This final rule is issued under Marketing Order No. 920 as amended (7 CFR part 920), regulating the handling of kiwifruit grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

This final rule revises pack requirements currently prescribed for California kiwifruit under the order. This rule: (1) Removes the requirement that the count must equal three times the size designation for shipments in volume filled containers in which the quantity is specified by count; (2) continues to suspend, for the 2003-04 season, the standard packaging requirement that requires volume filled containers of kiwifruit designated by weight to hold 22-pounds (10-kilograms) net weight of kiwifruit, unless such containers hold less than 10-pounds or more than 35-pounds net weight of kiwifruit; and (3) exempts the “Hort16A” kiwifruit variety from the “tightly packed” standard pack requirement. The Committee recommended these changes at its March 12, 2003, meeting. This rule is expected to help handlers compete more effectively in the marketplace, better meet the needs of retailers, and to improve grower returns.

Under the terms of the order, fresh market shipments of kiwifruit grown in California are required to be inspected and meet grade, size, maturity, pack, and container requirements.

Section 920.52(a)(1) and (3) of the order authorizes the establishment of pack requirements for California kiwifruit.

Section 920.302(a)(4) of the order's administrative rules and regulations outlines specific pack requirements for fresh shipments of California kiwifruit.

Section 920.302(a)(4)(iv) provides that for volume filled containers in which the quantity is specified by count, the count must equal three times the size designation in accordance with tolerances specified in 7 CFR 51.2328(c)(2) of the U.S. Standards for Grades of Kiwifruit (Grade Standards). For example, if the fruit has a size designation of “30” marked on the container, then three times the size designation or 90 kiwifruit must be packed into the container and the container must be marked with “90 count.”

During the early 1990's handlers packed kiwifruit into several styles of containers: trays, bins, consumer packs, and volume filled containers. (Volume filled containers are those in which kiwifruit are loosely packed without cell compartments, cardboard fillers, or molded trays). Volume filled containers were designated by size and also either net weight or count. It was a customary industry practice to pack the equivalent of three single layer trays into a volume filled container and to specify the quantity of the kiwifruit placed into the volume filled container by count.

In 1993, the Committee recommended and the USDA established a pack requirement under the order's administrative rules and regulations which specified that for shipments in volume filled containers in which the quantity was specified by count, the count must equal three times the size designation in accordance with tolerances specified in 7 CFR 51.2328(c)(2) of the Grade Standards, (58 FR 43243, April 16, 1993). This requirement was established to ensure that volume filled containers designated by size and count held a consistent number of kiwifruit.

During the 1993-94 season handlers realized that it was more labor intensive and more expensive to pack volume filled containers designated by count than by net weight. They also realized that the difference in the average FOB values for each type of volume filled container was negligible. Retailers were unwilling to pay a higher price for volume filled containers designated by count and handlers were unwilling to pack these more labor-intensive and more expensive containers, if they could not recoup the extra handling costs. As a result, the amount of kiwifruit packed into volume filled containers designated by count and size declined to 2 percent during the 1995-96 season. While kiwifruit handlers have not used volume filled containers designated by count and size since the 1995-96 season, they continue to use volume filled containers designated by net weight and size.

Recently, retailers have requested new, smaller containers of kiwifruit designated by count and size. Some handlers in the industry, including those that are packing a new variety, “Hort16A”, want the flexibility to pack these smaller containers of kiwifruit. These handlers are currently unable to meet retailer requests for smaller volume filled containers of kiwifruit, as the order's administrative rules and regulations require the count to equal three times the size designation in volume filled containers in which the quantity is specified by count. For example, if a retailer requests containers of Size 20 fruit with 50 kiwifruit in each container, the handler will not be able to meet the retailer's requirements because the order's administrative rules and regulations require that 60 kiwifruit (a count equal to three times the size designation) be packed into the container.

Thus, the Committee, at its March 12, 2003, meeting, unanimously recommended removing this requirement as it is obsolete and no longer meets the industry's needs. This relaxation in pack requirements is expected to enable handlers to compete more effectively in the marketplace and to improve grower returns.

Section 920.52(a)(3) of the order authorizes the establishment of weight requirements for containers of California kiwifruit.

Section 920.302(a)(4) of the order's administrative rules and regulations outlines pack requirements for fresh shipments of California kiwifruit.

Prior to the issuance of an interim final rule on August 22, 2002 (67 FR 54327), § 920.302 (a)(4)(v) specified that all volume filled containers of kiwifruit designated by weight had to hold 22-pounds (10-kilograms) net weight of kiwifruit unless such containers hold less than 10-pounds or more than 35-pounds net weight of kiwifruit. This standard packaging requirement was unanimously recommended by the Committee and established under the order's administrative rules and regulations by a final rule issued on October 25, 1994, (59 FR 53563).

During the 1994-95 season 52 percent of the total crop was packed into volume filled containers. The percentage of the total crop packed into volume filled containers increased to 85 percent during the 2001-02 season. In 2001-02, imports from the Northern hemisphere (Greece, Italy, and France) totaled approximately 17 percent of the U.S. market share. The majority of imported kiwifruit was shipped in 19.8-pound (9-kilogram) net weight volume filled containers, whereas the order limited California handlers to 22-pound (10-kilogram) net weight volume filled containers. Retailers do not differentiate between imported 19.8-pound (9-kilogram) and 22-pound (10-kilogram) net weight volume filled containers from California. Because buyers pay the same price for each container, the effect is not favorable for California handlers.

At its April 9, 2002, meeting, the Committee unanimously recommended and the USDA approved suspending the standardized packaging requirement of 22-pounds (10-kilograms) net weight for volume filled containers for the 2002-03 season. This suspension was implemented by an interim final rule published on August 22, 2002 (67 FR 54327) and will be in effect until July 31, 2003. This was made final on November 21, 2002 (67 FR 76140).

To date during the 2002-03 season, handlers shipped 85 percent of the crop in volume filled containers (73 percent in 22-pounds (10-kilograms) net weight volume filled containers, 12 percent in 19.8-pounds (9-kilograms) net weight containers, and less than 1 percent in volume filled containers of other weights).

At its March 12, 2003, meeting, the Committee discussed three options for volume filled containers: (1) Establishing a standard packaging requirement of 19.8-pounds (9-kilograms) net weight, (2) reestablishing a standard packaging requirement of 22-pounds (10-kilograms) net weight and (3) continuing the suspension of the standardized packaging requirement for the 2003-04 season, thus allowing flexibility to pack any net weight volume filled container. In its deliberations, the Committee discussed grower returns and the ability to meet buyer's preferences for alternate containers. Committee members mentioned that 10 percent more containers could be packed if the standard were set at 19.8-pounds (9-kilograms) net weight. Others mentioned that the increased number of containers will not offset the increased handler costs of packing more, smaller containers and could result in decreased grower returns. Many retailers do not differentiate between 19.8-pounds (9-kilograms) net weight volume filled containers and 22-pounds (10-kilograms) net weight volume filled containers and pay the same price for each. Thus, packaging 19.8-pounds (9-kilograms) net weight containers may not be beneficial for growers and handlers.

The Committee also discussed reestablishing the 22-pounds (10-kilograms) net weight container standard packaging requirement. Some Committee members believe that increased flexibility benefits growers and handlers, as handlers are able to meet buyer's preferences for alternate containers. Before making the change permanent, the Committee needs to gather more data to further evaluate the benefits of suspending standard pack requirements for another season, the 2003-04 season.

The majority of the Committee members agreed that the suspension of the standard packaging requirement for volume filled containers by net weight should be continued for the 2003-04 season. Of the twelve members present, eight voted for this change and four voted against it. Opponents of this recommendation preferred standard packaging, but could not agree whether the 22-pound (10-kilogram) or 19.8-pound (9-kilogram) net weight containers should be the standard. The majority of the Committee believes that handlers and growers will benefit by being able to meet buyer's preferences for alternate containers. Small and large growers and handlers are expected to continue benefiting from this change. This suspension will be in effect until July 31, 2004.

Section 920.52(a)(2) of the order authorizes the establishment of grade standards.

Section 920.302(a)(1) of the order's administrative rules and regulations states the minimum grade shall be at least KAC No. 1 quality.

Section 920.302(b) defines the term KAC No. 1 quality as kiwifruit that meets the requirements of U.S. No. 1 grade as defined in 7 CFR 51.2335 through 51.2340 of the Grade Standards, except that the kiwifruit shall be “not badly misshapen” and an additional 7 percent tolerance is provided for “badly misshapen” fruit. Section 51.2338(a) of the Grade Standards defines standard pack requirements, requires containers to be well filled; and requires the contents to be tightly packed, but not excessively or unnecessarily bruised by overfilling or oversizing.

The Grade Standard's “tightly packed” provisions were established under the order to ensure that the “Hayward” variety (the predominant kiwifruit variety produced in the production area) fits tightly into the tray-liner cups (55 FR 42179, October 18, 1990). Kiwifruit that is packed tightly into the cups of the tray-liners is less subject to movement and therefore less damage.

Recently, a new kiwifruit cultivar, the Actinidia chinensis “Hort16A” has been introduced in California and is expected to be harvested and sold commercially during the 2003-04 season. The “Hort16A” is referred to as a “gold” variety because the internal flesh is a yellow to gold color when fully mature. The “Hort16A” kiwifruit is more susceptible to bruising and injury and has a protrusion on the blossom end, referred to as a “beak.” Therefore, the “Hort16A” must be handled differently than the “Hayward” variety. Care must be taken during the packing process to protect the beak. To minimize damage, the “Hort16A” is packed into a special shallow molded tray with a notch for the beak. The “Hort16A” kiwifruit, when packed in this shallow tray, may not meet the “tightly packed” requirement for standard pack under the Grade Standards.

Therefore, the Committee, at its March 12, 2003, meeting, unanimously recommended an exemption for all “gold” kiwifruit varieties from the order's “tightly packed” requirement. However, the “Hort16A” with its unique “beak” is currently the only known commercially produced “gold” kiwifruit. Because it is not known whether other “gold” kiwifruit varieties will experience the same difficulty in meeting the “tightly packed” standard pack requirement, this final rule limits the exemption to the “Hort16A” variety.

This change is expected to enable handlers to be more competitive in the marketplace and to provide consumers with higher quality “Hort16A” kiwifruit.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

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

There are approximately 46 handlers of California kiwifruit subject to regulation under the marketing order and approximately 300 growers in the production area. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those whose annual receipts are less than $5,000,000, and small agricultural producers are defined as those whose annual receipts are less than $750,000. None of the 46 handlers subject to regulation have annual kiwifruit sales of at least $5,000,000. In addition, six growers subject to regulation have annual sales exceeding $750,000. Therefore, a majority of the kiwifruit handlers and growers may be classified as small entities.

This final rule revises pack requirements prescribed under the California kiwifruit order. This rule: (1) Removes the requirement that the count must equal three times the size designation for shipments in volume filled containers in which the quantity is specified by count; (2) continues to suspend, for the 2003-04 season, the standard packaging requirement that requires volume filled containers of kiwifruit designated by weight to hold 22-pounds (10-kilograms) net weight of kiwifruit, unless such containers hold less than 10-pounds or more than 35-pounds net weight of kiwifruit; and (3) exempts the “Hort16A” kiwifruit variety from the “tightly packed” standard pack requirement.

The Committee recommended these changes at its March 12, 2003, meeting. These changes are expected to help handlers compete more effectively in the marketplace, better meet the needs of retailers, and to improve grower returns. Authority for these actions is provided in § 920.52 of the order.

Section 920.302(a)(4) of the order's administrative rules and regulations outlines specific pack requirements for fresh shipments of California kiwifruit.

Section 920.302(a)(4)(iv) of the order's administrative rules and regulations provides that for volume filled containers in which the quantity is specified by count, the count must equal three times the size designation in accordance with tolerances specified in the Grade Standards listed in 7 CFR 51.2328(c)(2). For example, if the fruit has a size designation of “30” marked on the container, then three times the size designation or 90 kiwifruit must be packed into the container and the container must be marked with “90 count.”

During the early 1990's handlers packed kiwifruit into several styles of containers: trays, bins, consumer packs, and volume filled containers. Volume filled containers were designated by size and also by either net weight or count. It was a customary industry practice to pack the equivalent of three single layer trays into a volume filled container and to specify the quantity of the kiwifruit placed into the volume filled container as the count.

In 1993, the Committee recommended and the USDA established a pack requirement under the order's administrative rules and regulations which specified that for shipments in volume filled containers in which the quantity is specified by count, the count must equal three times the size designation in accordance with tolerances specified in 7 CFR 51.2328(c)(2) of the Grade Standards, (58 FR 43243, April 16, 1993). This requirement was established to ensure that volume filled containers designated by size and count held a consistent number of kiwifruit.

During the 1993-94 season handlers realized it was more labor intensive and more expensive to pack volume filled containers by count than by net weight. They also realized that the difference in the average FOB values for each type of volume filled container was negligible. Retailers were unwilling to pay a higher price for volume filled containers designated by count and handlers were unwilling to pack these more labor-intensive and more expensive containers, if they could not recoup the extra handling costs. As a result, the amount of kiwifruit packed into volume filled containers designated by count and size declined to 2 percent during the 1995-96 season. While kiwifruit handlers have not used volume filled containers designated by count and size since the 1995-96 season, they continue to use volume filled containers packed by net weight and size designation.

Recently, retailers have requested new, smaller containers of kiwifruit designated by count and size. Some kiwifruit handlers in the industry, including those that are packing a new variety, “Hort16A”, want the flexibility to pack these smaller containers of kiwifruit. These handlers are currently unable to meet retailer's requests for smaller volume filled containers of kiwifruit, as the order's administrative rules and regulations require the count to equal three times the size designation in volume filled containers in which the quantity is specified by count. For example, if a retailer requests containers of Size 20 fruit with 50 kiwifruit in each container, the handler will not be able to meet the retailer's requirements because the order's administrative rules and regulations require that 60 pieces of fruit (a count equal to three times the size designation) be packed into the container.

Thus, the Committee, at its March 12, 2003, meeting, unanimously recommended removing the requirement as it is obsolete and no longer meets the industry's needs. The Committee discussed alternatives to this change, including not removing this requirement from the order's administrative rules and regulations, but concluded that small and large growers and handlers will benefit from this change. This change will not affect volume filled containers packed by net weight and is expected to help handlers compete more effectively in the marketplace and to improve grower returns.

Section 920.302(a)(4) of the order's administrative rules and regulations outlines pack requirements for fresh shipments of California kiwifruit.

Prior to the issuance of an interim final rule on August 22, 2002 (67 FR 54327), § 920.302(a)(4)(v) specified that all volume filled containers of kiwifruit designated by weight shall hold 22-pounds (10-kilograms) net weight of kiwifruit unless such containers hold less than 10-pounds or more than 35-pounds net weight of kiwifruit. This standard packaging requirement was unanimously recommended by the Committee and established under the order's administrative rules and regulations by a final rule issued on October 25, 1994, (59 FR 53563).

During the 1994-95 season, 52 percent of the total crop was packed into volume filled containers. The percentage of the total crop packed into volume filled containers increased to 85 percent during the 2001-02 season. In 2001-02, imports from the Northern hemisphere (Greece, Italy, and France) totaled approximately 17 percent of the U.S. market share. The majority of imported kiwifruit was shipped in 9.8-pound (9-kilogram) net weight volume filled containers, whereas the order limited California handlers to 22-pound (10-kilogram) net weight volume filled containers. Retailers do not differentiate between imported 19.8-pound (9-kilogram) and 22-pound (10-kilogram) net weight volume filled containers from California. Because buyers pay the same price for each container, the effect is not favorable for California handlers.

At its April 9, 2002, meeting, the Committee, unanimously recommended and the USDA approved suspending the standardized packaging requirement of 22-pounds (10-kilograms) net weight for volume filled containers for the 2002-03 season. This suspension was implemented by an interim final rule published on August 22, 2002 (67 FR 54327) and will be in effect until July 31, 2003. This was made final on November 21, 2002 (67 FR 76140). To date, relaxation of these packaging requirements during the 2002-03 season enabled handlers to ship 73 percent of the crop in 22-pound (10-kilogram) net weight volume filled containers, 12 percent of the crop in 19.8-pound (9-kilogram) net weight containers and less than 1 percent in volume filled containers of other weights.

The Committee concluded that while suspending the standard packaging requirements for the 2002-03 season had enabled handlers to compete more effectively in the marketplace, it needs to gather more data to further evaluate the benefits of suspended standard pack requirements for another season, the 2003-04.

Therefore, the majority of the Committee members agreed that the suspension of the standard packaging requirement for volume filled containers by net weight should be continued for the 2003-04 season. Of the twelve members present, eight voted for this change, and four voted against it. Opponents of this recommendation preferred standard packaging, but could not agree whether the 22-pound (10-kilogram) or the 19.8-pound (9-kilogram) net weight container should be the standard. Small and large growers and handlers are expected to benefit from the continued suspension of the standard packaging requirements. The majority of the Committee believes that handlers and growers will benefit by being able to meet buyer's preferences for alternate containers. This suspension will be in effect until July 31, 2004.

