On September 20, 2000, we published in the Federal Register (65 FR 56803-56806, Docket No. 98-103-1) a proposal to amend the regulations governing the importation of plants and plant products to allow artificially dwarfed plants (penjing) of the genera Buxus, Ehretia (Carmona), Podcarpus, Sageretia , and Serissa to be imported into the United States from the People's Republic of China in an approved growing medium subject to specified growing, inspection, and certification requirements. We proposed this action after assessing the pest risks associated with the importation of penjing established in growing media from the People's Republic of China under the conditions outlined in the proposed rule and determining that those plants could be imported into the United States without presenting a significant risk of introducing or disseminating dangerous plant pests. We solicited comments regarding the proposed rule for 60 days, ending November 20, 2000. We subsequently extended the comment period until December 20, 2000 (see 65 FR 75187, Docket No. 98-103-2, published on December 1, 2000).

In response to comments received on the proposed rule (discussed in detail later in this document), the Animal and Plant Health Inspection Service (APHIS) narrowed the application of the rule to five species of plants ( Buxus sinica, Sageretia thea, Serissa foetida, Podcarpus macrophyllus, and Ehretia microphylla ) from China and entered into consultation with the U.S. Fish and Wildlife Service (FWS) to assess the potential effects of the proposed action on endangered or threatened species, as required under section 7 of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ). On April 10, 2003, FWS concluded the section 7 consultation process by concurring with APHIS's determination that the importation of penjing plants from China in growing media will not adversely affect federally listed or proposed endangered or threatened species or their habitats. The section 7 consultation for this rule is described later in this document.

Upon receiving concurrence from FWS, APHIS completed an environmental assessment in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq. ), (2) regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and (4) APHIS's NEPA Implementing Procedures (7 CFR part 372). On September 15, 2003, we published in the Federal Register (68 FR 53956-53957, Docket No. 98-103-3) a notice announcing the availability of the environmental assessment, and solicited comments on the environmental assessment for 30 days ending October 15, 2003. On October 28, 2003, we published in the Federal Register (68 FR 61391-61392, Docket No. 98-103-4) another notice that extended the comment period on the environmental assessment for an additional 15 days ending November 12, 2003.

The risk assessments that supported our proposed rule (referred to elsewhere in this document as the 1996 risk assessments) identified pests that are known to be associated with the five species of penjing plants in China and assessed the risk posed by those pests in the absence of the mitigative effects of the requirements of § 319.37-8(e), which are designed to establish and maintain a pest-free production environment and ensure the use of pest-free seeds or parent plants. Because the original risk assessments were prepared in September 1996, APHIS believed it was appropriate to update them in order to bring them up to date with current APHIS guidelines  1 for pathway-initiated risk assessments. The 1996 risk assessments were based on guidelines applicable at the time those assessments were drafted, and the updates were necessary to provide the most transparent communication of risk possible at this time. The updated risk assessment documents are referred to elsewhere in this document as the 2003 supplementary risk assessments.

Further, as noted by commenters, the 1996 risk assessments did not contain a thorough description of how the mitigation measures required under the regulations in § 319.37-8(e) reduce the risk posed by the specific quarantine pests of penjing that were identified in the risk assessments. To address these concerns, we have prepared a risk management analysis, “Pest Risk Management for Chinese Penjing Plants (September 15, 2003),” that includes a substantial discussion of how the risk mitigation measures required under this final rule mitigate the risks posed by the classes of quarantine pests that were identified as likely to follow the commodity import pathway. The 2003 risk management analysis, as well as the 2003 supplemental risk assessments are available on the Internet at http://www.aphis.usda.gov/ppq/pim/.

In this document, APHIS is adopting its proposal to allow the importation of penjing plants from China established in an approved growing medium as a final rule, with the changes discussed in this document. Specifically, we are allowing the importation of Buxus sinica, Sageretia thea, Serissa foetida, Podcarpus macrophyllus, and Ehretia microphylla penjing plants in growing media from China only.

Under § 412(a) of the Plant Protection Act, the Secretary of Agriculture may prohibit or restrict the importation and entry of any plant or plant product if the Secretary determines that the prohibition or restriction is necessary to prevent the introduction into the United States or the dissemination within the United States of a plant pest or noxious weed.

The Secretary has determined that it is not necessary to prohibit the importation of five species of penjing plants from China that are established in an approved growing medium in order to prevent the introduction into the United States or the dissemination within the United States of a plant pest or noxious weed. This determination is based on the findings of the risk documents referred to earlier in this document and the Secretary's judgment that the application of the measures required under this rule will prevent the introduction or dissemination of plant pests into the United States.

Under this final rule, penjing plants of the species Buxus sinica, Sageretia thea, Serissa foetida, Podocarpus macrophyllus, and Ehretia microphylla imported in growing media are subject to the requirements of paragraph (a) of § 319.37-8 of the regulations, which requires, with certain exceptions, that plants offered for importation into the United States be free of sand, soil, earth, and other growing media. This requirement is intended to help prevent the introduction of plant pests that might be present in the growing media; the exceptions to the requirement take into account factors that mitigate that plant pest risk. Those exceptions, which are found in paragraphs (b) through (e) of § 319.37-8, consider either the origin of the plants and growing media (paragraph (b)), the nature of the growing media (paragraphs (c) and (d)), or the use of a combination of growing conditions, approved media, inspections, and other requirements (paragraph (e)).

That combination approach found in § 319.37-8(e) provides conditions under which plants from 10 listed taxa may be imported into the United States established in an approved growing medium. In addition to other requirements, § 319.37-8(e):

• Specifies the types of growing media that may be used;

• Requires plants to be grown in accordance with written agreements between APHIS and the plant protection service of the country where the plants are grown and between the foreign plant protection service and the grower;

• Requires the plants to be rooted and grown in a greenhouse that meets certain requirements for pest exclusion and that is used only for plants being grown in compliance with § 319.37-8(e);

• Restricts the source of the seeds or parent plants used to produce the plants, and requires grow-out or treatment of parent plants imported into the exporting country from another country;

• Specifies the sources of water that may be used on the plants, the height of the benches on which the plants must be grown, and the conditions under which the plants must be stored and packaged; and

• Requires that the plants be inspected in the greenhouse and found free of evidence of plant pests no more than 30 days prior to the exportation of the plants.

A phytosanitary certificate issued by the plant protection service of the country in which the plants were grown that declares that the above conditions have been met must accompany the plants at the time of importation. These conditions have been used successfully to mitigate the risk of pest introduction associated with the importation into the United States of approved plants established in growing media.

In addition to being subject to the general requirements of § 319.37-8(e), under this final rule, penjing plants imported from China in growing media must also meet the following requirements:

• The propagative materials used to produce the penjing plants may enter an approved greenhouse only as seeds, tissue cultures, unrooted cuttings, or rooted cuttings without growing media. Rooted cuttings may not be established or grown in soil at any time. Rooted cuttings may be established in a greenhouse or outside the greenhouse on raised benches (46 cm in height) in pots containing only APHIS approved growing media.

• When any cuttings are introduced into the greenhouse, they must be free of growing media, inspected, and found free of plant pests and then treated with a pesticide dip approved by the Animal and Plant Quarantine Service of the People's Republic of China that will control mites, scale insects, whiteflies, thrips, and fungi. The plants must be propagated from mother plants that have been visually inspected by an APHIS inspector or an inspector of the Animal and Plant Quarantine Service of the People's Republic of China and found free of certain pests.

• The penjing plants must be grown in a greenhouse that meets the requirements of § 319.37-8(e) for at least 6 months immediately prior to export.

• While in the greenhouse, plants must be treated with appropriate pesticides at least once every 10 days or as needed for 3 months before shipping to maintain a pest-free condition.

These additional requirements were determined to be necessary according to risk analysis to mitigate the unique risks posed by the five species of penjing plants that are eligible for importation from China in growing media under this final rule.

On August 19, 2002, APHIS published in the Federal Register a final rule (67 FR 53727-53731, Docket No. 00-042-2) that amended the regulations pertaining to all imported artificially dwarfed plants. Under the requirements established by that final rule (contained in § 319.37-5(q)), imported artificially dwarfed plants must be grown in accordance with the following requirements and be accompanied by a phytosanitary certificate containing declarations that those requirements have been met:

• The artificially dwarfed plants must be grown for at least 2 years in a greenhouse or screenhouse in a nursery registered with the government of the country where the plants were grown;

• The greenhouse or screenhouse in which the artificially dwarfed plants are grown must have screening with openings of not more than 1.6 mm on all vents and openings, and all entryways must be equipped with automatic closing doors;

• The artificially dwarfed plants must be grown in pots containing only sterile growing media during the 2-year period when they are grown in a greenhouse or screenhouse in a registered nursery;

• The artificially dwarfed plants must be grown on benches at least 50 cm above the ground during the 2-year period when they are grown in a greenhouse or screenhouse in a registered nursery; and

• The plants and the greenhouse or screenhouse and nursery where they are grown must be inspected for any evidence of pests and found free of pests of quarantine significance to the United States at least once every 12 months by the plant protection service of the country where the plants are grown.

We wish to clarify that, for the purposes of the regulations, plants less than 2 years of age are not considered to be artificially dwarfed, even if they have been trained in the same manner as other artificially dwarfed plants. Although the regulations in § 319.37-5(q) require artificially dwarfed plants to be grown in a greenhouse for 2 years, plants that are less than 2 years of age may be imported subject to applicable regulations in “Subpart—Nursery Stock, Plants, Roots, Bulbs, Seeds, and Other Plant Products” (§§ 319.37 through 319.37-14).

The regulations in § 319.37-5(q) were proposed and adopted after publication of our proposed rule regarding the importation of penjing from China in growing media, and were intended to address the risk that imported artificially dwarfed plants could be infested by longhorned beetles. These requirements do not apply to penjing plants imported from China in growing media under the regulations in § 319.37-8(e) unless the imported penjing plants are 2 years of age or older. Penjing plants less than 2 years of age that are grown in accordance with the requirements of § 319.37-8(e) are not likely to become infested with longhorned beetles due to pest-exclusionary greenhouse conditions. Furthermore, such plants are not likely to be of suitable size to provide harborage for wood-boring beetles.

We believe that plants that are 2 years of age or greater may reach dimensions that could provide harborage for longhorned beetles, and therefore, penjing plants imported from China in growing media that are 2 years of age or older must satisfy the requirements of this final rule and the requirements of § 319.37-5(q). For example, the regulations in § 319.37-5(q) require that plants be grown for 2 years in a greenhouse or screenhouse with screen openings no greater than 1.6 mm in size, while § 319.37-8(e) requires that plants be grown for 6 months in a greenhouse with screen openings no greater than 0.6 mm in size. Again, both requirements must be satisfied. One way to satisfy both requirements would be to grow the plants in accordance with § 319.37-5(q) for 18 months, and then move them to a greenhouse that meets the requirements of § 319.37-8(e) for 6 additional months. Alternately, the plants could be grown in a greenhouse that meets the requirements of § 319.37-8(e) for a total of 24 months, thus eliminating the need for multiple facilities and the movement of plants.

The current regulations in § 319.37-5(q) do not make it clear that plants less than 2 years of age are not subject to the regulations in that section. We are therefore clarifying that fact in this final rule. This change will not affect the way the current regulations are enforced, and is necessary to clarify what imported plants are subject to the requirements of § 319.37-5(q), especially in light of the revisions made to the regulations by this final rule.

We received eight comments on the proposed rule. Two comments, which arrived during the first 60 days of the comment period, simply asked for an extension of the comment period, which we granted. The other six comments were from representatives of plant industry organizations, an invasive species interest group, and representatives of State agricultural agencies.

We also received seven comments in response to our September 2003 notice of the availability of the environmental assessment. Some of those comments pertain to the risk documents or to the proposed rule for this action. All of these comments are addressed below, along with comments submitted during the comment period for the proposed rule.

One commenter stated that due to budget cuts and downsizing in Federal agencies, it is unclear whether APHIS can continue to conduct adequate inspections, especially in the face of an increase in the amount of plant material entering the United States.

While some Federal agencies have been subject to budget cuts and downsizing, APHIS's appropriated funding for Agricultural Quarantine Inspection (AQI) Programs has doubled since 1998, from approximately $27.2 million to $55 million in 2002. Funds collected via AQI user fees have increased from $140.5 million in 1998 to $260 million in 2002. The inspections required under this rule will not be affected by the transfer of APHIS personnel to the Department of Homeland Security (DHS). All plants imported under this rule are required to be imported into Federal plant inspection stations, 2 which continue to be staffed by specially trained APHIS, not DHS, inspectors. APHIS has reviewed its resources and believes it has adequate resources available to ensure compliance with the conditions of the final rule.

Another commenter suggested that some inspectors may not be able to recognize every pest of risk, and claimed that APHIS's own pest interception data show that inspectors are often unable to identify the genus and species of intercepted pests.

When an unknown pest is found, inspectors may allow treatment of the commodity; they may allow the shipper to re-export the commodity to the country of origin, or, in some cases, to another country, or they may destroy the commodity, if necessary. Such decisions are based on the information that is available on the pests and are made in consultation with APHIS-Plant Protection and Quarantine's National Identification Service, 3 which is made up of national experts on pest identification.

One commenter stated that the conditions imposed by § 319.37-8 cannot be verified by APHIS because the cost of attempting to verify compliance is a significant expense and would require an unprecedented level of cooperation from other governments and their agencies.

Under the regulations in § 319.37-8, there must be an agreement between APHIS and a foreign entity for enforcement of the regulations in that section. In this case, the agreement will technically be between APHIS and the national plant protection organization of China. This agreement is referred to elsewhere in this document as the bilateral workplan. Each grower who wishes to export to the United States under the regulations must enter into an agreement with the national plant protection organization of the People's Republic of China whereby he or she must agree to comply with the provisions of the regulations in § 319.37-8 and to allow APHIS inspectors, and representatives of the People's Republic of China's national plant protection organization, access to the growing facility as necessary to monitor compliance with the provisions of that section. China's national plant protection organization is responsible for ongoing oversight of the program. APHIS inspectors will monitor for compliance with the regulations by making periodic visits to production sites, as is the case with current and past plants in growing media programs such as the following:

• In the Netherlands, two to four greenhouses (companies) have participated in the plants in growing media program each year since 1990. Both ferns and Anthurium have been grown and exported to the United States. Currently, three greenhouses are in the program. APHIS plant health specialists inspect the greenhouses 4 to 12 times a year for compliance with program requirements, including the absence of plant pests. No greenhouses have been found to be noncompliant, and no plant pests have been found on any of these visits.

• In Israel, one greenhouse growing ferns and African violets participated in the plants in growing media program between 1990 and 1994. This facility was inspected by APHIS plant health specialists three to five times a year. Again, no greenhouses were found to be noncompliant and no plant pests were found.

Based on our experience with these programs, we are confident that the safeguards work, and that we can verify compliance effectively.

One commenter questioned what will happen if parties are caught out of compliance, including in the event of pest- or disease-infested shipments.

If APHIS determines that certain species of penjing imported from China in growing media contain quarantine or actionable pests, APHIS will investigate the source of the detection and apply appropriate measures to mitigate the pest risk, including stopping imports from a specific producer or shutting down the entire program, if the circumstances show that either of these actions is warranted.

