The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2004-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any written relevant data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2004-18784; Directorate Identifier 2004-NM-59-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You can review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you can visit http://dms.dot.gov.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov.

You can examine the AD docket on the Internet at http://dms.dot.gov, or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

We have received a report indicating that a certain combination of conditions could cause the fuel spar shutoff valves to remain partially open, potentially contributing to a fire fed by engine fuel at the engine or strut. The engine fire procedure requires the pilot to set the engine fuel control switch to the cutoff position and then activate the engine fire switch. These actions transfer power required to close the fuel spar shutoff valves between the wires connecting the fuel control switch and the engine fire switch. During an engine fire, the wire connected to the engine fire switch could have a latent open circuit that could leave the fuel spar shutoff valve in a partially open position when the engine fire switch is activated. This condition, if not corrected, could result in fuel from the engine feeding an uncontrolled fire in the engine or the strut.

We have reviewed the following Boeing Special Attention Service Bulletins, which describe procedures for installing a jumper wire between the wiring of the fire extinguisher switch and the fuel shutoff switch for each engine, and other specified actions:

• 747-28-2238 (for Model 747-400, -400D, and -400F series airplanes), dated October 18, 2001.

• 767-28-0066 (for Model 767-200, -300, and -300F series airplanes), Revision 1, dated May 29, 2003.

• 777-28-0025 (for Model 777-200 and -300 series airplanes), dated January 10, 2002.

The other specified actions include testing the electrical connections after installing the jumper wires, and operational testing of the fuel spar shutoff valves.

Accomplishing the actions specified in the service information is intended to adequately address the identified unsafe condition.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. Therefore, we are proposing this AD, which would require installing a jumper wire between the wiring of the fire extinguisher switch and the fuel shutoff switch for each engine, and other specified actions. The proposed AD would require you to use the service information described previously to perform these actions, except as discussed under “Differences Between the Proposed AD and Service Information.”

The service bulletins do not include a compliance time for installing the jumper wire; however, the manufacturer recommends a compliance time of 60 months, with which we concur. Paragraph (f) of this proposed AD requires installing the jumper wire within 60 months after the effective date of the AD.

This proposed AD would affect about 1,882 airplanes worldwide. We estimate that 579 airplanes of U.S. registry would be affected by this proposed AD. The following table provides the estimated costs for U.S. operators to comply with this proposed AD.

We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2004-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any written relevant data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2004-18786; Directorate Identifier 2004-NM-26-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc. ). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov.

You may examine the AD docket in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

We have received a report of two operators finding cracks in the fillet radii of the left and right butt line (BL) 25 vertical chords, common to the nose wheel well bulkhead at station 287, on several Boeing Model 767-300 series airplanes. Stress corrosion was determined to have caused the cracks. This condition, if not corrected, could grow downward into a critical area that serves as a primary load path for the nose landing gear (NLG) and result in the collapse of the NLG during landing.

We have reviewed Boeing Alert Service Bulletin 767-53A0113, dated February 26, 2004. The service bulletin describes procedures for repetitive high frequency eddy current inspections (HFEC) and detailed inspections of the left and right BL 25 vertical chords common to the nose wheel well bulkhead at station 287 for cracks, and corrective actions if necessary. The corrective action includes repairing any damaged BL 25 vertical chord or contacting the manufacturer for repair instructions, as applicable. We have determined that accomplishment of the actions specified in the service bulletin will adequately address the unsafe condition.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. Therefore, we are proposing this AD, which would require repetitive HFEC inspections and detailed inspections of the left and right BL 25 vertical chords common to the nose wheel well bulkhead at station 287 for cracks, and corrective actions if necessary. The proposed AD would require you to use the service information described previously to perform these actions, except as discussed under “Difference Between the Proposed AD and the Service Bulletin.”

