years, accepted the “Appeal” form (Form 4767) attached to the Regional Director's dismissal letter as an appeal and sent acknowledgement to the parties based on a timely filing of such form. The policy was developed in response to the reality that many individual appellants to not have the language skills to perfect a more traditional appeal. Quite often, individuals without benefit of counsel have merely sent the form as indicative of an intent to appeal. These individuals apparently believe that they have perfected an appeal by sending in the form officially attached to the Region's dismissal letter. Since seeking review is the last recourse for a charging party whose charge has been dismissed, the Office of Appeals has maintained a policy that reflects a liberal exercise of discretion in order to afford appeal rights to the broadest population. Although an appeal is more effective if the party seeking review explains the basis for the disagreement with the Region's disposition, failure to include such a statement has not been considered by the Office of Appeals a basis for rejecting an otherwise timely filed appeal. In Grand Rapids Gravel Company, JD-114-02 (issued November 22, 2002), 1 an administrative law judge specifically rejected the assumption “that the filing of a notice of appeal is legally tantamount to the filing of the actual appeal.” Skip op. p.20. In order to avoid future challenges concerning the viability of an appeal based only on a notice, the rules and regulations and related forms are being revised to reflect the actual practice. Because of the obvious utility of such a statement, the General Counsel believes most charging parties will continue to submit them, even if it is not mandatory. Once a case is appealed, the same level of review is afforded despite the brevity of an appeal. Because the current practice is fairer to individual, unrepresented charging parties, the language applicable to the procedures of filing an appeal has been revised to reflect that practice and to make the public aware of the actual practice.

For these reasons, the General Counsel is eliminating the requirement that a complete and separate statement must be submitted in order to constitute an appeal from the Regional Director's refusal to issue, or reissue, a compliant.

Because the change involves rules of agency organization, procedure or practice, the Agency is not required to publish for comment under Section 553 of the Administrative Procedure Act (5.U.S.C. 553).

Because no notice of proposed rule-making is required for procedural rules, the requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) pertaining to regulatory flexibility analysis do to apply to these rules. However, even if the Regulatory Flexibility Act were to apply, the NLRB certifies that these changes will not have a significant economic impact on small business entities since the changes merely codify the actual practice under the existing rules.

Because the rule relates to Agency procedure and practice and merely modifies the agency's existing filing procedure, the General Counsel has determined that the Congressional review provisions of the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801) do not apply

This part does not impose any reporting or recordkeeping requirements under the Paperwork Reduction Act of 1995.

Section 106(6) of the Copyright Act, title 17 of the United States Code, gives a copyright owner of sound recordings an exclusive right to perform the copyrighted works publicly by means of a digital audio transmission. This right is limited by section 114(d), which allows certain non-interactive digital audio services to make digital transmissions of a sound recording under a compulsory license, provided that the services pay a reasonable royalty fee and comply with the terms of the license. Moreover, these services may make any necessary ephemeral reproductions to facilitate the digital transmission of the sound recording under a second license set forth in section 112(e) of the Copyright Act.

In accordance with the time frame set forth in the law for the purpose of setting rates and terms for use of the section 114 license by preexisting services, the Copyright Office published a notice in the Federal Register on January 9, 2001. 66 FR 1700 (January 9, 2001). This notice initiated a six-month negotiation period the purpose of which was to provide an opportunity for interested parties to set rates and terms for use of the section 114 license as it applied to both the preexisting subscription services and the preexisting satellite digital audio radio services. Unfortunately, no agreement was reached by the end of that period and petitions were filed requesting that the Librarian of Congress convene a Copyright Arbitration Royalty Panel (“CARP”) to determine the rates and terms for both categories of preexisting services.

On January 17, 2003, the Copyright Office received notification of a settlement among the parties contesting rates and terms for preexisting services and a joint petition requesting the Librarian to publish their proposed rates and terms in accordance with § 251.63(b) of the CARP rules, 37 CFR, which provides that—

On January 30, 2003, the Copyright Office published a Notice of Proposed Rulemaking (“NPRM”) in the Federal Register announcing the settlement and proposing the rates and terms for preexisting services. 68 FR 4744 (January 30, 2003). The NPRM specified that—

RLI's March 3, 2003, objection and Notice of Intent to Participate represents RLI's second attempt to enter this proceeding. On January 17, 2003, on the same day that the Copyright Office received notification of the settlement of rates and terms for preexisting services and 14 months after the Office called for Notices of Intent to Participate in this proceeding, RLI filed a motion to accept a late-filed Notice of Intent to Participate. In an Order issued March 14, 2003, the Office denied RLI's motion. The Office applied its two-part test for considering late-filed Notices of Intent to Participate—the disruption to the proceeding by accepting the Notice and whether good cause is shown for it being late—and determined that RLI failed both prongs of the test. Order in Docket No. 2001-1 CARP DSTRA2 (March 14, 2003). We now consider whether there are sufficient grounds to accept RLI's March 3 objection and its new Notice of Intent to Participate.