As noted earlier in this document, several commenters expressed that the rule should apply only to imports of Buxus sinica, Sageretia thea, Serissa foetida, Podocarpus macrophyllus, and Ehretia microphylla penjing plants, since those were the only species considered in the 1996 risk assessments. The commenters expressed concern that if the rule was applied at the genus level for each species without considering the unique risks posed by other species within the genus, imports would pose greater pest risks than APHIS estimated in its risk assessments.

We agree with commenters' concerns, and this final rule allows only the importation of Buxus sinica, Sageretia thea, Serissa foetida, Podocarpus macrophyllus, and Ehretia microphylla penjing plants, as those species were the only ones considered in the 1996 risk assessments.

Several commenters stated that APHIS should reexamine its 1996 pest risk assessments, analysis procedures, and policies to ensure that they are consistent with current levels of scientific knowledge and standards. Commenters suggested that the 1996 risk assessments should form “a link between scientific data and decision makers,” but also that decisionmakers must have accurate and adequate scientific data upon which to base their decisions—which, the commenters argued, is not the case in this rulemaking. The commenters further claimed that the risk assessors' conclusions were not supported by enough scientific information and that the risk assessments should describe the processes and information sources used to estimate the risk posed by the importation of each plant species.

As noted elsewhere in this document, we have updated the 1996 risk assessment to bring them up to current standards. These updates included (1) inserting the data from the 1996 risk assessment into the risk assessment document format currently used by APHIS, (2) searching for additional research and data published since the 1996 risk assessment was prepared that could have a bearing on the findings of the risk assessment, and (3) preparing a risk management analysis to address how to reduce the risk posed by quarantine pests of the five species of penjing that can be expected to follow the import pathway. The 2003 supplemental risk assessments and risk management analysis also cite scientific evidence upon which conclusions were based.

We believe that by making the link between the identified quarantine pests and the mitigation measures more apparent, we have addressed the commenters' concerns about the need for a link between scientific data and decisionmakers. The 2003 risk assessment and risk management analysis are based on the best data available to us at the time the documents were drafted, and they provide a clear and rational basis as to why the five identified species of penjing imported from People's Republic of China in growing media will not lead to the introduction of plant pests or noxious weeds into the United States.

Further, the pest list contained in the 1996 and 2003 risk assessments are based on (1) a search of all available scientific literature and (2) APHIS's pest interception records for imported plants of the five penjing species. As such, we examined data on prior bare-root penjing imports and visited some of the production sites that would export as a result of the final rule. Furthermore, any exports of the five species of penjing by People's Republic of China would be contingent on an inspection of the production sites by APHIS and the execution of the bilateral workplan described earlier in this document. We believe our 2003 risk analysis provides an adequate analysis of the risks posed by quarantine pests, and documents how the measures in § 319.37-8(e) remove those pests from the import pathway.

Several commenters stated that basing a risk assessment on a literature search has some inherent weaknesses. One of the commenters stated that literature searches do not catch all pests due to the fact that pests have different common names, and because only the title words of literature are searched. Several commenters also stated that insufficient scientific literature and biological information regarding penjing pests exists to justify reliance upon a literature search, as the five species of penjing are not a major agricultural commodity and research has not been conducted to the necessary depth for every pest on every penjing species. Several commenters noted that penjing is an uncommon crop, and that as such, has not had the extensive research that more widely produced crops typically endure. Another commenter claimed that the risk potential for all the pest species identified may be high, yet due to a lack of information, the potential effects of penjing importation cannot be adequately addressed at this time. Another commenter stated that the 1996 risk assessment may not consider all potential pests, and relatedly, other commenters stated that the risk mitigations are not designed to protect against all potential unidentified pests.

The purpose of conducting an analysis of the risk posed by imported agricultural commodities is to evaluate available scientific evidence and to provide an evaluation of the risk associated with the importation of those commodities. As such, APHIS can only make the determination to allow the importation of the commodity based on the current state of scientific knowledge. In developing the list of pests that are analyzed in the 1996 and 2003 risk assessments, we began with a list of pests provided to us by People's Republic of China. We then consulted applicable scientific literature (including field surveys done to date) and reviewed APHIS's records to determine what pests were intercepted on imported plants of the five penjing species. Literature searches are unique to each risk analysis, and typically begin with broad searches of both abstracts of publications and the entire text of publications, depending on the database being searched. These initial searches typically use scientific species, genus, and family names, as well as known common names of plants. As analysts learn more about the pests involved and their nomenclature, additional pest-specific searches are conducted. We believe these sources provide an adequate means to identify and assess pests of concern, even on plants considered to be uncommon crops.

While we do not believe there is a shortage of appropriate scientific information in this specific case, if APHIS were to regulate the trade of agricultural commodities based on the risk posed by unknown factors, such an action could be viewed as highly arbitrary, which could potentially affect the export markets for our own domestically produced commodities. Under the Plant Protection Act, APHIS protects American agriculture while facilitating the trade of agricultural commodities. There is always some uncertainty associated with the risk posed by imported agricultural products, and if zero risk were the standard applied, there would be no international trade in agricultural products. While we can never be certain that our methods, regulations, and policies will exclude pests 100 percent of the time, our goal is to do just that, to the extent practicable. We are confident that the measures required under this rule will mitigate the pest risk posed by importing penjing plants of the species Buxus sinica, Sageretia thea, Serissa foetida, Podocarpus macrophyllus , and Ehretia microphylla in approved growing media. Our judgment is supported by the fact that bare-rooted penjing plants and the growing media in which they will be imported have separately been imported from throughout the world for many years with no known associated pest introductions. Given that the plants in growing media will be subject to a number of additional requirements (the effects of which are considered and evaluated in the 2003 risk management analysis) that do not apply to bare-rooted plants, we believe that the risk posed by known and unknown pests is appropriately reduced, to the extent practicable, by the measures required by this final rule.

Several commenters stated that we had not included certain pests of concern in the 1996 pest risk assessments. The commenters also claimed that the risk assessments should be reevaluated in light of past detections of wood-boring citrus longhorned beetles that were believed to be associated with imported artificially dwarfed plants.

As described earlier in this document, in August 2002, APHIS amended the regulations pertaining to the importation of artificially dwarfed plants from all countries. Those amendments to the regulations were intended to address the risk that imported artificially dwarfed plants could contain longhorned beetles. Further, we are confident that our 1996 risk assessments and our 2003 risk assessment and management documents consider all pests known to be associated with the five species of penjing. Based on the findings of our risk documents, we believe that the measures contained in § 319.37-8(e) will effectively remove known quarantine pests from the import pathway. As stated previously, the measures contained in § 319.37-5(q) will effectively address the risk posed by longhorned beetles.

Several commenters claimed that inspection is not a reliable mitigation against many pests, including pathogens.

Inspection is only one of several risk mitigation measures required by this final rule to be applied to penjing plants imported from China in growing media, and is not intended to be the sole source of protection against the introduction of pests, including pathogens. The combined effects of several other measures required are described in detail in the 2003 risk management analysis. We believe the application of the measures required by the plants in growing media regulations in § 319.37-8(e), as revised, is sufficient to reduce the risk posed by penjing plants imported from China in growing media to the extent practicable.

One commenter suggested that APHIS should require plant defoliation prior to export of plants from China, since defoliation would eliminate many foliar pathogens and make visual inspections of the plant at the port of entry easier to conduct.

We are confident that the proposed preshipment inspection and pesticide sprays will remove foliar pests of concern from the import pathway. Furthermore, it is standard practice for inspectors at plant inspection stations to visually inspect the entire imported plant, including foliage.

Several commenters noted that the proposed rule's provisions allow field-grown plants to be moved into a greenhouse, and claimed that the risk posed by such an action is unacceptable due to the potential for field-grown plants to become infested with soil-based pests such as nematodes prior to entry into the greenhouse.

We agree that the risks noted by commenters should be further mitigated. In response, we are prohibiting the entry of field-grown plants into approved greenhouses. Under this final rule, the propagative materials used to produce artificially dwarfed (penjing) plants may enter an approved greenhouse only as seeds, tissue cultures, unrooted cuttings, or rooted cuttings with no attached growing media. Furthermore, cuttings may not be established or grown in soil at any time, but may be established in a greenhouse in approved media or outside the greenhouse on raised benches (46 cm in height) in pots containing only APHIS approved growing media. We believe this revision to our proposal reduces the risk that plants entering an approved greenhouse could be infested with nematodes or other soil-based pests to the extent practicable.

One commenter stated that the risk mitigations contained in the proposed rule rely too heavily on the use of chemicals and further suggested that serious alien pests are resistant to many highly toxic and persistent chemical insecticides. That commenter also noted that many effective pesticides are no longer available in the United States. Another commenter suggested that APHIS needs to require the use of specific chemicals and provide efficacy data for each one.

There is no specific scientific evidence that any of the quarantine pests affecting the five species of penjing are resistant to pesticides. We are confident that the measures required under the regulations in § 319.37-8(e) will reduce the risk posed by penjing plants imported from China, regardless of whether or not the pests are resistant to pesticides. Our judgment is supported by the fact that these plants have been imported bare-rooted for many years, with no known associated pest introductions. Given that the plants in growing media will be subject to a number of additional requirements that do not apply to bare-rooted plants, we believe that the risks are appropriately mitigated.

APHIS generally does not require, by regulation, that specific pesticides be used to control pests as part of foreign import programs, given that pesticide labels are subject to change and given that certain pesticides may not be available in all countries. Rather, APHIS will not enter into a bilateral workplan with an exporting country unless the exporting country provides us with data on the efficacy of pesticides that are to be applied as part of a regulatory system.

One commenter claimed that the success of the proposed rule depends upon the cooperation and enforcement of the government of exporting country, which in many cases simply are inadequate or underfunded. The commenter claimed that compliance with the conditions spelled out in § 319.37-8(e) could only be assured if an inspector were on-site every hour of every day in every “certified” greenhouse—and perhaps not even then—and stated that signing an agreement does not guarantee that it will be followed. The commenter stated that APHIS should take extra precautions to enter only into agreements that have a high likelihood of compliance and claimed that there is no such assurance in this case.

The regulations in § 319.37-8 require that for penjing producers in the People's Republic of China to export Buxus sinica, Sageretia thea, Serissa foetida, Podocarpus macrophyllus, and Ehretia microphylla to the United States, there must be an agreement in place that stipulates provisions for how the regulations will be enforced. Furthermore, each grower who wishes to export to the United States under the regulations must enter into an agreement with the national plant protection organization of the People's Republic of China whereby he or she must agree to comply with the provisions of the regulations in § 319.37-8 and to allow APHIS inspectors, and representatives of the People's Republic of China's national plant protection service, access to the growing facility as necessary to monitor compliance with the provisions of that section.

We disagree with the commenter that these agreements do not provide for verification that the conditions specified in the regulations will be followed. As noted elsewhere in this document, APHIS monitors production sites to ensure compliance with the regulations. If the regulations are not followed, inspections of the production sites and inspections of the imported plants at the ports of entry in the United States will reveal as much, and APHIS may hold imports until an investigation can be completed and appropriate measures initiated, including stopping imports from a specific producer or shutting down the entire program, if the circumstances show that such an action is warranted. For this reason, the national plant protection organization of the People's Republic of China and growers have an economic incentive to follow the regulations.

Several commenters stated that screens of 0.6 mm mesh are inadequate to keep out certain important pests.

The screen mesh size required under the regulations in § 319.37-8(e) is sufficient to exclude most life stages of all quarantine pests of the five penjing species. Mesh screening is one part of the systems approach, and those screens are used in conjunction with pesticide dips; these measures act as redundant phytosanitary measures to remove all pests of concern from the pathway. Regular inspections of growing premises are intended to ensure that plants are grown in a pest-free environment, and our past experience with this type of program provides evidence that this approach is successful.

Some commenters stated that increased risk of pest introduction comes not from penjing plants but from the medium in which they are shipped, which, they maintain, the 1996 risk assessment did not consider. The commenters stated that the likelihood of importing pests and diseases is greatly increased where plants are already established in sphagnum, or any other growing medium, as bare-root plants allow a more thorough inspection of plant roots and easier detection of any pests or diseases which may be present. One commenter stated that the medium also provides harborage for dormant pest stages and may delay pest and disease symptoms. Another commenter stated that insects and other pests that feed on roots are found in substrates during part of their life cycle may not be noticed by the APHIS inspector during inspection. The commenters also stated that there may be an unacceptable risk of pest introduction associated with even bare-root penjing.

The 1996 risk assessment and 2003 risk documents consider the fact that growing media has an effect on pests' ability to find suitable shelter and an effect on the ability of inspectors to detect certain pests that may be obscured by growing media. Specifically, the risk assessment took these factors into consideration in its estimates of the likelihood of introduction. The risk posed by growing media in and of itself was not considered in the risk assessment, because the specific types of growing media are already approved and listed in § 319.37-8(e)(1) of the regulations, and have been successfully imported into the United States for years. Such media do not present a risk of pest introduction into the United States.

Based on many years of inspections of bare-rooted artificially dwarfed plants, we do not believe that it is necessary to impose any additional restrictions on their entry, beyond those we established in 2002 (described earlier in this document). We believe the recently amended regulations provide protection against the introduction of pests known to infest such plants.

One commenter stated, without providing specific evidence, that growing media increases the possibility that the imported commodity will be a host for bacteria and viruses.

We are aware that many plants, including those not established in growing media, carry bacterial and viral pathogens. Available literature, however, indicates that none of these pathogens are specifically identified as a pest of the five species of penjing. As stated elsewhere in this document, we can only make determinations as to whether a new agricultural commodity can be safely imported based on available scientific evidence, and we are not aware of any evidence that supports the commenter's suggestion. Given that the commenter did not identify particular viruses and bacteria, we have no basis to revise our risk documents.

One commenter stated that plants should be required to be established in sterile growing media rather than unused media, as was proposed.

Based on years of importations and inspections of various types of approved growing media we are confident that the approved growing media listed in § 319.37-8(e)(1), by virtue of their natural composition, are inhospitable to most pest species, and need not be sterilized to remain pest-free. Further, APHIS intends to require under the conditions of the bilateral workplan for this program that media will have to be safeguarded against pest infestation prior to entry into the greenhouse.

Several commenters expressed confusion regarding our use of the terms penjing and artificially dwarfed plants, and requested we clarify them.

A plant is considered by APHIS to be artificially dwarfed if the plant and its root system are trained and/or trimmed by a grower to restrict the plant's growth and to create or maintain an aesthetically pleasing miniature plant. Penjing is an art form which utilizes artificially dwarfed plants.

Nearly any species of plant can be artificially dwarfed, but certain species are preferred by growers due to their natural characteristics and ability to respond to training. Such plants are artificially dwarfed to create miniature landscapes in pots. In fact, a literal translation of the Chinese word penjing is “landscape in a pot.” The Chinese term penjing, like the Japanese term bonsai, simply refers to any plant that has received this kind of training, regardless of species of the plant. To clarify, this final rule applies to plants of Buxus sinica, Sageretia thea, Serissa foetida, Podocarpus macrophyllus, and Ehretia microphylla that have been artificially dwarfed by growers, and that are imported in growing media from China.

