This rule is issued under Marketing Agreement No. 84 and Marketing Order No. 905, both as amended (7 CFR part 905), regulating the handling of oranges, grapefruit, tangerines, and tangelos grown in Florida, 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.

There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of import regulations issued under section 8e of the Act.

This rule continues in effect the removal of regulations for seeded grapefruit under the order for Florida citrus. Thus, handlers of seeded grapefruit are no longer subject to minimum grade, size, assessment, and reporting requirements under the order. Production has declined to the point that removing seeded grapefruit from order requirements will have no significant impact on the grapefruit market. This rule also continues in effect a relaxation in the minimum grade requirements for domestic shipments of fresh Valencia and other late type oranges the last few weeks of the season. For the purposes of this final rule, the term “domestic shipments” includes shipments between the production area and any point outside thereof in the 48 contiguous States and the District of Columbia of the United States. The volume of fruit remaining at the end of the season is small and has difficultly meeting grade requirements. This rule will help the industry maximize fresh shipments and returns for Valencia and other late type oranges. These actions were unanimously recommended by the committee at its meeting on July 1, 2003.

Sections 905.51 and 905.52 of the order authorize the committee to recommend minimum grade and size regulation to USDA. The grade and size requirements are designed to provide fresh markets with citrus fruit of acceptable quality and size. This helps create buyer confidence and contributes to stable marketing conditions. This is in the interest of growers, handlers, and consumers, and is designed to increase returns to Florida citrus growers.

Section 905.306 of the order's rules and regulations specifies the minimum grade and size requirements for different varieties of fresh Florida citrus. Such requirements for domestic shipments are specified in § 905.306 in Table I of paragraph (a), and for export shipments in Table II of paragraph (b). Prior to the issuance of the interim final rule, the minimum grade for domestic seeded grapefruit was a U.S. No. 1 as specified in the U.S. Standard for Grades of Florida Grapefruit (7 CFR 51.750 through 51.784), with a minimum size of 3 12/16 inches in diameter for domestic shipments, and 3 9/16 inches for export shipments. The minimum grade for domestic Valencia and other late type oranges was a U.S. No. 1 for the season as specified in the U.S. Standard for Grades of Florida Oranges and Tangelos (7 CFR 51.1140 through 51.1179), with a minimum size of 2 8/16 inches in diameter for both domestic and export shipments.

Under §§ 905.51 and 905.52 of the order, the committee has authority to recommend to USDA the varieties of citrus to be regulated. This rule continues to modify § 905.306 by removing seeded grapefruit from the list of entries in Table I of paragraph (a), and in Table II of paragraph (b). The removal of seeded grapefruit from these tables has the effect of removing the grade and size requirements for seeded grapefruit under the order. Also, assessment and reporting requirements no longer apply to seeded grapefruit. In addition, this rule continues to amend Table I of § 905.306 by reducing the minimum grade requirements for domestic shipments of fresh Valencia and other late type oranges from U.S. No. 1 to U.S. No. 2 external grade from June 15 to July 31, each season.

In making its recommendation, the committee recognized that seeded grapefruit is no longer significant in terms of shipments and market share. During the 2002-03 season, only 150 cartons of seeded grapefruit were shipped to the fresh market. This is down from 4,705 cartons shipped in the 1998-99 season. Currently, shipments of seeded grapefruit represent less than .0005 percent of fresh shipments of Florida grapefruit. Seeded grapefruit production has declined as new seedless varieties have been developed and planted. Consequently, the committee determined that removing seeded grapefruit varieties from the order regulations will not have a negative impact on the grapefruit market.

In addition, this rule also continues to relax the minimum grade requirements for domestic shipments of fresh Valencia and other late oranges. The committee recommended reducing the minimum grade requirements for Valencia and other late type oranges from a U.S. No. 1 to a U.S. No. 2 external grade with a U.S. No. 1 internal grade from June 15, 2004, to July 31, 2004, and during the same period of each season thereafter. Valencia and late type oranges have difficulty meeting grade requirements late in the season. This is usually due to regreening, which is considered a defect under the U.S. Standard for Grades of Oranges.

At the end of the season growers still have a limited volume of unharvested Valencia and late type oranges. The volume of fruit remaining after June 15 is small, averaging less than 5 percent of the crop over the last 5 years. The committee believes that permitting the shipment of a U.S. No. 2 external grade during the specified time will help the industry maximize fresh shipments and returns for Valencia and other late type oranges. Consequently, the committee recommended that during the period June 15 to July 31 that the grade standard be lowered to U.S. No. 2 external grade with U.S. No. 1 internal grade for Valencia and other late type oranges shipped to domestic markets.

Section 8e of the Act provides that when certain domestically produced commodities, including grapefruit, are regulated under a Federal marketing order, imports of that commodity must meet the same or comparable grade, size, quality, and maturity requirements. Since this rule removes the minimum size and grade requirements for seeded grapefruit under the domestic handling regulations, a corresponding change to the import regulations is necessary.

Minimum grade and size requirements for grapefruit imported into the United States are currently in effect under § 944.106 (7 CFR 944.106). The minimum grade and size requirements are specified in a table in paragraph (a) of § 944.106. This rule removes the minimum grade and size requirements for imported seeded grapefruit to reflect the change made under the order for seeded grapefruit grown in Florida.

Section 8e import requirements for oranges are based on the marketing order for South Texas oranges and as such will not be impacted by this relaxation.

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

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

There are approximately 75 grapefruit and Valencia and other late type orange handlers subject to regulation under the order, approximately 11,000 producers of Florida citrus in the regulated area, and approximately 10 grapefruit importers. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000.

Based on industry and Committee data, the average annual f.o.b. price for fresh Florida grapefruit during the 2002-03 season was approximately $7.24 per 4/5 -bushel carton, and total fresh shipments for the 2002-03 season are estimated at 28.3 million cartons of grapefruit. The average annual f.o.b. price for fresh Florida Valencia and other late type oranges during the 2002-03 season was approximately $6.99 per carton, and total fresh shipments are estimated at 3,669,000 cartons. Approximately 25 percent of all handlers handled 75 percent of Florida's grapefruit and Valencia and other late type orange shipments. Using the average f.o.b. prices, at least 75 percent of the grapefruit and Valencia and other late type orange handlers could be considered small businesses under SBA's definition. Therefore, the majority of Florida grapefruit and Valencia and other late type orange handlers may be classified as small entities. In addition, based on information from the Foreign Agricultural Service, USDA, the dollar value of imported grapefruit ranged from $902,000 in 1998 to $2,018,000 during the 2002 season. Using these numbers, all grapefruit importers may be classified as small entities. The majority of Florida grapefruit and Valencia and other late type orange producers may also be classified as small entities.

This rule continues in effect the removal of seeded grapefruit from regulation under the order. Handlers of seeded grapefruit are no longer required to meet the minimum grade and size requirements and are not subject to assessments and reporting requirements. Removing these varieties from the minimum grade and size requirements will have no significant impact on the grapefruit market. This rule also continues in effect a reduction in the minimum grade requirements for domestic shipments of fresh Valencia and other late type oranges from U.S. No. 1 to U.S. No. 2 external grade from June 15 to July 31 each season. This rule will help maximize shipments and returns for fresh Valencia and other late type oranges.

Sections 905.51 and 905.52 of the order authorize the committee to recommend minimum grade and size regulation to USDA. Section 905.306 of the order's rules and regulations specifies the regulation period and the minimum grade and size requirements for different varieties of fresh Florida citrus. The committee unanimously recommended this action at a meeting on July 1, 2003.

During the 2002-2003 season, only 150 cartons of seeded grapefruit were shipped out of a total of 28.3 million 4/5-bushel cartons of seedless grapefruit. Production of seeded varieties has declined as newer seedless varieties have been developed and planted. Current market share and shipment levels justify removal of the order requirements for seeded grapefruit.

Valencia and late type oranges have difficulty meeting grade requirements late in the season. At the end of the season, growers still have a limited volume of unharvested Valencia and late type oranges. The volume of fruit remaining after June 15 is small, averaging less than 5 percent of the crop over the last 5 years. The committee believes permitting the shipment of a U.S. No. 2 external grade with a minimum U.S. No. 1 internal grade from June 15 to July 31 for domestic shipments will help the industry maximize fresh shipments and returns for Valencia and other late type oranges.

This rule is expected to continue to have a positive impact on affected entities as it relaxes handling requirements. With this rule removing seeded grapefruit from the varieties regulated, handlers are able to market these varieties free from order requirements. In addition, the relaxation in grade requirements from June 15 to July 31 each season for Valencia and other late type oranges allows handlers to make additional supplies available for the fresh domestic market, and may increase returns. No additional costs are imposed on growers, handlers, and importers with this rule. The benefits derived from this change are expected to benefit both large and small entities equally.

During the period January 1 through December 31, 2002, imports of grapefruit totaled 23,246 metric tons (approximately 1,100,000 cartons). The Bahamas were the principal source, accounting for nearly 99 percent of the total. Remaining imports were supplied by Israel. Most imported grapefruit enters the United States from October through May.

Section 8e of the Act provides that when certain domestically produced commodities, including grapefruit, are regulated under a Federal marketing order, imports of that commodity must meet the same or comparable grade, size, quality and maturity requirements. Because this rule changes the requirements for domestic seeded grapefruit shipments, this change must also be applicable to imported grapefruit. This rule removes the import requirements for seeded grapefruit. This regulation will benefit importers to the same extent that it benefits Florida grapefruit producers and handlers.

One alternative to this action was to make no changes to the order's handling regulations. However, the committee believes that seeded grapefruit varieties have no significant impact on the grapefruit market and that action should be taken to remove them from the handling regulations. In addition, the committee believes that making additional supplies of oranges available late in the season may increase returns. Therefore, the alternative of making no changes was rejected.

This rule will not impose any additional reporting or recordkeeping requirements on either small or large citrus handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. In addition, as noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

Further, the committee's meeting was widely publicized throughout the citrus industry and all interested persons were invited to attend the meeting and participate in committee deliberations. Like all committee meetings, the July 1, 2003, meeting was a public meeting and all entities, both large and small, were able to express their views on this issue. Finally, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses.

An interim final rule concerning this action was published in the Federal Register on September 9, 2003. A correction to this docket was published in the Federal Register on October 15, 2003. Copies were mailed by the committee's staff to all committee members and citrus handlers. In addition, the rule and correction were made available through the Internet by the Office of the Federal Register and USDA. The rule provided for a 60-day comment period, which ended November 10, 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 committee's recommendation, and other information, it is found that finalizing the interim final rule, without change as published in the Federal Register (68 FR 53021, September 9, 2003) and as corrected in the Federal Register (68 FR 59446, October 15, 2003) will tend to effectuate the declared policy of the Act.

The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the approval design and, thus, delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA, therefore, finds that good cause exists for making these special conditions effective upon issuance.

Interested persons are invited to submit such written data, views, or arguments, as they may desire. Communications should identify the regulatory docket or notice number and be submitted in duplicate to the address specified above. All communications received on or before the closing date for comments will be considered by the Administrator. The special conditions may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must include a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. CE202.” The postcard will be date stamped and returned to the commenter.

HIRF protection is recognized as a Certification Review Item (CRI) under the Bilateral Aviation Agreement in place between the FAA and the Polish Certification Authority, or CAO. As part of the FAA validation process for issuance of a Type Certificate in the United States for foreign applicants, the FAA is issuing these special conditions to address special certification review items for novel and unusual features of the PZL-Mielec M28 05 Skytruck. The proposed type design incorporates novel or unusual design features such as an EFIS and AHRS that are vulnerable to HIRF external to the airplane.

Under the provisions of 14 CFR part 21, § 21.17 for TC, PZL-Mielec, must show that the M28 05 Skytruck aircraft meets the following provisions, or the applicable regulations in effect on the date of application for the M28 05 Skytruck: 14 CFR part 23, dated February 1, 1965, as amended through Amendment 23-42, effective February 4, 1991; 14 CFR part 34, dated September 10, 1990, as amended through Amendment 34-1, effective July 31, 1995; and 14 CFR part 36, dated December 1, 1969, as amended through amendment in effect on the date of issuance of the U.S. type certificate (currently Amendment 36-21, effective December 28, 1995); exemptions, if any; and the special conditions adopted by this rulemaking action.

If the Administrator finds that the applicable airworthiness standards do not contain adequate or appropriate safety standards because of novel or unusual design features of an airplane, special conditions are prescribed under the provisions of § 21.16.

Special conditions, as appropriate, as defined in § 11.19, are issued in accordance with § 11.38 after public notice and become part of the type certification basis in accordance with § 21.17(a)(2).

Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model already included on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of § 21.101.

PZL-Mielec plans to incorporate certain novel and unusual design features into an airplane for which the airworthiness standards do not contain adequate or appropriate safety standards for protection from the effects of HIRF. These features include EFIS, which are susceptible to the HIRF environment, that were not envisaged by the existing regulations for this type of airplane.

Protection of Systems from High Intensity Radiated Fields (HIRF): Recent advances in technology have given rise to the application in aircraft designs of advanced electrical and electronic systems that perform functions required for continued safe flight and landing. Due to the use of sensitive solid state advanced components in analog and digital electronics circuits, these advanced systems are readily responsive to the transient effects of induced electrical current and voltage caused by the HIRF. The HIRF can degrade electronic systems performance by damaging components or upsetting system functions.