The Committee discussed alternatives to this change including reinstating the 22-pound (10-kilogram) net weight standard packaging requirement for the 2003-04 season. Committee members also suggested two other alternatives. One alternative was to establish a standard packing requirement that will require volume filled containers of kiwifruit designated by weight to hold 19.8-pounds (9 kilograms) net weight of kiwifruit, unless such containers hold less than 10-pounds or more than 35-pounds net weight of kiwifruit. The other alternative suggested was to establish a standard packing requirement that requires volume filled containers of kiwifruit designated by weight to hold 19.8-pounds (9-kilograms) net weight of kiwifruit, unless such containers hold less than 15-pounds or more than 35-pounds net weight of kiwifruit. The Committee did not adopt these suggestions, as it believes that continuing the suspension of the standard packaging requirement of 22-pounds (10-kilograms) net weight for volume filled containers of kiwifruit designated by weight will allow handlers the flexibility to meet buyer container preferences and to increase sales. Further, the majority of the Committee believes that establishing standard packaging requirements for volume filled containers of kiwifruit packed by net weight may negatively impact grower returns.

Section 920.302(a)(1) of the order's administrative rules and regulations states the minimum grade shall be at least KAC No. 1 quality.

Section 920.302(b) defines the term KAC No. 1 quality as kiwifruit that meets the requirements of U.S. No. 1 grade as defined in 7 CFR 51.2335 through 51.2340 of the Grade Standards, except that the kiwifruit shall be “not badly misshapen” and an additional 7 percent tolerance is provided for badly misshapen fruit. Section 51.2338(a) of the Grade Standards defines standard pack requirements, requires containers to be well filled; and requires the contents to be tightly packed, but not excessively or unnecessarily bruised by overfilling or oversizing.

The Grade Standard's “tightly packed” provisions were established in the order to ensure that the “Hayward” variety (the predominant kiwifruit produced in the production area) fits tightly into the tray-liner cups (55 FR 42179, October 18, 1990). Kiwifruit that is packed tightly into the cups of the tray-liners is less subject to movement and therefore less damage.

As previously mentioned, a new kiwifruit cultivar, the Actinidia chinensis “Hort16A” has recently been introduced in California and is expected to be harvested and sold commercially during the 2003-04 season. The “Hort16A” is referred to as a “gold” variety because the internal flesh is a yellow to gold color when fully mature. The “Hort16A” kiwifruit is more susceptible to bruising and injury and has a protrusion on the blossom end, referred to as a “beak.” Therefore, the “Hort16A” must be handled differently than the “Hayward” variety. Care must be taken during the packing process to protect the beak. To minimize damage, the “Hort16A” is packed into a special shallow molded tray with a notch for the beak. The “Hort16A” kiwifruit, when packed in this shallow tray, may not meet the “tightly packed” requirement for standard pack under the Grade Standards.

Therefore, the Committee, at its March 12, 2003, meeting, unanimously recommended an exemption for all “gold” kiwifruit varieties from the order's “tightly packed” requirement. However, the “Hort16A” with its unique “beak” is currently the only known commercially produced “gold” kiwifruit. Because it is not known whether other “gold” kiwifruit varieties will experience the same difficulty in meeting the “tightly packed” standard pack requirement, this rule limits the exemption to the “Hort16A” variety.

This change is expected to enable handlers to be more competitive in the marketplace and to provide consumers with higher quality “Hort16A” kiwifruit.

The Committee discussed alternatives to this change, including exempting all kiwifruit packs from the “tightly packed” requirement, but did not adopt this suggestion because eliminating the requirement for the “Hayward” variety is unnecessary and “tightly packed” is still a pack standard desired by the industry for the vast majority of kiwifruit currently packed in California. It is anticipated that within the next 5 to 10 years more than 1,000 acres of “Hort16A” will be planted in California with production exceeding one million tray equivalents (one tray equivalent equals approximately 7 pounds). Small and large growers and handlers are expected to benefit from this change. These changes are expected to help handlers compete more effectively in the marketplace and to improve grower returns.

These changes relax pack requirements under the kiwifruit order. Accordingly, these actions will not impose any additional reporting or recordkeeping requirements on either small or large kiwifruit handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

As noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule. However, as previously stated, California kiwifruit must meet the “tight-fill” requirements, as specified in the U.S. Standards for Grade of Kiwifruit (7 CFR 51.2335 through 51.2340) issued under the Agricultural Marketing Agreement Act of 1946 (7 U.S.C. 1621 through 1627).

In addition, the Committee's meeting was widely publicized throughout the kiwifruit industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the March 12, 2003, meeting, was a public meeting and all entities, both large and small, were able to express their views on these issues.

A proposed rule concerning this action was published in the Federal Register on June 23, 2003 (68 FR 37097). Copies of the rule were mailed or sent via facsimile to all Committee members and kiwifruit handlers. Finally, the rule was made available through the Internet by the Office of the Federal Register and USDA. A 15-day comment period ending July 8, 2003, was provided to allow interested persons to respond to the proposal. No comments were received.

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

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

It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C. 553) because the fiscal period for kiwifruit begins on August 1, 2003, and these relaxations should be made as soon as possible. Further, handlers are aware of this rule, which was recommended at a public meeting. Also, a 15-day comment period was provided for in the proposed rule and no comments were received.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to all BAE Systems (Operations) Limited (Jetstream) Model 4101 airplanes was published in the Federal Register on April 15, 2003 (68 FR 18168). That action proposed to require inspection of the drive trunnion pins for the main landing gear (MLG) doors to determine the part number of the pins, and corrective action if necessary.

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

The FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

On July 10, 2002, the FAA issued a new version of 14 CFR part 39 (67 FR 47997, July 22, 2002), which governs the FAA's airworthiness directives system. The regulation now includes material that relates to altered products, special flight permits, and alternative methods of compliance. However, for clarity and consistency in this final rule, we have retained the language of the NPRM regarding that material.

After the proposed AD was issued, we reviewed the figures we use to calculate the labor rate to do the required actions. To account for various inflationary costs in the airline industry, we find it appropriate to increase the labor rate used in these calculations from $60 to $65 per work hour. The economic impact information below has been revised to reflect this increase in the specified hourly labor rate.

The FAA estimates that 57 airplanes of U.S. registry will be affected by this AD, that it will take approximately 2 work hours per airplane to accomplish the required actions, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be $7,410, or $130 per airplane.

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

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Boeing Model 767 series airplanes was published as a supplemental notice of proposed rulemaking (NPRM) in the Federal Register on February 24, 2003 (68 FR 8566). That action proposed to require replacement of the aileron control override quadrant with a modified unit. That action also proposed to revise the applicability of the original NPRM.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received. One commenter has a program in place to do the modification specified in the supplemental NPRM. Another commenter concurs with the contents of the supplemental NPRM and has no additional comments.

One commenter agrees that the replacement of the aileron control override quadrant with a modified unit that is not susceptible to corrosion, as specified in the supplemental NPRM, is necessary. However, the commenter states that it would have preferred that an additional immediate check of the fleet be added to the supplemental NPRM to identify any seized assemblies so that they could be replaced before a dormant failure became critical. The commenter adds that 18 months is a long time for airplanes to be exposed to the identified deficiency.

We do not agree that it is necessary to add an immediate check of the fleet to the final rule to identify seized assemblies of the aileron control override quadrant before accomplishment of the replacement. In developing the 18-month compliance time for the replacement of the aileron control override quadrant, we considered the effects of a jammed lateral system, combined with a seized override bearing (increased wheel load), and determined that such a compliance time would allow operators sufficient time to accomplish the replacement and would adequately address the unsafe condition. However, operators are always permitted to perform the actions earlier than the compliance time specified in an AD. No change to the final rule is necessary in this regard.

One commenter asks that the compliance time specified in the supplemental NPRM be extended from 18 months to 24 months or at the next C-check, whichever is later. The commenter states it has reworked four of its airplanes and submits the following supporting data:

• No signs of corrosion or seizure of bearings was present.

• Currently, limited quantities of compliant spares exist in industry.

• Costs and turnaround times far exceed the supplemental NPRM estimates.

Paragraph (a) of the supplemental NPRM specifies an 18-month compliance period to replace the aileron control quadrant with a modified unit. The commenter does not have “in house” capabilities to accomplish the retrofit of the aileron quadrants, nor is its machine shop utilized for heavy maintenance. Therefore, the quadrants must be sent to Boeing for modification and/or repair, which exceeds the specified turnaround time and costs.

We do not agree with the commenter's request to extend the compliance time to 24 months or the next C-check, whichever is later. With regard to parts availability, as stated above, we find that an 18-month compliance time will be adequate for a sufficient quantity of parts to be available. With regard to extending the compliance time to allow the replacement to be accomplished at a C-check, we have already considered factors such as operators' maintenance schedules in setting a compliance time for the required replacement and determined that 18 months is an appropriate compliance time in which the replacement may be accomplished during scheduled airplane maintenance for the majority of affected operators. Since maintenance schedules vary from operator to operator, it would not be possible to guarantee that all affected airplanes could be modified during scheduled maintenance, even with a compliance time of 24 months. In any event, we find that 18 months represents the maximum time wherein the affected airplanes may continue to operate without compromising safety. No change to the final rule is necessary in this regard.

One commenter asks that, as an alternate method of compliance to the required roller swage installation procedures done during the specified replacement, operators be allowed to stake the subject bearings per the Boeing Standard Overhaul Practices Manual (SOPM), Chapter 20-50-03.

We infer that the commenter requests this alternate method because it's easier to do; however, we do not agree with the commenter that the suggested alternative method of staking the bearings per the SOPM, instead of doing the roller swage installation procedures, can be done. The replacement bearings and the bearing lugs of the aileron control quadrant are specifically designed for roller swaging, not bearing staking. No change to the final rule is necessary in this regard.

One commenter asks that the Cost Impact section in the supplemental NPRM be changed. In addition to the supporting information provided in the Request To Extend Compliance Time section discussed previously, the commenter adds that two of the four aileron quadrant assemblies on its airplanes were damaged during the removal process. As a result of this damage, the assemblies were sent to Boeing for repair, at a cost of $2,816.67, with an estimated turnaround time of 45 days. Boeing indicated that the damage caused is common to this type of bearing housing when removed. Two new units were purchased by the commenter to replace the damaged units at a cost of approximately $13,000.00 per unit. The commenter notes that this cost is not specified in the referenced service bulletin, and adds that the supplemental NPRM should be re-evaluated for costs and work hours necessary for the replacement.

We have investigated the commenter's concerns regarding the cost information specified in the supplemental NPRM, and we do not agree with the request to re-evaluate the costs and work hours necessary for the replacement specified in the Cost Impact section of the supplemental NPRM. The Cost Impact section only includes the “direct” costs of the specific actions required, not costs associated with repair of parts damaged while performing the actions, costs of new parts to replace the damaged parts, or costs associated with the turnaround time for the repair. Such costs would be required regardless of AD direction, to correct an unsafe condition identified in an airplane and to ensure the airworthiness of that airplane, as required by the Federal Aviation Regulations. No change to the Cost Impact section in the final rule is necessary.

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

On July 10, 2002, the FAA issued a new version of 14 CFR part 39 (67 FR 47997, July 22, 2002), which governs the FAA's airworthiness directives system. The regulation now includes material that relates to altered products, special flight permits, and alternative methods of compliance. However, for clarity and consistency in this final rule, we have retained the language of the supplemental NPRM regarding that material.

There are approximately 836 airplanes of the affected design in the worldwide fleet. The FAA estimates that 443 airplanes of U.S. registry will be affected by this AD, that it will take approximately 10 work hours per airplane to accomplish the actions, and that the average labor rate is $60 per work hour. Required parts will cost approximately $146 per airplane. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be $330,478, or $746 per airplane.

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

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

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

On Thursday, April 3, 2003, the FAA proposed to revise part 71 of the Federal Aviation Regulations (14 CFR part 71) to create new Class E airspace upward from 1,200′ above the surface at Ambler, AK (68 FR 16227). The action was proposed in order to add Class E airspace sufficient in size to contain aircraft within a Terminal Arrival Area (TAA) while executing two new SIAPs for the Ambler Airport. The new approaches are (1) Area Navigation-Global Positioning System (RNAV GPS) Z Runway 36 original, and (2) RNAV (GPS) Y Runway 36 original. The proposed Class E airspace encompasses small and unusable pieces of Class G airspace that remained from Class E airspace actions in the past. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received, thus, the rule is adopted as proposed.

The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 of FAA Order 7400.9K, Airspace Designations and Reporting Points, dated August 30, 2002, and effective September 16, 2002, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be revoked and revised subsequently in the Order.

This revision to 14 CFR part 71 establishes Class E airspace at Ambler, Alaska. This additional Class E airspace is being created to accommodate aircraft executing new SIAPs and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at Ambler Airport, Ambler, Alaska.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA published this direct final rule with a request for comments in the Federal Register on May 23, 2003 (68 FR 28126) and subsequently published a correction in the Federal Register on June 3, 2003 (68 FR 33231). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on September 4, 2003. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on May 23, 2003 (68 FR 28121) and subsequently published a correction in the Federal Register on June 4, 2003 (68 FR 33579). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on September 4, 2003. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on May 23, 2003 (68 FR 28123) and subsequently published a correction in the Federal Register on June 4, 2003 (68 FR 33579). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on September 4, 2003. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on May 23, 2003 (68 FR 28127). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on September 4, 2003. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

On Monday, March 31, 2003, the FAA proposed to amend 14 CFR part 71 to modify Class E airspace at Kenton, OH, and revoke Class E airspace at Bellefontaine, OH, (68 FR 15388). The proposal was to modify controlled airspace extending upward from 700 feet above the surface of the earth to contain Instrument Flight Rules (IFR) operations in controlled airspace during portions of the terminal operation and while transiting between the enroute and terminal environments. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments objecting to the proposal were received. Class E airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005, of FAA Order 7400.9K dated August 30, 2002, and effective September 16, 2002, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the order.

This amendment to 14 CFR part 71 modifies Class E airspace at Kenton, OH, and revokes Class E airspace at Bellefontaine, OH. This will accommodate aircraft executing instrument flight procedures. The area will be depicted on appropriate aeronautical charts.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore this, proposed regulation—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Federal Register Document 03-15142, Docket No. FAA-2003-15360; Airspace Docket 03-ASO-7, published on June 16, 2003, (68 FR 35535), amends Class E5 airspace at Tuscaloosa, AL, changing the name of the Tuscaloosa VHF Omnidirectional Range/Tactical Air Navigation (VORTAC) to Crimson VORTAC. On July 15, 2003, the Tuscaloosa Municipal Airport name was changed to the Tuscaloosa Regional Airport. This action corrects the published docket.

Designations for Class E airspace areas designated as surface areas are published in Paragraph 6002 of FAA Order 7400.9K, dated August 30, 2002, and effective September 16, 2002, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

As published, the final rule contains an error which incorrectly identifies the name of the airport. Accordingly, pursuant to the authority delegated to me, the legal description for the Class E5 airspace area at Tuscaloosa, AL, incorporated by reference at § 71.1, 14 CFR 71.1, and published in the Federal Register on June 16, 2003, (68 FR 35535), is corrected by making the following correcting amendment.

This amendment to part 97 of the Federal Aviation Regulations (14 CFR part 97) establishes, amends, suspends, or revokes Standard Instrument Approach Procedures (SIAPs). The complete regulatory description of each SIAP is contained in official FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of the Federal Aviation Regulations (FAR). The applicable FAA Forms are identified as FAA Forms 8260-3, 8260-4, and 8260-5. Materials incorporated by reference are available for examination or purchase as stated above.

The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. The provisions of this amendment state the affected CFR (and FAR) sections, with the types and effective dates of the SIAPs. This amendment also identifies the airport, its location, the procedure identification and the amendment number.

This amendment to part 97 is effective upon publication of each separate SIAP as contained in the transmittal. Some SIAP amendments may have been previously issued by the FAA in a National Flight Data Center (NFDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP amendments may require making them effective in less than 30 days. For the remaining SIAPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This amendment to part 97 of the Federal Aviation Regulations (14 CFR part 97) establishes, amends, suspends, or revokes Standard Instrument Approach Procedures (SIAPs). The complete regulatory description on each SIAP is contained in the appropriate FAA Form 8260 and the National Flight Data Center (FDC)/Permanent (P) Notices to Airmen (NOTAM) which are incorporated by reference in the amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of the Federal Aviation's Regulations (FAR). Materials incorporated by reference are available for examination or purchase as stated above.

The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction of charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. The provisions of this amendment state the affected CFR (and FAR) sections, with the types and effective dates of the SIAPs. This amendment also identifies the airport, its location, the procedure identification and the amendment number.

This amendment to part 97 of the Federal Aviation Regulations (14 CFR part 97) establishes, amends, suspends, or revokes SIAPs. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained in the content of the following FDC/P NOTAMs for each SIAP. The SIAP information in some previously designated FDC/Temporary (FDC/T) NOTAMs is of such duration as to be permanent. With conversion to FDC/P NOTAMs, the respective FDC/T NOTAMs have been canceled.