One commenter stated that the regulatory flexibility analysis included in the proposed rule was superficial and not sensitive to the losses the commenter suggested that U.S. plant retailers and importers would face as a result of the importation of penjing established in growing media from China. The commenter also suggested that the economic analysis did not adequately account for the extra costs and losses that U.S. growers may suffer should a penjing-related pest become established in the country.

The commenter did not provide specific figures or other data for us to evaluate. APHIS is bound under international trade agreements to remove technical barriers to trade in the event that such barriers are found by scientific analysis to be unnecessary. In this case, we have conducted risk analyses that found that all quarantine pests associated with the five species of penjing from China are effectively removed from the import pathway by the measures required under § 319.37-8(e). As such, we have determined that it is not necessary to prohibit those penjing species from the People's Republic of China in approved growing media. We believe our final regulatory flexibility analysis complies with the requirements of the Regulatory Flexibility Act, as amended. Further, our analysis makes use of all the relevant data that we could locate.

One commenter suggested that the proposed rule was published prematurely because APHIS's Section 7 consultations with the U.S. Fish and Wildlife Service were incomplete.

We have now concluded those consultations, and we have received concurrence from the U.S. Fish and Wildlife Service. Information regarding those findings is available by contacting the person listed under FOR FURTHER INFORMATION CONTACT.

Another commenter expressed confusion as to why the title for the environmental assessment for this action referred to a final rule, when no final rule had been published at the time the environmental assessment was made available for public review.

The environmental assessment for this action pertained simply to this rulemaking action, and evaluated the potential environmental effects of the proposed imports given the application of the provisions of this final rule, which are different from the provisions originally proposed.

Another commenter stated that the body and conclusion of the environmental assessment made contradictory statements regarding eradication and control programs.

We note the potential for confusion in these statements, and have revised the environmental assessment to eliminate the potential for confusion. The conclusion now clearly corresponds to statements made within the body of the document regarding control and eradication programs.

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, with the one change, as discussed in this document.

This rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In this rule we are amending the regulations governing the importation of plants and plant products to add artificially dwarfed (penjing) plants of the species Buxus sinica, Ehretia microphylla, Podocarpus macrophyllus, Sageretia thea, and Serissa foetida from the People's Republic of China to the list of plants that may be imported in an approved growing medium subject to specified growing, inspection, and certification requirements. This rule will relieve restrictions that currently allow these species to be imported only as bare-rooted plants.

This analysis provides a qualitative assessment of the potential costs and benefits to U.S. interests and domestic small entities that are associated with the regulatory change. Given that pest risks will be adequately mitigated by the application of measures required by this rule, both costs and benefits associated with the rule derive primarily from increased availability of artificially dwarfed plants. Costs of the regulations will be borne largely by U.S. penjing growers and producers who could experience increased competition and marginally lowered prices. Benefits will be enjoyed by U.S. consumers, who will have access to an increased variety of penjing for consumption at lowered prices, and also by U.S. penjing importers (many of whom are also growers).

Historically, the five penjing species have been enterable from China as bare-rooted plants. Penjing potted in growing media may have some advantages over bare-rooted plants, including the potential for enhanced survival time in transit and decreased transit costs. Bare-rooted plants have short survival time outside of potting media and must be shipped by air freight. Potted plants, on the other hand, are more likely to tolerate the long and much less expensive ocean freight transit process.

APHIS considered three alternatives to the implementation of a rule to allow the importation of penjing plants in growing media from China: (1) No action (no change to the current regulations), (2) a rule change to allow the importation of 5 species of penjing plants in approved growing media subject only to the general requirements contained in § 319.37-8(e) without additional restrictions that are specific to penjing, and (3) a rule change to allow the importation of 5 species of penjing plants in approved growing media subject to the general requirements contained in § 319.37-8(e) and subject to additional restrictions that are specific to penjing (preferred alternative).

Under the first alternative (no change to the current regulations) APHIS would continue to allow the importation of bare-rooted penjing plants from China, according to the current regulations in §§ 319.37 through 319.37-14 and would not allow penjing plants to be imported in approved media. This alternative was not chosen because we have conducted risk analyses that found that all quarantine pests associated with the five species of penjing from China are effectively removed from the import pathway by the measures required under § 319.37-8(e). As such, we have determined that it is not necessary to prohibit those penjing species from the People's Republic of China in approved growing media.

The second alternative would allow importation of B. sinica, E. microphylla, P. macrophyullus, S. thea, and S. foetida in approved growing media from China under the universal requirements that apply to all plants imported in growing media under § 319.37-8(e), without additional penjing-specific restrictions. This alternative was not chosen because it did not adequately mitigate the risk posed by specific pests that may be associated with the plants in media in China.

Under the third alternative, APHIS would allow the importation of penjing plants in APHIS-approved growing media provided that certain phytosanitary requirements are met. This is the preferred regulatory option because it effectively mitigates the risk posed by all identified pests and is responsive to China's request.

The changes to the regulations in § 319.37-8(e) include specific risk management measures that, when applied, will provide adequate protection against the introduction into the United States of certain pests that may be present in shipments of penjing plants from China that are established in growing media. The components of this regulatory system, either used singly or in combination with one another, work toward ensuring that plant pests or diseases will not be imported with penjing plants from China. The components of the regulatory system are described in detail earlier in this document and in the 2003 risk management analysis.

Neither the U.S. Department of Agriculture nor the U.S. Census Bureau report domestic production data or trade data for artificially dwarfed plants. Available data on imports, which are based on number of shipments rather than number of plants, shows that in 2001, 207 shipments of artificially dwarfed plants entered the United States. Almost half (97) of the shipments were from China, 23 were from Japan, 13 were from Vietnam, and the remaining 37 were from Korea, Hong Kong, Canada, and other sources.

A National Arboretum survey of North American nurseries and businesses involved in supplying artificially dwarfed plants and related products  4 identified 367 bonsai and penjing firms, 95 percent of which were in the United States (not including retail nurseries, garden centers, florists, or kiosks found in large U.S. shopping malls, which buy small numbers of plants for resale). The number of firms has been increasing steadily since the early 1950s. One hundred eight firms (30 percent) were identified in the Southeast, 102 (28 percent) were identified in the Southwest, including California in particular, 84 (23 percent) were identified in the Northeast, 37 (10 percent) were in the Midwest, and 26 (7 percent) in the Northwest; however, a few of the firms identified in the Northeast and Northwest are located in Canada. Ninety-seven (26 percent) full-service firms were identified, which import, obtain from other sources, and produce plants and supply all of the tools needed to cultivate and display plants, as well as 82 plant and/or seed suppliers, 81 tool suppliers, 46 pot and container suppliers, 32 educational material suppliers, 28 suppliers of educational services, and one rock supplier.

Of the 367 bonsai-related firms reported in the survey, the 225 most affected by this rule would probably be the full service bonsai nurseries (97 firms in 1997), specialty stores selling plants (82 firms in 1997), and stores selling containers and pots (46 firms in 1997).

Retail prices for penjing, reported by one of the larger full-service firms on the west coast, range between $5 and $10 for 80 percent of the trees in inventory, $20 and $35 for 10 percent of the trees in inventory, and $36 and up for the remainder. 5 Three year old penjing plants, 7 inches tall, typically sell for $20.00.

In general, retail penjing prices increase with age, quality, and the amount of labor devoted to production and maintenance. Retail prices also appear to vary by species. A simple ordinary least squares regression of retail prices on age, height, and species indicates that retail prices increase almost $11 and $9 for each year a Japanese bonsai and Chinese penjing, respectively, have been alive. In addition, retail prices increased over $14 and a little less than $2 for each tree inch. The marginal impact of age on retail price was statistically significant for bonsai and penjing; however, the marginal impacts were not statistically different. The price data and regression statistics indicate that Japanese bonsai are much more expensive than Chinese penjing, as well as older and larger.

Given the age/price relationships reported here, we would expect young penjing (greater than 6 months and less than 24 months) plants imported from China under this rule to be at the lower end of the price spectrum, and to sell for less than the $20.00 price reported for 7 inch 3-year-old penjing plants.

The majority of penjing are imported via air freight or ocean vessel with soil removed from the roots. Because penjing and bonsai eventually die if left bare-rooted too long (especially plants 25 years old or older), only young trees can survive ocean shipment bare-rooted.

Transportation costs vary widely and depend on the size of the tree, whether soil is attached to the roots, and the method of shipment (See table below). It may cost roughly $0.50 to ocean ship a small bare-rooted tree, $3.00 to ship the same bare-rooted tree airfreight, and $115 to ship a larger bare-rooted tree airfreight.

Transportation costs increase dramatically for potted plants in media, because costs are based on the dimensions of the tree and its weight, both of which increase with the addition of growing media and a pot. For example, it may cost anywhere between $400 and $1,200 to airfreight a large tree with growing media attached to its roots  6 and between $67 and $200 for ocean shipment, using the relationship between ocean and airfreight costs for small bare-rooted trees.

The data in the table present air and sea shipping costs for bare-rooted and potted penjing as a percentage of retail plant prices (for plants of a height and price appropriate to 2 year old trees). Because of data limitations, shipping costs for plants less than 2 years old are not analyzed here. Shipping costs are a declining percentage of retail price for all four transit modes examined here. Air freight for penjing potted in media is by far the most expensive shipping option. Sea shipment of bare-rooted plants is the least expensive; but is usually not feasible because bare-rooted plants tend to die in transit during the long sea voyage.

The cost of air shipping bare-rooted plants and the cost of sea shipping potted plants in media are roughly equivalent. This relationship suggests that the decision about whether to air freight bare-rooted penjing plants or sea freight potted penjing to the United States will probably be made on a case-by-case basis, and will depend on factors such as size, age, and species.

Upon implementation of this rule, five species ( Buxus sinica, Ehretia microphylla, Podocarpus macrophyullus, Sageretia thea , and Serissa foetida ) of potted penjing plants (of any age, but which have been grown in a greenhouse for at least 6 months) will be enterable into the United States. All other species of penjing plants may continue to enter the United States as bare-rooted plants as they have done in the past. Under the new rule we might see increased imports of less expensive potted penjing of the five designated species.

It is impossible to predict the amount by which volume of penjing imports from China will increase under this rule. Compliance with the more stringent mitigations required to ship potted penjing in media to the United States will impose additional costs on Chinese penjing producers. The extent to which the compliance costs associated with potted penjing will offset potential cost savings associated with shipping potted penjing is unclear. Possible sources of cost savings for potted penjing include improved survival in-transit for some ages/sizes plants; possible cost advantages associated with selling plants and pots together as a unit; or unit cost savings that might be associated with high volume importations of potted penjing by U.S. chain stores using proprietary shipping lines.

Many full-service bonsai nurseries import penjing from China and also grow their own artificially dwarfed plants; the net effects of potentially increased imports of lower-priced penjing from China on these firms is unclear. For large nurseries we contacted, roughly 45 percent of the current inventory is imported, mostly from China, and 55 percent is produced domestically or obtained from other sources. Potted penjing between 6 and 24 months shipped under this rule could compete with less expensive, younger, domestically produced dwarfed plants. But at the same time, these same firms would benefit by being able to import lower priced potted plants from China. Based on the National Arboretum survey, roughly 97 full service bonsai nurseries could be affected in this way. The net effect of the rule is expected to be positive, as consumers and some firms in the bonsai/penjing industry are expected to benefit from increased availability and potentially lower prices.

The U.S. Small Business Administration defines a small full-service bonsai and penjing nursery as one with annual sales receipts no greater than $6 million (NAICS 444220 Nursery and Garden Centers) or one with fewer than 100 employees (NAICS 422930 Flower, Nursery Stock, and Florists' Supplies Wholesalers). There were 97 full service bonsai nurseries in 1997. All of the full-service firms in the United States are small entities (Elias 2003). Net impacts of the regulation on these firms are unclear, as many of these firms are both importers and growers of penjing; however, impacts are not expected to be significant.

Small plant and/or seed suppliers are those with annual sales receipts no greater than $0.75 million (NAICS 111421, Nursery and Tree Production). There were 82 stores specializing in bonsai plants in 1997. It is thought that all of these were small firms. To the extent that these firms benefit from increased availability and variety of penjing at lower prices, the net effect of the regulation on these firms could be positive.

Small pot, container, tool, and rock suppliers in the industry are those with annual sales receipts no greater than $6 million (NAICS 444220, Nursery and Garden Centers; NAICS 451120, Hobby, Toy, and Game Stores). There were 128 firms specializing in bonsai/penjing tools in 1997. All are believed to be small firms. To the extent that the supply of penjing increases following implementation of this rule, the 82 bonsai tool and supply firms should be positively affected. Most custom bonsai container and pot manufacturers produce pots for more expensive plants, so they should not be significantly affected by this rule.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

An environmental assessment and finding of no significant impact (FONSI) have been prepared for this final rule. The assessment provides a basis for the conclusion that the importation of penjing plants from China in approved growing media under the conditions specified in this rule will not present a risk of introducing or disseminating plant pests and will not have a significant impact on the quality of the human environment. Based on the finding of no significant impact, the Administrator of the Animal and Plant Health Inspection Service has determined that an environmental impact statement need not be prepared.

The environmental assessment and FONSI were prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq. ), (2) regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and (4) APHIS's NEPA Implementing Procedures (7 CFR part 372).

The environmental assessment and FONSI may be viewed on the Internet at http://www.aphis.usda.gov/ppd/es/ppqdocs.html. You may request paper copies of the environmental assessment and FONSI from the person listed under FOR FURTHER INFORMATION CONTACT . Please refer to the title of the environmental assessment when requesting copies. The environmental assessment and FONSI are also available for review in our reading room, which is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call (202) 690-2817 before coming.

This final rule contains no new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

This rule is issued under Marketing Agreement No. 143 and Order No. 959, both as amended (7 CFR part 959), regulating the handling of onions grown in South Texas, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, South Texas onion handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable onions beginning August 1, 2003, and continue until amended, suspended, or terminated. 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. Such handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule decreases the assessment rate established for the Committee for the 2003-04 and subsequent fiscal periods from $0.085 to $0.03 per 50-pound equivalent of onions handled.

The South Texas onion marketing order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers and handlers of South Texas onions. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2002-03 and subsequent fiscal periods, the Committee recommended, and USDA approved, an assessment rate that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.

The Committee met on June 5, 2003, and unanimously recommended 2003-04 expenditures of $124,661 and an assessment rate of $0.03 per 50-pound equivalent of onions. In comparison, last year's budgeted expenditures were $325,400. The assessment rate of $0.03 is $0.055 lower than the rate currently in effect. The decrease in the assessment rate and budget is primarily due to the discontinuation of funding for production research projects and a lower marketing and promotion budget. The reduced assessment rate and budget lowers handler costs by about $220,000 and keeps the Committee's operating reserve at an acceptable level.

The major expenditures recommended by the Committee for the 2003-04 fiscal period include $74,661 for personnel and office expenses, $30,000 for compliance, and $20,000 for promotion expenses. Budgeted expenses for these items in 2002-03 were $72,002, $35,000, and $170,500, respectively.