Furthermore, the HIRF environment has undergone a transformation that was not foreseen when the current requirements were developed. Higher energy levels are radiated from transmitters that are used for radar, radio, and television. Also, the number of transmitters has increased significantly. There is also uncertainty concerning the effectiveness of airframe shielding for HIRF. Furthermore, coupling to cockpit-installed equipment through the cockpit window apertures is undefined.

The combined effect of the technological advances in airplane design and the changing environment has resulted in an increased level of vulnerability of electrical and electronic systems required for the continued safe flight and landing of the airplane. Effective measures against the effects of exposure to HIRF must be provided by the design and installation of these systems. The accepted maximum energy levels in which civilian airplane system installations must be capable of operating safely are based on surveys and analysis of existing radio frequency emitters. These special conditions require that the airplane be evaluated under these energy levels for the protection of the electronic system and its associated wiring harness. These external threat levels, which are lower than previous required values, are believed to represent the worst case to which an airplane would be exposed in the operating environment.

These special conditions require qualification of systems that perform critical functions, as installed in aircraft, to the defined HIRF environment in paragraph 1 or, as an option to a fixed value using laboratory tests, in paragraph 2, as follows:

(1) The applicant may demonstrate that the operation and operational capability of the installed electrical and electronic systems that perform critical functions are not adversely affected when the aircraft is exposed to the HIRF environment defined below:

(2) The applicant may demonstrate by a system test and analysis that the electrical and electronic systems that perform critical functions can withstand a minimum threat of 100 volts per meter, electrical field strength, from 10 kHz to 18 GHz. When using this test to show compliance with the HIRF requirements, no credit is given for signal attenuation due to installation.

A preliminary hazard analysis must be performed by the applicant, for approval by the FAA, to identify either electrical or electronic systems that perform critical functions. The term “critical” means those functions whose failure would contribute to, or cause, a failure condition that would prevent the continued safe flight and landing of the airplane. The systems identified by the hazard analysis that perform critical functions are candidates for the application of HIRF requirements. A system may perform both critical and non-critical functions. Primary electronic flight display systems, and their associated components, perform critical functions such as attitude, altitude, and airspeed indication. The HIRF requirements apply only to critical functions.

Compliance with HIRF requirements may be demonstrated by tests, analysis, models, similarity with existing systems, or any combination of these. Service experience alone is not acceptable since normal flight operations may not include an exposure to the HIRF environment. Reliance on a system with similar design features for redundancy as a means of protection against the effects of external HIRF is generally insufficient since all elements of a redundant system are likely to be exposed to the fields concurrently.

As discussed above, these special conditions are applicable to PZL-Mielec in Poland. Should PZL-Mielec apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101.

This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.

The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. For this reason, and because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

1. Protection of Electrical and Electronic Systems from High Intensity Radiated Fields (HIRF). Each system that performs critical functions must be designed and installed to ensure that the operations, and operational capabilities of these systems to perform critical functions, are not adversely affected when the airplane is exposed to high intensity radiated electromagnetic fields external to the airplane.

2. For the purpose of these special conditions, the following definition applies: Critical Functions: Functions whose failure would contribute to, or cause, a failure condition that would prevent the continued safe flight and landing of the airplane.

The FAA has determined that notice and opportunity for prior public comment is impracticable because these procedures would significantly delay certification of the airplane and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon issuance; however, the FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning these special conditions. The docket is available for public inspection before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays.

We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

If you want the FAA to acknowledge receipt of your comments on these special conditions, include with your comments a pre-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you.

On November 14, 2003, Canard Aerospace Corporation, 13050 Pioneer Trail, Eden Prairie, Minnesota 55347, applied for a Supplemental Type Certificate (STC) to modify Airbus model A300-600 series; and A310-200, -300 series airplanes approved under Type Certificate No. A35EU. The Airbus A300 and A310 series airplanes are a large transport category airplane. The wide body twin-engine, twin-aisle aircraft family offers configurations for 220 to 360 seats or freighter versions. These airplanes have maximum take-off weights of up to 378,530 pounds and are powered by either General Electric CF6-80C2 or Pratt & Whitney JT9D/PW4000 turbofan engines. The modification incorporates the installation of the Honeywell Air Data Inertial Reference Units (ADIRU) to replace aging Inertial Reference Units (IRU). The ADIRU provide flight critical functions by determining the airplane's attitude, heading, and position. The avionics/electronics and electrical systems installed in this airplane have the potential to be vulnerable to high-intensity radiated fields (HIRF) external to the airplane.

Under the provisions of 14 CFR 21.101, Canard Aerospace must show the Airbus A300 and A310 series airplanes, as changed, continue to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. A35EU, or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The certification basis for the Airbus A300-600 series airplanes includes 14 CFR part 25, dated February 1, 1965, as amended by Amendments 25-1 through 25-74; 14 CFR part 36 effective December 1, 1969, including Amendments 36-1 through 36-22. The certification basis for the modified Airbus A310-200 and -300 series airplanes includes 14 CFR part 25, dated February 1, 1965, as amended by Amendments 25-1 through 25-54; 14 CFR part 36 effective December 1, 1969, including Amendments 36-1 through 36-12. In addition to the basis cited for all of the above models, the certification basis includes special conditions, exceptions, and variations noted in Type Certificate Data Sheet (TCDS) A35EU.

If the Administrator finds that the applicable airworthiness regulations ( i.e. , part 25, as amended) do not contain adequate or appropriate safety standards for the Airbus model A300-600 series, and A310-200 and -300 series airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the Airbus model A300-600 series, and A310-200 and -300 series airplanes must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

Special conditions, as defined in 14 CFR 11.19, are issued in accordance with § 11.38 and become part of the type certification basis in accordance with § 21.101.

Special conditions are initially applicable to the model for which they are issued. Should Canard Aerospace apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. A35EU to incorporate the same or similar novel or unusual design feature, these special conditions would also apply to the other model under the provisions of § 21.101.

As noted earlier, the Airbus model A300-600 series, and A310-200 and -300 series airplanes modified by Canard Aerospace will incorporate new Honeywell Air Data Inertial Reference Units (ADIRU) that will perform critical functions. This system may be vulnerable to high-intensity radiated fields external to the airplane. The current airworthiness standards of part 25 do not contain adequate or appropriate safety standards for the protection of this equipment from the adverse effects of HIRF. Accordingly, this system is considered to be a novel or unusual design feature.

There is no specific regulation that addresses protection requirements for electrical and electronic systems from HIRF. Increased power levels from ground-based radio transmitters and the growing use of sensitive avionics/electronics and electrical systems to command and control airplanes have made it necessary to provide adequate protection.

To ensure that a level of safety is achieved equivalent to that intended by the regulations incorporated by reference, special conditions are needed for the Airbus model A300 and A310 series airplanes modified by Canard Aerospace. These special conditions require that new avionics/electronics and electrical systems that perform critical functions be designed and installed to preclude component damage and interruption of function due to both the direct and indirect effects of HIRF.

With the trend toward increased power levels from ground-based transmitters, and the advent of space and satellite communications coupled with electronic command and control of the airplane, the immunity of critical avionics/electronics and electrical systems to HIRF must be established.

It is not possible to precisely define the HIRF to which the airplane will be exposed in service. There is also uncertainty concerning the effectiveness of airframe shielding for HIRF. Furthermore, coupling of electromagnetic energy to cockpit-installed equipment through the cockpit window apertures is undefined. Based on surveys and analysis of existing HIRF emitters, an adequate level of protection exists when compliance with the HIRF protection special condition is shown with either paragraph 1 or 2 below:

1. A minimum threat of 100 volts rms (root-mean-square) per meter electric field strength from 10 KHz to 18 GHz.

a. The threat must be applied to the system elements and their associated wiring harnesses without the benefit of airframe shielding.

b. Demonstration of this level of protection is established through system tests and analysis.

2. A threat external to the airframe of the field strengths identified in the table below for the frequency ranges indicated. Both peak and average field strength components from the table are to be demonstrated.

The threat levels identified above are the result of an FAA review of existing studies on the subject of HIRF, in light of the ongoing work of the Electromagnetic Effects Harmonization Working Group of the Aviation Rulemaking Advisory Committee.

As discussed above, these special conditions are applicable to Airbus model A300-600 series, and A310-200 and -300 series airplanes modified by Canard Aerospace Corporation. Should Canard Aerospace apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. A35EU to incorporate the same or similar novel or unusual design feature, these special conditions would apply to that model as well under the provisions of § 21.101.

This action affects only certain novel or unusual design features on Airbus model A300-600 series, and A310-200 and -300 series airplanes modified by Canard Aerospace. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.

The substance of these special conditions has been subjected to the notice and comment procedure in several prior instances and has been derived without substantive change from those previously issued. Because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the supplemental type certification basis for the Airbus model A300-600 series, A310-200 series, and A310-300 series airplanes modified by Canard Aerospace Corporation.

1. Protection from Unwanted Effects of High-Intensity Radiated Fields (HIRF). Each electrical and electronic system that performs critical functions must be designed and installed to ensure that the operation and operational capability of these systems to perform critical functions are not adversely affected when the airplane is exposed to high-intensity radiated fields.

2. For the purpose of these special conditions, the following definition applies: Critical Functions: Functions whose failure would contribute to or cause a failure condition that would prevent the continued safe flight and landing of the airplane.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that applies to PW JT9D-7R4 series turbofan engines was published in the Federal Register on April 23, 2003 (68 FR 19962). That action proposed to require on JT9D-7R4 series turbofan engines with steel fan cases, replacement of the existing one-piece fan case shield with a thicker four-piece fan case shield and would add four fan case shield supports.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received.

Two commenters state that the material cost in the economic analysis published with the proposed AD is incorrect. They note that since the notice of proposed rulemaking (NPRM) was issued, a subsequent service bulletin (SB) revision was issued that quoted a higher price for the containment shield kit. The revised SB also included a reduction in the number of work hours to do the replacements.

The FAA agrees. We have revised the economic analysis in this AD.

One commenter, the manufacturer, recommends that the four-piece fan cases, part numbers (P/Ns) 815132 and 821545, be installed using the information found in PW SB JT9D-7R4-72-583, Revision 1, and PW SB JT9D-7R4-72-584, Revision 1, both dated September 10, 2003, instead of the original release of each SB, dated December 12, 2002. The manufacturer states that the SB revisions require changing the position of the shield attachment hardware and the assembly sequence to provide a better fit between the washer and the containment shield bolthole.

The FAA agrees that these SB revisions enhance the installation process. Removal of the old containment shield, and proper installation of the new containment shield is the purpose of this AD. Since we are referencing the SBs for additional information only and are not incorporating those documents by reference, we have removed the date from the references in paragraphs (a), (b), and (c) in the AD. Removing the dates will allow the operator to refer to the latest revisions of the SBs.

One commenter believes the intent of this AD is to incorporate the new fan case shield assembly at the next heavy maintenance, which would involve separation of the “B” flange. During a less invasive visit (repair), the containment shields are not normally accessed and would cause an incremental cost increase.

The FAA agrees. The purpose of this AD is to replace the containment shield the next time the fan case module is accessed, which would involve the separation of the “B” flange. The FAA has changed the compliance time to reference “shop visit” and added Paragraph (d) to provide a definition of “shop visit” that makes this intent clear. As a result, the remaining paragraphs are changed from (d) and (e) to (d), (e), (f), and (g).

The same commenter expresses a concern about the ambiguous definition of engine overhaul and suggests that a simplified clarification might further reduce compliance times. The commenter also requests further clarification that the intent is a shop visit for heavy maintenance or overhaul.

The FAA agrees. Since the AD intends to mandate the replacement of the containment shield during the next time the engine is serviced for an in-shop overhaul, and not during on-wing replacement, the compliance statement is revised by replacing “engine overhaul where access to the fan case aft containment area is available” with “shop visit”. The definition of shop visit is added in a new paragraph (d) of the AD. As a result, the remaining paragraphs are changed from (d) and (e) to (d), (e), (f), and (g).

The same commenter asks that the AD include a provision to allow the removal of the four-piece fan case shield for those engines on which the improved containment has already been installed. The commenter seeks this provision to use up inventoried spare parts, but acknowledges that the final compliance date of December 31, 2012 must be met.

The FAA disagrees. Compliance with this AD is required at the next shop visit, which is defined as the separation of the B-flange except to replace fan case assemblies for rub strip repairs. Compliance is required at each shop visit. The FAA has included a compliance end-date of December 31, 2012, only to ensure that those engines, if there are any, that do not see a shop visit before that date have the improved containment shields installed. This compliance program establishes an acceptable level of safety based on the FAA's review of the entire fleet's exposure to the described unsafe condition, an analysis that does not contemplate the removal of the required improvements to the containment shield once installed.

Although the FAA proposed that this AD would supersede AD 87-23-05R1, after further review and careful consideration of all the comments received, the FAA has determined to publish this AD as a new AD and leave AD 87-23-05R1 in place. Superseding AD 87-23-05R1 would have had the effect of removing the requirements for installing P/N 802096 on engines with titanium fan case assemblies and for modifying the fan case assemblies by installing ring segments, which are both critical to the safety of the containment shields. Removal of these requirements would not meet the intent of this AD.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule with the changes described previously. The FAA has determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 309 JT9D-7R4 series turbofan engines with steel fan cases, of the affected design in the worldwide fleet. The FAA estimates that 155 engines installed on PW JT9D-7R4 series turbofan engines of U.S. registry would be affected by this AD. The FAA also estimates that it would take approximately 1 work hour per engine to perform the actions, and that the average labor rate is $65 per work hour. Required parts would cost approximately $7,600 per engine. Based on these figures, the total cost of the AD to U.S. operators is estimated to be $1,188,075.