The service bulletin specifies that you may contact the manufacturer for instructions on repairing certain conditions. This proposed AD, however, would require you to repair those conditions using a method approved by the FAA, or with data meeting the type certification basis of the airplane approved by a Boeing Company Designated Engineering Representative who has been authorized by the FAA to make such findings.

In this proposed AD, the “detailed visual inspection” specified in the service bulletin is referred to as a “detailed inspection.” We have included the definition for a detailed inspection in a note in this proposed AD.

The service bulletin specifies a compliance time of 6 years in service, or within 18 months from the release date of the service bulletin. However, paragraph (g) of this proposed AD specifies the compliance time as the later of the following: (1) within 72 months since the date of issuance of the original Airworthiness Certificate or the date of issuance of the original Export Certificate of Airworthiness, or (2) within 18 months after the effective date of this AD. This decision is based on our determination that “years in service” may be interpreted differently by different operators. We find that our proposed terminology is generally understood within the industry and records will always exist that establish these dates with certainty.

This proposed AD would affect about 743 airplanes worldwide and 312 airplanes of U.S. registry. The proposed actions would take about 8 work hours per airplane, at an average labor rate of $65 per work hour. No parts are required. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $162,240, or $520 per airplane, per inspection cycle.

We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2004-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any written relevant data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2004-18787; Directorate Identifier 2003-NM-264-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of our docket Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc. ). You can review the DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov.

You can examine the AD docket in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

The Civil Aviation Authority-The Netherlands (CAA-NL), which is the airworthiness authority for the Netherlands, notified us that an unsafe condition may exist on all Fokker Model F27 Mark 100, 200, 300, 400, 500, 600, and 700 series airplanes. The CAA-NL advises that it received a report indicating that, during heavy turbulence, a pilot needed to apply aileron trim to maintain level flight because of cracking of the upper inboard attachment lug of the aileron spring tab balance unit, probably due to corrosion, which caused permanent deflection of the spring tab and consequent aileron damage. This condition, if not corrected, could result in diminished control of the airplane in turbulence or total loss of roll control for the affected wing.

Fokker Services B.V. has issued Fokker Service Bulletin F27/27-137, dated March 19, 2003. The service bulletin describes procedures for a one-time high-frequency eddy current inspection of the attachment lugs of the aileron spring tab balance unit (including any removal of loose paint and/or corrosion); reworking of the balance unit attachment lugs; and replacement of the balance unit, if necessary. We have determined that accomplishing the actions specified in the service information will adequately address the unsafe condition. The CAA-NL mandated the service information and issued Dutch airworthiness directive 2003-037, dated March 31, 2003, to ensure the continued airworthiness of these airplanes in the Netherlands.

This airplane model is manufactured in the Netherlands and is type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, the CAA-NL has kept the FAA informed of the situation described above. We have examined the CAA-NL's findings, evaluated all pertinent information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

Therefore, we are proposing this AD, which would require a one-time high-frequency eddy current inspection of the attachment lugs of the aileron spring tab balance unit, with any needed removal of loose paint and/or corrosion, reworking of the balance unit attachment lugs, and replacement of the balance unit, if necessary. The proposed AD would require you to use the service information described previously to perform these actions, except as discussed under “Differences Between the Proposed AD and Service Bulletin.”

Although the referenced service bulletin describes procedures for reporting certain information to Fokker Services B.V., this proposed AD would not require that action. We do not need this information from operators.

Although the referenced service bulletin specifies that you may contact the manufacturer for instructions on how to repair certain conditions, this proposed AD would require you to repair those conditions using a method that we or the CAA-NL (or its delegated agent) approve. In light of the type of repair that would be required to address the unsafe condition, and consistent with existing bilateral airworthiness agreements, we have determined that, for this proposed AD, a repair we or the CAA-NL approve would be acceptable for compliance with this proposed AD.

We consider this proposed AD interim action. If final action is later identified, we may consider further rulemaking then.