As discussed above, the NPRM required parties filing an objection to state their interest in the proceeding and the reasons for their challenge. In its March 3 filing, RLI asserts that it is a for-profit corporation that administers music licensing royalties on behalf of hundreds of radio and television stations and that one of its key business objectives “is to provide these same types of agency services to recording labels and performing artists with respect to the administration and distribution of royalty payments to be made to them pursuant to the statutory licenses under sections 112(e) and 114 of the Copyright Act.” RLI Objection at 2. In order to enter this business, RLI states that it is necessary for it to be recognized in the rules proposed in the NPRM as a Designated Agent to receive royalties from preexisting services, which it currently is not. RLI notes that it is a recognized Designated Agent for another statutory license in section 114 of the Copyright Act for nonsubscription transmission services, see 37 CFR 260.3(a), but its “efforts to enroll clients have been substantially impeded by its inability to assure clients of RLI's ability to administer all license payments to which these clients would be entitled.” Id. at 3. Consequently, RLI objects to the NPRM so that further proceedings may be held to include it as a Designated Agent in the Copyright Office rules for distribution of royalties collected from preexisting subscription services.

Having offered the reason for its objection, RLI asserts that it has an interest in this proceeding because it is an entity that distributes royalties, is already a Designated Agent for royalties collected from nonsubscription transmission services, and “has a stake” in this proceeding. Id. at 5. RLI also offers that having multiple Designated Agents identified in the regulations is beneficial and desirable for copyright owners and performers and will offer them an alternative to SoundExchange, the only Designated Agent in the NPRM. Id. at 7-9.

On March 26, 2003, RLI filed a supplement to its March 3, 2003, objection to the NPRM. RLI stated that—

The Recording Industry Association of America, Inc., and, jointly, the American Federation of Musicians of the United States and Canada and the American Federation of Television and Radio Artists opposed RLI's March 26 supplement.

The consequences of an objection to a proposal of rates published under § 251.63(b) of the CARP rules are considerable; the Librarian will not adopt the proposed rates and terms and will schedule a CARP proceeding to resolve the matter. However, because a challenge is lodged does not necessarily mean that a CARP must be convened. The Librarian must evaluate the sufficiency of the objection to determine whether the objecting party (1) has a significant interest in the establishment of the rates and terms and (2) has asserted objections to the proposed rates and terms that can be resolved in a CARP proceeding.

The first requirement, that an objecting party have a significant interest in the rates and terms to be established, is derived from the language of the Copyright Act. Section 803(a)(1) of the Act provides that rate proceedings for certain statutory licenses in the Act-particularly sections 112 and 114 which are at issue in this proceeding-begin with the submission of a petition to the Librarian of Congress. In other words, one or more parties may request the Librarian to invoke the CARP process to establish rates and terms by filing a petition or petitions. For each petition received, the statute requires that the “Librarian of Congress shall, upon the recommendation of the Register of Copyrights, make a determination as to whether the petitioner has such a significant interest in the royalty rate in which an adjustment is requested.” 17 U.S.C. 803(a)(1). Although there is no legislative history as to what constitutes a “significant interest,” the requirement of such makes a great deal of sense. Rate proceedings before a CARP are lengthy, complex, and expensive. It would make no sense to allow an entity with a tentative or collateral interest in the rates to invoke a CARP proceeding; in order to initiate the proceeding, a party should at a minimum have a significant interest in the rates and terms to be established.

While section 803(a)(1) addresses petitions to initiate rate proceedings, there is no similar provision in the Copyright Act related to challenges of proposed rates and terms that are the result of settlement reached by participants in a CARP proceeding. The Copyright Office developed § 251.63(b) of the CARP rules to address circumstances where, due to a settlement, a CARP is no longer necessary. Although § 251.63(b) is a rule and not a statutory provision, it has the specific endorsement of the Congress.

The question then remains: what is a significant or substantial interest in a rate proceeding? The inquiry is a factual one and determinations must be made on a case-by-case basis. Clearly, a copyright owner whose works are being used under a statutory license has a significant interest in a rate setting or adjustment of that license, as does the person or entity using those works under the statutory license. Order in Docket No. 99-6 CARP DTRA (June 21, 2000). An entity that collects the royalties generated under a statutory license on behalf of certain copyright owners whose works are used can have a specific interest in a rate proceeding, but only to the extent that such entity is fully authorized by, and acts on the behalf of, those copyright owners to represent their interests in the rate proceeding. It is through the authorization of these copyright owners, however, and not because of its business or personal interest, that a royalty collection entity gains a specific interest in a rate proceeding.

Likewise, an entity that represents users of copyrighted works can have a specific interest in a rate proceeding, but only gains that specific interest from the authorization of the users it represents. A person or entity that is not a user of a statutory license but expresses a vague or unspecified desire to form a business that would make use of the license or that would benefit indirectly from another's use does not have a specific interest. Order in Docket No. 99-6 CARP DTRA at 2 (June 21, 2000) (“Glaser's interest in what the fees will be is general in that it may affect the profitability of his other businesses, but it is not specific to his person or to his role as a representative of these other businesses.”). And a person or entity that proposes or objects to a rate proceeding solely on the basis of espoused public policy or consumer interest concerns does not have a specific interest.