This final rule does not have federalism implications, as defined in Executive Order 13132, because it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the FAA has not consulted with state authorities prior to publication of this final rule.

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

This amendment to 14 CFR 71 modifies the Class E airspace area extending upward from 700 feet above the surface at Plattsmouth, NE. It incorporates the current airport reference point for Plattsmouth Municipal Airport and the current location of the Plattsmouth NDB. It provides appropriate controlled airspace to protect aircraft executing SIAPs to Plattsmouth Municipal Airport. It enlarges the airspace area to comply with the criteria for 700 feet Above Ground Level (AGL) airspace required for diverse departures as specified in FAA Order 7400.2E, Procedures for Handling Airspace Matters. It brings the legal description of this airspace area into compliance with FAA Order 7400.2E. The area will be depicted on appropriate aeronautical charts. Class AE airspace area extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005 of FAA Order 7400.9L, dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

The FAA anticipates that this regulation will not result in adverse or negative comment and, therefore, is issuing it as a direct final rule. Previous actions of this nature have not been controversial and have not resulted in adverse comments or objections. Unless a written adverse or negative comment, or a written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified above. After the close of the comment period, the FAA will publish a document in the Federal Register indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of intent to submit such a comment, a document withdrawing the direct final rule will be published in the Federal Register , and a notice of proposed rulemaking may be published with a new comment period.

Interested parties are invited to participate in this rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2003-16408/Airspace Docket No. 03-ACE-76.” The postcard will be date/time stamped and returned to the commenter.

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

The FAA has determined that this regulation is noncontroversial and unlikely to result in adverse or negative comments. For the reasons discussed in the preamble, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA published this direct final rule with a request for comments in the Federal Register on November 20, 2003 (68 FR 65389). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on February 19, 2004. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

An individual must file an application in order to receive benefits under title II of the Social Security Act (the Act). In part 404 of our regulations, we have established rules for filing a claim for old-age, disability, dependents', and survivors' insurance benefits, which define the criteria for determining when an application is a claim for benefits. Similarly, we include the names of places where an application may be filed, and explain what makes an application form acceptable as a claim for benefits. Our rules state that individuals must either sign the application or have someone who can act on their behalf sign for them. Except in limited situations, individuals must be alive at the time the application is filed.

In part 404, we further state that a claim filed with the Railroad Retirement Board on one of its forms for an annuity is an application for title II benefits, unless the individual states otherwise. We state that a claim filed with the Department of Veterans Affairs on one of its forms for survivors' dependency and indemnity compensation is also an application for Social Security dependents’ and survivors’ benefits (except for the lump sum death payment).

The types of applications currently prescribed by SSA are described in part 422 of our regulations. SSA's application process has evolved from its primary use of the traditional pre-printed application form for claims-taking to SSA employees who input information provided by the applicant into a computer terminal for processing. Computer printouts of the data are generated for the applicant to review the information and to sign the application.

We are committed to providing the public with the option to conduct business electronically by adding more Internet services on SSA's Web site, Social Security Online http://www.socialsecurity.gov/.

Toward this objective, we developed an Internet Retirement Insurance Benefit application for national implementation in the fall of 2000. Since then, we have expanded Internet applications to encompass spouses’ and disability insurance benefits. Statistics confirm that Internet usage has increased among older Americans, and as a result they have requested that more online services be made available to them. Internet applications for other benefits categories will be available in the future. As applications become available on our Web site, an explanation of our approved signature method for the application will be incorporated as part of the Internet application process. In the interim, individuals who use the Internet application process must physically sign the printed application and submit it to us.

The main purpose for these revisions is to inform the public of the option of filing an Internet application on our Web site for several types of Social Security benefits. These revisions include updating the list of related forms in section 422.505(b) to reflect only those forms that are currently in use in the application process. These revisions add cross-references to related sections to ensure that all necessary information for filing an application is available to the public. Finally, the revisions make the regulations more readable, thus enabling the public to better understand the contents of the sections.

The following is a summary of the revisions and our reasons for the changes.

We have changed the language in section 404.610 for clarity. We added a cross-reference in section 404.610(a) to related section 422.505(a), which explains the types of prescribed applications to be used by the public when filing for Social Security benefits. In section 404.611, we changed the heading as part of reformatting the section. In addition we added a cross-reference in section 404.611(a) to related section 422.505(a), which, as noted above, explains the types of prescribed applications. We also revised the caption in section 404.611(b) as part of the new format and revised the text to make the section clearer. Similarly, in section 404.611(c) we changed the caption and the text as part of the format change. We changed the heading in section 422.505 and the language in section 422.505(a) to make the contents of the section clearer. We also have changed section 422.505(a) to include language to state that Internet applications on SSA's Web site are prescribed applications. In section 422.505(b) we changed the list of related forms to delete the forms that are obsolete and to add forms that are currently in use. We also updated the titles of several forms.

We published a Notice of Proposed Rulemaking (NPRM) on August 17, 2001 (66 FR 43136), and provided a 60-day comment period on the NPRM. The only comment concerned the subject of electronic filing. The comment stated that “it was about time.” This comment was supportive of our proposed changes. Accordingly, we are publishing these changes as indicated in the NPRM except we:

• Clarified in § 422.505(a) that an applicant must sign a hard paper copy.

• Added SSA-783 to § 422.505(b). This form was inadvertently omitted from the NPRM.

• Deleted SSA-1323 from § 422.505(b). This form has been obsoleted.

• Made minor editorial changes.

We have consulted with the Office of Management and Budget (OMB) and determined that these final rules do not meet the criteria for a significant regulatory action under E.O. 12866, as amended by E.O. 13258. Thus, they were not subject to OMB review.

We certify that these final rules will not have a significant economic impact on a substantial number of small entities because they affect only individuals. Thus, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.

These final rules contain reporting requirements in sections 404.610, 404.611, and 422.505. The public reporting burden is accounted in the Information Collection Request for the various forms that the public uses to submit the information to us. Consequently, a 1-hour placeholder burden is being assigned to the specific reporting requirements contained in these rules. We are seeking clearance of the burdens referenced in these rules because they were not considered during publication; these burdens will not be effective until cleared by the OMB. We are soliciting comments on the burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize the burden on respondents, including the use of automated collection techniques or other forms of information technology. We will publish a notice in the Federal Register upon OMB approval of the information collection requirement(s). Comments should be submitted to the OMB desk officer for SSA within 30 days of publication of these final rules at the following address: Office of Management and Budget, Attn: Desk Officer for SSA, New Executive Office Building, Room 10235, 725 17th Street, NW., Washington, DC 20503. Fax No. (202) 395-6974.

IDEXX Pharmaceuticals, Inc., 4249-105 Piedmont Pkwy., Greensboro, NC 27410, filed NADA 141-178 for veterinary prescription use of NAVIGATOR (32 percent nitazoxanide) Antiprotozoal Oral Paste for the treatment of EPM caused by Sarcocystis neurona . The NADA is approved as of November 18, 2003, and 21 CFR part 520 is amended by adding new § 520.1498 to reflect the approval. The basis of approval is discussed in the freedom of information summary.

In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

Under section 512(c)(2)(F)(i) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 360b(c)(2)(F)(i)), this approval qualifies for 5 years of marketing exclusivity beginning November 18, 2003.

The agency has determined under 21 CFR 25.33(d)(1) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

Fort Dodge Animal Health, Division of Wyeth, 500 Fifth St. NW., Fort Dodge, IA 50501, filed ANADA 200-367 for the use of three different strength trenbolone acetate and estradiol implants in cattle. SYNOVEX T120 and SYNOVEX T80 are for use in steers fed in confinement for slaughter for increased rate of weight gain and improved feed efficiency. SYNOVEX T40 is for use in pasture cattle (slaughter, stocker, and feeder steers and heifers) for increased rate of weight gain. Fort Dodge Animal Health's SYNOVEX T120, SYNOVEX T80, and SYNOVEX T40 are approved as generic copies of Intervet, Inc.'s REVALOR-S, REVALOR-IS, and REVALOR-G, approved under NADA 140-897. The application is approved as of November 18, 2003, and the regulations are amended in 21 CFR 522.2477 to reflect the approval. The basis of approval is discussed in the freedom of information summary.

In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

The agency has determined under 21 CFR 25.33(a)(1) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

Merial Ltd., 3239 Satellite Blvd., Bldg. 500, Duluth, GA 30096-4640, filed a supplement to NADA 140-841 for IVOMEC (ivermectin) Pour-On for Cattle. The application provides for topical use of 0.5 percent ivermectin solution on cattle to control infections and prevent reinfection with Oesophagostomum radiatum and Dictyocaulus viviparus for 28 days after treatment, Cooperia punctata and Trichostrongylus axei for 21 days after treatment, C. surnabada for 14 days after treatment, and Damalinia bovis for 56 days after treatment. The NADA is approved as of November 24, 2003, and § 524.1193 is amended to reflect the approval. The basis of approval is discussed in the freedom of information summary.

In addition, the regulation is revised to remove two species of parasites, Oesophagostomum venulosum and Chorioptes bovis , which were codified in error during the original approval NADA 140-841 (55 FR 50551, December 7, 1990). Also at this time, the indication for Cooperia spp. is speciated as Cooperia oncophora , C. punctata , and C. surnabada to conform with current labeling practices. A veal calf warning statement is being added because residue depletion data for this class of cattle has not been submitted to the application.

In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

Under section 512(c)(2)(F)(iii) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360b(c)(2)(F)(iii)), this approval qualifies for 3 years of marketing exclusivity beginning November 24, 2003. Exclusivity applies only to the extension of the persistent effectiveness claims for O. radiatum from 14 days after treatment to 28 days after treatment and for C. punctata and T. axei from 14 days after treatment to 21 days after treatment, and to the new persistent effectiveness claims for D. viviparus , C. surnabada , and D. bovis for which new data were required.

The agency has carefully considered the potential environmental impact of this action and has concluded that the action will not have a significant impact on the human environment and that an environmental impact statement is not required. FDA's finding of no significant impact and the evidence supporting that finding, contained in an environmental assessment, may be seen in the Division of Dockets Management (see ADDRESSES ) between 9 a.m. and 4 p.m., Monday through Friday.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

On July 7, 2003, the IRS published a notice of proposed rulemaking in the Federal Register (68 FR 40218) proposing amendments to the Income Tax Regulations (26 CFR part 1) under section 42 of the Internal Revenue Code. These amendments provide guidance regarding changes to section 42 made by the Community Renewal Tax Relief Act of 2000 (Public Law 106-554) (2000 Act) and make certain changes to the regulations to help facilitate the electronic filing (E-filing) of income tax returns.

One commentator submitted written comments in response to the notice of proposed rulemaking. A public hearing was scheduled for September 23, 2003, pursuant to a notice of public hearing published simultaneously with the notice of proposed rulemaking. The IRS received one request to speak at the public hearing. This request was withdrawn before the hearing date. On September 15, 2003, the IRS published a notice (68 FR 53926) canceling the public hearing on the proposed regulations. After consideration of the comments received, the proposed regulations are adopted as revised by this Treasury decision. The revisions are discussed below.

Section 42 provides for a low-income housing tax credit that may be claimed as part of the general business credit under section 38. In general, the credit is allowable only if the owner of a qualified low-income building receives a housing credit allocation from a State or local housing credit agency (Agency) of the jurisdiction where the building is located.

In general, an allocation must be made not later than the close of the calendar year in which the building is placed in service. Under section 42(h)(1)(E), an allocation (carryover allocation) may be made to a “qualified building” that has not yet been placed in service, provided the building is placed in service not later than the close of the second calendar year following the calendar year of the allocation. Section 42(h)(1)(F) provides rules for multi-building projects receiving project-based carryover allocations. Following the changes made by the 2000 Act, section 42(h)(1)(E)(ii) defines a qualified building as any building that is part of a project if the taxpayer's basis in the project (as of the later of the date which is 6 months after the date that the allocation was made or the close of the calendar year in which the allocation is made) is more than 10 percent of the taxpayer's reasonably expected basis in the project (as of the close of the second calendar year following the calendar year of the allocation).

The commentator recommended revising § 1.42-6(a)(2) of the proposed regulations to clarify that each building in a multi-building project receiving a project-based carryover allocation under section 42(h)(1)(F) need not separately meet the 10 percent basis requirement. The commentator states that the proposed regulations appear to require that each building in a multi-building project that receives a project-based carryover allocation must meet the 10 percent basis requirement separately. The proposed regulations do not require that each building in a multi-building project satisfy the 10 percent basis requirement separately for project-based carryover allocations made under section 42(h)(1)(F). For allocations made under section 42(h)(1)(F), the 10 percent basis requirement is only required to be met on a project basis. The final regulations clarify this issue.

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

The principal authors of these regulations are Christopher J. Wilson and Lauren R. Taylor, Office of the Associate Chief Counsel (Passthroughs and Special Industries), IRS. However, other personnel from the IRS and Treasury Department participated in their development.

This document contains amendments to 26 CFR part 301 under section 6103(l) and (m) of the Code. On February 1, 2002, the Federal Register published a notice of proposed rulemaking (REG-120135-01) regarding the definition of agent for certain purposes (67 FR 4938). No public comments or requests for hearing were received. The Treasury decision adopts the regulations as proposed.