This proposed AD would affect about 38 airplanes of U.S. registry. The proposed actions would take about 5 work hours per airplane, at an average labor rate of $65 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $12,350, or $325 per airplane.

We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2004-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2004-18788; Directorate Identifier 2003-NM-203-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You can review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov .

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov .

You can examine the AD docket on the Internet at http://dms.dot.gov , or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

We have received a report indicating that eleven operators have found fatigue cracks in the intercostal web at body station (BS) 358.5 and stringer (S) S-16L on several Boeing Model 737-200 series airplanes. The cracks extended from the inboard edge of the intercostal through tooling or fastener holes and terminated at the two-inch diameter lightening hole. Three operators have also reported four airplanes with cracks in the intercostals at S-11L, S-12L, and S-13L on the forward and aft sides of the forward entry door. All additional cracks are in the radius of return flanges of the webs and attachment clips. One operator has reported one airplane with cracks in the stringer splice channels at S-14L and S-15L on the aft side of the forward entry door. The cracks were in the intercostal web attachment flange at the aft end of the intercostal. Such fatigue cracking, if not detected and corrected in a timely manner, could result in loss of the forward entry door and rapid decompression of the airplane.

The intercostal webs, attachment clips, and stringer splice channels on certain Boeing Model 737-100, -200C, -300, -400, and -500 series airplanes are identical to those on the affected Boeing Model 737-200 series airplanes. Therefore, all of these models may be subject to the same unsafe condition.

We have reviewed Boeing Special Attention Service Bulletin 737-53-1204, dated June 19, 2003. The service bulletin describes procedures for detailed and high frequency eddy current inspections (as applicable) of the intercostal webs, attachment clips, and stringer splice channels for cracks; and corrective actions if necessary. The corrective actions include repairing cracks and contacting Boeing for certain repair instructions.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. Therefore, we are proposing this AD, which would require repetitive inspections of the intercostal webs, attachment clips, and stringer splice channels for cracks; and corrective action if necessary. The proposed AD would require you to use the service information described previously to perform these actions, except as discussed under “Differences Between the Proposed AD and the Service Bulletin.”

Although the service bulletin specifies that operators may contact the manufacturer for disposition of certain repair conditions, this proposed AD would require operators to repair those conditions per a method approved by the FAA, or per data meeting the type certification basis of the airplane approved by a Boeing Company Designated Engineering Representative who has been authorized by the FAA to make such findings.

The service bulletin specifies to repair any crack found at the S-16L intercostal (BS 348.2-360) on Boeing Model 737-400 series airplanes per 737-400 Structural Repair Manual (SRM) 53-10-04, Figure 202. Figure 202 does not exist; the correct figure is 737-400 SRM 53-10-04, Figure 201. Note 2 of this proposed AD points out this error in the service bulletin.

Paragraphs 3. and 4. of the “Part 1 for Group 1 passenger airplanes” section of the Work Instructions of the service bulletin do not give instructions for repairing cracks found in the attachment clip or stringer splice channel during the inspections. Other paragraphs of the service bulletin give instructions for similar attachment clips and stringer splice channels. This proposed AD would require operators to contact the FAA or an FAA-authorized Boeing Delegated Engineer Representative (DER) for repair instructions and do the repair before further flight if any crack is found in the attachment clip or stringer splice channel during the inspections specified in “Part 1 for Group 1 passenger airplanes.” If no crack is found in the attachment clip or stringer splice channel during the inspections, this proposed AD would require the repetitive inspections.

The differences discussed above have been coordinated with Boeing.

This proposed AD would affect about 3,113 airplanes worldwide and 876 airplanes of U.S. registry. The proposed actions would take about 2 work hours per airplane, at an average labor rate of $65 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $113,880, or $130 per airplane, per inspection cycle.

We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2004-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any written relevant data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2004-18728; Directorate Identifier 2003-NM-176-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov.