The NPRM in this proceeding specified that parties objecting to the proposed rates and terms identify their interest in the proceeding no later than March 3, 2003. Review of RLI's March 3, 2003, filing reveals that RLI did not represent any copyright owners entitled to collect royalties from preexisting subscription services under the section 112 and 114 licenses. Rather, it states that its “key business objective” is to distribute such royalties in the future and that its participation in this proceeding is necessary to attaining that objective. RLI Objection at 2. This is confirmed in the March 26, 2003, “supplement” to its objection where RLI states that it is “pleased to inform the Copyright Office” that it had entered into affiliation agreements with unspecified copyright owners and performers whose works it purports are used under the section 112 and 114 licenses. RLI Supplement at 2. 1 Since RLI did not represent copyright owners entitled to royalties from preexisting subscription services under the section 112 and 114 licenses at the time that it filed its objection, and did not have authorization from any copyright owners eligible to receive such royalties to lodge the objection and participate in a CARP proceeding on their behalf, RLI does not have a specific interest in this rate adjustment proceeding.

Moreover, even if the information in RLI's March 26 “supplement” were accurate as of March 3, RLI does not even purport to assert that any copyright owners have authorized RLI to represent them in a CARP proceeding or even to object to the proposed rates and terms on their behalf. RLI states its belief that “[b]y affiliating with RLI and electing to receive their royalties from an agent other than SoundExchange, RLI's client performers and copyright owners are expressing their opposition, through RLI, to the proposed settlement.” Supplement at 3 (emphasis added). But it is hardly self-evident that the act of affiliating with RLI and electing to use RLI as their agent to receive royalties constituted an authorization by those unidentified copyright owners for RLI to express opposition on their behalf to the proposed rates and terms or to participate in a CARP on their behalf. Indeed, RLI has failed even to identify a single copyright owner whom it represents in asserting its objection to the proposed rates and terms. If RLI wishes to participate in a CARP as a representative of copyright owners, it must identify the copyright owners whom it represents.

RLI also argues that copyright owners and performers should be given a “competitive choice among agents for the distribution of sound recording performance royalties,” Objection at 7, and that in amending 17 U.S.C. 114(g) in the Small Webcaster Settlement Act of 2002, Pub. L. 107-321, Congress (1) “acknowledged and contemplated that more than one entity could serve as a Designated Agent in competition with SoundExchange,” and (2) provided that “performers and copyright owners have the absolute right to choose a Designated Agent other than SoundExchange so as to avoid the recoupment of historical litigation and other costs.” Id. at 8 (footnote omitted).

These arguments do not compel the conclusion that RLI has standing to block a settlement and force the determination of rates and terms to be made by a CARP. The fact that more than one entity could serve as Designated Agents does not mean that there necessarily ought to be more than one Designated Agent, 2 or that an aspiring candidate for designation has sufficient interest to participate in its own right in a CARP proceeding. The fact that Congress has recognized that there have been and may continue to be more than one Designated Agent also does not mean that this is a necessary or even a desirable outcome. On the other hand, it could be that when Congress, in the Small Webcaster Settlement Act, amended the law to permit SoundExchange to deduct costs incurred in licensing rights under section 114 or to deduct costs incurred as a participant in a CARP proceeding from the royalties that it distributes to copyright owners and performers, 3 it also included the provision denying SoundExchange that right with respect to “copyright owners and performers who have elected to receive royalties from another designated agent,” 17 U.S.C. 114(g)(3), in order to give copyright owners and performers a means to avoid being subject to recoupment of SoundExchange's litigation and other costs. Such a provision may have been intended to deter SoundExchange from making excessive deductions, in light of the fact that copyright owners and performers could elect to receive their royalties from an alternative Designated Agent if they were dissatisfied with the extent of SoundExchange's deductions. But even if that is so, it would not give RLI standing to participate on its own behalf in a CARP in order to seek designation as an agent. Instead, it would give a copyright owner or performer entitled to participate in the CARP the power to seek the designation of RLI or some other entity as an alternative Designated Agent. 4

For the reasons stated above, the Librarian of Congress determines that RLI does not have a specific interest in the rates and terms proposed in this NPRM and consequently does not have standing to require the convocation of a CARP. RLI's objection is therefore dismissed. Since there were no other objections filed, the Librarian is adopting the proposed rates and terms announced in the NPRM as final.

The following rates and terms for the use of sound recordings by preexisting subscription services under the section 112(e) and section 114 licenses of the Copyright Act shall be effective for the period January 1, 2002 through December 31, 2007.

Entities potentially regulated by this action are nine States in the Western United States (Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah and Wyoming) and Indian Tribes within that same geographic area. This action, and an earlier action taken by EPA in 1999, provides these States and Tribes with an optional program to protect visibility in federally protected scenic areas. The portion of the program addressed by today's action is a program for tracking of mobile source emissions under the 1999 rule.

Docket. The EPA has established an official public docket for this action under Docket No. OAR-2002-0076. 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 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 Air Docket in the EPA Docket Center, Room B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742. A reasonable fee may be charged for copying.

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/. 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 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 above. Once in the system, select “search,” then key in the docket identification number, OAR-2002-0076.

Outline. The contents of today's preamble are listed in the following outline.