The FDC/P NOTAMs for the SIAPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these chart changes to SIAPs by FDC/P NOTAMs, the TERPS criteria were applied to only these specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a National Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for all these SIAP amendments requires making them effective in less than 30 days.

Further, the SIAPs contained in this amendment are based on the criteria contained in the TERPS. Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making these SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

In the Federal Register of October 2, 2002 (67 FR 61773), 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 soluble dietary fiber from certain foods and reduced risk of CHD, to include an additional eligible source of whole oat beta-glucan soluble fiber, oatrim, the soluble fraction of alpha-amylase hydrolyzed oat bran or whole oat flour. 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 (21 U.S.C. 343(r)(4)). Section 403(r)(3)(B)(i) of the act states that the Secretary of Health and Human Services (the Secretary) (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 April 21, 2001, the Quaker Oats Co. and Rhodia, Inc., (the petitioners) jointly filed a petition requesting that the agency amend the “soluble fiber from certain foods and coronary heart disease health claim” at § 101.81 to include a fourth source of beta-glucan soluble fiber eligible for the health claim. The petitioners requested that this amendment be made “with specific reference to the Quaker-Rhodia group oatrim, known as Oatrim (BETATRIM)” (Ref. 1). FDA filed the petition for comprehensive review in accordance with section 403(r)(4) of the act on July 20, 2001.

FDA considered the relevant scientific evidence presented in the petition as part of its review of the scientific literature on soluble fiber from the soluble fraction of alpha-amylase hydrolyzed oat bran or whole oat flour (referred to as “oatrim”) and CHD risk. The agency summarized this evidence in the interim final rule and determined that based on the available evidence: (1) CHD continues to be a disease for which the U.S. population is at risk; (2) soluble fiber from oatrim when used at levels providing 0.75 grams of beta-glucan soluble fiber per serving is a food because it provides nutritive value; (3) oatrim when used at levels necessary to justify the health claim is safe and lawful; (4) there is a physiological equivalence of beta-glucan soluble fiber from oatrim and beta-glucan soluble fiber from whole oat sources such as oat bran and rolled oats; and (5) there is significant scientific agreement, among qualified experts, that oatrim with a beta-glucan content of up to 10 percent on a dry weight basis (dwb) and not less than that of the starting material (dwb) may reduce the risk of CHD (67 FR 61773 at 61775 to 61779). Consequently, FDA published an interim final rule amending the health claim on the relationship between soluble dietary fiber from certain foods and reduced risk of CHD (§ 101.81) to include oatrim, the soluble fraction of alpha-amylase hydrolyzed oat bran or whole oat flour with a beta-glucan soluble fiber content of up to 10 percent on a dwb and not less than that of the starting material (dwb) as a source of oat beta-glucan soluble fiber eligible for the health claim.

FDA solicited comments on the interim final rule. The 75-day comment period closed on December 16, 2002. The agency received no comments in response to the interim final rule. 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 § 101.81 to add oatrim, the soluble fraction of alpha-amylase hydrolyzed oat bran or whole oat flour with a beta-glucan soluble fiber content of up to 10 percent on a dwb and not less than that of the starting material (dwb) as a substance eligible for the 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 October 2, 2002. The interim final rule amended the regulation authorizing a health claim on the relationship between beta-glucan soluble fiber from whole oat sources and reduced risk of CHD to include oatrim, the soluble fraction of alpha-amylase hydrolyzed oat bran or whole oat flour with a beta-glucan content up to 10 percent dwb and not less than that of the starting material (dwb). We assessed the costs and benefits of the interim final rule in that Federal Register document (67 FR 61773 at 61781). 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 economic 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.

As this final rule does not make any changes to the interim final rule or our analysis included therein, this final rule does not impose any new costs on firms. Accordingly, we certify that this final rule will not have a significant economic impact on a substantial number of small entities. Therefore, under the Regulatory Flexibility Act, no further analysis is required.

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 oatrim and reduced risk of CHD 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 (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 rule and the interim final rule that preceded it, this provision operated to preempt States from imposing health claim labeling requirements concerning beta glucan soluble fiber from oatrim and reduced risk of CHD because no such requirements had been imposed by FDA under section 403(r) of the act. Under this final rule and the interim final rule that preceded it, States are preempted from imposing any health claim labeling requirements for beta-glucan soluble fiber from oatrim and reduced risk of CHD that are not identical to those required by these rules. 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 final rule has preemptive effect in that it would preclude States from adopting statues, issuing regulations or adopting or enforcing any requirements including state tort-law requirements, about beta-glucan soluble fiber from oatrim and reduced risk of CHD that are not identical to the provisions 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(e) 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 . There were no comments from State or local government entities 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 final rule are consistent with Executive Order 13132.

The following reference has been placed on display at 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.

1. The Quaker Oats Co. and Rhodia, Inc., “Oatrim (BETATRIM) Health Claim Petition,” HCN1, vol. 1, Docket No. 01Q-0313, April 12, 2001.

On May 30, 2003, the Coast Guard published a final rule (68 FR 32366) establishing safety zones, in 33 CFR § 165.1315, to provide for the safety of vessels in the vicinity of fireworks displays. One of these fireworks displays is the Oregon Symphony Concert fireworks display. The safety zone covers all waters of the Willamette River bounded by the Hawthorne Bridge to the north, Marquam Bridge to the south, and shoreline to the east and west. Entry into this zone is prohibited unless authorized by the Captain of the Port or his designee. The Captain of the Port Portland will enforce this safety zone on August 28, 2003 from 8:30 p.m. (PDT) until 9:30 p.m. (PDT). A rain date is scheduled for August 29. The Captain of the Port may be assisted by other federal, state, or local agencies in enforcing this safety zone.

On April 30, 2002, NHTSA published a Notice of Proposed Rulemaking (NPRM) to amend 49 CFR part 512, Confidential Business Information (part 512). The proposal was intended to make the regulation clearer and easier to follow, particularly for organizations or individuals who do not submit materials to the agency on a regular or frequent basis, and to update specific sections of the regulation to reflect developments in the law. The agency proposed to reorganize the provisions of part 512 and to use a question and answer format, designed to guide the reader through the procedural steps of making a claim for confidential treatment of business information. The NPRM also addressed a variety of procedural matters relating to such claims.

The agency sought comment on whether it should create a series of class determinations of information presumed not to cause substantial competitive harm, in addition to those classes already contained in Appendix B to Part 512 applicable to information the disclosure of which has been determined to cause substantial competitive harm. Although the final rule establishing the early warning reporting obligations had not yet been issued, the agency sought comment on whether to establish class determinations relating to the early warning reporting information.

The comment period closed on July 1, 2002. The agency received timely comments from various sectors of the automotive industry, including vehicle manufacturers, tire manufacturers, supplier and equipment manufacturers, and other interested parties. Comments were received from the following trade associations: the Alliance of Automobile Manufacturers (Alliance), the Association of International Automobile Manufacturers (AIAM), the Rubber Manufacturers Association (RMA), the Tire Industry Association (TIA), the Motor and Equipment Manufacturers Association and the Original Equipment Suppliers Association (MEMA/OESA), the Automotive Occupant Restraints Council (AORC), the Juvenile Products Manufacturers Association (JPMA), the Truck Manufacturers Association (TMA) and the Motorcycle Industry Council (MIC). Comments were received also from individual manufacturers: General Motors North America (GM), Cooper Tire (Cooper), Utilimaster, Blue Bird Body Company (Blue Bird), Bendix, Harley-Davidson Motorcycle Company (Harley-Davidson), WABCO North America (WABCO), Meritor-WABCO, and Workhorse Custom Chassis (Workhorse). Enterprise Rent-A-Car Company (Enterprise) and the Washington Legal Foundation (WLF) also filed comments.

On October 17, 2002, representatives of Public Citizen met with the agency and requested the opportunity to file comments three months after the closing of the comment period. As was noted in a memo to the docket, the agency informed Public Citizen that, consistent with its longstanding practice, the agency would consider late filed comments to the extent possible. 1 Public Citizen filed its comments on November 27, 2002.

Most of the comments supported the NPRM's approach to make Part 512 easier to read and to update the substantive description of what constitutes confidential business information to conform to developments in the law. Many commenters expressed concern over the number of copies the agency was considering requiring to be filed, the agency's request that certain submitters redact personal identifiers, and various other aspects of the proposal. Objections were also raised to the concept of establishing categories of information presumed not to cause substantial competitive harm if disclosed.

The majority of the comments responded to the agency's request that commenters address the early warning reporting requirements, which were proposed on December 21, 2001. See 66 FR 66190. Most of the business interests argued that the TREAD Act's disclosure provision in 49 U.S.C. 30166(m)(4)(C) created a categorical, statutory exemption for information submitted pursuant to the early warning reporting regulations, unless the Administrator makes certain findings specified in 49 U.S.C. 30167(b). This position was presented with the most detail in the comments filed by the RMA.

Many of the comments also expressed substantive concerns that the early warning data, given that it is “raw” and comprehensive in scope, could be misleading, available for misuse, and create public confusion. Many business interests presented arguments as to why the disclosure of specific elements of the early warning data would be competitively harmful within their particular sections of the motor vehicle or equipment industry. In addition, many commenters expressed concern that the public disclosure of the early warning information would be unfair to those companies that proactively seek out and collect customer feedback and field data.

The Alliance and Public Citizen did not adopt the view that the TREAD Act created a statutory exemption from disclosure. Public Citizen and the Alliance agreed with much of the analysis set forth in an internal departmental memo, dated October 27, 2000, and placed into the public docket on March 6, 2001. That memo expressed the view of NHTSA's Chief Counsel that the TREAD Act's disclosure provision did not create a statutory categorical exemption because of the manner in which it referenced 49 U.S.C. 30167(b). The memo concluded that the provision instead indicated a Congressional intent that NHTSA determine the confidentiality of the early warning reporting data in the same manner as it treated other data submitted to the agency; i.e. , under Exemption 4 of the Freedom of Information Act (FOIA), 5 U.S.C. 502(b)(4).

The Alliance suggested that, in accordance with the October 27, 2000 memo, the agency could apply either Exemption 4 (confidential business information) or Exemption 7 (investigative records), and further argued that either exemption allows the agency to retain the data as confidential. The Alliance asserted that Congress considered the early warning data to be pre-investigative screening information of the type NHTSA traditionally considers part of its internal deliberative process, and intended that the information be confidential until such time as a defect investigation is opened. The Alliance contended that the effect of Section 30166(m)(4)(C) was to modify a presumption in Section 30167(b) generally favoring disclosure.

Public Citizen argued that the TREAD Act did not create a categorical, statutory exemption from disclosure, and that a class determination that information does not presumptively create competitive harm should apply to information about consumer complaints, warranty data and property damage claims. Public Citizen further contended that it is reasonable to disclose each of the other categories of information because it is summary data by make and model and therefore, in Public Citizen's view, not competitively harmful. Public Citizen also asserted that reports of death and injuries and field reports are materials prepared as part of a defect investigation and therefore should be disclosed.

In the NPRM, we proposed changes to part 512 that were designed primarily to simplify and improve the clarity of the regulation and to update specific sections of the regulation to reflect current case law and legislation. The proposal was intended to ensure the efficient processing of requests for confidential treatment and the proper protection for sensitive business information received by NHTSA.

In a newly captioned Subpart A, the final rule includes the general provisions that establish the purpose, scope, and applicability of the regulation governing claims for confidential treatment, and that define the terms used in the regulation. Additionally, the final rule revises the definition of confidential business information to reflect developments in the law.

The final rule addresses the number of copies to be submitted to the agency when information is claimed to be confidential. The following must accompany any claim for confidential treatment: (1) A complete copy of the submission, (2) a copy of a public version of the submission and (3) either a second complete copy of the submission or, alternatively, only those portions of the submission containing the material relating to the request for confidential treatment, with any appropriate sections within the pages marked in accordance with this rule. Those filing comments to rulemakings must additionally submit a copy of the public version to the docket. The submissions must also be marked in accordance with this final rule.

The final rule has eliminated the requirement that submitters redact personal identifying information from their submissions. The final rule specifies in Subpart B the manner in which information submitted to NHTSA and claimed to be confidential must be marked and identifies the supporting documentation that must accompany each submission. Each page containing information claimed to be confidential must be marked. If an entire page is claimed to be confidential, the markings must indicate this clearly. If portions of a page are claimed to be confidential, they must be marked by enclosing them within brackets “[ ].”

The final rule clarifies issues relating to the duty to amend claims for confidential treatment. It also provides that, when confidentiality is claimed for information obtained by the submitter from a third party, such as a supplier, the submitter is responsible for obtaining from the third party the information that is necessary to comply with the submission requirements of Part 512, including the requirement to submit a certificate and supporting information.

We have decided against the creation of categories of information presumed not to cause substantial competitive harm for a variety of reasons, including the fact that such a presumption is duplicative of existing law. Class determinations are intended to reduce or eliminate the need for individual consideration of information that, by its nature, has been determined to cause substantial competitive harm if released. Class determinations alleviate the unnecessary burden of filing individual claims for confidential treatment. Information not subject to one of the class determinations is already presumed to be publicly available. Submitters must make individual claims relating to the information and carry the burden of showing that disclosure would either likely cause substantial competitive harm or, if the information is voluntarily submitted, that it is not ordinarily released to the public.

We nonetheless remain concerned that submitters may routinely seek confidential treatment for information the agency has consistently determined would not cause competitive harm if released. We will take appropriate action to discourage those who repeatedly file claims for confidential treatment despite our consistent rejection of similar requests.

Consistent with the analysis contained in the October 27, 2000 memo, we have determined that Section 30166(m)(4)(C) of the TREAD Act did not create a categorical statutory exemption pursuant to Exemption 3 of the FOIA applicable to all early warning reporting information. We have decided to consider the confidentiality of early warning reporting information pursuant to Exemption 4 of the FOIA, which exempts confidential business information from disclosure. We have created a series of class determinations covering those portions of the early warning reporting information we have determined are entitled to confidential treatment. We are permitting the information in these classes to be submitted and given confidential treatment without the filing of a part 512 justification and the accompanying certificate.

The agency proposed to include in Subpart A the general provisions that establish the purpose, scope, and applicability of the regulation governing claims for confidential treatment, and that define the terms used in the regulation. In addition, we proposed to revise the definition of confidential business information to reflect developments in the law.

The agency did not receive any comments objecting to these portions of the regulation, and is adopting the proposed changes to this subpart without modification.

The agency proposed to delineate in Subpart B the specific requirements that submitters must follow when they request confidential treatment for materials submitted to NHTSA. The NPRM described the information required to be submitted with a confidentiality request, how documents were to be marked, how many copies would be required, where materials were to be submitted and what supporting documentation would be needed. The comments raised no concerns regarding most provisions contained in proposed Subpart B, but several commenters objected to certain of its features.

Part 512 previously provided that submitters send to the Chief Counsel two copies of documents containing information claimed to be confidential and one copy of a public version of the documents, from which portions claimed to be confidential were redacted. Submitters were also to send a second copy of the public version of the document to the appropriate program office within NHTSA (typically those engaged in the development of motor vehicle safety—Enforcement, Rulemaking or Applied Research). Thus, the submitter sent the agency two confidential sets of documents and two public sets of documents.

We proposed changing the regulation to require the submitters to send to the Office of the Chief Counsel one confidential and one public set of submitted documents. The submitter could also send, along with the confidential set, any non-confidential information the submitter wanted NHTSA to consider along with its request. We also proposed that submitters send a confidential and a public set of the documents to the appropriate program office.

A number of comments characterized this proposal as requiring the creation of a “third version” of the submitted materials, and argued that it would significantly increase the time, expense, and difficulty associated with the exercise of the statutory right to protection of confidential commercial and financial information. JPMA and others suggested instead that the agency require submitters to furnish two copies of the complete submission and one or two redacted versions.

The agency did not intend to require the creation of any “third version” of submitted documents. The agency believes that some companies may find it easier to send the Chief Counsel only those material for which confidential treatment is sought, especially when the amount of material claimed to be confidential is small in comparison to the whole submission or when it is limited to documents that are easily severable from the whole. We have accordingly modified this provision to provide this option when submitting confidentiality claims.

Each claim for confidential treatment must be accompanied with the following: (1) A complete copy of the submission, (2) a copy of a public version of the submission and (3) either a second complete copy of the submission or, alternatively, only those portions of the submission containing the material relating to the request for confidential treatment, with any appropriate sections within the pages marked in accordance with this rule. Those individuals who are filing comments to rulemakings must additionally file an electronic or hard copy of the public version to the docket. All submissions must be appropriately marked in accordance with this final rule. Information for which the submitter requests confidential treatment may be submitted electronically or in an electronic format. Submitters should also provide any special software necessary to review the submitted materials.

The Chief Counsel will distribute the complete copy and the public version of the material to the program office for its use, and will use the additional marked copy or set of material to evaluate the claim for confidential treatment. This will provide the program office expeditiously with the information necessary for program activity and ensure that the program office is aware of which material is claimed to be confidential and which is not. This process will also provide the Chief Counsel with the information needed to consider the claim for confidential treatment. Generally, this will simply be the material for which confidential treatment is sought. The submitter may also include any additional information it wishes the Chief Counsel to evaluate in considering the claim.

