See the Supplementary Information provided in the direct final rule located in the Rules and Regulations direct final rule section of this Federal Register for the applicable supplementary information on this action.

In recent years, the OCC has received numerous inquiries concerning the applicability of state law to national banks,1 and the extent to which state law applies to a national bank's exercise of powers authorized by Federal law has been the subject of litigation in different contexts.2 The number and variety of these questions reflect a need for clarification of the circumstances when state laws or regulations apply to activities and operations of national banks. Without further clarification, national banks, particularly those with customers in multiple states, face uncertain compliance risks and substantial additional compliance burdens and expense that, for practical purposes, materially impact their ability to offer particular products and services.

A recent inquiry by National City Bank, National City Bank of Indiana, and two operating subsidiaries of these banks (collectively, National City) concerning the Georgia Fair Lending Act (GFLA)3 illustrates the impact that state laws can have on a national bank's lending activities. Our analysis of the issues raised by National City in the response to the bank, which is discussed below and published in full elsewhere in this edition of the Federal Register (National City Order), underscores the need for clarity and more predictability in our regulations concerning the extent to which state laws apply to national banks' real estate lending activities as well as other aspects of national bank activities.

Due to the number and significance of the questions that continue to arise with respect to the preemption of state laws in these areas, we believe it is now timely to provide more comprehensive standards regarding the applicability of state laws to lending, deposit-taking, and other authorized activities of national banks. Accordingly, we are proposing to amend our regulations to provide such standards.

Preemption is not a new concept. It is a doctrine, based on Constitutional principles, that has been recognized by the Supreme Court since the earliest years of our Nation's history. In 1819, in the landmark case of McCulloch v. Maryland, the Court held that under the Supremacy Clause of the U.S. Constitution, states “have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control, the operations” of an entity created under Federal law.4 Notably, the entity involved in that case was a bank chartered under Federal law, the Second Bank of the United States. As discussed below, since the creation of the national banking system in 1863, courts have applied comparable principles of Federal preemption in connection with many aspects of national banks' operations, and have repeatedly found that the exercise by Federally-chartered national banks of their Federally-authorized powers is ordinarily not subject to state law.

Congress enacted the National Currency Act (Currency Act) in 1863 and modified it with the National Bank Act a year thereafter for the purpose of establishing a new national banking system that would operate distinctly and separately from the existing system of state banks. The Currency Act and the National Bank Act were intended to create a uniform and secure national currency and a system of national banks designed to help stabilize and support the national economy both during and after the Civil War.

Both proponents and opponents of the new national banking system expected that it would replace the existing system of state banks.5 Given this anticipated impact on state banks and the resulting diminution of control by the states over banking in general,6 proponents of the national banking system were concerned that states would attempt to undermine it. Remarks of Senator Sumner illustrate the sentiment of many legislators of the time: “Clearly, the [national] bank must not be subjected to any local government, State or municipal; it must be kept absolutely and exclusively under that Government from which it derives its functions.”7

The allocation of any supervisory responsibility for the new national banking system to the states would have been inconsistent with this need to protect national banks from state interference. Congress, accordingly, established a Federal supervisory regime and created a Federal agency within the Department of Treasury—the OCC—to carry it out. Congress granted the OCC the broad authority “to make a thorough examination of all the affairs of [a national bank],”8 and solidified this Federal supervisory authority by vesting the OCC with exclusive visitorial powers over national banks, except where Federal law provided otherwise. These provisions assured, among other things, that the OCC would have comprehensive authority to examine all the affairs of a national bank and protect national banks from potentially hostile state interference by establishing that the authority to examine, supervise, and regulate national banks is vested only in the OCC, unless otherwise provided by Federal law.9

A state law may be preempted by Federal law and thus rendered invalid by operation of the Supremacy Clause of the Constitution.10 The Supreme Court has identified three ways in which this may occur. First, Congress can adopt express language setting forth the existence and scope of preemption.11 Second, Congress can adopt a framework for regulation that “occupies the field” and leaves no room for states to adopt supplemental laws.12 Third, preemption may be found when state law actually conflicts with Federal law. Conflict will be found when either: (i) compliance with both laws is a “physical impossibility;” 13 or (ii) when the state law stands “as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”14

Because the origins of Federal preemption are Constitutional, the underlying purpose of the state legislation, no matter how salutary, does not determine the essential issue of preemption. As explained in Association of Banks in Insurance, Inc. v. Duryee, 15 “[w]here state and federal laws are inconsistent, the state law is pre-empted even if it was enacted by the state to protect its citizens or consumers.”16

From the earliest years of the national banking system, up to and including a decision rendered just months ago, the Supreme Court has consistently recognized the unique status of the national banking system and the limits placed on states by the National Bank Act.17 In one of the first cases to address the role of the national banking system, the Supreme Court stated that “[t]he national banks organized under the [National Bank Act] are instruments designed to be used to aid the government in the administration of an important branch of the public service. They are means appropriate to that end.”18

Subsequent opinions of the Supreme Court have been equally clear about national banks' unique role and status. See Marquette Nat'l Bank of Minneapolis v. First of Omaha Service Corp., 439 U.S. 299, 314-315 (1978) (“Close examination of the National Bank Act of 1864, its legislative history, and its historical context makes clear that, . . . Congress intended to facilitate . . . a ‘national banking system’.”) (citation omitted); Franklin Nat'l Bank, 347 U.S. at 375 (“The United States has set up a system of national banks as Federal instrumentalities to perform various functions such as providing circulating medium and government credit, as well as financing commerce and acting as private depositories.”); Davis v. Elmira Sav. Bank, 161 U.S. 275, 283 (1896) (“National banks are instrumentalities of the federal government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States.”); Guthrie v. Harkness, 199 U.S. 148, 159 (1905) (“It was the intention that this statute should contain a full code of provisions upon the subject, and that no state law or enactment should undertake to exercise the right of visitation over a national corporation.”).

The Supreme Court also has recognized the clear intent on the part of Congress to limit the authority of states over national banks precisely so that the nationwide system of banking that was created in the Currency Act could develop and flourish. For instance, in Easton v. Iowa, 19 the Court stated that Federal legislation affecting national banks—

Thus, as recognized by the Supreme Court in Barnett, the history of national bank powers is one of “interpreting grants of both enumerated and incidental ‘powers’ to national banks as grants of authority not normally limited by, but rather ordinarily pre-empting, contrary state law.”22 “[W]here Congress has not expressly conditioned the grant of 'power' upon a grant of state permission, the Court has ordinarily found that no such condition applies.”23

These principles have been recognized and applied in a series of recent cases invalidating state and local restrictions upon national bank activities that are authorized under Federal law. In each case, the court determined that the state or local restriction obstructed, in whole or in part, the exercise of an authorized national bank power and therefore was preempted by operation of the Supremacy Clause.

For example, ordinances passed by four municipalities in California and New Jersey specifically to prohibit ATM access fees were enjoined by district court order on grounds that included National Bank Act preemption. In California, the district court entered a preliminary injunction against the fee prohibition ordinances adopted by San Francisco and Santa Monica, and the Ninth Circuit affirmed. On remand, the district court entered a permanent injunction against the ordinances, and the Ninth Circuit once again affirmed.24 Similarly, a Federal district court in New Jersey entered temporary restraining orders preventing fee prohibition ordinances adopted by Newark and Woodbridge from becoming effective. The combined case was ultimately settled by each city's consent to a permanent injunction against its ordinance.25 A Federal district court in Des Moines declared a longstanding Iowa prohibition on ATM access fees to be in conflict with the national bank power to charge fees and therefore preempted.26 For similar reasons, the Fifth Circuit upheld a Federal district court ruling that Federal law displaced a Texas statute that prohibited the charging of fees for cashing checks drawn upon accounts at the payor bank.27 A Federal district court in Georgia reached the same conclusion with respect to a Georgia law that similarly attempted to restrict the authority of national banks under Federal law to charge such fees.28

Restrictions on national bank activities other than the charging of fees have also been held preempted. Deferring to the OCC's interpretations of the National Bank Act, the Eighth Circuit held that Federal law preempted Iowa restrictions on ATM location, operation, and advertising as applied to national banks.29 More recently, a Federal district court in California permanently enjoined the California Attorney General and Director of the Department of Consumer Affairs from enforcing a California statute requiring that certain language and information be placed on the billing statements credit card issuers provide their cardholders.30 In so doing, the Court held that there is “no indication in the NBA that Congress intended to subject that power [to loan money on personal security] to local restriction.” Thus, the court applied “the ordinary rule * * * of preemption of contrary state law.”31 Contrary state law also may be preempted by Federal regulation. “Federal regulations have no less pre-emptive effect than federal statutes.”32

Federal courts apply no general presumption that state laws are applicable to national banks. As explained recently by the Supreme Court, a presumption against preemption is “not triggered when the States regulate in an area where there has been a history of significant federal presence.”33 As further explained by the Ninth Circuit in Bank of America, “because there has been a “history of significant federal presence” in national banking, the presumption against preemption of state law is inapplicable.”34

Moreover, no Federal statute endorses the presumptive application of state laws to national banks. Although the national bank branching statute makes applicable the laws of the host state regarding community reinvestment, consumer protection, and fair lending to branches of an out-of-state national bank located in the host state to the same extent as those laws apply to a bank chartered by that state, the statute expressly excepts any case where Federal law preempts the application of state law to national banks.35

In a few situations, Federal law has incorporated provisions of state law for specific purposes,36 and Congress may more generally establish standards that govern when state law will apply to national banks' activities.37 In such cases, the OCC applies the law or the standards that Congress has required or established.

State laws also may apply to national banks' activities under circumstances that have been described variously by the courts as not altering or conditioning a national bank's ability to exercise a power that Federal law grants to it.38 “Thus, states retain some power to regulate national banks in areas such as contracts, debt collection, acquisition and transfer of property, and taxation, zoning, criminal, and tort law.”39 Notably, these types of laws typically do not regulate the manner or content of the business of banking authorized for national banks under Federal law, but rather establish the legal infrastructure that surrounds and supports the conduct of that business. In other words, they promote a national bank's ability to conduct business; they do not obstruct a national bank's exercise of powers granted under Federal law.40

The OCC and Federal courts have thus far concluded that a wide variety of state laws are preempted, either because the state laws fit within the express preemption provisions of an OCC regulation or because the laws conflict with a Federal power vested in national banks. Types of state laws that have been addressed by the OCC or the courts include:

• Licensing laws. State statutes that require national banks to obtain a license or to register with the state before exercising a Federally-granted authority have been found to be preempted.41

• Filing requirements. State statutes that require national banks to make filings with, or report to, states conflict with the OCC's exclusive visitorial powers over national banks.42

• Terms of real estate loans. The OCC's current regulations in subpart A of part 34 address real estate lending generally. Section 34.4(a) expressly preempts state laws concerning five areas of fixed-rate mortgage lending. Section 34.4(a)(1) preempts state laws concerning loan-to-value ratios. Section 34.4(a)(2) preempts state laws concerning the schedule for repayment of principal and interest. In this regard, the key elements of any repayment schedule are: (1) the timing of the expected payments, and (2) the amount of expected payments.43 Section 34.4(a)(3) preempts state laws concerning the term to maturity of real estate loans.44 Subpart B of part 34, governing adjustable rate mortgages (ARMs), states that national banks may engage in ARM lending without regard to any state law limitation.45

• Advertising. Courts have consistently held that state laws limiting the ability of a national bank to advertise are preempted.46

• Permissible rates of interest. Federal law establishes that national banks may charge interest (both the rate and amount 47 ) permitted by the state where the bank is located without regard to the laws of the state where the borrower is located.48

• Permissible fees and non-interest charges. Section 7.4002 of the OCC's rules outlines the framework for national banks' ability to impose non-interest fees and charges; courts have consistently held that state laws limiting the ability of national banks to charge such fees are preempted.49

• Management of credit accounts. The OCC has taken the position that state laws that interfere with a national bank's Federally-granted power to lend and to engage in activities incidental to its lending operations are preempted. For example, in our view, a state law that imposed restrictions or requirements that, under the Barnett standards, interfere with or burden a national bank's communication with its credit card holders, management of credit accounts, or terms of offers of credit was preempted. A Federal district court in California recently upheld this position.50

• Due-on-sale clauses. Section 34.5 of the OCC's rules and 12 U.S.C. 1701j-3 preempt state restrictions on due-on-sale clauses.

• Leaseholds as acceptable security. The provision set out in proposed § 34.4(a)(14) preempting state laws governing covenants and restrictions that must be contained in a lease to qualify the leasehold as acceptable security for a real estate loan is a restatement of the provision in current § 34.4(a)(5).

• Mandated statements and disclosures. State attempts to require national banks to make disclosures in connection with specified credit card repayment terms have been held preempted as an impermissible interference with the ability to extend credit.51 OCC regulations already address the applicability of state law to national bank activities in some of these areas,52 but to date, unlike the Office of Thrift Supervision (OTS),53 we have not adopted regulations that more broadly codify the application of principles of preemption according to major groupings of activities, such as lending, deposit-taking, and other authorized bank activities. Our positions in some instances also have not clearly reflected whether we were employing an “occupation of the field” or “conflicts” approach, although our individual preemption decisions have more commonly reflected a “conflict” type approach to preemption analysis. The proposal clarifies the types of state law restrictions and requirements that do, and do not, apply to major types of activities and operations of national banks and, for those types of activities and operations, articulates the standards that determine whether particular types of state law restrictions and requirements are preempted.

Part 34 of our rules implements 12 U.S.C. 371, which authorizes national banks to engage in real estate lending subject to “such restrictions and requirements as the Comptroller of the Currency may prescribe by regulation or order.” Under subpart A of part 34 (which sets forth the general authority for national banks to engage in real estate transactions), state laws concerning five enumerated areas already are explicitly preempted in their application to national banks and their operating subsidiaries. 12 CFR 34.1(b) and 34.4(a). Section 34.4(b) then states that the OCC will apply recognized principles of Federal preemption in considering whether state laws apply to other aspects of real estate lending by national banks.