Section 169(A) of the Clean Air Act (CAA) establishes a national goal for protecting visibility in federally-protected scenic areas. These “Class I” areas include national parks and wilderness areas. The national visibility goal is to remedy existing impairment and prevent future impairment in these Class I areas, consistent with the requirements of sections 169A and 169B of the CAA.

Regional haze is a type of visibility impairment caused by air pollutants emitted by numerous sources across a broad region. The EPA uses the term regional haze to distinguish this type of visibility problem from those which are more local in nature. In 1999, EPA issued a regional haze rule requiring States to develop implementation plans that will make “reasonable progress” toward the national visibility goal (64 FR 35714, July 1, 1999). The first State plans for regional haze are due between 2003 and 2008. The regional haze rule provisions appear at 40 CFR 51.308 and 40 CFR 51.309.

The regional haze rule at 40 CFR 51.308 sets forth the requirements for State implementation plans (SIPs) under the regional haze program. The rule requires State plans to include visibility progress goals for each Class I area, as well as emissions reductions strategies and other measures needed to meet these goals. The rule also provides an optional approach, described in 40 CFR 51.309, that may be followed by the nine Western States (Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, and Wyoming) that comprise the transport region analyzed by the Grand Canyon Visibility Transport Commission (GCVTC) during the 1990's. This optional approach is also available to eligible Indian Tribes within this geographic region. The regulatory provisions at 40 CFR 51.309 are based on the final report issued by the GCVTC in 1996, 1 which included a number of recommended emissions reductions strategies designed to improve visibility in the 16 Class I areas on the Colorado Plateau.

In developing the regional haze rule, EPA received a number of comments on the proposed rule encouraging the Agency to recognize explicitly the work of the GCVTC. In addition, in June 1998, Governor Leavitt of Utah provided comments to EPA on behalf of the Western Governors Association (WGA), further emphasizing the commitment of Western States to implementing the GCVTC recommendations. The WGA's comments also suggested the translation of the GCVTC's recommendations into specific regulatory language. The EPA issued a Notice of Availability during the fall of 1998 requesting further comment on the WGA's proposal and a draft set of regulatory language based upon the WGA's recommendations. Based on the comments received on this Federal Register action, EPA developed the provisions set forth in 40 CFR 51.309 that allow the nine Transport Region States and eligible Tribes within that geographic area to implement many of the GCVTC recommendations within the framework of the national regional haze rule.

The provisions in 40 CFR 51.309 comprise a comprehensive long-term strategy for addressing sources that contribute to visibility impairment within this geographic region. The strategy addresses the time period between the year 2003, when the implementation plans are due, 2 and the year 2018. The provisions address emissions from stationary sources, mobile sources, and area sources such as emissions from fires and windblown dust.

The GCVTC determined that mobile source emissions need to be an essential part of a strategy to reduce haze on the Colorado Plateau. Therefore, one element of the GCVTC's strategy, as reflected in 40 CFR 51.309(d)(5), was to address mobile sources emissions. Section 309 also requires States to establish a mobile source emissions budget for each area that significantly contributes to visibility impairment in any of the 16 Class I areas covered by this section of the regulations. At the time the GCVTC made its recommendations (in 1996), mobile source emissions were projected to be lowest in 2005, and to subsequently rise over the course of the first regional haze planning period ( i.e. , until 2018). Accordingly, section 309 required mobile source emissions budgets to be set using the lowest projected level as a planning objective and performance indicator for each area.

Since the GCVTC made its recommendations, new developments have caused mobile source emissions projections to change significantly. Over the past few years, we have promulgated a series of new emissions standards for several different engine types, as well as new standards for diesel fuel content. 3 As a result of these new standards, the WRAP, using EPA's latest models, 4 now projects a significant decline in mobile source emissions throughout the region during the 2003-2018 time period covered by the section 309 plans, particularly from on-road mobile sources. Rather than emissions being lowest in 2005, and subsequently rising, mobile source emissions for all pollutants except sulfur dioxide (SO 2 ) are expected to decline continuously over the course of the first regional haze planning period.

The projected trends for mobile source emissions of SO 2 differ from those of other pollutants. Emissions reductions from pollutants such as nitrogen oxides (NO X ) and particulate matter (PM) are dependent on technological changes to the onroad fleet and to nonroad engines which are implemented gradually. In contrast, SO 2 emissions reductions are immediately realized when the sulfur content of the fuel changes, because emissions from both new and existing engines immediately drop sharply. We have already published stringent fuel sulfur limits for onroad engines and have proposed stringent fuel sulfur limits for nonroad engines. 5 These Federal fuel sulfur regulations, fully implemented, would together result in a substantial reduction in SO 2 emissions over the 2003-2018 planning period.

These revisions would change § 51.309(d)(5)(i) to eliminate the requirement for setting mobile source emissions budgets using the lowest projected level as a planning objective and performance indicator for each area. Instead, the new § 51.309(d)(5)(i) would substitute, as the new planning objective and performance indicator, a requirement for statewide inventories to show a continuous decline in emissions of each pollutant of concern over the planning period. Should mobile source emissions not decline as expected, States would have to revise their SIPs to include any feasible additional strategies. This new requirement conforms to trends that are currently projected.