Generally, returns and return information are confidential under section 6103 of the Code unless a specific statutory exception applies. In cases of non-tax-related disclosures, returns and return information generally may be disclosed only to officers and employees of Federal, state, and local government agencies, and not to contractors or agents of such agencies. In certain limited circumstances, however, Congress has permitted disclosures to “agents” of these agencies. See section 6103(l)(6)(B), (l)(12), (m)(2), (m)(4), (m)(5), (m)(7).

This document contains final regulations that clarify that the term agent in section 6103(l) and (m) includes contractors. Clarification that the term agent includes contractors is necessary for the purpose of bringing certain statutory grants of disclosure authority into alignment with the reality of many agencies' operations. Agencies generally procure the services of third parties under public contracting laws, which do not necessarily incorporate common law concepts of agent . This clarification is also consistent with Congressional intent. For example, the Senate Finance Committee, in amending section 6103(m)(2), stated, “[a]gents are those who are engaged directly in performing or assisting in collection functions for the federal government, presumably, private collection agencies who have contracted with the government to collect claims * * * .” S. Rep. No. 97-378, at 15 (1982).

This clarification does not provide any new disclosure authority, nor does it authorize the disclosure of return information to contractors that Congress has not previously specifically authorized in the Code. With regard to protection of taxpayer data, agents/contractors are subject to safeguard requirements, redisclosure prohibitions, and civil and criminal penalties for unauthorized disclosures. Accordingly, the regulations do not have an impact on taxpayer privacy.

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

The principal author of these regulations is Helene R. Newsome, Office of the Associate Chief Counsel (Procedure & Administration), Disclosure & Privacy Law Division.

The proposed rule was previously published on January 11, 2002, at 67 FR 1423. No comments were received; therefore, the rule is being adopted as final.

It has been determined that Privacy Act rules for the Department of Defense are not significant rules. The rules do not (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 this Executive order.

It has been determined that Privacy Act rules for the Department of Defense do not have significant economic impact on a substantial number of small entities because they are concerned only with the administration of Privacy Act systems of records within the Department of Defense.

It has been determined that Privacy Act rules for the Department of Defense impose no information requirements beyond the Department of Defense and that the information collected within the Department of Defense is necessary and consistent with 5 U.S.C. 552a, known as the Privacy Act of 1974.

It has been determined that Privacy Act rulemaking for the Department of Defense does not involve a Federal mandate that may result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100 million or more and that such rulemaking will not significantly or uniquely affect small governments.

It has been determined that Privacy Act rules for the Department of Defense do not have federalism implications. The rules do 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.

Copies: To order copies of the Federal Register containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 512-1800 or by faxing to (202) 512-2250. The cost for each copy is $10. As an alternative, you can view and photocopy the Federal Register document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register .

This Federal Register document is also available from the Federal Register online database through GPO access, a service of the U.S. Government Printing Office. The Web site address is http://www.access.gpo.gov/nara/index.html.

In this interim final rule with comment period, we are removing the 3-year recordkeeping requirements, replacing them with 10-year recordkeeping requirements on a temporary basis, and soliciting comments on the 10-year requirements. Manufacturers must retain records beyond the 10-year period if the records are the subject of an audit or a government investigation of which the manufacturer is aware. These requirements regarding record retention will be in effect until December 31, 2004 or when we publish final recordkeeping requirements in the Federal Register , whichever occurs first.

We are also publishing this interim final rule with comment period to address some of the comments received on the final rule with comment period we published on August 29, 2003 (68 FR 51912). Specifically, we are addressing comments pertaining to the 3-year recordkeeping requirements at § 447.534(h). The 3-year recordkeeping requirement for drug manufacturers participating in the Medicaid drug rebate program has caused a significant amount of concern from commenters with regard to the rule's potential effect on the False Claims Act (FCA) and other possible fraud and abuse violations.

On August 29, 2003, we published a final rule with comment period (68 FR 51912) in the Federal Register that finalized two specific provisions: It established new recordkeeping requirements for drug manufacturers under the Medicaid drug rebate program and set a 3-year time limitation during which manufacturers must report changes to average manufacturer price and best price for purposes of reporting data to us. In addition, it announced the pressing need for codification of recordkeeping requirements. On September 26, 2003, we issued a correction notice (68 FR 51912) to delay the effective date of the August 29, 2003 rule from October 1, 2003 to January 1, 2004.

We received 12 public comments in response to the August 29, 2003 rule. We received comments from State government officials, representatives of the pharmaceutical industry including manufacturers, attorneys, consultants, provider representatives, and a non-profit organization. We received comments on a variety of topics pertaining to the final rule with comment period, as well as comments pertaining to the general Medicaid drug rebate program. For example, several commenters raised issues regarding disputes under the Medicaid drug rebate program, which were not addressed in the August 29, 2003 rule. We are not responding to comments that pertain to the 3-year time limitation for price recalculations at this time; we intend to respond to those comments in a subsequent document that we will publish in the Federal Register . In this document, we are summarizing and responding to those comments that pertain to the 3-year recordkeeping requirements at § 447.534(h). These comments and our responses are summarized below:

Comment: One commenter noted that there is significant crossover between data required under the Medicaid drug rebate program, section 340B of the Public Health Service Act, and section 603 of the Veterans Health Care Act (VHCA). The commenter indicated that this rule is inconsistent with the 5-year record retention requirement in the VHCA. The commenter also requested that we define the term, “authorized government agency,” as it appeared in section IV of the August 29, 2003 rule. As written, this term implies that if, for example, the Department of Veterans Affairs (DVA) determines that a manufacturer's underlying pricing data contain errors, then the manufacturer must retroactively revise average manufacturer price or best price.

Response: We recognize that there is some cross-over between the data required for the Medicaid drug rebate program, the 340B program, and section 603 of VHCA. However, our regulation is designed to address Medicaid drug rebate best price and average manufacturer price calculations. Due to concerns raised regarding record destruction and the fraud and abuse violations, we also acknowledge the need to increase the record retention period and have chosen a longer 10-year recordkeeping requirement. We expect this longer retention period will alleviate concerns regarding inadvertent record destruction that might impact the 340B program or section 603 of VHCA. We also note that the FCA exists outside the scope of these regulations and applies equally to all of the data provided to the Federal agencies listed and that manufacturers may keep records to support their calculations for all three programs accordingly. With regard to the term, “authorized government agency,” our intent was to include any agency with oversight authority and jurisdiction over the Medicaid drug rebate program (for example, the Office of the Inspector General or the Department of Justice).

Comment: One commenter asked for clarification regarding how a manufacturer can provide data supporting its position for periods more than 12 quarters if those data are not to be retained.

Response: In this rule, we are extending the minimum record retention requirement from 3 to 10 years. Therefore, we are requiring that a manufacturer retain data in excess of 12 quarters. Thus, a manufacturer can provide data as may be necessary to substantiate its calculations. Nevertheless, the time limitation for pricing recalculations issued in the August 29, 2003 rule will go into effect on January 1, 2004.

Comment: One commenter expressed concern for manufacturers who find the inconsistent recordkeeping requirements among the Federal drug programs to be confusing. Specifically, if manufacturers are bound by timeframes longer than 3 years, the 3-year recordkeeping requirement in the August 29, 2003 rule is moot. Since we used the 3-year recordkeeping requirement as a reason to justify the 3-year time limitation for price recalculations, we need to reconcile these differences before moving ahead with time limits for pricing changes.

Response: As noted earlier, we acknowledge that different Federal programs may have varying standards in place with regard to recordkeeping; however, we are only regulating the recordkeeping requirements for Medicaid drug rebate pricing data in this rule. We received numerous comments suggesting the 3-year recordkeeping requirements were too short, but none to convince us to expand the time limit on pricing recalculations. We believe that the concerns raised regarding the impact of the recordkeeping requirements on the FCA and State fraud and abuse provisions are compelling. Moreover, because manufacturers are in full possession of the documents that they need to make pricing recalculations, we continue to believe that 3 years is an adequate timeframe to permit manufacturers to recalculate their pricing data. Nevertheless, we want to offer interested parties an opportunity to provide comments about whether a 10-year recordkeeping requirement is the proper timeframe to address the concerns raised on this provision. For these reasons, we are establishing a temporary recordkeeping standard that is longer than the time limitation for price recalculations promulgated in the August 29, 2003 rule and soliciting public comments on the longer standard.

Comment: Two commenters urged us to address comments received on the August 29, 2003 rule and issue a final rule in the near future. One commenter asked when we will publish a final rule.

Response: We are addressing comments that pertain to the provisions in the August 29, 2003 rule in this interim final rule with comment period, which includes a sunset date provision. We anticipate that we will issue a final rule once we have addressed all the comments which we receive on this interim rule.

Comment: Several commenters noted strong opposition to the 3-year recordkeeping requirement, expressing concern with any provision that could permit the destruction of potential evidence of fraud and thereby interfere with efforts to eliminate fraud related to the Medicaid program. One commenter emphasized the importance of the FCA in allowing persons with evidence of fraud against Federal programs or contracts to bring suit on behalf of the government. Another commenter noted that requiring drug manufacturers to maintain their pricing data for only 3 years is a regrettable policy choice that will impose negative financial burdens on providers who participate in the drug pricing program under Section 340B (42 U.S.C. section 256b) of the Public Health Service Act. The commenters noted that there are dozens of pending cases and investigations involving allegations of fraudulent pricing practices by prescription drug manufacturers, many of which look back well beyond the last 3 years. In addition, commenters noted that there are ongoing confidential investigations of similar allegations of fraud that are, by necessity, conducted without notification to the manufacturers. Further, qui tam actions have been filed under seal throughout the country and the preliminary investigation of those matters typically takes place without notice to the manufacturers. The commenters noted that premature destruction of documents concerning average manufacturer prices and best prices could severely hamper these investigations.

Some commenters indicated that a record retention requirement of 6 years, with carve-outs relating to records and data concerning matters under investigation, would strike a more effective balance between efficiency and law enforcement concerns. One commenter recommended a 7-year record retention requirement. Another commenter recommended that we promulgate a recordkeeping requirement with the same substantive standard as that in the FCA: 10 years. That commenter further noted that anything less than a 10-year recordkeeping requirement will seriously undermine the FCA's ability to combat fraud against the Medicaid drug rebate program. Several commenters recommended that we simply remove the recordkeeping requirement.

Response: We concur with commenters who indicated that the 3-year recordkeeping requirement should be increased to address law enforcement concerns. After further consideration, we believe that, due to potential fraud and abuse violations and litigation, a 10-year recordkeeping requirement will be more appropriate and sufficient to ensure a Federal standard with regard to the Medicaid drug rebate program that will not hinder the activities of Federal and State law enforcement officials. Nonetheless, we are soliciting public comment on whether a 10-year recordkeeping requirement is the proper timeframe to address the concerns raised on this provision.

Comment: One commenter questioned the true benefit to manufacturers from the record retention provision in the rule if adjustments can be made to periods older than 3 years under a government investigation.

Response: We recognize the commenter's concerns and note that this provision will have no effect on a manufacturer that correctly calculates its average manufacturer price and best price. However, we held open the exception to the 3-year period to give all government agencies with oversight authority the opportunity to review manufacturer records and to prevent a manufacturer from claiming that the original 3-year recordkeeping timeframe in any way protected that manufacturer from needing to report correct data. With the new 10-year recordkeeping requirement and its consistency with the FCA, we believe we have made the relationship even clearer.

Comment: In light of ongoing government investigations, one commenter asked whether we still advise manufacturers to discard records that are older than 3 years.

Response: At no time have we advised manufacturers to discard Medicaid drug rebate records. This rule addresses the retention of manufacturer pricing records under the Medicaid drug rebate program and is not designed to provide advice regarding document destruction. We now recognize that the 3-year record retention requirement set forth in the August 29, 2003 rule should be extended in order to address concerns and potential conflicts with Federal and State law enforcement efforts.

We believe that the 10-year recordkeeping requirement is necessary in light of the unique nature of the Medicaid drug rebate program. In particular, we are concerned that because of the way the drug rebate program operates, and the complexity of drug pricing, the program is potentially more susceptible to continuing errors, fraud or abuse. For example, while other programs or activities may be subject to individual, one-time errors, fraud or abuse, the drug rebate program could be more susceptible to such activities via ongoing utilization of a practice, procedure or formula instituted in the past, that is perpetuated and remains undetected. In accordance with section 1927 of the Act and the drug rebate agreement, manufacturers that participate in the drug rebate program submit best price and average manufacturer price with respect to their drugs on a quarterly basis. Manufacturers, not the Secretary, are in possession of the documentation used to substantiate those prices. We believe that the 10-year recordkeeping requirement is necessary in order to preserve critical pricing records and that a timeframe less than 10 years could interfere with efforts to eliminate the documented fraud and abuse related to the drug rebate program.

This interim final rule with comment period removes the 3-year recordkeeping requirement issued in the August 29, 2003 rule and replaces it with a 10-year recordkeeping requirement from January 1, 2004 through December 31, 2004. This provision will be set forth in 42 CFR part 447 in a new subpart I entitled “Payment for Outpatient Prescription Drugs Under Drug Rebate Agreements” at § 447.534(h). Under the 10-year recordkeeping requirement, a drug manufacturer must retain records for 10 years from the date the manufacturer reports that rebate period's data to us. In addition, a manufacturer must retain data beyond the 10-year period if the records are the subject of an audit or a government investigation and if the audit findings or investigation related to the average manufacturer price and best price have not been resolved.

Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues:

• The need for the information collection and its usefulness in carrying out the proper functions of our agency.

• The accuracy of our estimate of the information collection burden.

• The quality, utility, and clarity of the information to be collected.

• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.

We have, however, submitted a request for emergency approval of the information collection requirements in this final rule. We are requesting an emergency approval because the collection of this information is needed before the expiration of the normal time limits under OMB's regulations at 5 CFR part 1320, to ensure compliance with the False Claims Act (FCA). We could not reasonably comply with normal clearance procedures because public harm is likely to result if the agency cannot enforce the requirements of the FCA because records may be destroyed.

As stated earlier in this preamble, we are concerned that, without this final rule and implementation of the longer record retention requirement, manufacturers participating in the Medicaid drug rebate program will destroy records concerning drug price calculations, as well as data supporting those calculations after 3 years. If the requirements cannot be implemented immediately, there is a chance that manufacturers could minimize their potential civil liability under the FCA by destroying their Medicaid rebate records through December 31, 2000. As a result, the effective use of the FCA to investigate fraud regarding the Medicaid drug rebate program could be severely limited at a considerable cost to the Federal and State treasuries.

We are requesting OMB review and approval of this collection, with a 180-day approval period. During this 180-day period, we will publish a separate Federal Register notice announcing the initiation of an extensive 60-day agency review and public comment period on these requirements. We will submit the requirements for OMB review and an extension of this emergency approval.

Therefore, we are soliciting public comment on each of these issues for the following section of this document that contains information collection requirements:

Section 447.534 of this document contains the following information collection requirements.

Under paragraph (h) of § 447.534, there are two recordkeeping requirements:

(1)(i) A manufacturer must retain records (written or electronic) for 10 years from the date the manufacturer reports that rebate period's data. The records must include these data and any other materials from which the calculations of the average manufacturer price and best price are derived, including a record of any assumptions made in the calculations. The 10-year timeframe applies to a manufacturer's quarterly submission of pricing data as well as any revised pricing data subsequently submitted to us.

(ii) A manufacturer must retain records beyond the 10-year period if both of the following circumstances exist: (A) The records are the subject of an audit or of a government investigation related to pricing data that are used in average manufacturer price or best price of which the manufacturer is aware, and (B) The audit findings related to the average manufacturer price and best price have not been resolved.

These information collection requirements, except for the timeframe, already exist. The recordkeeping requirements are in the contract between the drug manufacturer and CMS, with the retention period not specified. The regulation merely revises timeframes specified for maintaining records in the current regulation.

The burden associated with the recordkeeping is minimal. While we have no data on the staffing costs associated with retaining the data, we estimate that it will cost each manufacturer no more than $1.00, the maximum cost of a compact disc for electronic storage per manufacturer, or a total cost maximum cost of $500 per year. (We base the estimate on the assumption that the manufacturers will store 1 year's data per disc, although it is not necessary to have one disc per year.) The cost to manufacturers that maintain paper copies will be even less as they will just have to keep their paper copy of what they submit to us. Again, the staffing costs cannot be estimated at this time.

We will be collecting data on the cost of staffing.

As required by section 3504(h) of the Paperwork Reduction Act of 1995, we have submitted a copy of this document to the Office of Management and Budget (OMB) for its review of these information collection requirements.

If you comment on these information collection and recordkeeping requirements, please mail copies directly to the following:

Comments submitted to OMB may also be emailed to the following address: email: baguilar@omb.eop.gov ; or faxed to OMB at (202) 395-6974.

In accordance with section 553(d) of the Administrative Procedure Act (5 U.S.C. 553(d)), final rules ordinarily are not effective until at least 30 days after their publication in the Federal Register . This 30-day delay in effective date can be waived, however, if an agency finds good cause that the delay is impracticable, unnecessary, or contrary to the public interest, and the agency incorporates a statement of the finding and its reasons in the rule issued.

In this rule, we are removing the 3-year recordkeeping requirement from the August 29, 2003 rule and replacing it with a 10-year recordkeeping requirement for manufacturers that participate in the Medicaid drug rebate program. Due to concerns regarding the FCA and the potential destruction of drug pricing records, we find good cause to waive the 30-day delay in the effective date of the provision in this rule revising the record retention requirement. As discussed below, failure to waive the delay in effective date would be contrary to the public interest. The FCA establishes civil liability for persons or entities who knowingly submit false or fraudulent claims for Federal funds. Essential to the strength of the FCA are its qui tam whistleblower provisions, which allow persons with evidence of fraud against Federal programs or contracts to bring suit on behalf of the government. Qui tam actions are filed under seal and preliminary investigations often take place without notice to manufacturers. While the August 29, 2003 rule would only require manufacturers to keep drug pricing records 3 years following the date the manufacturer first reported the data to us for purposes of average manufacturer price and best price, it could be misinterpreted to permit these records to be discarded for other purposes. As noted, the August 29, 2003 rule would require manufacturers to retain earlier records if they were aware of an unresolved audit or government investigation concerning the manufacturers' average manufacturer price or best price. However, since the manufacturer is often unaware of qui tam investigations, we are concerned that, without this final rule, manufacturers participating in the Medicaid drug rebate program would erroneously conclude that they could discard records concerning drug price calculations, as well as data supporting those calculations that are subject to the FCA and other fraud laws. If the rule is not revised, there is a chance that manufacturers would seek to minimize their potential civil liability under the FCA by discarding their Medicaid rebate records through December 31, 2000. As a result, the effective use of the FCA to investigate fraud regarding the Medicaid drug rebate program could be severely limited at a considerable cost to the Federal and State treasuries. Accordingly, we believe there is a compelling public interest to waive the 30-day delay in effective date for this revision.

We have examined the impacts of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.

Executive Order 12866 (as amended by Executive Order 13258, which merely assigns responsibility of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). We believe this rule will not have an economically significant effect. We believe the rule will result in neither costs nor savings to the Medicaid program and that additional costs to drug manufacturers will be minimal. We do not consider this rule to be a major rule.

The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6 million to $29 million or less in any 1 year. For purposes of the RFA, pharmaceutical manufacturers with 750 or fewer employees are considered small businesses according to the Small Business Administration's size standards matched to the North American Industry Classification System, effective October 1, 2002, http://www.sba.gov/size/sizetable2002.html ). Use of the Small Business Administration's size standards matched to North American Industry Classification System is in compliance with the Small Business Administration's regulation that set forth size standards for health care industries at 65 FR 69432. Individuals and States are not included in the definition of a small entity. Because pharmaceutical manufacturers are not required to report their number of employees to the Small Business Administration, we are unable to determine how many of them are considered small entities. This rule will not have a significant impact on small businesses because although some pharmaceutical manufacturers may be small businesses, we estimated that the cost to manufacturers will be minimal, as described in section VII.B below.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 100 beds. This rule will not have a significant impact on small rural hospitals because the provisions contained in this final rule do not pertain to hospitals. Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditure in any 1 year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. We anticipate this rule will not impact State governments or the private sector.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. We do not anticipate this rule will impose direct requirement costs on State governments.

We do not collect information on the costs associated with manufacturer recordkeeping under the Medicaid drug rebate program. Therefore, in the absence of such information, we derived an estimate based on our annual costs of storing electronic pricing data that we receive from approximately 500 drug manufacturers. We store drug product data, including pricing information, for approximately 55,000 drug products. Over the course of the 12 years the Medicaid drug rebate program has been in existence, we have gathered nearly 250 megabytes of information. This information fits on one compact disc. The cost of one blank compact disc is less than $1. We did not have a reasonable proxy available to estimate the staffing costs associated with maintaining the data, so our estimate does not include these costs.

On the whole, we believe this approach is reasonable because it is our understanding that these records are maintained by most manufacturers in an electronic format, while smaller companies may maintain their pricing records in written format. In order to more accurately evaluate the fiscal impact of this provision, we are requesting that manufacturers provide us with information on the costs they would expect to incur pursuant to retaining records for a 10-year period. To the extent possible, we ask that manufacturers make an effort to distinguish between the cost of meeting the 10-year recordkeeping requirement versus other recordkeeping requirements that may apply to the same records.

We do not anticipate that this rule will adversely affect a drug manufacturer's participation in the Medicaid Drug Rebate program or impact the current level of access and availability of prescription drugs for Medicaid beneficiaries. There is no impact on contractors or providers.

We are unable to quantitatively address the burden to States with respect to recordkeeping. This rule will not adversely affect a State's ability to obtain manufacturers' rebates or impact the current level of access and availability of prescription drugs for Medicaid beneficiaries. There is no impact on Medicaid providers or contractors.

Retain the 3-year recordkeeping provision in the August 29, 2003 final rule with comment period.

We considered retaining the 3-year recordkeeping provision in the August 29, 2003 final rule with comment period. However, we believe it is necessary to replace the 3-year provision with a 10-year provision to address concerns raised by commenters regarding Federal and State investigations under the FCA and related anti-fraud provisions.

Establish a different time limitation.

Another alternative would be to establish a longer or a shorter recordkeeping requirement. We did not choose a longer recordkeeping timeframe because we believe a 10-year period will offer immediate protection to address situations where investigations are under seal in qui tam actions. Further, the exception to the 10-year requirement adequately addresses situations where investigations known to manufacturers are not yet resolved. We did not choose a shorter recordkeeping timeframe in this rule because we are concerned that such a timeframe could be misconstrued to lead a manufacturer to believe it could prematurely destroy vital evidence in a case of fraud against the government.

Finalize the 10-year requirement without a sunset date provision.

We considered finalizing the 10-year recordkeeping requirement without a sunset date provision. However, we believe that it is important to offer the regulated community an opportunity to provide comments on the impact that such a provision will have before we finalize the 10-year recordkeeping requirement beyond the December 31, 2004 date. In addition, we want to offer interested parties an opportunity to provide comments about whether a 10-year recordkeeping requirement is the proper timeframe to address the concerns raised on this provision.

For these reasons, we are not preparing analyses for either the RFA or section 1102(b) of the Act because we have determined, and we certify, that this rule will not have a significant economic impact on a substantial number of small entities or a significant impact on the operations of a substantial number of small rural hospitals.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

The modified BFEs are not listed for each community in this interim rule. However, the address of the Chief Executive Officer of the community where the modified BFE determinations are available for inspection is provided.

Any request for reconsideration must be based upon knowledge of changed conditions, or upon new scientific or technical data.

The modifications are made pursuant to Section 201 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq. , and with 44 CFR part 65.

For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.

The modified BFEs are the basis for the floodplain management measures that the community is required to either adopt or to show evidence of being already in effect in order to qualify or to remain qualified for participation in the National Flood Insurance Program (NFIP).

These modified elevations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, state or regional entities.

The changes in BFEs are in accordance with 44 CFR 65.4.

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 modified BFEs are required by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are required to maintain community eligibility in the NFIP. No regulatory flexibility analysis has been prepared.

Regulatory Classification. This interim 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 rule meets the applicable standards of Section 2(b)(2) of Executive Order 12778.

FEMA makes the final determinations listed below of modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Mitigation Division Director of the Emergency Preparedness and Response Directorate has resolved any appeals resulting from this notification.

The modified BFEs are not listed for each community in this notice. However, this rule includes the address of the Chief Executive Officer of the community where the modified base flood elevation determinations are available for inspection.

The modifications are made pursuant to Section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq. , and with 44 CFR part 65.

For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.

The modified BFEs are the basis for the floodplain management measures that the community is required to either adopt or to show evidence of being already in effect in order to qualify or to remain qualified for participation in the National Flood Insurance Program (NFIP).

These modified elevations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, state or regional entities.

These modified elevations are used to meet the floodplain management requirements of the NFIP and are also used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in these buildings.

The changes in BFEs are in accordance with 44 CFR 65.4.

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

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 modified BFEs are required by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are required to maintain community eligibility in the NFIP. No regulatory flexibility analysis has been prepared.

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.

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

This rule meets the applicable standards of Section 2(b)(2) of Executive Order 12778.

The Federal Emergency Management Agency makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Mitigation Division Director of the Emergency Preparedness and Response Directorate has resolved any appeals resulting from this notification.

The modified BFEs are not listed for each community in this notice. However, this rule includes the address of the Chief Executive Officer of the community where the modified BFE determinations are available for inspection.

The modifications are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq. , and with 44 CFR part 65.

For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.

The modified BFEs are the basis for the floodplain management measures that the community is required to either adopt or to show evidence of being already in effect in order to qualify or to remain qualified for participation in the National Flood Insurance Program (NFIP).

These modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, State, or regional entities.

These modified BFEs are used to meet the floodplain management requirements of the NFIP and are also used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in these buildings.

The changes in BFEs are in accordance with 44 CFR 65.4.

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

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 modified base flood elevations are required by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are required to maintain community eligibility in the NFIP. No regulatory flexibility analysis has been prepared.

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.

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

This rule meets the applicable standards of section 2(b)(2) of Executive Order 12778.

FEMA makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Mitigation Division Director of the Emergency Preparedness and Response Directorate, has resolved any appeals resulting from this notification.

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.

The Agency 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.

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

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.

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.

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

This rule meets the applicable standards of section 2(b)(2) of Executive Order 12778.

FEMA makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Mitigation Division Director of the Emergency Preparedness and Response Directorate has resolved any appeals resulting from this notification.

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.

The Agency 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.

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

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.

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.

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

This rule meets the applicable standards of section 2(b)(2) of Executive Order 12778.