Pursuant to our authority under section 371, the proposal amends § 34.4(a) and (b) to provide a more complete statement of the types of state law restrictions and requirements that do, and do not, apply to real estate lending activities of national banks. However, as recognized by the Supreme Court, Federal law may preempt state law expressly (by an express statement of preemption in the law) or implicitly (because the Federal law is so complete that it “occupies the field” or because the state law conflicts with a Federal power). Although the regulation proposed today would address state laws by type, for reasons discussed below, we invite comment on whether our regulations, like those of the OTS,54 should state explicitly that Federal law occupies the entire field of national banks' real estate lending activities.55

Section 371 provides a broad grant of authority to national banks to engage in real estate lending. The only qualification in the statute is that these Federal powers are subject “to section 1828(o) of this title [which requires the adoption of uniform Federal safety and soundness standards governing real estate lending] and such restrictions and requirements as the Comptroller of the Currency may prescribe by regulation or order.”56 On its face, section 371 does not condition the grant of authority to national banks to engage in real estate lending upon engaging in that activity only to the extent that a state permits it.

The breadth of the Federal power and the OCC's rulemaking authority created by section 371 can be understood by comparing the text and structure of that section to that of 12 U.S.C. 92, a statute similar in both respects and one that vests comparably broad rulemaking authority in the OCC. In Barnett, the Supreme Court analyzed the extent to which section 92 leaves room for state regulation of the activities the statute authorizes, and is thus instructive for purposes of analyzing section 371. The Supreme Court stated that—

The Court noted that “[i]n defining the pre-emptive scope of statutes and regulations granting a power to national banks, [prior U.S. Supreme Court decisions] take the view that normally Congress would not want States to forbid, or to impair significantly, the exercise of a power that Congress explicitly granted.”58 The Supreme Court concluded that “where Congress has not expressly conditioned the grant of ‘power’ upon a grant of state permission, the Court has ordinarily found that no such condition applies.”59

This analysis of section 92 by the Supreme Court is instructive in addressing section 371 as well. Like section 92, section 371 creates a broad power for national banks. By its terms, section 371 also is not a limited permission, that is, it does not authorize national banks to engage in real estate lending only to the extent state law allows.60 Moreover, section 371 differs from section 92 in two respects that are even more telling. First, section 371 refers expressly and exclusively to the OCC as the entity possessing authority to set restrictions and requirements that apply to national banks' real estate lending activities. Second, unlike the activity to which section 92 pertains—the sale of insurance—which historically has been predominantly regulated at the state level, national bank real estate lending authority has been extensively regulated at the Federal level since the power first was codified.

Beginning with the enactment of the Federal Reserve Act of 1913, national banks' real estate lending authority has been governed by the express terms of section 371. As originally enacted in 1913, section 371 contained a limited grant of authority to national banks to lend on the security of “improved and unencumbered farm land, situated within its Federal reserve district.”61 In addition to the geographic limits inherent in this authorization, the Federal Reserve Act also imposed limits on the term and amount of each loan as well as an aggregate lending limit. Over the years, section 371 was repeatedly amended to broaden the types of real estate loans national banks were permitted to make, to expand geographic limits, and to modify loan term limits and per-loan and aggregate lending limits.

In 1982, Congress removed these “rigid statutory limitations” 62 in favor of a broad provision authorizing national banks to “make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate, subject to such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation.”63 The purpose of the 1982 amendment was “to provide national banks with the ability to engage in more creative and flexible financing, and to become stronger participants in the home financing market.”64 In 1991, Congress removed the term “rule” from this phrase and enacted an additional requirement, codified at 12 U.S.C. 1828(o), that national banks (and other insured depository institutions) conduct real estate lending pursuant to uniform standards adopted at the Federal level by regulation of the OCC and the other Federal banking agencies.65 Thus, the history of national banks' real estate lending activities under section 371 is one of extensive Congressional involvement gradually giving way to a streamlined approach in which Congress has delegated broad rulemaking authority to the Comptroller. The two versions of section 371—namely, the lengthy and prescriptive approach prior to 1982 and the more recent statement of broad authority qualified only by reference to Federal law—may be seen as evolving articulations of the same idea.

In the advance notice of proposed rulemaking (ANPRM) for OTC laxative, antidiarrheal, emetic, and antiemetic drug products (40 FR 12902 at 12906, March 21, 1975), the advisory review panel on OTC laxative, antidiarrheal, emetic, and antiemetic drug products (the Panel) recommended Category I status for the OTC bulk laxative psyllium ingredients, which include plantago seed, plantago ovata husks, psyllium (hemicellulose), psyllium hydrophilic mucilloid, psyllium seed, psyllium seed (blond), and psyllium seed husks. FDA concurred with the Panel's Category I classification of these ingredients in the tentative final monograph (TFM) published in the Federal Register of January 15, 1985 (50 FR 2124 at 2152).

In the ANPRM, the Panel recommended a warning statement (§ 334.52(a)(1) 21 CFR 334.52(a)(1)) for bulk forming laxatives that advised drinking a full glass, 8 ounces (oz), of liquid with each dose and direction statements (§ 334.10(f)) advising adequate fluid intake. The Panel concluded that adequate fluid intake was necessary for the proper use of bulk-forming laxatives because esophageal and intestinal obstruction had occurred from ingesting bulk-forming laxatives with insufficient water or in the presence of certain disease conditions (40 FR 12902 at 12908). FDA discussed the risk of esophageal obstruction from certain bulk laxative ingredients, including water-soluble gums, and the need for adequate fluid intake (8 oz) with each dose in comments 36 and 37 of the TFM (50 FR 2124 at 2131 and 2132). FDA proposed the direction “Drink a full glass (8 oz) of liquid with each dose” to define adequate fluid intake.

In the Federal Register of October 1, 1986 (51 FR 35136), FDA amended the TFM and proposed that bulk laxative ingredients be administered in divided doses rather than a single daily dose. The amendment was based on data that indicated the maximum daily dose of some bulk laxatives was so large that it may pose a risk of esophageal obstruction if taken at one time (51 FR 35136).

After receiving reports of cases of esophageal obstruction due to ingestion of laxative products containing water-soluble gums, hydrophilic gums, and hydrophilic mucilloids, including psyllium, FDA published a proposed rule in the Federal Register of October 30, 1990 (55 FR 45782), to require a warning in the labeling of all OTC drug products containing water-soluble gums as active ingredients. FDA added the warning to alert users to take adequate fluid and to avoid using these products if the person had previously experienced any difficulty in swallowing. FDA published a final rule requiring new warning and direction statements in the Federal Register of August 26, 1993 (58 FR 45194) and amended that rule in the Federal Register of March 17, 1999 (64 FR 13254 at 13292). The current warnings and directions (in § 201.319(b) (21 CFR 201.319(b)) state:

A granular dosage form of psyllium, as a single ingredient product or a combination product containing psyllium (82 percent) and senna (18 percent), was introduced into the OTC market around 1979. In 1989, a major manufacturer of psyllium granular dosage form products reported to FDA 61 cases of esophageal obstruction and choking that occurred between February 1980 and December 1988 (Ref. 1). No deaths occurred, but these reports indicated that 19 people were hospitalized and 31 people required medical intervention in the form of endoscopy to dislodge the esophageal obstructions. The same manufacturer had submitted a comment in 1985 (Ref. 2) to the laxative TFM stating that consumer labeling of psyllium containing laxatives should: (1) State that bulk-forming laxatives have the potential to block the esophagus, particularly in the presence of esophageal narrowing or when consumed with insufficient liquid, (2) bear a warning to drink sufficient amounts of fluid, (3) advise people with esophageal narrowing against using the product, and (4) direct individuals who experience esophageal obstruction, regurgitation, and difficulty swallowing to seek immediate medical attention. In response to the comment (Ref. 3), FDA suggested that the cases of esophageal blockage may be related to the manufacturer's directions for use, which instruct consumers to place the granules in the mouth and swallow, without chewing, prior to drinking liquid. FDA noted that other psyllium-containing OTC laxative drug products are mixed into liquid or food or, in the case of wafers and chewable tablets, chewed before swallowing. FDA indicated that it did not consider the manufacturer's directions for its products adequate to provide for their “safe OTC use” and suggested that, to retain OTC status, the manufacturer should consider reformulating the products to be suspended in “no less than 8 ounces of liquid per dose prior to consumption” or provide more specific labeling information indicating that the product is “not to be taken directly by spoon or swallowed dry.” FDA stated that the manufacturer's products might require a new drug application (NDA) for use under medical supervision. FDA mentioned other reports of esophageal obstruction and asphyxiation associated with the ingestion of water-soluble gums, hydrophilic gums, and hydrophilic mucilloids, including psyllium.

In response to FDA's concerns (Ref. 4), the manufacturer noted that it took the following actions to resolve the problems of esophageal obstruction and choking: (1) In 1985, the directions for use were modified to emphasize the need to have adequate fluid intake, (2) a patient package insert was placed inside each package stressing the importance of taking sufficient liquid, and (3) a “dear doctor” letter was issued in February 1985 to U.S. physicians calling attention to the need for adequate fluid intake to avoid the risk of esophageal obstruction. The manufacturer stated that only 15 of the 61 cases occurred after it took these actions.

As noted previously, on August 26, 1993, FDA published a final rule in the Federal Register requiring warning and direction statements in the labeling of all OTC drug products containing water-soluble gums as active ingredients, including psyllium. Additional warnings and directions were added to alert users to consume adequate fluid and to avoid using such products if the person had previously experienced any difficulty in swallowing.

Despite the new required warnings and directions and other labeling changes initiated by the manufacturer, FDA continued to receive reports of choking and esophageal obstruction associated with psyllium, particularly the granular dosage form. In November 2000, FDA reviewed reports (postmarketing safety review) from its adverse event reporting system (AERS) database and the medical literature for the time between 1966 and 2000 (Ref. 5). FDA identified 98 reported cases of esophageal obstruction and choking associated with the use of psyllium products (Ref. 6). Four deaths occurred and 66 cases required medical intervention and/or hospitalization. Of these 98 cases, 78 (80 percent), including 1 death and 59 cases that required medical intervention and/or hospitalization, were related to the granular dosage form that is swallowed unchewed while drinking liquid. Medical intervention included endoscopy (in 41 cases), esophageal dilatation, surgery, nasogastric tube, Heimlich maneuver, and polypectomy snare. The mean age in these cases (27 cases not reporting age) was 69 years. Possible risk factors were identified in 52 percent of the cases, although there were 37 cases with no reported or apparent risk factors.

FDA also identified 13 (11 percent) cases of choking-related events (and two cases of esophageal obstruction (2 percent)) related to a powder or wafer psyllium product. The label of these products stated that the powder should be mixed with 8 oz of liquid and the wafers should be consumed with 8 oz of liquid. The mean age in these cases was 71 years. There were three deaths (two from asphyxiation and one from bronchus obstruction) and seven people who required hospitalization. Three cases (4 percent) of choking and/or difficulty swallowing and four cases (5 percent) of esophageal obstruction were related to the use of another psyllium product available as a powder or toasted granules. The product directions indicated to mix the powder with liquid and sprinkle the granules on food. All seven cases (mean age was 64 years) required hospitalization.

Although these reports indicate there were fewer deaths related to the granular dosage form that was swallowed unchewed while drinking liquid (one out of four), there were significantly more overall cases of esophageal obstruction (78 out of 98) and cases that required medical intervention (59 out of 66) with this dosage form.

In January 2001, FDA requested and obtained updated adverse event reports from a current major manufacturer of psyllium laxative products in granular dosage form for the time period between January 1999 and January 2001 (Ref. 7). In April 2002, FDA received an update from this manufacturer for the time period after January 2001 (Ref. 8). This manufacturer's product labeling contained the following directions:

FDA's reviews (Refs. 9 and 10) of these reports identified 44 additional cases of adverse events related to esophageal obstruction between January 1999 and May 2002. No deaths were reported, but 13 of the reported cases were considered serious events requiring medical intervention (11 underwent endoscopy). The adverse event reports suggested that most of the people using the products followed the directions on the label (information on the dose taken was available in 36 out of 44 cases). Most people (27 out of 35) took sufficient fluid with the product, while insufficient fluid intake may have contributed to the esophageal obstruction in 7 cases.

In summary, FDA has received 142 cases of adverse events regarding esophageal obstruction and choking associated with psyllium between 1966 and May 2002. Of these 142 cases, 59 occurred after publication of the 1993 required warning (58 FR 45194) with 45 reported to have occurred during the last 3 years alone. Eleven of these 45 reported cases (25 percent) involved hospitalization and/or the need for invasive procedures.

Based on the data reviewed, and despite the warnings it has mandated, FDA now believes that there still exists a significant safety problem with esophageal obstruction associated with psyllium laxative products in granular dosage form, particularly products that are swallowed dry, swallowed partially moistened prior to drinking liquid, and swallowed unchewed while drinking liquid. FDA is concerned that a consumer ingesting this granular dosage form is less likely to drink adequate amounts of fluid with the product than a consumer instructed to mix the product in 8 oz of fluid prior to ingestion. Multiple labeling changes, including additional warnings and enhanced directions to take adequate fluid, have not alleviated this problem. Rather, the problem seems to have worsened. During the first 10 years of marketing, 61 cases of esophageal obstruction were reported compared to 44 cases during the last 3 years alone. In addition, FDA is concerned that the incidence of serious adverse events for these products is underreported because reporting for products marketed under an OTC drug monograph is not currently mandatory.

FDA now considers OTC laxative drug products containing psyllium ingredients in granular dosage form as presenting an unacceptable health risk to consumers. These drug products include, but are not limited to: (1) Any granules that are swallowed dry prior to drinking liquid, (2) any granules that are dispersed, suspended, or partially dissolved in liquid prior to swallowing, (3) any granules that are chewed, partially chewed, or unchewed, and then washed down (or swallowed) with liquid, and (4) any granules that are sprinkled over food.