The assessment rate recommended by the Committee was derived by dividing anticipated expenses by expected shipments of South Texas onions. Onion shipments for the fiscal period are estimated at 4 million 50-pound equivalents, which should provide $120,000 in assessment income. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve, should be adequate to cover budgeted expenses. Funds in the reserve (currently $256,982) will be kept within the maximum permitted by the order (approximately two fiscal periods' expenses, § 959.43).

The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.

Although this assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2003-04 budget and those for subsequent fiscal periods will be reviewed and, as appropriate, approved by USDA.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule 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 78 producers of onions in the production area and approximately 37 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $5,000,000.

Most of the handlers are vertically integrated corporations involved in producing, shipping, and marketing onions. For the 2002-03 marketing year, the industry's 37 handlers shipped onions produced on 12,740 acres with the average and median volume handled being 114,454 and 91,792 fifty-pound equivalents, respectively. In terms of production value, total revenues for the 37 handlers were estimated to be $73 million, with average and median revenues being $1.97 million and $1.58 million, respectively.

The South Texas onion industry is characterized by producers and handlers whose farming operations generally involve more than one commodity, and whose income from farming operations is not exclusively dependent on the production of onions. Alternative crops provide an opportunity to utilize many of the same facilities and equipment not in use when the onion production season is complete. For this reason, typical onion producers and handlers either produce multiple crops or alternate crops within a single year.

Based on the SBA's definition of small entities, the Committee estimates that 36 of the 37 handlers regulated by the order would be considered small entities if only their spring onion revenues are considered. However, revenues from other productive enterprises would likely push a large number of these handlers above the $5,000,000 annual receipt threshold. All of the 78 producers may be classified as small entities based on the SBA definition if only their revenue from spring onions is considered. When revenues from all sources are considered, a majority of the producers would not be considered small entities because receipts would exceed $750,000.

This rule decreases the assessment rate established for the Committee and collected from handlers for the 2003-04 and subsequent fiscal periods from $0.085 to $0.03 per 50-pound equivalent of onions handled. The Committee unanimously recommended 2003-04 expenditures of $124,661 and an assessment rate of $0.03 per 50-pound equivalent. The assessment rate of $0.03 is $0.055 lower than the current rate. The quantity of assessable onions for the 2003-04 fiscal period is estimated at 4 million 50-pound equivalents. Thus, the $0.03 rate should provide $120,000 in assessment income. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve, should be more than adequate to cover budgeted expenses.

The major expenditures recommended by the Committee for the 2003-04 fiscal period include $74,661 for personnel and office expenses, $30,000 for compliance, and $20,000 for promotion expenses. Budgeted expenses for these items in 2002-03 were $72,002, $35,000, and $170,500, respectively. In addition, the Committee budgeted $47,900 for production research in 2002-03.

The Committee reviewed and unanimously recommended 2003-04 expenditures of $124,661, which included increases in administrative expenses and decreases in the compliance and promotion expenses. The Committee did not approve any production research program expenses for 2003-04. In 2002-03, the Committee budgeted $47,900 for production research. Prior to arriving at this budget, the Committee considered information from various sources, including the Research and Market Development Subcommittee. Numerous alternative expenditure levels were discussed based upon the relative value of various promotion projects to the onion industry. The assessment rate of $0.03 per 50-pound equivalent of assessable onions was then determined by dividing the total recommended budget by the quantity of assessable onions, estimated at 4 million 50-pound equivalents for the 2003-04 fiscal period.

A review of historical information and preliminary information pertaining to the upcoming fiscal period indicates that the grower price for the 2003-04 fiscal period could range between $9.05 and $19.05 per 50-pound equivalent of onions. Therefore, the estimated assessment revenue for the 2003-04 fiscal period as a percentage of total grower revenue could range between .16 and .33 percent.

This action decreases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, decreasing the assessment rate reduces the burden on handlers, and may reduce the burden on producers. In addition, the Committee's meeting was widely publicized throughout the South Texas onion industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the June 5, 2003, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

This rule imposes no additional reporting or recordkeeping requirements on either small or large South Texas onion 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.

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

A proposed rule concerning this action was published in the Federal Register on November 21, 2003 (68 FR 65643). Copies of the proposed rule were also mailed to all onion handlers on November 24, 2003. Finally, the proposal was made available through the Internet by the Office of the Federal Register and USDA. A 30-day comment period ending December 22, 2003, was provided for interested persons to respond to the proposal. One comment in support of the proposal was received. The commenter expressed support for the decreased assessment rate due to the current economic condition surrounding the agricultural industry.

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 information and recommendation submitted by the Committee, the comment received, and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because the 2003-04 fiscal period began August 1, 2003, and the marketing order requires that the rate of assessment for each fiscal period apply to all assessable onions handled during such fiscal period. This action decreases the assessment rate for assessable onions beginning with the 2003-04 fiscal period. Further, handlers are aware of this rule which was recommended at a public meeting. Also, a 30-day comment period was provided for in the proposed rule and one comment in support of the assessment decrease was received.

This rule is issued under Marketing Agreement No. 115 and Marketing Order No. 982, both as amended (7 CFR Part 982), regulating the handling of hazelnuts grown in Oregon and Washington, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is intended that this action apply to all merchantable hazelnuts handled during the 2003-2004 marketing year (July 1, 2003, through June 30, 2004). This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

This rule establishes marketing percentages that allocate the quantity of inshell hazelnuts that may be marketed in domestic markets. The Board is required to meet prior to September 20 of each marketing year to compute its marketing policy for that year, and compute and announce an inshell trade demand if it determines that volume regulations would tend to effectuate the declared policy of the Act. The Board also computes and announces preliminary free and restricted percentages for that year.

The inshell trade demand is the amount of inshell hazelnuts that handlers may ship to the domestic market throughout the marketing season. The order specifies that the inshell trade demand be computed by averaging the preceding three “normal” years’ trade acquisitions of inshell hazelnuts, rounded to the nearest whole number. The Board may increase the three-year average by up to 25 percent, if market conditions warrant an increase. The Board's authority to recommend volume regulations and the computations used to determine the percentages are specified in § 982.40 of the order.

The quantity to be marketed is broken down into free and restricted percentages to make available hazelnuts which may be marketed in domestic inshell markets (free) and hazelnuts which must be exported, shelled, or otherwise disposed of by handlers (restricted). Prior to September 20 of each marketing year, the Board must compute and announce preliminary free and restricted percentages. The preliminary free percentage releases 80 percent of the adjusted inshell trade demand to the domestic market. The purpose of releasing only 80 percent of the inshell trade demand under the preliminary percentage is to guard against an underestimate of crop size. The preliminary free percentage is expressed as a percentage of the total supply subject to regulation (supply) and is based on the preliminary crop estimate.

The National Agricultural Statistics Service (NASS) has estimated hazelnut production at 35,000 tons for the Oregon and Washington area. The majority of domestic inshell hazelnuts are marketed in October, November, and December. By November, the marketing season is well under way.

At its August 28, 2003, meeting, the Board adjusted the NASS crop estimate down to 33,717 tons by deducting the average crop disappearance over the preceding three years (4.64 percent or 1,624 tons) and adding the undeclared carryin (341 tons) to the 35,000 ton production estimate. Disappearance is the difference between orchard-run production (crop estimate) and the available supply of merchantable product available for sale by handlers. Disappearance consists of (1) unharvested hazelnuts, (2) culled product (nuts that are delivered to handlers but later discarded), or (3) product used on the farm, sold locally, or otherwise disposed of by producers. The Board computed the adjusted inshell trade demand of 2,306 tons by taking the difference between the average of the past three years' sales (3,127 tons) and the declared carryin from last year's crop (821 tons).

The Board computed and announced preliminary free and restricted percentages of 5.4720 percent and 94.5280 percent, respectively, at its August 28, 2003, meeting. The preliminary free percentage was computed by multiplying the adjusted trade demand by 80 percent and dividing the result by the adjusted crop estimate (2,306 tons × 80 percent/33,717 tons = 5.4720 percent.) The preliminary free percentage thus initially released 1,845 tons of hazelnuts from the 2003 supply for domestic inshell use, and the preliminary restricted percentage withheld 31,872 tons for the export and shelled (kernel) markets.

Under the order, the Board must meet again on or before November 15 to recommend interim final and final percentages. The Board uses current crop estimates to calculate interim final and final percentages. The interim final percentages are calculated in the same way as the preliminary percentages and release the remaining 20 percent (to total 100 percent of the inshell trade demand) previously computed by the Board. Final free and restricted percentages may release up to an additional 15 percent of the average of the preceding three years' trade acquisitions to provide an adequate carryover into the following season ( i.e., desirable carryout). The order requires that the final free and restricted percentages shall be effective 30 days prior to the end of the marketing year, or earlier, if recommended by the Board and approved by USDA. Revisions in the marketing policy can be made until February 15 of each marketing year, but the inshell trade demand can only be revised upward, consistent with § 982.40(e).

The Board met on November 13, 2003, and reviewed and approved an amended marketing policy and recommended the establishment of interim final and final free and restricted percentages. The interim final free and restricted percentages were recommended at 6.8393 percent free and 93.1607 percent restricted. Final percentages, which included an additional 15 percent of the average of the preceding three-years' trade acquisitions for desirable carryout, were recommended at 8.2303 free and 91.7697 percent restricted effective May 31, 2004. The final free percentage releases 2,775 tons of inshell hazelnuts from the 2003 supply for domestic inshell use.

The interim and final marketing percentages are based on the Board's final production estimate and the following supply and demand information for the 2003-2004 marketing year:

In addition to complying with the provisions of the order, the Board also considered USDA's 1982 “Guidelines for Fruit, Vegetable, and Specialty Crop Marketing Orders” (Guidelines) when making its computations in the marketing policy. This volume control regulation provides a method to collectively limit the supply of inshell hazelnuts available for sale in domestic markets. The Guidelines provide that the domestic inshell market has available a quantity equal to 110 percent of prior years' shipments before allocating supplies for the export inshell, export kernel, and domestic kernel markets. This provides for plentiful supplies for consumers and for market expansion, while retaining the mechanism for dealing with oversupply situations. The established final percentages will make available an additional 469 tons for desirable carryout effective May 31, 2004. The total free supply for the 2003-2004 marketing year is 3,596 tons of hazelnuts, which is the sum of the final trade demand of 3,127 tons and the 469 ton desirable carryout. This amount is 115 percent of prior years' sales and exceeds the goal of the Guidelines.

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 initial 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.

Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those having annual receipts of less than $5,000,000. There are approximately 750 producers of hazelnuts in the production area and approximately 17 handlers subject to regulation under the order. Average annual hazelnut revenue per producer is approximately $36,133. This is computed by dividing NASS figures for the average value of production for 2001 and 2002 ($27,100,000) by the number of producers. The level of sales of other crops by hazelnut producers is not known. In addition, based on Board records, about 95 percent of the handlers ship under $5,000,000 worth of hazelnuts on an annual basis. In view of the foregoing, it can be concluded that the majority of hazelnut producers and handlers may be classified as small entities.

Board meetings are widely publicized in advance of the meetings and are held in a location central to the production area. The meetings are open to all industry members and other interested persons who are encouraged to participate in the deliberations and voice their opinions on topics under discussion. Thus, Board recommendations can be considered to represent the interests of small business entities in the industry.

Currently, U.S. hazelnut production is allocated among three market outlets: domestic inshell, export inshell, and kernel markets. Handlers and growers receive the highest return on domestic inshell, less for export inshell, and the least for kernels. Based on Board records of average shipments for 1993-2002, the percentage going to each of these markets was 13 percent (domestic inshell), 43 percent (export inshell), and 44 percent (kernels).

The inshell market can be characterized as having limited demand and being prone to oversupply and low grower prices in the absence of supply restrictions. This volume control regulation provides a method for the U.S. hazelnut industry to limit the supply of domestic inshell hazelnuts available for sale in the continental U.S. On average, 77 percent of domestic inshell hazelnuts are shipped during the period October 1 through November 30, primarily to supply the holiday nut market.

Many years of marketing experience led to the development of the current volume control procedures. These procedures have helped the industry to improve its marketing situation by keeping inshell supplies in balance with domestic needs. Volume controls fully supply the domestic inshell market while preventing an oversupply of that market.

The estimated inshell trade demand (2,306 tons) and the larger 2003 crop were key market factors leading to the Board's recommendation for the 8.2303 percent final free percentage. The 35,000 ton hazelnut production for 2003 is 15,500 tons more than in 2002, and 14,500 tons less than the production level in 2001, the largest crop in the last ten years.

Although the domestic inshell market is a relatively small proportion of total sales (13 percent of average shipments over the last ten years, and 11 percent of average shipments for the last two years), it remains a profitable market segment. The volume control provisions of the marketing order are designed to avoid oversupplying this particular market segment, because that would likely lead to substantially lower grower prices. The domestic kernel market and inshell exports are both expected to continue to be good outlets for U.S. hazelnut production.

Recent production and price data reflect the stabilizing effect of the volume control regulations. Industry statistics show that total hazelnut production has varied widely over the 10-year period between 1993 and 2002, from a low of 15,400 tons in 1998 to a high of 49,500 tons in 2001. Production in the shortest crop year and the biggest crop year was 49 percent and 159 percent, respectively, of the 10-year average tonnage of 31,220. Since low production years typically follow high production years (a consistent pattern for hazelnuts), lower production is expected in 2004.

The coefficient of variation (a standard statistical measure of variability; “CV”) for hazelnut production over the 10-year period is 0.39. In contrast, the coefficient of variation for hazelnut grower prices is 0.12, less than one third of the CV for production. The considerably lower variability of prices versus production provides an illustration of the order's price-stabilizing impacts.

Comparing grower cost of production to grower revenue in recent years highlights the financial impacts on growers at varying production levels. A recent hazelnut cost of production study from Oregon State University estimated cost of production per acre to be approximately $1,340 for a typical 100-acre hazelnut enterprise. Average grower revenue per bearing acre (based on NASS acreage and value of production data) equaled or exceeded that typical cost level twice between 1995 and 2002. Average grower revenue was below typical costs in the other years. Since 1995, the highest level of revenue per bearing acre was $1,552 (1997) and the lowest was $561 in 1996. Without the stabilizing impact of the order, growers may have lost more money. While crop size fluctuates, the volume regulations contribute to orderly marketing and market stability, and help to moderate the variation in returns for all producers and handlers, both large and small.

While the level of benefits of this rulemaking is difficult to quantify, the stabilizing effects of the volume regulations impact both small and large handlers positively by helping them maintain and expand markets even though hazelnut supplies fluctuate widely from season to season. This regulation provides equitable allotment of the most profitable market, the domestic inshell market. That market is available to all handlers, regardless of size.

As an alternative to this regulation, the Board discussed not regulating the 2003-2004 hazelnut crop. However, without any regulations in effect, the Board believes that the industry would oversupply the inshell domestic market.

Section 982.40 of the order establishes a procedure and computations for the Board to follow in recommending to USDA the preliminary, interim final, and final quantities of hazelnuts to be released to the free and restricted markets each marketing year. The program results in plentiful supplies for consumers and for market expansion while retaining the mechanism for dealing with oversupply situations.