FEMA 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 rule meets the applicable standards of Section 2(b)(2) of Executive Order 12778.

We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, to http://dms.dot.gov and will include any personal information you have provided. We have an agreement with the Department of Transportation (DOT) to use the Docket Management Facility. Please see DOT's “Privacy Act” paragraph below.

Submitting comments: If you submit a comment, please include your name and address, identify the docket number for this rulemaking (USCG-2003-14500), indicate the specific section of this document to which each comment applies, and give the reason for each comment. You may submit your comments and material by electronic means, mail, fax, or delivery to the Docket Management Facility at the address under ADDRESSES ; but please submit your comments and material by only one means. If you submit them by mail or delivery, submit them in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying and electronic filing. If you submit them by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this rule in view of them.

Viewing comments and documents: To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://dms.dot.gov at any time and conduct a simple search using the docket number. You may also visit the Docket Management Facility in room PL-401 on the Plaza level of the Nassif Building, 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Privacy Act: Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review the Department of Transportation's Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477), or you may visit http://dms.dot.gov.

We do not now plan to hold a public meeting. But you may submit a request for one to the Docket Management Facility at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register .

On Thursday, February 20, 2003, the Coast Guard published, in the Federal Register , a Notice of Policy entitled: “Merchant Mariners” Documents: Forms and Procedures for Renewals and Issuances” [68 FR 8326]. This Notice informed the public that on February 3, 2003, the Coast Guard had suspended issuing all MMDs using a previous form (CG-2838 [Rev. 7-94]) and had begun renewing them using a new form (CG-2838 [Rev. 09/02]). On Tuesday, April 8, 2003, the Coast Guard issued another Notice of Policy, under the same title [68 FR 17064], announcing that it had begun to issue original MMDs on February 28, 2003, also using the new identification card. This new card is more tamper-resistant. Possession of the card continues to serve as verification of an individual's qualifications to work on board certain U.S.-flagged vessels.

We did not publish a notice of proposed rulemaking (NPRM) for this rulemaking. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. This interim rule instates changes previously announced and implemented that are necessary to protect the national security interests of the United States. The Coast Guard finds that notice before the effective date of these changes is unnecessary, impracticable, and contrary to the public interest, within the meaning of 5 U.S.C. 553(f)(B) of the Administrative Procedure Act (APA).

In response to national security concerns, the Coast Guard temporarily suspended issuing MMDs to examine the MMD program. Enhancements to the security procedures for issuing MMDs were made, and the Coast Guard resumed issuing the documents using the augmented procedures. The security-related processes needed to be implemented before the security-enhanced MMD cards could be issued; not issuing MMDs for a prolonged period would have been unacceptable and would have had a detrimental effect on merchant mariners who are required to possess these documents to obtain work on board vessels of 100 gross tons or more.

Pursuant to 5 U.S.C. 553(d)(3) and for the reasons stated above, the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register .

46 U.S.C. 2103 gives the Secretary of the Department in which the Coast Guard is operating general superintendence over merchant marine personnel and authorizes the issuance of regulations promoting maritime safety interests. 46 U.S.C. Chapter 73 addresses MMDs and authorizes the Coast Guard to issue MMDs to qualified mariners. Mariners must hold MMDs to serve on board U.S.-flagged merchant vessels of 100 gross tons or more. (46 U.S.C. 8701). The MMD functions as a certificate of identification and a certificate of service, specifying each rating for which the holder is qualified (46 U.S.C. 7302(a)). Additionally, the MMD is issued with an appropriate endorsement, to qualified tankermen. An MMD may be issued for five years, and renewed for additional five-year periods (46 U.S.C. 7302(f)). Coast Guard regulations governing the certification of seamen, including issuance and renewal of MMDs, appear at 46 CFR Part 12.

46 U.S.C. 7302(d) allows the Secretary to review the criminal record of an individual who applies for an MMD. 46 CFR 12.02-4 states that the Officer in Charge, Marine Inspection, may require a criminal record check of an applicant for an MMD. Moreover, 46 U.S.C. 7302(c) prohibits the Secretary from issuing an MMD unless the individual applying for the MMD makes available to the Secretary any information related to an offense described in section 205 of the National Driver Register (NDR) Act of 1982, as amended (49 U.S.C. 30304). Additionally, the President under the Magnuson Act, 50 U.S.C. 191, may institute such measures and issue such rules and regulations to safeguard against destruction, loss, or injury from sabotage or other subversive acts, accidents, or other causes of similar nature, to vessels, harbors, ports, and waterfront facilities in the United States and all territory and water, continental or insular, subject to the jurisdiction of the United States. By Executive Order 10173 dated October 18, 1950, and subsequent Executive Orders, the President implemented his authority under the Magnuson Act by regulation at Title 33 CFR Part 6. 33 CFR 6.10-1 says that no person shall be issued a document required for employment on a merchant vessel of the United States, nor shall any person be employed on a merchant vessel of the United States unless the Commandant is satisfied that the character and habits of life of such person are such as to authorize the belief that the presence of the individual on board would not be adverse to the security of the United States.

The Coast Guard will implement the requirements of 33 CFR 6.10-1 to evaluate the character and habits of life of MMD applicants and the Board appeals process for persons refused issuance based on character and habits of life required by 33 CFR 6.10-9. For denials not based on character and habits of life, the Coast Guard will continue to use the process for certification of seamen set out in 46 CFR Part 12.

The purpose of this interim rule is to amend 46 CFR Part 12. Since February 3, 2003, all eligible mariners, renewing or conducting certain other transactions involving existing MMDs, have been receiving more tamper-resistant MMDs. After February 28, 2003, all eligible original MMD applicants have been receiving more tamper-resistant MMDs.

The more tamper-resistant MMDs are designed to address marine safety and national security concerns. The new MMDs are similar in appearance to the old ones, but embody several improvements for increased security, including features to deter counterfeiting and graphics that enhance the document's professional appearance. The new MMD allows for a more detailed description of a mariner's qualifications than did the old one. Those renewing their documents will be subject to the renewal requirements set out in 46 CFR 12.02-27.

At the time of this rule, mariners may continue to apply for renewal of the MMD and certain other transactions involving an existing MMD by mail, but will have to make a personal appearance at least once during the application process, to have their fingerprints taken, show proof of identity, and return the old MMD to the Coast Guard. For their convenience, they may elect to make an appearance at any of the 17 Regional Exam Centers (RECs) in the United States.

To ensure the issuance of MMDs only to eligible mariners, the Coast Guard requires fingerprints, and the revalidation and update of the information provided on the original MMD application. We will verify the information provided and conduct a criminal record review and a safety and a security check of the applicant in accordance with applicable law. We may disapprove an application for an MMD if the criminal record review and safety and security check leads the Coast Guard to determine that the applicant's criminal record or character and habits of life demonstrate that the applicant is not a safe and suitable person. A safe and suitable person eligible for an MMD is a person who, as determined by the appropriate Coast Guard official, possesses the character and habits of life to warrant the belief that their presence aboard vessels of the United States is not adverse to the security of the United States. If an application is disapproved, the applicant will be notified, in writing, of the reason(s) for disapproval and of the appeal process available to him or her. The applicant will be notified in writing of the reason(s) for disapproval, unless the Coast Guard determines that such disclosure of information is prohibited by law, regulation, or agency policy, in which case the reason(s) will not be disclosed. No MMD transactions will be performed pending a decision on an appeal.

If you would like more information on the background of this rulemaking, and of the Coast Guard's licensing and documentation program, refer to the Notices discussed in the Regulatory Information or contact the offices noted in FOR FURTHER INFORMATION CONTACT . For questions on submitting an application for the issuance of an MMD, call your nearest REC, a list of which appears in 46 CFR 12.01-7, or on the internet at http://www.uscg.mil/STCW/index.htm.

This rulemaking identifies the authorities for evaluating mariner applications with respect to qualifications and character and habits of life, which may disqualify a mariner from receiving an MMD and modifies certain application and administrative processes involved in issuing MMDs. It will—

• Provide new definitions of the terms “conviction”, “safety and security check”, and “safe and suitable person”;

• Require that an applicant disclose foreign and military convictions on the application;

• Describe the criminal record review and a safety and security check conducted on MMD applicants;

• Require that an applicant provide fingerprints during the application process for an MMD in a form and manner specified by the Coast Guard;

• Require that the applicant appear in person at an REC at least one time during the application process to prove their identity and submit fingerprints in a form and manner specified by the Coast Guard;

• Describe authority for the Coast Guard to review and deny issuance of an MMD for applicants whose “character and habits of life” are adverse to the security of the United States;

• Describe how an applicant may “prove” identity and require applicant to produce two forms of identification, one of which must contain a picture;

• Describe acceptable forms for proof of citizenship;

• Remove from 46 CFR 12.02-13 reference to “Shipping Commissioner”;

• Remove from 46 CFR 12.02-17 the requirement that a fingerprint be affixed to an MMD form;

• Eliminate the requirement that a mariner's Social Security Number (SSN) be placed on the MMD;

• Replace the term “missing” in 46 CFR 12.02-23 with the term “lost”;

• Remove the description of internal Coast Guard administrative procedures from 46 CFR 12.02-24 and require the applicant to communicate the loss of an MMD to the Coast Guard by letter;

• Require the submission of a complete application before processing; and,

• Require the surrender of an old MMD to the Coast Guard on issuance of a new one.

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

A draft Regulatory Evaluation under the regulatory policies and procedures of DHS follows:

This interim rule will amend certain requirements in 46 CFR Part 12 for how merchant mariners and prospective mariners will apply for MMDs.

This interim rule will require all applicants to process MMDs at an REC. The rule requires an applicant to appear at least once in the application process, even if making an application by mail, and requires that fingerprinting to be conducted by the Coast Guard for all types of MMD applications.

The total annual population of affected MMD applicants is 28,243 mariners. This total includes 11,210 applicants for original (new) MMDs and 17,033 applicants for reissued (renewal and duplicate) MMDs. This is based on 2002 data received from the Coast Guard's National Marine Center (NMC).

Not all mariners incur cost from this interim rule. The subset of the affected population that incurs costs comprises those mariners who (1) previously applied for original MMDs by mail and were not fingerprinted at an REC, and (2) previously applied for reissue MMDs and were not fingerprinted at an REC.

From discussions with the Coast Guard's NMC, we estimate the percentage of mariners who apply for original MMDs and incur a cost to be 20 percent of the 11,210 original MMD applicants, or 2,242 mariners (0.20 × 11,210 original MMD applicants = 2,242 mariners).

We also estimate the percentage of mariners who apply for reissued MMDs and incur a cost to be 70 percent of the 17,033 reissue MMD applicants, or 11,923 mariners (0.70 × 17,033 reissue MMD applicants = 11,923 mariners).

Based on the percentage of applicants who incur a cost discussed above, the total annual quantity of mariners who incur a cost by this final rule is 14,165 mariners (2,242 original MMD applicants + 11,923 reissue MMD applicants = 14,165 total mariners).

The period of analysis is from 2003 to 2007. We use a five-year period because all current documented mariners must renew their MMDs once every five years. Therefore, this five-year period will cover a complete MMD renewal cycle—giving an accurate snapshot of the total cost of the rule.

The costs of this final rule include (1) the cost of mariners' time at an REC, and (2) the cost of mariners' travel to and from an REC. In all costs we assume an average mariner's wage rate as a proxy for the opportunity cost of a mariner's time spent at the REC and the time spent traveling to and from the REC. We also assume per diem reimbursement rates as proxy unit costs for travel expenses. Table 1 presents the basic unit cost assumptions and sources that we used in this analysis of the final rule.

We assume, on average, a mariner will spend one hour at the REC submitting an application and being fingerprinted. This time estimate is based on discussions with Coast Guard personnel familiar with REC operations and customer service. We realize some applicants may take more time and some may take less time; however, we believe one hour to be a reasonable estimate of the average time a mariner will spend at an REC.

We estimate the cost of a mariner's time at the REC to be $22 (1 hour × $22/hour cost of time = $22). The estimated annual cost of REC time for affected mariners is $311,630 ($22/mariner × 14,165 total applicants = $311,630).

We assume round-trip travel, to an REC, to take either one-day or require an overnight stay. Furthermore, we believe most mariners live within close proximity to an REC. According to data from the Coast Guard's NMC, at least 70 percent of MMD applicants live within one-day round-trip travel to and from an REC and the remaining 30 percent may require an overnight stay. We also assume mariners will drive to an REC regardless of the distance. While there may be some mariners that take public transportation or use another mode of travel, we believe, on average, most mariners will drive themselves to an REC.

We estimate the one-day and overnight travel cost as follows:

For an applicant within one-day round-trip travel to and from an REC, we assume the cost to include the mileage, the opportunity cost of the time spent traveling, and incidentals.

We estimate the one-day round-trip driving distance and time to be 100 miles in 4 hours (or 50 miles one-way in 2 hours driving time). While some mariners will drive more than this and some will drive less, we believe 100 miles driving distance, in 4 hours, to be a reasonable average estimate of the one-day round-trip travel distance and time. We also assume the cost for one-day round-trip incidentals to be $50 and the mileage reimbursement to be $0.36/mile.

The estimated cost per mariner for one-day round-trip travel is $174 (100 roundtrip miles × $0.36/mile reimbursement rate + 4 travel hours × $22/hour cost of time + $50/day incidentals = $174). The estimated annual cost for one-day round-trip travel for affected mariners is $1,725,297 ($174/mariner × .70 {percent one-day travel} × 14,165 mariners = $1,725,297).