FDA continues to receive reports of esophageal obstruction and choking associated with these products despite the warning and direction statements required for all water soluble gums in § 201.319. Therefore, due to the significant safety risk these products pose, FDA is proposing to reclassify bulk laxative psyllium ingredients in granular dosage form from Category I (monograph) to Category II (nonmonograph). FDA proposes to add these ingredients in granular dosage form to the list of bulk laxatives in § 310.545(a)(12)(i) (21 CFR 310.545(a)(12)(i)) and to amend proposed § 334.10 (bulk-forming laxative active ingredients) to exclude the granular dosage form.

Mandating warnings in an OTC drug monograph does not require a finding that any or all of the OTC drug products covered by the monograph actually caused an adverse event, and FDA does not find so. Nor does FDA's requirement of warnings repudiate the prior OTC drug regulations and monograph rulemakings under which the affected drug products have been lawfully marketed. Rather, as a consumer protection agency, FDA has determined that warnings are necessary to ensure that OTC drug products continue to be safe and effective for their labeled indications under ordinary conditions of use as those terms are defined in the Federal Food, Drug, and Cosmetic Act (the act). This judgment balances the benefits of these drug products against their potential risks (see § 330.10(a) 21 CFR 330.10(a)). In the current situation, FDA has determined that warnings are not adequate to address the significant safety risks that these products pose.

FDA's decision to act in this instance need not meet the standard of proof required to prevail in a private tort action (Glastetter v. Novartis Pharmaceuticals, Corp., 252 F.3d 986, 991 (8th Cir. 2001)). To mandate warnings or take similar regulatory action, FDA need not show, nor do we allege, actual causation. For an expanded discussion of case law supporting FDA's authority to require such warnings, see “Labeling of Diphenhydramine-Containing Drug Products for Over-the-Counter Human Use, final rule” (67 FR 72555, December 6, 2002).

Accordingly, if a final rule based on this proposal issues any drug product containing any psyllium ingredients in granular dosage form will be considered nonmonograph and misbranded under section 502 of the act (21 U.S.C. 352). This type of drug product would also be considered a new drug under section 201(p) of the act (21 U.S.C. 321(p)) for which an approved application under section 505 of the act (21 U.S.C. 355), and set forth in part 314 of the regulations, is required for marketing. If a final rule is based on this proposal issues, it would apply to any OTC drug product containing psyllium ingredients in granular dosage form that is initially introduced or initially delivered for introduction into interstate commerce after the effective date of the final rule. Further, any OTC drug product that was previously initially introduced or initially delivered for introduction into interstate commerce could not then be repackaged or relabeled after the effective date of the final rule.

FDA has examined the impacts of this proposed rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-12), 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). Under the Regulatory Flexibility Act, if a rule has a significant economic impact on a substantial number of small entities, an agency must analyze regulatory options that would minimize any significant impact of the rule on small entities. Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement of anticipated costs and benefits before proposing any rule that may result in an expenditure in any one year by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million (adjusted annually for inflation).

FDA believes that this proposed rule is consistent with the principles set out in Executive Order 12866 and in these two statutes. The proposed rule is not a significant regulatory action as defined by the Executive order and so is not subject to review under the Executive order. The Unfunded Mandates Reform Act of 1995 does not require FDA to prepare a statement of costs and benefits for this proposed rule, because the proposed rule is not expected to result in any 1-year expenditures that would exceed $100 million adjusted for inflation. The current inflation adjusted statutory threshold is about $110 million.

The purpose of this proposed rule is to establish conditions under which OTC bulk-forming laxative psyllium ingredients in a granular dosage form are not generally recognized as safe and effective. FDA's drug listing system (DLS) identifies nine currently marketed OTC laxative drug products containing psyllium ingredients in granular dosage form and FDA is aware of at least one other product not in its DLS. One manufacturer currently markets three stock keeping units (SKUs) (individual products, packages, and sizes) of the granular dosage form that requires the product to be swallowed dry while drinking liquid; two manufacturers market two SKUs each, and one manufacturer markets one SKU. It is likely that there may be a few additional products that are currently not included in FDA's DLS. This proposed rule, when finalized, will result in the reformulation or removal of probably less than a dozen products.

• Reformulation Costs

Some manufacturers may elect not to reformulate (i.e., they may elect to discontinue marketing of the product). For those products that need reformulation, the cost can be significant. The cost to reformulate a product will vary greatly depending on the nature of the change in the formulation, the product, the process, and the size of the firm. A manufacturer may elect to change the dosage form of the psyllium product or to substitute other monograph ingredients. This would require the manufacturer to redo the validation (product, process, new supplier), conduct stability tests, change master production records in order to insure compliance with good manufacturing practice, and, for some dosage forms, conduct palatability tests. (See section 501(a)(1)(B) of the act (21 U.S.C. 351(a)(1)(B) and 21 CFR parts 210 and 211.) FDA estimates the cost of reformulation to range from $100,000 to $500,000 per product. Therefore, if 10 products are reformulated, the midpoint of the cost estimate implies total costs of $3,000,000. However, FDA believes the total costs will be much smaller because not all manufacturers will elect to reformulate and some may choose to discontinue a product line if sales are too low to justify the added cost, and/or they also produce substitute products that do not require reformulation. Manufacturers may also elect to purchase reformulated products from another manufacturer and then be a distributor of that product. Competitive market forces and increased public awareness of a potential safety hazard of these ingredients in a granular dosage form would most likely lead all manufacturers to move to alternative products over time.

• Relabeling Costs

Manufacturers of these products will also incur costs to relabel their products to reflect the new formulation. Estimates of relabeling costs vary greatly and range from $3,000 to $5,000 per SKU depending on whether the products are nationally branded or private label. FDA estimates that manufacturers with more than one affected SKU will likely discontinue one or more SKUs. If some SKUs are discontinued, FDA estimates that only three to six SKUs will need to be relabeled as a result of reformulation. If these SKUs are relabeled, the total one-time cost of relabeling could range from $9,000 (three SKUs x $3,000) to $30,000 (six SKUs x $5,000). This relabeling cost should not be a significant economic impact on a substantial number or small entities.

Some manufacturers may choose to submit an NDA deviation for their psyllium product in accordance with § 330.11. Overall, there may be fewer costs incurred by this process than by submission of a full NDA.

Because these products must be manufactured in compliance with the pharmaceutical current good manufacturing practices (21 CFR parts 210 and 211), all firms have the necessary skills and personnel to perform the tasks of reformulation, validation, and relabeling either in-house or by contractual arrangement. The rule will not require any new reporting and recordkeeping activities. No additional professional skills are needed.

• Regulatory Alternatives Considered

FDA considered but rejected the following additional alternatives: (1) Leave these products in the monograph, and (2) an exemption from coverage for small entities. FDA does not consider either of these approaches acceptable because they do not assure that consumers will have safe OTC psyllium laxative drug products in a granular dosage form. FDA does not believe that there are any significant alternatives to the proposed rule that would adequately provide for the safe use of these OTC drug products.

FDA does not believe that this proposed rule would have a significant economic impact on a substantial number of small entities. However, FDA recognizes the uncertainty of its estimates with respect to the number of affected small entities and products, as well as the economic impact of the rule on those small entities. Thus, this economic analysis, together with other relevant sections, serves as FDA's initial regulatory flexibility analysis.

Finally, FDA specifically invites public comment regarding any substantial or significant economic impact that this proposed rule would have on OTC laxative drug products containing psyllium ingredients in a granular dosage form. Types of impact may include, but are not limited to, the costs associated with reformulation, relabeling, or repackaging. Comments regarding the impact of this rulemaking on OTC laxative drug products containing these ingredients should be accompanied by appropriate documentation. FDA is providing a period of 90 days from the date of publication of this proposed rule in the Federal Register for comments on this subject to be developed and submitted. FDA will evaluate any comments and supporting data that are received and will reassess the economic impact of this rulemaking in the preamble to the final rule.

Through this rule, the Bureau will revise its regulations in 28 CFR part 522, on Civil Contempt of Court Commitments (civil contempt commitments).

We are making this rule to comply with the DC Revitalization Act, enacted August 5, 1997. This Act makes the Bureau responsible for the “custody, care, subsistence, education, treatment and training” of “the felony population sentenced pursuant to the District of Columbia Code” (DC Code offenders). (DC Code section 24-101 (a) and (b).)

As a result of absorbing approximately 8000 DC Code offenders, we revise our rules on Civil Contempt of Court Commitments to address DC Code offenders.

We also revise this rule to clarify existing provisions by using simpler organization and language. To clarify § 522.11, which is long and unnecessarily complex, we divided it into five separate rules with clearer headings. For further simplification, we remove language relating solely to internal agency practices and procedures. We do not, however, make any substantive changes to the current rules.

You can send written comments on this rule to the Rules Unit, Office of General Counsel, Bureau of Prisons, 320 First Street, NW., Washington, DC 20534.

We will consider comments we receive during the comment period before we take final action. We will try to consider comments we receive after the end of the comment period. In light of comments we receive, we may change the rule.

We do not plan to have oral hearings on this rule. All the comments we receive remain on file for public inspection at the above address.

This regulation has been drafted and reviewed in accordance with Executive Order 12866, “Regulatory Planning and Review”, section 1(b), Principles of Regulation. The Director of the Bureau of Prisons has determined that this rule is not a “significant regulatory action” under Executive Order 12866, section 3(f), and accordingly this rule has not been reviewed by the Office of Management and Budget.

This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on distribution of power and responsibilities among the various levels of government. Under Executive Order 13132, this rule does not have sufficient federalism implications for which we would prepare a Federalism Assessment.

The Director of the Bureau of Prisons, under the Regulatory Flexibility Act (5 U.S.C. 605(b)), reviewed this regulation. By approving it, the Director certifies that it will not have a significant economic impact upon a substantial number of small entities because: This rule is about the correctional management of offenders committed to the custody of the Attorney General or the Director of the Bureau of Prisons, and its economic impact is limited to the Bureau's appropriated funds.

This rule will not cause State, local and tribal governments, or the private sector, to spend $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. We do not need to take action under the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States based companies to compete with foreign based companies in domestic and export markets.

Under rulemaking authority vested in the Attorney General in 5 U.S.C. 552(a) and delegated to the Director, Bureau of Prisons, we amend 28 CFR part 522 as follows.

We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking [CGD07-03-088], indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8\1/2\ by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them.

We do not now plan to hold a public meeting. But you may submit a request for a meeting by writing to Bridge Branch, Seventh Coast Guard District, 909 SE. 1st Avenue, Room 432, Miami, Florida 33131, explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register.

The Seaboard System Railroad Bridge across the Miami River, mile 5.3, is a railroad bridge with a vertical clearance of 6 feet at mean high water and a horizontal clearance of 60 feet. The current operating regulations published in 33 CFR 117.307 require the bridge to open on signal from 8:30 a.m. to 5:30 p.m., Monday through Friday. At all other times, the draw must open on signal if at least three hours notice is given. The last time the bridge was opened for vessel traffic, however, was December 2, 2001, though a full time bridge tender is on site. The proposed rule would improve the efficiency of the bridge system and meet the reasonable needs of navigation by providing for openings with a 48-hour advance notice to the CSX System Operating Headquarters, at (800) 232-0144, and would still meet the reasonable needs of navigation. In addition, the owner is requesting that the Coast Guard change the name of the bridge, which has been sold, from the Seaboard System Railroad Bridge to the CSX Railroad Bridge.

Under the proposed rule, the bridge would open only with a 48-hour advance notice to the CSX System Operating Headquarters, at (800) 232-0144. The bridge is the last moveable bridge on the waterway approximately 1000 yards from a salinity dam, which marks the end of navigability on the waterway of the Miami River. The bridge has not opened for navigation since December 2, 2001, and, except for normal maintenance, experienced the same pattern of no openings for the year 2002. Accordingly, this proposed schedule would meet the reasonable needs of navigation. Moreover, in order to accurately refer to the bridge, this proposed rule would change the name from Seaboard System Railroad Bridge to the CSX Railroad Bridge.

This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS).

We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation is unnecessary, because the proposed rule would provide for openings with advanced notice.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities, because the past few years of the bridge's history indicates that it rarely opens. The proposed rule provides for openings and meets the reasonable needs of navigation.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If this proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed under FOR FURTHER INFORMATION CONTACT. Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

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

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

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

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

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

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

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

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

We have analyzed this proposed rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (32)(e), of the Instruction, from further environmental documentation. Under figure 2-1, paragraph (32)(e), an “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are not required for this rule.

For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows:

For further information, please see the information provided in the direct final action, with the same title, that is located in the “Rules and Regulations” section of this Federal Register publication.

You may submit comments either electronically or by mail. To ensure proper receipt by EPA, identify the appropriate rulemaking identification number PA206-4212 in the subject line on the first page of your comment. Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments.

1. Electronically. If you submit an electronic comment as prescribed below, EPA recommends that you include your name, mailing address, and an e-mail address or other contact information in the body of your comment. Also include this contact information on the outside of any disk or CD ROM you submit, and in any cover letter accompanying the disk or CD ROM. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. EPA's policy is that EPA will not edit your comment, and any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.

i. E-mail. Comments may be sent by electronic mail (e-mail) to morris.makeba@epa.gov, attention PA206-4212. EPA's e-mail system is not an “anonymous access” system. If you send an e-mail comment directly without going through Regulations.gov , EPA's e-mail system automatically captures your e-mail address. E-mail addresses that are automatically captured by EPA's e-mail system are included as part of the comment that is placed in the official public docket.

ii. Regulations.gov. Your use of Regulation.gov is an alternative method of submitting electronic comments to EPA. Go directly to http://www.regulations.gov, then select “Environmental Protection Agency” at the top of the page and use the “go” button. The list of current EPA actions available for comment will be listed. Please follow the online instructions for submitting comments. The system is an “anonymous access” system, which means EPA will not know your identity, e-mail address, or other contact information unless you provide it in the body of your comment.

iii. Disk or CD ROM. You may submit comments on a disk or CD ROM that you mail to the mailing address identified in the ADDRESSES section of this document. These electronic submissions will be accepted in WordPerfect, Word or ASCII file format. Avoid the use of special characters and any form of encryption.