In addition, in light of the continuous decline in mobile source emissions expected over the entire region, these revisions also eliminate the unneeded requirement in § 51.309(5)(ii) and (iii) to determine whether mobile sources emissions constitute a significant contributor to haze in a given State. The revisions retain the requirements for statewide inventories and performance demonstrations.

Finally, the revisions contain a backstop provision, requested by the WRAP, to address any potential concerns regarding SO 2 from nonroad sources in the event that recently proposed Federal standards, referenced above, are not finalized. The backstop provision, contained in the new § 51.309(d)(5)(i)(B), requires States to assess the need for any long-term strategies to address SO 2 from nonroad mobile sources by no later than December 31, 2008. In determining whether to revise their SIPs to address SO 2 from mobile sources, States may consider the emissions reductions achieved—or anticipated—by any Federal standards that are in place addressing fuel sulfur content for nonroad engines.

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

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

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

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

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

Pursuant to the terms of Executive Order 12866, we have determined that this direct final rule is not a significant regulatory action.

This action does not add any new requirements involving the collection of information as defined by the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The OMB has approved the information collection requirements contained in the final Regional Haze regulations (64 FR 35714, July 1, 1999) and has assigned OMB control number 2060-0421 (EPA ICR No. 1813.04).

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq., generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of today's rulemaking on small entities, small entity is defined as: (1) A small business that is a small industrial entity as defined in the U.S. Small Business Administration (SBA) size standards (as discussed on the SBA Web site at http://www.sba.gov/size/indextableofsize.html) ; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's direct final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

This rule eliminates certain comprehensive requirements to address mobile source emissions that EPA now considers to be unnecessary. Specifically, as discussed above, this rule eliminates the requirements in § 51.309(5)(ii) and (iii) to determine whether mobile sources emissions constitute a significant contributor to haze in a given State, and for those States with areas that meet this significance criterion, to establish mobile source emissions budgets. The rule requires emissions reductions consistent with the downward trend in mobile source emission inventories that is currently projected, based on regulations that have already been promulgated. We have therefore concluded that today's rule will relieve regulatory burden for all small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) (UMRA), 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, 2 U.S.C. 1532, EPA generally must prepare a written statement, including a cost-benefit analysis, for any proposed or final rule that “includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more * * * in any one year.” A “Federal mandate” is defined under section 421(6), 2 U.S.C. 658(6), to include a “Federal intergovernmental mandate” and a “Federal private sector mandate.” A “Federal intergovernmental mandate,” in turn, is defined to include a regulation that “would impose an enforceable duty upon State, local, or Tribal governments,” section 421(5)(A)(i), 2 U.S.C. 658(5)(A)(i), except for, among other things, a duty that is “a condition of Federal assistance,” section 421(5)(A)(i)(I). A “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector,” with certain exceptions, section 421(7)(A), 2 U.S.C. 658(7)(A).

Before promulgating an EPA rule for which a written statement is needed under section 202 of the UMRA, section 205, 2 U.S.C. 1535, of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule.

Because the entire program under 40 CFR 51.309, including today's amendments, is an option that each of the States may choose to exercise, these revisions to section 309 do not establish any regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments. The program is not required and, thus is clearly not a “mandate.” Moreover, as explained above, today's rule eliminates certain requirements and will overall reduce any regulatory burdens. Accordingly, this rule will not result in expenditures to State, local, and Tribal governments, in the aggregate, or the private sector, of $100 million or more in any given year. Thus EPA is not obligated, under section 203 of UMRA, to develop a small government agency plan.

We believe that this rulemaking is not subject to the requirements of UMRA. For regional haze SIPs overall, it is questionable whether a requirement to submit a SIP revision constitutes a Federal mandate, as discussed in the preamble to the regional haze rule (64 FR 35761, July 1, 1999). However, today's direct final rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local or tribal governments or the private sector. In addition, the program contained in 40 CFR 51.309, including today's revisions, is an optional program.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), 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 section 6(b) of 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 a regulation. Under section 6(c) of Executive Order 13132, EPA may not issue a regulation that has federalism implications and that preempts State law, unless EPA consults with State and local officials early in the process of developing the regulation.

This rule does not have federalism implications. It 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. As described above, this rule contains minor revisions to section 309 of the regional haze rule which will reduce any regulatory burden on the States. In addition, section 309 is an optional program for States. The minor revisions to section 309, accordingly, do not directly impose significant new requirements on State and local governments. Moreover, even if today's revisions did have federalism implications, these revisions would not impose substantial direct compliance costs on State or local governments, nor would they preempt State law. Thus, Executive Order 13132 does not apply to this rule.

Consistent with EPA policy, we nonetheless did consult with representatives of State and local governments in developing this rule. This rule directly implements specific recommendations from the WRAP, which includes representatives from all the affected States.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 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.” “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 eliminates certain requirements and will overall reduce any regulatory burden on the Tribes. Moreover, the section 309 program is an optional program for Tribes within the same geographic region as the WRAP states. Accordingly, this rule will not have tribal implications. In addition, this rule directly implements specific recommendations from the WRAP, which includes representatives of Tribal governments. Thus, although the rule does not have tribal implications, representatives of Tribal governments have had the opportunity to provide input into development of the recommendations forming its basis.