The agency proposed to include in Part 512 a request that submitters remove personal information, such as names, addresses and telephone numbers of consumers, from the redacted version of submitted materials, to protect the privacy of individuals. The agency's policy has been to redact personal identifiers from all owner complaints (whether filed directly with the agency or from documents obtained from manufacturers in the course of a defect investigation) before placing them on the public record. The policy was designed to encourage the submission of information by protecting personal privacy concerns. The agency believes that consumers may be less willing to make complaints if their personal contact and other information are made publicly available.

In Center for Auto Safety v. National Highway Traffic Safety Administration , 809 F. Supp. 148 (D.D.C. 1993), the Center for Auto Safety sought release of the names and addresses of consumers who filed complaints directly with the agency. The court analyzed the possible effects of disclosure, balancing the interests of the individuals filing complaints with the asserted public interest in obtaining not only the substance of the complaint, which was publicly available, but also the identities of those filing them. The Court ruled that the privacy of the complainants will be recognized and protected because “there is no ascertainable public interest of sufficient significance or certainty to outweigh [a complainant's privacy] right” that would justify the release of this personal contact information provided by consumers. Id. at 150. Thus, the court upheld the agency's decision not to release the names of, and other personal information about, those voluntarily providing information to the agency. 2

The same policy concerns apply to personal identifiers on copies of information submitted by manufacturers. The judicially recognized privacy interest in protecting the personal identifiers and contact information when a consumer complains to the agency is at least as strong when applied to a consumer who complains directly to the company, and is in all likelihood unaware that the company may be required to send that communication to the government, which, in turn, will place it into a publicly accessible file.

Many comments, including those from TMA and the Alliance, objected to the proposed requirement that submitters remove personal information, pointing out that the legal burden of reviewing and redacting personal identifiers lay with the agency, not with the private submitters of the information. TMA also argued that relying on submitters to redact the information might lead to inconsistent approaches and cause confusion over what personal identifiers are or are not redacted.

In light of the comments, we have revised the proposed regulation to eliminate this requirement. The agency nonetheless would appreciate submissions, in addition to the complete copy, of redacted versions deleting any personal identifiers from any companies willing to provide them.

The proposal specified the manner in which information submitted to NHTSA and claimed to be confidential must be marked, and identified the supporting documentation that must accompany each submission. The NPRM intended to continue the requirement that each page containing information claimed to be confidential be marked as such. The markings would indicate if an entire page was claimed to be confidential or would identify with brackets any particular portions of a page claimed to be confidential.

This proposal was intended to avoid misunderstanding by establishing a system through which companies could provide the agency with clear direction as to which portions of the pages or documents were claimed to be confidential. To allow the pages with confidential information to be identified easily, the proposal provided also that each page claimed to contain confidential information must be numbered.

The RMA claimed that the combination of this feature with other parts of the proposed regulation would create an unreasonable burden and violate the Paperwork Reduction Act. The RMA was concerned with the combined effect of presumably requiring three versions of the same information, stamping each appropriate page with the word “confidential,” potentially redacting personal information, and the potential application of all the requirements to each quarterly submission of the early warning reporting information.

As noted above, we have made various modifications to address many of these concerns. We have clarified that we did not intend to require a so-called third version of each submission, have eliminated the proposal to require the redaction of personal identifiers, and have addressed the early warning reporting information through a series of class determinations covering those portions we have determined are entitled to confidential treatment under Exemption 4 of the FOIA.

In sum, we believe that this final rule simplifies the process for submitting confidentiality claims, allows for the more efficient handling of those claims within the agency and imposes no additional burden on those submitting the information. The final early warning reporting regulation likewise clarified those reporting obligations and, we believe, assuages many of the concerns raised by the RMA.

Those providing submissions electronically must either separate the material that is confidential from that which is not, or find an alternative method of marking those pages that are confidential. We note that companies increasingly are supplying information required as part of a defect or noncompliance investigation in electronic formats.

In Subpart C, the agency proposed to retain additional requirements from the existing regulation that submitters must follow when certain circumstances apply. The NPRM stated that we did not intend to change these requirements substantively, only to clarify the requirements and assemble them in a single subpart.

The requirements contained in this portion of the proposed rule covered such issues as the submitter's continuing obligation to amend information provided in support of a claim for confidential treatment, the manner in which confidential treatment is to be claimed for multiple items of information or for information submitted by a third party, the steps submitters must take if they need an extension of time to claim confidential treatment, and the consequences for noncompliance with part 512.

The final rule includes the requirement that submitters specify with their claim the length of time for which confidential treatment is sought. The information supporting the confidentiality request must include adequate justification for the time period specified in the claim.

The agency did not receive comments objecting to the proposed reorganization of these provisions into Subpart C, or to most of the specific requirements contained in this portion of the proposal. Objections were raised, however, regarding two provisions of the proposal:

The existing regulation provides that submitters of information “shall promptly amend supporting information” justifying a claim for confidential treatment “if the submitter obtains information upon the basis of which the submitter knows that the supporting information was incorrect when provided, or that the supporting information, though correct when provided, is no longer correct and the circumstances are such that a failure to amend the supporting information is in substance a knowing concealment.” 49 CFR 512.4(i). The NPRM proposed to revise this language to provide that submitters “shall promptly amend any information under § 512.4 of this part whenever the submitter knows or becomes aware that the information was incorrect at the time it was provided to NHTSA, or that the information, although correct when provided to NHTSA, is no longer correct.”

Several comments, including those submitted by TMA and AIAM, objected to this proposed change on the grounds that it would impose an unreasonable burden on submitters to monitor submissions constantly in order to avoid civil penalties. Workhorse expressed concern that, by removing the “knowing concealment” standard, the rule would subject submitters to civil penalties based on “constructive knowledge.” Business interests urged the agency not to adopt the proposed changes. Public Citizen, on the other hand, considers the “knowing concealment” standard “too weak” and believes it allows situations in which materials that are no longer confidential receive continued protection “long after the conditions justifying its confidentiality have been removed.”

We note that the agency requires the submitter to identify the length of time for which confidential treatment is sought. The agency will evaluate these requests when determining whether to grant confidential treatment and will release information once the time period for which confidential treatment is granted has lapsed. If the time period between the grant and the possible disclosure is long, the agency may seek reconfirmation, with appropriate support, that the information remains confidential.

The comments show that the proposed language could impose substantial and unnecessary burdens on submitters to monitor information previously submitted to the agency without providing additional benefit, since the agency is able to monitor the time for which confidential treatment is granted and is able to reassess a confidentiality grant should the information be requested. Accordingly, we have revised the final rule to clarify that the duty to amend relates to the supporting information submitted to justify the claim for confidential treatment, not to the substance of the reported information itself. In addition, we have revised the rule further so that, as before, the duty to amend is triggered only when circumstances are such that a failure to amend the supporting information would constitute a knowing concealment.

In the NPRM, the agency proposed that, when confidentiality is claimed for information obtained by the submitter from a third party, such as a supplier, the submitter is responsible for obtaining from the third party the information that is necessary to comply with the requirements of this regulation, including the requirement to submit a certificate of confidentiality.

The agency received several comments, all from suppliers, raising questions concerning this aspect of the agency's proposal. MEMA/OESA, AORC, Bendix, and WABCO, among others, argued that they should have the opportunity to request confidentiality directly with respect to information that they submit to their customers, and should be able to deal directly with the agency regarding information that is not available to the original submitter.

The agency believes these comments reflect a misunderstanding of the proposed regulation. The proposed regulation would not prevent suppliers from submitting information to the agency or seeking confidential treatment directly. This provision of the NPRM merely provided that if a person submits information that was obtained from a third party (such as an automobile manufacturer submitting information obtained from a supplier, a supplier submitting information obtained from a vehicle manufacturer, a contractor submitting information obtained from a subcontractor, or a similar situation involving wholly different parties), and if the submitter seeks confidential treatment for the information, it must obtain adequate supporting documentation to justify the claim. For example, it may be appropriate, or even necessary, to obtain and submit a Certificate in Support of the Request for Confidentiality that was prepared by the entity from which the information was obtained. In the absence of adequate supporting information, the agency will have no choice but to make the information public. Accordingly, this provision of the proposed rule is adopted without change.

NHTSA proposed in the NPRM to delineate the confidentiality standards and procedures used by the agency to render a confidentiality determination. We also proposed to state that the agency may render determinations involving classes of information and that submitters may request reconsideration if they disagree with an agency decision. We indicated that we were proposing to clarify these provisions and assemble them into a single subpart. We indicated also that we were proposing some substantive changes to these portions of the regulation.

The majority of the comments related to the submission and protection of early warning reporting information, but a few additional issues were also addressed:

Part 512 previously provided that, if a request for confidential treatment is denied in whole or in part, the agency would inform the submitter of its right to petition for reconsideration of the denial within ten working days after receiving notice of the agency's decision. The NPRM proposed no changes to this aspect of the rule. A number of comments, primarily from smaller businesses, requested that this period of time be extended.

Blue Bird, for example, asserted that small-to medium-sized companies should have “the opportunity to undertake the type of expanded review which the Company would need in cases where it must fully consider and present all possible arguments and justifications to protect what [it considers to be] proprietary, competitively sensitive information.” In addition, MEMA/OESA asserted that “requests for reconsideration where sensitive company documents are otherwise at risk will often require the input of many company employees * * * [and that] the ten-day period under the current and proposed rules * * * provides insufficient time.” These comments recommended that the period of time should be extended from 10 working days to 20 working days or 30 calendar days.

Upon consideration of the difficulties faced by small companies (Blue Bird) and the potential need to coordinate responses with widely dispersed employees (MEMA/OESA), the agency has decided to adopt the commenters' request to extend the period of time to request reconsideration of denials of confidential treatment rendered by the agency, from ten working days to twenty working days.

In related comments, citing sections 512.22 and 512.23 of the regulation, which appear in Subpart E and relate to modifications of confidentiality decisions and the public release of confidential information under certain limited circumstances, the WLF recommended that “the agency should [n]ever give less than ten (10) day advance notice to [a] company before releasing business documents.” Although not specifically raised in any other comments, the agency notes that several portions of part 512 provide submitters of information with ten working days within which to seek review of agency decisions.

For example, if a petition for reconsideration is denied in whole or in part under Section 512.19 (also in subpart D), or if the agency determines that an earlier determination of confidentiality should be modified under section 512.22 or that information previously determined or claimed to be confidential will be disclosed under section 512.23 (in subpart E), the submitter is advised that the information will be made available to the public not less than ten working days after the date on which notification of the agency's action is received.

The reasons that support an extension from ten working days to twenty working days for requesting reconsideration also justify the extension of these other time periods. Nonetheless, while we are revising the regulations to provide a period of twenty working days, rather than ten, in each of the sections referenced above, we are reserving the right to shorten these periods when the agency finds it to be in the public interest.

WLF asserted that the NPRM would provide “an inadequate amount of time to businesses to review and respond to FOIA requests submitted to the [agency] by third parties,” and recommended that the agency “provide the third-party FOIA request to the affected business within three (3) business days after receiving it * * * [and] copies of all correspondence between the agency and the FOIA requester.”

The agency notes that while the WLF's comments asserted that they concern notice to businesses upon the agency's receipt of a FOIA request for the information, the sections of the NPRM that WLF cites do not relate to these circumstances. Moreover, the agency does not believe that additional notice to submitters is needed at the time a FOIA request is received. Unlike many other Federal agencies, NHTSA does not wait until it has received a FOIA request before asking a submitter to justify the withholding of information. Instead, NHTSA's regulation provides that submitters must support their claims for confidential treatment at the time of submission. See 49 CFR 512.4. The agency would not expect, nor would we welcome, any additional materials from a submitter simply because a FOIA request has been filed. If a submitter disagrees with the agency's confidentiality determination (whether or not it is made in the context of a FOIA request), it can then request reconsideration. Therefore, there is no need to notify submitters if a FOIA request is received by the agency for submitted information.

Bendix suggested that Section 512.18 should be amended to “clarify” that information voluntarily provided to the agency subject to a claim for confidential treatment should be returned to the submitter if the agency denies the request for confidential treatment. Such information may be submitted as part of a rulemaking, research activity or a request for interpretation of our statutes and regulations.

We note that the Federal Records Act imposes limitations on the agency's ability to return information voluntarily submitted to the agency. That Act mandates the maintenance and preservation of federal records. 3 It does not contemplate the return of records to individual submitters. Those providing technical or market information as part of a rulemaking or in connection with the agency's research activity do so voluntarily and with knowledge of the standards applicable to the treatment of the data. Further, we believe we can respond to interpretation requests while maintaining the confidentiality of any information. Accordingly, we are not adopting this suggestion.

The NPRM proposed no specific changes to the already established class determinations applicable to information found to cause substantial competitive harm if released. Appendix B to part 512 currently contains three such determinations. These classes are blueprints and engineering drawings (under certain circumstances), future specific model plans, and anticipated vehicle or equipment production or sales figures (in some cases, for limited periods of time).

The NPRM sought comment with regard to whether the agency should also consider the establishment of class determinations applicable to categories of information that presumptively would not cause substantial competitive harm if released. The proposal suggested that such class determinations, if established, would be applicable only to compelled information. The agency did not intend that any such class determinations would be applicable to information voluntarily submitted to the agency. Such information is subject to disclosure under a different legal standard and only upon a showing that the company customarily discloses the information to the public.

We have decided against the creation of class determinations trying to address categories of information the release of which would be presumed not to cause substantial competitive harm. Such class determinations are unnecessary because all data the agency requires to be submitted is already presumptively subject to disclosure under FOIA unless shown to be subject to a FOIA exemption or covered by a class determination. Class determinations merely set forth those categories in which it is unnecessary to make individual submissions regarding the release of data that by its very nature would cause substantial competitive harm or impair the Government's ability to obtain the information in the future. In addition, we have concluded that some of the areas we posed as candidates for such treatment, such as testing conducted pursuant to “known” procedures, would require specific evaluation, thus rendering the class determination futile.

We nonetheless remain concerned that submitters may routinely seek confidential treatment for information the agency has consistently determined would not cause competitive harm if released. We will take appropriate action to discourage those who repeatedly file claims for confidential treatment despite our consistent rejection of similar requests.

In Subpart E, the proposal described the manner in which information claimed to be confidential would be treated by the agency. The proposal intended to continue the practice of providing that any information identified and claimed to be confidential would be protected from disclosure by the agency pending an agency decision, and would continue to be treated confidentially as if the submitter's request for confidential treatment were granted, except under certain limited circumstances.

The Alliance suggested that the final rule should explicitly state that information claimed to be confidential would remain confidential pending the agency's administrative determination that the information is not entitled to confidential treatment. The NPRM expressly proposed such protection during the administrative reconsideration process: “Upon receipt of a timely petition for reconsideration * * * the submitted information will remain confidential, pending a determination regarding the petition.” The Alliance also suggested an express regulatory provision maintaining the confidentiality of material pending any judicial review of the agency's final administrative action regarding confidential treatment.

The agency will continue to treat as confidential any information that remains subject to an administrative review. This includes both the initial determination and the agency's response to any petition for reconsideration. The agency declines, however, to adopt the Alliance's suggestion that we continue automatically to treat such information as confidential pending judicial review. The agency will make the information publicly available, consistent with its administrative decision, unless ordered otherwise by a court of competent jurisdiction. We recognize that if we were to make information available immediately following the denial of a petition for reconsideration, it would obviate the submitters' right to judicial review. Accordingly, the regulation will provide that the agency will allow the submitter twenty working days within which to obtain a court order ( e.g. , through a temporary restraining order) requiring the agency to maintain the confidentiality of information pending judicial review. We have chosen twenty working days to be consistent with the other time periods incorporated into this final rule. We also recognize that, while the basis and arguments for the confidentiality claim should have been fully developed by the time a submitter seeks judicial review of our determination, additional work may be necessary before a lawsuit is filed. In the absence of a judicial order to the contrary, information we have determined is not entitled to confidential treatment will be placed into the public record twenty working days after receipt of the agency's decision on reconsideration. As in other contexts, we reserve the right to shorten this period if we find that it is in the public interest to do so.

The proposal also provided that a grant of confidentiality may be modified under certain circumstances, including newly discovered or changed facts, a change in applicable law, a change in a class determination, or a finding that the prior determination was erroneous.

The proposal further incorporated certain statutory provisions under which information that has been claimed or determined to be entitled to confidential treatment may nonetheless be publicly released in some situations, including releases made to Congress, pursuant to a court order, to the Secretary of Transportation or to other Executive agencies in accordance with applicable law, with the consent of the submitter, and to contractors (subject to certain conditions).

The agency's existing regulation also listed three additional situations under which information determined to be confidential may nonetheless be disclosed to the public. The proposed rule explained that the Cost Savings Act and the Vehicle Safety Act have been repealed and their pertinent provisions have been codified under title 49 of the United States Code. Accordingly, the NPRM proposed to modify part 512 in a manner consistent with these statutory changes. We are adopting these revisions.