2. By Mail. Written comments should be addressed to the EPA Regional office listed in the ADDRESSES section of this document.

For public commenters, it is important to note that EPA's policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing at the EPA Regional Office, as EPA receives them and without change, unless the comment contains copyrighted material, confidential business information (CBI), or other information whose disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in the official public rulemaking file. The entire printed comment, including the copyrighted material, will be available at the Regional Office for public inspection.

Do not submit information that you consider to be CBI electronically to EPA. You may claim information that you submit to EPA as CBI by marking any part or all of that information as CBI (if you submit CBI on disk or CD ROM, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is CBI). Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the official public regional rulemaking file. If you submit the copy that does not contain CBI on disk or CD ROM, mark the outside of the disk or CD ROM clearly that it does not contain CBI. Information not marked as CBI will be included in the public file and available for public inspection without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified in the FOR FURTHER INFORMATION CONTACT section.

You may find the following suggestions helpful for preparing your comments:

1. Explain your views as clearly as possible.

2. Describe any assumptions that you used.

3. Provide any technical information and/or data you used that support your views.

4. If you estimate potential burden or costs, explain how you arrived at your estimate.

5. Provide specific examples to illustrate your concerns.

6. Offer alternatives.

7. Make sure to submit your comments by the comment period deadline identified.

8. To ensure proper receipt by EPA, identify the appropriate regional file/rulemaking identification number in the subject line on the first page of your response. It would also be helpful if you provided the name, date, and Federal Register citation related to your comments.

This document concerns an “Amendment to Project XL Site-Specific Rulemaking for Georgia-Pacific Corporation's Facility in Big Island, Virginia.” For further information, please see the related direct final action that is located in the “Rules and Regulations” section of this Federal Register publication.

It is our intent that any final action resulting from this proposal will be as accurate as possible. Therefore, we solicit comments or suggestions from the public, other concerned governmental agencies, the scientific community, industry, or any other interested party concerning this proposed rule. Based on public comment, in developing the final rule we may find that areas proposed are not essential, appropriate for exclusion under section 4(b)(2), or not appropriate for exclusion, in which case, they would be made part of the final designation. We particularly seek comments concerning:

(1) The reasons why any areas should or should not be determined to be critical habitat as provided by section 4 of the Act, including whether the benefits of designation will outweigh any threats to the species resulting from the designation;

(2) Specific information on the amount and distribution of Astragalus magdalenae var. peirsonii and its habitat, and which habitat or habitat components are essential to the conservation of this species and why;

(3) Land use designations and current or planned activities in or adjacent to the areas proposed and their possible impacts on proposed critical habitat;

(4) Any foreseeable economic or other potential impacts resulting from the proposed designation, in particular, any impacts on small entities;

(5) Economic and other values associated with designating critical habitat for Astragalus magdalenae var. peirsonii such as those derived from non-consumptive uses (e.g., hiking, camping, photography, improved air quality, increased soil retention, and “existence values”); and

(6) Whether our approach to designating critical habitat could be improved or modified in any way to provide for greater public participation and understanding, or to assist us in accommodating public concerns and comments.

If you wish to comment, you may submit your comments and materials concerning this proposal by any one of several methods (see ADDRESSES section). Please submit electronic comments in ASCII file format and avoid the use of special characters or any form of encryption. Please also include “Attn: RIN1018-AI77” in your e-mail subject header and your name and return address in the body of your message. If you do not receive a confirmation from the system that we have received your internet message, contact us directly by calling our Carlsbad Fish and Wildlife Office at phone number 760-431-9440. Please note that the e-mail address “FW1PMV@r1.fws.gov” will be closed out at the termination of the public comment period.

Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address from the rulemaking record, which we will honor to the extent allowable by law. There also may be circumstances in which we would withhold from the rulemaking record a respondent's identity, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety. Comments and materials received will be available for public inspection, by appointment, during normal business hours at the above address.

We listed Astragalus magdalenae var. peirsonii as threatened on October 6, 1998 (63 FR 53596) due to threats of increasing habitat loss from Off-Highway Vehicle (OHV) use and associated recreational development, destruction of plants, and lack of protection afforded the plant under State law. It is our intent, in this proposed rule, to reiterate and discuss only those topics directly relevant to the development and designation of critical habitat or relevant information obtained since the final listing. Please refer to our final listing rule for a more detailed discussion of the plant's taxonomic history and physical description.

The current name, Astragalus magdalenae var. peirsonii (Munz and Mc Burney) Barneby (Barneby 1958), is accepted in both systematic (Barneby 1964) and floristic treatments (Barneby 1959, Munz 1974, and Spellenberg 1993). Surveys conducted in the Borrego Valley, have failed to document a historical reference to an occurrence of Astragalus magdalenae var. peirsonii (Bureau of Land Management (BLM) 2001); consequently this population is thought to be extirpated. A collection from the Yuma Dunes of Arizona thought to represent A. m. var. peirsonii was found to be misidentified. In Mexico, A. m. var. peirsonii is known from the Gran Desierto of northwestern Sonora (Felger 2000) and from northeastern Estado de Baja California (Barneby 1959, 1965; Spellenberg 1993). Currently, the only known population of A. m. var. peirsonii remaining in the United States is located in the Algodones Dunes of Imperial County, California. This dune field is one of the largest in the United States and one of the most popular for OHV use.

Astragalus magdalenae var. peirsonii is a stout, short-lived perennial member of the Fabaceae (Legume Family). Plants develop extremely long tap roots (Barneby 1964) that penetrate deeply to the more moist sand and anchor the plants in the shifting dunes. The root crown is often exposed by wind action moving the sand away from the base of the plants. The flowers are arranged in 10 to 17 flowered racemes. The inflated fruits are large and contain 11 to 16 large flattened black seeds—among the largest seeds of any Astragalus in North America. Seeds are either dispersed locally by falling out of partly opened fruits on the parent plant salt-shaker style or by their release from fruits blown across the sand after falling from the parent plant. Seeds require no pre-germination treatment to induce germination, but show increased germination success when scarified (outer cover is broken) (Romspert and Burk 1979; Porter in litt. 2002). Dispersed seeds that do not germinate during the subsequent growing season become part of the seed bank (Given 1994). In laboratory studies, seeds germinated more readily at lower and intermediate temperatures of 59 to 77 degrees Fahrenheit (15 to 25 degrees Celsius) in the cooler fall and winter months as might be expected (Romspert and Burk 1979).

Astragalus magdalenae var. peirsonii seedlings reportedly mature rapidly, and although perennial, some plants may bear fruit within several months of germination (Barneby 1964; Romspert and Burk 1979). Romspert and Burk (1979) noted that older plants were the primary seed producers, and plants that become reproductive in the first season do not make significant contributions to the seedbank. It is therefore important that plants survive for more than 1 year in order to replenish the existing seedbank.

Astragalus magdalenae var. peirsonii exhibits temporal variability in plant numbers apparently associated with annual precipitation patterns. In dune-wide surveys conducted in 1997, 1998, 1999, and 2000, the species was most abundant in 1998, the highest rainfall year, and least abundant in 2000, the lowest rainfall year (BLM 2001). Based on current understanding of the species' life history, sufficient rain in conjunction with wetter-than-average fall weather appears to trigger significant germination events. Seedlings may be generally present in suitable habitat throughout the dunes, especially during above-normal precipitation years. In intervening drier years, plant numbers decrease as individuals die and are not replaced by new seedlings. The species likely depends on the production of seeds in the wetter years and the persistence of the seed banks until appropriate conditions for production and germination occur. Further research and modeling are necessary to better understand the dynamics of this system and how the species may be responding to natural and man-made disturbances within its range.

Astragalus magdalenae var. peirsonii occurs on open sand dunes in a vegetation community referred to as psammophytic scrub (Westec 1977; BLM 2000). Desert psammophytic scrub is described as being distinguished by a rather large number of plants restricted entirely or largely to an active dune area (Thorne 1982). Desert psammophytic scrub transitions into the sandier phases of creosote bush scrub, which is generally only present at the lower, more stabilized margins of the dunes (Thorne 1982). Astragalus magdalenae var. peirsonii, Helianthus niveus ssp. tephrodes (Algodones Dunes sunflower), Croton wigginsii (Wiggins' croton), Palafoxia arida ssp. gigantea (giant Spanish needle), Pholisma (as Ammobroma) sonorae (sand food), Ephedra trifurca (three-forked ephedra), and Eriogonum deserticola (desert eriogonum), are restricted desert psammophytic scrub taxa in the Algodones Dunes (Thorne 1982) while the same author included Astragalus lentiginosus var. borreganus (Borrego milk-vetch), Dicorea canescens (dune bugseed), Petalonyx thurberi (sandpaper plant), and Tiquilia species as more widely distributed species found off the dunes. Many of these taxa are also found in association with A. m. var. peirsonii in the Gran Desierto of Sonora, Mexico (Felger 2000). Astragalus magdalenae var. peirsonii is found on deep, active dunes generally under 20 degrees slope. Usually, one or more of the other psammophytic scrub taxa (Thorne 1982) are also found with A. m. var. peirsonii. Creosote bush scrub is rarely found in deep sand dunes, but may encroach in adjacent areas especially where the base soil is exposed.

The current known geographical range of Astragalus magdalenae var. peirsonii in the United States is limited to a narrow band in the central portion of the Algodones Dunes of Imperial County, California. This band runs parallel to the active, linear dunes on the western edge of the dune field in a northwest to southeast direction. The band is between these active linear dunes on the west and transverse ridge dunes to the east. The dunes in this band are composed of a series of transitional crescentic ridges (Muhs et al. 1995). Historically A. m. var. peirsonii was found in Borrego Valley, San Diego County (Barneby 1964). In Mexico, A. m. var. peirsonii occurs in northeastern Estado de Baja California (Barneby 1959, 1964; Westec 1977; Spellenberg 1993), and in the Gran Desierto of Sonora (Felger 2000).

The Algodones Dunes are one of the largest dune fields in North America. The Algodones Dunes are often referred to as the Imperial Sand Dunes, a designation derived from their inclusion in the Imperial Sand Dunes Recreation Area (ISDRA) established by the BLM. Virtually all lands in the Algodones Dunes are managed by BLM. However, the State of California and private parties own some small inholdings in the dune area (see Table 1).

The dunes extend about 40 miles (mi) (64 kilometers (km)), trending from northwest to southeast (Norris and Norris 1961). Winds from the northwest are prevalent in the winter, while in the summer the winds are from the southeast (Romspert and Burk 1979). This regime is likely responsible for the dune-building (Norris and Norris 1961) and fruit dispersal that result in the persistence of the plants in the dune system. The dunes are generally considered to have formed from sands from Lake Cahuilla that historically occupied the Cahuilla Basin. The western boundary of the dunes is marked by a series of parallel, longitudinal generally southeast trending ridges. The northern third of the dunes is narrow, about 2 mi (3 km) wide, and increases in elevation from 200 to 300 feet (ft) (60-91 meters (m)) in the northern portion to 300 to 400 ft (91 to 121 m) in the southern portion north of Highway 78. Areas in the central portion of the dunes reach an elevation 500 ft (152 m) south of State Highway 78, but reach elevations of only 200 ft (60 m) for most areas just north of Interstate 8. The central portion of the dunes is wider, about 5 mi (8 km), and is characterized by deep bowls (hollows among the dunes) and slip faces (areas so steep that the loose sand naturally cascades downward) that run transverse to the primary ridge line (Norris and Norris 1961). The area south of Interstate 8 is generally characterized by lower elevation, under 300 ft (91 m), dunes.

The Algodones Dunes are one of the driest and hottest regions in the United States. Romspert and Burk (1979) reported average yearly precipitation between 1941-1970 was 2.6 in (67.8 mm). The rainfall is often described as scattered or patchy. Rainfall amounts differ from place to place and from year to year with areas to the northwest being generally dryer than those to the southeast (BLM 2001). A soil survey for the Imperial Valley area of Imperial County (Zimmerman 1981) did not include the areas east of the Coachella Canal but did depict a few adjacent portions of the Algodones Dunes as Rositas fine sand with 9 to 30 percent slopes. Rositas fine sand are described as deep, somewhat excessively drained, sloping soils formed in wind-blown sands of diverse origin. Dean (1978) describes the sand as quartz with a mean grain size of 0.006 in (0.17 mm). Norris and Norris (1961) report that the dunes contain 60 to 70 percent quartz and 30 to 40 percent feldspar sand. Further analysis of the sands of the Algodones Dunes found its source was likely sediment from the Colorado River that flowed into the Cahuilla Basin (Muhs et al. 1995)

Destruction of plants and modification of habitat associated with OHV activity is considered the primary threat to Astragalus magdalenae var. peirsonii. Vehicles may have a direct impact on the plants by crushing and killing them or reducing their reproductive output. Vehicles can alter dune structure by altering hydrological traits of the dune, cover standing plants with encroaching sand, or expose standing plants by causing sand to fall away from the plants. Willoughby (BLM 2001), however, concluded that healthy populations of A. m. var. peirsonii persist in OHV “open areas” in the Algodones Dunes and that populations in both “open” and “closed” areas respond to precipitation patterns. This likely results from the observation that OHV use does not tend to encroach on habitat of the plants in more distant regions of the open area away from concentrated OHV staging sites (BLM 2001). Significant impacts from OHV use on A. m. var. peirsonii have been observed at and near OHV staging areas and have been previously documented (WESTEC 1977; ECOS 1990; BLM 2000). Since the species' listing, recreational use has steadily increased in the Algodones Dunes.