Executive Order 13045: “Protection of Children from Environmental Health 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.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

This rule is not subject to Executive Order 13211, “Actions 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(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, section 12(d) (15 U.S.C. 272 note ) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This action does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards.

Executive Order 12898 requires that each Federal agency make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minorities and low-income populations. The requirements of Executive Order 12898 have been previously addressed to the extent practicable in the Regulatory Impact Analysis (RIA) for the regional haze rule (cited above), particularly in chapters 2 and 9 of the RIA. Today's direct final rule makes no changes that would have a disproportionately high and adverse human health or environmental effect on minorities and low-income populations.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the SBREFA, 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. The 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(a).

Statutory authority for today's direct final rule comes from sections 169(a) and 169(b) of the CAA (42 U.S.C. 7545(c) and (k)). These sections require EPA to issue regulations that will require States to revise their SIPs to ensure that reasonable progress is made toward the national visibility goals specified in section 169(A).

You may be potentially affected by this action if you an are 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. To determine whether you or your business may be affected by this action, you should carefully examine the applicability provisions in. 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-2003-0135. 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 April 2, 2003 (68 FR 16046) (FRL-7299-6), 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 2E6448, 2E6462, 2E6486, and 3E6526) by IR-4, 681 US Highway #1 South, New Brunswick, NJ 08902-3390. That notice included a summary of the petitions prepared by Syngenta Crop Protection, Inc., the registrant.

The petitions requested that 40 CFR 180.516 be amended by establishing tolerances for residues of the fungicide fludioxonil, (4-(2,2-difluoro-1,3-benzodioxol-4-yl)-1 H -pyrrole-3-carbonitrile), in or on the following commodities: Brassica, head and stem, subgroup 5A at 1.5 ppm; brassica, leafy greens, subgroup 5B at 9.0 ppm; carrot at 0.5 ppm; herb subgroup 19A at 33 ppm; longan, lychee, pulasan, rambutan, and spanish lime at 2.0 ppm; and turnip, greens at 9.0 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 (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 residues of fludioxonil on Brassica, head and stem, subgroup 5A at 2.0 ppm; brassica, leafy greens, subgroup 5B at 10 ppm; carrot at 0.75 ppm; herb, fresh, subgroup 19A at 10 ppm; herb, dried, subgroup 19A at 65 ppm; longan, lychee, pulasan, rambutan, and spanish lime at 1.0 ppm; and turnip, greens at 10 ppm. EPA's assessment of exposures and risks associated with establishing the 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 fludioxonil are discussed in Unit III.A. of the final rule on fludioxonil, which published in the Federal Register of December 29, 2000 (65 FR 82927) (FRL-6760-9), and August 2, 2002 (67 FR 50354) (FRL-7188-7).

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 intra species differences.

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 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 fludioxonil used for human risk assessment is Unit III.B.of the final rule on fludioxonil, which published in the Federal Register of December 29, 2000 (65 FR 82927) and August 2, 2002 (67 FR 50354).

1. Dietary exposure from food and feed uses . Tolerances have been established (40 CFR 180.516) for the residues of fludioxonil, in or on a variety of raw agricultural commodities. Fludioxonil is registered for foliar application (grape, strawberry, green onion, dry bulb onion, bushberry, caneberry, juneberry, longonberry, pistachio, salal, and watercress), post-harvest application (stone fruit), and for seed treatment purposes (numerous crops) with tolerances for residues of fludioxonil ranging from 0.01-7.0 ppm (40 CFR 180.516(a)). A section 18 registration is also established for post-harvest application to pomegranate with a tolerance for residues of fludioxonil of 5.0 ppm (40 CFR 180.516(b)). Currently there are no tolerances established for residues of fludioxonil in/on livestock. Risk assessments were conducted by EPA to assess dietary exposures from fludioxonil 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 USDA 1994-1996, 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 acute exposure assessments: The acute analysis assumed tolerance level residues, 100% crop treatment (CT), and DEEM (ver. 7.76) default processing factors for all registered/proposed commodities (tier 1).

ii. Chronic exposure . In conducting this chronic dietary risk assessment the DEEM 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 analysis assumed tolerance level residues, 100% CT, and DEEM (ver. 7.76) default processing factors for all registered/proposed commodities (tier 1).

iii. Cancer . EPA's Cancer Peer Review Committee (CPRC) classified fludioxonil as a Group D - not classifiable as to human carcinogenicity.

2. Dietary exposure from drinking water . The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for fludioxonil 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 fludioxonil.

The Agency uses the First Index Reservoir Screening Tool (FIRST) 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 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. FIRST and PRZM/EXAMS incorporate an index reservoir environment, and 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 screen for sorting out pesticides for which it is unlikely that drinking water concentrations would 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 fludioxonil they are further discussed in the aggregate risk sections E.