The NPRM sought public comment on how the agency should handle the data to be submitted under the new early warning reporting regulation. Although the final rule prescribing the early warning reporting requirements had not yet been issued, the agency received numerous comments with regard to that data.

Some business interests argued that the TREAD Act itself prohibits the disclosure of any early warning reporting information under Exemption 3 of the Freedom of Information Act (FOIA). Others argued that Exemption 4 of the FOIA, applicable to confidential business information, governs whether the information should be disclosed. All business interests contended that release of the early warning data is likely to cause substantial competitive harm and many pointed out that disclosure is likely to impair the agency's ability to obtain the material in the future. Public Citizen, while agreeing that Exemption 4 is applicable, argued that all the data should be released because it is summary in nature, is important to the identification of potential defects and is often released in the course of individual defect determinations.

As the Court of Appeal for the District of Columbia Circuit recently noted, the Freedom of Information Act is premised on public access to information within enumerated bounds ensuring that the government's proper functions are not impeded:

We have determined that the confidentiality of the early warning submissions should be reviewed under Exemption 4 of FOIA relating to confidential business information. Below we briefly set forth the early warning reporting requirements and the arguments made in favor and against disclosure. We then apply the principles set forth in National Parks & Conservation Ass'n v. Morton ( National Parks ), 498 F.2d 765 (D.C. Cir. 1974), and its progeny to each element of the early warning reporting information.

The bulk of the early warning reporting requirements apply to larger manufacturers of motor vehicles, and all manufacturers of child restraint systems and tires ( see 49 CFR part 579). In general, vehicle manufacturers must submit quarterly reports with regard to the following categories of vehicles, if they produce 500 or more vehicles of a category annually: light vehicles, medium-heavy vehicles and all buses, trailers, and motorcycles. The reporting information required of these manufacturers is summarized below:

In addition, these manufacturers must submit to the agency, on a one-time basis, historical data relating to the number of warranty claims/adjustments and field reports for each calendar quarter during the three-year period from July 1, 2000 through June 30, 2003. 4

Smaller manufacturers (as defined in the early warning rule), and manufacturers of original motor vehicle equipment or replacement equipment other than child restraint systems and tires, are required to submit reports containing information about claims and notices of deaths allegedly caused by their products, but are not required to submit other information.

The TREAD Act's disclosure provision applies to information provided under 49 U.S.C. 30166(m), which was added to the Vehicle Safety Act in the aftermath of hearings held in connection with NHTSA's investigation of Firestone ATX and Wilderness AT tires. That statutory section mandates that the agency initiate a rulemaking “to establish early warning reporting requirements for manufacturers of motor vehicles and motor vehicle equipment to enhance the Secretary's ability to carry out the provisions of this chapter.” 49 U.S.C. 30166(m)(1).

Section 30166(m)(3) sets forth the type of information Congress expected the rulemaking to include. Congress specifically directed the agency to require the submission of information relating to repair and/or replacement campaigns. The Act provides for the submission of data on claims submitted to the manufacturer for serious injuries (including death) and aggregate statistical data on property damage from alleged defects in a motor vehicle or in motor vehicle equipment that may assist in the identification of defects. 49 U.S.C. 30166(m)(3)(A). Congress also specifically provided for manufacturers to submit information relating to claims of death or serious injury alleged to be caused by a defect where the manufacturer receives actual notice. 49 U.S.C. 30166(m)(3)(C).

Congress recognized that additional types of information may be useful to the agency in carrying out its mission to identify safety related defects. In Section 30166(m)(3)(B), Congress gave the agency the authority to mandate the submission of “other data” in addition to the information described above “to the extent that such information may assist in the identification of defects related to motor vehicle safety in motor vehicles and motor vehicle equipment in the United States.” Pursuant to that authority, NHTSA's early warning reporting rule requires the submission of information relating, among others, to warranty claims, field reports and consumer complaints.

Congress also considered the extent to which the data submitted as part of the early warning reporting regulation should be subject to public disclosure or, alternatively, the extent to which it should be held confidential to enhance the agency's ability to identify potential safety defects. The TREAD Act's disclosure provision, Section 30166(m)(4)(C), reads:

In a letter to Secretary Slater dated October 20, 2000, days after passage of the TREAD Act, but before President Clinton signed the Act into law, Public Citizen objected to the disclosure provision. 6 Public Citizen was concerned that the provision would be construed to prohibit the disclosure of any early warning reporting data:

NHTSA's Chief Counsel considered and rejected this view of the TREAD Act's disclosure provision in an internal departmental memo, which was subsequently placed in the public record. That memo stated in part:

In its comments to this rulemaking, Public Citizen agreed that Section 30166(m)(4)(C) permits the agency to consider the early warning information under Exemption 4 of the FOIA. Public Citizen claimed that the effect of the provision is to alter a preexisting presumption in Section 30167(b) from one of disclosure to nondisclosure in the absence of the specified findings of the Secretary. Public Citizen also clarified that its “statements about the possible meaning of the bill were concerned with its potential for legal manipulation by the industry, i.e. , what in the worst case it could mean, rather than any suggestion of what it should or actually does mean in agency practice.”

The RMA argued that the TREAD Act provision falls within Exemption 3(b) of the FOIA, which negates disclosure when Congress has established particular criteria for withholding information or has referred to particular types of matters to be withheld. The RMA asserted that the reference in the disclosure provision to the rulemaking required by Section 30166(m)(1) is sufficient to bring the statute within the purview of Exemption 3. According to the RMA, the analysis prepared by the agency in the October 27, 2000 memorandum would render the statutory provision meaningless and violate a central tenet of statutory construction.

The RMA, as well as individual tire makers and many other manufacturers, further argued that the information required by the early warning reporting regulation would lead to substantial competitive harm if disclosed. In addition, they suggest that disclosure would lead to less candor from field personnel, resulting in less reliable information, and would discourage marketing efforts that lead to more complete and useful data.

The Alliance suggested that the provision assumes the confidentiality of the early warning reporting data because information cannot be disclosed under section 30167(b) unless it is otherwise confidential. The Alliance asserted that the information may be found to be confidential under either Exemption 4 or Exemption 7 of the FOIA. The Alliance submitted affidavit evidence to support its claim that disclosure of the early warning reporting information would lead to substantial competitive harm within the automotive industry. General Motors also submitted comments explaining how, in its view, substantial competitive harm is likely to result if the data were disclosed.

The TREAD Act mandated that NHTSA collect and maintain information in a manner not previously followed by the agency. Historically, the agency has received information relating specifically to a particular alleged defect or noncompliance, including engineering drawings, warranty claim information, customer complaints, field reports and lawsuit information. Manufacturers submitting information in response to the agency's information requests frequently seek confidential treatment for portions of the information submitted. The agency reviews those requests in accordance with Exemption 4 of the FOIA.

The early warning reporting regulation requires regular periodic submissions of data that relate not simply to alleged problems, but to all of a manufacturer's products. These submissions are not necessarily indicative of any problem needing investigation. We do not believe that the language of Section 30166(m)(4)(C), and the colloquy accompanying its enactment ( See Appendix A), expresses a Congressional mandate to treat all early warning reporting information confidentially. Instead, we believe that Congress expected the agency to review the confidentiality of early warning reporting information under Exemption 4 of the FOIA, but to apply Section 30167(b) in a more restrictive manner to that data than to other information received by the agency. 9

As many of the commenters pointed out, Section 30167(b) applies only after we have determined that information is entitled to confidential treatment. The provision permits the disclosure of confidential information whenever the Secretary, in his discretion, believes that the information can be useful in carrying out the agency's defect identification and remediation function. In contrast, the TREAD Act's disclosure provision does not permit the disclosure of confidential early warning reporting information unless the Secretary specifically finds that disclosure is necessary to carry out the agency's responsibility to identify potential safety-related defects. Thus, the basis for justifying disclosure of the early warning reporting information is significantly more stringent than that for all other material submitted to the agency and found entitled to confidential treatment under the FOIA.

Both Public Citizen and the Alliance construed the TREAD Act provision in a manner consistent with our analysis. Public Citizen stated that the provision “inverts existing law, as the current presumption of 49 U.S.C. § 30167(b) is to favor disclosure over and above the disclosure requirements of the Freedom of Information Act (FOIA).” 10 The Alliance similarly argued that Congress enacted the TREAD Act aware that the Vehicle Safety Act contained a provision generally favoring disclosure of information, even if it is otherwise confidential, when deemed necessary to assist in carrying out the agency's defect remediation function. According to the Alliance, Congress intended to neutralize that presumption and to disfavor disclosure of the early warning information:

As set forth in the October 27, 2000 memo, the agency disagrees with the assertion presented by the RMA and other business interests that the TREAD Act provision categorically prohibits the disclosure of any early warning reporting information pursuant to Exemption 3 of the FOIA. Our analysis of the arguments in favor of the application of FOIA Exemption 3, and our reasons for rejecting those arguments are amplified in Appendix A to this Final Rule. In sum, we believe the TREAD Act provision intended the Secretary initially to determine which information is entitled to confidential treatment as confidential business information, and, if so and only then, to consider whether disclosure is nonetheless necessary for the agency to fulfill its responsibilities to detect and enforce the laws governing the recall of vehicles and equipment containing safety related defects.

Consistent with the October 27, 2000 memo, we have determined that the confidentiality of the early warning reporting information should be construed under Exemption 4 of the FOIA. Exemption 4 protects information from disclosure that are “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. 552(b)(4). Information is confidential if its disclosure is likely “(1) to impair the Government's ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.” National Parks, 498 F.2d at 770. See also Center for Auto Safety v. National Highway Traffic Safety Administration ( CAS v. NHTSA ), 244 F.3d 144, 147-48 (D.C. Cir. 2001) (discussing application of Exemption 4 to mandatory submissions). 11

Business interests contended that the early warning reporting information is entitled to protection under both prongs. They argued that early warning submissions would provide insight into the field experience and performance of a submitter's entire product line. Business enterprises were concerned that this information could then be analyzed by competitors to assess various factors, such as a submitter's experience with a particular supplier, production cycles, and the reliability of that submitter's products. Many of the commenters also pointed out that the disclosure of information may deter candor and discourage efforts to obtain reliable information from the field.

The RMA asserted that disclosure of early warning reporting information would harm individual competitors. The Alliance echoed these concerns and emphasized that the information would be valuable to competitors, particularly within the context of competition among its member companies, aftermarket parts manufacturers, potential new entrants, and franchised dealers. Many commenters pointed out that the early warning reporting information constitutes a unique and comprehensive compilation of information not otherwise available, and, while subject to misinterpretation by the public, is especially valuable to competitors.

The Alliance submitted affidavit evidence with its comments from an automotive marketing consultant to support its claim that the early warning reporting information relates to issues of importance to new car buyers, and therefore that the material is likely to be used (and potentially misused) in the competitive marketplace. The Alliance pointed out that the most significant factors cited by automobile consumers when choosing a vehicle relate to reliability, quality and dependability—all factors upon which the early warning reporting information is likely to shed some light.

The Alliance and others expressed concern over the potential misuse of the early warning reporting information, either by competing companies or others who may draw conclusions from the data that, according to the Alliance and others, may be unwarranted. The Alliance stated that in addition to “[t]he unfairness of subjecting the submitting manufacturers to the competitive harm that would flow from the disclosure of [early warning information],” any comparison of this information by the public would not be valid because of the differences in warranty periods among manufacturers.

GM reiterated this concern. Workhorse similarly wrote that disclosure of early warning information would create “a serious risk that the public will be misled by disclosing such raw, unverified data” and lead to “consumer confusion and manufacturer harm.” The RMA, while arguing that the potential misuse should support a blanket prohibition from disclosure, also asserted that the early warning reporting information is commercially valuable, and that its value is directly related to the extent of its confidentiality.

The Alliance recognized and did not take issue with NHTSA's current practice of releasing similar types of information submitted during specific defect investigations, but argued that this “does not justify the release of the comprehensive compilations of information” collected under the early warning reporting rule. The Alliance explained that “[a] limited release of information that is relevant to, and specific to, an individual defect investigation is much different from a competitive standpoint than the automatic release of the continually collected, full compendium of quality and customer satisfaction information that is represented by the complete ‘early warning’ submission each quarter.”

Because of the comprehensive nature of the early warning information, the Alliance argued that these submissions “should * * * be protected by a class determination presuming their confidentiality and * * * should not have to be accompanied by a traditional part 512 justification with each quarterly submission.” The Alliance added that NHTSA's “long-standing practice of releasing information limited in terms of scope and timeframe related to consumer complaints, warranty claims, property damage claims, field reports, etc., when this information has been submitted in connection with an individual, specific defect investigation does not defeat the presumptive confidentiality of the comprehensive collection of such information.”

AIAM asserted a similar argument in favor of protecting early warning information, claiming that its main point of contention “lies with a comprehensive disclosure of all, unscreened early warning information.” The AIAM added that “we recognize that, in appropriate instances, portions of the early warning information could still be disclosed to the public.” AIAM explained that such releases could occur “after NHTSA has processed and evaluated early warning information and decided to pursue an investigation about a particular vehicle/component.”

GM also distinguished between the disclosures that NHTSA currently makes during defect investigations and the disclosures that would occur if the class determinations the agency proposed for warranty information were made. The company explained that its responses to agency information requests “often include warranty data for a limited number of makes, models, and years.”

Public Citizen argued that most of the information to be submitted under the early warning reporting rule is summary in nature and not specific enough to qualify for confidential treatment. Public Citizen also contended that because information to be submitted is similar or identical to the type of information submitted as part of a defect investigation, it should be treated as it currently is in a defect investigation. Public Citizen noted that the agency had speculated early in the development of the early warning reporting regulation that it thought manufacturers may not seek confidential treatment of the early warning reporting information.

We believe that the information submitted in the course of a defect investigation is qualitatively and quantitatively different from the comprehensive compendium of pre-investigation information to be submitted under the early warning reporting rule, and further that the competitive harm caused by the disclosure of some of the early warning reporting data is substantial. While the early warning reporting information will generally not be as specific as the data submitted during a defect investigation into a defined and particular problem, each company must provide data with regard to each product it manufacturers. The information relating to certain elements of reporting provides specific information that competitors are likely to find valuable and, at the same time, provides comparative data across each manufacturer's entire product line.

The U.S. Court of Appeals for the D.C. Circuit has also recognized that a collection of information may be found likely to cause substantial competitive harm even if some of the individual pieces of data are not independently entitled to confidential treatment. See Trans-Pacific Policing Agreement v. United States Customs Service , 177 F.3d 1022 (D.C. Cir. 1999). 12 See also Center for National Security Studies, et. al. v. U.S. Dept. of Justice , 331 F.3d 918 (D.C. Cir. 2003) (finding that Exemption 7 protects a comprehensive list of names and other personal information even though individual pieces of information have been otherwise revealed). We further note that the D.C. Circuit has acknowledged that potential consumer misuse, with competitive consequences, is a legitimate factor to consider when determining the confidentiality of the information required to be submitted to the agency. See Worthington Compressors v. Costle , 662 F.2d 45, 52 n.43 (D.C. Cir. 1981)(trial court should consider “whether competitors or consumers may misuse the information to the detriment” of the submitters' competitive positions). 13

NHTSA has consistently recognized the importance of providing accurate (and complete) information to the public about motor vehicle safety. The agency issues Consumer Advisories to help instruct consumers on the proper use of automotive products and encourages the public to refer to its New Car Assessment Program (NCAP) when choosing a vehicle to purchase. In developing the NCAP program, the agency expressed its belief that “if consumers have valid comparative information on important motor vehicle characteristics, they will use that information in their vehicle purchase decisions.” See 52 FR 31691 (Aug. 21, 1987). The agency has even rescinded certain aspects of its Consumer Information programs after concluding that the data may mislead consumers and, therefore, will not provide valuable safety information. See 60 FR 32918 (June 26, 1985).

Some of the commenters also raised the possibility that NHTSA's release of early warning information would impair both the agency's ability to obtain this information in the future and the quality of the information that the agency receives. For example, AIAM noted that “[d]espite the manufacturer's intent to the contrary, individuals who prepare field reports may be less thorough or candid if they know that their reports will be available to the general public and not just to experienced, sophisticated analysts employed by the manufacturer and the government.” Similarly, TIA asserted that, under the proposed presumptive categories, submitters “will produce the bare minimum required.” TIA added that if the information were protected, submitters “will be more likely to provide robust amounts of data.”

The purpose of the TREAD Act's mandate to develop a regulation requiring the submission of the early warning data to the agency is made clear in the language of the law itself. The purpose of the early warning reporting regulation is “to enhance the Secretary's ability to carry out the provisions of this chapter,” 49 U.S.C. 30166(m)(1), which includes reducing both the number of traffic accidents and the fatalities and injuries arising from them. (Emphasis added). The Secretary has delegated those responsibilities to NHTSA. See 49 CFR 501.2. The agency's ability promptly to identify safety related defects would not be “enhanced” if disclosure of all or part of the data diminishes the volume and/or reliability of the information, nor would the public interest in motor vehicle safety be served if disclosure has the result of discouraging manufacturers from being responsive to consumer concerns that may relate to motor vehicle safety or imposing greater costs on consumers who need to address such concerns. 14 Therefore, we must consider whether the disclosure of each reporting element has the potential to impair our early detection of possible safety related defects.