You may examine the AD docket in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

We have received two reports indicating that cracked/fractured side guide support fittings were found in the aft, lower lobe cargo compartment on Boeing Model 747-400F series airplanes that had been in service less than 16 months. One airplane had a total of 16 cracked/fractured side guide support fittings and the other airplane had 4. The side guide support fittings provide lateral and vertical restraint for cargo in the lower lobe cargo compartments.

Investigation revealed that failed roller assemblies in the outboard roller trays caused the conveyor plane of the unit load device (ULD) to drop and allowed the ULD to impact the side guide support fittings. Repeated impacts by the ULD can result in fatigue and consequent cracked/fractured side guide support fittings. The roller assembly failures were caused by a manufacturing defect in the bearings that resulted in the separation of the bearing's inner and outer race.

Cracked/fractured side guide support fittings in the lower lobe cargo compartments, if not corrected, could result in unrestrained cargo shifting in flight and damaging the airplane structure or systems and consequent reduced controllability of the airplane.

We have reviewed Boeing Alert Service Bulletin 747-25A3335, dated July 3, 2003. The service bulletin describes procedures for a detailed inspection(s) for cracks and fractures of the side guide support fittings in the lower lobe cargo compartments, and applicable investigative/corrective actions and operational limitations, if necessary. The applicable investigative actions include a general visual inspection of the cargo compartment for damage, and repair if necessary. The corrective actions include replacing cracked or fractured side guide support fittings with new fittings; and replacing all outboard roller assemblies with new assemblies, which would eliminate the need for repetitive detailed inspections. The service bulletin also describes operational limitations for missing restraints until replacement of cracked or fractured side guide support fittings. We have determined that accomplishing of the actions specified in the service bulletin will adequately address the unsafe condition.

Boeing Alert Service Bulletin 747-25A3335 refers to Goodrich Alert Service Bulletin 65B60176-25-A01, dated March 3, 2003, as an additional source of service information for doing the replacement of the outboard roller assemblies.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. Therefore, we are proposing this AD, which would require a detailed inspection(s) of the side guide support fittings in the lower lobe cargo compartments for cracks and fractures; and applicable investigative/corrective actions and operational limitations, if necessary. This proposed AD also would require a terminating action for the repetitive inspections. The proposed AD would require you to use the service information described previously to perform these actions, except as discussed under “Difference Between the Proposed AD and Service Bulletin.”

Figures 1 and 2 of the referenced Boeing service bulletin specify a general visual inspection of the cargo compartment for damage, and repair if necessary. We have determined that those actions are not necessary to adequately address the identified unsafe condition of this AD. Therefore, this proposed AD would not require operators to do that inspection and repair.

This proposed AD would affect about 22 airplanes worldwide. The following table provides the estimated costs for U.S. operators to comply with this proposed AD.

We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2004-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any written relevant data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2004-18729; Directorate Identifier 2004-NM-24-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You can review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you can visit http://dms.dot.gov.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov.

You can examine the AD docket on the Internet at http://dms.dot.gov, or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

We have examined the underlying safety issues involved in recent fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements'' (67 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83).

Among other actions, SFAR 88 requires certain type design ( i.e. , type certificate (TC) and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews.

In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: single failures, single failures in combination with another latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action.

Based on this process, we have determined that the actions identified in this proposed AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane.

As a result of fuel system reviews associated with SFAR 88, the airplane manufacturer determined that the electrical bonding at the interface of the housings for the main fuel pumps and the fuel tanks is not adequate on certain Boeing Model 747-100 and -200B series airplanes. The eight main fuel boost pumps currently rely on a bolted connection to provide the required low electrical resistance between the pump housing and the fuel tank structure. However, on the affected airplanes, a special corrosion protection finish used on the fuel tank acts as a partial insulator. Given a lightning strike or pump electrical fault, arcing can occur at this existing interface, which is inside the fuel tank. This condition, if not corrected, could result in ignition of fuel vapor in the fuel tanks, which could result in a fuel tank explosion.