Another threat is herbivory by seed weevils, in the family Bruchidae, which contributes to the mortality of seeds and reduces seed crop for Astragalus magdalenae var. peirsonii (Romspert and Burk 1979). Fruits collected in April and stored in a bottle continued to release these seed weevils into October (Romspert and Burk 1979). However, the overall impact of seed weevils on the reproductive output of A. m. var. peirsonii is not known at this time. Weevils were noted on nearly all of the A. m. var. peirsonii plants encountered in 2003 by Porter (Porter, in litt. 2003). Herbivory of leaves, leaflets, and stem tips by rodents was also noted by Porter ( in litt. 2002a; in litt. 2003).

We have not yet developed a recovery plan or a conservation strategy for Astragalus magdalenae var. peirsonii. Based on our current understanding of the species' biology, the primary conservation needs include: maintenance of the major occurrences of A. m. var. peirsonii to conserve genetic diversity; management of the species' habitat to prevent catastrophic population declines; and collection of additional information concerning recreational use-patterns in the Algodones Dunes, the direct and indirect effects of OHV use on this species, and biological factors affecting milk-vetch demographics.

The final rule listing A. m. var. peirsonii as threatened was published in the Federal Register on October 6, 1998 (63 FR 53596). At the time we listed the plant we determined that designation of critical habitat was not prudent based on concerns about potential, deliberate acts of vandalism that could result from such a designation.

On October 25, 2001, we received a petition to delist Astragalus magdalenae var. peirsonii, dated October 24, 2001, from David P. Hubbard, Ted. J. Griswold, and Philip J. Giacinti, Jr. of Procopio, Cory, Hargreaves & Savitch LLP on behalf of the American Sand Association (ASA), San Diego Off-Road Coalition (SDO-RC), and Off-Road Business Association (O-RBA). On November 20, 2001, we sent a letter to David P. Hubbard of Procopio, Cory, Hargreaves & Savitch LLP acknowledging receipt of their petition. The Service is in the process of making the 90-day finding on the petition.

On November 15, 2001, the Center for Biological Diversity and California Native Plant Society filed a lawsuit in the U.S. District Court for the Southern District of California challenging our determination not to designate critical habitat for eight desert plants, including Astragalus magdalenae var. peirsonii (Center for Biological Diversity et al. v. Norton, No. 01 CV 2101). A second lawsuit also asserting the same challenge was filed on November 21, 2001, by the Building Industry Legal Defense Fund v. Norton, No. 01 CV 2145). Following the filing of these suits, the ASA, California Off-Road Vehicle Association, American Motorcycle Association, Inc.—District 37, the SDO-RC, and the O-RBA filed a motion to intervene. The motion was granted by the Court but limited the interveners' participation to resolution of an appropriate timeline for reconsideration of the critical habitat determination for A. m. var. peirsonii. On July 1, 2002, the court ordered the Service to complete a review of the prudency determination and, if prudent, to propose critical habitat for the plant on or before July 28, 2003.

In 30 years of implementing the ESA, we have found that the designation of statutory critical habitat provides little additional protection to most listed species, while consuming significant amounts of available conservation resources. Our present system for designating critical habitat has evolved since its original statutory prescription into a process that provides little real conservation benefit, is driven by litigation and the courts rather than biology, limits our ability to fully evaluate the science involved, consumes enormous agency resources, and imposes huge social and economic costs. We believe that additional agency discretion would allow our focus to return to those actions that provide the greatest benefit to the species most in need of protection.

While attention to and protection of habitat is paramount to successful conservation actions, we have consistently found that, in most circumstances, the designation of critical habitat is of little additional value for most listed species, yet it consumes large amounts of conservation resources. Sidle (1987) stated, “Because the ESA can protect species with and without critical habitat designation, critical habitat designation may be redundant to the other consultation requirements of section 7.” Currently, only 306 species or 25 percent of the 1,211 listed species in the United States under our jurisdiction have designated critical habitat. We address the habitat needs of all 1,211 listed species through conservation mechanisms such as listing, section 7 consultations, the Section 4 recovery planning process, the Section 9 protective prohibitions of unauthorized take, Section 6 funding to the States, and the Section 10 incidental take permit process. We believe that it is these measures that may make the difference between extinction and survival for many species.

We have been inundated with lawsuits for our failure to designate critical habitat, and we face a growing number of lawsuits challenging critical habitat determinations once they are made. These lawsuits have subjected us to an ever-increasing series of court orders and court-approved settlement agreements, compliance with which now consumes nearly the entire listing program budget. This leaves us with little ability to prioritize our activities to direct scarce listing resources to the listing program actions with the most biologically urgent species conservation needs.

The consequence of the critical habitat litigation activity is that limited listing funds are used to defend active lawsuits, to respond to Notices of Intent (NOIs) to sue relative to critical habitat, and to comply with the growing number of adverse court orders. As a result, listing petition responses, our own proposals to list critically imperiled species, and final listing determinations on existing proposals are all significantly delayed.

The accelerated schedules of court ordered designations have left us with almost no ability to provide for adequate public participation or to ensure a defect-free rulemaking process before making decisions on listing and critical habitat proposals due to the risks associated with noncompliance with judicially-imposed deadlines. This in turn fosters a second round of litigation in which those who fear adverse impacts from critical habitat designations challenge those designations. The cycle of litigation appears endless, is very expensive, and in the final analysis provides relatively little additional protection to listed species.

The costs resulting from the designation include legal costs, the cost of preparation and publication of the designation, the analysis of the economic effects and the cost of requesting and responding to public comment, and in some cases the costs of compliance with NEPA; all are part of the cost of critical habitat designation. None of these costs result in any benefit to the species that is not already afforded by the protections of the Act enumerated earlier, and they directly reduce the funds available for direct and tangible conservation actions.

Section 3(5)(A) of the Act defines critical habitat as—(i) the specific areas within the geographic area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features (I) essential to the conservation of the species and (II) that may require special management considerations or protection; and (ii) specific areas outside the geographic area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. “Conservation” means the use of all methods and procedures that are necessary to bring an endangered or a threatened species to the point at which listing under the Act is no longer necessary.

The designation of critical habitat does not affect land ownership or establish a refuge, wilderness, reserve, preserve, or other conservation area. It does not allow government or public access to private lands. Under section 7 of the Act, Federal agencies must consult with us on activities they undertake, fund, or permit that may affect critical habitat and lead to its destruction or adverse modification. However, the Act prohibits unauthorized take of listed species and requires consultation for activities that may affect them, including habitat alterations, regardless of whether critical habitat has been designated. We have found that the designation of critical habitat provides little additional protection to most listed species.

To be included in a critical habitat designation, habitat must be either a specific area within the geographic area occupied by the species on which are found those physical or biological features essential to the conservation of the species (primary constituent elements, as defined at 50 CFR 424.12(b)) and which may require special management considerations or protections, or be specific areas outside of the geographic area occupied by the species which are determined to be essential to the conservation of the species. Section 3(5)(C) of the Act states that not all areas that can be occupied by a species should be designated as critical habitat unless the Secretary determines that all such areas are essential to the conservation of the species. Our regulations (50 CFR 424.12(e)) also state that, “The Secretary shall designate as critical habitat areas outside the geographic area presently occupied by the species only when a designation limited to its present range would be inadequate to ensure the conservation of the species.”

Regulations at 50 CFR 424.02(j) define special management considerations or protection to mean any methods or procedures useful in protecting the physical and biological features of the environment for the conservation of listed species. When we designate critical habitat, we may not have the information necessary to identify all areas which are essential for the conservation of the species. Nevertheless, we are required to designate those areas we consider to be essential, using the best information available to us. Accordingly, we do not designate critical habitat in areas outside the geographic area occupied by the species unless the best available scientific and commercial data demonstrate that unoccupied areas are essential for the conservation needs of the species.

Section 4(b)(2) of the Act requires that we take into consideration the economic, and any other relevant impact, of specifying any particular area as critical habitat. We may exclude areas from critical habitat designation when the benefits of exclusion outweigh the benefits of including the areas within critical habitat, provided the exclusion will not result in extinction of the species.

Our Policy on Information Standards Under the Endangered Species Act, published in the Federal Register on July 1, 1994 (59 FR 34271), provides criteria, establishes procedures, and provides guidance to ensure that our decisions represent the best scientific and commercial data available. It requires our biologists, to the extent consistent with the Act and with the use of the best scientific and commercial data available, to use primary and original sources of information as the basis for recommendations to designate critical habitat. When determining which areas are critical habitat, a primary source of information should be the listing package for the species. Additional information may be obtained from a recovery plan, articles in peer-reviewed journals, conservation plans developed by States and counties, scientific status surveys and studies, biological assessments, or other unpublished materials and expert opinion or personal knowledge.

Section 4 of the Act requires that we designate critical habitat on the basis of what we know at the time of designation. Habitat is often dynamic, and species may move from one area to another over time. Furthermore, we recognize that designation of critical habitat may not include all of the habitat areas that may eventually be determined to be necessary for the recovery of the species. For these reasons, critical habitat designations do not signal that habitat outside the designation is unimportant or may not be required for recovery.

Areas that support populations, but are outside the critical habitat designation, will continue to be subject to conservation actions implemented under section 7(a)(1) of the Act and to the regulatory protections afforded by the section 7(a)(2) jeopardy standard, as determined on the basis of the best available information at the time of the action. Federally funded or permitted projects affecting listed species outside their designated critical habitat areas may still result in jeopardy findings in some cases. Similarly, critical habitat designations made on the basis of the best available information at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans, or other species conservation planning efforts if new information available to these planning efforts calls for a different outcome.

Section 3(5)(A) of the Act defines critical habitat as the specific areas within the geographic area occupied by the species on which are found those physical and biological features (I) essential to the conservation of the species and (II) which may require special management considerations or protection. As such, for an area to be designated as critical habitat for a species it must meet both provisions of the definition. In those cases where an area does not provide those physical and biological features essential to the conservation of the species, it has been our policy not to include these specific areas in designated critical habitat. Likewise, if we believe, based on an analysis, that an area determined to be biologically essential has an adequate conservation management plan that covers the species and provides for adaptive management sufficient to conserve the species, then special management and protection are already being provided, so those areas do not meet the second provision of the definition and are also not proposed as critical habitat.

Further, section 4(b)(2) of the Act states that critical habitat shall be designated, and revised, on the basis of the best available scientific data available after taking into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat. An area may be excluded from critical habitat if it is determined, following an analysis, that the benefits of such exclusion outweigh the benefits of specifying a particular area as critical habitat, unless the failure to designate such area as critical habitat will result in the extinction of the species. Consequently, we may exclude an area from designated critical habitat based on economic impacts, or other relevant impacts such as preservation of conservation partnerships and national security, if we determine the benefits of excluding an area from critical habitat outweigh the benefits of including the area in critical habitat, provided the action of excluding the area will not result in the extinction of the species.

In our critical habitat designations we have used both the provisions outlined in sections 3(5)(A) and 4(b)(2) of the Act to evaluate those specific areas which are proposed for designation as critical habitat and those areas which are subsequently finalized (i.e., designated).

Section 4(a)(3) of the Act and its implementing regulations (50 CFR 424.12) require that, to the maximum extent prudent and determinable, we designate critical habitat at the time a species is listed as endangered or threatened. Our regulations at 50 CFR 424.12(a)(1) state that the designation of critical habitat is not prudent when one or both of the following situations exist: (1) The species is threatened by taking or other activity and the identification of critical habitat can be expected to increase the degree of threat to the species or (2) such designation of critical habitat would not be beneficial to the species. In our October 6, 1998, final rule (63 FR 53596), we determined that designation of critical habitat would provide little conservation benefit over that provided by listing. We determined that designation of critical habitat was not prudent based on the increased threat of vandalism and stated that designation of critical habitat could lead to acts of vandalism, may provoke deliberate incidents of vandalism by OHV users and may serve to encourage acts of vandalism.

However, in the past few years, several of our determinations that the designation of critical habitat would not be prudent have been overturned by court decisions. For example, in Conservation Council for Hawaii v. Babbitt, the United States District Court for the District of Hawaii ruled that the Service could not rely on the “increased threat” rationale for a “not prudent” determination without specific evidence of the threat to the species at issue (2 F. Supp. 2d 1280 [D. Hawaii 1998]). Additionally, in Natural Resources Defense Council v. U.S. Department of the Interior, the United States Court of Appeals for the Ninth Circuit ruled that the Service must balance, in order to invoke the “increased threat rationale,” the threat against the benefit to the species of designating critical habitat (113 F. 3d 1121, 1125 [9th Cir. 1997]).

We continue to be concerned that Peirson's milk-vetch is vulnerable to impacts from OHV use in the area, vandalism, or disturbance of their habitat and that these threats might be increased by the designation of critical habitat, publication of critical habitat maps, and further dissemination of location and habitat information. The periodically low numbers and restricted range of this plant taxon make it vulnerable. At this time, we do have some limited specific evidence for vandalism, and other unauthorized human disturbance specific to this plant and its habitat.

The courts also have ruled that, in the absence of a finding that the designation of critical habitat would increase threats to a species, the existence of another type of protection, even if it offers potentially greater protection to the species, does not justify a “not prudent” finding (Conservation Council for Hawaii v. Babbitt 2 F. Supp. 2d 1280). We are already working with Federal and State agencies and organizations in carrying out conservation activities for this plant and conducting surveys for additional occurrences of the species and to assess habitat conditions. These entities are fully aware of the distribution, status, and habitat requirements for this plant.