The Alliance argued that all early warning data are entitled to confidential treatment under Exemption 4, although both it and General Motors placed particular emphasis on the confidential nature of warranty information. Conversely, Public Citizen argued that all of the early warning data should be categorically considered public in order to achieve what it perceives to be the purpose of the TREAD Act—that is, to give the public complete access to the data required pursuant to the TREAD Act so that the public can make its own decisions relating to products. Public Citizen contended that some Members of Congress voted for the TREAD Act only because they believed the information required by it would be publicly available, citing unreported conversations between NHTSA's and Congressional staff. 15 Public Citizen also argued that business interests failed to establish that early warning reporting submissions qualify for blanket confidential treatment under Exemption 4.

We do not believe that Exemption 4 should be applied to the early warning reporting information on a wholesale basis, whether in favor or against disclosure. Instead, we will consider the application of Exemption 4 to each “reporting element” to be submitted under the early warning reporting regulation. In doing so, we consider whether the disclosure of each element of information is either likely to cause substantial competitive harm or likely to impair the agency's ability to obtain necessary information in the future (and thereby impair an important government function). An analysis of the case law applying National Parks and its progeny, and discussing the impairment prong in particular, is included as Appendix B.

Congress provided for the agency to collect from manufacturers reports of safety related recalls and campaigns conducted outside the United States, and reports relating to claims for deaths and serious injuries. 16 These mandates grew directly from information arising from the Ford/Firestone tire problem—reports of foreign safety related service actions and a plethora of lawsuits, neither of which had been reported to the agency. Congress also directed the agency to collect aggregate statistical information on property damage claims and authorized it to collect any other data that would assist the agency in its efforts to identify safety related defects in the field.

The purpose of the early warning reporting rule is to ensure that the agency has information from which it can detect potential safety problems and investigate them in a timely manner. We are concerned that our decisions on whether information will be disclosed could discourage manufacturers from collecting the information in the first instance, thereby reducing the information available to the agency to serve this critical function. We are also worried that the public interest in motor vehicle safety will be adversely affected if disclosure has the result of causing manufacturers to be less responsive to consumer safety concerns or to impose greater costs on consumers who need to address problems with their vehicles and equipment, thereby reducing the likelihood of repairing potential safety issues.

The case law construing Exemption 4 makes clear that, while the functioning of our early warning defect detection program is an appropriate consideration when construing the confidentiality of the data, assertions that the data may be useful in a broader public context is not. ( See Appendix B) We must consider whether each element required to be submitted pursuant to the early warning reporting regulation is entitled to confidential treatment either because its disclosure will likely cause substantial competitive harm or because its disclosure will likely impair our ability to obtain in the future information important to our early warning defect detection program.

The early warning reporting rule requires certain manufacturers to submit the number of vehicles, tires and child restraint systems, by make, model, and model (or production) year, produced during the model year of the reporting period and the prior nine model years (prior four years for child restraint systems and tires). The agency previously noted in the early warning reporting NPRM that it has generally granted confidential treatment to production data on child restraints and tires submitted to NHTSA, but that light vehicle production numbers are generally available to the public through the automotive press and have generally not been granted confidential status.

Many business interests discussed their efforts to maintain the confidentiality of their production figures. Harley Davidson and MIC stated that production numbers by model have never been generally available in the motorcycle industry. Cooper Tire submitted an affidavit, further confirmed through RMA's comments, with regard to the competitive harm that disclosure of otherwise confidential production numbers would have in the tire industry. JPMA argued that disclosure of these data would provide new entrants and competitors in the child restraint industry with information about production capacities, sales and market performance not otherwise available in the absence of considerable investment in market research. Bluebird (buses, school buses and motor homes), Utilimaster (final stage walk-in vans and freight bodies for commercial use) and the AORC (occupant restraint systems and other components) also each stated that production numbers in their segment of the industry are confidential and likely to lead to substantial competitive harm if released.

The comments substantiate that production numbers in many sectors of the automotive and equipment industries are competitively protected information, revealing otherwise unobtainable data relating to business practices and marketing strategies. Production numbers for manufacturers other than light vehicle manufacturers have been treated confidentially in the past and their disclosure is likely to cause substantial competitive harm to the businesses engaged in these industries. Accordingly, we are establishing a class determination applicable to such information.

The early warning reporting rule requires all vehicle and equipment manufacturers, including those producing less than 500 vehicles annually, to report certain information about each incident involving a death that occurred in the United States that is identified in a claim against and received by the manufacturer. They must also report information about incidents involving a death in the United States that is identified in a notice received by the manufacturer alleging or proving that the death was caused by a possible defect in the manufacturer's product. Finally, they must report on each death occurring in a foreign country that is identified in a claim against and received by the manufacturer involving the manufacturer's product, if it is identical or substantially similar to a product that the manufacturer has offered for sale in the United States.

Certain manufacturers are also required to report specified information about each incident involving an injury that occurred in the United States that is identified in a claim against and received by the manufacturer, or that is identified in a notice received by the manufacturer alleging or proving that the injury was caused by a possible defect in the manufacturer's product.

In general, the information that must be reported includes, for each claim or notice: the make, model, model year and Vehicle Identification Number of the vehicle involved, the date of the incident, the number of deaths and/or injuries involved, the state or foreign country in which the incident occurred, and each system or component that is referred to in the claim or notice. In addition, the larger vehicle manufacturers and tire manufacturers must report the numbers of claims for property damage that occurred in the United States that involve certain specified components and systems, regardless of the amount of such claims.

Industry commenters, such as TMA and MEMA/OESA, alleged that release of death and injury data will result in substantial competitive harm. Public Citizen claimed that such reports do not reveal detailed competitive information, but rather reveal only summary information about the incidents reported.

The submissions relating to claims and notices of death, personal injury or property damage involve a collection of information, many of the pieces of which are publicly available. While the data are not generally available to the public in this type of compilation, the disclosure of this collected information is not likely to reveal business strategies or other data that can be used competitively. These kinds of claims tend to be more historical than other types of information required by the early warning reporting regulation, with any apparent trends arising over longer periods of time. Given the nature of the data, we consider it unlikely that information about claims of death, personal injury or property damage will lend itself to cross-company comparison. We further note that the claims about a particular issue against a particular manufacturer, and in particular a developing set of claims, often receive media attention and are already in the public domain.

Nor are we concerned that disclosure will detract from the future availability or reliability of this information. Manufacturers receive claims based on incidents occurring in the field, not as the result of proactive efforts to obtain data or customer feedback. They are required under 49 CFR part 576 to retain this information and do not have the option to refuse to amass it. Further, the required information relating to these claims does not involve subjective determinations or require companies to make any admissions relating to facts or legal conclusions in dispute. The reports simply reflect the existence of allegations made with regard to events that occurred in the field.

For these reasons, we have decided not to create a class determination to cover the early warning reporting information relating to claims and notices of death or personal injury, or property damage claims. We have determined that release of that data generally will neither lead to substantial competitive harm nor impair our ability to obtain such information in the future.

Manufacturers of more than 500 vehicles per year and tire manufacturers must report quarterly the number of warranty claims (adjustments for tire manufacturers), including extended warranty and good will, they paid that involved certain specified components and systems and that arose in the United States. Manufacturers of child restraint systems must combine these with the number of reportable consumer complaints. In addition, these manufacturers must provide similar historical information relating to warranty claims paid during each calendar quarter from July 1, 2000 to June 30, 2003. The information is provided on a make/model basis and categorized with reference to the twenty-two categories defined as part of implementation of the early warning regulation.

Public Citizen argued that the information is summary in nature and typical of that generally provided as part of particularized defect investigations. Conversely, almost all the corporate commenters decried the potential disclosure of warranty data claims as the revelation of vital competitive information. Comments from the Alliance and Cooper Tire included affidavits providing evidence relating to the competitive harm that would be associated with the disclosure of warranty data within the light vehicle and tire industry, respectively.

As suggested by the affidavit from AutoPacific, Inc., submitted by the Alliance, knowledge of the warranty experience of one of the specified components or systems on a make/model level can provide other manufacturers with information about the reliability of a component or system not otherwise available to them, except perhaps through extensive investment in market research. GM offered the following example:

General Motors also makes the further point that warranty cost information is critical in the competitive automotive marketplace. While particular warranty information (such as that submitted as part of a particular defect investigation) does not reveal a company's cost structure, when aggregated by make, model and model year and applied across systems, a cost index is created. As GM notes, cost structure information has consistently been considered data likely to cause substantial competitive harm if released.

Cooper Tire raised concerns that competitors could mischaracterize the data and use it to their competitive advantage. In an affidavit submitted to the docket, Cooper Tire's expert explained that the release of “a few statistics, such as the warranty adjustment rate, without the complete background behind those statistics could lead to a very misleading picture of tire performance.” The company indicated that the differences between warranties among otherwise identical tire lines sold to different types of users “could lead to erroneous inferences about tire safety which, in turn could lead to erroneous and justified competitive harm.” Many other commenters echoed this same concern, asserting that because warranty practices differ and because the raw data do not reflect any technical evaluation, the data can be used and abused competitively.

In addition to the comments filed in the docket, additional public information illustrates the extent to which the industry as a whole relies on and uses sensitive warranty information. For example, GM uses its warranty data to help it pinpoint problem areas and to help it reduce its warranty costs. See, e.g. , Gregory L. White, “GM Takes Tips from CDC to Debug its Fleet of Cars,” Wall St. J., April 8, 1999, at B1 (noting GM's adaptation of the epidemiological system used by the Centers for Disease Control and Prevention to warranty issues) and “A Message to Dealers Regarding the Ford Recall of Firestone Wilderness AT Tires and General Motors Continued Use of Firestone Tires on its Vehicles” (May 25, 2001)(stating that GM and Firestone tire engineers “are on site at GM's tire and wheel laboratory two days a week” to “monitor tire warranty data”), published on GM's Web site at http://www.gmfleet.com.

The comments and affidavits submitted support a conclusion that the warranty information required by the early warning reporting rule—that is, the number of claims associated with specific components and systems broken down by make, model and model year (with slightly different breakouts for tires and child restraint systems)—is likely to provide competing manufacturers with sufficient information about the field experience of those components and systems to provide commercial value to competitors who may be deciding whether to purchase similar components, the price at which to purchase those components and which suppliers to choose.

While manufacturers are likely to explore the practices and policies of their competitors when reviewing any publicly available warranty claims information, the public is more likely simply to rely on generic cross-company comparisons. The warranty claims information may be used as part of vehicle comparisons, even though the warranty terms and conditions and corporate warranty practices may differ. As a result, the potential for the warranty claims information to give rise to misleading comparisons and cause substantial competitive harm is also strong.

For the reasons set forth above, we have determined that the early warning reporting of warranty information, both as regards the quarterly reports and the one-time seeding of the system, is entitled to confidential treatment because its disclosure is likely to cause substantial competitive harm. 17

The warranty data required by the early warning reporting regulation are also entitled to confidential treatment because their disclosure is likely to impair the agency's ability in the future to obtain and use reliable warranty information as part of its program to identify potential safety related defects. Warranty claims data—which begin to accumulate as soon as vehicles are sold and continue for the length of any given warranty policy—will be a significant indicant of potential defects. The quarterly warranty claims reports, combined initially with the historical seeding material, will help the agency to identify trends involving particular equipment and systems or components in a particular make, model and model year of a given product.

The more warranty information available to the agency, the more useful the warranty data will be in assisting the agency in identifying areas for further investigation. Warranty information is particularly important since it is generated early in the life of the vehicle, thus assisting in the prompt identification of potential defects. The record is replete with comments explaining why disclosure is likely to impair corporate willingness to provide expansive warranty coverage or to apply warranty policy in a more generous and less restrictive way. Longer warranties, and more liberal applications of warranty policy, will increase the number of claims paid by manufacturers and, therefore, the amount of data available to the agency. Moreover, changes in warranty policy caused by a reaction to disclosure of warranty data would likely reduce the ability of the agency to compare current data with historical data and to explore apparent changes in the data.

We are aware that, for marketing purposes, manufacturers may choose to make available to their customers warranties of longer duration and broader mileage ( e.g., a company may offer a 5 year/50,000 mile warranty or a 3 year/36,000 mile warranty), making more warranty claims information available to the agency. DaimlerChrysler, for example, lengthened its engine warranty period to gain in the competitive market. See, e.g. , Jeff Green, “DC Emphasizes Warranty,” Bloomberg, Sept. 6, 2002, available at http://www.theautochannel.com. Not only do warranties differ by manufacturer, they also differ based on the targeted market ( e.g. luxury v. non-luxury) and on system components. See , 2003 Manufacturers' Warranties, available at http://www.enterprise.com.

Similarly, companies can choose strictly to adhere to their warranty limitations or, alternatively, they may adopt policies of avoiding customer dissatisfaction by covering repairs arguably no longer covered under warranty, either because they may not fall within the terms of the warranty or because they fall outside their time or mileage parameters. As pointed out in the comments, the disclosure of early warning warranty data may deter “good will,” customer satisfaction, and early dispute resolution efforts since such efforts will increase the number of warranty claims. 18 If these data were made public, it could lead consumers to assume that the product was of poorer quality than a similar competing product made by a manufacturer with a stricter approach to allowing warranty or “good will” claims.

The disclosure of early warning warranty information could lead to contraction of current warranty policies, and discourage their expansion, resulting in substantially less information available to NHTSA to screen for signs of early field problems. Thus, the disclosure of the comprehensive compendium of warranty data will likely impair the agency's defect detection program. Because disclosure of the early warning reporting warranty information is likely to cause substantial competitive harm and will likely impair the ability of the agency to obtain comprehensive warranty information in the future, we have decided to create a class determination covering this information.

Larger vehicle manufacturers and manufacturers of child restraint systems must report on a quarterly basis the total number of field reports they receive from the manufacturer's employees, representatives, and dealers, and from fleets, that are related to problems with certain specified components and systems, with respect to vehicles and restraints offered for sale, sold or leased in the United States. In addition, these manufacturers must provide copies of certain field reports received from their employees, representatives, and fleets, but are not required to provide copies of reports received from dealers. Like information relating to warranty claims, the agency is requiring the submission of historical field report information from these manufacturers to provide it with a seeding of data it can use immediately to detect any trends within the manufacturers' product lines.

The nature, quality and quantity of field reports vary significantly from company to company. Some companies actively pursue field feedback, whether directly from customers or through dealers and manufacturer representatives. Our experience in conducting defect investigations, in which we routinely receive field reports about the specific problem under investigation, shows that companies obtain information from the field in differing ways and with differing degrees of specificity and technical evaluation. Some manufacturers collect field reports that are little more than customer complaints, collected through dealers and field personnel. For others, a field report is more akin to technical investigation into a problem detected through warranty, consumer complaint or other data available to the company.

Field reports reflect the in-use experience of a manufacturer's product, collected by the company at its expense and with the intent of identifying problems associated with its products in the field. Such information would be of substantial value to competitors, who could—if this information were to be made public—avert similar issues or improve their products without the need to invest in market research, engineering development or actual market experience. Competitors (and others) may also use the field report information competitively, just as with warranty data, to suggest comparisons that may merely result from differing policies and practices.

Public Citizen maintains that, because field reports are often disclosed as part of individual defect investigations, field reports and/or field report information should also be disclosed in a wholesale fashion when submitted as part of early warning data. On the other hand, manufacturers such as Utilimaster and Enterprise Fleet Services described the harmful competitive effects of disclosing the confidential field reports relating to the performance of their products. As stated by Utilimaster, “public and private parcel delivery operations do not under any circumstances want their competitors (or competitors of their respective customers) to be aware of and exploit delivery vehicle fleet performance, maintenance or durability issues which might impact on the operational capability of the delivery company in a particular region/trading area, or on the operations of particular customer accounts.”

The same is true for other manufacturers, who collect equally proprietary information about their products that allows them to conform future design and production to field experience. Because they would have access to comprehensive data covering all products, competitors would obtain data revealing which product features, components and systems have met with consumer acceptance (and which have not), as well as what problems may be associated with particular components and systems. The information may also reveal which aspects of a vehicle's performance (whether potentially safety related or not) a manufacturer deems important in its commercial efforts. As a result, and as commenters have illustrated, the disclosure both of the hard copies of field reports and information about the number of reports associated with the components and systems specified is likely to cause substantial competitive harm. This is true both for the quarterly reports and with regard to the historical seeding field report information.

The field report data are also entitled to protection because their disclosure is likely to lead to fewer and less reliable field reports available to the agency in its efforts to identify potential safety defects promptly. The agency has required the submission of hard copies of certain field reports, as well as the numbers of all field reports, because the agency believes that this information will be especially helpful in identifying the existence of possible safety-related problems. We recognize that we cannot compel the preparation of field reports, but rather only require that manufacturers submit to the agency information about, and copies of, those field reports that companies choose to prepare and/or obtain. See 49 U.S.C. 30166(m)(4)(B). Therefore, we do not want to do anything to discourage manufacturers from preparing accurate and comprehensive field reports about problems with their products. Nor do we want to detract from the candor and specificity with which field reports are written.

