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

The Agency certifies that this rule will not have a significant economic effect on a substantial number of small entities, because it does not require any specific actions on the part of the borrower or the lenders. The Agency, therefore, is not required to perform a Regulatory Flexibility Analysis as required by the Regulatory Flexibility Act, Public Law 96-534, as amended (5 U.S.C. 601).

The environmental impacts of this proposed rule have been considered in accordance with the provisions of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and the FSA regulations for compliance with NEPA, 7 CFR parts 799, and 1940, subpart G. FSA completed an environmental evaluation and concluded that the rule requires no further environmental review. No extraordinary circumstances or other unforeseeable factors exist which would require preparation of an environmental assessment or environmental impact statement. A copy of the environmental evaluation is available for inspection and review upon request.

This rule has been reviewed in accordance with E.O. 12988, Civil Justice Reform. In accordance with that Executive Order: (1) All State and local laws and regulations that are in conflict with this rule will be preempted; (2) no retroactive effect will be given to this rule except that lender servicing under this rule will apply to loans guaranteed prior to the effective date of the rule; and (3) administrative proceedings in accordance with 7 CFR part 11 must be exhausted before requesting judicial review.

For reasons contained in the Notice related to 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983) the programs and activities within this rule are excluded from the scope of Executive Order 12372, which requires intergovernmental consultation with state and local officials.

This rule contains no Federal mandates, as defined by title II of Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

The policies contained in this rule do not have any substantial direct effect on states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with the states is not required.

The amendments to 7 CFR part 762 contained in this rule require no revisions to the information collection requirements that were previously approved by OMB under control number 0560-0155.

These changes affect the following FSA programs as listed in the Catalog of Federal Domestic Assistance:

10.406 Farm Operating Loans

10.407 Farm Ownership Loans

The first proposed change is in section 762.140(d), regarding payment of loan installments. Currently, the regulations require that guaranteed loan installments always be paid before unguaranteed loans held by the same lender. The Agency has found that this requirement is very difficult to implement. In practice the only way the FSA guaranteed loan payment can be made first is if all the payments come due at the same time. A typical farming operation may have payments coming due from several different creditors throughout the year. It is virtually impossible to get all payments structured so that they come due at the same time. The Agency recognizes that in the normal course of business, lien priority, payment due dates and cash flow are the determining factors in deciding the order in which loans are paid. The Agency's original intent was to assure that lenders were not paying non-guaranteed loans at the expense of the guaranteed loan. However, this risk only occurs at liquidation where proceeds will be applied in accordance with lien priority. Outside of a liquidation scenario, all installments would be paid since the loan would usually be in a current status. FSA proposes to change the wording in this section, to allow loan installments to be paid in accordance with lien priority, the due date, and the cash flow projection, in the normal course of business, which is in accordance with actual commercial lending practices. Therefore, the proposed rule states that when it becomes evident that a borrower will be unable to make all installments, the lender will be required to apply payments to the guaranteed loan before unguaranteed loans held by the same lender. The effect will be to maximize collection on the guaranteed loan, and minimize any loss claim. Lenders are responsible for servicing the entire loan in a reasonable manner.

The second proposed change is section 762.142(c)(3)(ii), regarding the Agency's approval requirements for certain subordinations. Currently, the regulations allow the lender to subordinate its interest in crops, feeder livestock, livestock offspring, or livestock products when no funds have been advanced from the guaranteed loan for their production, so another lender can make a loan for annual production expenses. Approval of subordinations for real estate, machinery, and other basic security can only be granted by the Agency's National Office, if such action is in the Agency's best interest. However, there are situations where devolution of this approval authority is justified and would lead to more prompt service to Agency borrowers and lenders. The Agency proposes to place the approval authority at the local level for situations when a lender is simply refinancing existing indebtedness secured by a lien superior to the guaranteed loan, and no additional debt is being incurred. This is often done to allow a borrower to obtain better rates and/or terms on the loan, which in turn helps the borrower meet all of the borrower's loan obligations. There is no additional risk to the guaranteed loan, which remains in the same exact lien and security position after the subordination as it was before the subordination. It is not necessary for subordination requests of this nature to be routed to the Agency's national office, which may result in a time lag for approval or rejection.

The third proposed change is in section 762.144(c)(3)(iii), which discusses the payment of interest on loans which the Agency has repurchased. The proposed change will correct the second sentence where the words “holder” and “lender” were inadvertently reversed. The holder, not the lender would be requesting the Agency to repurchase the loan, after requesting the lender to repurchase the loan.

The fourth change proposed would allow balloon payments in restructuring guaranteed loans. Section 762.145 governs the restructuring of guaranteed loans, and paragraph (b)(4) of this section specifically prohibits the use of balloon payments in the restructuring process. FSA is proposing to lift this restriction and allow a lender to restructure a guaranteed loan with a balloon payment. This is standard practice in the lending industry, and lenders participating in the guaranteed program have requested the ability to use balloon payments in restructuring. FSA has made numerous administrative policy changes to enable lenders to service guaranteed loans in the same manner they service their non-guaranteed loans. This proposed change would provide lenders with another tool to use in servicing loans guaranteed by FSA, consistent with tools utilized for non-guaranteed loans.

Current regulations allow lenders to use balloon payments when originating loans, but not in loan servicing. Unequal installments can be used in both loan making and loan servicing, and lenders can use both unequal installments and balloon payments in originating a new loan. These tools are used primarily when establishing new enterprises or building facilities, situations where cash flow would be inadequate to support full amortization of the loan for some period of time. These same tools would be helpful, and may be necessary in a rescheduling situation such as recovering from a natural disaster, or a barn fire or other calamity, for instance. Definitions of unequal installments and balloon payments will be added in the FSA Handbook 2-FLP upon publication of the final rule.

To insure that this proposal would not result in additional exposure or loss to the Government, a provision requiring adequate security to be available at the time the balloon payment comes due will be included, in 7 CFR 762.145(b)(4). For real estate security a current appraisal would be required, with depreciation projected to the time the balloon payment is due for depreciable property such as buildings and improvements. Also, for equipment security, a current appraisal will be required. The lender will be required to project the security value of the equipment at the time the balloon payment is due, based on the remaining life of the equipment, or using the depreciation schedule on the borrower's Federal income tax return. Under no circumstances may livestock or crops alone be used as security for a guaranteed loan that is to be rescheduled using a balloon payment.

Allowing the restructuring of loans using a balloon payment schedule does not unduly increase the Government's risk. This change will allow more delinquent borrowers to achieve a feasible plan and ultimately be successful in paying their loans in full. FSA estimates that less than 200 loans per year will be rescheduled with a balloon payment. Currently, when a borrower becomes delinquent, a lender may choose to not continue with the loan since a balloon payment schedule is prohibited. Therefore, a viable operation may have to be liquidated due to limited loan servicing alternatives. Use of a balloon payment under those circumstances will reduce the likelihood that FSA will pay a loss under the guarantee and allow the lender to retain the guarantee. As in the current rule, 7 CFR 762.145(b)(4) permits the lender to allow unequal installments so long as a feasible plan can be projected when the installments are scheduled to increase.

As to the fifth change, FSA proposes to revise the security requirements in section 762.145(b)(7) for loans restructured with balloon payments. This change is necessary to prevent undue risk to the Government from adding balloon payment options as a loan servicing tool. Revising the rule to permit balloon payments, but retaining the not fully secured position (or no security as long as the lender's security position is not diminished) of the current rule would increase FSA's exposure on loss claims and would be inconsistent with Government policy as expressed in Office of Management and Budget Circular A-129, November 29, 2000, Appendix A, II 3 (OMB Circular A-129). OMB Circular A-129 requires that agencies control the risk and cost of their credit programs and follow sound financial practices which include requiring lenders to have a substantial stake in full repayment in accordance with the loan. See 65 FR 71215. Therefore, FSA proposes to require loans restructured with balloon payments to be fully secured when the balloon payment becomes due.

The sixth proposed change would clarify § 762.149(d) and (i), to provide that packager fees and outside consultant fees for servicing guaranteed loans are not covered by the guarantee, and will not be paid in either the estimated or final loss claim.

Lenders should note that §§ 762.105 and 762.106 contain eligibility requirements for lenders participating in the guaranteed loan program, as well as a description of the classifications of lenders, and specific requirements for lenders in each classification. Under these sections, all lenders are required to have experience in making and servicing agricultural loans and have the capability to make and service the loan for which a guarantee is requested. A lender participating in the guaranteed loan program, therefore, should have adequately trained loan officers and analysts on staff to make and service guaranteed loans and should not usually have to rely on outside or contracted individuals to service their loans. Therefore, FSA will not pay any packager or servicing fees for guaranteed loans. At times, a lender may find it necessary to hire outside help to service its loan portfolio, or may find it financially advantageous to have someone from outside the lender analyze the loan portfolio; however the cost of these services will not be passed on to the Government in the event of a loss. It was never the intent of the Agency to cover such fees, and if the Agency were to cover such fees it would be tantamount to paying the lender's labor costs. The Lender's Agreement specifies that liquidation costs do not include the lender's in-house expenses.

The seventh proposed change would clarify § 762.149(h)(3) to specify that if a lender bids at a foreclosure sale, their bid will be either the net recovery value plus the prior lien amount, or the unpaid balance of the loan plus the prior lien amount, whichever is less. Under current regulations the lender has the authority to determine the amount it will bid at the foreclosure sale, starting at the amount which is the lesser between the net recovery value or the unpaid loan balance. Because the lender eventually could bid more than the net recovery value of the property, other potential bidders are discouraged from bidding, thus increasing the probability that the lender will take title to the property. If a lender is then unable to sell the security for at least the net recovery value, plus the expenses of holding and selling the property, under current regulations the lender's loss claim increases accordingly. After this excess bid amount is applied to the borrower's account, the loss claim amount is negotiated, which discourages the lender from taking responsibility for the excess bid.

The proposed rule, which limits the bid amount to the lesser of the net recovery value plus the prior lien or the unpaid loan balance plus the prior lien, will result in decreasing the Government's losses. Decreasing the bid amount will encourage potential bidders to bid on the property, thus increasing the likelihood of reducing the lender's loss claim. In situations where the lender bids an amount more than the lesser of the net recovery plus the prior lien, or the unpaid balance of the debt plus the prior lien, this action may be considered negligent servicing. To the extent that negligent servicing reduces the recovery on the loan, the resulting loss claim will be reduced. The Agency believes that the proposed rule will give lenders the incentive to maximize recovery, thus decreasing Government losses.

Accordingly, 7 CFR part 762 is proposed to be amended as follows:

For additional information see the direct final rule published in the final rules section of this Federal Register.

This rule is limited to the changes contained in Amendment 5 to CoC No. 1004 and does not include other aspects of the Standardized NUHOMS®-24P, -52B, and -61BT cask system design. The NRC is using the “direct final rule procedure” to issue this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured.

Because NRC considers this action noncontroversial and routine, the proposed rule is being published concurrently as a direct final rule. The direct final rule will become effective on November 3, 2003. However, if the NRC receives significant adverse comments by September 18, 2003, then the NRC will publish a document that withdraws this action and will address the comments received in response to the proposed amendments published elsewhere in this issue of the Federal Register. A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if:

(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, in a substantive response:

(a) The comment causes the NRC staff to reevaluate (or reconsider) its position or conduct additional analysis;

(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or

(c) The comment raises a relevant issue that was not previously addressed or considered by the NRC staff.

(2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.

(3) The comment causes the NRC staff to make a change (other than editorial) to the CoC or Technical Specifications.

These comments will be addressed in a subsequent final rule. The NRC will not initiate a second comment period on this action.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 553, the NRC is proposing to adopt the following amendments to 10 CFR Part 72.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2003-15695/Airspace Docket No. 03-AAL-17.” The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the Internet at http://dms.dot.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov or the Superintendent of Document's web page at http://www.access.gpo.gov/nara.

Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591 or by calling (202) 267-8783. Communications must identify both docket numbers for this notice. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking, (202) 267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.

The FAA is considering an amendment to the Code of Federal Regulations (14 CFR Part 71) by establishing new Class E airspace at Kivilina, AK. The intended effect of this proposal is to establish Class E airspace upward from 700 ft. and 1,200 ft. above the surface, to contain Instrument Flight Rules (IFR) operations at Kivilina, AK.

The FAA Instrument Flight Procedures Production and Maintenance Branch has developed two new SIAPs for the Kivilina Airport. The new approaches are (1) Area Navigation (Global Positioning System) (RNAV GPS) Runway (RWY) 30, original; and (2) RNAV (GPS) Runway 12, original. New Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface within the Kivilina, Alaska area would be created by this action. The proposed airspace is sufficient to contain aircraft executing the new instrument procedures for the Kivilina Airport.

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

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

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

This document contains proposed regulations amending the Procedure and Administration Regulations (26 CFR part 301) under section 6334 of the Internal Revenue Code of 1986. The proposed regulations provide guidance on the amendments to section 6334 made by the IRS Restructuring and Reform Act of 1998 (Public Law 105-206)(RRA 98), and the Taxpayer Relief Act of 1997 (Public Law 105-34)(TRA 97).

Section 6334 enumerates items of property exempt from levy and provides special rules for levies. In RRA 98, Congress amended section 6334 and created new requirements for levy upon certain residential property and business assets. Specifically, section 6334 was amended to provide for an exemption, in small deficiency cases, from levy for certain real property used as a residence by any individual; to require judicial approval of the levy of certain principal residences; to require administrative approval of the levy of certain business assets; to increase certain exemption amounts; and to make certain conforming amendments. RRA 98 also mandated an IRS reorganization, which changed or eliminated certain position titles. TRA 97 amended section 6334 to provide that certain payments shall not be exempt from levy if the Secretary approves. The proposed regulations provide guidance on each of these provisions.

As amended, section 6334(a)(13) provides an exemption from levy for any real property used as a residence by the taxpayer or any other individual (except for real property that is rented) if the amount of the levy does not exceed $5,000. The proposed regulations provide guidance on this exemption.

Prior to RRA 98, section 6334(a)(13) provided that the principal residence of the taxpayer, within the meaning of section 121, was exempt from levy in the absence of jeopardy or certain approval. Section 6334(e) permitted levy if an IRS district director or assistant district director personally approved, in writing, the levy of property, or the Secretary determined that the collection of tax was in jeopardy.

As amended, section 6334(a)(13)(B)(i) provides that the principal residence of the taxpayer, within the meaning of section 121, is exempt from levy except to the extent provided in section 6334(e). Section 6334(e)(1)(A) provides that a principal residence shall not be exempt from levy if a judge or magistrate of a district court of the United States approves, in writing, the levy of such residence. Section 6334(e)(1)(B) provides that the district courts of the United States shall have exclusive jurisdiction to approve such levy. Accordingly, judicial approval is required prior to levy of a taxpayer's principal residence (hereinafter referred to as the section 6334(e)(1) proceeding).

The Conference Report for RRA 98 states that no seizure of a dwelling that is the principal residence of the taxpayer or the taxpayer's spouse, former spouse, or minor child will be allowed without prior judicial approval. The Conference Report further provides that notice of the judicial hearing must be provided to the taxpayer and family members residing in the property. The Conference Report also states that at the judicial hearing, the Secretary will be required to demonstrate (1) that the requirements of any applicable law or administrative procedures relevant to the levy have been met, (2) that the liability is owed, and (3) that no reasonable alternative for the collection of the taxpayer's debt exists. IRS Restructuring and Reform Act of 1998, Conference Report to Accompany H.R. 2676, H.R. Conf. Rep. No. 105-599, 105th Cong., 2d Sess., at 267.