We have reconsidered our evaluation of the threats posed by vandalism in the prudency determination. We have determined that the threats to Peirson's milk-vetch from specific instances of vandalism we previously identified are limited, if not speculative. Accordingly, we withdraw our previous determination that the designation of critical habitat is not prudent for Peirson's milk-vetch. Therefore, we determine that the designation of critical habitat is prudent for Peirson's milk-vetch. At this time, we have sufficient information necessary to identify specific areas as essential to the conservation of this plant taxon and are therefore proposing critical habitat (see “Methods and Analysis used to Identify Proposed Critical Habitat” section below for a discussion of information used in our reevaluation).

As required by section 4(b)(2) of the Act and regulations at 50 CFR 424.12, we used the best scientific information available to determine areas that contain the physical and biological features that are essential for the conservation of Astragalus magdalenae var. peirsonii. This included information from our own documents on this plant and related taxa, available information that pertains to the biology and habitat requirements of this taxon, including data from research and survey observations, such as Westec (1977), BLM surveys conducted from 1998 to 2002 primarily summarized by Willoughby (BLM 2000, 2001), Thomas Olsen Associates (TOA) (2001), and Phillips and Kennedy (2002); the California Natural Diversity Database (2003); peer-reviewed journal articles and book excerpts regarding A. m. var. peirsonii, similar species, or more generalized issues of conservation biology; unpublished biological documents and discussions with botanical experts regarding A. m. var. peirsonii and related species; site visits; and discussions.

The area proposed for critical habitat is occupied by Astragalus magdalenae var. peirsonii as demonstrated by repeated surveys summarized by BLM (BLM 2000, 2001), and independently confirmed by TOA (TOA 2001). This plant may be present as standing plants, as seed bank in the sand or as plants persisting as perennial root crowns in the sand. During any given year, the suitable habitat for A. m. var. peirsonii may be occupied by various combinations of these three life history phases. The dynamics of dune morphology, local rainfall patterns and amounts, as well as the spatial distribution of the seed bank, and seed scarification each contribute to the patchy or mosaic nature of the distribution of standing plants of A. m. var. peirsonii. Local rainfall patterns and amounts are likely to cause shifts in the proportions of these three life history phases. All areas proposed as critical habitat contain at least one of the primary constituent elements and have been determined to be essential to the conservation of the species, as described below.

Areas proposed as critical habitat are occupied, in any given year, by standing plants, root crowns, or the soil seed bank. Likewise, areas of unsurveyed, suitable habitat that are contiguous with areas where standing plants have been documented by BLM surveys (BLM 2000, 2001), are reasonably likely to support standing plants, root crowns, or a portion of the soil seed bank. BLM did not survey every west-to-east transect across the dunes, however, interpolation of earlier survey data (WESTEC 1977) and census data (TOA 2001) confirms the presence of Astragalus magdalenae var. peirsonii and the continuity of the northwest-to-southeast habitat. These data sustain our inclusion of these areas in the proposed critical habitat. These areas are not likely any bigger than naturally occurring gaps in the spatial distribution. As a result, these intervening areas, where standing plants may not have been documented are determined to be essential to the conservation of A. m. var. peirsonii because they contain the primary constituent elements and will accommodate the natural fluctuations and movement of populations as well as connectivity across the plants' range. Surveys need not have identified standing plants for an area to be considered occupied because a species may still be present at a site as part of the seed bank (Given 1994) or unsprouted root crowns.

The most extensive survey of the Algodones Dunes was conducted in 1977 (Westec 1977). This survey used 66 transects that ran across the dunes from west to east. Along the transects they recorded presence and relative abundance of standing plants of Astragalus magdalenae var. peirsonii and four other rare psammophytic scrub species. In 1998 the BLM began surveying for rare plants in the dunes repeating the methodology used by Westec in their 1977 survey; however, the BLM surveyed only 34 of the original 66 transects and employed a different abundance measure. The BLM conducted these surveys for 5 consecutive years (1998, 1999, 2000, 2001, and 2002) recording the presence and abundance of the rare plant taxa along the transects.

To determine the general range of Astragalus magdalenae var. peirsonii in the Algodones Dunes, we used survey information from published and unpublished documents and maps including Westec (1977), BLM (2000, 2001), and TOA (2001). Westec (1977) devised a grid system overlay for the Algodones Dunes. Each quadrant of the grid was approximately 0.45 mi (0.72 km) on a side. BLM reproduced this grid system to present data from their subsequent annual surveys from 1998 to 2002 (BLM 2000, 2001). Both Westec and BLM considered a grid square occupied if A. m. var. peirsonii was encountered anywhere within that grid square. For comparison, we also superimposed census data included by TOA (2001) on this same grid system. We produced maps based on Westec (1977), BLM (2000, 2001), and TOA (2001) data. Because of the differences in survey methodologies and abundance classes used by these surveys, we considered each of these records to represent presence or absence only. Due to fluctuations in both the presence and abundance of A. m. var. peirsonii from year to year, we combined the data from multiple years of survey data. Also the various surveys recorded standing plants as the only measure of occupancy, not taking into account a dormant soil seed bank or root crowns.

The survey efforts, discussed above, provided us with the data necessary to construct a model showing which regions of the Algodones Dunes represent essential habitat for the Astragalus magdalenae var. peirsonii. The model that we created used the data collected by the BLM from 1998 to 2002 as the input data and the data collected by Westec 1977 and TOA 2001 as a means of verifying the information generated by the model. The BLM data was used as the input data source for the model because it was more current, covered multiple years, and used the same methodology each year. Time and resources precluded us from conducting independent surveys. Outlier occurrences evidenced only by Westec 1977 were not included because of the age of the report and the lack of substantiation by more recent BLM surveys.

In order to create this model we used the BLM data to extrapolate the values for four variables: (1) The presence or absence of standing plants of A. m. var. peirsonii; (2) the abundance of A. m. var. peirsonii; (3) the frequency of occurrence of A. m. var. peirsonii; and (4) the number of associated rare psammophytic plant taxa present. These variables were scored, then standardized, and finally compiled. We grouped the data into five categories and created a map depicting the distribution of the model's output. This map showed a strong band of high values that ran from the Northeast to the Southwest of the dune field. The portion of the dunes that corresponded to the top three categories represented the portion of the Algodones Dunes that is essential to the conservation of this species.

Analysis of four variables depicted on GIS-based maps provided us with information necessary for determining which areas of the Algodones Dunes are essential for the conservation of the species and contain the primary constituent elements. The first variable was that of the presence or absence of standing plants. This indicated localities where Astragalus magdalenae var. peirsonii had been found in each of the five survey years either as seedlings or as older plants. The second variable gave us information about the relative abundance of A. m. var. peirsonii in each of the five survey years. The highest abundance class value recorded for each grid cell during the five survey years was used as the cell's value for this variable. This provided us with information to depict areas that seem to have higher plant densities, and thus presence of primary constituent elements. The third variable provided us with information about the frequency with which A. m. var. peirsonii occurred from year to year. This variable was calculated based on the number of times A. m. var. peirsonii was reported in a grid cell throughout the 5-year survey period. This was important in determining areas that continued to function as good habitat for A. m. var. peirsonii and were most likely to contain the primary constituent elements. Finally, we used the presence and absence data for the other rare psammophytic scrub taxa that occur in the Algodones dunes and are often found with A. m. var. peirsonii as the fourth variable. These plants included Croton wigginsii, Helianthus niveus ssp. tephrodes, Palafoxia arida var. gigantea, and Pholisma sonorae. For each grid cell, scores were assigned based on the number of these associated plants that were found over the course of the 5 years of surveys. Higher scores may indicate a greater abundance and persistence of A. m. var. peirsonii and/or the diversity of associated psammophytic scrub species. Therefore, by this measure higher scores indicate the presence of higher quality psammophytic scrub habitat, and thus the presence of primary constituent elements.

Intrinsic to the creation of the essential habitat model for Astragalus magdalenae var. peirsonii was the application of several assumptions related to the (1) BLM study design (Willoughby 2000 and Willoughby 2001), (2) habitat and weather variability across the entire dune system, (3) paved roads as barriers to dispersal, (4) occurrences of plants and seeds in grid cells over different survey periods, and (5) model protocol. These assumptions are described to allow the reviewer to understand the potential strengths and limitations of the results of the habitat modeling. Based on the BLM study design, a consistent survey methodology was used for the plant surveys conducted in 1998, 1999, and 2000 (Willoughby 2000 and Willoughby 2001). Vegetation maps (BLM 2003), wind patterns (Romspert and Burk 1979 and Norris and Norris 1961), and precipitation patterns (Willoughby 2000 and Willoughby 2001) supported our assumption that the habitat, in terms of dune action, precipitation, and vegetation, was uniform in variation and continuous throughout the dune system. Based on rainfall data collected from November 16, 2000 to March 16, 2001 (1.40 inches of precipitation was recorded at Cahuilla Ranger Station in the northwest part of the dunes and 2.67 inches of precipitation was reported at Buttercup Campground in the southern end of the dunes (Willoughby 2001)), BLM indicated that more precipitation may fall in the southern portion of the Algodones Dunes compared to the northern end of the dunes. However, given the limited precipitation data available for the Algodones Dunes (5 months) and the relatively short linear extent of the dunes (40 mi long) (64 km long), we could not project a rainfall gradient and, instead, assumed that the precipitation was uniformly variable and continuous throughout the dune system. Based on observations of unimpeded sand and wind movement across existing paved roads, we did not expect that the paved roads would represent a barrier to the dispersal of the fruits and seeds of Astragalus magdalenae var. peirsonii. Surveys conducted by BLM indicate variability in occurrences of standing plants from year to year (Willoughby 2000 and Willoughby 2001) and that at any given time, these occurrences may represent standing plants, root crown regrowth, or seedlings of Astragalus magdalenae var. peirsonii. We assumed that if standing plants were not found in a particular grid cell during a survey, but were recorded as present in other survey years, then that grid cell may be occupied by either root crowns or seeds of this species. BLM randomly selected survey transects and, as expected, this random selection results in gaps between transects. We projected the distribution of Astragalus magdalenae var. peirsonii across the gaps by assuming that the values of unknown grid cells are more closely related to nearby cells rather than distant cells.

From the data provided by BLM we were able to calculate scores for each of these variables and then extrapolate the values for each variable for the entire dune area. We made this extrapolation based on a statistical method called Kriging, which calculates new values for unsurveyed areas based on the known values for the cells that were surveyed. The data for these four variables was then standardized to a scale of 0 to 5 points so that the range of scores, from low to high, would be comparable to one another. The standardized scores were then totaled for each cell, for a possible high score of 20 points. This set of values was then further refined using the Kriging method to generate a map similar in appearance to a topographic map, showing the resulting scores of the model in the same way a topographic map shows variations in elevation. A line was then drawn around those areas of higher-quality psammophytic scrub habitat described above and considered essential to the conservation of Astragalus magdalenae var. peirsonii.

In accordance with section 3(5)(A)(i) of the Act and regulations at 50 CFR 424.12, in determining which areas to propose as critical habitat, we consider those physical and biological features (primary constituent elements) that are essential to the conservation of the species and that may require special management considerations or protection. These include but are not limited to: Space for individual and population growth and for normal behavior; food, water, air, light, minerals or other nutritional or physiological requirements; cover or shelter; sites for germination or seed dispersal; and habitats that are protected from disturbance or are representative of the historic geographical and ecological distributions of a species.

Much of what is known about the specific physical and biological requirements of Astragalus magdalenae var. peirsonii is described in the Background section of this proposal and in the final listing rule. The proposed critical habitat is designed to provide sufficient habitat to maintain self-sustaining populations of A. m. var. peirsonii throughout its range and to provide those habitat components essential for the conservation of the species. These habitat components provide for: (1) Individual and population growth, including sites for germination, pollination, reproduction, pollen and seed dispersal, and seed bank; (2) intervening areas that allow gene flow and provide connectivity or linkage within segments of the larger population; and (3) areas that provide basic requirements for growth, such as water, light, and minerals.

The conservation of Astragalus magdalenae var. peirsonii is dependent upon a number of factors including the protection and management of existing population sites and habitat, the maintenance of normal ecological functions within these sites, including connectivity between groups of plants within close geographic proximity to facilitate gene flow among the sites by pollinator activity and fruit as well as seed dispersal. Some of the factors associated with the observed and potential distribution of this species include: seeds will likely germinate if germination requirements of scarification and moisture are met within a germination time frame for the species (Porter, in litt. 2003); germination patterns likely reflect the distribution of the seed bank in the shifting sands, (seeds will not effectively germinate below a certain depth); and distribution patterns of standing plants may, in large part, reflect the distribution pattern of adequate rainfall for a particular year.

The areas we are proposing to designate as critical habitat provide some or all of the habitat components essential for the conservation of Astragalus magdalenae var. peirsonii. These habitat components and primary constituent elements are generally associated with psammophytic scrub (e.g., Croton wigginsii, Eriogonum deserticola, Helianthus niveus ssp. tephrodes, Palafoxia arida var. gigantea, Pholisma sonorae, and Tiquilia plicata). Based on the best available information at this time, the primary constituent elements of critical habitat for A. m. var. peirsonii consist of:

(1) Intact, active sand dune systems (defined as sand areas that are subject to sand-moving winds that result in natural expanses of slopes and swales) within the historical range of A. m. var. peirsonii that are characterized by:

(A) substrates of the Rositas soil series, specifically Rositas fine sands of sufficient depth to promote A. m. var. peirsonii and discourage creosote bush scrub; and

(B) wind-formed slopes of less than 30 degrees, but generally less than 20 degrees.

We identified critical habitat essential to the conservation of Astragalus magdalenae var. peirsonii in the primary locations where it currently occurs or has been known to occur in the Algodones Dunes. We are proposing to designate critical habitat to maintain self-sustaining populations of A. m. var. peirsonii within the range of the taxon in the United States.

Astragalus magdalenae var. peirsonii has a very limited range even within the Algodones Dunes. Less than one-third of the area delineated by the ISDRA has documented occurrences of A. m. var. peirsonii. Extreme fluctuations in populations have been demonstrated. As a result, it is likely in some years that few, if any, seeds are added to the soil seed bank. The patchy distribution of the plants in any given year is likely a combination of several factors including the dynamics of dune morphology, local rainfall patterns and amounts, as well as the spatial distribution of the seed bank, and seed scarification.