As made clear throughout the comments, disclosure of field reports is likely to discourage candor on the part of field personnel and could adversely affect corporate policies and practices with respect to their preparation. The available evidence shows that the disclosure of the field reports and the field report data would likely inhibit a significant feature of the agency's program to encourage the collection and reporting of information and to identify the potential existence of safety defects as soon as they begin to manifest themselves in the field. It would also reduce the amount of valuable information available to the agency during our defect investigations.

Because disclosure of the field report information required by the early warning reporting rule is likely to cause substantial competitive harm and will likely impair the ability of the agency to obtain comprehensive field report information in the future, we have decided to create a class determination applicable to these data.

The early warning reporting regulation also requires larger vehicle manufacturers and child restraint manufacturers to submit complaints received each quarter relating to specified components and systems. 19 Consumer complaints are defined by the regulation as:

The definition recognizes that companies may receive customer input in a variety of ways and may establish differing practices for the receipt of customer complaints. Companies may enhance their ability to receive consumer complaints, for example, by increasing the staff at their toll free telephone numbers or by creating web-based systems through which consumers can make complaints instantly by email. The more consumer inputs a company receives, the more reliable the information available to it, and the agency, to assess its products' performance in the hands of consumers.

We are concerned that release of the consumer complaint information will discourage companies from actively pursuing or will restrict their ability to receive consumer feedback. 21 Consumer complaint information is a critical aspect of the data the agency intends to use to identify potential vehicle problems. Like warranty data and field reports, the aggregate information is likely to be a useful pointer to areas that, after appropriate inquiry, may lead to defect investigations and ultimately to the remedy of safety defects.

Our experience in defect investigations has been that companies generally receive considerably more consumer inputs than does the agency on any given vehicle problem. Indeed, the importance of this material increases as warranties expire and the availability of warranty claims information correspondingly diminishes. The early warning reporting regulation will make available to the agency information about the volume of complaints received by manufacturers as to each of the specified components or systems, thus considerably enhancing the agency's ability to review field experience as it arises. The disclosure of this information is likely to discourage manufacturers' proactive efforts to obtain the data or to expend sums to establish systems to receive more information or to use it more effectively. Consequently, such disclosure could impair the effective and efficient implementation of the agency's early warning process.

Manufacturers argued that release of consumer complaint information is likely to cause substantial competitive harm because it will be used by competing manufacturers and potentially others in the public to make cross-company comparisons. If misinterpreted, the information may result in unwarranted product disparagement, leading to substantial competitive harm. As many of the comments pointed out, consumer complaints reveal the raw, unverified perceptions of vehicle owners. They neither reflect a repair that was conducted (which is revealed by warranty claims) nor an evaluation of an event by a manufacturer's employee or dealer (which is often the source of field reports). Furthermore, the consumer complaint information is not subject to any controls or analytic rigor that we believe are imbedded into the development of public acceptance surveys.

Competitors with access to complaint data would obtain, to a certain extent, information revealing which product features, components and systems have met with consumer acceptance (and which have not) and what perceived problems may be associated with particular components and systems. The information may also reveal which aspects of a vehicle's performance (whether potentially safety related or not) a manufacturer deems important in its commercial efforts. Thus, the public disclosure of complaint data is likely to cause substantial competitive harm.

Because we have determined that the disclosure of the consumer complaint data required by the early warning reporting rule will likely impair the ability of the agency to obtain comprehensive consumer complaint information in the future and is likely to cause substantial competitive harm, we have decided to create a class determination covering these data.

Exemption 3 of the Freedom of Information Act prevents the disclosure of information provided to the government when Congress evidences a clear intent through a statutory scheme that prohibits disclosure. The RMA argued that Congress referred specifically to all of the information submitted under the regulations issued to implement Section 30166(m)(1), and therefore all such information must be withheld from disclosure under Exemption 3.

Exemption 3 is designed to incorporate into the FOIA exemptions other statutes that, on their face, clearly exempt information from FOIA's disclosure requirements. See, e.g., Reporters Comm'n for Freedom of the Press v. Department of Justice , 816 F.2d 730, 735 (D.C. Cir.), modified on other grounds , 831 F.2d 1124 (D.C. Cir. 1987), rev'd on other grounds , 489 U.S. 749 (1989) (providing that “a statute that is claimed to qualify as an Exemption 3 withholding statute must, on its face, exempt matters from disclosure”), and Irons & Sears v. Dann , 606 F.2d 1215, 1220 (D.C. Cir. 1979) (stating that “[o]nly explicit nondisclosure statutes that evidence a congressional determination that certain materials ought to be kept in confidence will be sufficient to qualify under the exemption.”). An Exemption 3 statute must either make clear that the agency has no discretion on whether to disclose the information or must clearly circumscribe the determination by setting forth particular criteria or specifically identifying the information to be withheld from disclosure. The RMA claims that the TREAD Act's disclosure provision does the latter.

We disagree. Had Section 30166(m)(4)(C) stated only that “none of the information collected pursuant to the final rule promulgated under paragraph (1) shall be disclosed,” then the provision would have provided unambiguous direction to the agency and clearly identified the information to be withheld. But that is not what the disclosure provision states. Instead, the provision makes reference to Section 30167(b) and states that “[n]one of the information collected pursuant to the final rule promulgated under paragraph (1) shall be disclosed pursuant to section 30167(b) unless the Secretary determines the disclosure of such information will assist in carrying out sections 30117(b) and 30118 through 30121.” By making reference to preexisting Section 30167(b), the provision suggests that Congress intended the Secretary to determine initially which of the early warning reporting information is entitled to confidential treatment as confidential business information, and, if so and only then, would consider whether disclosure was nonetheless necessary for the agency to fulfill its responsibilities.

The colloquy between Congressmen Markey and Tauzin during the TREAD Act hearings suggests that Congress intended the agency to consider the confidentiality of the early warning reporting information by applying the same legal standards otherwise applicable to information the agency requires to be submitted:

The RMA and other commenters, however, pointed to other statutory schemes in which Congress' intent to ensure the confidentiality of submitted information was made clear. The AIAM, citing the practices of several State and Federal agencies, noted that these “regulatory agencies receive product quality-related information from regulated parties for compliance evaluation purposes” and have “consistently follow[ed] policies of withholding such information from public disclosure.” AIAM admitted, however, that the statutory provisions for these agencies “differ from those affecting NHTSA” and “do not * * * provide controlling legal authority for NHTSA's handling of the early warning report information.”

For example, the Supreme Court has held that the statute governing the activities of the Consumer Product Safety Commission (CPSC) contains a provision constituting an Exemption 3 statute. CPSC v. GTE Sylvania , 447 U.S. 102 (1980). The Court noted that Section 6(b) of the Consumer Product Safety Act, 15 U.S.C. 2055, sets forth specific procedures that CPSC must follow prior to the release of information to the public. Id. at 105. Under that provision, the CPSC must ensure the accuracy of the information it plans to release, notify the manufacturer and provide it with a summary of the information that the CPSC intends to release if the summary would enable one to readily ascertain the identity of that manufacturer. Id. The manufacturer is also afforded an opportunity to comment on the CPSC's summary. Id.

Similarly, some of the statutory provisions regarding the disclosure of information the Federal Aviation Administration (FAA) receives involve very specific instances or types of information. For example, in Public Citizen v. FAA , 988 F.2d 186 (D.C. Cir. 1993), the court determined that information concerning air transportation security could be withheld under the agency's Air Security Improvement Act of 1990. Under the provisions of that Act, the court determined that “Congress's intent was to broaden the FAA's power to withhold sensitive information” held by the agency. Id. at 195 (emphasis in original).

Indeed, the extent of protection afforded to submitters of information under federal programs varies. 23 For example, while the Food and Drug Administration (FDA) must adhere to a statutory scheme that governs the public disclosure of information (21 U.S.C. 360j), the D.C. Circuit noted that a lower court's reading of the FDA statute as an Exemption 3 provision was “contradicted by the language of Section 360j(h), its legislative history, and its interrelation with other provisions of the Medical Device Amendments.” Public Citizen Health Research Group v. FDA , 704 F.2d 1280, 1284 (D.C. Cir. 1983). Under the FDA's statutory provisions, the agency must release a summary of information relating to the safety of medical devices. The court noted that the statutory provision's “legislative history repudiates the proposition that Section 360j(h) specifically prohibits the disclosure of health and safety data that do not qualify for protection under Exemption 4 to the FOIA or [Trade Secrets Act].” Id. at 1285.

The Tenth Circuit Court of Appeals considered whether another provision of the FDA statute, 21 U.S.C. 331(j), qualifies as an Exemption 3 statute. See Anderson v. HHS , 907 F.2d 936, 950 (D.C. Cir. 1990). Section 331(j) provides that any information acquired under the FDA's various information-collection statutes must not be disclosed if the information “concern[s] any method or process which as a trade secret is entitled to protection.” Id. While the court indicated that Section 331(j) qualified as an Exemption 3 statute, it held that the scope of the statute is not broader than Exemption 4 and “cannot provide any independent justification for nondisclosure.” Id.

The colloquy between Congressmen Markey and Tauzin suggests no intent to create a statutory scheme like that governing the disclosure of information from the CPSC or other provisions prohibiting disclosure. Rather, the limited legislative history of Section 30166(m)(4)(C), and the reference to Section 30167(b) in that provision, shows that Congress intended the agency to determine the confidentiality of the early warning reporting information in accordance with its long standing practice of considering whether the data constitutes confidential business information. Congress is presumed to be aware of agency practice when promulgating statutes and, therefore, is presumed to have been aware of NHTSA's practice of analyzing confidentiality claims pursuant to Exemption 4 of the FOIA. See e.g. , U.S. v. Wilson, 290 F.3d 347, 356 (D.C. Cir. 2002) (“Congress is presumed to preserve, not abrogate, the background understandings against which it legislates”). 24

In assessing whether Exemption 4 applies to required submissions the Government must examine whether the disclosure is likely to impair the Government's ability to obtain necessary information in the future or is likely to cause substantial competitive harm to the submitter. Substantial competitive harm can arise when the information has significant commercial value to competitors, such as: from revealing fundamental data (such as price, cost or other proprietary business structure); from revealing information that would otherwise require investment, through reverse engineering or other means, to obtain; or from revealing business strategies by making information that otherwise would be unobtainable available to competitors.

The National Parks test also recognizes that the Government requires the submission of certain information because it is needed to serve an important government function. In describing this aspect of Exemption 4, the court in National Parks noted that:

The DC Circuit nonetheless decided that the information at issue—financial information of concessionaires in national parks—did not qualify as confidential under the impairment prong because it was required by government regulation and therefore the government's ability to obtain it in the future would not be impaired by its disclosure. The court remanded the case to the district court for a determination of whether the data would cause competitive harm if released.

That the National Parks test was intended in part to ensure the proper functioning of government business was further made clear in Washington Post Co. v. HHS , 865 F.2d 320 (D.C. Cir. 1989). In remanding the case for the development of a more complete record, the court emphasized that it had no intention of undermining the impairment prong of National Parks . Instead, the Washington Post court prognosticated that the impairment prong would tend to focus on protecting the reliability of data, rather than the availability of data. Id. at 328. Thus, the court reiterated the fundamental concept that the receipt of valid information on which the government can rely in performing its programmatic functions is a critical component of considering Exemption 4 claims.

The DC Circuit once again considered its policy of encouraging the submission of information to the government in Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871 (D.C. Cir. 1992) (en banc). In Critical Mass, the court distinguished between information the government compels and that which is voluntarily submitted to help further governmental functions, such as rulemakings. The court held that information voluntarily submitted to the government should be treated as confidential under Exemption 4 as long as the submitter can show that it is not customarily released to the public. Id. at 880. In contrast, information compelled by the government would continue to be considered under the two prongs enunciated in National Parks.

The Exemption 4 jurisprudence in the aftermath of Critical Mass makes clear that the determination of whether information should be protected under Exemption 4 may include additional considerations, but only to the extent that those considerations relate to the government functions for which the information is sought. Underpinning the jurisprudence surrounding Exemption 4 has been the acknowledgement that “it is intended to protect the interests of both the Government and the individual,” including advancing the efficiency of government operations. National Parks, 498 F.2d at 767. The concern that disclosure policy should not impair government programs remains strong whether the information is compelled (and its disclosure governed by the two prongs of National Parks ) or voluntarily submitted (and its disclosure governed by the Critical Mass test). See CAS v. NHTSA, 244 F.3d at 148 (D.C. Cir. 2001) (explaining that “[w]hen the Government obtains the information as part of a mandatory submission, the Government's access to the information normally is not seriously threatened by disclosure; the private interest is the principal factor tending against disclosure, and the harm to the private interest must be significant to prevent public access to information”) (emphasis added).

For example, the government may withhold information that, if disclosed, would diminish the effectiveness of a licensing program even when the basis for disclosure would arguably advance an underlying public interest. See Public Citizen Health Research Group v. National Institutes of Health (PCHRG v. NIH ), 209 F. Supp. 2d 37, 46 (D.D.C. 2002) (finding certain royalty information confidential under Exemption 4 because “disclosure of the royalty information would impair the efficient and effective performance of [the government's] licensing program”).

It is not sufficient, therefore, to argue that some public need unrelated to the government's function warrants the disclosure of information under Exemption 4. Public Citizen Health Research Group v. Food & Drug Administration (PCHRG v. FDA ), 185 F.3d 898 (D.C. Cir. 1999) (rejecting the argument that a company's clinical studies, which were required to be submitted to the FDA, should be disclosed because disclosure would allow the public to learn from the company's experience). As the D.C. Circuit stated in PCHRG v. FDA:

In most of the cases discussing the National Parks test, the courts were considering the kind of commercial information that would be created independent of any government mandate, and thus the courts have generally considered the inquiry under the impairment prong to focus on the reliability, rather than the availability, of the data. Yet, the courts have carefully maintained the vitality of the impairment prong as applied to compelled submissions and, in doing so, have maintained an analytic framework within which to ensure that the disclosure of information does not unduly impair the government's functions by reducing both qualitatively and quantitatively the data available to the government. Thus, as in CAS v. NHTSA, the Court was careful to state that “when the Government obtains the information as part of a mandatory submission, the Government's access to information normally is not seriously threatened by disclosure,” and in PCHRG v. NIH, the impairment of the government's program served as an independent basis for the court's refusal to require disclosure.

NHTSA has considered the impact of this rulemaking action under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures. This rulemaking document is not economically significant. It was, however, reviewed by the Office of Management and Budget under E.O. 12866, “Regulatory Planning and Review.” The rulemaking action has been determined to be significant under the Department's regulatory policies and procedures, given the degree of public interest in the treatment of the early warning reporting information.

This final rule simplifies and clarifies the agency's regulation on confidential information and updates specific sections of the regulation to reflect legal developments. In addition, this final rule creates a series of class determinations applicable to those portions of the data to be submitted pursuant to the early warning reporting regulation that are determined to be entitled to confidential treatment under the procedures set forth in this final rule.

The procedural aspects of this final rule impose no new, significant burdens on submitters of information. The treatment of the early warning reporting information addresses the manner in which the agency will handle the data, and also imposes no new, significant burdens on submitters of information. Because no additional burdens are imposed, there are no costs requiring the development of a full cost/benefit evaluation.

We have considered the effects of this rulemaking action under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) This rule does not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis is not required for this action. This final rule imposes no additional obligations on the submitters of information to NHTSA beyond those otherwise required by the Vehicle Safety Act and the early warning reporting regulation. This final rule addresses the agency's treatment of early warning reporting data and simplifies procedures for all submitters, including small entities, when submitting information to the agency. The rule protects from disclosure early warning reporting information found likely to cause competitive harm. It permits the disclosure of that early warning information determined neither to cause competitive harm if released nor to impair the ability of the government to obtain the information in the future.

NHTSA has analyzed this rule for the purposes of the National Environmental Policy Act and determined that it does not have any significant impact on the quality of the human environment.

The agency has analyzed this rulemaking action in accordance with the principles and criteria set forth in Executive Order 13132 and has determined that it does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The rule has no substantial effects on the States, or on the current Federalism-State relationship, or on the current distribution of power and responsibilities among the various local officials.

The Unfunded Mandate Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). This rule will not result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually.

This rule will not have any preemptive or retroactive effect. This action meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The rule does not require submission of a petition for reconsideration or other administrative proceedings before parties may file suit in court.

The existing requirements of part 512 are considered to be information collection requirements as that term is defined by the Office of Budget and Management (OMB) in 5 CFR part 1320. Accordingly, the existing part 512 regulation was submitted to and approved by OMB pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ). These requirements were approved in February, 2002 through February 28, 2005. This final rule does not revise the existing currently approved information collection under Part 512.

Commenters to the Notice of Proposed Rulemaking objected to the submission of a “third version” of information for review, a request for submitters to redact personal identifiers and certain other features of the form with which the agency had proposed the submission of information claimed to be confidential. This agency has considered and addressed these concerns, including the number of copies to be submitted. These proposals, whether intended or otherwise interpreted, were not adopted.

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant” as defined under E.O. 12866, and (2) concerns an environmental, health or safety risk that NHTSA has reason to believe may have a disproportionate effect on children. This regulatory action does not meet either of these criteria.

Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) requires NHTSA to evaluate and use existing voluntary consensus standards  25 in its regulatory activities unless doing so would be inconsistent with applicable law ( e.g. , the statutory provisions regarding NHTSA's vehicle safety authority) or otherwise impractical. This requirement is not relevant to this rulemaking action.

Section 515 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (the “Data Quality Act”) requires agencies to take certain affirmative steps to maximize the utility, objectivity, and integrity of data agencies disseminate to the public. This final rule establishes a series of class determinations applicable to those portions of the early warning reporting information determined likely, if released, to cause substantial competitive harm and to impair the government's ability to obtain data necessary to the operation of the agency's defect detection and remediation program. Such submissions are entitled to confidential treatment under Exemption 4 of the Freedom of Information Act.

The early warning reporting information determined not to be entitled to confidential treatment—reports of claims and notices of deaths, personal injury and property damage and some production numbers—involves factual matter and does not constitute data relied on or developed as part of a determination by the agency. The remainder of the early warning information is similarly factual, but will not be disclosed to the public. This rule does not implicate Data Quality Act concerns.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.

The Summer Flounder, Scup, and Black Sea Bass Fishery Management Plan (FMP) and its implementing regulations found at 50 CFR part 648, subparts A, G (summer flounder), H (scup), and I (black sea bass), describe the process for specifying annual recreational measures. Final quota specifications for the 2003 summer flounder, scup, and black sea bass fisheries were published on January 2, 2003 (68 FR 60); a correction notice was published on March 3, 2003 (68 FR 9905). These specifications were determined to be consistent with the 2003 target fishing mortality rate (F) for summer flounder and the target exploitation rates for scup and black sea bass. The 2003 coastwide recreational harvest limits are 9.28 million lb (4,209 mt) for summer flounder, 4.01 million lb (1,819 mt) for scup, and 3.43 million lb (1,557 mt) for black sea bass.

The proposed rule to implement annual Federal recreational measures for the 2003 summer flounder, scup, and black sea bass fisheries was published on May 21, 2003 (68 FR 27768), and contained management measures (minimum fish sizes, possession limits, and fishing seasons) intended to keep annual recreational landings from exceeding the specified harvest limits. A complete discussion of the development of the recreational measures appeared in the preamble of the proposed rule and is not repeated here.

The recreational measures for scup and black sea bass contained in this final rule are unchanged from those published in the proposed rule. Table 1 contains the coastwide Federal measures for scup and black sea bass that are being implemented. For summer flounder, this final rule implements conservation equivalency, as the process was described in the proposed rule. The management measures will vary according to the state of landing (see Table 2). All minimum fish sizes discussed below are total length (TL) measurements of the fish, i.e., the straight-line distance from the tip of the snout to the end of the tail while the fish is lying on its side.

Section 648.107(a) is corrected to clarify that the recreational measures proposed to be implemented by the states of Maine through North Carolina for 2003 are the conservation equivalent of the non-preferred (i.e., to be implemented in the Exclusive Economic Zone if conservation equivalency is not implemented) coastwide season, minimum size, and possession limit prescribed in §§ 648.102, 648.103, and 648.105(a), as identified in the proposed rule.

There were no public comments received on the proposed rule.

This final rule has been determined to be not significant for purposes of E.O. 12866.

This action establishes recreational management measures for federally permitted vessels participating in the recreational fishery, specifically party/charter vessels. The recreational summer flounder, scup, and black sea bass fisheries are fully underway. In 2002, recreational black sea bass landings exceeded the recreational harvest limit by approximately 30 percent. This information was not available until development of this rule was begun. Immediate action to impose a more stringent minimum fish size in the black sea bass fishery must be taken to slow the recreational harvest of black sea bass and enhance the probability that the black sea bass harvest limit will not be exceeded in 2003. For summer flounder, this action is necessary to achieve consistency between state and Federal measures. Recreational summer flounder landings have exceeded the recreational harvest limits by an average of 50 percent over the 1996-2002 period. Failure to implement these provisions immediately could result in similar overharvest in 2003. Furthermore, because the Federal fishery is currently operating under status quo measures and the states have already implemented measures for state waters, inconsistencies between state and Federal regulations also can lead to confusion for operators of federally-permitted vessels. The Assistant Administrator for Fisheries, NOAA (AA), therefore finds good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in effectiveness of the 2003 summer flounder and black sea bass recreational measures.

For the scup fishery, the recreational sector is currently fishing under the Federal EEZ measures, which allow for a possession limit of only 20 fish. This final rule will increase the possession limit to 50 fish, thereby relieving the possession limit restriction. This increase is being implemented to allow the recreational fishing sector to achieve the recreational harvest limit. The improving status of these fisheries has allowed NOAA Fisheries to implement these regulations, which provide some relief to the recreational sector from the current, more restrictive, measures. Implementation of the revised possession limit as soon as possible is important to allow for the increased scup fishing opportunities intended by the Council in amending this regulation. Because the increase to the possession limit relieves a restriction on the recreational fishing industry, the AA finds that the 30-day delayed effectiveness period of the scup regulations contained within this final rule does not apply, pursuant to 5 U.S.C. 553(d)(1).

Included in this final rule is the Final Regulatory Flexibility Analysis prepared pursuant to 5 U.S.C. 604(a). The FRFA is composed of the IRFA, the comments (and responses) on the proposed rule, and the analyses completed in support of this action.

A description of the reasons why action by the agency is being taken and the objectives of this final rule are explained in the preambles to the proposed rule and this final rule and are not repeated here.

No comments were received on the economic impacts of the measures contained in the proposed rule.

The Mid-Atlantic Fishery Management Council (Council) estimated that the proposed action could affect any of the 760 vessels possessing a Federal party/charter permit for summer flounder, scup, and/or black sea bass in 2001, the most recent year for which complete permit data are available. Only 368 of these vessels reported active participation in the recreational summer flounder, scup, and/or black sea bass fisheries in 2001.

No additional reporting, recordkeeping, or other compliance requirements are included in this final rule.

It is not possible to further mitigate economic impacts on small entities because the Council selected the alternative with least significant impacts relative to the other alternatives determined to achieve the biological objectives. Specifications of recreational fish size limits, possession limits, and open fishing seasons is constrained by the conservation objectives of the FMP, and implemented at 50 CFR part 648 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

The economic analysis assessed the impacts of the various management alternatives. In the EA, the no action alternative for each species is defined as the continuation of the management measures implemented for the 2002 fishing season. The Council did not analyze an alternative combining the status quo measures in place for all three species. In consideration of the Council-recommended recreational harvest limits established for the 2003 fishing year, implementation of the same recreational measures established for the 2002 fishing year would be inconsistent with the goals and objectives of the FMP and its implementing regulations, and, because it could result in overfishing of the black sea bass fishery, it also would be inconsistent with National Standard 1 of the Magnuson-Stevens Act. Therefore, the no action alternative was not considered to be a reasonable alternative to the preferred action and its collective impacts were not analyzed in the EA/RIR/IRFA. The no action measure for summer flounder was analyzed in Alternative 1, in combination with preferred measures for scup and black sea bass. The no action measures for scup and black sea bass were considered as part of Alternative 2, in combination with the non-preferred coastwide measures for summer flounder, i.e., the measures that would be implemented if conservation equivalency were not implemented in the final rule. A summary of the economic impacts of the measures to be implemented follow.

Landings projections for 2002 indicate that Virginia (VA) is the only state required to reduce summer flounder landings (by 11 percent) in 2003. States other than VA do not require any reductions in recreational summer flounder landings, if their current regulations are maintained. At this time, it is not possible to determine the economic impact of conservation equivalency for Virginia. However, it may be proportional to the level of landings reductions required. If the preferred conservation equivalency alternative is effective at achieving the recreational harvest limit, then it is likely to be the only alternative that minimizes economic impacts, to the extent practicable, yet achieves the biological objectives of the FMP. Because states have a choice of specific measures to implement, it is more rational for the states to adopt conservation equivalent measures that result in fewer adverse economic impacts than to adopt the much more restrictive measures contained in the precautionary default alternative.

The impacts of the non-preferred summer flounder coastwide alternative (in Alternative 2), which proposes a 17-inch (43.2-cm) minimum fish size, a possession limit of four fish per person, and no closed season, were evaluated. Impacted trips were defined as individual angler trips taken aboard party/charter vessels in 2002 that landed at least one summer flounder smaller than 17 inches (43.2 cm), or that landed more than four summer flounder. The analysis concluded that the measures would affect 1 percent or less of the party/charter trips in most states, with state revenue losses identified for Massachusetts (MA) ($927), Rhode Island (RI) ($15,850), New York (NY) ($155,636), New Jersey (NJ) ($22,208), Delaware (DE) ($570), Maryland (MD) ($570), VA ($7,362), and North Carolina (NC) ($161). (These figures are for all vessels operating in each state, rather than for each vessel). No state revenue losses were identified for Maine (ME), New Hampshire (NH), or Connecticut (CT).

The average maximum gross revenue loss per party/charter vessel was estimated to be $9 in MA, $634 in RI, $2,993 in NY, $347 in NJ, $285 in DE, $190 in MD, $409 in VA, and $23 in NC. As discussed in the proposed rule, it is very likely that the Council's analysis of economic impacts overestimates potential revenue impacts of the proposed measures, since some anglers would continue to take party/charter vessel trips, even if the restrictions limit their landings, because they participate in catch and release fishing or target other species.

Precautionary default measures are defined as measures that would achieve at least the overall required reduction in landings for each state. The precautionary default measures specified by the Council and the Council's Demersal Species Committee and the Commission's Summer Flounder, Scup, and Black Sea Bass Management Board (in Alternative 3) consists of an 18-inch (45.7-cm) minimum fish size, a possession limit of one fish per person, and no closed season.

The precautionary default measures would reduce state specific landings by a range of 41 percent (DE) to 88 percent (NC). As specified by Framework 2 to the FMP, states that fail to implement conservation equivalent measures would be required to implement precautionary default measures. The state-specific landings reductions associated with the precautionary default measures are substantially higher than the reductions that would be implemented using conservation equivalency. As such, it is expected that states will avoid the impacts of precautionary approach measures by establishing conservation equivalent management measures. Therefore, the precautionary default provision that is included in the conservation equivalency proposal was not analyzed as a separate provision.

The proposed action for scup would limit coastwide landings to 4.01 million lb (1,819 mt) and reduce landings by at least 27 percent compared to 2001. The overall estimated economic impacts of the proposed action are less than the impacts that would result from implementation of either of the other scup alternatives analyzed.

For the preferred scup alternative (in Alternative 1), impacted trips were defined as individual angler trips taken aboard party/charter vessels in 2002 that landed at least one scup smaller than 10 inches (25.4 cm), that landed more than 50 scup, or that landed at least one scup during the proposed closed seasons of March 1 through June 30, and December 1 through December 31. The analysis concluded that the measures would affect 10 percent of the party/charter trips in MA and 1 percent or less of the party/charter trips in five states, with statewide revenue losses identified for MA ($421,057), RI ($2,324), NY ($1,829), NJ ($6,475), MD ($25,450), and NC ($8,064).

The average maximum gross revenue loss per party/charter vessel associated with the preferred scup alternative was estimated to be $8,593 in MA, $166 in RI, $59 in NY, $185 in NJ, $25,450 in MD, and $2,688 in NC.

For the scup no action alternative (in Alternative 2), impacted trips were defined as individual angler trips taken aboard party/charter vessels in 2002 that landed at least one scup smaller than 10 inches (25.4 cm), that landed more than 20 scup, or that landed at least one scup during the periods of March 1 through June 30, and October 3 through December 31. The analysis concluded that the measures would affect 11 percent of angler trips taken aboard party/charter boats in MA, 4 percent in RI, 5 percent in NY, and less than 1 percent in NJ, DE, MD, and NC, with statewide revenue losses identified for MA ($486,423), RI ($55,664), NY ($702,429), NJ ($67,060), MD ($25,450), and NC ($8,064). No state revenue losses were identified for ME, NH, CT, DE, or VA.

The average maximum gross revenue loss per party/charter vessel associated with this alternative was estimated to be $9,927 in MA, $3,976 in RI, $22,659 in NY, $1,916 in NJ, $25,450 in MD, and $2,688 in NC.

For the scup measures considered in Alternative 3, impacted trips were defined as individual angler trips taken aboard party/charter vessels in 2002 that landed at least one scup smaller than 10 inches (25.4 cm), that landed more than 50 scup, or that landed at least one scup during the period March 1 through July 13. The analysis concluded that the measures in this alternative would affect 11 percent of the party/charter trips in MA and 1 percent or less of the party/charter trips in most states, with statewide revenue losses identified for MA ($469,518), RI ($9,576), NY ($81,902), NJ ($19,880), MD ($25,450), and NC ($8,064). No state revenue losses were identified for ME, NH, CT, DE, or VA.

The average maximum gross revenue loss per party/charter vessel associated with this alternative was estimated to be $9,582 in MA, $684 in RI, $2,642 in NY, $568 in NJ, $25,450 in MD, and $2,688 in NC.

The proposed action for black sea bass would limit coastwide landings to 3.43 million lb (1,557 mt) and reduce landings by at least 27 percent compared to 2002. Although the economic impacts of the preferred alternative (in Alternative 1) are greater than for the status quo measures (in Alternative 2), Alternative 1 was selected for implementation because it is expected to achieve the necessary reduction in landings relative to 2002, consistent with the goals and objectives of the FMP, while resulting in less economic impact than would the measures in Alternative 3.

For the preferred black sea bass alternative, impacted trips were defined as individual angler trips taken aboard party/charter vessels in 2002 that landed at least one black sea bass smaller than 12 inches (30.5 cm), that landed more than 25 black sea bass, or that landed at least one black sea bass during the proposed closed seasons of September 2 through September 15, and December 1 through December 31. The analysis concluded that the measures would affect 3 percent of the party/charter trips in NJ, 4 percent in DE, and 1 percent or less in most states, with statewide revenue losses identified for MA ($1,805), RI ($5,404), CT ($368), NY ($20,332), NJ ($441,702), DE ($89,544), MD ($41,331), VA ($19,418), and NC ($364). No state revenue losses were identified for ME or NH.

The average maximum gross revenue loss per party/charter vessel associated with the proposed black sea bass alternative was estimated to be $19 in MA, $193 in RI, $46 in CT, $442 in NY, $8,334 in NJ, $44,772 in DE, $13,777 in MD, $1,022 in VA, and $52 in NC.

For the non-preferred black sea bass measures considered in Alternative 2, impacted trips were defined as individual angler trips taken aboard party/charter vessels in 2002 that landed at least one black sea bass smaller than 11.5 inches (29.2 cm), or that landed more than 25 black sea bass. The analysis concluded that the measures would affect 3 percent of the party/charter trips in DE, 2 percent in NJ, and 1 percent or less in most states, with statewide revenue losses identified for RI ($1,960), CT ($368), NJ ($248,570), DE ($82,988), MD ($16,329), VA ($21,261), and NC ($119). No state revenue losses were identified for ME, NH, MA, or NY.

The average maximum gross revenue loss per party/charter vessel associated with this alternative was estimated to be $70 in RI, $46 in CT, $4,690 in NJ, $41,494 in DE, $5,443 in MD, $1,119 in VA, and $17 in NC.

For the non-preferred black sea bass measures considered in Alternative 3, impacted trips were defined as individual angler trips taken aboard party/charter vessels in 2002 that landed at least one black sea bass smaller than 12.5 inches (31.8 cm) or that landed more than 25 black sea bass. The analysis concluded that the measures would affect approximately 5 percent of the party/charter trips in DE, 3 percent in NJ, and 1 percent or less in most states, with statewide revenue losses identified for RI ($1,960), CT ($368), NY ($3,220), NJ ($483,095), DE ($125,132), MD ($40,395), VA ($29,602), and NC ($364). No state revenue losses were identified for ME, NH, or MA.

The average maximum gross revenue loss per party/charter vessel associated with this alternative was estimated to be $70 in RI, $46 in CT, $70 in NY, $9,115 in NJ, $62,566 in DE, $13,465 in MD, $1,558 in VA, and $52 in NC.

Potential revenue losses in 2003 could differ for party/charter vessels that land more than one of the regulated species. The cumulative maximum gross revenue loss per vessel varies by the combination of permits held and by state. In RI, for example, revenue losses could reach $993 for vessels that land all three species in 2003, compared to expected revenues for 2002. However, in MD, where the contribution of black sea bass to the total catch by party/charter vessels is nearly twice as high as it is for other states, a vessel that lands all three species could potentially lose up to a maximum of $39,417 in 2003. On average, the largest potential losses were projected for party/charter vessels operating out of MA, NJ, DE, and MD in 2003.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as "small entity compliance guides." The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a small entity compliance guide (the guide) was prepared. Copies of the guide will be sent to all holders of Federal party/charter permits issued for the summer flounder, scup, and black sea bass fisheries. The guide will be available on the Internet at http://www.nero.noaa.gov . Copies of the guide can also be obtained from the Regional Administrator (see ADDRESSES ).