For an applicant having to travel and stay overnight, we assume the cost to include mileage, the opportunity cost of time spent traveling, lodging, and incidentals.

We estimate the overnight round-trip driving distance and time, to an REC, to be 200 miles in 8 hours (double the one-day round trip scenario). While some mariners will drive more than this and some will drive less, we believe 200 miles driving distance, in 8 hours, to be a reasonable average estimate of the distance and time a mariner would drive for overnight travel to a REC. We also assume the cost for lodging and incidentals for overnight travel to be $220 (2 × $50/day incidentals + $120/night lodging = $220).

The estimated cost per mariner for overnight travel is $468 (200 roundtrip miles × $0.36/mile reimbursement rate + 8 travel hours × $22/hour cost of time + $220 lodging and incidentals = $468). The estimated annual cost of overnight travel for affected mariners is $1,988,766 ($468/mariner × .30 {percent overnight travel} × 14,165 mariners = $1,988,766).

The annual cost of this interim rule, consisting of the cost of travel and time for affected mariners, is estimated to be $4 million (non-discounted). Table 2 summarizes the total annual cost of the rule to industry.

The present value (PV) of the total cost of this interim rule is $18 million in 2003 dollars (2003-2007, 7 percent discount rate).

The primary cost of this rule is the travel cost, which is driven by the mariners' opportunity cost of time, lodging, and other per diem factors. However, we believe the total cost of this rule is conservative because the REC locations, together, can serve more than 70 percent of affected mariners—especially given that the RECs are located in or near major maritime ports that may be accessed by mariners.

The Coast Guard will review a mariner's background before issuing an MMD and anticipates several qualitative benefits from this new process. The Coast Guard will require mariners, seeking MMDs, to validate their basic information on identity and criminal records to ensure the issuance of MMDs only to eligible mariners. The Coast Guard expects to ensure marine safety and protect national security by conducting a background check of all MMD applicants and identifying those who pose a threat.

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

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

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on state or local governments and would either preempt state law or impose a substantial direct cost of compliance on them.

We have analyzed this interim rule under that Order and have determined that it does not have implications for federalism. It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled, now, that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration, repair, maintenance, operation, equipping, personnel qualification, and manning of vessels), as well as the reporting of casualties and any other category in which Congress intended the Coast Guard to be the sole source of a vessel's obligations, are within the field foreclosed from regulation by the states. (See the decision of the Supreme Court in the consolidated cases of United States v. Locke and Intertanko v. Locke , 529 U.S. 89, 120 S.Ct. 1135 (March 6, 2000).) Since this rule involves the manning of U.S. vessels and the documentation of merchant mariners, it is a matter of personnel qualifications, and so precludes states from regulation. Because states may not promulgate rules within this category, preemption is not an issue under Executive Order 13132.

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

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

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

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

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

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

We have considered the environmental impact of this interim rule and concluded that under figure 2-1, paragraph (34)(c), of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation. The rule will not result in any significant cumulative impact on the human environment; any substantial controversy or substantial change to existing environmental conditions; any impact, more than minimal, on properties protected under 4(f) of the DOT Act, as superseded by Public Law 97-449 and Section 106 of the National Historic Preservation Act; or any inconsistencies with any Federal, State, or local laws or administrative determinations relating to the environment. A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES .

The interim rule, as published, contained an erroneous figure for the total of District One's Projected Return on Investment. This was due to the omission of a number in the column designated as “Total District One.” There were also two incorrect tables placed in Step 6a. The tables should have been “Table B.—District Two—Projected Return on Investment” and Table C.—District Three—Projected Return on Investment.”

This is a synopsis of the Commission's Report and Order, MB Docket No. 02-239, adopted December 18, 2003, and released December 23, 2003. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC, 20554. The document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, telephone (202) 863-2893; facsimile (202) 863-2898, or via e-mail qualexint@aol.com.

This is a synopsis of the Commission's Report and Order, MB Docket No. 02-114, adopted December 18, 2003, and released December 23, 2003. The reallotment from Tuscumbia to Meridianville is conditioned on the reallotment of Station WWWQ(FM), Channel 263C, Anniston, Alabama to College Park, Georgia that was granted in MM Docket No. 98-112 and is effective but not final. No construction is to commence for any of the changes approved in this Order until finality has occurred in MM Docket 98-112. Operating authority for Station WLAY-FM, Channel 262C2 at Meridianville may not be granted until operations have commenced by Station WWWQ(FM), Channel 263C at College Park, Georgia.

The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center (Room 239), 445 12th Street, SW., Washington, DC. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone (202) 863-2893, facsimile (202) 863-2898, or via e-mail qualexint@aol.com .

This is a synopsis of the Commission's Report and Order, MB Docket No. 03-69, adopted December 12, 2003, and released December 16, 2003. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, (202) 863-2893, facsimile (202) 863-2898, or via e-mail qualexint@aol.com .

This is a synopsis of the Commission's Report and Order, MB Docket No. 02-121, adopted December 12, 2003, and released December 16, 2003. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, (202) 863-2893, facsimile (202) 863-2898, or via e-mail qualexint@aol.com.

This is a synopsis of the Commission's R eport and Order in MB Docket No. 02-166, adopted December 12, 2003, and released December 16, 2003. The full text of this decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, Qualex International, Portals 11, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone (202) 863-2893, facsimile (202) 863-2898, or via e-mail qualexint@aol.com .

This is a synopsis of the Commission's Report and Order, MB Docket No. 02-128, adopted December 12, 2003, and released December 16, 2003. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW, Room CY-B402, Washington, DC, 20554, (202) 863-2893, facsimile (202) 863-2898, or via e-mail qualexint@aol.com .

This is a summary of the Commission's Report and Order, adopted December 12, 2003, and released December 16, 2003. The full text of this Commission decision is available for inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com .

The Federal pipeline safety regulations at 49 CFR part 195 apply to more than 160,000 miles of hazardous liquid and carbon dioxide pipelines. RSPA/OPS shares responsibility for inspecting and overseeing the safety of these pipelines with many State pipeline safety offices.

RSPA/OPS uses pipeline accident data to identify safety issues and target risk-based inspections. The data are from accident reports that operators submit on Form F7000-1, Accident Report—Hazardous Liquid Pipelines (§§ 195.50 and 195.54).

In recent years, Congress, the National Transportation Safety Board (NTSB), and DOT's Office of the Inspector General (OIG) have urged RSPA/OPS to improve the quality of its accident data and data analyses. In response, RSPA/OPS reduced the volumetric threshold for accident reporting from 5 barrels to as little as 5 gallons of product released during an accident (67 FR 831; January 8, 2002). However, RSPA/OPS still lacks the information necessary to improve accident analyses.

To obtain this information, RSPA/OPS published a notice of proposed rulemaking (NPRM) that would require operators to submit an annual report of pipeline inventory and other information about their pipeline systems (67 FR 48844; July 26, 2002). This information would provide a foundation for more efficient and meaningful analyses of accident data. For example, to help determine the effect of system improvements and other safety practices, RSPA/OPS would use information from annual reports to calculate leaks by cause on a per mile basis. The information could also be used for trending accident data, assessing risk, prioritizing safety inspections, determining appropriate remedial actions, comparing individual operator performance with industry performance, assessing costs and benefits of safety regulations, monitoring industry performance and regulatory compliance, and allocating RSPA/OPS resources.

RSPA/OPS already collects similar annual report information for gas transmission and gathering systems (RSPA F 7100-2.1, Natural Gas Transmission Pipeline Operator Annual Report; revised August 8, 2001). This information is currently used by RSPA/OPS, State pipeline safety programs, State governors, congressional committees, metropolitan planners, pipeline research engineers, industry safety experts, the media, and the public. Similarly, a hazardous liquid pipeline annual report would provide these stakeholders with information they need to manage the safety of hazardous liquid pipelines.

In response to a petition from the American Petroleum Institute (API) and the Association of Oil Pipelines (AOPL), RSPA/OPS extended the period for public comment on the NPRM until November 22, 2002 (67 FR 59045; September 19, 2002). Based on written comments on the NPRM, RSPA revised the proposed annual report form and sought advice from the statutorily mandated hazardous liquid pipeline advisory committee—the Technical Hazardous Liquid Pipeline Safety Advisory Committee—at its March 25, 2003, meeting ( see Docket No. RSPA-01-9832 for meeting minutes). RSPA/OPS then published the revised report form for further public comment (68 FR 28884; May 27, 2003).

RSPA/OPS received comments on the proposed rule from API, Enbridge Energy Company, Inc. (Enbridge), and Marathon Pipe Line, LLC (Marathon). API, Enbridge, and BP Pipelines North America also commented on the revised annual report form. This section of the preamble summarizes the comments and explains how we considered them in this final rule.

State-by-State reporting. Both Enbridge and API commented on alleged difficulties that could result from the proposal to collect hazardous liquid pipeline information on a State-by-State basis. RSPA/OPS recognizes that the hazardous liquid pipeline industry has not had business reasons for maintaining the requested data by State. And, because pipeline companies now report mileage of the hazardous liquid pipelines to the National Pipeline Mapping System (NPMS), RSPA/OPS already has the data to determine operator mileage by State. RSPA/OPS is examining how future enhancements to the NPMS might enable us to efficiently obtain additional State-by-State information without imposing additional data collection requirements on hazardous liquid pipeline operators.

Enbridge urged RSPA/OPS to collect only mileage information by State and to collect all other data by pipeline system. It noted that volume, capacity, construction, and integrity assessment data is now maintained only for pipeline systems, and that reporting this information by State would require extensive manual sorting of data. Enbridge alleged that such data would be challenging for RSPA/OPS to validate, decipher, and analyze. For example, Enbridge noted that State-by-State data could not be used to trend commodity-specific information or integrity assessment data by line size or decade of construction. Moreover, for pipelines crossing two or more States, the same volumes would appear on the reports for upstream and downstream States, greatly complicating any cumulative volume analysis.

API had similar concerns, alleging that the proposed annual report form would result in poor quality national data and an inability to analyze or understand the national pipeline system. As an example, it noted that if operators were to report only aggregate data for all pipelines operated in a State, RSPA/OPS could not discern differences in corrosion rates based on commodities transported. API also noted that the part 195 integrity management rules require operators to integrate a wide range of risk-related information on particular pipelines. It sees no need to maintain this information by State. API suggested that RSPA/OPS develop a form similar to the one used in the industry's Pipeline Performance Tracking System (PPTS) that would focus on data about each operator's system rather than on data aggregated by State. Separate entries could provide interstate and intrastate mileage in each State. API alleged that this approach would reduce erroneous data and the reporting burden and give RSPA/OPS a good understanding of nationwide performance. In addition, API suggested the approach should satisfy the needs of individual States because each State's leaks per mile—determined from the mileage data and the operators' accident reports—could be compared to the national leak rate.

RSPA response. In this final rule RSPA/OPS has simplified the form by dropping the State-by-State requirement and separating the decade-installed information into a separate category, similar to that requested for gas transmission lines on the Gas Transmission Operator Annual Report form. These changes reduce the complexity of the form and the reporting burden.

As stated above, RSPA/OPS is considering how State-by-State information might be obtained through the NPMS or by other methods. RSPA/OPS believes it is important to have State-by-State information for various purposes, including meeting the informational needs of the State pipeline safety programs and other interested stakeholders, and for a variety of trending purposes, such as examining State population increase and encroachment impacts on pipelines.

Historical integrity assessment. Enbridge alleged that requiring operators to report annually the percentage of pipeline integrity assessments (hydrostatic testing and internal inspection) done in the decade before the reporting year would not yield meaningful data. It explained that as total system mileage changes (through purchases, sales, abandonments, or conversions), the reported percentages would also change, leading to invalid data and conclusions. API observed that the proposed internal inspection information would not be useful as a baseline for comparison with inspections in future years under the integrity management requirements because operators would have to estimate much of the data. Enbridge suggested that we limit assessment information to the number of miles assessed during the reporting year and that we use a different approach, such as an industry survey, to collect historical assessment information. API thought the percentage assessed question could result in a percentage larger than the nationwide pipeline mileage because some systems may be pigged several times in a 10-year period, some with deformation tools only, and others with both metal loss tools and deformation tools. Both Enbridge and API said internal inspection results be reported by type of defect rather than by the technology of the inspection tool.

RSPA response. RSPA/OPS agrees that the collection of historical integrity assessment information should be closely aligned with RSPA/OPS’ Integrity Management Program. In response to comments, RSPA/OPS published a revised form on May 27, 2003, to reflect this approach. RSPA/OPS will obtain historical information through the Integrity Management inspections. The final form adopted herewith requests more detailed information about integrity assessments done during each calendar year.

Gathering lines. Enbridge argued that the annual report requirement should not apply to gathering lines, particularly gathering lines that RSPA/OPS does not regulate. It reasoned that the information collected would be incomplete because the requirement would not apply to all operators of gathering lines, just those who operate pipelines regulated by part 195. API added that because the vast majority of gathering lines not regulated by part 195 are operated by companies that do not operate part 195 regulated pipelines, the proposed annual report would not disclose the nation's total gathering line mileage.

RSPA response. In the final annual report form, RSPA/OPS has eliminated the information on gathering pipeline mileage not subject to part 195, but will require information on gathering lines that are subject to part 195.

Anhydrous ammonia. API commented that anhydrous ammonia pipeline data should not be combined with carbon dioxide pipeline data for the purposes of analysis. It suggested that anhydrous ammonia be included with highly volatile liquids (HVL) because the physical properties are similar.