We delineated the proposed critical habitat by creating data layers in a GIS format. Because of the dynamic nature of the distribution of this plant, the cyclic nature of suitable climatic regimes, and the presence of a seed bank for Astragalus magdalenae var. peirsonii, grid squares where this plant has not been encountered are included as critical habitat if they are contiguous with grid squares where the plant has been found and possess the primary constituent elements and are considered occupied. Another reason for their inclusion is that there are gaps in those transects surveyed by Westec and BLM. The TOA (2001) survey bridged some of these gaps and leave little doubt that additional surveys in previously unsurveyed transects would likely fill in the east-to-west pattern as well. The BLM surveys serve as the basis for the mapping of critical habitat. An exception to this is instances where Westec (1977) data is the only source of a record. Because BLM has included only 34 west-east transects along the length of the dunes, and additional data from TOA (2001) and Westec (1977) tend to bridge the gaps between BLM's transects, we considered the northwest to southeast distribution to be generally continuous.

In order to provide legal descriptions of the critical habitat boundaries, we then used an overlayed 100-meter grid to establish Universal Transverse Mercator (UTM) North American Datum 27 (NAD 27) coordinates which, when connected, provided the critical habitat unit boundaries.

In designating critical habitat, we made an effort to avoid developed areas, OHV staging areas, and disturbed areas along roadways that are unlikely to contain the primary constituent elements and therefore contribute to the conservation of Astragalus magdalenae var. peirsonii. However, we did not map critical habitat in sufficient detail to exclude all developed areas, or other lands unlikely to contain the primary constituent elements essential for the conservation of A. m. var. peirsonii. Areas within the boundaries of the mapped units, such as buildings, roads, parking lots, railroad tracks, canals, and other paved areas, will not contain one or more of the primary constituent elements. Federal actions limited to these areas, therefore, would not trigger a consultation under section 7 of the Act, unless they affect the species or primary constituent elements in adjacent critical habitat.

Special management considerations or protections may be needed to maintain the physical and biological features as well as the primary constituent elements that are essential for the conservation of Astragalus magdalenae var. peirsonii within the unit being proposed as critical habitat. As noted in the Critical Habitat section, “special management considerations or protection” is a term that originates in section 3(5)(A) of the Act under the definition of critical habitat. We believe that the proposed critical habitat unit may require the special management considerations or protections outlined below.

1. The dune composition and structure should be maintained in a manner compatible with the natural distribution pattern of Astragalus magdalenae var. peirsonii and be conducive to the persistence of associated psammophytic scrub species and discourage creosote bush scrub.

2. The direct and indirect impacts of OHVs on individual plants, as well as on the plants reproductive capacity, must be scientifically determined. These impacts must be assessed at a relevant time scale to determine seasonal impact, frequency of impact, duration of impacts, and pattern of impacts. This may allow an objective application of acceptable levels and timing of OHV activity in each of the BLM recreation management areas.

Recently, the BLM issued a Recreation Area Management Plan (RAMP) for the Imperial San Dunes (BLM 2003). A specified major focus of the RAMP is to ensure that the “world class opportunities” of Imperial Sand Dunes Recreation Area (ISDRA) are continuously available while responding to increased need for protection of plant and animal species in the dunes (BLM 2003). Species specific management needs and measures for Astragalus magdalenae var. peirsonii are not addressed in the RAMP. In the RAMP, BLM does include a monitoring/study plan that they propose to implement. The results of this monitoring would be incorporated into a management plan developed for Astragalus magdalenae var. peirsonii.

Within the ISDRA only the North Algodones Dune Wilderness Area (Wilderness Area) will remain closed to public motorized vehicle use. Although the Wilderness Area does not allow motorized recreational use, it is open to non-motorized public uses including hiking and horseback riding. Additionally, vehicular use by the California Department of Fish and Game, the Border Patrol and other permitted entities will be allowed. The Wilderness Area is not actively managed for the conservation of plant and animal species, rather management will take the form of “minimal and subtle on-site controls and restrictions.”

Lands proposed for critical habitat designation include Federal and private lands. The approximate areas of proposed critical habitat by land ownership are shown previously in this document in table 1.

The proposed critical habitat areas constitute our best assessment of the areas essential for the conservation of Astragalus magdalenae var. peirsonii and provide the primary constituent elements described above. The critical habitat includes locations where standing plants of A. m. var. peirsonii have been observed during BLM and Westec surveys. Because of the natural fluctuations in population numbers and timing of rainfall and pattern of seed germination, standing plants may not appear in all areas of critical habitat every year. Within the boundary of critical habitat we also include areas contiguous to those where standing plants have been recorded, and where, because of plant proximity and habitat continuity, we have no reason to doubt the presence of plants as a seed bank. This has been supported by recent findings from a single survey by TOA (2001) that found plants in areas of the dunes interspersed with those included in the BLM transects.

The Algodones Dunes Critical Habitat Unit is in eastern Imperial County, California. This is the only region in the United States where there are deep dunes maintained by dune-building winds that result in natural expanses of swales and slopes under 20 degrees slope, and appropriate Rositas soils. This is also the only region of the United States that supports an extant population of Astragalus magdalenae var. peirsonii, and we have no evidence that another such area exists. It extends, as an elongate triangle shape, from the International Boundary northward in a northwesterly direction. The western boundary parallels the Coachella Canal. The eastern boundary is generally half way between this and Ted Kipf Road to the east. The northern end attenuates to a point near the convergence of the Coachella Canal and Ted Kipf Road.

The Algodones Dunes Critical Habitat Unit has three separate portions separated by highways. The discontinuities associated with the highways are likely traversed occasionally by mature fruits dispersed by the wind as well as by pollinators. The northern portion of the Unit is north of State Highway 78. The majority of the northern portion of the critical habitat lies within the North Algodones Dunes Wilderness. The central portion of the Unit is south of State Highway 78 and north of Interstate 8. This portion of the Unit extends from the leeward side of the dunes east of the Coachella Canal eastward to approximately one half the distance to Ted Kipf Road on the eastern side of the Algodones Dunes. West of the central portion of the critical habitat, there are at least 11 campgrounds mostly associated with the Gecko Road area. The southern portion of the Unit is south of Interstate 8 and includes campgrounds and a major OHV staging area. Astragalus magdalenae var. peirsonii has consistently been found in the Buttercup Management Area. A primary feature of the area are the barchan dunes that between 1953 and 1968 were determined to migrate toward the southeast (Smith 1978). This pattern is likely still operative. This area is important to the conservation of A. m. var. peirsonii because it provides the only potential connectivity between the range of the plant in the United States and that in Mexico.

Section 7(a) of the Act requires Federal agencies, including the Service, to ensure that actions they fund, authorize, permit, or carry out do not destroy or adversely modify critical habitat. Destruction or adverse modification of critical habitat occurs when a Federal action directly or indirectly alters critical habitat to the extent that it appreciably diminishes the value of critical habitat for the conservation of the species. Individuals, organizations, States, local governments, and other non-Federal entities are affected by the designation of critical habitat only if their actions occur on Federal lands, require a Federal permit, license, or other authorization, or involve Federal funding.

In our regulations at 50 CFR 402.02, we define destruction or adverse modification as “a direct or indirect alteration that appreciably diminishes the value of critical habitat for both the survival and recovery of a listed species. Such alterations include, but are not limited to: alterations adversely modifying any of those physical or biological features that were the basis for determining the habitat to be critical.” However, in a March 15, 2001, decision of the United States Court of Appeals for the Fifth Circuit (Sierra Club v. U.S. Fish and Wildlife Service et al., F.3d 434), the Court found our definition of destruction or adverse modification to be invalid. In response to this decision, we are reviewing the regulatory definition of adverse modification in relation to the conservation of the species.

Section 7(a) of the Act requires Federal agencies, including the Service, to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened, and with respect to its critical habitat, if any is designated or proposed. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) of the Act requires Federal agencies to confer with us on any action that is likely to jeopardize the continued existence of a proposed species or result in destruction or adverse modification of proposed critical habitat. Conference reports provide conservation recommendations to assist Federal agencies in eliminating conflicts that may be caused by their proposed actions. The conservation measures in a conference report are advisory.

We may issue a formal conference report, if requested by the Federal action agency. Formal conference reports include an opinion that is prepared according to 50 CFR 402.14, as if the species was listed or critical habitat designated. We may adopt the formal conference report as the biological opinion when the species is listed or critical habitat designated, if no substantial new information or changes in the action alter the content of the opinion (50 CFR 402.10(d)).

If a species is listed or critical habitat is designated, section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of such a species or to destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us. Through this consultation, the Federal action agency would ensure that the permitted actions do not destroy or adversely modify critical habitat.

If we issue a biological opinion concluding that a project is likely to result in the destruction or adverse modification of critical habitat, we also provide “reasonable and prudent alternatives” to the project, if any are identifiable. Reasonable and prudent alternatives are defined at 50 CFR 402.02 as alternative actions identified during consultation that can be implemented in a manner consistent with the intended purpose of the action, that are consistent with the scope of the Federal agency's legal authority and jurisdiction, that are economically and technologically feasible, and that the Director believes would avoid the likelihood of jeopardizing the continued existence of listed species or resulting in the destruction or adverse modification of critical habitat.

Regulations at 50 CFR 402.16 require Federal agencies to reinitiate consultation on previously reviewed actions under certain circumstances, including instances where critical habitat is subsequently designated and the Federal agency has retained discretionary involvement or control over the action or such discretionary involvement or control is authorized by law. Consequently, some Federal agencies may request reinitiating of consultation or conference with us on actions for which formal consultation has been completed, if those actions may affect designated critical habitat, or adversely modify or destroy proposed critical habitat.

Activities that, when carried out, funded, or authorized by a Federal agency, may affect critical habitat and require that a section 7 consultation be conducted include, but are not limited to:

(1) Activities that disturb or degrade the structure of the dunes (ridges, slip faces, bowls, and swales);

(2) Activities that irreversibly compact or disturb the sand such that seeds of Astragalus magdalenae var. peirsonii are not capable of germinating or plants are not able to survive; and,

(3) Activities that alter the existing hydrology or reduce soil moisture by lowering the groundwater table or redirecting surface flows.

Activities that may destroy or adversely modify critical habitat include those that alter the primary constituent elements to an extent that the value of critical habitat for both the survival and recovery of Peirson's milk-vetch is appreciably reduced. We note that such activities may also jeopardize the continued existence of the species.

We recognize that the proposed designation of critical habitat may not include all of the habitat areas that may eventually be determined to be necessary for the recovery of the species. For these reasons, we want to ensure that the public is aware that critical habitat designations do not signal that habitat outside the proposed designation is unimportant or may not be required for recovery. Areas outside the proposed critical habitat designation will continue to be subject to conservation actions that may be implemented under section 7(a)(1) of the Act and to the regulatory protections afforded by the section 7(a)(2) jeopardy standard and the prohibitions of section 9 of the Act. Critical habitat designations made on the basis of the best available information at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans, or other species conservation planning efforts if new information available to these planning efforts calls for a different outcome.

Section 4(b)(8) of the Act requires us to evaluate briefly and describe, in any proposed or final regulation that designates critical habitat, those activities involving a Federal action that may adversely modify such habitat or that may be affected by such designation. Activities that may destroy or adversely modify critical habitat would be those that alter the primary constituent elements to the extent that the value of critical habitat for the conservation of the Astragalus magdalenae var. peirsonii is appreciably reduced. The actions listed previously are activities that may affect critical habitat and are not necessarily actions that would result in adverse modification. We also note that such activities may also jeopardize the continued existence of the species.

Moreover, we completed a section 7 consultation with BLM on the Imperial Sand Dunes Recreational Area Management Plan (RAMP) (FWS-IMP-3419.2) dated April 3, 2003. In that biological opinion, we concluded that the implementation of the RAMP is not likely to jeopardize the continued existence of Astragalus magdalenae var. peirsonii. BLM will modify the monitoring plan to include (1) dune-wide monitoring of A. m. var. peirsonii, (2) dune-wide monitoring and calibration of OHV use patterns, (3) two experimental studies on the effects of OHVs on A. m. var. peirsonii, (4) examination for correlation between OHV use patterns and A. m. var. peirsonii population levels, (5) modeling of A. m. var. peirsonii populations under various management scenarios, and (6) an implementation schedule. In addition, BLM proposes to establish triggers to activate alternative management actions when visitation exceeds target levels and to reinitiate consultation (1) if A. m. var. peirsonii population levels in individual Management Areas fall to 50 percent of baseline in a comparable rainfall year (at or above the long-term mean), and (2) after accumulation of 4 years of monitoring information. This information will be valuable in determining the effects of the RAMP on critical habitat. While BLM's proposed action has not been analyzed in the context of a final designation of critical habitat, we expect that a similar approach would be used to evaluate whether the implementation of the RAMP would result in destruction or adverse modification of critical habitat.

If you have questions regarding whether specific activities will constitute destruction or adverse modification of critical habitat, contact the Field Supervisor, Carlsbad Fish and Wildlife Office (see ADDRESSES section). Requests for copies of the regulations on listed wildlife and plants and inquiries about prohibitions and permits may be addressed to the U.S. Fish and Wildlife Service, Branch of Endangered Species, 911 N.E. 11th Ave, Portland, OR 97232 (telephone 503/231-2063; facsimile 503/231-6243).

All lands proposed as critical habitat are within the geographical area occupied by the species and are necessary for the conservation of Astragalus magdalenae var. peirsonii. Federal agencies already consult with us on actions that may affect A. m. var. peirsonii to ensure that their actions do not jeopardize the continued existence of the species. Thus, we do not anticipate substantial additional regulatory protection will result from critical habitat designation.