Hazelnuts produced under the order comprise virtually all of the hazelnuts produced in the U.S. This production represents, on average, less than 4 percent of total U.S. production for other tree nuts, and less than 4 percent of the world's hazelnut production.

During the 2002-2003 season, 87 percent of the kernels were marketed in the domestic market and 13 percent were exported. Domestically produced kernels generally command a higher price in the domestic market than imported kernels. The industry is continuing its efforts to develop new markets and expand demand, with emphasis on the domestic kernel market. Small business entities, both producers and handlers, benefit from the expansion efforts resulting from this program.

Inshell hazelnuts produced under the order compete well in export markets because of quality. Based on Board statistics, Europe has historically been the primary export market for U.S.-produced inshell hazelnuts, with a 10-year average of 5,249 tons, 40 percent of total average exports of 12,478 tons. The largest share went to Germany. In 1995, 70 percent of export shipments went to Europe. Recent years have seen a significant shift in export destinations, however, with Europe's share declining to 30 percent of inshell shipments (3,321 tons) in the 2002-2003 season. Inshell shipments to Asia have increased dramatically in the past few years, growing to 55 percent of total exports of 10,979 tons in the 2002-2003 season. Hong Kong is the largest export destination, followed by China. The industry continues to pursue export opportunities.

There are some reporting, recordkeeping, and other compliance requirements under the order. The reporting and recordkeeping burdens are necessary for compliance purposes and for developing statistical data for maintenance of the program. The information collection requirements have been previously approved by the Office of Management and Budget under OMB No. 0581-0178. The forms require information which is readily available from handler records and which can be provided without data processing equipment or trained statistical staff. 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. This rule does not change those requirements. In addition, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.

Further, the Board's meetings were widely publicized throughout the hazelnut industry and all interested persons were invited to attend the meetings and participate in Board deliberations. Like all Board meetings, those held on August 28 and November 13, 2003, were public meetings and all entities, both large and small, were able to express their views on this issue. Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.

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.

This rule invites comments on the establishment of interim final and final free and restricted percentages for the 2003-2004 marketing year under the hazelnut marketing order. Any comments received will be considered prior to finalization of this rule.

After consideration of all relevant material presented, including the Board's recommendation, and other information, it is found that this interim final rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined upon good cause that it is impracticable, unnecessary, and contrary to the public interest to give preliminary notice prior to putting this rule into effect and that good cause exists for not postponing the effective date of this action until 30 days after publication in the Federal Register because: (1) The 2003-2004 marketing year began July 1, 2003, and the percentages established herein apply to all merchantable hazelnuts handled from the beginning of the crop year; (2) handlers are aware of this rule, which was recommended at an open Board meeting, and need no additional time to comply with this rule; and (3) interested persons are provided a 60-day comment period in which to respond, and all comments timely received will be considered prior to finalization of this action.

Background

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

To implement this mandate, the NRC approved dry storage of spent nuclear fuel in NRC-approved casks under a general license by publishing a final rule in 10 CFR part 72 entitled, “General License for Storage of Spent Fuel at Power Reactor Sites” (55 FR 29181; July 18, 1990). This rule also established a new subpart L within 10 CFR part 72, entitled “Approval of Spent Fuel Storage Casks” containing procedures and criteria for obtaining NRC approval of spent fuel storage cask designs. The NRC subsequently issued a final rule on October 19, 2000 (65 FR 62581), that approved the NAC-UMS cask design and added it to the list of NRC-approved cask designs in § 72.214 as Certificate of Compliance Number (CoC No.) 1015.

On January 15, 2002, and as supplemented on February 4, July 3, August 7, November 27, and December 11, 2002; and August 15, 2003, NAC International (NAC) submitted an application to amend the NAC-UMS Universal Storage System to Incorporate Enhanced Design Features. The amendment adds an alternate poison material, revises the structural analysis, revises the thermal analyses, revises fuel assembly weight and dimensions, and revises allowable fuel cladding temperature. The amendment also revises the criticality analyses and reorganizes the SAR Criticality Section, revises Technical Specification A.5.5 to remove the effluent reporting requirements, and makes several editorial and administrative changes as described in the SER. No other changes to the NAC-UMS cask system design were requested in this application. The NRC staff performed a detailed safety evaluation of the proposed CoC amendment request and found that an acceptable safety margin is maintained. In addition, the NRC staff has determined that there is still reasonable assurance that public health and safety and the environment will be adequately protected.

This direct final rule revises the NAC-UMS cask design listing in § 72.214 by adding Amendment No. 3 to CoC No. 1015. The amendment primarily consists of changes to the Technical Specification (TS) to incorporate enhanced design features. The particular TS which are changed are identified in the NRC staff's SER for Amendment No. 3.

The amended NAC-UMS cask system, when used in accordance with the conditions specified in the CoC, the TS, and NRC regulations, will meet the requirements of part 72; thus, adequate protection of public health and safety will continue to be ensured.

Certificate No. 1015 is revised by adding the effective date of the initial certificate and the effective date of Amendment No. 3.

This rule is limited to the changes contained in Amendment No. 3 to CoC No. 1015 and does not include other aspects of the NAC-UMS cask system design. The NRC is using the “direct final rule procedure” to issue this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured. The amendment to the rule will become effective on March 31, 2004. However, if the NRC receives significant adverse comments by February 17, 2004, then the NRC will publish a document that withdraws this action and will address the comments received in response to the proposed amendments published elsewhere in this issue of the Federal Register . A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if:

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

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

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

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

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

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

These comments will be addressed in a subsequent final rule. The NRC will not initiate a second comment period on this action. However, if the NRC receives significant adverse comments by February 17, 2004, then the NRC will publish a document that withdraws this action and will address the comments received in response to the proposed amendments published elsewhere in this issue of the Federal Register .

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

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

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

Under the National Environmental Policy Act of 1969, as amended, and the NRC regulations in subpart A of 10 CFR part 51, the NRC has determined that this rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. The rule would amend the CoC for the NAC-UMS cask system within the list of approved spent fuel storage casks that power reactor licensees can use to store spent fuel at reactor sites under a general license. The amendment will modify the present cask system design to add an alternate poison material, revises the structural analysis, revises the thermal analyses, revises fuel assembly weight and dimensions, and revises allowable fuel cladding temperature. The amendment also revises the criticality analyses and reorganizes the SAR Criticality Section, revises Technical Specification A.5.5 to remove the effluent reporting requirements, and makes several editorial and administrative changes. The environmental assessment and finding of no significant impact on which this determination is based are available for inspection at the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD. Single copies of the environmental assessment and finding of no significant impact are available from Jayne M. McCausland, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-6219, email jmm2@nrc.gov .

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

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

On July 18, 1990 (55 FR 29181), the NRC issued an amendment to 10 CFR part 72 to provide for the storage of spent nuclear fuel under a general license in cask designs approved by the NRC. Any nuclear power reactor licensee can use NRC-approved cask designs to store spent nuclear fuel if it notifies the NRC in advance, spent fuel is stored under the conditions specified in the cask's CoC, and the conditions of the general license are met. A list of NRC-approved cask designs is contained in § 72.214. On October 19, 2000 (65 FR 62581), the NRC issued an amendment to part 72 that approved the NAC-UMS cask design by adding it to the list of NRC-approved cask designs in § 72.214. On January 15, 2002, and as supplemented on February 4, July 3, August 7, November 27, and December 11, 2002; and August 15, 2003, NAC International (NAC) submitted an application to amend the NAC-UMS Universal Storage System to Incorporate Enhanced Design Features. The amendment adds an alternate poison material, revises the structural analysis, revises the thermal analyses, revises fuel assembly weight and dimensions, and revises allowable fuel cladding temperature. The amendment also revises the criticality analyses and reorganizes the SAR Criticality Section, revises Technical Specification A.5.5 to remove the effluent reporting requirements, and makes several editorial and administrative changes.

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

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

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

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

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

The ASC, since its creation under Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (“Title XI”), has adopted and amended several regulations that appear at 12 CFR part 1102. These regulations, found in subparts A, B, C, and D of that part, relate to the ASC's implementation of The Privacy Act of 1974, the Freedom of Information Act, and various sections of Title XI.

In November 1998, the ASC moved its offices from 2100 Pennsylvania Avenue, NW., to its current location at 2000 K Street, NW. Part 1102, as adopted, contained numerous references to the ASC's Pennsylvania Avenue address and one reference to its previous fax number. The ASC is amending part 1102 by removing all references to its Pennsylvania Avenue address and prior fax number and replacing it with its new K Street address and new fax number.

The ASC, under 12 U.S.C. 553, is required, among other things, to publish in the Federal Register for public notice and comment a general notice of proposed rule making, unless, in accordance with paragraph (b)(3)(B), the agency finds “for good cause . . . that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” The ASC finds that notice and procedure are unnecessary in connection with these rule amendments because they are nonsubstantive and essentially are nomenclature changes, as that term is defined in the Federal Register Document Drafting Handbook, page 2-31 (October 1998).

On April 25, 1997, the United States ratified the Convention on the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction, also known as the Chemical Weapons Convention (CWC or Convention). The CWC, which entered into force on April 29, 1997, is an arms control treaty with significant non-proliferation aspects. As such, the CWC bans the development, production, stockpiling or use of chemical weapons and prohibits States Parties to the CWC from assisting or encouraging anyone to engage in a prohibited activity. The CWC provides for declaration and inspection of all States Parties' chemical weapons and chemical weapon production facilities, and oversees the destruction of such weapons and facilities. To fulfill its arms control and non-proliferation objectives, the CWC also establishes a comprehensive verification scheme and requires the declaration and inspection of facilities that produce, process or consume certain “scheduled” chemicals and unscheduled discrete organic chemicals, many of which have significant commercial applications. The CWC also requires States Parties to report exports and imports and to impose export and import restrictions on certain chemicals. These requirements apply to all entities under the jurisdiction and control of States Parties, including commercial entities and individuals. States Parties to the CWC, including the United States, have agreed to this verification scheme in order to provide transparency and to ensure that no State Party to the CWC is engaging in prohibited activities.

The Chemical Weapons Convention Implementation Act of 1998 (“Act”) (22 U.S.C. 6701 et seq. ), enacted on October 21, 1998, authorizes the United States to require the U.S. chemical industry and other private entities to submit declarations, notifications and other reports and also to provide access for on-site inspections conducted by inspectors sent by the Organization for the Prohibition of Chemical Weapons (OPCW). Executive Order (E.O.) 13128 delegates authority to the Department of Commerce to promulgate regulations, obtain and execute warrants, provide assistance to certain facilities, and carry out appropriate functions to implement the CWC, consistent with the Act.

On December 30, 1999, the Bureau of Industry and Security (BIS), U.S. Department of Commerce, published an interim rule that established the Chemical Weapons Convention Regulations (CWCR) (15 CFR parts 710-722). The CWCR implemented the provisions of the CWC, affecting U.S. industry and U.S. persons, in accordance with the provisions of the Act. This interim final rule amends the CWCR by adding instructions on how to obtain authorization from BIS to make electronic submissions of declarations and reports through the Web-Data Entry System for Industry (Web-DESI), which can be accessed on the CWC Web site at http://www.cwc.gov . The rule also establishes procedures for the assignment and use of passwords for facilities, plant sites and trading companies (USC password) and procedures for the assignment and use of Web-DESI user accounts (user name and password).

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

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall a person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act (PRA), unless that collection of information displays a current, valid OMB control number. This rule amends an existing collection of information authority approved under OMB Control No. 0694-0091. The public reporting burdens for the collection of information are estimated to average 10.6 hours for Schedule 1 Chemicals, 11.9 hours for Schedule 2 chemicals, 2.5 hours for Schedule 3 chemicals, 5.3 for Unscheduled Discrete Organic Chemicals (UDOCs), and 0.17 hours for Schedule 1 notifications. The burden hours associated with completing a particular type of declaration or report package ( e.g. , Schedule 2 annual declaration on past activities) will change depending on the number of forms required to comply with the specific declaration or report requirement. Supplement 2 to parts 712, 713, 714, and 715 of the CWCR identifies the specific forms that must be included in each type of declaration or report package. The CWC Declaration and Report Handbook includes a “Guide to Submission of Forms” which also identifies the specific forms that must be included in a declaration or report package.

BIS will use the information contained in declarations and reports submitted by U.S. persons to compile the U.S. National Industrial Declaration in order to meet our obligations under the Chemicals Weapons Convention (CWC). BIS will submit the U.S. National Industrial Declaration to the United States National Authority who will forward the Declaration to the Organization for the Prohibition of Chemical Weapons (OPCW) as required by the Convention.

3. This rule does not contain policies with Federalism implications as this term is defined in Executive Order 13132.

4. Pursuant to 5 U.S.C. 553(b)(B), the provisions of the Administrative Procedure Act requiring a prior notice and an opportunity for public comment are waived for good cause, because it is unnecessary to provide public notice and opportunity for comment. This regulation does not impose any new regulatory requirements or effect a substantive change to any existing regulatory requirement. Submission of documents through the Web-DESI system is voluntary and provided for the convenience of submitters. No other law requires that a notice of final rulemaking and an opportunity for public comment be given for this rule. Because a notice of final rulemaking and an opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are not applicable.

1. This Final Rule revises the Commission's regulations to ensure that filing deadlines and deadlines for action by the Commission do not expire during periods in which the Commission is closed due to temporary emergency conditions, such as severe weather emergencies. The Commission's regulations currently provide that the last day of a time period is not counted if that day is a Saturday, Sunday, part-day holiday that affects the Commission, or legal public holiday. 18 CFR 385.2007(a)(2) (2003) (Rule 2007). Thus, Rule 2007 would not have covered, for example, the Commission's temporary closure for two and one-half days in September 2003 due to the effects of Hurricane Isabel.

2. This Final Rule adds a provision to Rule 2007 covering temporary closures due to weather or other adverse conditions. The absence of such a provision could result in unintended action by the Commission or otherwise cause hardship to participants in Commission proceedings who face filing deadlines. This would particularly be a problem in connection with statutory deadlines that the Commission cannot extend, such as the 30-day period for requesting rehearing of a Commission order. 1 See 15 U.S.C. 717r(a) (Natural Gas Act); 16 U.S.C. 825l(a) (Federal Power Act). In addition, situations could arise in which the Commission is required to take action by a date certain but cannot do so because its offices are closed. For example, the Commission must act by a specified time on a rate proposal filed by a public utility, or an oil or natural gas pipeline, or the filing becomes effective by operation of law. See 16 U.S.C. 824d (Federal Power Act) (60 days); 15 U.S.C. 717c (Natural Gas Act) (30 days); 49 App. U.S.C. 6(3) (Interstate Commerce Act) (30 days). It is therefore in the public interest to revise the Commission's rules to ensure that a day on which it is closed due to adverse conditions does not count as the last day of the time period for a deadline.

3. In view of the foregoing, the Commission is making one addition to Rule 2007. Currently, the last day of a time period is extended if it falls on a weekend, part-day holiday or legal public holiday. The addition will cover days on which the Commission is closed due to adverse conditions. It will apply to full-day closures and also part-day closures as long as the Commission does not reopen prior to the official close of business.