We have reviewed Boeing Alert Service Bulletin 747-28A2033, Revision 1, dated December 18, 2003, which is divided into two parts. Part 1 of the service bulletin describes procedures for installing bonding clips and bonding jumpers from the housing of each fuel pump to airplane structure outside the fuel tanks, including installing “caution” markers next to each pump, and measuring the resistance between the mounting flanges of each fuel pump and the airplane structure. Part 2 of the service bulletin is optional and describes procedures for removing existing bonding jumpers from the housing of each fuel pump, and applying a corrosion resistant finish. Accomplishing the actions specified in Part 1 of the service information is intended to adequately address the unsafe condition.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. Therefore, we are proposing this AD, which would require installing bonding clips and bonding jumpers from the housing of each fuel pump to airplane structure outside the fuel tanks. The proposed AD would require you to use Part 1 of the service information described previously to perform these actions.

This proposed AD would affect about 158 airplanes worldwide. The following table provides the estimated costs for U.S. operators to comply with this proposed AD.

We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The collections of information contained in this notice of proposed rulemaking have been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collections of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP Washington, DC 20224. Comments on the collection of information should be received by October 5, 2004. Comments are specifically requested concerning:

Whether the proposed collections of information are necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility;

The accuracy of the estimated burden associated with the proposed collections of information (see below);

How the quality, utility, and clarity of the information to be collected may be enhanced;

How the burden of complying with the proposed collections of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and

Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

The collections of information in this proposed regulation are in § 1.861-4(b)(2) (ii)(C)( 1 )( i ), (b)(2)(ii)(D), and (b)(2)(ii)(D)( 6 ). The information required in § 1.861-4(b)(2) (ii)(C)( 1 )( i ) will enable an individual, where appropriate, to use an alternative basis other than that described in § 1.861-4(b)(2)(ii)(A) or (B) to determine the source of his or her compensation as an employee for labor or personal services performed partly within and partly without the United States. The information required in § 1.861-4(b)(2)(ii)(D) and (D)( 6 ) will enable an employee to source certain fringe benefits on a geographical basis. The collections of information will, likewise, allow the IRS to verify these determinations.

The collections of information and responses to these collections of information are required to obtain and maintain benefits. The likely respondents are individuals who perform labor or personal services partly within and partly without the United States, some of which may receive certain fringe benefit compensation for those services.

Estimated total annual recordkeeping burden: 10,000 hours.

The estimated annual burden per recordkeeper varies from 15 minutes to one hour, depending on the circumstances of the individual, with an estimated average of 30 minutes.

Estimated number of recordkeepers: 20,000.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

This document contains proposed amendments (the new proposed regulations) 26 CFR part 1 under section 861 of the Internal Revenue Code (Code). On January 21, 2000, a notice of proposed rulemaking was published in the Federal Register at 65 FR 3401 (REG-208254-90; 2000-1 C.B. 577) (the previously proposed regulations). The previously proposed regulations would have modified the existing final regulations relating to the determination of the source of income from the performance of labor or personal services performed partly within and partly without the United States. Written comments were received in response to the notice of proposed rulemaking. A public hearing was held on July 18, 2000. In response to these comments, and after further consideration of the issue, the previously proposed regulations are withdrawn and new regulations are proposed. This preamble discusses comments received on the previously proposed regulations and describes the differences between the new proposed regulations and the previously proposed regulations.

The existing final regulations, § 1.861-4(b), provide that if a person performs labor or personal services partly within and partly without the United States, the amount to be included in gross income from United States sources shall be determined on the basis that most correctly reflects the proper source of income under the facts and circumstances of the particular case.

The previously proposed regulations retained the facts and circumstances basis for determining the source of such income for persons other than individuals. For individuals, however, the previously proposed regulations provided that if an individual received compensation for a specific time period for labor or personal services that are performed partly within and partly without the United States, the amount of compensation for labor or personal services performed within the United States would have been determined solely on a time basis.