There are no ground or surface water monitoring data available for fludioxonil. Tier I models, FIRST and SCI-GROW, were used to derive the surface water and ground water EECs, respectively. According to the proposed label information, the maximum application rate for fludioxonil is 4 lbs active ingredient (ai)/Acre/year on turf (maximum single application rate of 0.675 lbs ai/Acre). Application to turf provided the high exposure scenario; therefore, the drinking water EECs were derived from the use on turf.

Ground water . SCI-GROW provides a ground water screening exposure value for use in determining the potential risk to human health from drinking ground water contaminated with pesticides. The ground water modeling generated a ground water EEC of 0.11 parts per billion (ppb) for fludioxonil.

Surface water . The predicted index reservoir concentrations for total residues using FIRST for the proposed use of fludioxonil generated acute and chronic surface water EECs of 132 ppb and 49 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).

Fludioxonil is currently registered for use on the following residential non-dietary sites: Based on the registered labels, fludioxonil can be used as a protectant fungicide for control of certain diseases of turfgrass and certain foliar, stem and root diseases in ornamentals in residential and commercial landscapes. The risk assessment was conducted using the following residential exposure assumptions: Short- and intermediate-term dermal exposures (adults and toddlers), and short- and intermediate-term incidental ingestion exposures (toddlers).

Fludioxonil is registered for uses on residential lawns and ornamentals; however, it is restricted to professional applicators only. As such, no residential handler (i.e., applicator) exposures are anticipated.

EPA did not select short- or intermediate-term dermal endpoints; subsequently, no residential post-application dermal assessment is included. Additionally, due to the low vapor pressure of fludioxonil, no significant post-application inhalation exposure is anticipated. As a result, there are no significant post-application exposures anticipated from treated landscape ornamentals. Therefore, the residential component of this assessment only includes a post-application assessment for toddler incidental ingestion exposures related to residential lawn applications.

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 fludioxonil 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 fludioxonil and any other substances and fludioxonil 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 fludioxonil 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 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 . The developmental and reproductive toxicity data did not indicate increased quantitative or qualitative susceptibility of rats or rabbits to in utero and/or postnatal exposure.

3. Conclusion . There is a complete toxicity data base for fludioxonil 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 to 1X because:

• The toxicology data base is complete.

•  The developmental and reproductive toxicity data did not indicate increased quantitative or qualitative susceptibility of rats or rabbits to in utero and/or postnatal exposure.

• A developmental neurotoxicity study is not required because there was no evidence of neurotoxicity in the current toxicity data base.

• The exposure assessment approach will not underestimate the potential dietary (food and water) and non-dietary exposures for infants and children resulting from the use of fludioxonil.

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 milligram/kilogram (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 ground water 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 fludioxonil will occupy 1% of the aPAD for females 13-49 years old. Fludioxonil is not expected to pose an acute dietary risk for the general population (including children and infants). In addition, there is potential for acute dietary exposure to fludioxonil in drinking water. 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 aPAD for females 13-49 years old, as shown in Table 1 of this unit:

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to fludioxonil from food will utilize 11% of the cPAD for the U.S. population, 30% of the cPAD for all infants ( < 1 year old) and 38% of the cPAD for children 1-2 years old. Based on the use pattern, chronic residential exposure to residues of fludioxonil is not expected. In addition, there is potential for chronic dietary exposure to fludioxonil in drinking water. 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 2 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).

Fludioxonil is currently registered for use that could result in short-term residential exposure and the Agency has determined that it is appropriate to aggregate chronic food and water and short-term exposures for fludioxonil.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded that food and residential exposures aggregated result in aggregate MOEs of 460 for all infants < 1 year old; 410 for children 1-2 years old; 490 for children 3-5 years old. These aggregate MOEs do not exceed the Agency's level of concern for aggregate exposure to food and residential uses. In addition, short-term DWLOCs were calculated and compared to the EECs for chronic exposure of fludioxonil in ground and surface water. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect short-term aggregate exposure to exceed the Agency's level of concern, as shown in Table 3 of this unit:

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).

Fludioxonil is currently registered for use(s) that could result in intermediate-term residential exposure and the Agency has determined that it is appropriate to aggregate chronic food and water and intermediate-term exposures for fludioxonil.

Using the exposure assumptions described in this unit for intermediate-term exposures, EPA has concluded that food and residential exposures aggregated result in aggregate MOEs of 200 for all infants < 1 year old; 180 for children 1-2 years old; and 220 for children 3-5 years old. These aggregate MOEs do not exceed the Agency's level of concern for aggregate exposure to food and residential uses. In addition, intermediate-term DWLOCs were calculated and compared to the EECs for chronic exposure of fludioxonil in ground and surface water. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect intermediate-term aggregate exposure to exceed the Agency's level of concern, as shown in Table 4 of this unit:

5. Aggregate cancer risk for U.S. population . EPA's Cancer Peer Review Committee (CPRC) classified fludioxonil as a Group D - not classifiable as to human carcinogenicity.

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 fludioxonil residues.

The methods used in the field trial studies were similar to a method validated by the Analytical Chemistry Branch. Since adequate method validation and concurrent recoveries were attained in the field trial studies, EPA concludes that the ACB validated method is appropriate for enforcement of the tolerances associated with this petition. No further validation is necessary.