RSPA response. RSPA/OPS concurs. The final annual report form includes anhydrous ammonia with HVLs.

Pre-1940 pipe. API commented that lumping all pre-1940 pipe into a single category could diminish the understanding of technological differences between 1920s and 1930s pipe. It called the differences major, and was concerned that whole decades of pipe might be unwittingly condemned.

RSPA response. RSPA/OPS concurs. The final annual report form requires reporting by decade of installation beginning with pre-1920s and for each decade thereafter.

Cost of compliance. API disputed RSPA/OPS’ estimate of the cost of compliance with the proposed annual report requirement, calling it grossly underestimated. It said most data is not readily available electronically, is not subdivided or identified in operator records by State, and would require extensive hands-on research and correlation. Further, API said the assumed hourly rate ($40/hour) is unrealistically low, since the identification, coordination and oversight of data collection, interpretation, and management would be conducted by experienced engineering personnel at two to three times this rate.

RSPA response. The final Regulatory Evaluation (included herein) takes this comment into account in estimating industry costs.

Further notice and response time. API urged RSPA/OPS to publish another notice for public comment based on comments to the NPRM before adopting a final annual report form. It also said operators would not be able to respond to the NPRM's proposed data collection in the 60-90 days suggested in the NPRM.

RSPA response. As stated above, following the close of the extended comment period on the NPRM, RSPA posted a revised form in the docket and invited further public comment (68 FR 28884; May 27, 2003). API and Enbridge submitted additional comments on details, organization, and design of the form that helped to clarify entries, correct errors, and provide consistency. The final report form reflects these additional comments. The final annual report form substantially addresses all objections to the proposed form. Recognizing that industry will need some time to gather the requested information, RSPA/OPS is delaying the filing of the initial hazardous liquid pipeline annual report form until June 15, 2005. This initial report would be for calendar year 2004. Recognizing that many operators are prepared for early submission because of industry's need for having an earlier submission for a variety of purposes, including measuring national progress of meeting new integrity management requirements, RSPA/OPS will accept voluntary submissions at an operator's discretion at any time.

User fees. Marathon questioned how the proposed annual report data would relate to the annual user fee assessments.

RSPA response. RSPA/OPS will use information from the new hazardous liquid pipeline annual report to calculate annual user fee assessments. This is similar to the procedure used for calculating the gas transmission pipeline user fees based on information in the gas transmission pipeline annual reports.

In compliance with the new § 195.49, each operator must submit by March 15 of each year an annual report on Form RSPA F7000.1-1 for each of the following types of pipeline systems operated at the end of the previous year: crude oil, highly volatile liquid (including anhydrous ammonia), petroleum products, and carbon dioxide. System type is determined by the commodity the system transported in largest volume. For example, if a pipeline system transports only crude oil, it would be a crude oil type system. If a pipeline system transports batches of crude oil and petroleum products, it would be either a crude oil or petroleum product type system, depending on which commodity is transported in larger volume.

The annual report form asks whether the report is for crude oil, highly volatile liquid (including anhydrous ammonia), petroleum products, or carbon dioxide type systems and the volumes of these commodities transported by the system. The form also asks for pipeline mileage, cathodically protected versus unprotected, coated versus bare steel, steel pipeline by decade and diameter, electric resistance welded (ERW) pipeline by decade and weld type, miles of regulated gathering lines, and information on breakout tanks and integrity assessment.

The first annual report form is due March 15, 2005, and includes data for calendar year 2004 for systems operated at the end of 2004. Operators can submit the form in hard copy to the RSPA/OPS Information Resources Manager, at the same address for filing hazardous liquid accident reports: Information Resources Manager, Office of Pipeline Safety, Room 2301, 400 7th St., SW., Washington, DC 20590.

Alternatively, reports may be submitted electronically via the RSPA/OPS Online Data Entry System, a Web-based reporting system accessible at http://ops.dot.gov. Electronic submission will be available by the end of 2004. RSPA/OPS is examining how much of the information requested on the annual report form may, in the future, be submitted via the National Pipeline Mapping System.

The final annual report form and instructions for completing the form are published with this Final Rule. Blank forms and instructions may also be obtained at http://ops.dot.gov under the Forms section of Online Library, or from the Information Resources Manager at the address provided above.

RSPA does not consider this rulemaking to be a significant regulatory action under section 3(f) of Executive Order 12866 (58 FR 51735; October 4, 1993). RSPA also does not consider this rulemaking to be significant under DOT's regulatory policies and procedures (44 FR 11034; February 26, 1979). Below is a summary of the regulatory evaluation which can be found in the public docket for this final rule.

Two comments were received on the cost/benefit analysis of the proposed rule from a major hazardous liquid operator and a trade association representing hazardous liquid operators. They criticized the cost-benefit analysis for underestimating the costs of the proposed rule. Specifically the trade association stated that the $40 per hour labor cost used is too low. RSPA concurs that we may have underestimated the fully loaded labor cost for hazardous liquid pipeline personnel. Therefore, RSPA is doubling the per hour labor cost for hazardous liquid pipeline personnel to $80 per hour.

RSPA was also criticized for underestimating the time to perform the necessary paperwork. RSPA concurs in part. RSPA believes that the most burdensome of the proposals was the requirement for collection of the data by state. This provision is being removed from the final rule. Additionally, RSPA is removing the provision for the collection of data on integrity management as well. RSPA was also criticized for proposing the collection of data on currently unregulated gathering lines. RSPA agrees with these comments and is removing these requirements in the final rule. Additional changes were made in regards to collection of cathodic protection and pipe diameter information, as discussed in the preamble.

Even with these changes, RSPA's time estimates for preparing hazardous liquid pipeline annual reports need to be adjusted. RSPA is doubling the estimated time for completion of an annual report from that used in the proposed rule. We now estimate each operator will need, on average, 24 hours to complete the annual report in the first year and 12 hours in each subsequent year.

The hazardous liquid pipeline system inventory information is needed for: meaningful trending of hazardous liquid pipeline accident safety data; risk assessment; recommendations regarding rehabilitation or replacement of pipeline segments; analysis of costs and benefits; and comparison of individual operator performance against industry performance. This safety information will be used by RSPA/OPS for assessment of pipeline risks, regulatory development, and programmatic resource allocation. RSPA/OPS also uses the information in monitoring industry performance and regulatory compliance, and for planning standard safety inspections of operators. States, local community planners, and emergency responders will benefit from access to information about hazardous liquid pipeline systems. Industry will benefit when RSPA/OPS establishes a baseline measurement for pipeline company safety performance using the collected data.

The form asks for information that should be readily available to the operator on their own databases. RSPA expects that the time required to complete the form will decrease as operators adjust their computerized systems to track the requested information. RSPA estimates it will take an operator 24 hours to complete the form the first year and half as long (12 hours annually) in subsequent years.

Based on an analysis of operators who pay user fees, there are 208 regulated operators of hazardous liquid pipelines in the U.S.

RSPA previously estimated the hourly cost of the person completing the form at $40. This was based on the U.S. Department of Labor's National Occupational Employment and Wage Earnings data for 1999. According to that data, the hourly wage for a Transportation, Storage, and Distribution Manager (the closest category to a pipeline manager) was $26.03 per hour. The $26.03 figure was multiplied by 1.35 to account for fringe benefits ($26.03 × 1.35 = $35.14). RSPA added an inflation factor of 14% to account for inflation from 1999 to 2002 ($35.14 × 1.14 = $40.05). However, based on comments from industry trade associations, RSPA is revising its estimate to $80 per hour.

RSPA estimates that it will take an operator about 24 hours to complete the form the first year. Based on an average cost of $80 per hour, the cost to industry of completing the form for the first year will be approximately $400,000 (208 forms × 24 hours × $80 per hour = $399,360). Total hours expended by industry to complete the form in the first year will be approximately 5,000 hours (208 forms × 24 hours = 4,992 hours).

After the first year, adjustments to company databases and computer systems will likely reduce the annual industry cost to approximately $200,000 (208 × 12 × $80 = $199,680). After the first year, total hours expended by industry to complete the form will be approximately 2,500 hours (208 forms × 12 hours = 2,496 hours).

RSPA believes that the initial annual cost of $400,000 and ongoing annual cost of $200,000 is a modest burden on the hazardous liquid pipeline industry. The benefits accruing to RSPA and the pipeline industry through the increased utility of the hazardous liquid accident data should easily outweigh this modest cost. The additional information will allow RSPA/OPS and the hazardous liquid pipeline industry to identify safety issues and trends, and allow operators to make changes to procedures and practices that will ultimately reduce pipeline accidents and improve pipeline safety.

The final rule's first year industry cost of $400,000, divided by the 208 hazardous liquid pipeline operators, results in an average cost of $2,000 per operator. Subsequent annual cost to complete the form is approximately $1,000 per operator ($200,000 divided by 208 operators).

The Small Business Administration (SBA) criteria for defining a small entity in the hazardous liquid pipeline industry is 1,500 employees, as specified in the North American Industry Classification System (NAICS) codes. The NAICS codes relevant to hazardous liquid pipelines are code 486110—Pipeline Transportation of Crude Oil and code 486910—Pipeline Transportation of Refined Petroleum Products. RSPA does not collect information on number of employees or revenues for pipeline operators. Such a collection would require OMB approval. RSPA nevertheless continues to seek information about the number of small pipeline operators from which to more fully determine impact on small entities, i.e. companies with less than 1,500 employees, including employees of parent corporations.

RSPA has reviewed the data it collects from the hazardous liquid pipeline industry and has estimated there are probably 10-20 small entities in this industry. Several of the operators do not transport petroleum products, but rather transport carbon dioxide, ammonia, or chlorine and may not be indirect competition with large pipeline operators. Other small operators remain competitive as they have developed niche markets and may supply only a small number of customers.

In the proposed rule on Hazardous Liquid Pipeline Accident Reporting Revisions (66 FR 15681; March 20, 2001), RSPA/OPS sought input from the public on the impact of the proposed annual report on small entities. We received no responses to this request for comments from small entities. However, the SBA Chief Counsel for Advocacy provided comments on behalf of small businesses. SBA asked how many hazardous liquid pipeline operators RSPA/OPS would characterize as small operators. We believe the answer is between 10 and 20, as noted above. And, we believe the impact of this rule will be proportionate to the size of the company. Smaller companies tend to have less pipeline mileage and will likely have to collect less information at a lower cost. This rule will cost an average company less than $2,000 the first year and $1,000 per year thereafter. RSPA believes this will be even less for small operators.

If you are an operator of a small pipeline company, RSPA/OPS requests that you identify yourself to help us more accurately determine impact on small businesses in this and future rulemakings ( see the ADDRESSES and SUPPLEMENTARY INFORMATION sections above for how to provide comments).

Based on the small cost to companies of any size and to the industry at large, I certify pursuant to section 605 of the Regulatory Flexibility Act (5 U.S.C. 605), that this rulemaking would not have a significant impact on a substantial number of small entities.

Below is a summary of the Paperwork Reduction Analysis. A complete copy is available for copy and review in the public docket for this final rule.

This final rule contains information collection requirements. As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the DOT has submitted a copy of the Paperwork Reduction Act Analysis to the Office of Management and Budget (OMB) for its review. The name of the information collection is Transportation of Hazardous Liquids by Pipeline Recordkeeping and Annual Reporting . The purpose of this information collection is to improve the current hazardous liquid pipeline accident information collection.

Number of Respondents: 208.

Frequency of Responses: 1.

Annual Burden: 24 hours the first year and 12 hours per year thereafter for each company.

Type of Respondent: Hazardous liquid pipeline operators.

Total Annual Burden: 4,992 hours the first year and 2,496 per year thereafter.

Comments on the paperwork reduction analysis are invited on: (a) The need for the proposed collection of information for the proper performance of the functions of the agency, including whether the information will have practical utility: (b) the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who respond including the use of the appropriate automated, electronic, mechanical, or other technological collection techniques. Send comments within 30 days of the publication of this notice directly to the Office of Management and Budget, Office of Information and Regulatory Affairs, ATTN: Desk Officer, Department of Transportation, 715 Jackson Place, NW., Washington, DC. Please be sure to include the docket number in your comments.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13175, Consultation and Coordination with Indian Tribal Governments . Because this final rule would not significantly or uniquely affect the communities of the Indian tribal governments and would not impose substantial direct compliance costs, the funding and consultation requirements of Executive Order 13175 do not apply.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, Federalism . The final rule does adopt any regulation that: (1) Has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government; (2) imposes substantial direct compliance costs on State and local governments; or (3) preempts state law. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

This final rule does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It would not result in costs of $100 million or more to either State, local, or tribal governments, in the aggregate, or to the private sector, and would be the least burdensome alternative that achieves the objective of the rule.

We have analyzed the final rule for purposes of the National Environmental Policy Act (42 U.S.C. 4321 et seq. ) and have concluded that this action would not significantly affect the quality of the environment. Because the final rule parallels present reporting requirements and practices for gas pipeline operators and collection of information does not result in an environmental impact.

RSPA has determined that this rule does not constitute a significant energy action within the meaning of Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use . This rule will not result in adverse effects on energy supply, distribution, or use.

Because this rule is not an energy-related project, Executive Order 13212, Actions to Expedite Energy-Related Projects , does not apply.

This rule does not affect or potentially affect the use or value of real, personal, or intellectual property. Therefore, Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights , does not apply to this rule.