Several comments questioned the rule in the previously proposed regulations that required individuals to determine the source of such income on a time basis. In response to those comments, and after further consideration of the issues presented, the previously proposed regulations are withdrawn and new regulations are proposed that take into account the concerns raised.

Treasury and the IRS believe that a time basis generally is the most appropriate method for determining the source of an individual employee's compensation for labor and personal services performed partly within and partly without the United States. Compensation provided to an employee for a specific time period is generally considered to be earned by the employee ratably over that time period. Accordingly, it is appropriate generally to source such compensation on a ratable basis. In addition, Treasury and the IRS believe that this rule will provide certainty and simplification for both taxpayers and the IRS. The information necessary to apply the time basis should be readily available to employers and employees. For example, Form 2555, “Foreign Earned Income”, requires an individual who claims the foreign earned income exclusion to provide the IRS with information relating to the number of business days spent within the United States and any fringe benefits received. Sourcing on a time basis may be appropriate as well for individuals other than employees who receive compensation for labor or personal services and who may be viewed as earning such compensation ratably.

Nonetheless, for entities other than individuals and for individuals who are not employees, the facts and circumstances in many cases may be such that an apportionment on a basis other than a time basis may be more appropriate. For example, a corporation could receive payments under a contract for services to be performed by numerous employees at various pay levels in a number of different geographic locations. In such a case, payroll costs under the contract for services, or another basis besides time, may more correctly reflect the proper source of the corporation's income.

The new proposed regulations retain the facts and circumstances basis as the general rule for determining the source of compensation for labor and personal services performed partly within and partly without the United States received by persons other than individuals and by individuals who are not employees. However, the new proposed regulations provide two new general bases for determining the proper source of compensation that an individual receives as an employee for such labor or personal services. Under the first general basis of § 1.861-4(b)(2)(ii)(A), an individual who receives compensation, other than compensation in the form of certain fringe benefits, as an employee for labor or personal services performed partly within and partly without the United States is required to source such compensation on a time basis, as defined in § 1.861-4(b)(2)(ii)(E).

Under the second general basis of § 1.861-4(b)(2)(ii)(B) and (D), an individual who receives compensation as an employee for labor or personal services performed partly within and partly without the United States in the form of fringe benefits, as described in § 1.861-4(b)(2)(ii)(D)( 1 ) through ( 6 ), is required to source such compensation on a geographical basis ( e.g., at the employee's principal place of work, as defined in section 217 and § 1.217-2(c)(3)). The fringe benefits to which this general basis applies are: Housing, education, local transportation, tax reimbursement, hazardous or hardship duty pay, and moving expense reimbursement fringe benefits. This general basis will apply only if the amount of the fringe benefit is reasonable and is substantiated by adequate contemporaneous records or sufficient evidence under rules similar to those set forth in § 1.274-5T(c) or (h) or § 1.132-5, and only if the fringe benefit meets the definition set forth in the new proposed regulations. Treasury and the IRS intend to keep the list and descriptions of identified fringe benefits current and invite comments regarding whether the identified fringe benefits are appropriately defined and whether other fringe benefits should be identified in the regulations and sourced on a specific geographic basis.

Treasury and the IRS recognize that there are circumstances in which these two general bases may not be the most appropriate basis for determining the source of an employee's compensation for labor or personal services performed partly within and partly without the United States. Accordingly, the new proposed regulations at § 1.861-4(b)(2)(ii)(C)(1)( i ) provide that an employee may use an alternative basis, based upon the facts and circumstances, to source such compensation if he or she establishes to the satisfaction of the Commissioner that such an alternative basis more properly determines the source of the compensation. For example, when an employee's compensation is tied to the performance of specific actions rather than earned ratably over a specific time period, an alternative basis may more properly determine the source of compensation than the bases for determining source of compensation described in § 1.861-4(b)(2)(ii)(A) and (B).