With respect to whether a liability is owed, these proposed regulations interpret the legislative history to require the IRS to demonstrate only that an assessed liability has not been satisfied. The proposed regulations specifically do not require the IRS to demonstrate the merits of the underlying liability. Treasury and the IRS have concluded that the purpose of a section 6334(e)(1) proceeding is to determine whether the proposed seizure is appropriate rather than to afford the taxpayer with an additional opportunity to contest the merits of the underlying tax liability. As discussed below, a section 6334(e)(1) proceeding, therefore, looks to whether the IRS has followed applicable law and procedural rules relating to the levy and the existence of reasonable collection alternatives, in addition to whether an unsatisfied liability exists. Other provisions of the Code, such as the deficiency procedures for income taxes, provide taxpayers with the opportunity to challenge the merits of an asserted liability. In the levy context, section 6330 gives taxpayers the right to request a hearing prior to levy, including levies that also are the subject of a section 6334(e)(1) proceeding. Section 6330(c)(2)(B) specifically gives the taxpayer the right to challenge the merits of the underlying liability if the taxpayer did not receive the statutory notice of deficiency or did not otherwise have an opportunity to dispute the tax liability. In contrast, nothing in section 6334(e)(1) indicates that Congress intended to provide a taxpayer with a further opportunity to contest the merits of the underlying tax liability.

Consistent with the language of section 6334(e)(1) and the legislative history, the proposed regulations provide that judicial approval is required prior to levy of the principal residence of the taxpayer, taxpayer's spouse, taxpayer's former spouse, or taxpayer's minor child. Also in accordance with this legislative history, the proposed regulations provide that the Government will request that the taxpayer be given notice and an opportunity to participate in the section 6334(e)(1) proceeding.

The Government will initiate the section 6334(e)(1) proceeding by filing with a district court of the United States a petition seeking judicial approval of a principal residence levy. In its petition, the Government will set forth its prima facie case by demonstrating that (1) The underlying tax liability has not been satisfied, (2) the requirements of any applicable law or administrative procedure relevant to the levy have been met, and (3) no reasonable alternative for collection of the taxpayer's debt exists. The petition will ask the court to issue to the taxpayer an order to show cause why the principal residence property should not be levied and a notice of hearing.

The taxpayer will be granted a hearing to rebut the Government's prima facie case if the taxpayer files an objection within the time period required by the court raising a genuine issue of material fact demonstrating that (1) The assessed tax liability has been satisfied, (2) the taxpayer has other assets from which the liability can be satisfied, or (3) the IRS did not follow the applicable laws or procedures pertaining to the levy. The taxpayer is not permitted to challenge the merits underlying the tax liability in the proceeding. Unless the taxpayer makes a timely and appropriate showing, the court would be expected to enter an order approving the levy of the principal residence property.

If the property to be levied is the principal residence of the taxpayer's spouse, former spouse, or minor child, the Government will send each such person a letter providing notice of the commencement of the proceeding. The letter will be addressed in the name of the taxpayer's spouse or ex-spouse, individually or on behalf of any minor children. If it is unclear who is living in the principal residence and/or what such person's relationship is to the taxpayer, a letter will be addressed to “Occupant”. The purpose of the letter is to make the family members aware that their living arrangements may be placed in jeopardy if the court approves levy of the principal residence property.

The proposed regulations provide that family members who receive notice of the commencement of a section 6334(e)(1) proceeding may not be joined as parties to the proceeding. As noted above, Treasury and the IRS believe that the purpose of such notification is to ensure that family members living at the residence that is the subject of the proposed levy understand that their living arrangements may be placed in jeopardy. A levy by the IRS, however, can reach only the taxpayer's interest in property. The property rights (if any) of family members living at the residence are outside of the scope of that levy and are not at issue when an order approving the levy is sought from the court. Accordingly, because only the taxpayer's property rights are at issue in a section 6334(e)(1) proceeding, the proposed regulations do not permit other family members to contest a request for judicial approval of a principal residence levy. This rule is similar to those for actions by the IRS to foreclose on tax liens on property under section 7403. In those actions, the Government names as defendants all individuals who may claim an interest in the property; residents who do not otherwise have a legal interest in property, such as by co-tenancy, are not named as defendants.

The proposed regulations incorporate the procedures for obtaining judicial approval of a principal residence levy.

In enacting RRA 98, Congress created new approval requirements for levies of certain business assets. Specifically, Congress enacted new section 6334(a)(13)(B)(ii), which provides that, except to the extent provided in section 6334(e), tangible personal property or real property (other than real property that is rented) used in the trade or business of an individual taxpayer shall be exempt from levy. Section 6334(e) was amended to provide that such property shall not be exempt from levy if a district director or assistant district director of the IRS personally approves (in writing) the levy of such property, or the Secretary finds that the collection of tax is in jeopardy. Section 6334(e)(2) of the Internal Revenue Code (Code). Section 6334(e) was further amended to provide that an official may not approve such levy unless the official determines that the taxpayer's other assets subject to collection are insufficient to pay the amount due, together with expenses of the proceedings.

RRA 98 section 3445(c)(1) clarifies that, with respect to permits issued by a State and required under State law for the harvest of fish or wildlife in the trade or business of an individual taxpayer, the term other assets as used in section 6334(e)(2) includes future income that may be derived by such taxpayer from the commercial sale of fish or wildlife under such permit. RRA 98 section 3445(c)(2) provides that section 3445(c)(1) shall not be construed to invalidate or in any way prejudice any assertion that the privilege embodied in such permits is not property or a right to property under the Code.

The proposed regulations provide guidance on the current requirements of section 6334(e) relating to the procedures for approval of the levy of certain business assets.

In RRA 98, Congress amended section 6334(a)(2) and (a)(3) to increase the applicable exemption dollar amounts (which are indexed for inflation). Congress also enacted a conforming amendment to section 6334(g)(1) to revise the dates to be used in calculating the inflation adjustment to the section 6334(a)(2) and (a)(3) exemptions. The proposed regulations provide guidance on these provisions.

Pursuant to the reorganization of the IRS after RRA 98, the titles of district director and assistant district director cited in section 6334(e)(2)(A) no longer exist. The proposed regulations replace these titles with the current title, which is Area Director.

In TRA 97, Congress amended section 6334 by adding new section 6334(f) and redesignating former section 6334(f) as section 6334(g). Section 6334(f) provides that any payment described in section 6331(h)(2)(B) or (h)(2)(C) (certain payments upon which continuous levy may be authorized) shall not be exempt from levy if the Secretary approves the levy thereon under section 6331(h). The proposed regulations provide guidance on this provision.

The proposed regulations will apply on the date corresponding final regulations are published in the Federal Register.

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to these regulations, and, therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and 8 copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Federal Register.

The principal author of the proposed regulations is Robin Ferguson of the Office of Associate Chief Counsel, Procedure and Administration (Collection, Bankruptcy and Summonses Division).

Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.

Accordingly, 26 CFR part 301 is proposed to be amended as follows:

According to 10 USC 1086(g) TRICARE is to ensure “that no person eligible for health benefits under this section may be denied benefits under this section with respect to care or treatment for any service connected disability which is compensable under chapter 11 of title 38 solely on the basis that such person is entitled to care or treatment for such disability in facilities of the Department of Veterans Affairs”.

In applying this statutory provision, TRICARE has established a policy that would ensure free access to care under either program and continuity of care for beneficiaries while also ensuring that TRICARE and the Department of Veterans Affairs (VA) do not duplicate benefits. This policy allows beneficiaries to use either TRICARE or the VA for any episode of care, but they cannot use both. Often beneficiaries make the choice of which program to use, not by any definitive action, but simply by going first to either TRICARE or the VA for care. Once that is done, the other program cannot be involved. For example, if a beneficiary experiences back pain and goes to the VA for care, the beneficiary must then receive all care related to that back pain from the VA. If the beneficiary subsequently goes to a civilian physician for the back pain and submits a claim to TRICARE, TRICARE will deny the claim.

This limitation on care has been based on “episodes of care” which has never been fully defined under TRICARE, in either the regulation or any TRICARE manual. It is generally accepted to be all care related to a single injury or illness, but it has been left to the TRICARE managed care support contractors to actually determine what constitutes an episode of care when a claim is received that might be subject to this limitation. There has also not been any universal policy as to when an episode of care ends. Using the previous example of the beneficiary with back pain, if the beneficiary goes for thirty days without receiving any care for the back pain, does that end the episode of care? Should it be sixty days? Or ninety days? The end of the episode of care is important, because the limitation on using only TRICARE or the VA applies only to episodes of care. That is, if the beneficiary has elected to use the VA for one episode of care, the beneficiary can elect to use TRICARE for a different episode of care. That episode of care can overlap the initial episode of care if it is for a totally different injury or illness. If it is for the same injury of illness, an appropriate amount of time must have passed without the beneficiary receiving any care.

As noted above, this policy was established in order to ensure continuity of care for our beneficiaries and to ensure there was no duplication of care or payments between TRICARE and the VA. If a beneficiary is receiving care from the VA for an injury or illness, a plan of care will have been established by the VA provider, and subsequently receiving care from a different provider under TRICARE, who might decide on a different course of treatment, may actually negatively impact the beneficiary's progress. At the very least the services from the second provider would probably be duplicative and result in unnecessary expenditures by TRICARE.

This policy has caused few problems, but there have been cases where a beneficiary has been dissatisfied with the care he/she was receiving from either TRICARE or the VA and has wanted to switch to the other program to receive services for the same episode of care. They have been unable to do so.

Section 708 of the National Defense Authorization Act for FY 2003 (Pub. L. 107-314) addresses this issue. Although it makes no change to the statutes that govern TRICARE (10 U.S.C. Chapter 55), it directs the Secretary of Defense to (1) take actions to establish a process for coordinating care between TRICARE and the VA that ensures patient safety and continuity of care while preventing diminution of access to health care from either source, and (2) prescribe a clear definition of an episode of care for use in the process of coordinating care between TRICARE and the VA.

In analyzing how best to establish this process, we have decided to change our basic policy rather than defining episode of care. By changing our policy we will ensure that no one is inadvertently denied access to care under TRICARE for which they also can receive treatment in a VA facility.

Any attempt to establish a workable definition of episode of care would require some specific and arbitrary end date which undoubtedly would be detrimental to some individual case. We also believe that there are few cases that actually are affected by this policy. For the vast majority of cases, beneficiaries decide to use either TRICARE or the VA for reasons that are important to them, and they are satisfied with continuing to receive their care from the same source.

Therefore, we propose to change our policy to include care from VA medical care facilities under the definition of double coverage for TRICARE. In support of the policy explained above, the TRICARE regulation (32 CFR Part 199) currently states that TRICARE double coverage plans do not include entitlement to receive care from VA medical care facilities. Most other coverages (insurance, medical service or health plans) are considered double coverage, which means that a beneficiary simply must submit a claim for services or supplies to the double coverage plan first. After the double coverage makes payment, TRICARE will process the claim and usually will pay the remaining liability on the claim.

The effect of our proposed change will be to enable individuals who are receiving care from the VA to change to care under TRICARE for the same episode of care. Under this policy the VA will be responsible for payment for the services they provide, either directly through their medical care facilities or through a basic ordering agreement with a civilian provider. A claim can then be submitted to TRICARE for reimbursement of any VA cost-shares. At the same time, the beneficiary may choose to receive care from a civilian provider for the episode of care that has not been arranged by the VA. Claims for this care, so long as it is medically necessary, can be submitted to TRICARE, and they will be reimbursed.

This policy eliminates the need for an arbitrary definition of an episode of care, and it ensures full freedom of choice for beneficiaries who have entitlement to both TRICARE and VA benefits. While there may be some remaining issue regarding continuity of care and duplicative care for a very few cases, this is largely mitigated by the fact that many TRICARE beneficiaries are enrolled in TRICARE Prime. Under Prime, all care is coordinated by an assigned Primary Care Manager who can ensure that any care received under TRICARE does not interfere with or duplicate care being provided by the VA.

Executive Order (EO) 12866 requires that a comprehensive regulatory impact analysis be performed on any economically significant regulatory action, defined as one which would result in an annual effect of $100 million or more on the national economy or which would have other substantial impacts.

The Regulatory Flexibility Act (RFA) requires that each Federal agency prepare, and make available for public comment, a regulatory flexibility analysis when the agency issues a regulation which would have a significant impact on a substantial number of small entities.

This rule has been designated as significant and has been reviewed by the Office Management and Budget as required under the provisions of E.O. 12866. In addition, we certify that this proposed rule will not significantly affect a substantial number of small entities.

This rule imposes no burden as defined by the Paperwork Reduction Act of 1995.

Accordingly, 32 CFR part 199 is proposed to be amended as follows:

The Federal Subsistence Board (Board), through the Regional Councils, will hold meetings on this proposed rule at the following locations and on the following dates in Alaska:

We will publish notice of specific dates, times, and meeting locations in local and statewide newspapers prior to the meetings. We may need to change locations and dates based on weather or local circumstances. The amount of work on each Regional Council's agenda will determine the length of the Regional Council meetings. The agenda of each Regional Council meeting will include a review of wildlife issues in the Region, discussion and development of recommendations on fishery proposals for the Region, and staff briefings on matters of interest to the Council.

Electronic filing of comments (preferred method): You may submit electronic comments (proposals) and other data to Subsistence@fws.gov. Please submit as either WordPerfect or MS Word files, avoiding the use of any special characters and any form of encryption.

During November 2003, we will compile the written proposals to change Subpart D hunting and trapping regulations and customary and traditional use determinations in Subpart C and distribute them for additional public review. A 30-day public comment period will follow distribution of the compiled proposal packet. We will accept written public comments on distributed proposals during the public comment period, which is presently scheduled to end on January 5, 2004.

We will hold a second series of Regional Council meetings in February and March 2004, to assist the Regional Councils in developing recommendations to the Board. You may also present comments on published proposals to change hunting and trapping and customary and traditional use determination regulations to the Regional Councils at those winter meetings.

The Board will discuss and evaluate proposed changes to this rule during a public meeting scheduled to be held in Anchorage in May 2004. You may provide additional oral testimony on specific proposals before the Board at that time. At that public meeting, the Board will then deliberate and take final action on proposals received that request changes to this proposed rule.

The Board's review of your comments and wildlife proposals will be facilitated by you providing the following information: (a) Your name, address, and telephone number; (b) The section and/or paragraph of the proposed rule for which you are suggesting changes; (c) A statement explaining why the change is necessary; (d) The proposed wording change; (e) Any additional information you believe will help the Board in evaluating your proposal. Proposals that fail to include the above information, or proposals that are beyond the scope of authorities in § ____.24, Subpart C and §§ ____.25 or ____.26, Subpart D, may be rejected. The Board may defer review and action on some proposals if workload exceeds work capacity of staff, Regional Councils, or Board. These deferrals will be based on recommendations of the affected Regional Council, staff members, and on the basis of least harm to the subsistence user and the resource involved. Proposals should be specific to customary and traditional use determinations or to subsistence hunting and trapping seasons, harvest limits, and/or methods and means.

Title VIII of the Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111-3126) requires that the Secretary of the Interior and the Secretary of Agriculture (Secretaries) implement a joint program to grant a preference for subsistence uses of fish and wildlife resources on public lands, unless the State of Alaska enacts and implements laws of general applicability that are consistent with ANILCA and that provide for the subsistence definition, preference, and participation specified in Sections 803, 804, and 805 of ANILCA. The State implemented a program that the Department of the Interior previously found to be consistent with ANILCA. However, in December 1989, the Alaska Supreme Court ruled in McDowell v. State of Alaska that the rural preference in the State subsistence statute violated the Alaska Constitution. The Court's ruling in McDowell required the State to delete the rural preference from the subsistence statute and, therefore, negated State compliance with ANILCA. The Court stayed the effect of the decision until July 1, 1990.

As a result of the McDowell decision, the Department of the Interior and the Department of Agriculture (Departments) assumed, on July 1, 1990, responsibility for implementation of Title VIII of ANILCA on public lands. On June 29, 1990, the Temporary Subsistence Management Regulations for Public Lands in Alaska were published in the Federal Register (55 FR 27114-27170). Consistent with Subparts A, B, and C of these regulations, as revised February 18, 2003 (68 FR 7703), the Departments established a Federal Subsistence Board to administer the Federal Subsistence Management Program. The Board's composition includes a Chair appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture; the Alaska Regional Director, U.S. Fish and Wildlife Service; the Alaska Regional Director, U.S. National Park Service; the Alaska State Director, U.S. Bureau of Land Management; the Alaska Regional Director, U.S. Bureau of Indian Affairs; and the Alaska Regional Forester, USDA Forest Service. Through the Board, these agencies participate in the development of regulations for Subparts A, B, and C, and the annual Subpart D regulations.

All Board members have reviewed this rule and agree with its substance. Because this rule relates to public lands managed by an agency or agencies in both the Departments of Agriculture and the Interior, identical text would be incorporated into 36 CFR part 242 and 50 CFR part 100.

Subparts A, B, and C (unless otherwise amended) of the Subsistence Management Regulations for Public Lands in Alaska, 50 CFR 100.1 to 100.23 and 36 CFR 242.1 to 242.23, remain effective and apply to this rule. Therefore, all definitions located at 50 CFR 100.4 and 36 CFR 242.4 would apply to regulations found in this subpart.

Pursuant to the Record of Decision, Subsistence Management Regulations for Federal Public Lands in Alaska, April 6, 1992, and the Subsistence Management Regulations for Federal Public Lands in Alaska, 36 CFR 242.11 (2003) and 50 CFR 100.11 (2003), and for the purposes identified therein, we divide Alaska into 10 subsistence resource regions, each of which is represented by a Regional Council. The Regional Councils provide a forum for rural residents with personal knowledge of local conditions and resource requirements to have a meaningful role in the subsistence management of fish and wildlife on Alaska public lands. The Regional Council members represent varied geographical, cultural, and user diversity within each region.

The Regional Councils have a substantial role in reviewing the proposed rule and making recommendations for the final rule. Moreover, the Council Chairs, or their designated representatives, will present their Council's recommendations at the Board meeting in May 2004.

Subpart D regulations are subject to an annual cycle and require development of an entire new rule each year. Customary and traditional use determinations (§ ____.24 of Subpart C) are also subject to an annual review process providing for modification each year. The text of the 2003-2004 Subparts C and D final rule, without modification, served as the foundation for the 2004-2005 Subparts C and D proposed rule. The regulations contained in this proposed rule would take effect on July 1, 2004, unless elements are changed by subsequent Board action following the public review process outlined herein.

National Environmental Policy Act Compliance: A Draft Environmental Impact Statement (DEIS) that described four alternatives for developing a Federal Subsistence Management Program was distributed for public comment on October 7, 1991. That document described the major issues associated with Federal subsistence management as identified through public meetings, written comments, and staff analysis and examined the environmental consequences of the four alternatives. Proposed regulations (Subparts A, B, and C) that would implement the preferred alternative were included in the DEIS as an appendix. The DEIS and the proposed administrative regulations presented a framework for an annual regulatory cycle regarding subsistence hunting and fishing regulations (Subpart D). The Final Environmental Impact Statement (FEIS) was published on February 28, 1992.

Based on the public comment received, the analysis contained in the FEIS, and the recommendations of the Federal Subsistence Board and the Department of the Interior's Subsistence Policy Group, it was the decision of the Secretary of the Interior, with the concurrence of the Secretary of Agriculture, through the U.S. Department of Agriculture-Forest Service, to implement Alternative IV as identified in the DEIS and FEIS (Record of Decision on Subsistence Management for Federal Public Lands in Alaska (ROD), signed April 6, 1992). The DEIS and the selected alternative in the FEIS defined the administrative framework of an annual regulatory cycle for subsistence hunting and fishing regulations. The final rule for Subsistence Management Regulations for Public Lands in Alaska, Subparts A, B, and C (57 FR 22940; May 29, 1992) implemented the Federal Subsistence Management Program and included a framework for an annual cycle for subsistence hunting and fishing regulations.

An environmental assessment was prepared in 1997 on the expansion of Federal jurisdiction over fisheries and is available at the office listed under FOR FURTHER INFORMATION CONTACT. The Secretary of the Interior, with the concurrence of the Secretary of Agriculture, determined that the expansion of Federal jurisdiction does not constitute a major Federal action significantly affecting the human environment and has therefore signed a Finding of No Significant Impact.

Compliance with Section 810 of ANILCA: A Section 810 analysis was completed as part of the FEIS process on the Federal Subsistence Management Program. The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restriction is necessary to conserve healthy fish and wildlife populations. The final Section 810 analysis determination appeared in the April 6, 1992, ROD and concluded that the Federal Subsistence Management Program, under Alternative IV with an annual process for setting hunting and fishing regulations, may have some local impacts on subsistence uses, but will not likely restrict subsistence uses significantly.

During the environmental assessment process for extending fisheries jurisdiction, an evaluation of the effects of this rule was also conducted in accordance with Section 810. This evaluation supports the Secretaries' determination that the rule will not reach the “may significantly restrict” threshold for notice and hearings under ANILCA Section 810(a) for any subsistence resources or uses.

Paperwork Reduction Act: This rule contains information collection requirements subject to Office of Management and Budget (OMB) approval under the Paperwork Reduction Act of 1995. The information collection requirements are approved by OMB under 44 U.S.C. 3501 and have been assigned control number 1018-0075, which expires July 31, 2003. On July 3, 2003, we submitted our request for OMB renewal of 3-year approval of this information collection (68 FR 2347). We will not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a current valid OMB control number.

Economic Effects: This rule is not a significant rule subject to OMB review under Executive Order 12866. This rulemaking will impose no significant costs on small entities; this rule does not restrict any existing sport or commercial fishery on the public lands, and subsistence fisheries will continue at essentially the same levels as they presently occur. The exact number of businesses and the amount of trade that will result from this Federal land-related activity is unknown. The aggregate effect is an insignificant positive economic effect on a number of small entities, such as ammunition, snowmachine, and gasoline dealers. The number of small entities affected is unknown; however, the fact that the positive effects will be seasonal in nature and will, in most cases, merely continue preexisting uses of public lands indicates that they will not be significant.

In general, the resources to be harvested under this rule are already being harvested and consumed by the local harvester and do not result in an additional dollar benefit to the economy. However, we estimate that 2 million pounds of meat are harvested by subsistence users annually and, if given an estimated dollar value of $3.00 per pound, would equate to about $6 million in food value Statewide.

Regulatory Flexibility Act: The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) requires preparation of flexibility analyses for rules that will have a significant effect on a substantial number of small entities, which include small businesses, organizations or governmental jurisdictions. The Departments certify based on the above figures that this rulemaking will not have a significant economic effect on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. Under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 et seq.), this rule is not a major rule. It does not have an effect on the economy of $100 million or more, will not cause a major increase in costs or prices for consumers, and does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

Executive Order 12630: Title VIII of ANILCA requires the Secretaries to administer a subsistence priority on public lands. The scope of this program is limited by definition to certain public lands. Likewise, these regulations have no potential takings of private property implications as defined by Executive Order 12630.

Unfunded Mandates Reform Act: The Secretaries have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502 et seq., that this rulemaking will not impose a cost of $100 million or more in any given year on local or State governments or private entities. The implementation of this rule is by Federal agencies and there is no cost imposed on any State or local entities or tribal governments.

Executive Order 12988: The Secretaries have determined that these regulations meet the applicable standards provided in Sections 3(a) and 3(b)(2) of Executive Order 12988, regarding civil justice reform.

Executive Order 13132: In accordance with Executive Order 13132, the rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Title VIII of ANILCA precludes the State from exercising subsistence management authority over fish and wildlife resources on Federal lands unless it meets certain requirements.

Government-to-Government Relations with Native American Tribal Governments: 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 512 DM 2, we have evaluated possible effects on Federally recognized Indian tribes and have determined that there are no effects. The Bureau of Indian Affairs is a participating agency in this rulemaking.

Energy Effects: On May 18, 2001, the President issued Executive Order 13211 on regulations that significantly affect energy supply, distribution, or use. This Executive Order requires agencies to prepare Statements of Energy Effects when undertaking certain actions. As this rule is not a significant regulatory action under Executive Order 13211, affecting energy supply, distribution, or use, this action is not a significant action and no Statement of Energy Effects is required.

Drafting Information: William Knauer drafted these regulations under the guidance of Thomas H. Boyd, of the Office of Subsistence Management, Alaska Regional Office, U.S. Fish and Wildlife Service, Anchorage, Alaska. Dennis Tol, Alaska State Office, Bureau of Land Management; Sandy Rabinowitch, Alaska Regional Office, National Park Service; Warren Eastland, Alaska Regional Office, Bureau of Indian Affairs; Greg Bos, Alaska Regional Office, U.S. Fish and Wildlife Service; and Ken Thompson, USDA-Forest Service provided additional guidance.

For the reasons set out in the preamble, the Federal Subsistence Board proposes to amend 36 CFR 242 and 50 CFR 100 for the 2004-05 regulatory year. The text of the amendments would be the same as the final rule for the 2003-04 regulatory year published in the Federal Register of 68 FR 38464, June 27, 2003.

Federal hazardous material transportation law, 49 U.S.C. 5101 et seq., was enacted “to provide adequate protection against the risks to life and property inherent in the transportation of hazardous material in commerce * * *”. Certain provisions of this law, including sections 5105(e), 5109, and 5119, apply only to the transportation of hazardous material by motor vehicle. The authority for implementing these provisions (except section 5109(f)) has been delegated to FMCSA under 49 CFR 1.73(d)(2)). (This authority was transferred from the Federal Highway Administration (FHWA) to a separate Office of Motor Carrier Safety, 64 FR 56270 (Oct. 19, 1999), which became FMCSA on January 1, 2000. See 64 FR 72959 (Dec. 29, 1999), and 65 FR 220 (Jan. 4, 2000)).

Section 5105(e) provides that DOT “shall require by regulation that before each use of a motor vehicle to transport a highway-route-controlled quantity of radioactive material in commerce, the vehicle shall be inspected and certified as complying with this chapter and applicable United States motor carrier safety laws and regulations.” This section also provides that DOT “may require that the inspection be carried out by an authorized United States Government inspector or according to appropriate State procedures.” The definition of a “highway route controlled quantity” of a Class 7 (radioactive) material is set forth at 49 CFR 173.403, in terms of the activity level of the radioactive material in a single package. In general, this is a quantity that emits high levels of radioactivity and, accordingly, the packaging, hazard communication, and operating requirements that apply to a shipment of a highway route controlled quantity of a Class 7 material are intended to both adequately identify the presence of this material and ensure that the packaging will withstand normal transportation conditions and foreseeable accidents, without a breach of containment integrity.

Section 5109 requires DOT to issue regulations for safety permits for transporting certain hazardous materials. A motor carrier must hold a safety permit issued by DOT, and keep a copy of the permit or other proof of its existence in the vehicle, in order to transport certain hazardous materials in commerce or cause such materials to be transported in commerce by motor vehicle. 49 U.S.C. 5109(a). A person may not offer such hazardous materials for motor vehicle transportation in commerce unless the motor carrier has a safety permit. 49 U.S.C. 5109(f).

Under section 5109(b), a safety permit is required for the following four hazardous materials, above threshold amounts established by DOT, but DOT may also prescribe additional hazardous materials, and the amount of each, to be subject to the safety permit requirement:

1. A Class A or B explosive (now Division 1.1, 1.2, or 1.3 explosive);

2. Liquefied natural gas;

3. Hazardous material designated as extremely toxic by inhalation; and

4. A highway route controlled quantity of radioactive material.

Other provisions in section 5109 require DOT to issue regulations for issuing safety permits, including application procedures; the duration, term, and limitations of a safety permit; other conditions needed to protect public safety; and procedures to amend, suspend, or revoke a safety permit. In order to issue a safety permit, DOT must find that the motor carrier is fit, willing, and able to (1) Provide the transportation to be authorized by the safety permit; (2) comply with Federal hazardous material transportation law and DOT's regulations under that law; and (3) comply with applicable Federal motor carrier safety laws and applicable minimum financial responsibility laws and regulations. 49 U.S.C. 5109(a).

Section 5119 directed DOT to establish a working group of State and local government officials to make recommendations to DOT with respect to uniform forms and procedures for a State “to register persons that transport or cause to be transported hazardous material by motor vehicle in the State” and “to allow the transportation of hazardous material in the State,” including “whether to limit the filing of any State registration and permit forms and collection of filing fees to the State in which the person resides or has its principal place of business.” After receiving a final report from the working group, DOT “shall prescribe regulations to carry out the recommendations contained in the [final] report * * * with which the Secretary agrees.”

On June 17, 1993, the Federal Highway Administration (FHWA) published in the Federal Register a notice of proposed rulemaking to establish a safety permit program covering the four hazardous materials specified in 49 U.S.C. 5109(b), including the requirement for a pre-trip inspection of a motor vehicle to be used to transport a highway route controlled quantity of Class 7 (radioactive) material. 58 FR 33418. In response to that notice, FHWA received more than 50 written comments, and these comments have been considered in the preparation of this SNPRM, as discussed below.

On November 17, 1993, the Alliance for Uniform HazMat Transportation Procedures (Alliance), established under 49 U.S.C. 5119, transmitted its recommendations to DOT, and it submitted its final report to DOT on March 15, 1996. According to the Alliance, “[a]ll but nine states have some type of permitting and/or registration program for hazardous materials transportation.” November 17, 1993 Report, p. 2-7. The Alliance recommended that DOT:

1. Explore options for consolidating State registration programs with the Federal registration program (applicable to shippers and carriers by all modes and administered by DOT's Research and Special Programs Administration (RSPA), under 49 U.S.C. 5108);

2. Consider waiving the Federal requirement for a safety permit for a motor carrier that obtains a permit under a uniform State permit program; and

3. Promote a one-stop repository for up-to-date information on hazardous materials routing designations.

In its final report, the Alliance described a two-year pilot project carried out in four States (Minnesota, Nevada, Ohio, and West Virginia) of a “base-state” system for registration and collection of fees and reciprocity between States that require permits.

FHWA decided not to proceed with further rulemaking action to implement the requirements in 49 U.S.C. 5109 and 5105(e) until it had considered the final report and recommendations of the Alliance. In its July 9, 1996 notice published in the Federal Register (61 FR 36016), FHWA (1) summarized the Federal permit and registration requirements in the Federal hazardous material transportation law, (2) discussed the activities and recommendations of the Alliance, and (3) invited comments on the Alliance's final report and recommendations. In a supplemental notice published in the Federal Register on March 31, 1998 (63 FR 15362), FHWA discussed the comments received in response to its July 9, 1996 notice and directed a series of additional questions to State agencies and motor carriers. Only 11 States responded to the notice, and they did not reach a clear consensus on the direction FHWA should take. State designations and restrictions of highway routes for transporting hazardous materials have been published in the Federal Register on June 9, 1998 (63 FR 31549), and Dec. 4, 2000 (65 FR 75771), and are maintained on FMCSA's Internet Web site at http://hazmat.fmcsa.dot.gov.

DOT has asked Congress to amend or repeal 49 U.S.C. 5109 three times since 1997, because “many States have different permit requirements” for carriers of hazardous materials and because the agency believed it had appropriate safety monitoring systems in place to address unsafe carriers transporting these materials. In addition, the pilot project under 49 U.S.C. 5119 revealed that a uniform permit system will not likely resolve different States' concerns that their needs will be met, and raises additional concerns related to unnecessary preemption and expenses of a parallel Federal permitting system. In place of a Federal safety permit, DOT proposed that it should be authorized to continue its safety monitoring of carriers transporting hazardous materials and consider alternative means of enhancing safety in motor carrier transportation of hazardous materials, by such means as additional monitoring of the safety performance of carriers and performing a safety review of “new entrants” within 18 months of the date when the carrier begins operations. (On May 13, 2002, FMCSA published an interim final rule in the Federal Register establishing minimum requirements for new entrant motor carriers. The rulemaking seeks to ensure that they are knowledgeable about the applicable Federal regulations and advises that FMCSA will conduct a safety audit as soon as the new entrant has been in operation for enough time (generally, at least three months) to have sufficient records to evaluate the carrier's basic safety management controls. 67 FR 31978.)

Congress has not eliminated the statutory requirement for a Federal safety permit. Accordingly, the FMCSA is issuing a revised proposal in this SNPRM. The FMCSA invites all interested persons to comment on this revised proposal and hopes to issue a final rule that will phase in the requirement for a safety permit over the 2005-2006 time period as motor carriers submit or update their Motor Carrier Identification Report (Form MCS-150) (according to the schedule set forth in 49 CFR 390.19(a)).

In the 1993 NPRM, FHWA proposed that a motor carrier would be required to hold a safety permit in order to transport in commerce any of the four hazardous materials specified in 49 U.S.C. 5109(b), in the same threshold quantities for which the carrier must submit a registration statement and pay a registration fee under 49 U.S.C. 5108(a)(1)(A)-(D):

1. A highway route-controlled quantity of a Class 7 (radioactive) material;

2. more than 25 kg (55 pounds) of a Division 1.1, 1.2, or 1.3 (explosive) material;

3. more than one liter (1.08 quarts) per package of a poisonous-by-inhalation (PIH) material in Division 2.3, Packing Group I, Hazard Zone A, or Division 6.1, Packing Group I, Hazard Zone A; and

4. a shipment of compressed or refrigerated liquid methane or natural gas in bulk packaging having a capacity equal to or greater than 13,248 L (3,500 gallons) for liquids or gases.

Accordingly, the motor carriers required to hold a safety permit would be a subset of the carriers required to register and pay a registration fee, and no carrier that did not have to register would be required to hold a safety permit. In this SNPRM, FMCSA is proposing the same scope of the safety permit requirement, with the following modifications from the proposals in the NPRM:

In response to the 1993 NPRM, several commenters supported limiting the scope of the safety permit requirement to the materials specified in the statute. The Edison Electric Institute (EEI) stated that the requirement to hold a safety permit should not be extended to additional classes and quantities of hazardous materials “unless and until DOT gathers substantial evidence that such extension would significantly enhance transportation safety,” based on its view that this requirement “would impose additional administrative burdens on affected motor carriers and on FHWA.” EEI quoted the statement from DOT's comments on H.R. 3520, which became the Hazardous Materials Transportation Uniform Safety Act of 1990, Public Law 101-615, 104 Stat. 3244 (Nov. 16, 1990), that “it is essential to begin with a limited permitting program that is administratively practicable, and then consider expanding the program, as determined necessary.” House Report No. 101-444, Committee on Energy and Commerce, 101st Cong., 2d Sess., pp. 66-67 (April 3, 1990).

The Chemical Waste Transportation Institute (CWTI) recommended that the requirement for a safety permit be broadened to cover all motor carriers required to register and pay a registration fee under 49 U.S.C. 5108. CWTI stated that any motor carrier that transports a quantity of hazardous material for which a placard is required “should have a safety rating to demonstrate that [its] safety rating is above “unsatisfactory,”' and the “only ‘new’ administrative burden would be that created by the requirement to ‘review’ each subject motor carrier's rating every three years.”

Two commenters, Tri-State Motor Transport Co. (Tri-State) and the International Brotherhood of Teamsters, suggested that a safety permit should be required for motor carriers that transport any hazardous materials, without specifying any threshold amounts. According to Tri-State, “the sooner the program is expanded to cover all hazardous materials the more effect it will have in reaching this goal.” The Teamsters noted that “all classes of hazmat” are involved in hazardous materials incidents.

Additional comments addressed the specific hazardous materials for which a safety permit would be required. With respect to explosives, a construction industry association stated that a safety permit should be required only for a carrier that transports large quantities of explosives “from manufacturer to the supplier,” and that “[e]xisting OSHA regulations can cover the transportation” by a contractor who used explosives at a specific jobsite, because the 25 kg threshold “is often transported in a small ‘pick-up’ type truck.” The American Pyrotechnics Association (APA) stated that requiring a safety permit to transport more than 25 kg of Division 1.3 G explosives (including “display” fireworks) would present “unnecessary burdens” for this industry. APA referred to the seasonal nature of this industry (around July 4), its “excellent safety record” as reflected in the few incidents in RSPA's Hazardous Materials Information System, and other requirements such as: (1) provisions in the Hazardous Materials Regulations (HMRs, 49 CFR parts 171-180) on training of hazmat employees, and (2) the Federal Motor Carrier Safety Regulations (49 CFR parts 350-399) for the driver to have a commercial driver's license with a hazmat endorsement. APA stated that a requirement for a safety permit “will do nothing to enhance public safety beyond that which will be achieved through the [hazmat] training,” and it expressed concerns that States will develop separate programs “with duplicative permit requirements and unnecessary, burdensome paperwork.” APA asked for a delay in the effective date of the safety permit program for carriers of explosives, while the Idaho State Police opposed any extension of the three-year phase-in period. Tri-State also recommended reducing the three-year phase-in period.

In the NPRM, FHWA proposed to limit the poisonous inhalation (PIH) materials for which a safety permit would be required to those Packing Group I materials in Hazard Zone A. However, it asked for information on materials in Hazard Zone B and whether the safety permit requirement “should be expanded to include the transportation of [PIH] Hazard Zone B hazardous materials,” which “include such widely distributed chemicals as chlorine, hydrogen sulfide, ethylene oxide, and nitric oxide, to name a few.” (58 FR at 33420). Two State police forces recommended including Hazard Zone B materials (California) or giving further consideration to Hazard Zone B materials (Idaho); with Idaho suggesting that “safety is a greater concern under the safety permit program than under the registration program,” so that the reasons for not requiring registration by carriers of smaller amounts of Hazard Zone B materials (in a bulk container with a capacity less than 3,500 gallons) should not apply to the requirement for a safety permit. Three other commenters opposed expanding the safety permit requirement to Hazard Zone B materials, including the Oregon Public Utilities Commission, which stated that safety would not be increased by requiring a safety permit for “all movements of chlorine” and “many pesticide movements.”

Many comments addressed the proposal to require a safety permit to transport “liquefied natural gas,” including the gases covered by that term. Several persons said that the NPRM was ambiguous and could be read to cover all Division 2.1 materials that can be a “liquid natural gas” and all liquid fuels derived from natural gas. Air Products and Chemicals, Inc. stated that “liquefied petroleum gases and natural gas liquids represent at least comparable safety risks and require at least comparable carrier expertise,” while the National Propane Gas Association (NPGA) opined that “propane, also known as liquefied petroleum gas or LP-gas, was not included in the statute as a product to be regulated through a permit,” based on “the historical safety of the propane gas transportation system under the existing comprehensive DOT regulatory system.” NPGA stated that there is no basis in legislative history or experience to require a safety permit for all Division 2.1 hazardous materials. The American Petroleum Institute recommended that the proper shipping name(s) of the specific materials be set forth in the regulations, rather than references to Division 2.1 materials. Three commenters stated that the use of the term ‘in bulk’ to refer to a container with a capacity of 3,500 gallons or more would be confusing, because a “bulk packaging” is defined in 49 CFR 171.8 to include a container having a “maximum capacity greater than 450 L (119 gallons) as a receptacle for a liquid” and a “water capacity greater than 454 kg (1000 pounds) as a receptacle for a gas.” Yellow Freight System, Inc. supported the 3,500-gallon capacity threshold for liquefied natural gas, because “[l]ess than ‘in bulk’ quantities generally are less likely to pose an immediate danger to public safety while in transit compared to ‘in bulk’ shipments.”

In the preliminary cost-benefit analysis of this rulemaking (a copy of which has been placed in the docket), the agency considered three different lists of hazardous materials for which a safety permit would be required:

Option No. 1 is the “statutory” list of the four categories of hazardous materials in 49 U.S.C. 5109(b), at the same threshold quantities for which registration is required. Under this option, almost 2,500 motor carriers (including about 800 intrastate carriers) would be required to obtain a safety permit.

Option No. 2 includes an “expanded” list of the following hazardous materials, which would make approximately 6,500 motor carriers (including about 1,830 intrastate carriers) subject to the safety permit requirement:

Option No. 3 would apply the requirement for a safety permit to all motor carriers subject to the security plan requirements in 49 CFR 172.800, adopted in the final rule published by RSPA under docket No. RSPA-02-12064 (HM-232) on March 25, 2003 (67 FR 14521). This would be more than 16,250 motor carriers (including about 4,600 intrastate carriers) that are required to register with RSPA and pay a registration fee or transport a select agent or toxin regulated by the CDC under 42 CFR part 73.

FMCSA continues to believe that the initial requirements for a safety permit should apply to only those motor carriers that transport the materials mandated by Congress (option No. 1). However, expanding the existing statutory list to require a safety permit for motor carriers that transport other hazardous materials (covered by option Nos. 2 or 3) should provide the public with additional safety measures, and FMCSA invites comments on whether the agency should, in the future, apply the requirement for a safety permit to motor carriers that transport the hazardous materials in the “expanded” or “HM-232” lists above.

The requirement to hold a safety permit in 49 U.S.C. 5109 applies to both interstate and intrastate motor carrier operations within the United States. In the 1993 NPRM, FHWA proposed to require that intrastate motor carriers must comply with “all applicable parts of the FMCSRs” in order “to use the provisions of part 385, ‘Safety Fitness Procedures,’ in making determinations to issue, or deny, a request for a safety permit for either interstate or intrastate motor carriers” (58 FR at 33421). Several commenters raised concerns about applying the financial responsibility requirements in 49 CFR part 387 to intrastate carriers that are subject only to State requirements when they use a smaller vehicle (having a gross vehicle weight rating of less than 10,000 pounds) to transport the hazardous materials for which a safety permit would be required.

As discussed below under “Conditions for issuing a safety permit,” FMCSA is still proposing to require that a motor carrier have a “satisfactory” safety rating in order to obtain a safety permit. Accordingly, an intrastate carrier would be required to apply for a U.S. DOT number as a “new entrant” and subject itself to a compliance review. The safety rating issued by FMCSA to an intrastate carrier would be used only for purposes of issuing a safety permit; the safety rating issued to an intrastate carrier would not be posted on FMCSA's Web site nor would it be used by FMCSA for any purpose other than determining whether the carrier is entitled to a safety permit.

FMCSA does not consider that section 5109 is a mandate to make all intrastate motor carriers subject to provisions in the FMCSRs that do not already apply to them, including the financial responsibility requirements in 49 CFR part 387. Except for the requirement to hold a safety permit, in order to transport any of the designated hazardous materials, and to undergo a compliance review in order to demonstrate its fitness to hold a safety permit, an intrastate carrier would not become subject to other requirements in the FMCSRs that do not already apply.

The definition of “interstate commerce” includes foreign commerce. Therefore, Canadian and Mexico-domiciled motor carriers transporting HM permitted materials in the United States would be subject to the requirements proposed in this SNPRM.

Each motor carrier that conducts operations in interstate commerce must submit to FMCSA a Motor Carrier Identification Report, Form MCS-150, before it begins operations and on a two-year cycle thereafter (the month and year of submission are based on the last two digits of the carrier's U.S. DOT number). 49 CFR 390.19(a). Effective January 1, 2003, a “new entrant” motor carrier must also submit Form MCS-150A, Safety Certification for Application for a U.S. DOT Number, and other forms to obtain operating authority. 49 CFR 385.305.

In the 1993 NPRM, FHWA proposed to use a revised Form MCS-150 as the application for a safety permit. Two commenters supported the use of the MCS-150 form (with revisions) for applying for a safety permit. Other commenters suggested combining the safety permit and registration programs, in terms of a single application form, registration and permit number, and expiration dates.

FMCSA believes that the safety permit program can best be coordinated with the biennial report filed on Form MCS-150 (and Form MCS-150A for a new entrant). Rather than revising the Form MCS-150, however, FMCSA proposes to create a new Form MCS-150B for a motor carrier to provide the limited additional information required for issuance of a safety permit. FMCSA believes that keeping the safety permit program part of the motor carrier identification and safety fitness program with the same schedule for renewal will be more efficient than attempting to combine the safety permit application with the registration program (which applies to offerors and carriers by all modes of transportation, allows registration for one, two, or three years at the registrant's option, and operates on a mid-year basis [July 1 to June 30] rather than a staggered cycle throughout a two-year period).

Implementation of the safety permit requirement would be phased in beginning January 1, 2005. The actual date of compliance would depend on whether the motor carrier is already involved in the transportation of a permitted material. A motor carrier that is not involved in the transportation of a permitted material on January 1, 2005, would need to apply for and receive a safety permit before it may transport any of the hazardous materials for which a safety permit would be required. However, a “new entrant” motor carrier that applies for a U.S. DOT number after January 1, 2005, would be required to apply for a safety permit (by submitting Form MCS-150B) during 2005 or 2006. Thus, until the motor carrier that is already operating is required to renew its U.S. DOT number during 2005 or 2006, it need not apply for a safety permit. In all cases, a safety permit will be valid until the next date for filing Form MCS-150 (in accordance with the schedule set forth in 49 CFR 390.19(a)(2) and (3)).

A draft of Form MCS-150B is available in the docket (at the DMS Web site http://dms.dot.gov), and interested persons are invited to submit comments on that draft. As indicated on that draft, FMCSA proposes to require that an official of the motor carrier must certify “under penalties of perjury,” but not to require notarization. As in the 1993 NPRM, FMCSA is not proposing to charge a fee for applying for a safety permit, but it may consider the need to assess an application fee in the future, especially if the safety permit program is expanded to apply to motor carriers of additional types and quantities of hazardous materials.

In the 1993 NPRM, FHWA proposed that its determination on an application for a safety permit would be based “upon a safety fitness finding made pursuant to 49 CFR part 385.” 58 FR at 33421. FHWA also proposed authority to issue a temporary safety permit to an unrated motor carrier, pending a safety fitness determination, when the carrier has certified in its application that it is operating in full compliance with the FMCSRs and HMRs, or comparable State regulations (including financial responsibility requirements in part 387 or State regulations, whichever is applicable). Under the 1993 proposal, a temporary safety permit would remain in effect for no more than 120 days “or until a safety rating is assigned, whichever occurs first” (58 FR at 33424).

As in the 1993 NPRM, FMCSA proposes to require that a motor carrier have a “satisfactory” safety rating in order to obtain a safety permit. Appendix B to 49 CFR part 385 contains an explanation of the safety rating process including a list of the regulations that FMCSA considers “acute” (where noncompliance is so severe as to require immediate compliance) and “critical” (where noncompliance relates to management and/or operational controls). This SNPRM also proposes additions to the list of “acute” and “critical” regulations in Section VII of Appendix B to part 385.

FMCSA is also proposing to add two further conditions for issuing a safety permit: (1) the motor carrier must show that it has a satisfactory security program, and (2) the motor carrier must be registered with RSPA (and remain registered). A satisfactory security program would apply to motor carriers transporting hazardous materials in commerce listed in this Supplemental Notice of Proposed Rulemaking (SNPRM). A satisfactory security program must include: (1) A security plan as prescribed in subpart I of Part 172 of this title, (2) means of communication that will enable the vehicle operator to immediately contact the motor carrier during the course of transportation as required in this SNPRM, and (3) means of providing its hazardous materials employees with security training for hazardous materials employees. FMCSA is also proposing to issue a temporary safety permit, valid for up to 270 days, to a motor carrier that does not have a safety rating but certifies that it has a satisfactory security program and is operating in full compliance with the HMRs, the FMCSRs or comparable State regulations, and minimum financial responsibility requirements in 49 CFR part 387 or State regulations (whichever are applicable). However, FMCSA would not issue a temporary safety permit to a motor carrier that, as indicated in the Motor Carrier Management Information System (MCMIS), has a crash rate in the top 30% of the national average; has a driver, vehicle, hazardous material, or total out-of-service rate in the top 30% of the national average; or is listed on FMCSA's SafeStat A, B, C, or D lists.

Comments to the 1993 NPRM supported use of the safety rating to determine a motor carrier's fitness to hold a safety permit, but raised questions about the manner in which a safety rating is assigned and whether the 120 day limitation for a temporary safety permit was sufficient, especially to cover all intrastate carriers that have not previously been required to submit Form MCS-150 and obtain a U.S. DOT number. The California Highway Patrol (CHP) recommended that a safety rating be assigned only after a “compliance review,” with greater emphasis on “the mechanical condition of the carrier's vehicles,” and not a lesser “safety review” which it considered not to be “sufficient to determine a carrier's actual safety compliance.” CHP also recommended that the compliance review be performed at the principal location where hazardous materials operations take place, rather than at its main office or headquarters which may be “far removed from the actual working locations.”

The Oregon Public Utilities Commission expressed concern that the safety “rating system is difficult to decipher and appears * * * to be somewhat arbitrary” with variations among different regions. Baker Performance Chemicals, Inc. suggested that there be more discussion on how the safety rating is determined. CWTI recommended that a written notification of an “unsatisfactory” or “conditional” safety rating include written notice that the carrier is prohibited from transporting any of the hazardous materials for which a safety permit is required.

FMCSA believes that most, if not all, of the concerns expressed about the safety rating system itself have been addressed in the 1997 revisions to 49 CFR part 385, including the addition of Appendix B to that part (“Explanation of Safety Rating Process”). See the final rules published May 28, 1997 (62 FR 28807), and November 6, 1997 (62 FR 60035). At present, FMCSA bases a safety rating only on a full compliance review, and it retains the discretion to perform that review at any of the motor carrier's facilities. FMCSA shares the concerns that 120 days may not be sufficient time to perform a compliance review for a motor carrier that does not have a safety rating, and the agency proposes to allow a temporary safety permit to remain in effect for up to 270 days, providing that the applicant satisfies all the conditions for issuance of a temporary safety permit.

In the 1993 NPRM, FHWA proposed that its written notification of a “satisfactory” safety rating would “serve as the safety permit and shall include the safety permit number assigned.” (59 FR at 33424) It also proposed that the safety permit number must be “clearly displayed on shipping papers or the appropriate transportation document,” in order to meet the statutory requirement for the motor carrier to keep “a copy of the permit, or other proof of its existence, in the vehicle.” 49 U.S.C. 5109(a). FHWA noted the prohibition in § 5109(f) against a person offering a designated hazardous material for transportation by motor vehicle unless the carrier holds a safety permit, and it indicated that “RSPA will subsequently initiate rulemaking which will address shipper responsibility.” (58 CR at 33419)

The National Motor Freight Traffic Association (NMFTA) supported the use of a carrier's U.S. DOT number as the safety permit number and stated that “use of this number would minimize paperwork, inasmuch as the assigned safety permit number would be displayed on the carriers' transportation documents.” It also stated that, since FHWA intended to add a “permit” database to its existing information systems, “safety fitness and permit information would be readily available to federal and state officials and enforcement personnel.” CHP questioned whether use of the U.S. DOT identification number would be sufficient because “all private interstate motor carriers must obtain and display” this number. The Idaho State Police stated that “there is no way for an enforcement officer [to] know that the carrier has met the requirements for having a safety permit,” and it recommended the creation of an approach providing “adequate measures for ensuring that safety permit numbers are legitimate and verifiable.”

Some commenters suggested that the same number should be used for both registration and the safety permit, to cover the same period of time, and that DOT should use information from the registration program to issue safety permits to carriers with a U.S. DOT identification number. CWTI suggested that the safety permit number should be included on the registration certificate or another document carried on the vehicle, rather than the shipping paper prepared by the shipper (or offeror).

Other commenters objected to the proposed requirement that the safety permit number must be on the shipping paper or stated that the specific location and manner of displaying the safety permit number needed to be addressed. Yellow Freight stated that law enforcement officers should be able to determine “through another source” whether a carrier holds a safety permit, and adding additional information to shipping papers “that is not essential to immediate safety concerns will not enhance the transportation of hazardous materials.” The Institute of Makers of Explosives (IME) and the International Society of Explosive Engineers (ISEE) stated that requiring the shipper to put the carrier's safety permit number on the shipping paper would result in more errors, as well as increase the time and effort of preparing shipping papers. 3M suggested that the carrier (rather than the shipper) should be responsible for putting the safety permit number on shipping papers.

Associations of motor carriers endorsed the statutory requirement that a shipper (or offeror) must verify that the carrier holds a safety permit before offering a designated hazardous material for transportation. 3M objected and Mobil stated that access to FMCSA's Motor Carrier Management Information System (MCMIS) would be necessary for a shipper to verify that it has a permit, and that there would be no need to have the permit number on shipping papers if a carrier were required to provide “proof of fitness and safety permit issuance” to shippers. In addition, ISEE raised a concern about “the availability of explosives information to the public through the inclusion of carrier permit information in MCMIS.”

In this SNPRM, FMCSA is no longer proposing that the carrier's safety permit number must appear on the shipping paper, but the carrier would be required to maintain a copy of the safety permit or another document showing the permit number in the vehicle transporting a designated hazardous material. A State or local law enforcement officer would be able to confirm the validity of this number through real-time or close to real-time information made readily accessible by FMCSA.

Section 5109(f) provides that a person may offer a designated hazardous material to a motor carrier for transportation in commerce “only if the carrier has a safety permit.” The authority for implementing this provision has been delegated to RSPA. See 49 CFR 1.53(b)(2), 1.73(d)(2).

The 1993 NPRM included a proposal to require compliance with the routing and route plan requirements then set forth in 49 CFR 177.825 (with regard to radioactive materials) and 397.9 (with regard to Class A and B explosives). These requirements (now contained in 49 CFR 397.67 and 397.101) specify that the carrier must provide its driver with a written route plan when the motor vehicle contains a highway route controlled quantity of a Class 7 (radioactive) material or any quantity of a Division 1.1, 1.2, or 1.3 (explosive) material.

FMCSA considers that preparation of and adherence to a written route plan will improve the safety and security of transportation of all materials for which a safety permit is required. Accordingly, in this SNPRM, FMCSA is proposing to revise 49 CFR 397.67(d) to require the carrier or its agent to prepare and provide its driver with a written route plan covering any shipment of a PIH material or liquefied natural gas for which a safety permit is required, in addition, to all shipments of Division 1.1, 1.2, and 1.3 materials. We are also proposing to require (in proposed § 385.415) that the written route plan be carried in the vehicle and followed, unless an alternate route is required by a law enforcement officer or emergency conditions. The written route plan when carried in the vehicle, must be maintained in such a manner that ensures security requirements set forth in Subpart I of part 172 of this title are met. The driver would no longer be allowed to prepare the written route plan for the carrier, but the driver would be required to amend the written route plan to show any deviation. In addition, the driver would be required to communicate with the carrier at least once every two hours and any time there is a deviation from the written route plan, and the motor carrier would be required to contact law enforcement officials in the event that there has been no communication from its driver for more than three hours.

FMCSA is also proposing to require that the vehicle driver must have in the vehicle, and make available to law enforcement officials upon request, the telephone number of an employee of the motor carrier who has a copy of the written route plan and is able to determine whether the motor vehicle is on the route specified in that route plan. Furthermore, FMCSA is proposing to require the motor carrier to maintain a record of all communications with the vehicle driver during transportation of a hazardous material for which a safety permit is required, containing the name of the driver, identification of the vehicle, the hazardous material(s) being transported, the date and time of each communication, and each period of more than two hours without a communication with the driver including a statement of the facts or conditions that prevented communication for more than two hours.

To implement the pre-trip inspection requirement in 49 U.S.C. 5105(e), FHWA proposed in the 1993 NPRM to require an inspection of a vehicle transporting a highway route controlled quantity of a Class 7 (radioactive) material, before each trip, in accordance with Appendix G to the FMCSRs. FHWA also proposed that the inspector must have the qualifications specified in 49 CFR 396.19 and that written certification including certain information must be prepared and retained by the carrier for one year. It invited comments on its proposed inspection criteria and “whether radiological monitoring should be included.”

The comments on this topic addressed who should perform these inspections, the inspection criteria, and whether or not the inspection should include radiological monitoring. The Department of Energy (DOE) and EEI expressed concern that a requirement for radiological monitoring would duplicate the requirement in 49 CFR 173.441 to ensure that a package containing radioactive material is checked before shipment, but several other commenters supported a requirement for monitoring as part of the pre-trip inspection. To the extent that monitoring is performed, some commenters, including Tri-State, stated that only the shipper has monitoring equipment and trained personnel so that it (rather than the carrier) should perform the pre-trip inspection. DOE endorsed “the flexibility of allowing inspections to be performed by inspectors from organizations other than the carrier itself,” and other persons (besides a motor carrier official) should be allowed to sign the inspection certification. DOE also stated that in any case, radiological monitoring should not be done by “a qualified vehicle inspector” unless that person was also a qualified health physicist.

Tri-State and CHP supported use of the proposed inspection criteria and inspector qualifications in the FMCSRs. Others stated that the criteria in Appendix G are not sufficient and suggested using standards then under development by the Commercial Vehicle Safety Alliance (CVSA). The Idaho State Police also recommended that “in order to pass the inspection, the vehicle must be defect free.” CHP and Montana DOT recommended that the inspection document or certification must be carried on the vehicle.

In this SNPRM, FMCSA is proposing inspection standards similar to those contained in the CVSA Level VI Inspection Program for Radioactive Shipments. The pre-trip inspection would have to be performed by a government inspector, (i.e., one employed by or under contract to a Federal, State or local government). The inspector must have completed an appropriate training program of at least 104 hours, including at least 24 hours of training in conducting radiological surveys and inspecting vehicles transporting highway route controlled quantity (HRCQ) radioactive materials. The inspection must cover all applicable requirements in the HMRs and FMCSRs, or compatible State regulations, including 49 CFR parts 383 (commercial driver's license), 391 (driver qualifications), 395 (hours of service), parts 393 and 396 (vehicle condition), provisions in the HMRs on the transportation of radioactive materials (49 CFR parts 171, 172, 173, and 178), and registration (49 CFR part 107, subpart G).

As discussed above, in order to be issued a safety permit, a motor carrier would have to be registered with RSPA and have a “satisfactory” safety rating and a satisfactory security program. A temporary safety permit could be issued to a carrier that does not have a safety rating, valid for up to 270 days; if the carrier receives a “satisfactory” safety rating, it would receive a safety permit, but the temporary permit would be revoked if the carrier receives a safety rating that is less than “satisfactory.” FMCSA is also proposing that a safety permit will be subject to suspension or revocation if a carrier fails to maintain its “satisfactory” safety rating or under other specified circumstances, including the failure to submit a renewal application or providing any false or misleading information on a required application form; failure to maintain a satisfactory security plan; failure to comply with an out-of-service order; failure to comply with the FMCSRs, HMRs, or compatible State requirements, or an order issued under any of these, in a manner that shows the carrier is not fit to transport the hazardous materials for which a safety permit is required; loss of its operating rights; and suspension of its registration for failure to pay a civil penalty or abide by a payment plan.

The SNPRM contains procedures for administrative review of a denial, suspension, or revocation of a safety permit. A motor carrier's rights to administrative review would depend on the ground for denial, suspension, or revocation of the safety permit. In summary, where there already exists a right to administrative review of the underlying basis for denial, suspension, or revocation, the carrier must pursue its existing rights to review. Accordingly, if the basis for denial, suspension, or revocation of a safety permit is the carrier's failure to receive or maintain a “satisfactory” safety rating, its review rights are limited to those set forth in 49 CFR 385.15 (administrative review of a proposed safety rating) and 385.17 (change to safety rating based on corrective actions). If the basis for denial, suspension, or revocation of a safety permit is the carrier's failure to pay a civil penalty or abide by a payment plan, its review rights are limited to the show cause proceedings set forth in 49 CFR 386.83(b) and 386.84(b).

When a denial, suspension, or revocation of a safety permit is based on another ground, the SNPRM proposes that the carrier may submit a written request for administrative review within 30 days after service of a written notification that FMCSA has (1) denied a safety permit, (2) immediately suspended or revoked a safety permit (when an imminent hazard exists), or (3) proposed to suspend or revoke a safety permit. The specific procedures that would apply to a request for administrative review are contained in proposed § 385.423(d).

The 1993 NPRM contemplated that many States would continue to require carriers to obtain a permit in order to transport hazardous materials within the State. In the SNPRM, FMCSA proposes that the Federal safety permit would be in addition to any required State permit, but that FMCSA would issue a safety permit to a carrier without further inspection or investigation when FMCSA is able to verify that the carrier holds a safety permit issued by a State under a program that is equivalent to the Federal safety permit program.

As stated in the 1993 NPRM, a State permit requirement would be preempted “if compliance with both the State and Federal permit requirements is not possible, or if the State requirement creates an obstacle to the accomplishment” of Federal hazardous material transportation law and the regulations.” (58 FR at 33419) In addition to these general preemption criteria now set forth in 49 U.S.C. 5125(a), a State may impose a fee for a permit to transport hazardous materials, “only if the fee is fair and used for a purpose related to transporting hazardous material, including enforcement and planning, developing, and maintaining a capability for emergency response.” ( 49 U.S.C. 5125(g)(1)).

RSPA has stated that “[a] permit may serve several legitimate State police power purposes, and the bare requirement * * * that a permit be applied for and obtained is not inconsistent with Federal requirements. However, a permit itself is inextricably tied to what is required in order to get it” so that a permit requirement “must be considered together with the application requirements.” Inconsistency Ruling (IR) No. 2 (Rhode Island), 44 FR75566, 75570-71 (Dec. 20, 1979). Accordingly, a State and local permit for hazardous materials transportation is not preempted in all cases, but only when the underlying requirements that must be fulfilled in order to obtain the permit conflict with Federal hazardous materials law or the HMR. Id.; Preemption Determination (PD) No. 14 (Houston), 63 FR 67506, 67510 (Dec. 7, 1998), 64 FR 949, 33952 (June 24, 1999); IR-28 (San Jose, California), 55 FR 8884, 8890 (Mar. 8, 1990); IR-20 (Triborough Bridge and Tunnel Authority), 52 FR 24396, 24397-98 (June 30, 1987); IR-3 (Boston), 46 FR 18918, 18923 (Mar. 26, 1981).

The November 17, 1993 report of the Alliance discussed the two primary reasons that States carry out their own permit and registration programs: (1) The issuance of a permit provides an enforcement mechanism (suspension or revocation of the permit) if a carrier acts irresponsibly or violates State transportation or environmental laws, and (2) the registration or permit process provides a State information about the business activities of persons who operate within the State but are not based within the State. In its letter transmitting that report, the Alliance stated that its members had operated under the assumption that Federal hazardous material transportation law “authorized a dual system for registering and permitting motor carriers,” and that a 1992 technical amendment to the law made this explicit. The Alliance stated that the language in the two separate sections of the law on a Federal safety permit and State permits (now §§ 5109 and 5119) does not restrict “the types of hazardous materials” that may be covered under a State permit, and expressed opposition to finding that a Federal safety permit program “would preempt state permitting of carriers of hazardous materials covered under the federal program.”

CWTI concurred that a uniform State permit system proposed by the Alliance and implemented under Federal regulations would not be subject to preemption under the dual compliance and obstacle criteria, contained in 49 U.S.C. 5125(a). It recommended that the applicability of these criteria to State permits should be clarified in several respects by placing the preemption standard in the regulations (rather than just in the preamble) and explicitly stating that “a motor carrier holding a valid federal safety permit would be exempt from all non-federal permit requirements.”

The Public Utilities Commission of Ohio stated that it would be “against the public interest” to establish a Federal program under which a State permit program would be preempted with respect to the hazardous materials for which a safety permit would be required, but not with respect to other, “lower risk” materials. CHP asked for further clarification of the preemption standard to be applied to State permits, in light of the statement in the 1993 NPRM that a State permit covering the “same hazardous materials * * * based on a demonstration of safety fitness” would be preempted after implementation of a Federal safety permit program. (58 FR at 33423)

Other persons submitting comments on the 1993 NPRM urged alignment of the Federal and State programs, suggesting that States “accept the FHWA program” (IME), “closely align this permit program with the work of the Alliance” (Yellow Freight), “see if one program could be established” under the Alliance proposal (Montana DOT), or “consider waiving the FHWA permitting requirement” if a uniform State program contained requirements that “duplicate or exceed those contained in the NPRM” (DuPont).

FMCSA agrees that Federal hazardous materials transportation law allows States to continue their permit requirements after the implementation of a Federal safety permit requirement, and that, if a State has a safety permit program that is equivalent to the requirements in 49 U.S.C. 5109, FMCSA may properly accept the findings of the State that a motor carrier is “fit, willing, and able” to transport the designated hazardous materials and to comply with the applicable laws, regulations, and financial responsibility requirements. Section 5109 requires DOT to issue a Federal safety permit to a motor carrier that meets these requirements, rather than simply allow the carrier to operate under an equivalent State permit, so FMCSA proposes to issue a Federal permit, without further inspection or investigation, when it can verify that this condition exists. FMCSA encourages States to have or implement a HM Permit program equivalent to a Federal permit that will ultimately prevent duplication of a State and Federal requirement.

To the extent that a State permit program is equivalent to the Federal requirements, no preemption issues would arise. It is only differences between Federal and non-Federal requirements that should raise issues of preemption. In this regard, FMCSA and RSPA consider that the preemption criteria set forth in 49 U.S.C. 5125 will continue to apply to non-Federal permit requirements, just as those criteria have applied in the past, and that the impact on States of a Federal permit program should be “minimal.” (58 FR at 33423)

Preemption would not necessarily arise simply if a State applies its permit requirements to a smaller, larger, or different group of hazardous materials, than those to be covered by a Federal safety permit. In a recent determination, RSPA noted that it “has considered numerous challenges to non-Federal requirements without finding that the specific requirements were preempted because they did not apply to all hazard classes and all materials listed in the Hazardous Materials Table in 49 CFR 172.101,” although there are circumstances in which “a specific non-Federal requirement that applies only to one hazardous material may, indeed, be an obstacle to accomplishing and carrying out Federal hazardous material transportation law or the HMR.” PD-13(R) (Nassau County), decision on petition for reconsideration, 65 FR 60238, 60241 (Oct. 10, 2000). As already discussed, in assessing a differing State (or local) permit requirement, the issue will be whether the underlying requirements that must be fulfilled in order to obtain the permit conflict with Federal hazardous materials law or the HMR. The preemption criteria set forth in 49 U.S.C. 5125 will continue to apply to State permits, and it is not considered necessary to repeat those criteria in the regulatory text of this final rule.

As discussed above, in this SNPRM, we are proposing to require an applicant for a safety permit to certify compliance with the HMR security plan and training requirements adopted in a final rule published by the Research and Special Programs Administration (RSPA) on March 25, 2003 (68 FR 14509). That final rule, published under RSPA's docket HM-232, requires persons who offer for transportation or transport certain hazardous materials in commerce to develop and implement security plans. The security plan requirement, codified in a new subpart I of part 172 of the Hazardous Materials Regulations (HMR; 49 CFR Parts 171-180), applies to shipments of the following classes and quantities of hazardous materials:

A security plan must include an assessment of possible transportation security risks for shipments of the hazardous materials listed above and appropriate measures to address the assessed risks. Specific measures put into place by the plan may vary commensurate with the level of threat at a particular time. At a minimum, a security plan must cover personnel security, unauthorized access to shipments, and en route security.

In addition, the HM-232 final rule requires all hazmat employees (as defined in § 171.8 of the HMR) to receive security awareness training that provides an awareness of security risks associated with hazardous materials transportation and methods to enhance transportation security. This training must also include a component covering how to recognize and respond to possible security threats.

As part of DOT's effort comprehensively to enhance hazardous materials transportation security, FMCSA is conducting a field operational test (FOT) to quantify the security costs and benefits of an operational concept that applies technology and improved enforcement procedures to hazardous materials transportation by motor carriers. The FOT will demonstrate an approach that enhances the safety and security of hazardous materials shipments from origin to destination by examining possible vulnerabilities in the transportation system. In parallel with the FOT, FMCSA will also conduct an independent evaluation to ascertain whether the FOT met the objective of ensuring the safety and security of hazardous materials shipments. This evaluation will also include a benefit-cost analysis on the security technologies tested, including remote vehicle tracking systems, remote vehicle disabling systems, off-route alert systems, and electronic ignition locks. We expect to begin the FOT in the fall of 2003 and complete the FOT and evaluation by September 2004.

In a related action, on July 16, 2002, RSPA and FMCSA jointly published an advance notice of proposed rulemaking (ANPRM) under docket HM-232A to examine the need for enhanced security requirements for hazardous materials transportation that would be in addition to the security requirements adopted under HM-232 (67 FR 46622). The ANPRM sought comments on the feasibility of specific security enhancements and the potential costs and benefits of deploying such enhancements. Security measures under consideration include escorts, vehicle tracking and monitoring systems, emergency warning systems, remote shut-offs, direct short-range communications, and pre-notification of shipments to state and local authorities.

RSPA is currently evaluating comments received in response to the HM-232A ANPRM to determine if additional security rulemaking is necessary. This evaluation will include an examination of the security threats posed by specific classes and quantities of hazardous materials and an assessment of the effectiveness of specific operational or technological measures in reducing security threats. Persons who may be affected by the proposals in this NPRM should be aware that the ongoing research and rulemaking projects described above may result in modifications to the proposals in this NPRM.

Transportation Security Administration/Department of Homeland Security will continue to evaluate security issues, and in the future, may issue additional standards relating to security issues raised in this rulemaking.

The FMCSA has determined that this rulemaking is a significant regulatory action within the meaning of Executive Order 12866, and is significant within the meaning of the Department of Transportation's regulatory policies and procedures (DOT Order 2100.5 dated May 22, 1980; 44 FR 11034, February 26, 1979) because of significant public interest in the issues relating to hazardous material permitting. The FMCSA has estimated costs and benefits for three policy/regulatory options. These estimates are discussed in detail in the full regulatory evaluation contained in the docket. Option 1, the statutory option, is the one preferred by FMCSA. It is an option involving a limited listing of HM included by Congress in earlier rulemaking considerations. It is anticipated that the economic impact of this rule, implementing option 1, would be $0.6 million in the first year and $10.5 million in each subsequent year. The total discounted cost estimates are $74.5 million over 10 years. The costs and benefits for this NPRM are discussed below.

Permit Applications. Industry costs directly tied to obtaining a permit include obtaining an application form, completing the information requested on the form, and submitting the form to FMCSA. Using data from RSPA on carriers that are registered with DOT under the provisions of 49 CFR Part 107 (FY 2002, most recent year available), FMCSA estimates that 2,434 carriers will be subject to this proposed rule. FMCSA estimates that it will take carriers 2 hours to obtain and complete the initial permit application at a total cost per carrier of $42 ($15 per hour plus fringe benefits). There are no permit application fees under the proposed program. The industry would thus incur an estimated $102,228 in permit application costs. This is a one time non-recurring cost.

Permit renewal applications would be required every two years. The estimated burden to complete a renewal application is 15 minutes per carrier per year. This involves gathering some information and checking off a few additional boxes on the MCS-150 Form. Using the same unit cost of $15 per hour plus fringe benefits, the annual costs to industry are estimated at $12,789.

Safety Record Standards Compliance. FMCSA data show that 1,865 motor carriers subject to the requirements proposed in this rule do not currently possess a satisfactory safety rating and will need to obtain one as part of the permit process. This includes carriers without a current safety rating and those whose most recent safety ratings were unsatisfactory or conditional. Carriers who transport HRCQ or radioactive materials (RAM) are assumed to have met the safety record requirements of this rule through their compliance with regulations imposed by the Department of Energy and the Nuclear Regulatory Commission. FMCSA assumes that a typical carrier will spend $182 preparing for the compliance review necessary to obtain a new safety rating. This includes 2 hours for the carrier's safety director and 6 hours for a clerk to gather and process the necessary information. The total one-time non-recurring permit application and safety compliance costs to industry are, therefore, estimated to be $339,430.

Operational Costs. The proposed rule imposes four requirements on carriers that will result in increased costs, most of which will recur annually. The rule requires that drivers must be able to contact the carrier and/or law enforcement in emergencies. While many carriers employ sophisticated satellite communication systems, FMCSA assumes that cell-phone type service will meet these requirements and that 90 percent of the vehicles in service already have such a device. The service life of the communications equipment is assumed to be 10 years. Utilizing data from the 1997 Vehicle Inventory and Use Survey (VIUS), FMCSA estimates the total number of vehicles affected by the proposed regulations to be 12,500. Ten percent of these vehicles will require new equipment, estimated at $100 per vehicle, as well as a communications service plan, estimated at $60 per month. The one-time non-recurring communication requirement cost to industry is expected to be $125,000 (1,250 vehicles × $100/vehicle) and $900,000 annual cost in subsequent years (1,250 vehicles × $60/month × 12 months).

Under current requirements for the Commercial Vehicle Safety Alliance (CVSA) Level VI inspections, point of origin inspections are conducted on all shipments of HRCQ or radioactive materials (RAM). Carriers of these HM are required to have route plans and satisfy conditions for expeditious delivery. As such, HM carriers would not incur extra costs under the proposed permit program to satisfy point-of-origin inspections and route plan requirements.

The proposed rule requires carriers to develop and maintain route plans and ensure that route verification contact numbers are carried on the vehicle so that law enforcement could verify the correct location of the shipment. It is believed that the carrier's representative responsible for developing the route plans would be the one to ensure the numbers are placed in the vehicles and available for inspection. It was also assumed that the same individual would ensure that the permit verification number is placed in the vehicle. A unit cost of $5.25 per shipment was based on an hourly rate of $21 (including fringe benefits) for a clerk and 15 minutes to complete the task and was derived from comments to the joint FMCSA/RSPA ANPRM entitled “Security Requirements for Motor Carriers Transporting Hazardous Materials,” published July 16, 2002 (67 FR 46622) (FMCSA Docket No. 2002-11650). FMCSA realizes that some shipments are moved along the same routes repeatedly between given origins and destinations and new route plans would not need to be generated each year for these shipments. Further, the HM permits would be valid for two years and the carrier contact numbers are not expected to change frequently, if at all. Therefore, developing route plans and providing verification contact numbers and permit numbers in the vehicles are assumed to be repeated for only 50 percent of the shipments in a given year. The annual number of shipments, 1,221,144, were estimated with FMCSA data and VIUS data on the number of vehicles transporting different HM and assumptions regarding the anticipated number of trips per vehicle per year. Class 1.1, 1.2, and 1.3 and HRCQ RAM shipments were excluded as they already meet the proposed requirements. The estimated annual costs for industry compliance is $3,205,503 ([1,221,144 annual shipments] × [1/2 of shipments requiring action] × [$5.25/shipment]).

The cost to a carrier to document and maintain written communication records between itself and its drivers assumes 15 minutes of a clerk's time per shipment. All shipments are considered to require this documentation. The estimated annual cost for this requirement is $6,411,006 ([1,221,144 annual shipments] × [$5.25/shipment]).

Benefits. The benefits of the proposed HM permit program include improved safety due to reductions in accidental and intentional HM releases. Secondary benefits were also considered. Among the secondary benefits is the reduction in incident delays, evacuations, product losses, property damages, environmental damages and cleanups. For accidental releases, incident cost estimates for specific hazard classes from a prior FMCSA risk study were combined with estimates of the number of crashes expected to occur annually in each hazard class among the permitted shipments. FMCSA assumes that the safety elements of the proposed permitting program will reduce the number of HM incidents among permitted shipments by 25 percent. Therefore, the expected annual benefit from reducing accidental HM releases is $2,025,000.

The potential benefits of reducing intentional releases due to increased security measures are consistent with those analyzed in the NPRM for HM-232. The security measures under the HM-232 NPRM are consistent with, and applicable to, the proposed permitting program. Therefore, a separate analysis of the benefits of security was not conducted.

It is difficult to accurately ascertain the direct benefit of this proposal insofar as its impact upon reducing the malicious use of hazardous materials in transportation. To begin with, the actual costs that an averted terrorist attack of this nature would have imposed, and its probability of success with and without these measures, is unknowable. Terrorism is a fairly new phenomenon, and we have little notion of a likelihood function under the current conditions for HM transportation or under this proposal regarding hazardous materials permitting procedures. Similarly, we have little idea of the expected cost of a terrorist attack, given that one occurs. So although the theory for calculating the benefit is straightforward and simple, finding actual data for a future attack is not possible.

For purposes of this analysis and given the lack of data in this area, FMCSA has assigned 1/1000 as the probability that this proposal would be decisive in stopping an incident involving the malicious use of hazardous materials. FMCSA interprets this to mean that this proposal would result, over the next 1,000 years, in one additional year that is free from a malicious hazardous materials incident than would have occurred without these procedures. Interpreted differently, FMCSA estimates that this proposal would completely foil one of the next 1,000 attempted malicious hazardous materials incidents. FMCSA interprets this to mean that this proposal would make each attempted malicious hazardous materials incident less likely to inflict its intended damage. Alternately, one could interpret this to mean that these procedures will completely foil one of the next 1,000 attempted malicious hazardous materials incidents.

Next, FMCSA derived a scaled estimate of $25 billion as the cost of a malicious hazardous materials incident (This figure is based upon the lowest estimate reported of the most costly terrorist attack ever—the September 11th attacks and the costs of other recent terrorist attacks occurring in the past ten years. Please refer to the regulatory evaluation for this rulemaking, Hazardous Materials Carrier Permitting Program; Benefit-Cost Analysis of Permitting Options, for a more detailed discussion of how the scaled estimate was derived).

Finally, we multiplied the scaled estimate of the cost of a malicious hazardous materials incident by the probability estimate as follows: $25 billion × .001 =$25 million. Therefore, FMCSA estimates that this proposal would result in a direct benefit of $25 million each year for the ten-year planning horizon, insofar as it relates to a malicious hazardous materials incident. When calculating total benefits, these should be discounted using a standard 7% rate. We limit the analysis to ten years to conform to FMCSA analytical standards. (FMCSA uses a 10-year time frame for all its regulatory analyses to allow comparability from one rule to another.) There is no reason to believe that the benefits would stop unless the policy underlying this proposed rulemaking was to be changed.

Therefore, the combined annual direct benefit of this proposal would be $27 million ($2 million (rounded) + $25 million). FMCSA invites comments from the public to assess any potential costs or burdens that may be associated with this proposal.

The FMCSA has analyzed this action under Executive Order 13175, dated November 6, 2000, and believes that the proposed rule would not have substantial direct effects on one or more Indian tribes; would not impose substantial direct compliance costs on Indian tribal governments; and would not preempt tribal law. Therefore, a tribal summary impact statement is not required.

FMCSA has analyzed this proposed rule under Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.” FMCSA has preliminarily determined that this action would not be a significant energy action under that Executive Order because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects under Executive Order 13211 is not required.

The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; 2 U.S.C. 1532, et seq.) requires each agency to assess the effects of its regulatory actions on State, local, tribal governments, and the private sector. Any agency promulgating a final rule that is likely to result in a Federal mandate requiring expenditures by a State, local, or tribal government or by the private sector of $100 million or more in any one year must prepare a written statement incorporating various assessments, estimates, and descriptions that are delineated in the Act. The FMCSA has determined that the changes proposed in this rulemaking would not have an impact of $100 million or more in any one year.

The Regulatory Flexibility Act (5 U.S.C. 601-612) requires each agency to analyze proposed regulations and assess their impact on small businesses and other small entities to determine whether the proposed rule is expected to have a significant impact on a substantial number of small entities. Based on the assessment in the accompanying regulatory evaluation, and the absence of contradictory information submitted to the docket during the public comment period, FMCSA certifies that the proposals in this rulemaking are not applicable to a substantial number of small businesses.

The definition of “small businesses” has the same meaning as under the Small Business Act, established by the Small Business Administration (SBA), Office of Size Standards and codified in 13 CFR 121.201 . The FMCSA evaluated the effects of this proposed rule on small business entities, including as applicable small businesses, small non-profit organizations, and small governmental entities with populations under 50,000. Many of these small business entities operate as motor carriers of property in interstate or intrastate commerce.

Goal of the SNPRM. FMCSA is required by the Hazardous Materials Transportation Uniform Safety Act (HMTUSA) of 1990 to develop and implement a new motor carrier safety permit program. The safety permit program is intended to enhance the safety and security of certain hazardous materials shipments that, if released either accidentally or intentionally during transportation, have the potential to kill or injure large numbers of people and damage property and the environment.

Description of Actions. This SNPRM identifies specific fitness, financial and regulatory criteria for interstate and intrastate motor carriers to qualify and obtain a safety permit from FMCSA. Criteria include imposing operational security requirements, setting minimum safety and security standards, and making safety and security assessments of carriers to ensure compliance with operational, safety, and security standards. The specific hazardous materials covered by this permit program are: highway route-controlled quantities of a Class 7 radioactive material; more than 25 kg (55 pounds) of a Division 1.1, 1.2, or 1.3 (explosive) material; more than one liter (1.08 quarts) per package of extremely toxic-by-inhalation hazardous material; and compressed or refrigerated liquid methane or natural gas in bulk packaging of 13,248 liters (3,500 water gallons) or more.

Identification of potentially affected small entities. The proposed rule would affect intrastate and interstate carriers of hazardous materials. The number of small carriers is determined based on the Small Business Administration (SBA) definition used for the RSPA registration file. RSPA flags the small carriers in their registration system based on the number of employees or annual revenue. Of the 2,434 total carriers expected to be affected by this proposed rule, 1,816 have been estimated to be small entities.

In addition to small carriers, other small businesses and small entities potentially could be affected by the proposed permit system. Small businesses that provide services to small carriers, offer hazardous materials for transportation, or receive shipments could also be affected by the proposed rule. The customers and suppliers of small carriers could be adversely affected if a carrier were prohibited from shipping certain hazardous materials because a permit was denied or revoked. Similarly, local government entities such as police could be affected by the proposed hazardous materials permitting requirements. Local police would be notified anytime three or more hours elapsed after the last time that a communication was received from the driver of a hazardous materials vehicle covered by the permit. This probably would require the expenditure of law enforcement resources to investigate the communication lapse. The number of local police entities that would be involved is difficult to estimate before the permit program is implemented. It has been determined that 1,816 small motor carriers will be affected by the statutory requirements of this rule. Based on an expert judgment, the number of small businesses affected by this rule, excluding small motor carriers, was determined by doubling the number of small carriers affected by the statutory requirements. The application of expert judgment suggests that there could easily be two or more of these entities for each of the small carriers affected. Therefore, it is estimated that as many as approximately 4,000 small businesses could potentially be affected by the rule.

Reporting and recordkeeping requirements. This SNPRM proposes several new or modified recordkeeping requirements. While they have not been fully defined, they are detailed in the section of this preamble entitled “Paperwork Reduction Act.” FMCSA has built flexibility into the proposed requirements, so that entities can choose the method by which they comply with the proposals. For example, there is no prescribed method of communication between the driver and the carrier. Carriers are permitted to use any system which meets the performance criteria specified. Similarly, there are no specifications for the manner in which carriers develop and maintain route plans, allowing either electronic or paper-based approaches to be used. Entities can assess their own situations and tailor the requirements to fit them.

Related Federal rules and regulations. If this rule is adopted as proposed, FMCSA will eliminate possible conflict with two pieces of legislation: 49 U.S.C 5119 and U.S.C. 5105(e). 49 U.S.C. 5119 authorizes states to participate in the Alliance. The FMCSA intends to automatically issue a Federal permit to a carrier that obtains a permit from a State that is part of the Alliance program or another state that has a program equivalent to the Federal permit program in operation. Therefore, a comparable state program will be deemed equivalent to the Federal HM Permit Program and no statutory conflict will exist. The other area is the Point of Origin Inspections for Highway Route Controlled Quantities (HRCQ) shipments that are required by 49 U.S.C. 5105(e). These inspections are currently being conducted via the CVSA Level VI Enhanced Radioactive Materials Inspection Program. This current program would fulfill the requirements of this proposed rule and thus prevent any statutory conflict.

Alternate proposals for small businesses. The Regulatory Flexibility Act directs agencies to establish exceptions and differing compliance standards for small businesses, where it is possible to do so and still meet the objectives of applicable regulatory statutes. There are no significant alternatives to the proposed rule that would accomplish the stated proposed HM permitting rule and which would minimize any significant economic impact of the proposed rule on small entities. Alternative permitting systems, such as that of the Alliance program, could address national permitting needs if expanded to include all states, but the effects on small entities would be the same as under the proposed rule because the same requirements and provisions would be in effect.

We developed this SNPRM under the assumption that small businesses make up the majority of entities that will be subject to its provisions. Thus, we considered how to minimize the expected compliance costs as we developed this SNPRM.

Based on the discussion of the potential costs of this SNPRM in the section of this preamble entitled “Executive Order 12866 and DOT Regulatory Policies and Procedures,” FMCSA certifies that although this rulemaking would impose a significant economic impact on those small business entities, these small entities do not represent a substantial number of small businesses within the trucking industry. The Research and Special Programs Administration (RSPA) identifies the small carriers in their registration system based on the number of employees or annual revenue, consistent with the Small Business Administration's Small Business Size Standards, which are matched to the North American Industry Classification System (NAICS). FMCSA estimates the costs to a small carrier to comply with this proposed rule to be $4,512 in the initial year, and $4,093 in subsequent years. A summary and breakdown of these first-year and annual costs is shown in Table 1. Note that the number of shipments was determined by using data provided by FMCSA in conjunction with U.S. Census Bureau Vehicle Inventory and Use Survey (VIUS) data for the number of trucks transporting particular HM, and assumptions regarding the anticipated number of trips per vehicle per year. Communication requirements were assumed to be satisfied with a cell-phone-type service. Costs were calculated based on the assumption that 90 percent of the vehicles already have such a device and only 10 percent of the total vehicles will need new devices. Additionally, the table shows that the cost for route plans, route verification contact numbers, and permit verification is only half that of communication recordkeeping requirements. This is because the route planning activities are applied to only one half of shipments. Divisions 1.1 and 1.2 and HRCQ of RAM were excluded because all shipments of these materials have routing requirements under current DOT regulations. Finally, the unit cost is assumed to be a clerk's hourly pay of $15/hour plus fringe benefits (40%) for a total of $21/hour. A unit cost of $5.25 represents fifteen minutes of a clerk's labor.

We submitted the information collection and recordkeeping requirements contained in this SNPRM to the Office of Management and Budget (OMB) for approval under the provisions of the Paperwork Reduction Act of 1995, Section 1320.8(d). Title 5, Code of Federal Regulations requires FMCSA to provide interested members of the public and affected agencies an opportunity to comment on information collection and recordkeeping requests. Under the Paperwork Reduction Act, no person is required to respond to an information collection unless it has been approved by OMB and displays a valid OMB control number.

FMCSA currently has an approved information collection under OMB Control No. 2126-0013, “Motor Carrier Identification Report” with 74,250 burden hours and $0 cost. There will be an increase in the burden for OMB Control No. 2126-0013 due to extension of the data collection requirements to intrastate motor carriers that transport the permitted hazardous materials. Using RSPA registration data, it is estimated that 797 intrastate motor carriers will be required to comply with this current data collection, with an annual burden per carrier of 2 hours. In addition, there will be a new information collection burden for the new requirement to submit initial and renewal permit applications. This new information collection, “Hazardous Materials Safety Permits,” will be assigned an OMB control number after review and approval by OMB.

The new information collection requires that the carriers provide estimates of the anticipated annual shipments. It is assumed that this information would be readily available for large carriers, which would apply an inflationary estimate to the prior year's number from their database. Small carriers would either have a ready estimate (due to a limited number of shipments) or, more likely, could determine their prior year shipment totals from data they are required to maintain to support their reporting under the International Fuel Tax Agreement (IFTA) and International Registration Plan (IRP).

The burden to provide estimates of anticipated shipments are as follows: small carriers—30 minutes and large carriers—15 minutes. It is estimated that an additional 0.25 burden hours (15 minutes) per carrier will be required to complete the permit application form, including information, such as, carrier name and address, DOT number, etc. This results in a total burden of 1,671 hours as follows: [1,816 small carriers (596 intrastate + 1,220 interstate) × 0.75 hours per carrier = 1,362 hours] + [618 large carriers (201 intrastate + 417 interstate) × 0.50 hours = 309 hours].

Permit renewal will require carriers only to check-off a few additional boxes on the new MCS-150B Form as well as providing estimates of the annual shipments. The burden hours to check-off the additional boxes on MC-150B Form are considered negligible. The time required to gather the required information for the permit renewal is considered to be part of the time in estimating the number of shipments.

The proposed permitting program requires that carriers develop and maintain route plans and ensure that route verification contact numbers are carried in the vehicle. These provisions would add an average burden of 0.25 hour per day per carrier. The total burden hours were estimated assuming 260 working days in a year, based on an average of five working days per week—and one shipment per day on average. FMCSA realizes that some shipments are moved along the same routes repeatedly between given origins and destinations and new route plans would not need to be generated each year for these shipments. Further, the HM permits would be valid for two years and the carrier contact numbers are not expected to change frequently, if at all. Therefore, in estimating the burden hours involved in developing route plans and providing verification contact numbers and permit numbers on the vehicles, it was assumed that this activity will be repeated for only 50 percent of the shipments in a given year or 130 days per year [i.e., 0.5 × 260 = 130 days]. Thus, the burden hours for this activity is estimated as 79,105 hours [i.e., 2,434 (797 intrastate + 1,637 interstate) × 32.5 hours (0.25 hours per day × 130 days per year) = 79,105 hours].

The proposed permitting program also requires carriers to maintain written records of the communication between drivers and the carriers. The types of information required includes time of communication, HM transported, vehicle, and reasons for any communication lapses. While drivers and carriers are required under the proposed permitting program to be in frequent contact, this requirement places an additional reporting burden on the carriers. It is assumed that recording and maintaining these communications between the driver and carrier adds a burden of 0.25 hour per day on average per carrier. The total burden hours were similarly estimated assuming 260 working days in a year to be 158,210 hours as follows: [2,434 (797 intrastate + 1,637 interstate) × 65 hours (0.25 hours per day × 260 days per year) = 158,210 hours].

The total burden hours for the proposed rule are summarized in Table 2.

In subsequent years, we estimate that burden hours would include the permit renewal application and the time to provide shipment estimates, route plans, and communication records as indicated above. Given the biennial renewal process, the burden hours for application renewal and shipment estimates would be half as many in subsequent years. However, the burden hours for maintaining route plans and communication records will be the same for all years. Subsequent-year burden hour estimates are shown in Table 3.

We estimate that the new total information collection and recordkeeping burden resulting from the additional Motor Carrier Identification Reports and permit applications under this rule are as follows.

Total Annual Number of Respondents: 275,297.