4. The Office of Management and Budget's (OMB) regulations require that OMB approve certain information collection requirements imposed by agency rule. 5 CFR part 1320. This Final Rule contains no information reporting requirements, and is not subject to OMB approval.

5. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment. 2 Issuance of this Final Rule does not represent a major federal action having a significant adverse effect on the human environment under the Commission's regulations implementing the National Environmental Policy Act. 3 Part 380 of the Commission's regulations lists exemptions to the requirement that an Environmental Analysis or Environmental Impact Statement be done. Included is an exemption for procedural, ministerial or internal administrative actions. 18 CFR 380.4(1) and (5). This rulemaking is exempt under that provision.

6. The Regulatory Flexibility Act of 1980 (RFA)  4 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. This final rule concerns a matter of internal agency procedure and the Commission therefore certifies that it will not have such an impact. An analysis under the RFA is not required.

7. In addition to publishing the full text of this document in the Federal Register , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through FERC's Home Page ( http://www.ferc.gov ) and in FERC's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, Washington DC 20426.

8. From FERC's Home Page on the Internet, this information is available in the Federal Energy Regulatory Records Information System (FERRIS). The full text of this document is available on FERRIS in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in FERRIS, type the docket number excluding the last three digits of this document in the docket number field.

9. User assistance is available for FERRIS and the FERC's Web site during normal business hours from our Help line at (202)502-8222 or the Public Reference Room at (202) 502-8371 Press 0, TTY (202)502-8659. E-Mail the Public Reference Room at public.referenceroom@ferc.gov.

10. These regulations are effective immediately upon issuance. In accordance with 5 U.S.C. 553(d)(3), the Commission finds that good cause exists to make this Final Rule effective immediately. The rule is intended to act as a contingency measure in order to preserve, rather than alter, the rights of persons appearing before the Commission. Therefore, there is no reason to make it effective at a later date.

11. The provisions of 5 U.S.C. 801 regarding Congressional review of Final Rules do not apply to this Final Rule, because the rule concerns agency procedure and practice and will not substantially affect the rights of non-agency parties.

12. The Commission is issuing this as a final rule without a period for public comment. Under 5 U.S.C. 553(b), notice and comment procedures are unnecessary where a rulemaking concerns only agency procedure and practice, or where the agency finds that notice and comment is unnecessary. This rule concerns only matters of agency procedure and will not significantly affect regulated entities or the general public.

The Indian Gaming Regulatory Act (IGRA), enacted on October 17, 1988, established the National Indian Gaming Commission (Commission). The Commission is funded primarily from fees collected from Indian gaming operations. The Commission is changing its current regulations to reflect changes in the statutory limit imposed by Congress. This regulation is being amended so that the amount of fees imposed by the Commission is directly related to congressional action. Under the current regulations, the Commission may only impose fees not exceeding $8,000,000, during any fiscal year. For fiscal year, 2004 and 2005 Congress has increased that amount to a maximum of $12,000,000. The change will allow the Commission to collect up to the statutory maximum and will eliminate the need to regularly amend this regulation as Congress raises or lowers the fee level.

The Commission received comments in response to a Notice of Proposed Rulemaking. All of the comments received came from Indian tribes. Due consideration has been given to each of the comments received. A discussion of the comments follows.

Issue 1: One commenter expressed a preference for having the monetary cap included in the regulation so that tribes will know how much NIGC is authorized to collect. They also commented that amending the regulation every six years was not a great burden.

Response: Congress has set the monetary cap for the next two fiscal years. Therefore, the NIGC would be required to change its regulations whenever Congress adjusts that cap. The NIGC's position is that the time and money spent on amending its regulations could be better spent in performing its primary duties.

Issue 2: The commenter stated that while Congress has authorized NIGC to collect an additional $4,000,000 in overall fees, the Commission should not increase the individual fees paid by existing gaming enterprises but rather the increase should come from new gaming enterprises.

Response: It is the Commission's position that while small and large operations should be treated differently in regards to fee assessment, that new gaming operations should be treated the same as existing ones. This position is consistent with the guidelines established by IGRA.

Issue 3: One commenter suggested an additional change to the regulations since they felt there was an ambiguity in the regulation as to whether the Commission is required to credit amounts in excess the total amount of fees imposed or anything over the statutory maximum.

Response: The Commission does not see an ambiguity in the regulation. The Commission is only required to credit pro-rata any fees collected in excess of the statutory maximum. As the NIGC does not impose fees in specific dollar amounts (or a specific total fee for all tribes), but rather imposes fees as a percentage of gross tribal gaming revenues, until all the tribes have submitted their fee payments, the total amount of fees collected is not a sum certain. Only if the total so collected exceeds the statutory maximum do pro-rata credits become necessary, and the Commission strives to avoid that necessity as it establishes the fee rate.

The Commission certifies that the rule will not have a significant economic impact on a substantial number of small business entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). The factual basis for this certification is as follows:

Of the 330 Indian gaming operations across the country, approximately 150 have revenues under 10 million. Of these, approximately 90 operations have gross revenues under 3 million. Those operations that gross less than 1.5 million are exempt from fees. Since fee assessments are based on a percentage of gross revenues until the maximum allowed by Congress is reached, and new gaming operations continue to open, the amount individual tribal gaming operations will pay in fees will likely only increase slightly or may in fact decrease. For these reasons, the Commission has concluded that the rule will not have a significant economic impact on those small entities subject to the rule.

The rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. The rule will not result in an annual effect on the economy of more than $100 million per year; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of U.S. based enterprises.

The Commission is an independent regulatory agency, and, as such, is not subject to the Unfunded Mandates Reform Act. Even so, the Commission has determined that this final rule does not impose an unfunded mandate on State, local, or tribal governments, or on the private sector, of more than $100 million per year. Thus, it is not a “significant regulatory action” under the Unfunded Mandates Reform Act, 2 U.S.C. 1501 et seq.

In accordance with Executive Order 12630, the Commission has determined that this rule does not have significant takings implications. A takings implication assessment is not required.

In accordance with Executive Order 12988, the Office of General Counsel has determined that this rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.

The rule does not contain any information collection requirements for which OMB approval under the Paperwork Reduction Act (44 U.S.C. 3501-3520) would be required.

The Commission has determined that this rule does not constitute a major Federal Action significantly affecting the quality of the human environment and that no detailed statement is required pursuant to the National Environmental Policy Act of 1969.

New Treasury Direct is an account-based, online, book-entry system for purchasing, holding, and conducting transactions in Treasury securities via the Internet. Currently, Series EE and Series I savings bonds are offered through New Treasury Direct. Initially, only adult individuals were able to open accounts in New Treasury Direct. This rule will permit a parent or person who provides the chief financial support for a minor to open and access an account for a minor as custodian of the account.

The custodian is a fiduciary for the minor. The account is held in the name and social security number of the minor. The securities held in the minor's account are registered in the name and social security number of the minor, with the minor as sole owner, owner with beneficiary, or primary owner with secondary owner of the securities. The minor's account is a separate account that is linked to the primary New Treasury Direct account of the custodian. The custodian may access the minor's account using the custodian's primary New Treasury Direct account as a portal.

Using his or her own New Treasury Direct account, the custodian may access the minor's account to purchase and make transactions in securities on the minor's behalf. The custodian must certify that he or she is acting on behalf of the minor when he or she opens the minor's account and in all subsequent transactions in the account. The custodian may transfer the securities without a change in registration to another custodian for the same minor. The custodian may grant the right to view the securities to another New Treasury Direct account holder, and may grant the right to redeem the securities to a secondary owner named on the minor's securities. When the minor reaches the age of 18 years, the transactions that the custodian may make in the minor's account are limited to purchasing securities and transferring securities to another account identified by the minor's social security number, whether that is an account maintained by another custodian for the minor, or the minor's own previously established primary account. (We will continue to refer to a minor who has attained the age of 18 years by the term “minor”, until the minor's securities are transferred to the minor's (now adult's) own primary account.) The minor may also contact us when he reaches the age of 18 to have the securities transferred from the custodian's account to the minor's primary account.

In addition to permitting accounts on behalf of minors, this rule permits custom accounts, which are accounts that are linked to the primary account of the owner. A custom account contains securities in the same form of registration as the primary account, but the owner may informally designate a purpose for the custom account. However, the designation has no legal effect on the securities held in the account; the registration of the securities determines ownership. The annual purchase limitation will include securities held in custom accounts.

We are also deleting sections referring to special forms of registration. Initially, we had planned to permit representatives of a decedent's estate and guardians of an incompetent to make online transactions in securities held by a decedent or an incompetent through the personal New Treasury Direct account of the representative or guardian. At this time we believe that the interests of our customers will be better served by focusing our resources on expanding the scope of our basic online services. We therefore provide offline servicing for estates through our customer service staff.

When we initiated New Treasury Direct, we published but deferred the implementation of several sections of the regulations, including those related to minors. We have since revised our thinking on the treatment of minor accounts. Therefore, the provisions of the regulations published in Volume 67 of the Federal Register at page 64276, on October 17, 2002, relating to minor accounts, will never be implemented. In their place, this rule will apply, as of the date of its publication in the Federal Register .

This final rule does not meet the criteria for a “significant regulatory action” as defined in Executive Order 12866. Therefore, the regulatory review procedures contained therein do not apply.

This final rule relates to matters of public contract and procedures for United States securities. The notice and public procedures requirements and delayed effective date requirements of the Administrative Procedure Act are inapplicable, pursuant to 5 U.S.C. 553(a)(2).

As no notice of proposed rulemaking is required, the Regulatory Flexibility Act (5 U.S.C. 601, et seq. ) does not apply.

We ask for no new collections of information in this final rule. Therefore, the Paperwork Reduction Act (44 U.S.C. 3507) does not apply.

Currently, the Margate Bridge is required to open on signal at all times. The Margate Bridge is owned and operated by Ole Hansen & Sons of Cologne, New Jersey. The bridge owner has requested a temporary deviation from the operating regulations set out in 33 CFR 117.5.

The work involves a complete overhaul of the mechanical system and structural repairs of the draw span. To facilitate the repairs, the work requires completely immobilizing the operation of the bascule span in the closed position to vessels from midnight on January 4, 2004, through midnight on February 5, 2004. The Coast Guard has informed the known users of the waterway of the closure period for the bridge caused by the temporary deviation.

The District Commander has granted temporary deviation from the operating requirements listed in 33 CFR 117.35 for the purpose of repair completion of the drawbridge. The temporary deviation allows the Margate Bridge across Beach Thorofare, at ICW mile 74.0, to remain closed to navigation from midnight on January 4, 2004, through midnight on February 5, 2004.

On August 21, 1981 (46 FR 42450), April 16, 1982 (47 FR 16327), May 7, 1982 (47 FR 19694), June 23, 1982 (47 FR 27068), March 27, 1984 (49 FR 11626), October 19, 1984 (49 FR 42450), October 26, 1992 (57 FR 48457), April 3, 1995 (60 FR 16799), June 27, 1997 (62 FR 34641), December 3, 1998 (63 FR 66758), August 19, 1999 (64 FR 45175), May 26, 2000 (65 FR 34101), August 4, 2000 (65 FR 47863), September 13, 2000 (65 FR 55193), September 19, 2000 (65 FR 56486), and May 24, 2001 (66 FR 28666), EPA published final rulemaking actions approving various sections of Arizona, California, and Nevada State Implementation Plans (SIP). These actions incorporated material by reference into 40 CFR 52.120, Identification of plan for Arizona, 40 CFR 52.220, Identification of plan for California, and 40 CFR 52.1470, Identification of plan for Nevada. The various clerical and typographical errors occurred when the material was incorporated by reference into the Code of Federal Regulations (CFR). All of the errors are being corrected by this action. An explanation of each correction is listed below by State and date of publication.

On June 27, 1997 at 62 FR 3464, EPA published a final rulemaking deleting certain rules from the SIP. The codified language for § 52.120, paragraph (c)(3)(i) referenced an incorrect date. The correct date is being inserted in this action.

On April 16, 1982 at 47 FR 16326, EPA published a final rulemaking approving Pima County Department of Environmental Quality rules into the SIP. During the printing of the CFR from the year 1992 to 1993, the Government Printing Office inadvertently omitted two lines of codified rules from § 52.120, paragraph (c)(38)(i)(A). This action correctly replaces the approved rules.

On October 19, 1984 at 49 FR 41026, EPA published a final rule approving certain rules into the Arizona SIP. The codified language at § 52.120, paragraph (c)(56)(i)(A) contained two typographical errors, one for Rule R9-3-515 and the other for Appendix 11. These typographical errors are being corrected in this action.

On August 19, 1999 at 64 FR 45175, EPA published a direct final rule approving the recission of rules from the Mojave Desert Air Quality Management District. The codified language for § 52.220, paragraph (c)(39)(ii)(G) referenced an incorrect date. The correct date is being inserted in this action.

On August 21, 1981 at 46 FR 42450, EPA published a final rulemaking approving the San Joaquin Valley Air Basin Nonattainment Area Plan (SJVABNAP). On May 7, 1982 at 47 FR 19694, EPA published an additional final rulemaking on the SJVABNAP. Both rulemakings added language to § 52.220, paragraph (c)(71), creating duplicate paragraphs. This action combines and revises the language for (c)(71).

On June 23, 1982 at 47 FR 27068, EPA published a final rulemaking approving Placer County Air Pollution Control District rules. The rules were improperly codified in § 52.220 because paragraph (c)(80)(i)(B) already existed. This action eliminates the duplicate paragraphs by renumbering the June 23, 1982 entry from to (B) to (E).

On October 26, 1992 at 57 FR 48457, EPA published a final rulemaking approving South Coast Air Quality Management District rules. The rules were codified in § 52.220, paragraph (c)(184)(i)(B)( 2 ), creating duplicate paragraphs. This action eliminates the duplicate paragraphs by renumbering that entry from to ( 2 ) to ( 10 ).

On April 3, 1995 at 60 FR 16799, EPA published a direct final rule approving Bay Area Air Quality Management District rules. The codified language at § 52.220, paragraph (c)(202)(i)(A) incorrectly lists the entire Rule 2-1. The April 3, 1995 Federal Register clearly states that only Section 429 of Rule 2.1 is being approved. This action corrects the entry for paragraph (c)(202)(i)(A) to read Rule 2-1-249.

On June 27, 1997 at 62 FR 34641, EPA published a final rule deleting certain rules from the California SIP. The codified language for Ventura County Air Pollution Control District at § 52.220, paragraph (c)(35)(iii)(C) and paragraph (c)(51)(xx)(B) contained typographical errors. The typographical errors are being corrected in this action.

On December 3, 1998 at 63 FR 66758, EPA published a final rule approving Santa Barbara County Air Pollution Control rules. The codified language at § 52.220, paragraph (c)(225)(i)(F) was inadvertently omitted. The action correctly adds Santa Barbara Air Pollution Control District to paragraph (c)(225)(i)(F).

On May 26, 2000 at 65 FR 34101, EPA published a final rule approving Bay Area Air Quality Management District rules. The codified language at § 52.220, paragraph (c)(248)(i)(F) was inadvertently omitted. The action correctly adds Bay Area Air Quality Management District to paragraph (c)(248)(i)(F).