Section 4(b)(2) of the Act requires us to designate critical habitat on the basis of the best scientific and commercial data available and to consider the economic and other relevant impacts of designating a particular area as critical habitat. We may exclude areas from critical habitat upon a determination that the benefits of such exclusions outweigh the benefits of specifying such areas as critical habitat. We cannot exclude such areas from critical habitat when such exclusion will result in the extinction of the species.

An analysis of the economic impacts of proposing critical habitat for the Astragalus magdalenae var. peirsonii is being prepared. We will announce the availability of the draft economic analysis as soon as it is completed, at which time we will seek public review and comment. At that time, copies of the draft economic analysis will be available for downloading from the Internet at http://carlsbad.fws.gov, or by contacting the Carlsbad Fish and Wildlife Office directly (see ADDRESSES section).

In accordance with our policy published on July 1, 1994 (59 FR 34270), we will solicit the expert opinions of at least three appropriate and independent specialists regarding this proposed rule. The purpose of such review is to ensure that our critical habitat designation is based on scientifically sound data, assumptions, and analyses. We will send these peer reviewers copies of this proposed rule immediately following publication in the Federal Register. We will invite these peer reviewers to comment, during the public comment period, on the specific assumptions and conclusions regarding the proposed designation of critical habitat.

We will consider all comments and information received during the 60-day comment period on this proposed rule as we prepare our final rulemaking. Accordingly, the final designation may differ from this proposal.

The Act provides for one or more public hearings on this proposal, if requested. Requests must be received within 45 days of the date of publication of the proposal in the Federal Register. Such requests must be made in writing and be addressed to the Field Supervisor (see ADDRESSES section). We will schedule public hearings on this proposal, if any are requested, and announce the dates, times, and places of those hearings in the Federal Register and local newspapers at least 15 days prior to the first hearing.

Executive Order 12866 requires each agency to write regulations and notices that are easy to understand. We invite your comments on how to make this proposed rule easier to understand, including answers to questions such as the following: (1) Are the requirements in the proposed rule clearly stated? (2) Does the proposed rule contain technical jargon that interferes with the clarity? (3) Does the format of the proposed rule (grouping and order of the sections, use of headings, paragraphing, etc.) aid or reduce its clarity? (4) Is the description of the notice in the SUPPLEMENTARY INFORMATION section of the preamble helpful in understanding the proposed rule? (5) What else could we do to make this proposed rule easier to understand?

Send a copy of any comments on how we could make this proposed rule easier to understand to: Office of Regulatory Affairs, Department of the Interior, Room 7229, 1849 C Street, NW., Washington, DC 20240. You may e-mail your comments to this address: Exsec@ios.doi.gov.

In accordance with Executive Order 12866, this document is not a significant rule and, therefore, was not reviewed by the Office of Management and Budget (OMB). We will be preparing a draft economic analysis of this proposed action; we will use this analysis to meet the requirement of section 4(b)(2) of the Act to determine the economic consequences of designating the specific areas as critical habitat and excluding any area from critical habitat if it is determined that the benefits of such exclusion outweigh the benefits of specifying such areas as part of the critical habitat, unless failure to designate such area as critical habitat will lead to the extinction of the Astragalus magdalenae var. peirsonii. This draft economic analysis will be made available for public review and comment before we finalize this designation. At that time, copies of the analysis will be available for downloading from the Carlsbad Fish and Wildlife Office's Internet website at http://carlsbad.fws.gov or by contacting the Carlsbad Fish and Wildlife Office directly (see ADDRESSES section)

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effects of the rule on small entities (i.e., small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of the agency certifies the rule will not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities. SBREFA also amended the Regulatory Flexibility Act to require a certification statement. Based on the information that is available to us at this time, we are certifying that this proposed designation of critical habitat will not have a significant economic impact on a substantial number of small entities. The following discussion explains our rationale.

According to the Small Business Administration (SBA), small entities include small organizations, including any independent nonprofit organization that is not dominant in its field, and small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents, as well as small businesses. The SBA defines small businesses categorically and has provided standards for determining what constitutes a small business at 13 CFR 121-201 (also found at http://www.sba.gov/size/), which the Regulatory Flexibility Act requires all Federal agencies to follow. To determine if potential economic impacts to these small entities are significant, we consider the types of activities that might trigger regulatory impacts under this rule as well as the types of project modifications that may result.

The Regulatory Flexibility Act does not explicitly define either “substantial number” or “significant economic impact.” Consequently, to assess whether a “substantial number” of small entities is affected by this designation, this analysis considers the relative number of small entities likely to be impacted in the area. Similarly, this analysis considers the relative cost of compliance on the revenues/profit margins of small entities in determining whether or not entities incur a “significant economic impact.” Only small entities that are expected to be directly affected by the designation are considered in this portion of the analysis. This approach is consistent with several judicial opinions related to the scope of the Regulatory Flexibility Act. (Mid-Tex Electric Co-Op, Inc. v. F.E.R.C. and American Trucking Associations, Inc. v. EPA).

To determine if the rule would affect a substantial number of small entities, we considered the number of small entities affected within particular types of economic activities (e.g., housing development, grazing, oil and gas production, timber harvesting). We applied the “substantial number” test individually to each affected industry to determine if certification is appropriate. In estimating the numbers of small entities potentially affected, we also considered whether their activities have any Federal involvement; some kinds of activities are unlikely to have any Federal involvement and so will not be affected by critical habitat designation.

Designation of critical habitat only affects activities conducted, funded, or permitted by Federal agencies; non-Federal activities are not affected by the designation if they lack a Federal nexus. In areas where the species is present, Federal agencies funding, permitting, or implementing activities are already required to avoid jeopardizing the continued existence of the Astragalus magdalenae var. peirsonii through consultation with us under section 7 of the Act. If this critical habitat designation is finalized, Federal agencies must also consult with us to ensure that their activities do not destroy or adversely modify designated critical habitat through consultation with us.

Should a federally funded, permitted, or implemented project be proposed that may affect designated critical habitat, we will work with the Federal action agency and any applicant, through section 7 consultation, to identify ways to implement the proposed project while minimizing or avoiding any adverse effect to the species or critical habitat. In our experience, the vast majority of such projects can be successfully implemented with at most minor changes that avoid significant economic impacts to project proponents.

Based on our experience with section 7 consultations for all listed species, virtually all projects-including those that, in their initial proposed form, would result in jeopardy or adverse modification determinations in section 7 consultations—can be implemented successfully with, at most, the adoption of reasonable and prudent alternatives. These measures, by definition, must be economically feasible and within the scope of authority of the Federal agency involved in the consultation. The kinds of actions that may be included in future reasonable and prudent alternatives include avoidance, conservation set-asides, management of competing non-native species, restoration of degraded habitat, construction of protective fencing, and regular monitoring. These measures are not likely to result in a significant economic impact to project proponents.

In the case of Astragalus magdalenae var. peirsonii, our review of the consultation history for this plant suggests that the proposed designation of critical habitat is not likely to have a significant impact on any small entities or classes of small entities. The only class of small entities that could be affected by this designation is the off-highway vehicle industry. To identify potential small entities related to off-highway vehicle use that may be affected by the proposed designation, we considered the membership list of the Off-Road Business Association (updated June 11, 2003) to be an indication of the potential number of small entities that may be affected by the proposed designation of critical habitat. Based on the June 11, 2003, list, 247 companies were members of the Off-Road Business Association. Most of the Off-Road Business Association members represented business primarily located in California.

We considered the potential relative cost of compliance to these small entities and evaluated only small entities that are expected to be directly affected by the proposed designation of critical habitat. Based on the consultation history for Astragalus magdalenae var. peirsonii, we do not anticipate that the proposed designation of critical habitat will result in increased compliance costs for small entities. The business activities of these small entities and their effects on Astragalus magdalenae var. peirsonii or its proposed critical habitat have not directly triggered a section 7 consultation with the Service under the jeopardy standard and likely would not trigger a section 7 consultation under the adverse modification standard after designation of critical habitat. The proposed designation of critical habitat does not, therefore, create a new cost for the small entities to comply with the proposed designation. Instead, proposed designation only impacts Federal agencies that conduct, fund, or permit activities that may affect critical habitat for Astragalus magdalenae var. peirsonii. Moreover, none of the small entities have been applicants with a Federal agency for a section 7 consultation with the Service. On April 3, 2003, we also completed a section 7 consultation with BLM on the Imperial Sand Dunes RAMP. In that biological opinion, we concluded that the implementation of the RAMP is not likely to jeopardize the continued existence of Astragalus magdalenae var. peirsonii. Thus, we conclude that the proposed designation of critical habitat is not likely to result in a significant impact to this group of small entities.

In addition, we completed an informal section 7 consultation with BLM on the potential effects to Astragalus magdalenae var. peirsonii of a private company filming a movie on Federal lands within the Algodones Dunes. Given the relatively small number of consultations related to film-making activities on Federal lands within the Algodones Dunes, we anticipate that the proposed designation of critical habitat is not likely to have a significant impact on this group of small entities.

As required under section 4(b)(2) of the Act, we will conduct an analysis of the potential economic impacts of this proposed critical habitat designation and will make that analysis available for public review and comment before finalizing this designation. However, court deadlines require us to publish this proposed rule before the economic analysis can be completed.

In summary, we have considered whether this proposed designation would result in a significant economic impact on a substantial number of small entities and find that it would not. This rule would result in project modifications only when proposed activities with a Federal nexus would destroy or adversely modify critical habitat. While this may occur, it is not expected to occur frequently enough to affect a substantial number of small entities. Even if a small entity is affected, we do not expect it to result in a significant economic impact, as the measures included in reasonable and prudent alternatives must be economically feasible and consistent with the proposed action. The kinds of measures we anticipate we would recommend can usually be implemented at low cost. Therefore, we are certifying that the proposed designation of critical habitat for the Astragalus magdalenae var. peirsonii will not have a significant economic impact on a substantial number of small entities, and an initial regulatory flexibility analysis is not required. This determination will be revisited after the close of the comment period and revised, if necessary, in the final rule.

This discussion is based upon the information regarding potential economic impact that is available to us at this time. This assessment of economic effect may be modified prior to final rulemaking based upon development and review of the draft economic analysis prepared pursuant to section 4(b)(2) of the ESA and Executive Order 12866. This analysis is for the purpose of compliance with the Regulatory Flexibility Act and does not reflect our position on the type of economic analysis required by New Mexico Cattle Growers Assn. v. U.S. Fish & Wildlife Service 248 F.3d 1277 (10th Cir. 2001).

In the draft economic analysis, we will determine whether designation of critical habitat will cause (a) any effect on the economy of $100 million or more; (b) any increases in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or (c) any significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

On May 18, 2001, the President issued an Executive Order (E.O. 13211) on regulations that significantly affect energy supply, distribution, and use. Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This proposed rule to designate critical habitat for the Astragalus magdalenae var. peirsonii is not a significant regulatory action under Executive Order 12866, and it is not expected to significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required.

In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.), the Service will use the economic analysis to further this rule's effect on nonfederal governments.

In accordance with Executive Order 12630 (“Government Actions and Interference with Constitutionally Protected Private Property Rights”), we have analyzed the potential takings implications of designating critical habitat for Astragalus magdalenae var. peirsonii. This preliminary assessment concludes that this proposed rule does not pose significant takings implications. However, we have not yet completed the economic analysis for this proposed rule. Once the economic analysis is available, we will review and revise this preliminary assessment as warranted.

In accordance with Executive Order 13132, this rule does not have significant Federalism effects. A Federalism assessment is not required. In keeping with Department of the Interior policies, we requested information from and coordinated development of this proposed critical habitat designation with appropriate State resource agencies in California. The proposed designation of critical habitat in areas currently occupied by the Astragalus magdalenae var. peirsonii imposes no additional significant restrictions beyond those currently in place and, therefore, has little incremental impact on State and local governments and their activities.

The proposed designation of critical habitat may have some benefit to the State and local resource agencies in that the areas essential to the conservation of this species are more clearly defined, and the primary constituent elements of the habitat necessary to the conservation of this species are specifically identified. While this definition and identification does not alter where and what federally sponsored activities may occur, it may assist local governments in long-range planning (rather than waiting for case-by-case section 7 consultations to occur).

In accordance with Executive Order 12988, the Department of the Interior's Office of the Solicitor has determined that this rule does not unduly burden the judicial system and does meet the requirements of sections 3(a) and 3(b)(2) of the Order. We are proposing to designate critical habitat in accordance with the provisions of the Endangered Species Act. The rule uses standard property descriptions and identifies the primary constituent elements within the designated areas to assist the public in understanding the habitat needs of the Astragalus magdalenae var. peirsonii.

This proposed rule does not contain new or revised information collection for which OMB approval is required under the Paperwork Reduction Act. Information collections associated with certain Act permits are covered by an existing OMB approval and are assigned clearance No. 1018-0094, Forms 3-200-55 and 3-200-56, with an expiration date of July 31, 2004. Detailed information for Act documentation appears at 50 CFR 17. This rule will not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

We have determined that an Environmental Assessment and/or an Environmental Impact Statement as defined by the National Environmental Policy Act of 1969 need not be prepared in connection with regulations adopted pursuant to section 4(a) of the Endangered Species Act, as amended. A notice outlining our reason for this determination was published in the Federal Register on October 25, 1983 (48 FR 49244). This proposed rule does not constitute a major Federal action significantly affecting the quality of the human environment.

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. We have determined that there are no Tribal lands essential for the conservation of the Astragalus magdalenae var. peirsonii. Therefore, designation of critical habitat for the A. m. var. peirsonii has not been proposed on Tribal lands.

A complete list of all references cited in this proposed rule is available upon request from the Carlsbad Fish and Wildlife Office (see ADDRESSES section).

The primary authors of this notice are the Carlsbad Fish and Wildlife Office staff (see ADDRESSES section).

Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations as set forth below: