This rule is issued under Marketing Agreement and Order No. 993 (7 CFR part 993), both as amended, regulating the handling of dried prunes produced in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

USDA is issuing this rule in conformance with Executive Order 12866.

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

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

This rule continues in effect the suspension for five years of all provisions in the order and administrative rules and regulations concerning the prune reserve and voluntary producer prune plum diversion. This action was unanimously recommended by the PMC. This rule will continue to ensure that reserve percentages are not established, and that a prune plum diversion program is not implemented pursuant to these provisions. During the five-year suspension period, the industry will have the opportunity to determine whether these provisions should be modified, terminated, or remain unchanged.

Section 993.90(a) states in part: “The Secretary shall terminate or suspend the operation of any or all of the provisions of this subpart, whenever he/she finds that such provisions do not tend to effectuate the declared policy of the act.”

Section 993.54 of the order provides authority for volume regulation through establishing salable and reserve percentages of prunes received by handlers (prune reserve). When the prune reserve is in effect, the salable percentage of the California prune crop may be sold to any market while the reserve percentage must be held by the handlers for the account of the PMC. Reserve prunes may be sold to meet either domestic or foreign trade demand or for use in outlets noncompetitive with normal outlets for salable prunes. Net proceeds from sales of reserve prunes are ultimately distributed to producers. The prune reserve is designed to promote orderly marketing conditions, stabilize prices and supplies, and improve producer returns.

Section 993.62 of the order authorizes a producer diversion program, which prune producers may use when a prune reserve is implemented. Section 993.162 of the administrative rules and regulations specifies implementing procedures. Under the producer diversion program, any prune producer may divert prune plums of his own production for eligible purposes and receive a diversion certificate from the PMC. The certificate may be submitted to any handler in lieu of reserve prunes and the handler may apply the quantity represented by the certificate towards his reserve obligation. Participation in this program reduces a producer's expenses to convert prune plums into dried prunes that will ultimately be placed in a relatively low value prune reserve.

The prune reserve was last implemented in 1974 and the producer diversion program was last used in 1971. These programs were controversial in the 1970's and have become increasingly so since then. Some of the independent prune handlers who are also prune producers now oppose any regulatory marketing restrictions because they want to sell all of the prunes they have produced. If additional tonnage were needed, such handlers would buy prunes from other producers to meet their market demand. In addition, if a prune reserve is implemented, it may require these handlers to contract for additional tonnage in order to meet their reserve obligation.

Recently in 2001, when the PMC recommended using supply control techniques, some of the independent handlers and producers opposed the use of these programs. Ultimately, the supply control programs were not implemented at that time. Also, some in the industry do not support the use of these supply control provisions because the industry has successfully reduced crop sizes through other means.

Through industry and USDA funded tree pull programs, the industry has removed over 18,000 acres of prune plum trees; thus reducing the annual prune production by at least 27,000 tons of prunes over the five-year suspension period.

During the five-year suspension period, the industry will have the opportunity to either recommend that these provisions be terminated through rulemaking procedures, or recommend modifications to the provisions to make them more acceptable to all segments of the industry. In the interim, the suspension of these provisions continues to ensure that these provisions are not implemented. In the absence of any additional action, the provisions will automatically come back into effect at the end of the five-year suspension period.

The PMC unanimously recommended this action at an April 3, 2003, meeting. This rule continues to suspend §§ 993.21d, 993.36(i), 993.54, 993.55, 993.56, 993.57, 993.58, 993.59, 993.62, and 993.65 of the order, and §§ 993.156, 993.157, 993.158, 993.159, 993.162, 993.165 and 993.172(e) of the administrative rules and regulations in effect under the order. Portions of §§ 993.33 and 993.41(b) of the order and portions of §§ 993.173(a)(6), 993.173(b)(3), and 993.173(c)(1) of the administrative rules and regulations continue to be suspended. These sections of the order and administrative rules and regulations pertain to the various requirements of the prune reserve and producer diversion programs.

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

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

There are approximately 1,205 producers of dried prunes in the production area and approximately 21 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those having annual receipts of less than $5,000,000.

Eight of the 21 handlers (38 percent) shipped over $5,000,000 worth of dried prunes and could be considered large handlers by the Small Business Administration. Thirteen of the 21 handlers (62 percent) shipped less than $5,000,000 worth of dried prunes and could be considered small handlers. An estimated 32 producers, or less than 3 percent of the 1,205 total producers, would be considered large growers with annual incomes over $750,000. The majority of handlers and producers of California dried prunes may be classified as small entities.

This rule continues to suspend for five years all provisions in the order and administrative rules and regulations concerning the prune reserve and voluntary producer diversion programs. These supply control programs have been and continue to be controversial in the industry. Furthermore, the industry has successfully reduced crop sizes through other means. Through industry and USDA funded tree pull programs, over 18,000 acres of prune plum trees have been removed, reducing production by at least 27,000 tons over the five-year suspension period.

This rule continues to ensure that the reserve and diversion volume control programs will not be implemented for the five-year suspension period. Also, during the suspension period, the industry will have the opportunity to determine whether these provisions should be modified, terminated, or remain the same. In the absence of further rulemaking, these provisions will automatically come back into effect at the end of the suspension period. Authority to suspend these provisions of the marketing order and administrative rules and regulations is provided in § 993.90(a) of the order.

Regarding the impact of this rule on affected entities, this action could reduce the reporting and recordkeeping burden on California prune handlers and producers and reduce some of the PMC's administrative costs. Although the prune reserve and producer diversion programs have not been implemented since the 1970s and handlers and producers have not been required to file reports pertaining to these programs, suspending these provisions continues to reduce the potential reporting burden on handlers and producers. Suspension of the provisions continues to eliminate the possibility of requiring handlers and producers to file reports associated with the programs. It also continues to reduce some of the potential PMC administrative costs of managing these programs. The PMC estimates that 21 California prune handlers are subject to these provisions and to filing reports pertaining to these programs. Also, if a producer diversion program was implemented, it is estimated that as many as 300 producers would file forms applicable to this program. If handlers filed reports under the prune reserve program, their estimated burden would be 57 hours. If growers filed reports under the diversion program, their estimated burden would be 75.58 hours. Thus, there is a potential for reducing the estimated annual burden of 132.58 hours. The benefits of this rule apply to all prune handlers and producers, regardless of their size of operation.

The forms applicable to these programs are as follows: (1) Form PMC 4.1, Reserve Prunes Held—Handler; (2) Form PMC 4.2, Prune Reserve Tonnage Sales Agreement; (3) Form PMC 4.5, Certificate of Insurance Coverage; (4) Form PMC 5.1, Notice of Proposed Intent to Store Reserve Prunes; (5) Form PMC 8.44, Request for Replacement of Draft; (6) Form PMC 8.443, Claim for Reserve Pool Proceeds; (7) Form PMC 9.1, Notification of Desire for Deferment of Reserve Withholding; (8) Form PMC 10.1, Application for Prune Plum Diversion; (9) No form number, Proof of Diversion; and (10) No form number, Notification of Report of Diversion.

It should be noted that if the PMC determines this action is having an unfavorable impact on the industry, it could meet and recommend rescinding the suspension. Also, as previously mentioned, the provisions automatically come back into effect at the end of the suspension period.

The PMC and industry members discussed different alternatives to this action at the PMC's April 3, 2003, meeting. The PMC discussed the possibility of amending the marketing order provisions relating to reserve and producer diversion programs but decided to eliminate the prune reserve and producer diversion provisions from the order and administrative rules and regulations in a more timely fashion. During the suspension, the industry will have the opportunity to consider possible order amendments to the volume control provisions. Another alternative was to terminate the marketing order. Many on the PMC and in the industry deemed termination too drastic an action and preferred to preserve the marketing order and make necessary changes to it to meet current industry needs and to reflect current industry marketing practices.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the applicable forms being suspended by this rule were approved previously by the Office of Management and Budget and assigned OMB No. 0581-0178. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

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

The PMC's April 3, 2003, meeting where this issue was deliberated was widely publicized throughout the prune industry and all interested persons were invited to attend the meeting and participate in the industry's deliberations. Like all PMC meetings, this meeting was a public meeting and all entities, both large and small, were able to express their views on these issues.

An interim final rule concerning this action was published in the Federal Register on July 9, 2003. The PMC's staff mailed copies of the rule to all PMC members, alternates, and prune handlers. In addition, the rule was made available through the Internet by the Office of the Federal Register and USDA. That rule provided for a 60-day comment period which ended on September 8, 2003. No comments were received.

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

After consideration of all relevant material presented, including the PMC's recommendation, and other information, it is found that finalizing the interim final rule, without change, as published in the Federal Register (68 FR 40754, July 9, 2003) will tend to effectuate the declared policy of the Act.

Section 218(a) of the Nuclear Waste Policy Act of 1982, as amended (NWPA), requires that “[t]he Secretary [of the Department of Energy (DOE)] shall establish a demonstration program, in cooperation with the private sector, for the dry storage of spent nuclear fuel at civilian nuclear power reactor sites, with the objective of establishing one or more technologies that the [Nuclear Regulatory] Commission may, by rule, approve for use at the sites of civilian nuclear power reactors without, to the maximum extent practicable, the need for additional site-specific approvals by the Commission.” Section 133 of the NWPA states, in part, that “[t]he Commission shall, by rule, establish procedures for the licensing of any technology approved by the Commission under section 218(a) for use at the site of any civilian nuclear power reactor.”

To implement this mandate, the NRC approved dry storage of spent nuclear fuel in NRC-approved casks under a general license by publishing a final rule in 10 CFR part 72 entitled, “General License for Storage of Spent Fuel at Power Reactor Sites” (55 FR 29181; July 18, 1990). This rule also established a new subpart L within 10 CFR part 72, entitled “Approval of Spent Fuel Storage Casks” containing procedures and criteria for obtaining NRC approval of spent fuel storage cask designs. The NRC subsequently issued a final rule on December 22, 1994 (59 FR 65920), that approved the Standardized NUHOMS® System (NUHOMS®-24P and -52B) cask designs and added them to the list of NRC-approved cask designs in § 72.214 as CoC No. 1004. Amendments 3 and 5, respectively, added the -61BT and -32PT designs to the Standardized NUHOMS® System.

On August 31, 2001, and as supplemented June 13, 2002, November 18, 2002, and March 7, 2003, the certificate holder (Transnuclear, Inc.) submitted an application to the NRC to amend CoC No. 1004 to add the NUHOMS®-24PHB cask design to the Standardized NUHOMS® System. The amendment will permit a part 72 licensee to use the NUHOMS®-24PHB cask design to store high burnup Babcock & Wilcox (B&W) 15x15 spent fuel assemblies with an average burnup of up to 55,000 megawatt-days (MWd)/metric ton of uranium (MTU); enrichment equal to 4.5 weight percent U-235; maximum decay heat load of 1.3 kilowatt (kW) per assembly; and maximum heat load of 24 kW per cask, under a general license. No other changes to the Standardized NUHOMS® System were requested in this application. The NRC staff performed a detailed safety evaluation of the proposed CoC amendment request and found that an acceptable safety margin is maintained. In addition, the NRC staff has determined that there is still reasonable assurance that public health and safety and the environment will be adequately protected.

This direct final rule revises the Standardized NUHOMS® System listing in Section 72.214 by adding Amendment 6 to CoC No. 1004. The amended technical specifications (TS) are identified in the NRC staff's SER for Amendment 6.

The amended Standardized NUHOMS® System, when used in accordance with the conditions specified in the CoC, the TS, and NRC regulations, will meet the requirements of part 72; thus, adequate protection of public health and safety will continue to be ensured.

Certificate No. 1004 is revised by adding the effective date of Amendment Number 6 and adding Model Number NUHOMS®-24PHB.

This rule is limited to the changes contained in Amendment 6 to CoC No. 1004 and does not include other aspects of the Standardized NUHOMS® System. 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. The amendment to the rule will become effective on December 22, 2003. However, if the NRC receives significant adverse comments by November 6, 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 which 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 TS.

These comments will be addressed in a subsequent final rule. The NRC will not initiate a second comment period on this action. However, if the NRC receives significant adverse comments by November 6, 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 .

The National Technology Transfer Act of 1995 (Pub. L. 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this direct final rule, the NRC would revise the Standardized NUHOMS® System listed in § 72.214 (List of NRC-approved spent fuel storage cask designs). This action does not constitute the establishment of a standard that establishes generally applicable requirements.

Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs” approved by the Commission on June 30, 1997, and published in the Federal Register on September 3, 1997 (62 FR 46517), this rule is classified as Compatibility Category “NRC.” Compatibility is not required for Category “NRC” regulations. The NRC program elements in this category are those that relate directly to areas of regulation reserved to the NRC by the Atomic Energy Act of 1954, as amended (AEA), or the provisions of Title 10 of the Code of Federal Regulations. Although an Agreement State may not adopt program elements reserved to NRC, it may wish to inform its licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws, but does not confer regulatory authority on the State.

The Presidential Memorandum dated June 1, 1998, entitled “Plain Language in Government Writing,” directed that the Government's writing be in plain language. The NRC requests comments on this direct final rule specifically with respect to the clarity and effectiveness of the language used. Comments should be sent to the address listed under the heading ADDRESSES above.

Under the National Environmental Policy Act of 1969, as amended, and the NRC regulations in subpart A of 10 CFR part 51, the NRC has determined that this rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. The rule would amend the CoC for the Standardized NUHOMS® System within the list of approved spent fuel storage casks that power reactor licensees can use to store spent fuel at reactor sites under a general license by adding the NUHOMS®-24PHB cask design to the current cask system. The NUHOMS®-24PHB cask design will store high burnup B&W 15x15 spent fuel assemblies with an average burnup of up to 55,000 megawatt-days/metric ton of uranium, enrichment equal to 4.5 weight percent uranium-235, a maximum decay heat load of 1.3 kilowatt (kW) per assembly, and a maximum heat load of 24 kW per cask. The environmental assessment (EA) and finding of no significant impact on which this determination is based are available for inspection at the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD. Single copies of the EA and finding of no significant impact are available from Margaret Stambaugh, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-5449, e-mail mxs8@nrc.gov.

This direct final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). Existing requirements were approved by the Office of Management and Budget, Approval Number 3150-0132.

The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.

On July 18, 1990 (55 FR 29181), the NRC issued an amendment to 10 CFR part 72 to provide for the storage of spent nuclear fuel under a general license in cask designs approved by the NRC. Any nuclear power reactor licensee can use NRC-approved cask designs to store spent nuclear fuel if it notifies the NRC in advance, spent fuel is stored under the conditions specified in the cask's CoC, and the conditions of the general license are met. A list of NRC-approved cask designs is contained in § 72.214. On December 22, 1994 (59 FR 65920), the NRC issued an amendment to part 72 that approved the Standardized NUHOMS® System (NUHOMS®-24P and -52B) by adding it to the list of NRC-approved cask designs in § 72.214. Amendments 3 and 5, respectively, added the -61BT and -32PT cask designs to the Standardized NUHOMS® System. On August 31, 2001, and as supplemented June 13, 2002, November 18, 2002, and March 7, 2003, the certificate holder (Transnuclear, Inc.), submitted an application to the NRC to amend CoC No. 1004 to add the NUHOMS®-24PHB cask design to the Standardized NUHOMS® System. The proposed amendment permits a part 72 licensee to use the NUHOMS®-24PHB cask design to store high burnup B&W 15x15 spent fuel assemblies with an average burnup of up to 55,000 megawatt-days/metric ton of uranium, enrichment equal to 4.5 weight percent uranium-235, a maximum decay heat load of 1.3 kilowatt (kW) per assembly, and a maximum heat load of 24 kW per cask, under a general license.

The alternative to this action is to withhold approval of this amended cask system design and issue an exemption to the general license for each utility that decides to use the amended cask system design. This alternative would cost both the NRC and the utilities more time and money because each utility would have to pursue an exemption.

Approval of the direct final rule will eliminate this problem and is consistent with previous NRC actions. Further, the direct final rule will have no adverse effect on public health and safety. This direct final rule has no significant identifiable impact or benefit on other Government agencies. Based on this discussion of the benefits and impacts of the alternatives, the NRC concludes that the requirements of the direct final rule are commensurate with the NRC's responsibilities for public health and safety and the common defense and security. No other available alternative is believed to be as satisfactory, and thus, this action is recommended.

In accordance with the Regulatory Flexibility Act of 1980 [5 U.S.C. 605(b)], the NRC certifies that this rule will not, if issued, have a significant economic impact on a substantial number of small entities. This direct final rule affects only the licensing and operation of nuclear power plants, independent spent fuel storage facilities, and Transnuclear, Inc. The companies that own these plants do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the Small Business Size Standards set out in regulations issued by the Small Business Administration at 13 CFR part 121.

The NRC has determined that the backfit rule (10 CFR 50.109 or 10 CFR 72.62) does not apply to this direct final rule because this amendment does not involve any provisions that would impose backfits as defined. Therefore, a backfit analysis is not required.

In accordance with the Small Business Regulatory Enforcement Fairness Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs, Office of Management and Budget.

Section 19(b)(2) of the Federal Reserve Act (12 U.S.C. 461(b)(2)) requires each depository institution to maintain reserves against its transaction accounts and nonpersonal time deposits, as prescribed by Board regulations, for the purpose of implementing monetary policy. Section 11(a)(2) of the Federal Reserve Act (12 U.S.C. 248(a)(2)) authorizes the Board to require reports of liabilities and assets from depository institutions to enable the Board to conduct monetary policy. The Board's actions with respect to each of these provisions are discussed in turn below.

1. Reserve Requirements. Pursuant to section 19(b)(2) of the Federal Reserve Act, transaction account balances maintained at each depository institution up to a certain amount, known as the low reserve tranche, are subject to a three percent reserve requirement. Net transaction account balances over the low reserve tranche are subject to a ten percent reserve requirement. Section 19(b)(2) also provides that, before December 31 of each year, the Board shall issue a regulation adjusting the low reserve tranche for the next calendar year. The adjustment in the low reserve tranche is to be 80 percent of the percentage increase or decrease in net transaction accounts at all depository institutions over the one-year period that ends on the June 30 prior to the adjustment.

Currently, the low reserve tranche is $42.1 million. Net transaction accounts of all depository institutions rose 9.9 percent (from $611.5 billion to $671.9 billion) between June 30, 2002 and June 30, 2003. Accordingly, the Board is amending Regulation D (12 CFR part 204) to increase the low reserve tranche for net transaction accounts by $3.3 million, from $42.1 million in 2003 to $45.4 million in 2004.

Section 19(b)(11)(A) of the Federal Reserve Act (12 U.S.C. 461(b)(11)(A)) provides that a zero percent reserve requirement shall apply to total reservable liabilities at each depository institution that do not exceed a certain amount, known as the reserve requirement exemption amount. Section 19(b)(11)(B) provides that, before December 31 of each year, the Board shall issue a regulation adjusting the reserve requirement exemption amount for the next calendar year if total reservable liabilities held at all depository institutions increase from one year to the next. Unlike the low reserve tranche, which can be adjusted upward or downward, no adjustment is made to the reserve requirement exemption amount if total reservable liabilities held at all depository institutions should decrease during the applicable time period. The percentage increase in the reserve requirement exemption amount is to be 80 percent of the increase in total reservable liabilities at all depository institutions over the one-year period that ends on the June 30 prior to the adjustment.

Total reservable liabilities of all depository institutions increased by 12.9 percent (from $2,472.3 billion to $2,792.2 billion) between June 30, 2002, and June 30, 2003. Accordingly, the Board is amending Regulation D to increase the reserve requirement exemption amount by $0.6 million, from $6.0 million in 2003 to $6.6 million in 2004. 1

For depository institutions that report weekly, the adjusted low reserve tranche and reserve requirement exemption amount will be effective for the fourteen-day reserve computation period beginning Tuesday, November 25, 2003, and for the corresponding fourteen-day reserve maintenance period beginning Thursday, December 25, 2003. For depository institutions that report quarterly, the adjusted low reserve tranche and reserve requirement exemption amount will be effective for the seven-day computation period beginning Tuesday, December 16, 2003, and for the corresponding seven-day reserve maintenance period beginning Thursday, January 15, 2004.

2. Deposit Reports. Section 11(b)(2) of the Federal Reserve Act authorizes the Board to require depository institutions to file reports of their liabilities and assets as the Board may determine to be necessary or desirable to enable it to discharge its responsibility to monitor and control monetary and credit aggregates. The Board screens depository institutions each year to determine whether they must file deposit reports and, if so, how frequently they must file them (weekly, quarterly, or annually). These deposit reporting assignments become effective each September.

The screening of depository institutions for assignment to one of the four deposit reporting categories is based on three amounts: The reserve requirement exemption amount, the deposit cutoff level, and the reduced reporting limit. The annual adjustment to the first amount, the reserve requirement exemption amount, is described in Section 1 above. The other two amounts, the deposit cutoff level and the reduced reporting limit, are also adjusted annually, by an amount equal to 80 percent of the increase, if any, in total deposits at all depository institutions over the one-year period that ends on the June 30 prior to the adjustment.

Total deposits at all depository institutions increased by 9.3 percent (from $5,959.5 billion to $6,513.9 billion) between June 30, 2002 and June 30, 2003. Accordingly, the Board is adjusting the deposit cutoff level upward by $11.2 million, from its current level of $150.0 million in 2003 to $161.2 million in 2004. The Board is also adjusting the reduced reporting limit upward by $74 million, from its current level of $1.0 billion in 2003 to $1.074 billion in 2004. 2

Beginning in September 2004, the boundaries of the four deposit reporting categories will be defined as follows. Those depository institutions with net transaction accounts over $6.6 million (the reserve requirement exemption amount) or total deposits greater than or equal to $1.074 billion (the reduced reporting limit) are subject to detailed reporting, and must file an FR 2900 report either weekly or quarterly. Of this group, those with total deposits greater than or equal to $161.2 million (the deposit cutoff level) are required to file the FR 2900 report each week, while those with total deposits less than $161.2 million are required to file the FR 2900 report each quarter. Those depository institutions with net transaction accounts less than or equal to $6.6 million (the reserve requirement exemption amount) and with total deposits less than $1.074 billion (the reduced reporting limit) are eligible for reduced reporting, and must either file a deposit report annually or not at all. Of this group, those with total deposits greater than $6.6 million (but less than $1.074 billion) are required to file the FR 2910a report annually, while those with total deposits less than or equal to $6.6 million are not required to file a deposit report. A depository institution that manipulates its reporting, however, in an attempt to qualify for less frequent reporting or to reduce its reserve requirement may be required to report the FR 2900 on a weekly basis and maintain appropriate reserve balances with its Reserve Bank, regardless of its most recent panel assignment.

Notice and Regulatory Flexibility Act. The provisions of 5 U.S.C. 553(b) relating to notice of proposed rulemaking have not been followed in connection with the adoption of these amendments. The amendments involve expected, ministerial adjustments prescribed by statute and by the Board's policy concerning reporting practices. The increases in the reserve requirement exemption amount, the low reserve tranche, the deposit cutoff level, and the reduced reporting limit serve to reduce regulatory burdens on depository institutions. Accordingly, the Board finds good cause for determining, and so determines, that notice in accordance with 5 U.S.C. 553(b) is unnecessary. Consequently, the provisions of the Regulatory Flexibility Act, 5 U.S.C. 601, do not apply to these amendments.

Section 11(a)(1) of the HOLA (12 U.S.C. 1468(a)(1)) applies sections 23A and 23B of the FRA (12 U.S.C. 371c and 371c-1) to every savings association “in the same manner and to the same extent” as if the savings association were a member bank of the Federal Reserve System.

Section 23A of the FRA imposes three major limitations on a member bank's (and its subsidiaries') transactions with affiliates. First, section 23A limits the amount of “covered transactions” with any single affiliate to no more than 10 percent of the member bank's capital stock and surplus. Covered transactions with all affiliates are limited to no more than 20 percent of the member bank's capital stock and surplus. A covered transaction includes a loan or extension of credit to an affiliate, a purchase of or investment in securities issued by an affiliate, a purchase of assets from an affiliate, the acceptance of securities issued by an affiliate as collateral security for a loan or extension of credit to any person or company, and the issuance of a guarantee, acceptance, or letter of credit on behalf of an affiliate.

Second, section 23A requires that all covered transactions between a member bank and its affiliates be on terms and conditions that are consistent with safe and sound banking practices and prohibits a member bank from purchasing low-quality assets from an affiliate. Finally, section 23A requires that a member bank's extensions of credit to affiliates and guarantees on behalf of affiliates be appropriately secured by a statutorily defined amount of collateral.

Section 23B of the FRA protects member banks by requiring that transactions between the bank (and its subsidiaries) and its affiliates occur on market terms—on terms and under circumstances that are substantially the same, or at least as favorable to the bank, as those prevailing at the time for comparable transactions with unaffiliated companies. Section 23B applies to covered transactions under section 23A, as well as other transactions, such as the sale of securities or other assets to an affiliate and the payment of money or the furnishing of services to an affiliate. Section 23B also prohibits certain purchases and acquisitions of securities by a member bank or its subsidiary subject to certain conditions, and prohibits certain advertisements or agreements that state or suggest that the member bank is responsible for the obligations of its affiliates.

In addition to the section 23A and 23B restrictions, section 11(a)(1) of the HOLA imposes two prohibitions on savings associations. First, a savings association may not make a loan or other extension of credit to any affiliate unless that affiliate is engaged only in activities that a bank holding company may conduct. In addition, no savings association may purchase or invest in securities issued by an affiliate, other than with respect to shares of a subsidiary. Section 11(a)(4) of the HOLA authorizes OTS to impose such additional restrictions on any transaction between a savings association and any affiliate as it determines to be necessary to protect the safety and soundness of the association.

OTS issued comprehensive rules implementing section 11(a) of the HOLA in 1991. 1 These rules, which were codified at 12 CFR 563.41 and 563.42 (2002), defined and clarified the application of sections 23A and 23B to savings associations and their subsidiaries, implemented the two prohibitions imposed under section 11(a) of the HOLA, and imposed additional restrictions and safeguards, as authorized by section 11(a)(4) of the HOLA.

FRB has statutory authority to issue regulations to administer and carry out the purposes of sections 23A and 23B of the FRA. 2 Until recently, FRB had not promulgated comprehensive regulations on this subject. Instead, FRB relied on a series of regulatory interpretations and informal staff guidance. 3 On December 12, 2002, FRB issued Regulation W, a comprehensive final rule implementing sections 23A and 23B of the FRA. 4 Regulation W incorporated many existing FRB interpretations, superseded certain outdated interpretations, exempted specific types of transactions, and implemented revisions to sections 23A and 23B contained in the Gramm-Leach-Bliley Act (GLBA). 5

Regulation W does not, by its terms, apply to savings associations. However, because sections 23A and 23B apply to every savings association in the same manner and to the same extent as if the savings association were a member bank, OTS issued an interim final rule revising its regulations on transactions with affiliates to reflect Regulation W. 67 FR 77909 (Dec. 20, 2002). The OTS interim final rule had three goals:

• To incorporate all applicable provisions and exceptions prescribed by FRB in Regulation W;

• To provide guidance concerning the relationship between the additional prohibitions under section 11(a)(1) of the HOLA and Regulation W; and

• To set out the additional restrictions OTS imposes under section 11(a)(4) of the HOLA.

The interim rule cross referenced the substantive provisions contained in Regulation W; interpreted Regulation W to the extent necessary to apply these restrictions to savings associations; incorporated the prohibitions in section 11(a)(1) of the HOLA; and imposed various additional restrictions on savings associations under section 11(a)(4) of the HOLA. 6 The interim rule became effective April 1, 2003.

The comment period on the interim rule closed on February 18, 2003. OTS received comments from a savings association and from a representative of a savings association. Both commenters generally supported the interim rule.

Regulation W defines the term “affiliate” to include parent companies (any company that controls the member bank); companies under common control with the member bank; companies under other types of common control; companies with interlocking directors, trustees or general partners; companies that are sponsored and advised on a contractual basis by the member bank or an affiliate; investment companies for which a member bank or any affiliate is an investment advisor; depository institution subsidiaries of a member bank; financial subsidiaries; companies held under merchant banking or insurance company investment authority; partnerships for which the member bank or an affiliate serves as general partner; subsidiaries of affiliates, and other companies that FRB deems to be an affiliate of the member bank. 12 CFR 223.2(a). This definition specifically excludes certain companies, including most subsidiaries of member banks. 12 CFR 223.2(b).

Commenters raised various issues regarding the scope of the definition of affiliate. These matters are discussed below.

One of the fundamental concepts underlying the definition of affiliate is the concept of control. Regulation W states that control by a company or shareholder over another company means that:

• The company or shareholder, directly or indirectly, or acting through one or more other persons, owns, controls, or has the power to vote 25 percent or more of any class of voting securities of the other company.

• The company or shareholder controls in any manner the election of a majority of the directors, trustees, or general partners (or individuals exercising similar functions) of the other company.

• The Board determines, after notice and opportunity for hearing, that the company or shareholder, directly or indirectly, exercises a controlling influence over the management or policies of the other company. 12 CFR 223.3(g)(1).

Regulation W also includes specific provisions addressing ownership or control of shares as a fiduciary, securities by a subsidiary, convertible instruments, and nonvoting equity securities. See 12 CFR 223.3(g)(2)-(5).

Until today, OTS's transactions with affiliates regulation included a more expansive concept of control than prescribed by the FRB in final Regulation W. Specifically, OTS's prior rule stated that a company or shareholder has control over another company if the company or shareholder, directly or indirectly, or acting through one or more other persons owns, controls, or has the power to vote 25 percent or more of any class of voting securities of the other company or if the company or shareholder would be deemed to control another company under § 574.4(a) or presumed to control the company under § 574.4(b). See 12 CFR 563.41(b)(3) (2002). OTS also applied its own concepts of control to define a subsidiary of a savings association. 12 CFR 563.41(b)(4)(2002). This definition stated that a subsidiary of a savings association is a company that is controlled by a savings association within the meaning of part 574.

The major substantive difference between the control definitions in the prior OTS rule and final Regulation W involved the application of certain OTS rebuttable presumptions of control from part 574. For example under these control presumptions, a company will control another if it owns between 10 percent and 25 percent of any class of a company's voting stock and one or more control factors is present. 7 Regulation W does not have similar provisions. 8

The interim final rule continued to incorporate OTS concepts of control, but requested comment on whether the OTS definition of control was appropriate. One commenter addressed this issue and urged OTS to conform its rule more closely to Regulation W.

When OTS originally promulgated its transactions with affiliates rule in 1991, FRB had promulgated no rules interpreting the meaning of control under sections 23A and 23B. In the absence of such guidance, OTS defined control for transactions with affiliates consistently with other OTS rules addressing similar concepts. At the time, part 574 represented OTS's most current and comprehensive analysis of control issues. Most savings associations had some familiarity with the control concepts in part 574.

Now that FRB has issued final rules interpreting the definition of control for sections 23A and 23B it is difficult to articulate any regulatory purpose that would be furthered by continuing to prescribe a different definition. Applying part 574 control concepts to transactions with affiliates restricts savings associations in two ways. First, it broadens the application of the section 23A and 23B restrictions for thrifts in comparison to similarly situated member banks. OTS does not believe that savings association transactions with the additional “affiliates” reached by the OTS control definitions raise safety and soundness concerns that necessitate treating them differently from similarly situated member banks. Indeed, the application of the OTS definition of control leads to anomalous results because a company with identical relationships to a bank and a savings association in the same bank holding company structure could have been an affiliate of the savings association under the OTS interim rule, but not an affiliate of the member bank under Regulation W.

Second, the application of the part 574 control concepts also expands the scope of the additional prohibitions imposed under section 11 of the HOLA. These prohibitions apply only to savings associations and were imposed to reflect the fact that affiliates of savings associations engage in a greater range of activities than affiliates of banks, which may expose the savings association to greater risk. 9 There is no indication that Congress was concerned about the risks posed by relationships with companies that do not meet the definition of affiliate in section 23A. Indeed, the statute appears to contemplate that OTS would use the same definitions of “control” and “affiliate” as set forth in section 23A and Regulation W. 10 Accordingly, to promote consistency and equal treatment of insured depository institutions to the maximum extent possible, OTS has revised the final rule to use Regulation W control concepts.

Certain companies will no longer be considered to be savings association affiliates under the revised definitions in the final rule. OTS may, nonetheless, continue to treat such a company as an affiliate if it has a relationship with a savings association or any affiliate of the savings association such that covered transactions by the savings association with the company may be affected by the relationship to the detriment of the savings association, or where the company presents a risk to the safety and soundness of the savings association. 11

While certain companies will no longer be subject to the full range of restrictions and prohibitions under section 11 of the HOLA, some restrictions will continue to apply. For example, transactions between a savings association and a non-affiliate are subject to the “market terms” standards under section 23B, if an affiliate of the savings association has a financial interest in the non-affiliate. Thus, the market terms requirements will continue to apply to these entities.

As a related matter, OTS has identified an area where the OTS control rules may not have been as rigorous as final Regulation W. The definition of control in final Regulation W includes two provisions, not specifically addressed in section 23A, which discuss the treatment of convertible securities and nonvoting equity securities. 12 While the OTS control rules address similar concepts, the two rules are not identical. 13 As a result, certain entities could have been affiliates under Regulation W, but not affiliates under the OTS interim final rules. By adopting the FRB's definition of control, the OTS will conform its rules regarding the treatment of these securities.

Several regulations cross-reference the definition of “affiliate” at § 563.41. These rules include: 12 CFR 560.93(a) (loans to one borrower restrictions); 562.4 (regulatory reporting standards); and 563.142 (capital distributions). As a result of changes in this final rule, the coverage of these other rules also will change. 14

Regulation W defines affiliate to include a financial subsidiary of a member bank. 12 CFR 223.2(a)(8). A financial subsidiary generally is any subsidiary of a member bank that “engages, directly or indirectly, in any activity that national banks are not permitted to engage in directly or that is conducted on terms and conditions that differ from those that govern the conduct of such activity by national banks.”  15

In the preamble to the interim rule, OTS addressed whether a savings association subsidiary would be considered to be financial subsidiary and, thus, an affiliate under section 23A of the FRA. OTS concluded that there is no statutory or supervisory basis for applying affiliate restrictions to savings association subsidiaries by classifying them as financial subsidiaries. The one commenter who addressed this issue agreed with OTS's conclusion regarding financial subsidiaries.

For the reasons stated in the preamble to the interim rule, the final rule at § 563.41(b) continues to state that savings association subsidiaries do not meet the statutory definition of financial subsidiary. As a result, Regulation W references to financial subsidiaries do not apply.

As noted above, section 11 of the HOLA applies two prohibitions to a savings association's transactions with its affiliates in addition to the section 23A and 23B limitations. Commenters raised several issues regarding OTS's implementation of section 11(a)(1)(A) of the HOLA, which prohibits a savings association from making a loan or other extension of credit to an affiliate unless the affiliate is engaged only in activities that a bank holding company may conduct.

The interim rule retained a provision on repurchase agreements that was adopted in a final rule published August 13, 1998 (63 FR 43292). Specifically, the interim rule states that a purchase of assets that is subject to the affiliate's agreement to repurchase (reverse repurchase agreement)  16 is a loan or extension of credit for the purposes of the section 11 loan prohibition. As a result, a savings association may not generally enter into reverse repurchase agreements with an affiliate that engages in non-bank holding company activities. The interim rule exempted certain agreements that involve United States Treasury securities and that meet other specified requirements. OTS specifically requested comment whether it should retain the repurchase agreement provisions.

Both commenters responded to this request. One urged OTS to delete the repurchase agreement prohibition. The commenter asserted that “loan or extension of credit,” as used in section 11 of the HOLA, does not encompass reverse repurchase agreements. At a minimum, both commenters urged OTS to retain the current exemption for transactions in United States Treasury securities.

Upon further review, OTS has decided to delete the repurchase agreement prohibition. In the preamble to the 1998 rule, OTS noted that section 11 of the HOLA does not define “loan or other extension of credit,” and does not compel a legal conclusion that purchases of assets that are subject to an affiliate's agreement to repurchase are, or are not, prohibited by statute.

While the text of section 11 does not “compel” either legal conclusion, upon further review, OTS now believes that other factors strongly suggest that Congress did not intend for such transactions to be included as loans or extensions of credit under this section. OTS has two bases for this conclusion.

First, the definition of “covered transaction” in section 23A of the FRA treats repurchase agreements as asset purchases, rather than as loans or extensions of credit. Specifically, section 23A(b)(7)(C) of the FRA defines purchases of assets to include “assets subject to an agreement to repurchase” rather than a loan or extension of credit under section 23A(b)(7)(A). Based upon the language of the statute, FRB staff has informally indicated that it considers reverse repurchase agreements to be purchases of assets and not extensions of credit. 17

Second, the legislative history of the statutes governing thrift transactions with affiliates reinforces the conclusion that reverse repurchase agreements should not be treated as loans or extensions of credit under section 11(a)(1)(A). Before the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Public Law 101-73 (FIRREA), a savings association's transactions with affiliates were governed by section 408 of the National Housing Act (NHA). 12 U.S.C. 1730a. Under section 408(p) of the NHA, thrift transactions with affiliates engaged only in bank holding company activities were subject to sections 23A and 23B of the FRA. Section 408(d) of the NHA addressed transactions with affiliates engaged in non-bank holding company activities. This section specifically prohibited six types of transactions and, like current section 23A, listed loans and extensions of credit separately from the “purchase [of] securities or other assets or obligations under repurchase agreement from any affiliate.” Compare section 408(d)(3) with (d)(4). The successor statute addressing transactions with affiliates engaged in non-bank holding company activities at section 11(a)(1)(A) of the HOLA, however, specifically prohibits only transactions within one of the original six categories—loans and extensions of credit. This suggests that Congress did not intend to prohibit transactions with affiliates that engage in non-bank holding companies activities to the extent that the transactions fell within one of the other five categories.

The 1998 rule on repurchase agreements treated reverse repurchase agreements as loans because these transactions bear some of the economic characteristics of a loan. 18 However, the typical reverse repurchase agreement structured in conformity with general market practices has economic attributes that distinguish it from other loans and extensions of credit. For example, such agreements typically involve an institution's purchase of a security, subject to an agreement by the counterparty to repurchase the same or a similar security at a fixed price at a later date. In these transactions, the “purchaser” of the securities takes title to the securities and can trade, sell or pledge the security during the term of the contract. The reverse repurchase agreement merely imposes a contractual obligation to deliver identical securities on the settlement date set by the contract. This unique feature makes it far more flexible than a standard collateralized loan, where the lender cannot obtain access to the collateral in the absence of a default. 19

OTS may, of course, impose additional restrictions on transactions with affiliates under section 11(a)(4) of the HOLA if it determines that the restriction is necessary to protect the safety and soundness of savings associations. OTS believes that the quantitative limits, safety and soundness requirements, and low-quality asset prohibitions contained in section 23A, and the arms-length requirements in section 23B sufficiently address the safety and soundness concerns raised by repurchase agreements. To the extent that a particular savings association may attempt to evade the lending prohibition through artful restructuring of a prohibited loan as a reverse repurchase agreement, § 563.41(c)(1) (discussed below) provides OTS with sufficient authority to address the circumvention. Accordingly, the final rule treats reverse repurchase agreements as purchases of assets, and not as extensions of credit.

Sections 23A(a)(2) and 23B(a)(3) of the FRA require a member bank (and, thus, a savings association) to treat a transaction with any person as a transaction with an affiliate to the extent that the proceeds are used for the benefit of, or transferred to, an affiliate. 20 The text of section 11(a)(1)(A) of the HOLA does not specify a similar third party attribution requirement for the loan prohibition, and OTS has declined to infer such a requirement. To clarify this matter, the interim rule specifically stated that a loan or extension of credit to a third party is not prohibited under section 11(a)(1)(A) of the HOLA “merely because proceeds of the transaction are used for the benefit of, or transferred to, an affiliate.” Interim rule at § 563.41(c)(1).

The preamble to the interim rule noted that OTS may, nonetheless, attribute a loan to a third party to an affiliate, for example, where a savings association attempts to circumvent the loan prohibition through sham transactions. 21 OTS requested comment whether it should include this additional guidance in the final rule. One commenter responded asserting that further guidance was not needed.

The final regulation continues to state that a loan or extension of credit to a third party is not prohibited under section 11(a)(1)(A) merely because proceeds of the transaction are used for the benefit of, or transferred to, an affiliate. However, OTS is concerned that savings associations and their affiliates may misinterpret this provision and incorrectly conclude that the third party attribution rule will not apply to the loan prohibition under any circumstances. Accordingly, OTS clarified the final rule to state that OTS may inform the savings association that a particular transaction is prohibited if OTS determines that the transaction is, in substance, a loan or extension of credit to an affiliate that is engaged in non-bank holding company activities, or OTS has other supervisory concerns concerning the transaction. OTS will make such a determination, for example, if a loan is a prearranged step in a series of transactions designed to channel funds to an affiliate engaged in non-bank holding company activities, or is otherwise designed to circumvent the loan prohibition. If OTS determines that a particular transaction is prohibited it may direct the savings association to divest the loan, unwind the transaction, or take other appropriate action.

When OTS originally issued its transactions with affiliates rule in 1991, it considered whether a savings association would be barred from extending credit to an affiliate that directly engaged only in activities permissible for a bank holding company, but the affiliate owned or controlled subsidiaries engaged in impermissible activities. OTS determined that activities must be attributed from a subsidiary to a parent affiliate in a vertical ownership chain up to, but not including, a controlling holding company in the corporate structure. 22 The preamble to the 1991 rule suggests that this attribution determination was intended to prevent savings associations from evading the section 11 loan prohibition by structuring transactions through “strawmen” affiliates. 23

OTS specifically requested comment whether this interpretation should be included in the final rule. One commenter urged OTS to withdraw the guidance.

Upon reconsideration, OTS has decided to withdraw its 1991 guidance. Section 11 does not specifically require the attribution of activities from affiliated subsidiaries to their parent companies and, in the absence of information suggesting that this interpretation is necessary to protect the safety and soundness of savings associations, OTS is disinclined to interpret section 11 in a way that imposes additional burdens on savings associations. Rather than unduly restrict all savings associations, OTS believes that it can best address attempts at circumvention on a case-by-case basis. As noted above, the final rule states that OTS may prohibit a transaction if it determines that the transaction is, in substance, a loan or extension of credit to an affiliate that is engaged in non-bank holding company activities or OTS has other supervisory concerns concerning the transaction. Under this provision, OTS will prohibit a loan, for example, if it is a prearranged step in a series of transactions designed to channel funds to an affiliate engaged in non-bank holding company activities, or is otherwise designed to circumvent the loan prohibition.

OTS also wishes to clarify other guidance contained in its 1991 rulemaking. In the preamble to the 1991 final rule, OTS considered whether, for the purposes of calculating a savings association's aggregate amount of covered transactions with a particular affiliate, the savings association must include covered transactions with subsidiaries of the affiliate. To prevent savings associations from circumventing the 10 percent limit imposed under section 23A, OTS concluded that attribution of transactions was appropriate and necessary. Accordingly, OTS stated that, when computing the aggregate amount of transactions with a particular affiliate, a savings association must aggregate the amount of its covered transactions with all subsidiaries directly or indirectly controlled by the affiliate. OTS did not, however, require a savings association to attribute transactions to any holding company that controls the savings association or to attribute transactions by a parent downward to any subsidiary. 24

FRB has not issued similar guidance regarding the attribution of transactions. To the contrary, the preamble to final Regulation W states that the 10 percent limit would prohibit a bank from engaging in a covered transaction with an affiliate only when the aggregate amount of covered transactions between the bank and that affiliate would exceed 10 percent of the bank's capital. 67 FR 76560, at 76572. Nothing in section 11 of the HOLA requires the attribution of transactions among affiliates. 25 OTS may impose additional restrictions on savings associations if it determines that a restriction is necessary to protect the safety and soundness of savings associations. However, there is no reason to impose additional burdens on savings associations, particularly in light of other safeguards in sections 23A and 23B, including the overall 20 percent quantitative limits, qualitative restrictions, and other supervisory tools available to OTS. 26

Finally, in addition to the changes discussed above, OTS has made technical and clarifying changes to the interim rule. For example, the final rule clarifies that a savings association must comply with sections 23A and 23B of the FRA and Regulation W “as if it were a member bank,” and indicates that most references to the FRB or appropriate bank federal banking agency in Regulation W should be read to refer only to OTS. 27 The latter change clarifies that OTS, rather than the FRB, has the responsibility for administering and enforcing transaction with affiliates restrictions with respect to savings associations. See 12 U.S.C. 1468(c).

The final rule also clarifies Regulation W's definition of “well capitalized.” The sole use of this definition is in 12 CFR 223.41(d)(7), which states that a holding company and all of its subsidiary depository institutions must be “well capitalized” in order for a member bank to qualify for the internal corporate reorganization transaction exception. Section 223.3(kk) states that well capitalized has the same meaning as in 12 CFR 225.2, which prescribes various capital ratios and other capital-related requirements for bank holding companies, insured depository institutions, and uninsured depository institutions.

This requirement is not meaningful for many savings and loan holding companies. Although the activities of holding companies regulated by the FRB have expanded since GLBA, some savings and loan holding companies currently engage in a much broader range of activities. Because the universe of thrift holding companies is so diverse, the adequacy of holding company capital cannot be determined on the basis of a one-size-fits-all numeric formula or standard. Instead, OTS has found that specified capital ratios can be simultaneously too lax to support the activities of some holding companies and too restrictive for others. To recognize the diversity of the holding company universe, OTS does not impose a single consolidated or unconsolidated numerical capital requirement or ratio applicable to all holding companies. Rather, its analysis of the capital adequacy of savings and loan holding companies is a case-by-case process that reflects the overall risk profile of the organization.

To require savings associations and their holding companies to engage in a burdensome exercise merely to comply with specifications designed to address a more homogenous universe of holding companies, would serve no purpose. Rather, such a requirement would unduly obstruct some savings associations' ability to take advantage of the corporate reorganization exception, contrary to the stated intent of the FRB. 28 In addition, other savings and loan holding companies associations might attempt to claim the exception, even though their capital would be less than the amount OTS believed necessary to support their higher risk. Accordingly, to apply the internal corporate reorganization exception to savings associations in the same manner and to the same extent as to member banks OTS has clarified the “well capitalized” definition in light of the purposes of the exemption.

The stated purpose of the well capitalized requirement is to “prevent banking companies from abusing their banking units in reorganization transactions”  29 by ensuring that holding companies engaging in such transactions are appropriately capitalized and remain appropriately capitalized following the transaction. In light of the diverse activities engaged in by savings and loan holding companies, OTS believes that its case-by-case capital analysis best serves this goal. Accordingly, the final rule clarifies that for a savings and loan holding company, well-capitalized means that a holding company significantly exceeds OTS expectations for the amount of capital needed to adequately support the holding company's risk profile, as determined by OTS on a case-by-case basis. OTS emphasizes that this clarification does not substitute a relaxed standard for savings associations that avail themselves of the corporate reorganization exception. Rather, the clarification is intended to apply Regulation W meaningfully to savings associations while simultaneously recognizing the differences between bank and savings and loan holding companies and the goals of the corporate reorganization exemption. 30

The Director of OTS has determined that this rule does not constitute a “significant regulatory action” for the purposes of Executive Order 12866.

The Regulatory Flexibility Act (RFA) does not apply to a rule for which an agency is not required to publish a notice of proposed rulemaking. 5 U.S.C. 603. In issuing the interim rule, OTS concluded, for good cause, that it was not required to publish a notice of proposed rulemaking. Accordingly, the RFA does not require an initial or final regulatory flexibility analysis.

Nonetheless, OTS considered the likely impact of this final rule on small businesses and believes that the rule will not have a significant impact on a substantial number of small entities. OTS has had comprehensive regulations implementing section 11 of the HOLA since 1991. Today's final rule updates these provisions to incorporate Regulation W, interprets Regulation W to the extent necessary to apply the FRB rule to savings associations, clarifies the relationship between section 11(a)(1) of the HOLA and Regulation W, and sets out the additional restrictions imposed under section 11(a)(4) of the HOLA. In light of these preexisting rules, OTS does not believe that the final rule will significantly increase the applicable burdens for small or large savings associations. Accordingly, a regulatory flexibility analysis is not required.

The Unfunded Mandates Reform Act of 1995, Public Law 104-4 (Unfunded Mandates Act) applies only when an agency is required to issue a notice of proposed rulemaking or issues a final rule for which a notice of proposed rulemaking was published. 2 U.S.C. 1532. As noted above, OTS determined that a notice of proposed rulemaking was not required for the interim final rule. Accordingly, OTS concluded that the Unfunded Mandates Act does not require an analysis of this final rule.

Nonetheless, OTS has considered the impact of the final rule under the Unfunded Mandates Act and has concluded that the final rule will not result in expenditures by state, local, or tribal governments or by the private sector of $100 million or more. OTS has had comprehensive regulations implementing section 11 of the HOLA since 1991. Today's final rule merely updates these provisions to incorporate Regulation W, interprets Regulation W to the extent necessary to apply the FRB rule to savings associations, interprets Regulation W to the extent necessary to apply the FRB rule to savings associations, clarifies the relationship between section 11(a)(1) of the HOLA and Regulation W, and sets out the additional restrictions imposed under section 11(a)(4) of the HOLA. In light of these preexisting rules, OTS does not believe that the final rule will significantly increase the applicable burdens for savings associations and will not result in increased expenditures by these institutions. Accordingly, OTS did not prepare a budgetary impact statement or specifically address the regulatory alternatives considered.

Under 12 U.S.C. 4802(b), final rules that impose additional reporting, disclosure, or other new requirements on insured depository institutions must take effect on the first day of a calendar quarter that begins on or after the date of publication. The Administrative Procedure Act (5 U.S.C. 553(d)(APA) provides that a final rule cannot be made effective less than 30 days after its publication. Together, these two statutes would require OTS to establish a January 1, 2004 effective date for this final rule.

Both statutes, however, permit the OTS to find good cause for establishing an earlier effective date. Today's rule changes generally relieve burdens or recognize exceptions to requirements imposed under the interim final rule. For example, the final rule revises OTS's definition of control, generally narrowing the definition of affiliate; removes repurchase agreements from the scope of the section 11 loan prohibition; and clarifies previously issued guidance on the attribution of activities and the calculation of quantitative limits. While the final rule applies slightly broader presumptions of control for convertible securities and nonvoting equity securities and, thus, expands the definition of affiliate in these areas, OTS believes that this change should have only a marginal impact on the regulatory burdens imposed on savings associations as a whole. Accordingly, OTS finds good cause not to delay making this rule effective until the calendar quarter beginning January 1, 2004.

On the other hand, institutions will need some time to understand and adapt to the revised final rule. Consistent with the requirements of the APA, OTS believes that it is appropriate to delay the effective date of this rule for at least 30 days from publication. The effective date of this rule will be November 6, 2003.

The information collection requirements in the OTS rules were previously approved under OMB control number 1550-0078. The final rule incorporates these requirements at § 563.41(c)(3) and (4), and does not make any changes that materially affect the overall burden of compliance.

The reference to the Clearinghouse in section 1000.27, Directorate for Epidemiology, is being moved to section 1000.16, Office of the Secretary.

Since this rule relates solely to internal agency management, pursuant to 5 U.S.C. 553(b) notice and other public procedures are not required and it is effective immediately upon publication in the Federal Register . Further, this action is not a rule as defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612, and, thus, is exempt from the provisions of the Act.

In FR Doc. 03-19509, appearing on page 46403 in the Federal Register of Tuesday, August 5, 2003, the following corrections are made:

1. On page 46408, in the second column, under the heading “ D. Adequacy of Olestra's Label Statement  33 ” the first sentence is corrected to read “In its fifth objection and request for a hearing, CSPI challenges the label statement required by the 1996 final rule, claiming that it is not sufficient to protect the public from adverse effects associated with consumption of olestra.”

2. On page 46408, in the third column, under the heading “ E. Alleged Procedural Problems in the Olestra Proceeding ” the first sentence is corrected to read “In its sixth objection and hearing request, CSPI claims that there were a number of problems with the procedures utilized by FDA to reach a decision about the safety of olestra.”

3. On page 46408, in the third column, under heading “ E. Alleged Procedural Problems in the Olestra Proceeding ” the second to the last sentence on that page is corrected to read “As in the case with its fifth objection and hearing request, CSPI specifically identifies no factual issue underlying any of its six procedural complaints.”

DEA implements the Controlled Substances Act (21 U.S.C. 801-971), as amended by the Chemical Diversion and Trafficking Act, the Domestic Chemical Diversion Control Act, the Comprehensive Methamphetamine Control Act, and the recent Methamphetamine Anti-Proliferation Act (Pub. L. 106-310, 114 Stat. 1101), among others. DEA publishes the implementing regulations for these statutes in title 21 of the Code of Federal Regulations (21 CFR) parts 1300 to end. The regulations are designed to prevent the diversion of controlled substances and listed chemicals to illegal purposes.

MAPA, which is part of the Children's Health Act of 2000, amends the Controlled Substances Act (CSA) to reduce the retail and mail order thresholds for pseudoephedrine and phenylpropanolamine (PPA), to include certain export transactions under the mail order reporting requirement, and to provide certain exemptions from the mail order reporting requirement. This rule implements the Congressional mandate of MAPA.

An agency may find good cause to exempt a rule from the provisions of the Administrative Procedure Act (5 U.S.C. 553), including notice of proposed rulemaking and the opportunity for public comment, if it is determined to be unnecessary, impracticable, or contrary to the public interest. Most of the requirements of MAPA were set out in such detail as to be self-implementing. Therefore the changes in this rulemaking primarily provide conforming amendments to make the language of the regulations consistent with that of the law. Hence, DEA finds it unnecessary to publish for public notice and comment.

Specifically, Title XXXVI, Methamphetamine Anti-Proliferation Act, Section 3652 of the Children's Health Act, “Mail Order Requirements,” amends 21 U.S.C. 830(b)(3)(D) to exempt certain distributions and export transactions of ephedrine, pseudoephedrine, and phenylpropanolamine and drug products containing them from the monthly mail order reporting requirement as follows [emphasis added]:

MAPA also specifically reduces the threshold for drug products containing pseudoephedrine and phenylpropanolamine from 24 grams to 9 grams of pseudoephedrine or phenylpropanolamine as base. MAPA further establishes a new factor in determining a regulated transaction—a package size of 3 grams of pseudoephedrine base or phenylpropanolamine base. The language in Title XXXVI, Section 3622 of the Children's Health Act of 2000, “Reduction in Retail Sales Transaction Threshold for Non-Safe Harbor Products Containing Pseudoephedrine or Phenylpropanolamine,” clearly establishes without opportunity for discussion the new requirements. It amends 21 U.S.C. 802(39)(a)(iv)(II) to read as follows [emphasis added]:

Under the circumstances, there is no discretion for deviation from the changes made by MAPA. Therefore, DEA is implementing these conforming amendments to the regulations through a final rule.

MAPA mandated that effective October 17, 2001, both the reduction of the 24 gram transaction threshold to 9 grams and the addition of the 3 gram package size threshold for pseudoephedrine and phenylpropanolamine drug products apply to all retail distributors and all persons required to submit mail order reports under 21 U.S.C. 830(b)(3).

At the retail level, all drug products containing pseudoephedrine or phenylpropanolamine that do not meet the definition of “ordinary over-the-counter pseudoephedrine or phenylpropanolamine product” ( see 21 U.S.C. 802(45)) are subject to the threshold requirements of MAPA. This includes the single transaction threshold of 9 grams as base and the single package size of 3 grams or less of pseudoephedrine or 3 grams or less of phenylpropanolamine as base. The requirement of registration is waived for retail distributors whose activities consist solely of below-threshold distributions to an individual for a legitimate medical purpose (21 CFR 1309.24(e)). Retail distributors who engage in single transactions at or above 9 grams of pseudoephedrine or phenylpropanolamine as base or single transactions of package sizes containing more than 3 grams of pseudoephedrine base or 3 grams of phenylpropanolamine base per package will void their waiver of the registration requirement and must register with DEA. Transactions above these thresholds are regulated transactions and subject to all requirements of the Controlled Substances Act. For retail transactions, this would include customer identification, recordkeeping, and reporting.

For those required to submit mail order reports, the 9 gram transaction threshold (as base) for a single transaction and the 3 gram package size (as base) apply to every transaction involving pseudoephedrine, phenylpropanolamine or drug products containing them—regardless of the type of packaging for the products. There are no exemptions for ordinary over-the-counter pseudoephedrine and phenylpropanolamine products. All of the requirements of the CSA apply to threshold and above transactions and to above-threshold package sizes, that is, registration, identification, recordkeeping, and reporting, as well as the monthly mail order reports submitted to DEA.

MAPA provides the following exemptions to the mail order reporting requirement: Transactions involving sample packages of drug products, deliveries of prescriptions to consumers by retail distributors, distributions to long-term care facilities and their residents, mail order prescription deliveries, and exports already reported to DEA on a Form 486 or granted a waiver by the Administrator. These were specifically cited in the section of this rulemaking titled, “Why is DEA publishing a final rule?”

Congress also granted the Attorney General the authority (delegated to the Administrator of DEA) to develop regulations to expand the Congressional list of exemptions.

To implement the requirements of MAPA, DEA is adding the new definitions of “drug product” and “valid prescription” at 21 CFR 1300.02, and updating §§ 1310.03 and 1310.05 to reflect the revised reporting requirements for mail order distributions. Specifically, DEA is amending § 1310.05 to explicitly exempt from the reporting requirements the low-risk categories of mail order transactions previously listed.

DEA also reserves the right to exempt, by regulation, from the reporting requirements any other quantity, method, or type of distribution of a specific listed chemical (or drug product containing it) or group of listed chemicals (or drug products containing them) determined by the Administrator to be unnecessary for the effective enforcement of the Controlled Substances Act.

MAPA will not adversely impact the public's access to pseudoephedrine and phenylpropanolamine products. The majority of the products purchased by the public are commonly used medications most of which are available without a prescription at pharmacies, grocery stores, discount department stores, and a variety of other retail stores. Although the thresholds are being reduced, these thresholds still permit the public adequate access to these drug products for legitimate medical purposes, which include their use as decongestants for the temporary relief of nasal congestion. Each of the products is available as a single entity or in combination with antihistamines, antitussives, analgesics, and expectorants. Sale of a single package of drug product containing 3 grams or less per package of pseudoephedrine or phenylpropanolamine base is not a regulated transaction. A single transaction of less than 9 grams of pseudoephedrine or phenylpropanolamine as base is not a regulated transaction. The chart below indicates the number of tablets per package and per single transaction that constitute a regulated transaction. One tablet less would be a non-regulated transaction.

The final rule FR Doc. 03-23636, published on September 17, 2003, (68 FR 54335) is corrected as follows: On page 54336, in the second column, correct the amendatory instruction to read as follows: Accordingly, for the reasons stated in the preamble, the interim rule for part 982 of title 24 of the Code of Federal Regulations, published on October 28, 2002, 67 FR 65864, as corrected on November 6, 2002, 67 FR 67522, is promulgated as final, without change. Dated: October 1, 2003. Camille Acevedo, [FR Doc. 03-25325 Filed 10-6-03; 8:45 am] BILLING CODE 4210-33-P DEPARTMENT OF THE INTERIOR Office of Surface Mining Reclamation and Enforcement 30 CFR Part 938 [PA-144-FOR] Pennsylvania Regulatory Program AGENCY:

Office of Surface Mining Reclamation and Enforcement (OSM), Interior.

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

On June 18, 2003, the Copyright Office published final regulations effectuating an agreement on the terms that would govern SoundExchange  1 when it functions as the designated agent for the purpose of receiving royalty payments and statements of account from nonexempt subscription digital transmission services for transmissions of sound recordings made under a statutory license prior to January 1, 2002. 68 FR 36469 (June 18, 2003). Pursuant to the agreement, the Office amended § 260.7 by removing the word “fees” and replacing it with the word “payments.” 68 FR at 36470.

On July 3, 2003, the Copyright Office published final regulations implementing an agreement to adjust the royalty rates and terms for the section 114 license for the use of sound recordings by preexisting subscription services for the current license period—January 1, 2002, through December 31, 2007. 68 FR 39837 (July 3, 2003). Pursuant to the second agreement, the Office amended § 260.7 once again; however, the amendatory language did not reflect the aforementioned amendment made on June 18. As a result, the intended amendment to the final clause of § 260.7 could not be effectuated. The technical amendment published today rectifies this oversight, correctly identifying the language being amended.

Entities potentially regulated by the action are those that use analytical test methods to comply with the RFG, anti-dumping, and gasoline sulfur control program. Regulated categories and entities include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists all entities that we are now aware could potentially be regulated by this action. Other types of entities not listed in this table could also be regulated by this action. To determine whether your business is regulated by this action, you should carefully examine the applicability criteria in part 80 of Title 40 of the Code of Federal Regulations. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding section of this document.

Section 211(k) of the Clean Air Act (CAA) directs EPA to establish standards requiring the greatest reduction in emissions of ozone forming volatile organic compounds (VOCs) and toxic air emissions achievable through the reformulation of conventional gasoline, considering cost, other health and environmental factors and energy requirements. The Act requires that RFG meet certain content standards for oxygen, benzene, and heavy metals. RFG must be used in certain ozone nonattainment areas, called “covered areas.” The CAA also requires EPA to establish anti-dumping standards applicable to conventional gasoline used in the rest of the country. The Administrator signed the final RFG and anti-dumping regulations on December 15, 1993 1 and these regulations became effective in January 1995.

In 2000, EPA issued regulations establishing lower sulfur content requirements for all gasoline  2 and establishing stricter tailpipe emissions standards for all passenger vehicles, including sport utility vehicles (SUVs), minivans, vans and pick-up trucks. The gasoline sulfur control program begins phasing-in in 2004, and, in general, refiners must meet a refinery average sulfur standard of 30 ppm beginning in 2005 and a per gallon cap standard of 80 ppm beginning in 2006 (with the exception of challenged refiners, and gasoline sold in certain western states subject to geographic phase-in).

Under the RFG, anti-dumping and gasoline sulfur program, refiners, importers, and oxygenate blenders are required to test RFG and conventional gasoline for certain parameters, including sulfur levels, aromatic content, benzene content, and oxygen content. Test methods for determining these parameters are specified in the regulation. For the sulfur content of gasoline, 40 CFR 80.46(a)(1) specifies American Society for Testing and Materials (ASTM) standard method D-2622-98, entitled, “Standard Test Method for Sulfur in Petroleum Products by Wavelength Dispersive X-Ray Fluorescence Spectrometry” as the designated test method. In addition, the gasoline sulfur rulemaking required a test method for determining the sulfur content of butane blended into gasoline—ASTM standard method D 3246-96, entitled “Standard Test Method for Sulfur in Petroleum Gas by Oxidative Microcoulometry.”

In the gasoline sulfur control rulemaking, we specifically requested comments on the designated test method. We also requested comments on other ASTM methods. After considering comments received from the regulated industry during the gasoline sulfur rulemaking process, including comments supportive of ASTM D 2622-98 as the designated method, we decided to require the use of ASTM D 2622-98 for measuring sulfur content. We did not name any alternative analytical test methods because we anticipated that a comprehensive performance-based analytical test method approach rule would be issued in the near future. A comprehensive performance based test methods approach would allow anyone to qualify additional analytical test methods for use in demonstrating compliance with program requirements. We now know that a comprehensive performance based test methods rulemaking will take more time to complete than originally anticipated. We feel that permitting specific ASTM test methods to be used as alternative analytical test methods now provides a bridge to a more comprehensive performance based test methods approach in the future and grants refiners, importers and blenders significant flexibility and potential cost savings in meeting their testing requirements.

As discussed in a May 16, 2003 Federal Register notice, 3 Antek Instruments, which manufactures testing equipment, filed a petition challenging the final gasoline sulfur control rule. EPA and Antek entered into negotiations and reached a proposed settlement agreement. The proposed settlement agreement outlined a proposed rule which would identify ASTM D 5453-00 e1 as an alternative test method refiners and importers could use to comply with the requirement to test gasoline for sulfur content, provided the test result is correlated with ASTM D 2622-98. In today's action, EPA is revising its regulations to include such a provision. The proposed settlement agreement was available for comment until June 16, 2003. No adverse comments were received.

For the reasons discussed above, we are revising 40 CFR 80.46(a) to allow the use of ASTM D 5453-00 e1 , entitled “Standard Test Method for Determination of Total Sulfur in Light Hydrocarbons, Motor Fuels and Oils by Ultraviolet Fluorescence,” ASTM D 6428-99, entitled “Test Method for Total Sulfur in Liquid Aromatic Hydrocarbons and Their Derivatives by Oxidative Combustion and Electrochemical Detection,” and ASTM D 3120-96 (Reapproved 2002) e1 , entitled “Standard Test Method for Trace Quantities of Sulfur in Light Petroleum Hydrocarbons by Oxidative Microcoulometry.” Refiners and importers would be able to choose which of these test methods best fits their needs for compliance measurements. We believe that permitting the use of these test methods is desirable from the standpoint of permitting regulated parties more flexibility. A refiner or importer would be able to determine gasoline sulfur content using ASTM D 5453-00 e1 or any of the specified alternative analytical test methods named in the rule, provided that the refiner or importer result is correlated to ASTM D 2622-98.

In order to “correlate” a test result from an alternative test method to the designated test method, a laboratory would have to develop and apply a “correlation equation” to the alternative test method result. Because the “correlation equation” is designed to provide a prediction of the designated test method result from the use of an alternative test method, the “correlation equation” eliminates bias between the designated test method and the alternative test method, so results may be compared between these methods. After applying the correlation equation, the results obtained from an alternative test method should be equivalent to the result you would obtain if you had used the designated test method. Users of a correlation equation should periodically verify its correlation to the designated test method.

This direct final rule also permits the use of ASTM D 4468-85 (Reapproved 2000), “Standard Test Method for Total Sulfur in Gaseous Fuels by Hydrogenolysis and Rateometric Colorimetry” as an alternative test method for butane, because it is an ASTM approved method that some refiners may elect to use. If a refiner, importer, or blender chooses to measure butane levels with this alternative analytical test method, the results must be correlated to D 3246-96, “Standard Test Method for Sulfur in Petroleum Gas by Oxidative Microcoulometry,” which is the test method currently designated in the existing rule.

Some refiners and butane suppliers expressed concern that the designated test method is not currently in wide use. When we issued the final gasoline sulfur control regulations, we did not intend to require the use of this method until January 1, 2004. However, the final regulation inadvertently did not specify that date and we are clarifying the effective date by this action. Until January 1, 2004, any test method may be used to test the sulfur content of butane.

We believe that this direct final rule, and our intent to establish a comprehensive performance based test method approach in the future, will advance the purposes of the “National Technology Transfer and Advancement Act of 1995,” (NTTAA) section 12(d) of Public Law 104-113, and Office of Management and Budget (OMB) Circular A-119. Both of these documents are designed to encourage the adoption of standards developed by “voluntary consensus bodies” and to reduce reliance on government-unique standards where such consensus standards would suffice. This direct final rule would provide for the use of alternative test methods for the measurement of sulfur in gasoline and butane under the RFG, anti-dumping, and gasoline sulfur control programs. Allowing these test methods, which are widely available and approved by ASTM, a “voluntary consensus body,” is directly consistent with the goals of the NTTAA and OMB Circular A-119.

Any environmental effects of today's proposed action would be minimal, as it would merely grant limited flexibility to regulated parties in their choice of test method for determining the sulfur content of gasoline and butane. The economic effects of today's proposed action are expected to be positive, since it permits regulated parties the flexibility to choose the test method they will use to comply with existing regulations.

Under Executive Order 12866, (58 FR 51,735 (October 4, 1993)) the Agency must determine whether the regulatory action is “significant” and therefore subject to OMB review and the requirements of the Executive Order. The Order defines “significant regulatory action” as one that is likely to result in a rule that may:

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

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

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

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

This direct final rule is not a significant regulatory action within the meaning of the Executive Order. It will not have an annual effect on the economy of $100 million or more and is not expected to have any adverse economic effects as described in the Order. This direct final rule does not raise issues of consistency with the actions taken or planned by other agencies, will not materially alter the cited budgetary impacts, and does not raise any novel legal or policy issues as defined in the Order.

This direct final rule would not add any new requirements involving the collection of information as defined by the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Today's rule would only permit more flexibility to parties in their choice of analytical test methods. OMB has approved the information collection requirements contained in the final reformulated gasoline (RFG) and anti-dumping rulemaking and gasoline sulfur control rulemaking has assigned OMB control number 2060-0277.

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

EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this final rule. For purposes of assessing the impacts of today's direct final rule on small entities, small entity is defined as: (1) A small business that has not more than 1,500 employees (13 CFR 121.201); (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

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

We have therefore concluded that today's direct final rule will relieve regulatory burden for all small entities. By permitting alternative analytical test methods for the measurement of sulfur in gasoline and butane, smaller entities will be granted greater flexibility in performing compliance testing.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to state, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

Today's rule contains no federal mandates (under the regulatory provisions of Title II of the UMRA) for state, local or tribal governments or the private sector. The rule imposes no enforceable duty on any state, local or tribal governments or the private sector.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

This direct final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. The direct final rule is limited to permitting flexibility in the choice of test methods. Thus, Executive Order 13132 does not apply to this direct final rule.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.”

This direct final rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. This proposed rule would apply to parties required to test gasoline and butane for gasoline and butane and does not impose any enforceable duties on communities of Indian tribal governments. Thus, Executive Order 13175 does not apply to this rule.

Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be economically significant as defined under E.O. 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

EPA interprets E.O. 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This direct final rule is not subject to E.O. 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it does not involve decisions on environmental health risks or safety risks that may disproportionately affect children.

This direct final rule is not an economically “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)) because it does not have a significant adverse effect on the supply, distribution, or use of energy.

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

This direct final rule advances the goals of the NTTAA by adopting test methods developed by voluntary consensus standards bodies.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This direct final rule will be effective December 8, 2003.

Statutory authority for today's direct final rule comes from sections 211(c), 211(i) and 211(k) of the CAA (42 U.S.C. 7545(c) and (k)). Section 211(c) and 211(i) allows EPA to regulate fuels that contribute to air pollution which endangers public health or welfare, or which impairs emission control equipment. Section 211(k) prescribes requirements for RFG and conventional gasoline and requires EPA to promulgate regulations establishing these requirements. Additional support for the fuels controls in today's rule comes from sections 114(a) and 301(a) of the CAA.

Throughout this document, “we,” “us,” and “our” refer to EPA.

On August 15, 2003 (68 FR 48848), we proposed to approve minor revisions to the boundaries of the Los Angeles-South Coast Air Basin Area (“South Coast Air Basin”) and the Southeast Desert Air Basin. 1 These revisions were requested on November 18, 2002, by the California Air Resources Board (CARB) under CAA section 107(d)(3)(D), which authorizes States to submit revised area designations.

The purposes of CARB's request are to:

(1) enlarge the South Coast Air Basin to include the Banning Pass area, thereby excluding the area from the Southeast Desert;

(2) harmonize the boundaries of the Coachella Valley area  2 by changing them to match the PM-10 area boundaries; and

(3) correct the eastern boundary of the South Coast Air Basin with respect to CO.

We proposed to approve these redesignations and apply the boundary changes to all affected pollutants, because the revisions comply with the relevant provisions of CAA section 107(d)(3)(D) and apply equally to other pollutants for which the areas have existing designations. Our proposed action contains more information about the proposed revisions and our evaluation.

Our proposed action provided a 30-day public comment period. During this period, we received no comments.

As authorized in section 107(d)(3)(D), EPA is taking final action to:

(1) revise the boundary of the South Coast Air Basin to incorporate the Banning Pass;

(2) amend the boundary of the Coachella Valley area (Riverside County portion of the Southeast Desert Air Basin for 1-hour ozone) to correspond to the PM-10 boundary for the area; and

(3) approve the State's request to make a typographical correction to the boundary of the South Coast Air Basin with respect to CO.

We are making the first two changes for all pollutants for which the areas are designated in our regulations (40 CFR Part 81). Thus, the boundary changes apply to 1-hour ozone, PM-10, CO, NO 2 , SO 2 , and TSP. We are amending the descriptions of the areas in 40 CFR 81.305 for TSP, CO, 1-Hour Ozone, and NO 2 . No changes are required in the 40 CFR 81.305 designation tables for PM-10 and SO 2 , since the tables for these pollutants do not specify boundaries and the area names need not be changed.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. section 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. section 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 8, 2003. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

In Federal Register notices of February 3, 1993, (58 FR 6955) and March 31, 1994, (59 FR 15201) EPA determined that all portions of Virginia's Municipal Solid Waste Landfill permitting program, with the exception of the financial assurance portion, were equivalent to EPA's regulations for such programs under 40 CFR part 258. On January 21, 2003, Virginia submitted its financial assurance regulations to EPA for approval. After a thorough review, EPA determined that Virginia's financial assurance regulations, as defined under 9 VAC 20-70, Commonwealth of Virginia Financial Assurance Regulations for Solid Waste Disposal, Transfer and Treatment Facilities, are adequate to assure compliance with the Federal criteria as defined at 40 CFR part 258, subpart G (§§ 258.70 through 258.74). This determination will give full Federal approval to Virginia's Municipal Solid Waste Landfill permitting program.

This rule only approves State solid waste requirements pursuant to RCRA section 4005 and imposes no requirements other than those imposed by State law ( see SUPPLEMENTARY INFORMATION , above). Therefore, this rule complies with applicable executive orders and statutory provisions as follows.

1. Executive Order 12866: Regulatory Planning Review —The Office of Management and Budget has exempted this rule from its review under Executive Order 12866.

2. Paperwork Reduction Act —This rule does not impose an information collection burden under the Paperwork Reduction Act.

3. Regulatory Flexibility Act —After considering the economic impacts of today's rule on small entities under the Regulatory Flexibility Act, I certify that this rule will not have a significant economic impact on a substantial number of small entities.

4. Unfunded Mandates Reform Act —Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Act.

5. Executive Order 13132: Federalism —Executive Order 13132 does not apply to this rule because it will not have federalism implications ( i.e. , substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government).

6. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments —Executive Order 13175 does not apply to this rule because it will not have tribal implications ( i.e. , substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes).

7. Executive Order 13045: Protection of Children from Environmental Health & Safety Risks —This rule is not subject to Executive Order 13045 because it is not economically significant and it is not based on health or safety risks.

8. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use —This rule is not subject to Executive Order 13211 because it is not a significant regulatory action as defined in Executive Order 12866.

9. National Technology Transfer Advancement Act —EPA approves State programs as long as they meet criteria required by RCRA, so it would be inconsistent with applicable law for EPA, in its review of a State program, to require the use of any particular voluntary consensus standard in place of another standard that meets the requirements of RCRA. Thus, section 12(d) of the National Technology Transfer and Advance Act does not apply to this rule.

10. Congressional Review Act —EPA will submit a report containing this rule and other information required by the Congressional Review Act (5 U.S.C. 801 et seq. ) to the U.S. Senate, the U. S. House of Representatives, and the Comptroller General of the United States prior to publication in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This action will be effective December 8, 2003.

The Federal Emergency Management Agency makes the final determinations listed below of BFEs and modified BFEs for each community listed. The proposed BFEs and proposed modified BFEs were published in newspapers of local circulation and an opportunity for the community or individuals to appeal the proposed determinations to or through the community was provided for a period of ninety (90) days. The proposed BFEs and proposed modified BFEs were also published in the Federal Register .

This final rule is issued in accordance with Section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR Part 67.

FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR Part 60.

Interested lessees and owners of real property are encouraged to review the proof Flood Insurance Study and FIRM available at the address cited below for each community.

The BFEs and modified BFEs are made final in the communities listed below. Elevations at selected locations in each community are shown.

National Environmental Policy Act. This rule is categorically excluded from the requirements of 44 CFR Part 10, Environmental Consideration. No environmental impact assessment has been prepared.

Regulatory Flexibility Act. The Mitigation Division Director of the Emergency Preparedness and Response Directorate certifies that this rule is exempt from the requirements of the Regulatory Flexibility Act because final or modified BFEs are required by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and are required to establish and maintain community eligibility in the NFIP. No regulatory flexibility analysis has been prepared.

Regulatory Classification. This final rule is not a significant regulatory action under the criteria of Section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

Executive Order 12612, Federalism. This rule involves no policies that have federalism implications under Executive Order 12612, Federalism, dated October 26, 1987.

Executive Order 12778, Civil Justice Reform. This proposed rule meets the applicable standards of Section 2(b)(2) of Executive Order 12778.

FEMA published a notice of final flood elevation determination for Collier County, Florida and Incorporated Areas, on June 2, 2003, at FR 68, 32665 and 32666. Following coordination with Collier County, it was determined that additional time is needed to develop flood hazard data for the Golden Gates Estates area located within the Unincorporated Areas of Collier County and the City of Naples. Therefore, the final flood elevation for Collier County, Florida and Incorporated Areas is hereby rescinded in accordance with Section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104 until further notice.

The Wireless Telecommunications Bureau published a document revising the general competitive bidding rules for all auctionable services in the Federal Register of July 21, 2003 (68 FR 42984). This document corrects the Federal Register as it appeared.

In rule FR Doc. 03-18430 published on July 21, 2003 (68 FR 42984) make the following correction:

This is a synopsis of the Commission's Report and Order, MM Docket No. 01-43, adopted September 23, 2003, and released October 1, 2003. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., CY-B402, Washington, DC, 20554, telephone (202) 863-2893, facsimile (202) 863-2898, or via e-mail qualexint@aol.com.

Eriastrum hooveri (Hoover's woolly-star) was first collected in 1935 by Gregory Lyons near Little Panoche Creek, western Fresno County, in the San Joaquin Valley of California. In 1943, Willis Jepson described the plant as Hugelia hooveri, citing a 1937 collection by Robert Hoover (the namesake for the scientific and common names). Later, Herbert Mason (1945) transferred the species along with the rest of the woolly-stars to the genus Eriastrum.

Eriastrum hooveri, an annual herb of the phlox family (Polemoniaceae), produces many wire-like stems and tiny white to pale blue flowers that are less than 5 millimeters (mm) (0.2 inch (in)) across. The flowers are nearly hidden in tufts of woolly hair. The leaves are thread-like and may have two narrow lobes near the base. Standing 1 to 20 centimeters (cm) (0.4 to 8 in) tall, the species has grayish, fuzzy stems, which are often branched (Munz and Keck 1959; USFWS 1998). The most important characteristics for distinguishing this species from other Eriastrum species are the flower size and the ratio between the length of the corolla and the length of the lobes on the petals (petals are highly colored portions of the flower and collectively are called the corolla). Characteristics of the stamen (male reproductive organ) can also help identify this species (Taylor and Davilla 1986).

The seed of Eriastrum hooveri is small and dust-like, and dispersed by the wind. The stems of dead plants often break at the soil surface and the plants are conical-shaped, characteristic of a seed that disperses via the “tumbleweed” strategy. Laboratory germination of seeds was achieved by wetting seed on filter paper, and there was rapid and complete germination of new seed (Taylor and Davilla 1986). The small flowers of E. hooveri might suggest self-pollination (Taylor and Davilla 1986).

Eriastrum hooveri was originally thought to have a range that was mostly east of the Coastal Range in San Joaquin Valley, California, and distributed in a discontinuous fashion within valley saltbush scrub and valley sink scrub from Fresno County in the north, south to the Temblor Range (Kern and San Luis Obispo Counties), with very limited distribution south of the Temblor Range, in the Cuyama Valley (San Luis Obispo and Santa Barbara Counties) (Taylor and Davilla 1986). The San Joaquin Valley lies between the Coast Ranges and the Sierra Nevada, and on the southern end is bordered by the Transverse Ranges. The climate of the San Joaquin Valley is a product of these surrounding mountain ranges. Precipitation in the San Joaquin Valley is low; it averages less than 25 cm (10 in) per year, with localized areas averaging far less. As a result, the San Joaquin Valley climate can be classified as arid or desertic. The San Joaquin Valley floor is composed of thousands of feet of sediments deposited by runoff from the surrounding mountains. Below these sediments lie important petroleum and natural gas deposits (Schoenherr 1992). The extraction of these resources accounts for some of the native habitat loss and degradation in the San Joaquin Valley and adjacent foothills. Conversion of this arid land to pastures and agricultural farmland also has replaced native habitat and introduced nonnative grasses and shrubs.

Prior to 1986, Eriastrum hooveri was known from 19 sites (sites are clusters of plants that may be part of a larger population as documented by BLM) in San Luis Obispo, Kern, Fresno, and Santa Barbara Counties in California. Most of these sites occurred on private property on the San Joaquin and Cuyama valley floors or on public land located in the foothills of the southern part of the San Joaquin Valley (the Naval Petroleum Reserve (NPR-1 and NPR-2) administered by the U.S. Department of Energy, later turned over to a private interest, Occidental Petroleum Corporation).

A status survey of Eriastrum hooveri conducted in 1986 identified 10 historical populations as extirpated, 2 others as presumed extirpated, and approximately 40 percent of the historically reported populations as remaining (Taylor and Davilla 1986). At the time of the status survey, the majority of the E. hooveri known populations were from alluvial valleys. Hilly terrain was only documented in three instances, from the Temblor Range, and the authors were unable to gain access to this area during the status survey. Taylor and Davilla (1986) reported that most remaining populations were situated on “islands” of native habitat in an otherwise “sea” of intensively managed agricultural lands, thereby leaving the remaining populations vulnerable to destruction. Our subsequent listing of E. hooveri as a threatened species in 1990 relied heavily on the data and the threats assessment presented in the Taylor and Davilla 1986 status report, as well as on additional surveys conducted between 1986 and 1990 (55 FR 29361). The listing noted that 118 populations existed, only 9 of which occurred on public lands or in undeveloped foothills. The remaining 109 populations (92 percent) were considered to be threatened by conversion of valley floor native habitat to agricultural land, oil and gas development, urbanization, reservoir construction, uncontrolled heavy sheep grazing, disposal of nutrient-laden agricultural effluent, and nonnative invasive plants (55 FR 29361). Based on these threats, we listed E. hooveri as a threatened species under the Act on July 19, 1990 (55 FR 29361).

In 1990, we initiated recovery planning for 11 listed species, including Eriastrum hooveri, and 23 candidates or species of concern that share the same ecosystem (USFWS 1998). While the development of the final Recovery Plan was being accomplished, the recovery needs of listed species were simultaneously being addressed. During the 8 years of planning, Federal and State agencies conducted extensive surveys and research and learned new information about E. hooveri biology, including its abundance and distribution and its response to disturbance. The recovery strategy in the final Recovery Plan reflects pre-plan recovery efforts.

The recovery strategy, put forth in the 1998 Recovery Plan, stated that recovery for Eriastrum hooveri could be accomplished within four metapopulations (defined as a larger population clusters by BLM), by using existing public lands and other areas already dedicated to conservation. The four metapopulations from largest to smallest are: (1) The Kettleman Hills area in Fresno and Kings Counties; (2) the Carrizo Plain-Elkhorn Plain-Temblor Range-Caliente Mountains-Cuyama Valley-Sierra Madre Mountains area in San Luis Obispo, Santa Barbara, and extreme western Kern Counties; (3) the Lokern-Elk Hills-Buena Vista Hills-Coles Levee-Maricopa-Taft area in Kern County; and (4) the Antelope Plain-Lost Hills-Semitropic area in Kern County. Recovery goals included protecting populations throughout the species' geographic range (at the time thought to be from San Benito and Fresno Counties in the north, south to the Cuyama Valley), representing a variety of topographic positions (valley floor, slopes) and community types (chenopod scrub and grasslands), at elevations ranging from 50 to 915 meters (m) (165 to 3,000 feet (ft)). Because public lands have varying multi-use mandates, and therefore may or may not afford “protection” to plants under threat, specific commitments were needed to protect the populations from incompatible uses such as heavy oilfield development, commercial development, flooding or rising groundwater levels, and dense vegetation due to proliferation of nonnative plants or suppression of fires. Low and moderate oilfield development and grazing were not considered incompatible uses. The Recovery Plan recommended a minimum acreage and plant density for E. hooveri and continuation of the monitoring of trends at representative sites within each of the four recognized metapopulations. As 33 other species were also covered in this multispecies Recovery Plan, the ecosystem-level strategy recommended a network of large-scale preserves and conservation areas that represented all natural communities in the San Joaquin Valley upland ecosystems. The Recovery Plan stated that, within this network, habitat management would be compatible with traditional and ongoing land uses such as grazing and oil exploration. Prior to the completion of the Recovery Plan, it was discovered that E. hooveri could tolerate a certain amount of natural and man-made disturbances.

The listing and subsequent recovery planning efforts resulted in increased inventory activities for Eriastrum hooveri throughout its range. Surveys in the Mojave Desert area resulted in the discovery of E. hooveri more than 140 kilometers (km) (87 miles mi) southeast of the previously known range. Surveys into remote areas by the BLM and the Los Padres National Forest, as well as routine surveys at the NPR-1 and NPR-2, resulted in the discovery of many new occurrences (an occurrence is analogous to a population and is defined here as a cluster of plants separated from the nearest cluster by at least 0.25 mile) of E. hooveri . Through a section 7 consultation with the Service, the U.S. Department of Energy conducted periodic monitoring of six representative E. hooveri sites from the early to mid 1990s (EG&G 1994, 1996). Responses to precipitation patterns on north and south slopes and ridgetops were documented (EG&G 1996), and increased attention was focused on observations of and research into the plants' response to various levels of habitat disturbance. The pertinent recovery planning and implementation efforts, along with their results, are summarized below.

Abundance: The results of the 1986 status survey, which led to the Eriastrum hooveri listing, reflected its known distribution at the time, but did not reflect the species' larger distribution documented after 1990, probably as a consequence of the drought period and the resulting poor growing E. hooveri conditions during the two years preceding the survey (EG&G 1995a). Surveys by Federal agencies following the listing of the species in 1990 coincided with a change in precipitation, particularly in 1993, when abundant spring rainfall created favorable growing conditions for annual plants (EG&G 1994, 1995b). The favorable growing conditions along with the surveys resulted in a dramatic increase in the number of E. hooveri known populations, the size of its topographical and elevational range distribution, and a clearer understanding of its habitat associations.

Distribution: In 1992 and 1994, BLM staff surveyed private and public lands and estimated that about 1,000 Eriastrum hooveri sites occupied approximately 970 ha (2,426 ac) (BLM 1992, 1994). By 1998, the U.S. Department of Energy had comprehensively surveyed over 60 percent of NPR-1 for E. hooveri, and over 400 locations were documented; in addition, the species was also discovered on NPR-2 (Brian Cypher, Enterprise Advisory Services, Inc., pers. comm. 1998; Russ Lewis, BLM, pers. comm. 2002; Jay Hinshaw, Bureau of Indian Affairs, pers. comm. 2003).

Range: Surveys for another plant species at 820 to 910 m (2,700 to 3,000 ft) elevation in the Los Padres National Forest in 1993 led to the discovery of three populations of Eriastrum hooveri in Tennison Canyon, Goode Canyon, and Castro Canyon (Danielsen et al. 1994). These populations were 800 m (500 ft) higher in elevation than all other known populations, and the first to be located in habitat dominated by juniper. In 1998, Boyd and Porter (1999) found E. hooveri in two locations southeast of the Tehachapi Mountains within Antelope Valley, Los Angeles County. These occurrences in the Mojave Desert represent an extension of the range of the species by approximately 140 km (87 mi) to the southeast from the nearest population in the San Joaquin Valley. Additional surveys in the Antelope Valley, conducted through 2002, documented numerous occurrences of E. hooveri from near Rosamond, in Kern County, and south to Lancaster, in Los Angeles County. In 2003, 7 to 12 million plants, roughly distributed over a 100-square-mi area, were also found near Edwards Air Force Base (Ray Bransfield, USFWS, pers. comm. 2003; Patrick Buorsier, H.T. Harvey and Associates, pers. comm. 2003).

In summary, surveys have resulted in the discovery of many more valley floor sites as well as foothill sites, and have shown that Eriastrum hooveri populations discontinuously range in the north from the Ciervo/Panoche area of the San Joaquin Valley in Fresno and San Benito Counties, southward to Antelope Valley in Los Angeles County, a distance of approximately 314 km (196 mi). A total of 1,128 new sites have been found on BLM land. Along with the increase in the number of sites, the distribution and range of E. hooveri has increased. E. hooveri has been confirmed at elevations of 3,000 ft and has been found to occur in two additional habitat types: Juniper woodland and Mojave Desert. The species has a greater abundance, distribution, and range than previously thought.

At the time of listing, Eriastrum hooveri was identified as preferring areas with lower annual plant densities and stable, silty to sandy soils that often exhibit cryptogamic crusting (a thin microbiotic layer at the soil surface generally composed of a complex of mosses, algae, bacteria, fungi, and lichens, or a combination of these) (55 FR 29361). Since listing, E. hooveri has also been found on stable soils that do not exhibit crusting (BLM 1994), and on sandy loam and loamy soils (EG&G 1995a). Research results in 1994 documented that vascular plant cover at sites with E. hooveri ranged from a low of 5% to a high of 93%; the amount of bare ground varied between 5% and 90%, and the amount of cryptogamic crusting varied between 0% and 80% (EGG 1995b). The wide-ranging values in plant cover and bare ground for sites with E. hooveri indicate that, although this species does better in sparsely vegetated areas, it is found in areas of dense vegetation (E. Cypher, pers. comm. 2003). A 1995 report by EG&G documented E. hooveri responses to varying rainfall and found that this species, like most annual species, appears to be sensitive to changes in precipitation compared to the shrub and grass components of the community (EG&G 1996). Soils with cryptogamic crusts are naturally open surface areas where nonnative grasses do not seem to encroach (Lewis pers. comm. 1995). The association that E. hooveri has with cryptogamic crusting may be more related to lower annual plant densities (especially lower numbers of nonnative grasses) than to an affinity with some aspect of the crusting. Areas of crusting are found throughout the species' range (R. Lewis pers. comm. 1995), and although ground disturbance will eliminate the crusting, the complex of mosses, algae, and other cryptogamic organisms that compose the crust have been observed to come back two years after ground disturbance (Holmstead and Anderson 1998) in areas where E. hooveri is found.

During above-average annual rainfall periods, Eriastrum hooveri responds quickly and well (successful seed germination, larger plants, and a higher probability of being detected during surveys), whereas during years of below-average annual rainfall, plants that germinate reach a height of only 1 in and are less likely to be detected during surveys (Ellen Cypher, Endangered Species Recovery Program, pers. comm. 2003; Jay Hinshaw, Bureau of Indian Affairs, pers. comm. 2003).

In 1995, EG&G reported that ground disturbance did not significantly affect Eriastrum hooveri and that the species was found as abundantly on disturbed sites as on undisturbed sites (EG&G 1995a). The average E. hooveri density was higher on sites where mechanical ground disturbance (typical of oilfield development) was observed, and lower on sites where other types of disturbance (by grazing, alluvial deposit, fire, unknown) were observed (EG&G 1995a). Furthermore, a study on the effects of simulated oilfield disturbance and top soil salvage showed that, although surface disturbance negatively affected E. hooveri density for at least two years, this species recolonized disturbed plots within two growing seasons from seed naturally dispersed from adjacent habitat (Hinshaw et al. 1998).

In summary, research efforts, as part of the recovery process, have shown that Eriastrum hooveri is more resilient and less vulnerable than previously thought.

The Recovery Plan was developed for arid-land species in a part of California that receives 10 in (25 cm) or less of annual precipitation. Both below-average (drought) and above-average precipitation can cause severe population variations for Eriastrum hooveri, and other species covered in the Recovery Plan, if such extreme conditions extend for more than 1 year (USFWS 1998). The status survey that preceded listing of E. hooveri followed a 2-year drought, and during the early 1990s the southern San Joaquin valley experienced above-average rainfalls (E. Cypher pers. comm. 2003b). This above-average rainfall period coincided with initial research into disturbance responses, and it was observed by Holmstead and Anderson (1998) that E. hooveri responded extremely well to the increased rainfall levels. Timing of precipitation may have also played a significant role in the response of E. hooveri to above-average rainfall, since heavy rainfall in the study area occurred during January and March, later than during normal precipitation years (Holmstead and Anderson 1998).

Eriastrum hooveri's adaptability to disturbance was evident based on observations of the reestablishment of E. hooveri following two disturbances on NPR-1 during 1990, and on NPR-1 fire breaks that had been tilled the previous year (Holmstead and Anderson 1998). Eriastrum hooveri is more resilient and less vulnerable to certain activities than previously thought.

Section 4(f) of the Act directs us to develop recovery plans for listed species. Recovery plans are written to guide recovery efforts and establish criteria for measuring recovery progress. The criteria are not intended to be absolute prerequisites for delisting and should not preclude a delisting action if such action is otherwise warranted. This section discusses the four delisting criteria identified for Eriastrum hooveri in the Recovery Plan (USFWS 1998).

Although difficult to quantify due to annual variability in size of populations, we believe that the intent of this criterion has been met because a substantial amount of land, approximately 114,400 ha (286,000 ac), containing substantial portions of the four metapopulations or potential habitat is in a “protected status” (as defined in the Recovery Plan) (G. Warrick, Center for Natural Lands Management, pers. comm., 2002; Mary Ann McCrary, California Department of Fish and Game (CDFG), in litt. 2002; USFWS 1998, Ann Knox, BLM, in litt. 1997). Two BLM Areas of Critical Environmental Concern (ACEC), a National Monument, four CDFG Ecological Reserves, four privately owned mitigation sites, and NPR-2 (soon to be managed by BLM) are the protected areas that contain portions of the four metapopulations; these areas, listed by metapopulation are:

(a.) The Kettleman Hills area in Fresno and Kings Counties (includes the BLM ownership with ACEC designation of 2,692 ha (6,730 ac));

(b.) The Carrizo Plain-Elkhorn Plain-Temblor Range-Caliente Mountains-Cuyama Valley-Sierra Madre Mountains area in San Luis Obispo, Santa Barbara, and extreme western Kern Counties (includes the BLM Carrizo Plain National Monument and the CDFG Elkhorn Ecological Reserve, 101,170 ha (250,000 ac));

(c.) The Lokern-Elk Hills-Buena Vista Hills-Coles Levee-Maricopa-Taft area in Kern County (includes the BLM's Lokern ACEC, 1,244 ha (3,110 ac); the CDFG's Lokern Ecological Reserve, 330 ha (825 ac), and Buttonwillow Ecological Reserve, 540 ha (1,350 ac); and private conservation areas such as the Center for Natural Lands Management's Lokern Preserve, 1,200 ha (3000 ac), the Elk Hills Conservation Area, 2,830 ha (7,075 ac), and the Coles Levee Ecosystem Preserve, 2,424 ha (6,060 ac)); and

(d.) The Antelope Plain-Lost Hills-Semitropic area in Kern County (includes the CDFG's Semitropic Ecological Reserve, 1,912 ha (4,780 ac); and private conservation areas, such as the Center for Natural Lands Management's Semitropic Ridge Preserve, 1,200 ha (3,000 ac)).

The second delisting criterion has been met. Because patches of Eriastrum hooveri may vary in size annually due to rainfall, we considered all E. hooveri habitat in protected areas where the species is known to occur as occupied habitat. There are protected occurrences of E. hooveri found within the southern San Joaquin Valley floor, in BLM's Lokern ACEC, 1,244 ha (3,110 ac), and the Elk Hills Conservation Area, 1,408 ha (3,520 ac). Other protected areas on the San Joaquin Valley floor containing E. hooveri occurrences are the CDFG's Alkali Sink Ecological Reserve, 372 ha (930 ac), Lokern Ecological Reserve, 330 ha (825 ac) (USFWS 1998), and the private conservation area of Coles Levee Ecosystem Reserve, 2,424 ha (6,060 ac). The total acreage for these five protected valley floor areas that contain E. hooveri is approximately 5,778 ha (14,445 ac).

The third recovery criterion, approve and implement management plans for the recovery areas that include survival of Eriastrum hooveri as an objective, has also been met. A significant number of new sites (1,128) are found on BLM land, and BLM has holdings in all 4 metapopulations of this species, including the San Joaquin Valley floor metapopulation. The wider range in combination with the commitment of BLM to designate E. hooveri as a sensitive species is sufficient to meet the recovery criterion (E. Cypher, pers. comm. 2003a and 2003c). The BLM will ensure that actions they authorize, fund, or carry out do not contribute to the need to re-list the species. As a sensitive species, E. hooveri will be addressed in the National Environmental Policy Act (NEPA) documents for BLM actions requiring NEPA review. In addition, BLM will conduct on-the-ground monitoring of E. hooveri for a minimum of 5 years from the date of the publication of this final rule to delist the species. This monitoring will be conducted in all four metapopulations (Burke, in litt. 2002), including the San Joaquin Valley floor. We believe that BLM's Resource Management Plan (RMP) meets the criteria for specific commitments to protect E. hooveri from incompatible uses and that the BLM sensitive species designation will directly enhance the survival of this species. Other existing management plans (including six HCPs and private conservation areas such as the Occidental Management Plan for the Elk Hills Conservation Area and the Center for Natural Lands Management-Management Plan) will either directly cover E. hooveri even after delisting, or will indirectly protect this species through actions directed coexisting protected species. In addition, a provision of the West Mojave Plan, being developed by several local, State, and Federal agencies in the Mojave Desert area, would direct the establishment of a reserve for sensitive plant species in areas that may support E. hooveri ; if established, the reserve would include prescriptions for management and monitoring of the area (Ray Bransfield, USFWS, pers. comm. 2003).

Because BLM manages land in four metapopulations, including the San Joaquin Valley floor metapopulation, they are in the best position to take on the responsibility of post-delisting monitoring Eriastrum hooveri after delisting. The determination that the Recovery Plan's monitoring criterion had been met was made before the disjunct Mojave population was described. The Service and the BLM will jointly produce a post-delisting monitoring (PDM) plan for E. hooveri over the four metapopulations. It is assumed that any population trends and information gained through the PDM period will be representative of the species range-wide including the Mojave population (see the Post-Delisting Monitoring section of this rule for specifics on BLM's proposed monitoring).

The fourth recovery criterion requires demonstration of stable or increasing trends in four metapopulations, including the San Joaquin Valley floor metapopulation, through one precipitation cycle. This criterion has been met since Eriastrum hooveri has persisted through both drought and above-average rainfall in 5 years of monitoring. The purpose of this criterion was to show progress in achieving population goals through the most critical time for arid upland plants (either above or below average precipitation). Stability means the statistically same population size during a precipitation cycle that includes both drought and wet phases (a cycle was anticipated to be about 20 years in the Recovery Plan) (USFWS 1998). Although the monitoring has not been completed for 20 years (the anticipated precipitation cycle), baseline data exists on BLM lands and NPR-1 that, along with precipitation data, can be used to assess this species' stability. The Recovery Plan offers some flexibility in this regard; it states that if a species' population is monitored through 1 or more years through a drought cycle this data will suffice for necessary precipitation cycle data (USFWS 1998).

At the start of monitoring (in 1997) an above-average rainfall was recorded and later (2000 to 2002) monitoring data indicated below-normal rainfall. Through both extremes Eriastrum hooveri remained robust (E. Cypher, pers. comm. 2003a and 2003c).

In summary, this recovery criteria for Eriastrum hooveri is satisfied because the species is protected on approximately 114,400 ha (286,000 ac) of habitat and remains stable through a precipitation cycle.

On September 27, 1985, we published a revised notice of review for native plants in the Federal Register (50 FR 39526). This revised notice added Eriastrum hooveri as a category 2 candidate species. Category 2 species were those species for which information in our possession indicated that listing was possibly appropriate, but for which additional information on biological vulnerability and threats was needed to support a proposed rule. On July 27, 1989, we published a proposal to list E. hooveri as threatened (54 FR 31201). The final rule listing E. hooveri as a threatened species was published July 19, 1990 (55 FR 29361). On March 6, 2001, we published a proposed rule to remove E. hooveri from the Federal List of Endangered and Threatened Wildlife based on information indicating this species was more widespread and abundant than was documented at the time of listing, was more resilient and less vulnerable to certain activities than previously thought, and was sufficiently protected on Federal, State, and private land (66 FR 13474).

In the March 6, 2001, proposed delisting rule (66 FR 13474) and associated notifications, we invited all interested parties to submit comments or information that might contribute to the final delisting determination for this species. The public comment period ended May 7, 2001. We contacted and sent announcements of the proposed rule to appropriate Federal and State agencies, county governments, scientific organizations, recovery team members, and other interested parties. We established an Internet web site for electronic submittal of comments and hearing requests by any party. In addition, we solicited formal scientific peer review of the proposal in accordance with our July 1, 1994, Interagency Cooperative Policy for Peer Review in Endangered Species Act Activities (59 FR 34270). We requested four individuals, who possess expertise in Eriastrum hooveri biology, to review the proposed rule by the close of the comment period. We received one response to our request for peer review, and her comments are discussed below. We also received one response from the public supporting the delisting. No responses were received opposing the delisting. No requests for a public hearing were received.

Comment 1: Recovery of Eriastrum hooveri should have been the rationale for delisting, rather than the wider distribution of the species and tolerance of disturbance. The threatened status of E. hooveri prompted the surveys and research projects that now provide partial justification for delisting. More importantly, the listing led to actions by Federal agencies to protect the species and its habitat. Delisting E. hooveri is appropriate because of (1) the proportion of E. hooveri on public lands and in conserved areas, (2) the additional lands likely to be protected during recovery efforts for other listed species, (3) the BLM's willingness to consider treating it as a sensitive species, and (4) its tolerance of disturbance.

Our Response: We agree and have clarified that the delisting is due in large part to recovery.

Comment 2: The only recovery element that has not yet been met is to demonstrate that the populations are stable.

Our Response: We acknowledge that this recovery criterion has not been completed, however, the Recovery Plan states that for those species with existing data on population status spanning one or more years, these data can be included in measuring population recovery goals if it is deemed scientifically valid and representative. According to the flexible approach recommended in the Recovery Plan (USFWS 1998), Eriastrum hooveri data from the early 1990s was used to justify that the population goal for this species was not numerical, but rather “stability” shown through monitoring during above and below-average rainfall years. See the “Recovery Plan Criteria” section in this rule for additional information.

Comment 3: The peer reviewer disagreed with the use of number of plants and number of “sites” in the proposed delisting rule since a very small patch can contain a large number of plants, and the number of Eriastrum hooveri individuals in a specified area can vary by several orders of magnitude from one year to the next. “Sites” is an arbitrary term used to describe clusters of plants that does not indicate separate populations and does not have any relationship to the ecology or reproductive biology of the species.

Our Response: We agree and have based this delisting action on the amount of occupied and suitable habitat that has been protected for Eriastrum hooveri , along with its distribution, abundance, and resilience, rather than the number of plants and sites.

Comment 4: Protection for Eriastrum hooveri will result from efforts for other listed species. Nine of the core areas identified for recovery of multiple species support E. hooveri. Portions of each of the core areas are already conserved by Federal and State agencies and nongovernmental conservation organizations, and additional lands are likely to be protected through ongoing recovery efforts for other listed species.

Our Response: We agree that Eriastrum hooveri has benefited from conservation efforts for other listed species, and is likely to continue to do so. We have included specific information about collateral benefits in this final rule (see “Background” and “The inadequacy of existing regulatory mechanisms” under “Summary of Factors Affecting the Species”).

Comment 5: Residual mulch restrictions cited in the proposed rule are incorrect.

Our Response: We have made these corrections (see “The inadequacy of existing regulatory mechanisms” under “Summary of Factors Affecting the Species”). The BLM grazing restrictions include requirements for residual mulch (dry plant material) of 568 kilograms (kg) per ha (500 pounds (lb) per ac), and 5 cm (2 in) of green growth, or 795 kg per ha (700 lb per ac). The proposed rule to delist Eriastrum hooveri incorrectly stated that the required amount of residual dry mulch was 50 kg per ha (49 lb per ac) and required green growth was 318 kg per ha (238 lb per ac).

In addition, we considered and incorporated, as appropriate, into this final rule all biological information provided by the peer reviewer.

Section 4 of the Act and our regulations (50 CFR part 424) implementing the listing provisions of the Act set forth the procedures for listing, reclassifying, and delisting species. A species may be listed if one or more of the five factors described in section 4(a)(1) of the Act threatens the continued existence of the species. A species may be delisted, according to 50 CFR 424.11(d), if the best scientific and commercial data available substantiate that the species is neither endangered nor threatened because of (1) extinction, (2) recovery, and/or (3) error in the original data for classification of the species.

After a thorough review of all available information, it is evident that substantial recovery of Eriastrum hooveri has occurred. We have determined that none of the five factors addressed in section 4(a)(1) of the Act, and discussed below, is currently affecting the species to the extent that E. hooveri remains threatened with endangerment in the foreseeable future throughout all or a significant portion of its range. The five listing factors, their application to the recovery of E. hooveri, and the identification of which threats are considered to be residual and will be the subject of monitoring after delisting are discussed below.

One of the predominant threats facing Eriastrum hooveri at the time it was listed as a threatened species was oil and gas development, especially in the Elk Hills area (55 FR 29361). Russ Lewis of the BLM has conducted several surveys for E. hooveri on public and private lands since the time of listing (BLM 1992, 1994). Of the approximately 1,000 new sites found by Lewis during 1992 and 1994, oil and gas development threats were present for only about 21 percent of the sites. Threats at many of these sites are no longer significant because several oil fields are at or near their peak of development, new drilling occurs on existing wellpads, or they have already been abandoned (R. Lewis, pers. comm. 2003). Additionally, there are other listed species in these areas; HCPs and section 7 consultations coordinated for the listed species will also protect E. hooveri . For these reasons and the reasons discussed below, we believe that the likelihood of additional habitat loss from new activity is low.

In the Elk Hills area, oil production areas are established on the upper elevation of the hills on the former NPR-1. Exploration activities generally have failed to establish oil production in the lower elevations (BLM 1994). The majority (73 percent) of the Eriastrum hooveri sites occur at lower elevations (EG&G 1995a); therefore, the majority of E. hooveri populations in NPR-1 are in areas not likely to be developed for petroleum production (B. Cypher, pers. comm. 1998).

Mobil Oil Corporation enacted measures to protect Eriastrum hooveri by placing protective exclosures around all known sites on a Lost Hills leased property (BLM 1994). Lewis also noted that above-surface pipeline corridors appear to be unintentionally restricting access of off-highway vehicles to remaining undisturbed habitat and, consequently, are protecting many other sites in the area (BLM 1994). The Eriastrum hooveri Field Inventory Report (BLM 1994) documents the presence of E. hooveri in large numbers throughout fully developed oilfields, such as Lost Hills, that have been in existence for several decades.

Because Eriastrum hooveri establishes on disturbed substrates such as well pads and pipeline rights-of-way after a period of non-use, the species likely will continue to exist both on federally and privately owned, fully developed oilfields (BLM 1994). EG&G Energy Measurements (under sponsorship by the Department of Energy and Chevron) monitored the reestablishment of E. hooveri following two disturbances that occurred on NPR-1 in 1990. At both study sites, E. hooveri occupied all disturbed plots after one growing season and the plants increased in density from the first to second growing season (Holmstead and Anderson 1998). Holmstead and Anderson also noted that E. hooveri populations were observed in fire breaks on NPR-1 that had been tilled the previous year. Further, a study on the effects of simulated oilfield disturbance and top soil salvage showed that, although surface disturbance negatively affected E. hooveri density for at least two years, E. hooveri recolonized disturbed plots within two growing seasons from seed naturally dispersed from adjacent habitat (Hinshaw et al. 1998).

Agricultural and urban development was also cited as a threat at the time of listing. Much of the San Joaquin Valley floor has been agriculturally developed, virtually to its fullest extent. Future agricultural development is uncertain and would require encroachment into hilly and agriculturally less desirable geographic areas. Limited water availability for additional agricultural and urban development is a severely limiting factor in the southern San Joaquin Valley. Although sites that occur within the San Joaquin Valley are experiencing threats from development, particularly urban or industrial development along the Interstate 5 corridor (R. Lewis, pers. comm. March 7, 1995), the majority of the plants are found along the hilly margins of the San Joaquin Valley, usually between 90 and 910 m (300 to 3,000 ft) in elevation (BLM 1994).

One of the largest populations of Eriastrum hooveri occurs along the western edge of the Interstate 5 corridor near Kettleman City. This population is within the ACEC managed by BLM, where urban or industrial development is unlikely to occur (BLM 1996a; R. Lewis, pers. comm. 2003). In addition, conservation efforts for other listed species found along the Interstate 5 corridor are likely to provide continued collateral benefits for E. hooveri.

Other potential threats identified for Eriastrum hooveri at the time it was listed as a threatened species were impacts from groundwater recharge basins, a proposed reservoir (the Arroyo Pasajero Project), and disposal of nutrient-laden agricultural effluent (55 FR 29361). The only groundwater recharge basin developed in the range of E. hooveri is the Kern Water Bank, which helps to conserve E. hooveri through HCP measures that protect habitat in perpetuity. We are not aware of impacts to E. hooveri from disposal of nutrient-laden agricultural effluent. Land application of manure or dairy waste seepage is typically not conducted on natural habitat and is not likely to impact E. hooveri (Gary Burton, Service, pers. comm. 2002). The Arroyo Pasajero Project remains a potential location for water storage for the environmental water account. However, it is anticipated that the Arroyo Pasajero Project, if it goes forward, will have an insignificant effect on E . hooveri.

Off-highway vehicles were identified as a threat for Eriastrum hooveri at the time it was listed. In 1994 the Eriastrum hooveri Field Inventory Report (BLM 1994) considered 15 percent of sites evaluated to have potential threats from off-highway vehicles. However, observations of the plants subsequent to listing suggest that the species appears to persist in the absence of renewed disturbance. The low number of documented impacts and the recolonizing ability of E. hooveri indicate that off-highway vehicles are no longer considered a threat to the long-term survival of the species (BLM 1994).

Off-highway vehicle impacts are rare occurrences and typically consist of tire tracks across occupied habitat, in many cases as a one-time occurrence by a single vehicle. On some roads located in the Caliente Mountains and Cuyama Valley, the species was found growing in tire tracks. The species has been found growing on several inactive motorcycle paths located in the Kettleman Hills, some of which were approximately 46 cm (18 in) deep. Plants also grow on the margins of dirt roads and in the strip of vegetation between tire tracks on unimproved roads in the Lokern, Elk Hills, and Lost Hills areas (E. Cypher, in litt. 2001).

The majority of the six Eriastrum hooveri populations in Los Padres National Forest are located on lightly used or abandoned roads that receive an estimated one to ten vehicle passes per year. This light road use appears to help maintain the presence of the species, although the plants do not grow in the actual tire tracks. The populations do not extend into areas, which apparently have suitable habitat, that surround the roads (Mike Foster, Forest Service, pers. comm. 1998).

Habitat disturbance will still occur in areas of potential Eriastrum hooveri habitat, and may occasionally occur on occupied habitat. However, the Service has determined that the level of disturbance will be such that pressures from present or threatened destruction, modification, or curtailment of E. hooveri habitat or range, even when taken collectively with other residual threats, are sufficiently reduced and contained that the species is no longer threatened or endangered. The Service will monitor, as part of the required post-delisting monitoring, the management commitments by BLM to limit habitat disturbance.

Overutilization is not a factor known to affect Eriastrum hooveri .

Eriastrum hooveri tends to occupy soil surface that does not support a large amount of vegetation. Grazing by wild herbivores is not known to occur. Although cattle may trail through areas occupied by E. hooveri en route to areas of desirable forage, they do not appear to be grazing within the sparsely vegetated E. hooveri occupied habitat (BLM 1994). Furthermore, observations subsequent to the listing have shown that the wiry and low-growing E. hooveri plants are not desirable forage for livestock, and that monitored areas in both grazed and ungrazed areas showed no significant differences in survival, size, or reproduction (BLM 1994). Survival was higher in grazed areas possibly due to the reduced vegetation cover, and E. hooveri plants were taller in ungrazed areas. Therefore, predation through grazing, including trespass grazing, is no longer considered a serious threat to E. hooveri (with regards to management of grazing refer to Factor E “Other natural or manmade factors affecting its continued existence”).

No known diseases affect Eriastrum hooveri.

Eriastrum hooveri will continue to benefit from the many recovery and conservation activities that are being undertaken for the 33 other species in the Recovery Plan (collateral species benefits). Nine of the core areas identified for recovery of these collateral species support E. hooveri populations, and portions of these core areas are already protected ( E. Cypher, in litt. 2001). Efforts to maintain linkages around the San Joaquin Valley edge (from the Ciervo/Panoche area in Fresno County, south to Maricopa in Kern County) focus on protection of both valley floor and hilly topography areas for San Joaquin kit fox, an endangered species present in E. hooveri areas, and include grassland and chenopod scrub habitat types (USFWS 1998). Protection is also afforded through habitat conservation plans for the collateral, federally listed species, including the wide-ranging San Joaquin kit fox, blunt-nosed leopard lizard, the California jewelflower, and kern mallow. All these species are protected under the Act and share the same habitat types and climatic requirements with E. hooveri (Taylor and Davilla 1986).

The principal mechanism that will continue to afford Eriastrum hooveri protection will be designation by BLM of E. hooveri as a sensitive species after the species is delisted (E. Hastey, BLM, in litt. 1995, T. Burke, BLM, in litt. 2002). BLM policy will minimize impacts to the species at all known sites that are under their jurisdiction. Coordination and annual reviews by the Service will ensure that appropriate minimization actions will occur. To aid in this review, E. hooveri population locations have been, and will continue to be, placed onto BLM's geographic information system (GIS) to help in the management of future activities that may arise within the range of the species (S. Carter, pers. comm. 2002). Part of BLM's commitment to the delisting of E. hooveri will be the establishment of key monitoring locations on public land in the four metapopulations (see “Background” under SUPPLEMENTARY INFORMATION ). Additionally, BLM will evaluate the effects of any proposed management changes on E. hooveri and will periodically evaluate whether the objective of maintaining sufficient numbers and distribution to preclude listing is being met. Management strategies will be adapted to meet this objective if necessary (Tim Burke, Acting BLM State Director, in litt. 2002).

Eriastrum hooveri is not a State-listed species under the California Endangered Species Act.

Although Eriastrum hooveri is not a desirable forage plant for livestock, damage can occur by trampling as animals travel across the plants getting to areas they desire. Only five percent of the sites recorded by Lewis on BLM lands were affected by cattle and sheep grazing activities (BLM 1994). Occasionally sheep trespass in E. hooveri habitat, but sheep usually remain in one area for only a few days. Livestock trampling does not appear to constitute a serious threat to E. hooveri .

At the time of listing, competition with nonnative grasses was cited as a threat. Recent research and surveys have shown that Eriastrum hooveri prefers low densities of competing plants, whether nonnative or native. Although E. hooveri may initially colonize areas having low plant cover because of disturbance, it subsequently may be out-competed by nonnative plants in areas with sufficient moisture ( E. Cypher, pers. comm. 1995). Taking into consideration the discovery of the wide distribution of this species and the abundance and extent of preferred (sparse) habitat areas, competition with nonnative grasses is no longer considered a threat to the long-term survival of E. hooveri .

The Service has determined that grazing and competition from nonnative plants is currently not a threat to the species at a level for which protection of the Act is necessary, but acknowledges that the potential for poorly managed grazing and the pervasive problem of nonnative invasive plants remains to some degree. We believe, however, that management commitments by BLM will protect Eriastrum hooveri from these situations far into the future. These residual threats, even when taken collectively with other residual threats, are sufficiently reduced and contained so that the species is no longer threatened or endangered. Because this delisting is based partly on commitments by BLM for best management practices to be utilized by all grazing lessees and other such practices that will limit encroachment by nonnative plants, the Service will monitor, as part of the required post-delisting monitoring, the commitments by BLM.

In summary, Eriastrum hooveri is more widespread and abundant than was documented at the time of listing and is more resilient and less vulnerable to certain activities, particularly impacts from grazing and oil and gas development, than previously thought. Consequently, E. hooveri is no longer likely to become in danger of extinction within the foreseeable future throughout all or a significant portion of its range. This action removes E. hooveri from the Federal List of Endangered and Threatened Species.

In accordance with 5 U.S.C. 553(d), we have determined that this rule relieves an existing restriction and good cause exists to make the effective date of this rule immediate. Delay in implementation of this delisting would cost government agencies staff time and monies conducting formal section 7 consultation on actions that may affect species no longer in need of the protections under the Act. Relieving the existing restrictions associated with this listed species will enable Federal agencies to focus their attention on other species in need of protection.

This action removes Eriastrum hooveri from the List of Endangered and Threatened Plants and removes the protections afforded E. hooveri under the Act. However, protection provided to E. hooveri through incidental take permits for co-occurring listed animal species associated with HCPs issued under section 10(a)(1)(B) of the Act will continue by virtue of E. hooveri remaining as a covered species in HCPs developed for multiple species that remain listed under the Act. Currently, E. hooveri is a covered species in at least six HCPs in the San Joaquin Valley for which incidental take permits have been issued for various listed animal species. After delisting, E. hooveri will no longer be a covered listed species under these existing multi-species HCPs; instead E. hooveri becomes a covered non-listed species under the same HCP as of the effective date of this final rule. In order to receive No Surprises assurances, the permit holder must continue to abide by the original conditions of the permit (50 CFR 17.22(b)(5) and 17.32(b)(95)). If the permittee's actions violate the terms of the permit, then the permittee is outside the safety net of No Surprises should the species be relisted under the Act in the future.

After the effective date of this rule, Federal agencies will no longer be required to consult with us under section 7 of the Act to ensure that any action they authorize, fund, or carry out is not likely to jeopardize the continued existence of Eriastrum hooveri. However, BLM intends to designate E. hooveri as a sensitive species and will continue to minimize impacts to the species at all known sites that are under its jurisdiction. The use of E. hooveri must comply with State regulations. There is no designated critical habitat for this species. There are no specific preservation or management programs for the species that are terminated.

Section 4(g)(1) of the Act requires that the Secretary of the Interior, through the Service, implement a monitoring program for not less than five years for all species that have been recovered and delisted. Post-delisting monitoring (PDM) refers to activities undertaken to verify that a species delisted due to recovery remains secure from risk of extinction after it has been removed from the protections of the Act. The primary goal of PDM is to confirm that the species does not require relisting as threatened or endangered during the period following removal of the Act's protection. Therefore, we anticipate that data collection for PDM will be but a subset of that which was collected in support of the delisting rule. In general, PDM plans will monitor demographic data over a set period of time, and may monitor residual threats (see “Definitions”) or the effect on the species of the removal of the protections afforded by the Act, or be designed to detect new threats. If at any time during the PDM data indicate that protective status under the Act should be reinstated, we can initiate listing procedures, including, if appropriate, emergency listing. A PDM plan is being drafted in a cooperative effort between the Service and BLM to guide the collection and evaluation of pertinent information over the monitoring period.

The management practices of, and commitments by, the BLM, on whose land a substantial number of the new populations have been found, will afford adequate protection to the species upon delisting, when Eriastrum hooveri will be designated by BLM as a sensitive species pursuant to BLM Manual 6840 and California State Manual Supplement H-6840.06. The post-delisting monitoring, required under section 4 of the Act, will be facilitated by BLM's implementation of their Caliente Resource Management Plan (RMP) (BLM 1996). Under the RMP and separate agreements, BLM will conduct species-specific monitoring as well as monitoring of residual threats at representative sites within the 4 metapopulations. Threats considered “residual” for E. hooveri are habitat disturbance, removal of protections afforded by the Act, and poorly managed grazing and encroachment by nonnative plants.

The Service will monitor the implementation of these commitments for the first 5 years following delisting. During this time the RMP and other BLM commitments will be reviewed annually by the Service. The Service will monitor BLM's commitment to declare Eriastrum hooveri a sensitive species, and BLM's implementation of the RMP with regard to residual threats. The Service will monitor the management commitments by BLM to limit habitat disturbance; the collective commitments by BLM, particularly the sensitive species designation, which provide protections similar to those afforded by the Act; and the use of best management practices by all grazing lessees and BLM's implementation of other such practices to limit encroachment by nonnative plants. Additionally, we will review the data on residual threats and E. hooveri collected by BLM under their monitoring plan. At the close of 5 years we will evaluate whether BLM's RMP affords the conditions necessary to maintain the species in sufficient numbers and distribution such that the status of E. hooveri is secure.

The BLM monitoring plan is being designed to detect changes in the status of Eriastrum hooveri primarily by monitoring residual threats and habitat conditions. The BLM will monitor residual threats coupled with species-specific monitoring, in a representative fashion within all four metapopulations, including the San Joaquin Valley floor metapopulation. The BLM's monitoring plan will be agreed upon by the Service.

Thresholds that would trigger an extension of monitoring or a status review will be presented in the Service's draft post-delisting monitoring plan. At the end of the 5-year period, we may end post-delisting monitoring if information indicates that the overall status of Eriastrum hooveri is secure ( i.e. , BLM's RMP affords the conditions necessary to maintain the species in sufficient numbers and distribution such that the status of E. hooveri is secure).

Office of Management and Budget (OMB) regulations at 5 CFR 1320, which implement provisions of the Paperwork Reduction Act, require that Federal agencies obtain approval from OMB before collecting information from the public. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Implementation of this rule does not include any collections of information that require approval by OMB under the Paperwork Reduction Act.

We have determined that we do not need to prepare an Environmental Assessment, as defined under the authority of the National Environmental Policy Act of 1969, in connection with regulations adopted pursuant to section 4(a) of the Act. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244).

A complete list of all references cited herein is available upon request from the Sacramento Fish and Wildlife Office, U.S. Fish and Wildlife Service ( see ADDRESSES section).

The primary author of this final rule is Graciela Hinshaw, Sacramento Fish and Wildlife Office, U.S. Fish and Wildlife Service (see ADDRESSES section).

NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for the Groundfish Fishery of the Bering Sea and Aleutian Islands Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2003 TAC of Atka mackerel in the Western Aleutian District of the BSAI was established by the final 2003 harvest specifications for groundfish in the BSAI (68 FR 9907, March 3, 2003) as 18,491 metric tons (mt). Regulations that are the basis for specifying this TAC are found at § 679.20(c)(3)(iii) and (c)(6).