On December 19, 2000 at 65 FR 79314, EPA published a Final Interim Approval of an Operating Permits Program for the Antelope Valley Air Pollution Control District (AVAPCD). The Final Interim Approval created amendments to § 52.220, paragraph (c)(262)(i)(E)( 1 ), which expired on January 11, 2003. On May 24, 2001 at 66 FR 28666, EPA published a direct final rule approving AVAPCD Rule 1171. The amendments to § 52.220, paragraph (c)(262)(i)(E)( 2 ) were not codified into the CFR. This action codifies Rule 1171 and renumbers the paragraph in § 52.220, to paragraph (c)(262)(i)(E)( 1 ) because the previous entry has expired.

On August 4, 2000 at 65 FR 47863, EPA published a final rule correcting an amendment to the Sacramento Metropolitan Air Quality Management District Rule 464 at § 52.220, paragraph (c)(263)(i)(C)( 1 ). Because of inaccurate amendatory instruction, the paragraph was not corrected. This action corrects the entry for § 52.220, paragraph (c)(263)(i)(C)(1).

On September 13, 2000 at 65 FR 55193, EPA published a final rule approving San Joaquin Valley Unified Air Pollution Control District Rule 4653. Rule 4653 was erroneously codified in § 52.220, paragraph (c)(266)(i)(B)( 2 ) in lieu of (c)(266)(i)(B)( 1 ). This action corrects the codification.

On September 19, 2000 at 65 FR 56486, EPA published a final rule approving Tehama County Air Pollution Control District rules. A typographical error was inadvertently added to the entry for § 52.220, paragraph (c)(263)(i)(D)(1). This action will correct the typographical error.

On March 27, 1984 at 49 FR 11628, EPA published a final rule approving Nevada State Department of Conservation and Natural Resources rules. Several typographical errors occurred during the transfer of the information from the Federal Register action to the CFR. This action will correct the typographical errors in § 52.1470, paragraph (c)(25)(i)(A).

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), or require prior consultation with State officials as specified by Executive Order 12875 (58 FR 58093, October 28, 1993), or involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994).

Because this action is not subject to notice-and-comment requirements under the Administrative Procedure Act or any other statute, it is not subject to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business Regulatory Enforcement Fairness Act of 1996, EPA submitted a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives and the Comptroller General of the General Accounting Office prior to publication of this rule in today's Federal Register . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Throughout this document, “we,” “us,” or “our” means EPA.

Title V of the Clean Air Act (CAA or Act) required all state permitting authorities to develop operating permit programs that met certain federal criteria codified at 40 Code of Federal Regulations (CFR) part 70. On December 19, 2000, EPA granted final interim approval of Antelope Valley APCD's title V operating permit program. The District resolved two of the three deficiencies in a timely manner (submittal dates of October 22, 2001, and June 17, 2002). However, because the third deficiency involved EPA's finding that the State's agricultural permitting exemption at Health and Safety Code Section 42310(e) unduly restricted the District's ability to adequately administer and enforce its title V program, Antelope Valley APCD was not able to resolve all deficiencies prior to the expiration of interim approval on January 21, 2003. As a result, EPA began implementation of the part 71 program for all major stationary sources in Antelope Valley APCD, effective January 21, 2003. The three program deficiencies are described in detail in the proposed rulemaking for interim approval of the District's title V program. See 65 FR 17231 (March 31, 2000).

We are taking direct final action to approve the operating permit program of Antelope Valley APCD. As stated in the proposed rulemaking for interim approval of the District's title V program, two of the three deficiencies noted by EPA involved District rules: Rule 3006—Reopening, Reissuance, and Termination of Federal Operating Permits; and Rule 219—Equipment Not Requiring a Permit. For Rule 3006, a reference to Rule 3002(E)(2)(b) simply needed to be changed to Rule 3002(E)(2). For Rule 219, the insignificant activity emission cutoff for a regulated pollutant that is not a HAP needed to be reduced to 2 tons/yr. The required revisions were made to these two rules and submitted to EPA. Thus, these two deficiencies have been resolved.

The third deficiency involved California State law. Health and Safety Code Section 42310(e) contained an agricultural permitting exemption which unduly restricted the District's ability to adequately administer and enforce its title V program. On September 22, 2003, the Governor of California signed SB 700, which revised State law to remove the agricultural permitting exemption. Furthermore, we have received a legal opinion from the California Attorney General that confirms that the elimination of the agricultural permitting exemption from State law provides all local districts with authority to issue title V permits to major stationary agricultural sources. Therefore, the third deficiency has also been resolved.

A complete listing of each deficiency, as well as resolution of the deficiency, is contained in the technical support document which is a part of the docket for this action and which is available from the EPA contact ( see FOR FURTHER INFORMATION CONTACT section).

Today's action would result in Antelope Valley APCD having a title V program that requires all major stationary sources, including major stationary agricultural sources, to obtain title V operating permits. It would also terminate EPA's implementation of a part 71 federal operating permit program within Antelope Valley APCD.

Following final interim approval of the District's title V program, since the District was not able to submit a complete corrective program for full approval by July 21, 2002, EPA started an 18-month sanctions clock pursuant to CAA section 179(b), 40 CFR 70.10(a)(ii), and 40 CFR 70.4(f)(2). This sanctions clock was to expire on January 21, 2004. Today's action would terminate this sanctions clock.

EPA is fully approving the District's title V operating permits program because we believe it is consistent with Title V of the Clean Air Act and 40 CFR part 70. We are processing this action as a direct final action because the revisions made to the program to resolve the interim approval deficiencies are noncontroversial. Therefore, we do not think anyone will object to this approval. However, in the Proposed Rules section of this Federal Register, we are simultaneously proposing approval of this same operating permit program. If we receive adverse comments by February 17, 2004, we will publish a timely withdrawal in the Federal Register to notify the public that the direct final approval will not take effect and we will address the comments in a subsequent final action based on the proposal. If we do not receive timely adverse comments, the direct final approval will be effective without further notice on March 16, 2004. Please note that if we receive adverse comment on an amendment, paragraph, or section of this program and if that provision may be severed from the remainder of the program, we may adopt as final those provisions of the program that are not the subject of an adverse comment.

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

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

In reviewing revisions to state operating permit programs submitted pursuant to Title V of the CAA, EPA will approve such revisions provided that they meet the criteria of the Clean Air Act and EPA's regulations codified at 40 CFR part 70. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a part 70 program revision for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a part 70 program revision, to use VCS in place of a part 70 program revision that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This final rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Administrative Procedure Act requirements for notice of proposed rulemaking (NPRM) do not apply to rules when the agency for good cause finds, and incorporates the finding, and a brief statement of the reasons therefore in the rules issued, that notice thereon is impracticable, unnecessary or contrary to the public interest. The Department believes that amending certain provisions of the Head Start transportation regulations under 45 CFR part 1310, before their current effective date of January 20, 2004 is of such importance, that publishing a notice of proposed rulemaking would be contrary to the public interest.

Since the publication of 45 CFR part 1310, the Department has been informed of what we believe to be significant issues which, if not addressed, could result in many children being denied transportation services to and from their Head Start program and many grantees being cited with deficiencies which could lead to the termination of their Head Start grants. Furthermore, the Department is now aware of several new factors which have only come to the Department's attention since promulgation of the final rule and believes these factors warrant reconsideration of some of the requirements of this regulation.

Many Head Start programs operate coordinated transportation programs in which they arrange for other agencies to provide transportation services, often at reduced or no cost to the program. In addition, many Head Start grantees that are local school systems provide, using the school system's resources, free transportation to Head Start children. It has come to the Department's attention that many such arrangements integrate Head Start children into the on-going transportation system administered by the school system or other transportation provider. Head Start children ride the same bus as school age children and often represent only a few of the several dozen children on the bus. In considering the impact of this regulation, the Department did not fully appreciate the impact on such arrangements but rather was more focused on those programs with dedicated buses; that is buses on which only Head Start children are transported. Many school systems, and other transportation providers, forced to conform to the requirements of child restraint systems and monitors have indicated they will discontinue transportation services for Head Start children. This will not only diminish Head Start's ability to engage as a community player with other local organizations but will result in many Head Start grantees choosing to discontinue the provision of transportation services, as such services are not mandated. This will likely disenfranchise many families with no ability to get their children to and from the Head Start center and will pose significant safety risks for other children who now instead of being transported on a school bus will be transported in private vehicles which have been shown in studies by the National Highway Transportation Safety Administration (NHTSA) to put children at greater risk. We believe it more prudent to explore with the Department's transportation partners what alternatives might be available to assure children continue to be safely transported on school buses.

We have also come to understand that some earlier assumptions about possible options for implementing this regulation may have not been entirely correct. For example, requiring child restraint systems often times requires retrofitting a bus to make the installation of such seats possible and such retrofitting can, in and of itself, cause safety issues that may put children at risk. In addition, we have also, since the regulation's publication, been informed that one of the major requirements—that children up to 50 pounds be secured in child restraint systems should be reconsidered. This requirement was based on the National Highway Transportation and Safety Administration's (NHTSA) standards which were developed for restraint systems used in passenger vehicles. Crash testing by NHTSA with pre-school size dummies in school buses suggests that, because of the compartmentalization of a bus, only children less than 40 pounds need to be seated in child restraint systems. The Department believes regulations which may implement inappropriate requirements should be revisited.

Another consideration that led the Department to conclude an Interim Final Regulation is appropriate is our better understanding of some of the consequences which may result in grantees not fully implementing these requirements. Specifically, Head Start grantees which, during an on-site monitoring visit, were determined to not be complying with the restraint system/monitor requirement would be designated as deficient, and these programs would face the threat of having their grants terminated if they did not immediately bring their programs into compliance. This could result in many programs choosing to relinquish their transportation programs, only to discover that some months later, the Department had, through an NPRM process, chosen to provide an opportunity for an extension of the effective date; thus causing considerable disruption to those grantees and their enrolled children and families. Such grantees would then need to try and reimplement transportation programs which had been put in abeyance. Causing this type of situation in order to follow the full process of an NPRM seems unnecessary and unreasonable. There seems little gain in forcing those programs discovered to be not complying with this regulation ( i.e. those grantees monitored for the first several months after January 20) to remedy a situation which may become moot in a relatively short time period.

The Department sought other solutions to ensure timely and effective implementation of the requirements for bus monitors and child safety restraint systems but determined that none were practicable and that rulemaking is necessary. For example, several grantees sought relief from these requirements through the waiver authority provided under existing Head Start regulations at 45 CFR 1310.2(c). However, we determined that the limited waiver authority provided under the regulations did not envision the types of problems grantees are facing and that these grantees would not meet the test set out in regulations. Similarly, we attempted to assist grantees in meeting these rules through the provision of technical assistance. However, as discussed earlier, the issues involved are varied and widespread and cannot be addressed through the normal technical assistance route which offers limited one-time funding to assist individual grantees.

Therefore, the Department has determined that an Interim Final Regulation providing grantees a short-term extension of 150 days with the opportunity to request a longer extension of the effective date for child safety restraints and monitors when such an extension would be in the best interest of children they serve is warranted. Moreover, the Department will carefully consider appropriate solutions to the issues discussed above and, should changes to the current regulation be warranted, will pursue appropriate changes to the Head Start transportation regulation through a notice of proposed rulemaking.

In accordance with Section 644(d) of the Head Start Act as well as the relevant requirements of the Administrative Procedures Act, we are publishing notice of the interim final regulation and mailing copies to individual grantees 30 days prior to the effective date.

On January 18, 2001, the final Head Start transportation regulation was published in the Federal Register (66 FR 5296). This regulation, under 45 CFR part 1310, contains several requirements designed to assure that Head Start children are safely transported to and from Head Start centers and apply to all Head Start and Early Head Start programs that provide transportation either directly, using program owned or leased vehicles, or through arrangements with private or public transportation providers, including local education agencies (LEAs).

Different effective dates are included in the regulations for different requirements. The requirement, for example, that children be transported in school buses or allowable alternate vehicles does not take effect until January 18, 2006 while the requirement that each vehicle used to transport children is equipped for use of child safety restraint systems takes effect two years earlier on January 20, 2004.

This rule defers the effective date of the child safety restraint (45 CFR 1310.11) and the attendant bus monitor requirements (45 CFR 1310.15(c)) for 150 days and provides grantees the opportunity to request the date for their individual compliance be extended to not later than January 18, 2006, concurrent with the effective date of the school bus requirement, when such an extension would be in the best interest of the children they serve.

As indicated above, two sections of the regulations are scheduled to become effective on January 20, 2004; specifically, the regulations related to child safety restraints (45 CFR 1310.11) and bus monitors (45 CFR 1310.15(c)). Section 1310.11 requires that vehicles used to transport children weighing 50 pounds or less be equipped for use of child safety restraint systems compliant with Federal Motor Vehicle Safety Standard (FMVSS) 213. Section 1310.15(c) states that vehicles must be staffed with at least one bus monitor in addition to the driver.

We believe that implementation of these two requirements should be deferred while the Department of Health and Human Services considers to what extent, if any, exceptions to these two requirements should be permitted.

Many Head Start agencies are local school systems that have agreed to provide, as a local contribution, free transportation services to enrolled Head Start children. Other agencies have arranged coordinated transportation services with local school districts, often receiving these services at no cost or reduced cost to the program. Integrating Head Start children into regular bus routes is often the most efficient and effective way to transport young children who may be widely dispersed over an agency's service area. In many of these collaborative arrangements Head Start children are picked up along with K-12 school children that live in the same neighborhood. In these situations, Head Start children often represent no more than a few pupils on a large school bus. All of the other pupils weigh more than the amount at which child safety restraint systems are needed. The need to reconfigure seats to install child safety restraint systems for these few Head Start children, the reduction in the total number of children that can be transported on a modified bus, and multiple daily bus runs all combine to create significant obstacles for school systems and other agencies.

Of potentially greater impact is that each such bus, under current requirements, would need to have at least one monitor, irrespective of how few Head Start children might be on the bus. This could be prohibitively expensive if a monitor's salary is amortized among, for example, only three or four children. While many would support the argument that having a monitor on a bus filled with preschool age children would be appropriate, it is less clear that providing a monitor for three preschool age children is either appropriate or cost effective. In fact, the final rule published in 2001 included a discussion of alternatives for reducing the expense of providing monitors by having individual volunteers fill the role or by assigning bus monitor duties to individuals who are employed most of the time in filling other roles in the Head Start program but these alternatives are not practical when an agency other than a grantee is operating the bus.

Our concern is that these requirements will result in school systems and other contracted providers discontinuing the provision of transportation to Head Start children. This is an issue either because the monitor costs are prohibitively high or because the child safety restraint requirement will result in schools needing more buses to transport fewer children, again resulting in increased costs. Head Start grantees without free transportation services will need to either discontinue transportation services, forcing parents to transport children to and from Head Start centers—with all the potential safety issues such a situation could entail—or reduce enrollment in order to free up sufficient funds to pay for what had previously been a free service.

A few examples illustrate this point.

A school district in Kentucky serves over 97,000 students K-12. Approximately 3,900 Head Start children are transported by the district on 266 school buses. Adding child safety restraints would reduce the seating capacity of these buses, requiring the school district to purchase additional buses and add bus runs. Hiring 266 monitors would cost millions of dollars and be cost prohibitive.

At least ten school districts in the Philadelphia area have said they will curtail the provision of transportations services to Head Start children.

Similar concerns have been echoed throughout the country. Waiver requests and correspondence have come in, and more are anticipated as the deadline approaches and grantees submit their annual refunding applications.

Additionally, we believe the single most important safety feature in the Head Start transportation regulations is the requirement that children be transported on buses. Study after study, conducted by the NHTSA and others, clearly establish that children should be transported in buses and that children transported in other vehicles, such as passenger vans, are at much greater risk. We are concerned that use of funds for the cost of bus monitors and child safety restraint systems would discourage grantees from voluntary early compliance with the requirement for use of school buses or alternative vehicles, which would have a greater impact on the safety of children than compliance with either the bus monitor or child safety restraint requirement.

Finally, as explained in detail earlier under the justification for the interim final rule, the Department is aware of other new factors, including safety factors, since promulgation of the final rule which provide compelling support for providing flexibility in the effective date of the provisions addressing child restraint systems and bus monitors while we consider these provisions more thoughtfully. We continue to believe that the best interest of children should be our paramount concern and that failure to provide some relief on the January 20, 2004 effective date could jeopardize children.

For these reasons, we are revising section 45 CFR 1310.11 to provide under paragraph (a) that effective June 21, 2004, rather than January 20, 2004, each agency providing transportation services must ensure that each vehicle used to transport children receiving Head Start services is equipped for the use of height- and weight-appropriate child safety restraint systems.

The rule also adds a new paragraph (b) under section 1310.11 to provide that the responsible HHS official will approve requests to extend this deadline to not later than January 18, 2006 when: (1) The grantee provides notification of its intent to seek such an extension by March 1, 2004; and (2) the grantee submits by April 1, 2004 a request for an extension with information documenting that an extension through the period requested (but not later than January 20, 2006) would be in the best interest of the children served, as set out in guidance provided by HHS.

Similarly, we are revising 45 CFR 1310.15(c) to provide under a new paragraph (c)(1) that effective June 21, 2004, rather than January 20, 2004, there is at least one bus monitor on board at all times, with additional bus monitors provided, as necessary, such as when needed to accommodate the needs of children with disabilities. We also have added a new paragraph (c)(2) to section 1310.15 to provide that the responsible HHS official will approve requests to extend this deadline to not later than January 20, 2006 when: (1) The grantee provides notification of its intent to seek such an extension by March 1, 2004; and (2) the grantee submits by April 1, 2004 a request for an extension with information documenting that an extension through the period requested (but not later than January 20, 2006) would be in the best interest of the children served, as set out in guidance provided by HHS. We note that the waiver provisions of 45 CFR 1310.2(c) is distinct from the provision allowing for postponement for the requirements for child safety restraint systems and bus monitors.

Requests under section 1310.11(b) and 1310.15(c)(2) may be combined and may be based on the same documentation since these requirements are so closely interwoven, i.e., the role of the monitor under section 1310.15(c) is largely to assist children with the child safety restraint systems required under section 1310.11(a) of the interim final rule. HHS will issue further guidance on the process for seeking extensions shortly.

We are also making a conforming change to 45 CFR 1310.2(b), which summarizes the effective dates of the various provisions of the regulations to provide that Sections 1310.11 and 1310.15(c) of this part are effective June 21, 2004.

As indicated earlier, rules under 45 CFR 1310, including these changes, apply to all Head Start and Early Head Start programs that provide transportation either directly, using program owned or leased vehicles, or through arrangements with private or public transportation providers, including local education agencies (LEAs).

Thus this rule provides an immediate extension of 150 days of the requirements for child safety restraint systems and bus monitors. We selected this time period because we believe it will provide grantees sufficient time to consider their individual circumstances and to consider if circumstances warrant submission of an application for an extension without disrupting services or subjecting children to potentially dangerous alternative modes of transportation. In addition, this would extend the provision to nearly the end of the Head Start grantee program year which would further prevent program disruption.

In tandem with these rules, we will evaluate the issues raised on the requirements for child safety restraint systems and bus monitors and seek solutions for the safest, most effective transportation systems possible for Head Start and Early Head Start children and families.

Finally, we note that this rulemaking would address Congressional concerns which have suggested the need for some flexibility in the current regulations, especially where local education agencies and Head Start integrate transportation services.

This interim final rule contains information collection requirements in sections 1310.11(b) and 1310.15(c)(20). This summary includes the estimated costs and assumptions for the paperwork requirements related to this interim final rule. A copy of this information collection request is available on our Web site at http://regulations.acf.hhs.gov and can also be obtained in hardcopy by contacting Craig Turner at the Head Start Bureau, ACF. These paperwork requirements have been submitted to the Office of Management and Budget for review under number 0970-0260 as required by 44 U.S.C. 3504(h) of the Paperwork Reduction Act of 1995, as amended. Respondents are not required to respond to any collection of information unless it displays a current valid OMB control number.

The Head Start Bureau estimates that the interim final rule would create 1,670 burden hours in the first and only year of collection with related annualized costs of $41,750 for respondents and $50,100 for the Federal government. Table 1 summarizes number of costs by grantee. On a per grantee basis, the Head Start Bureau estimates the same paperwork for all relevant grantees. This is a onetime grantee collection.

The paperwork burden is summarized by total annualized burden hours by provision (Table 2) and by total annualized burden costs by provision (Table 3). New information collection requirements are imposed by sections 1310.11(b) and 1310.15(c)(2) of these regulations. Section 1310.11(b) requires the responsible HHS official to approve requests to extend the relevant deadline to no later than January 20, 2006 when (1) the grantee provides notification of its intent to seek such an extension by March 1, 2004; and (2) the grantee submits by April 1, 2004 a request for an extension with information documenting that an extension through the period requested (but not later than January 20, 2006) would be in the best interest of the children served, as set out in guidance provided by HHS. Section 1310.15(c)(2) requires the responsible HHS official to approve requests to extend this deadline to not later than January 20, 2006 when (A) the grantee provides notification of its intent to seek such an extension by March 1, 2004; and (B) the grantee submits by April 1, 2004 a request for an extension with information documenting that an extension through the period requested (but not later than January 20, 2006) would be in the best interest of the children served, as set out in guidance provided by HHS. Requests under section 1310.11(b) and 1310.15(c)(2) may be combined and may be based on the same documentation.

HHS is working with OMB to obtain emergency approval of the associated burden by February 1, 2004 in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) before the effective date of the rule. Comments on this proposed information collection should be directed to Robert Sargis, ACF Reports Clearance Officer, by e-mailing http://regulations.acf.hhs.gov or faxing (202) 401-5701. HHS will provide notification regarding that approval and the procedures necessary to submit an application for extension at http://regulations.acf.hhs.gov or by contacting Robert Sargis at 202-690-7275 or by faxing 202-401-5701.

The Secretary certifies, under 5 U.S.C. 605(b), and enacted by the Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not result in a significant impact on a substantial number of small entities. The regulation merely provides flexibility in meeting the effective date of certain existing Head Start transportation requirements.

Executive Order 12866 requires that regulations be reviewed to ensure that they are consistent with the priorities and principles set forth in the Executive Order. The Department has determined that this rule is consistent with these priorities and principles.

This rule is considered a “significant regulatory action” under the Executive Order, and therefore has been reviewed by the Office of Management and Budget.

Section 202 of the Unfunded Mandates Report Act requires that a covered agency prepare a budgetary impact statement before promulgating a rule that includes any 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 in any one year. The Department has determined that this rule would not impose a mandate that will result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of more than $100 million in any one year.

This regulation is not a major rule as defined in 5 U.S.C. chapter 8.

Section 654 of the Treasury and General Government Appropriations Act of 1999 requires Federal agencies to determine whether a proposed policy or regulation may affect family well being. If the agency's determination is affirmative, then the agency must prepare an impact assessment addressing seven criteria specified in the law. These regulations will not have an impact on family well being as defined in the legislation.

Executive Order 13132 on Federalism applies to policies that have Federalism implications, defined as “regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on the States, or on the distributions of power and responsibilities among the various levels of government.” This rule does not have Federalism implications for State or local governments as defined in the Executive Order.

This document grants the Petition for Reconsideration (Reconsideration Petition) filed by the Alliance for Telecommunications Industry Solutions (ATIS) on behalf of the Emergency Services Interconnection Forum (ESIF). In an Order released on September 30, 2002, the Commission stayed the rules contained in §§ 20.18(l)(1)(i) and (l)(2)(i) until the Commission resolved the Reconsideration Petition. This is a summary of the Commission Memorandum Opinion and Order, (MO&O) released November 3, 2003 (FCC 03-262). The full text of the MO&O is available for inspection and copying during normal business hours in the FCC Reference Center, Room CY-A257, 445 12th St., SW., Washington DC 20554. The complete text may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th St., SW., Room CY-B402, Washington DC, telephone (202) 863-2893, facsimile (202) 863-2898, or via e-mail qualexint@aol.com. Additionally, the complete item is available on the Commission's Web site at http://www.fcc.gov/wtb.

1. In this Memorandum Opinion and Order (MO&O), the Commission grants the Petition for Reconsideration (Reconsideration Petition) filed by the Alliance for Telecommunications Industry Solutions (ATIS) on behalf of the Emergency Services Interconnection Forum (ESIF). This document amends the Commission's rules with the requirement to program carrier-donated non-service initialized phones and new “911-only” handsets covered in our original Report and Order , 67 FR 36112 (May 23, 2002), with a sequential number beginning with “911,” plus seven digits selected in a manner analogous to the way a “telephone number” is generated by Annex C compliant network software, as explained in more detail. The Emergency Services Interconnection Forum (ESIF) refers to the solution as the “Annex C” solution because it was originally published as Annex C to J-STD-036-A, “Enhanced Wireless 9-1-1 Phase 2” (June 2002). The Commission's Report and Order under reconsideration required the programming of carrier-donated non-service-initialized phones and newly manufactured non-initialized “911-only” wireless handsets with the number 123-456-7890 as the “telephone number” transmitted to the Public Safety Answering Point (PSAP) receiving the call in order to address the problems created by the lack of call-back capability when 911 calls are dialed from these devices. The Commission concludes, in light of the new information presented by the ESIF, that the voluntary technical standard developed by the ESIF, which was recently adopted as part of the “Enhanced Wireless 9-1-1 Phase 2” industry consensus standard, provides a more far-reaching and technically superior solution and better serves the public interest.

2. Accordingly, the Stay currently in effect is lifted and the Commission's rules are modified by striking the requirement to program the 123-456-7890 sequential number into carrier-donated non-initialized and “911-only” phones. Carriers are also relieved of any attendant obligations to complete any network programming necessary to deliver the 123-456-7890 “telephone number” from these devices to PSAPs. Those rules are now amended with the requirement to program carrier-donated non-service initialized phones and new “911-only” handsets covered in our original Report and Order with a sequential number beginning with “911,” plus seven digits selected in a manner analogous to the way a “telephone number” is generated by Annex C compliant network software. Carriers are further required to complete any network programming necessary to deliver this “telephone number” from carrier-donated non-service initialized phones and “911-only” handsets to PSAPs.

3. In view of the potential importance to public safety to provide PSAPs with a means of identifying emergency calls made by recipients of non-initialized wireless phones donated to provide them with emergency assistance and by purchasers of non-initialized “911-only” phones, the Commission further requires that, within six months of the issuance of the November 3, 2003 MO&O, carriers donating such phones and handset manufacturers of “911-only” phones that were covered under the requirements in our Report and Order begin to program 911 plus a seven digit number that is derived by a methodology analogous to that described in Annex C. By striking the earlier programming requirement and replacing it with a requirement that is consistent with the emerging industry standard for network deployment of Phase II E911, the Commission is targeting its regulations to accomplish the greatest benefit with the least burden. If the network solution becomes ubiquitous in the future and is able to provide a means of identifying emergency calls from these handsets, as well, the Commission plans to revisit the imposition of this limited requirement.

4. In light of the record, the limited scope of the Commission's original Report and Order , and the need for flexibility in the face of rapidly changing technology, the Commission will give the ESIF consensus standards process time to achieve full implementation voluntarily. However, the Annex C solution is expected to be substantially implemented voluntarily within 18 months of the issuance of the November 3, 2003 MO&O. As previously stated in the context of the First Report and Order , if a need for further action is demonstrated, “especially once E911 Phase I is fully operational and ubiquitous, the Commission will revisit this issue, weigh the evidence presented, and look at the possibility of requiring a technical or other solution at that time.” If, within one year from the date the MO&O was issued, considerable progress towards the goal of voluntary implementation of the Annex C solution has not been made, the Commission will consider whether it is in the public interest to impose further specific implementation requirements.

5. The actions contained in the MO&O have been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose no new reporting requirements or burden on the public.

6. The Regulatory Flexibility Act (RFA) of 1980, as amended, requires that a regulatory flexibility analysis be prepared for notice-and-comment rule making proceedings, unless the agency certifies that “the rule will not, if promulgated, have significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (i) Is independently owned and operated; (ii) is not dominant in its field of operation; and (iii) satisfies any additional criteria established by the Small Business Administration (SBA). We continue to use these definitions and to consider the impact of this MM&O on the entities discussed in the initial Report and Order.

7. The RFA analysis adopted in the initial Report and Order remains correct because there is no greater burden on carriers who are donating non-initialized phones and manufacturers of “911-only” wireless devices to program these devices with 911 plus the seven least significant digits of the decimal representation of the ESN, IMEI, or other unique identifier programmed into the handset, than to program these devices with the 123-456-7890 sequential number. Also, there is no greater burden on carriers to program their networks to deliver these “telephone numbers” from carrier-donated non-service initialized phones and “911-only” handsets to PSAPs than programming their networks to deliver the 123-456-7890 sequential number from these devices.

This is a summary of the Federal Communications Commission's Order, DA 03-3936, adopted on December 11, 2003 and released on December 12, 2003. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street, SW., Washington, DC 20554. The complete text may be purchased from the Commission's copy contractor, Qualex International, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. The full text may also be downloaded at: http://www.fcc.gov. Alternative formats are available to persons with disabilities by contacting Brian Millin at (202) 418-7426 or TTY (202) 418-7365 or at Brian.Millin@fcc.gov.

1. In order to provide a more efficiently organized presentation of the various materials, e.g. , standards, specifications, and similar documents that are referenced in the regulations for broadcast radio services in part 73 of the Commission's rules, certain administrative revisions are necessary to those rules. Authority for adoption of the revisions is contained in 47 CFR 0.231(b). The amendments adopted herein pertain to agency organization, procedure, and practice. Consequently, the notice and comment provisions of the Administrative Procedure Act, contained in 5 U.S.C. 553(b), are inapplicable.

2. It is ordered that part 73 of the Commission's rules, set forth in title 47 of the Code of Federal Regulations, is amended, as set forth herein, and shall become effective upon publication in the Federal Register .