Total Annual Responses: 275,297.

Total Annual Burden Hours: 75,844.

Total Annual Burden Cost: $0.

First Year Annual Burden:

Total Annual Number of Respondents: 2,434.

Total Annual Responses: 1,835,367.

Total Annual Burden Hours: 240,580.

Total Annual Burden Cost: $0.

Subsequent Year Burden:

Total Annual Number of Respondents: 2,434.

Total Annual Responses: 1,835,367.

Total Annual Burden Hours: 238,151.

Total Annual Burden Cost: $0.

Send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 Seventeenth Street, NW., Washington, DC 20503, Attention: DOT Desk Officer. We particularly request your comments on whether the collection of information is necessary for the FMCSA to meet its goals of reducing truck crashes, including whether the information is useful to this goal; the accuracy of the estimate of the burden of the information collection; ways to enhance the quality, utility and clarity of the information collected; and ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms on information technology.

FMCSA has performed an Environmental Assessment that is available for review in the public docket on the DMS Web site, http://dms.dot.gov. Based on the assessment, FMCSA has determined that this SNPRM rule does not have any significant negative impacts to the environment and may result in a net benefit from increased protection and monitoring of hazardous materials shipments. Therefore, we find that there are no significant environmental impacts associated with this SNPRM. The agency solicits comments on this issue.

This action would meet 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.

This proposed action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 dated August 4, 1999, as discussed under “State permits,” above, where the applicable law and the concerns previously expressed by State officials are set forth.

Federal hazardous material transportation law allows States, political subdivisions, and Indian tribes to continue their permit requirements after the implementation of a Federal safety permit program. To the extent that a State permit program is equivalent to the Federal requirements, no preemption issues would arise. To the extent that there are differences between Federal and non-Federal requirements, the preemption provisions in 49 U.S.C. 5125 will continue to apply to non-Federal permit requirements, just as those criteria have applied in the past.

For these reasons, FMCSA believes that nothing in this proposed rule, if adopted, will directly preempt any State law or regulation or have a substantial direct effect or sufficient federalism implications that would limit the policymaking discretion of the States. FMCSA invites States and other interested parties to comment on whether they believe any State permit requirement would be affected by the adoption of this proposed rule.

We have analyzed this action under Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (April 23, 1997, 62 FR 1985). This proposed rule is not an economically significant rule because the FMCSA has determined that the proposed rule, if adopted, will not present an environmental risk to health or safety that may disproportionately affect children.

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.

Catalog of Federal Domestic Assistance Program Number 20.217 Motor Carrier Safety. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program.

Executive Order 13166, “Improving Access to Services for Persons With Limited English Proficiency” (LEP), requires each Federal agency to examine the services it provides and develop reasonable measures to ensure that persons seeking government services but limited in their English proficiency can meaningfully access these services consistent with, and without unduly burdening, the fundamental mission of the agency.

Its purpose is to clarify for Federal-fund recipients the steps those recipients can take to avoid administering programs in a way that results in discrimination on the basis of national origin. Thus, we believe that this proposed action complies with the principles enunciated in the Executive Order.

In consideration of the foregoing, the Federal Motor Carrier Safety Administration proposes to amend 49 CFR chapter III as set forth below:

In 1995, vehicle manufacturers were beginning to install, and would soon be required to install, right front passenger air bags in all passenger cars and light trucks. At that time, the National Highway Traffic Safety Administration (NHTSA) believed that placing a rear facing child safety system (RFCSS) in the front seat of passenger air bag-equipped vehicles would have the potential for producing harmful effects. The agency's laboratory tests had shown that when RFCSSs were placed in the front seat of a passenger air bag-equipped vehicle, they extended forward to a point near the instrument panel where they could be struck by a deploying air bag and have the potential to cause serious injury to infants. This possibility was particularly acute when caregivers had no other choice because the rear seats of the vehicle were too small to accommodate the RFCSS or because the vehicle was not equipped with a rear seat.

As a countermeasure to this potential safety problem, the agency amended FMVSS No. 208, “Occupant crash protection,” on May 23, 1995 (60 FR 27333) to allow manufacturers the option of installing an on-off switch that motorists could use to deactivate the front passenger-side air bag in vehicles that have no rear seat or a rear seat too small to accommodate a RFCSS. A yellow telltale light was also required to indicate when the passenger air bag was deactivated. On January 6, 1997, the agency published a Final Rule (62 FR 798) extending the allowance for on-off switches until September 1, 2000, and this was further extended to September 1, 2012 in the May 12, 2000 Final Rule regarding advanced air bag requirements (65 FR 30680).

In addition to the manual on-off switch extension, the FMVSS No. 208 Final Rule regarding advanced air bags added requirements for minimizing air bag risk to infants in RFCSS and car beds, and children in forward-facing child safety seats. The requirements allow manufacturers to meet one of two options: Option 1—Automatic Suppression Feature, or Option 2—Low Risk Deployment .1 Advanced air bag systems designed to meet the requirements are expected to work automatically. Once installed, the device should require no action on the part of the occupant. For example, if an automatic suppression system recognizes the presence of a RFCSS in the right front passenger seat, the air bag should automatically not deploy. We note that vehicle manufacturers are not restricted in their choice of technology. Unlike the earlier on-off switch requirements, there are no restrictions limiting installation of suppression systems to vehicles that have no rear seat or have rear seats that are too small to accommodate a RFCSS.

Currently FMVSS No. 225, “Child restraint anchorage systems,” mandates that if a vehicle does not have an air bag on-off switch meeting the requirements of S4.5.4 of FMVSS No. 208, it shall not have a child restraint anchorage system installed at a front designated seating position. The on-off switch requirements in S4.5.4 of FMVSS No. 208 specify, among other things, that the on-off device be operable by means of the ignition key for the vehicle.

On November 16, 1999, DaimlerChrysler Corporation (DaimlerChrysler) petitioned NHTSA to amend FMVSS No. 208, to allow for the deactivation of passenger air bags through the use of certain features of the child restraint lower anchorages described in FMVSS No. 225. DaimlerChrysler believes the attachment should be permitted as a substitute for, or in addition to, a manual on-off switch.

DaimlerChrysler stated they were considering the development of a system that would sense the presence of a RFCSS held in place with components (identified in FMVSS No. 213, “Child restraint systems”) for attaching to the child restraint lower anchorages described in FMVSS No. 225. In addition to sensing RFCSSs, the system would also deactivate the passenger air bag when forward facing child safety systems equipped with similar components are installed in the front seat. According to DaimlerChrysler, air bag deactivation would be accomplished and assured by the act of installing the child safety system attachment components onto the anchorages described in FMVSS No. 225. The attachment components would be detected by a switch actuator that is integral with the lower anchorages. The telltale light of S4.5.4.3 of FMVSS No. 208 would still be required, and would be illuminated whenever the passenger air bag is turned off by means of the proposed system.

Both of the proposed amendments included in DaimlerChrysler's petition for rulemaking are being denied. First, DaimlerChrysler petitioned that FMVSS No. 208 be amended to allow the child restraint anchorage system attachment be permitted as a means of turning off the right front passenger air bag in lieu of a manual air bag on-off switch. However, NHTSA believes that the child restraint anchorage system technology proposed by DaimlerChrysler would limit the target population of children that may benefit from a manual air bag on-off switch. Using this technology, children not in child seats, or in child seats without appropriate child seat anchorage hardware, will not be able to have their air bag manually turned off, in vehicles with no rear seat or a rear seat too small to accommodate a RFCSS. Currently, air bag on-off switches have the potential for suppressing the passenger air bag for all children (whether they are using a child restraint anchorage system or not).

DaimlerChrysler commented on the tragic circumstances that can occur when a caregiver neglects to manually turn “off” the right front passenger air bag. NHTSA has studied how manual passenger air bag on-off switches are being used and misused in the field and is developing new strategies on how to improve information and educational efforts regarding on-off switch use in current vehicles. For new vehicles, certified with advanced air bag technology in conjunction with an on-off switch, the on-off switch is largely a system redundancy for children. These vehicles will be able to provide the option for caregivers to manually turn off the passenger air bag in the presence of children, or, alternatively, allow the system to work in an automatic mode. The “automatic” mode would be required to minimize the risk of air bags to all children either through air bag suppression or providing a low risk deployment (depending upon a vehicle's certification methods), while maintaining moderate to high speed crash protection for adult occupants.

Adopting DaimlerChrysler's petition could also lead to conditioning caregivers into assuming that once a child seat is connected to the child restraint anchorage system in the right front passenger seat, no further action is necessary on their part to suppress passenger air bag deployment in vehicles that are not equipped with advanced air bags. For example, if that other vehicle has child restraint lower anchorages and a manual air bag on-off switch for the right front passenger seat, the caregiver may not know that the air bag will not be suppressed unless they use the manual, key-operated on-off switch.

DaimlerChrysler's petition acknowledged the argument that their system could encourage the placement of toddlers in child restraint systems equipped with FMVSS No. 225 lower anchorage attachments in the front rather than appropriate rear seating positions. However, they dismissed its significance by stating they believe the toddler has the advantage of the improved child restraint system. However, as previously discussed, this improved child restraint system would only apply to children in child seats equipped with lower anchorage attachments, not other children. Additionally, this system could be susceptible to mis-use if the lower anchorages are only partially engaged. DaimlerChrysler's petition did not address risks associated with partial engagement.

More recently, DaimlerChrysler demonstrated a new stowable/foldable lower anchorage deactivation system that is also applicable to this petition.2 In this design, the lower anchorages, and air bag deactivation feature, would only be accessible for child restraint attachment when the vehicle seat was placed in a certain seat track position. For example, the vehicle manufacturer could designate the most rearward seat track position to be the sole location where the stowable/foldable lower anchorages are made available. However, NHTSA believes that this technology, like the non-stowable/foldable type previously discussed, would not be applicable to the same target population as an on-off switch. Furthermore, even for the sub-population of children in child seats with lower anchorage hardware, we believe the stowable/foldable lower anchorage deactivation system provides little advantage over a switch since it still requires two actions by the caregiver. First, it requires activation of a switch to position the vehicle seat and make the anchorages accessible, followed by a second action of attaching the child restraint system to the lower anchorage. In addition, the stowable/foldable lower anchorage deactivation system has the potential of being defeated if the single seat track position, which provides the lower anchorages, is obstructed from use (i.e., due to cargo in the rear).

DaimlerChrysler alternatively proposed that NHTSA could consider their child restraint anchorage technology in conjunction with an air bag on-off switch system. NHTSA notes that FMVSS No. 208 does not prohibit the use of such technologies. While this technology alone will not be enough for certification with the advanced air bag requirements, it can be used to supplement the technologies that will be used for certification. For the interim fleet of vehicles that are being produced between now and the completion of the advanced air bag phase-in, NHTSA has never prohibited such systems. Furthermore, DaimlerChrysler's petition is very technology-specific to the child restraint lower anchorages, and would not encompass the broad range of other advanced technologies that could likely demonstrate the same air bag suppression capabilities and seek the same interim classification as an on-off switch. Therefore, NHTSA is denying DaimlerChrysler's petition for a rulemaking proceeding addressing vehicles produced in the interim.

NHTSA's educational campaigns have strongly encouraged caregivers to place children in the rear seat of vehicles, and FMVSS No. 225 currently prohibits the installation of child restraint anchorage systems in the front seat of vehicles unless an on-off switch is present. NHTSA believes that the child restraint anchorage system technology proposed by DaimlerChrysler would limit the target population of children that may benefit from a manual air bag on-off switch. Using this technology, children not in child seats, or in child seats without appropriate child seat anchorage hardware, will not be able to have their air bag manually turned off, in vehicles with no rear seat or a rear seat too small to accommodate a RFCSS. Consequently, NHTSA is denying this petition for rulemaking. We are also denying DaimlerChrysler's alternative proposal to consider their child restraint anchorage technology in conjunction with an air bag on-off switch system since FMVSS No. 208 does not prohibit the use of such technologies.

In accordance with 49 CFR Part 552, this completes the agency's review of the petition for rulemaking. The agency has concluded that there is no reasonable possibility that the amendments requested by the petitioner would be issued at the conclusion of the rulemaking proceeding. Accordingly, rulemaking on the petition is completed.

The Council proposes to take action to address the revised requirements of the Magnuson-Stevens Fishery Conservation and Management Act, as amended by the Sustainable Fisheries Act of 1996. The Council will consider comments from fishermen, interested parties, and the general public on the proposals and alternatives described in the public hearing document for the Northeast Multispecies FMP. Once it has considered public comments, the Council will approve final management measures and prepare a submission package to NMFS. There will be an additional opportunity for public comment when the proposed rule for this action is published in the Federal Register.

The primary purpose of this Amendment is to develop a program to rebuild overfished stocks. Major elements of the proposals in this public hearing document include: (1) management options to reduce fishing mortality that include reductions in the number of days-at-sea (DAS), additional gear requirements, trip/possession limits, and the use of “hard” Total Allowable Catch systems; (2) options that define and clarify the status determination criteria used to guide management actions; (3) measures designed to minimize, to the extent practicable, adverse effects of fishing on essential fish habitat; (4) measures to reduce or control excess harvesting capacity in the fishery; (5) measures to address a wide range of administrative issues, including but not limited to the development of special access programs, changes to the fishing year, and a DAS leasing proposal; (6) revisions to the northern shrimp fishery exemption area, restrictions on tuna purse seine vessel access to groundfish closed areas, and a proposal for a general category scallop exemption area in southern New England. The Council will consider all comments received on these proposals until the end of the comment period on October 15, 2003.

The dates, times, locations, and telephone numbers of the hearings are as follows:

Tuesday, September 9, 2003, at 5 p.m.—Holiday Inn, 290 Highway, 37 East, Tom's River, NJ 08753; telephone: (732)244-4000;

Wednesday, September 10, 2003, at 5 p.m.—Best Western East End, 1830 Route 25, Riverhead, NY 11901; telephone: (631) 369-2200;

Thursday, September 11, 2003, at 4 p.m.—Holiday Inn South Kingston, 3009 Tower Hill Road, South Kingston, RI 02674; telephone: (401) 789-1051;

Monday, September 15, 2003, at 2 p.m. (Recreational issues to begin at 7:00 p.m.)—Ramada Inn, 1127 Route 132, Hyannis, MA; telephone: (508) 775-1153;

Monday, September 22, 2003, at 4 p.m.—Tavern on the Harbor, 30 Western Avenue, Gloucester, MA 01930; telephone (978) 283-4200;

Tuesday, September 23, 2003, at 2 p.m. (Recreational Issues to begin at 7:00 p.m.)—Yoken's Comfort Inn, 1390 Lafayette Road, Portsmouth, NH 03801; telephone: (603) 433-3338;

Wednesday, September 24, 2003, at 5 p.m.—Holiday Inn Ellsworth, 215 High Street, Ellsworth, ME 04505; telephone (207) 667-9341;

Thursday, September 25, 2003, at 4 p.m.—DoubleTree Hotel, 1230 Congress Street, Portland, ME 04102; telephone: (207) 774-5611;

Tuesday, September 30, 2003, at 4 p.m.—Holiday Inn Express, 110 Middle Street, Fairhaven, MA 02719; telephone (508) 997-1281.

These hearings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Paul J. Howard (see ADDRESSES) at least 5 days prior to the meeting dates.