Adequate enforcement methodology (high pressure liquid chromatography method AG-597B) 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 (MRLs) for residues of fludioxonil in/on the subject crops. Therefore, harmonization is not an issue.

Therefore, the tolerances are established for residues of fludioxonil, (4-(2,2-difluoro-1,3-benzodioxol-4-yl)-1 H -pyrrole-3-carbonitrile) in or on brassica, head and stem, subgroup 5A at 2.0 ppm; brassica, leafy greens, subgroup 5B at 10 ppm; carrot at 0.75 ppm; herb, fresh, subgroup 19A at 10 ppm; herb, dried, subgroup 19A at 65 ppm; longan, lychee, pulasan, rambutan, and spanish lime at 1.0 ppm; and turnip, greens at 10 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-2003-0135 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 September 2, 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-2003-0135, 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).

On November 16, 1990, President George Bush signed the Act into law. The Act addresses the rights of lineal descendants, Indian tribes, and Native Hawaiian organizations to Native American human remains, funerary objects, sacred objects, and cultural patrimony with which they are affiliated. Section 9 of the Act authorizes the Secretary of the Interior (“the Secretary”) to assess a civil penalty against any museum that fails to comply with the requirements of the Act [25 U.S.C. 3007]. Such penalties must be assessed according to procedures established by the Secretary through regulation. An interim rule establishing civil penalty procedures was published in the Federal Register on January 13, 1997 (62 FR 1820), and went into effect on February 12, 1997. A final rule establishing civil penalty procedures was published in the Federal Register on April 3, 2003 (68 FR 16354), and went into effect on May 5, 2003. As published, the final rule contains an error that needs to be corrected.

Need for Correction: The correction clarifies the amendatory instruction to make it clear that the final rule published in the Federal Register on April 3, 2003 (68 FR 16354) replaces the interim rule published in the Federal Register on January 13, 1997 (62 FR 1820).

I. Background II. Final Action III. Statutory and Executive Order Reviews A. Executive Order 12866 B. Executive Order 12988 C. Regulatory Flexibility Act D. Paperwork Reduction Act E. National Environmental Policy Act F. Executive Order 13132 G. Unfunded Mandates Reform Act of 1995 H. Treasury and General Government Appropriation Act, 1999 I. Background

This final rule amends the Department of the Treasury Acquisition Regulation (DTAR). The DTAR, as reissued, uses plain English to improve clarity and understanding; eliminates internal operating procedures that do not have a significant effect beyond Treasury; establishes the Treasury Mentor-Protégé Program and, eliminates coverage that is obsolete or duplicates the FAR. The DTAR is intended to be simple for contractors, offerors, and Treasury contracting personnel to use.

A proposed rule was published in the Federal Register (67 FR 76150-67156) on December 11, 2002, providing for a 30 day comment period. There were no comments received regarding the proposed rule.

This final rule will amend the Department of the Treasury Acquisition Regulation system. It uses plain English, eliminates internal operating procedures that do not have significant effect beyond Treasury, establishes the Treasury Mentor-Protégé Program, and eliminates coverage that is obsolete or duplicates the FAR.

This final rule is not a significant regulatory action for the purposes of Executive Order 12866 as supplemented by Executive Order 13132, and is not a major rule under 5 U.S.C. 804; therefore no review is required by the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB).

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, Treasury has completed the required review and determined that this final rule meets the relevant standards of Executive Order 12988 as supplemented by Executive Order 13132.

This final regulation does not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, and et seq. The analysis requirement of the Act does not apply if the agency certifies that the rule, if promulgated, will not have a significant impact on a substantial number of small entities. The Mentor-Protégé Program does apply to large business and small business firms that receive a form of incentive for assuming the role of mentor to small businesses, other small disadvantaged businesses, qualified HUBZone small businesses, small businesses owned and controlled by service disabled veterans, and small women-owned businesses. It is expected that the proteégeé entities would directly benefit from the forms of mentoring provided for in this rule.

The other revisions do not add any new requirements, but restate existing requirements in plain English and provide consistency with the FAR.

This reissued DTAR contains information collection requirements subject to the Paperwork Reduction Act (44 U.S.C. 3501, et seq. ) that were approved previously by OMB and assigned the contract numbers shown in DTAR Section 1001.106.

This final rule does not individually or cumulatively have a significant impact on the human environment, as determined by Treasury's regulations (10 CFR part 1021, subpart D) implementing the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq. ). Therefore, no environmental impact statement or environmental assessment is required pursuant to NEPA.

Executive Order 13132 requires when formulating and implementing regulations, legislation, and any other policy actions that have federalism implications, that agencies must follow prescribed principles and criteria. Treasury has determined that this final rule does not contain federalism implications and would not preempt State laws.

The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally requires a Federal agency to perform a detailed assessment of costs and benefits of any rule imposing a federal mandate with costs to State, local or tribal governments, or to the private sector of $100 million or more. This final rule would only affect private sector entities and the impact is less than $100 million.

Section 654 of the Treasury and General Government Appropriation, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any proposed rule that may affect family well being. This final rule does not have any impact on the autonomy or integrity of the family as an institution. Accordingly, Treasury concluded that it is not necessary to prepare a Family Policymaking Assessment.