In order to satisfy the Commissioner, an employee must retain in his or her records documentation setting forth why the alternative basis more properly determines the source of the compensation than the basis for determining source of compensation described in § 1.861-4(b)(2)(ii)(A) or (B). In addition, it is anticipated that the Commissioner, by ruling or other administrative pronouncement, will issue guidance as to what procedures an employee must follow in order to assert an alternative basis to determine the source of his or her compensation for labor or personal services performed partly within and partly without the United States. Such administrative pronouncement will likely require that an individual who has $250,000 or more in compensation for the tax year must indicate in the manner prescribed that he or she is using an alternative basis to source his or her compensation. Such individual may be required to file a form, or retain the following in his or her records: (1) A written explanation of why the alternative basis more properly determines the source of the compensation than the basis for determining source of compensation described in § 1.861-4(b)(2)(ii)(A) or (B) under the facts and circumstances, and (2) a written comparison of the dollar amount of the compensation sourced within and without the United States under both the individual's alternative basis and the basis for determining source of compensation described in § 1.861-4(b)(2)(ii)(A) or (B).

Section 1.861-4(b)(2)(ii)(C)( 1 )( ii ) of the new proposed regulations also provides that the Commissioner may, under the facts and circumstances of the particular case, determine the source of compensation that is received by an individual as an employee for labor or personal services performed partly within and partly without the United States under an alternative basis other than a basis described in paragraph (b)(2)(ii)(A) or (B) if such compensation either (1) is not for a specific time period or (2) constitutes in substance a fringe benefit described in paragraph (b)(2)(ii)(D) notwithstanding a failure to meet any requirement of paragraph (b)(2)(ii)(D). The Commissioner may make this determination only if such alternative basis determines the source of compensation in a more reasonable manner than the basis used by the individual pursuant to paragraph (b)(2)(ii)(A) or (B).

Section 1.861-4(b)(2)(ii)(C)( 2 ) of the new proposed regulations provides that the Commissioner may, by ruling or other administrative pronouncement applying to similarly situated taxpayers generally, permit individuals to determine the source of their compensation as an employee for labor or personal services performed partly within and partly without the United States under an alternative basis. Any such individual shall be treated as having met the requirement to establish such alternative basis to the satisfaction of the Commissioner under the facts and circumstances of the particular case, provided that the individual meets the other requirements of paragraph (b)(2)(ii)(C)( 1 )( i ). This paragraph also provides that the Commissioner may, by ruling or other administrative pronouncement, indicate the circumstances in which he will require individuals to determine the source of certain compensation as an employee for labor or personal services performed partly within and partly without the United States under an alternative basis pursuant to the authority under paragraph (b)(2)(ii)(C)( 1 )( ii ) of this section.

Section 1.861-4(b)(2)(ii)(C)( 3 ) of the new proposed regulations is reserved with respect to artists and athletes who are employees. It is intended that the specific rules for artists and athletes who are employees will require such individuals to determine the proper source of compensation for labor or personal services on the basis that most correctly reflects the proper source of that income under the facts and circumstances of the particular case, consistent with current law. Comments are invited in this connection, including on the proper definition of an artist or athlete for this purpose.

Examples illustrating these new rules with respect to compensation that an individual receives as an employee are included in § 1.861-4(b)(2)(ii)(G) of the new proposed regulations.

Several of the comments to the previously proposed regulations requested specific rules for compensation arrangements that relate to services performed over a period of more than one year, such as employee stock option plans, transfers of restricted property, and other deferred compensation arrangements. The new proposed regulations provide at § 1.861-4(b)(2)(ii)(F) that the source of multi-year compensation of an employee is generally determined on a time basis over the applicable period to which the compensation is attributable. Determination of the applicable period to which the compensation is attributable (including whether the compensation relates to more than one taxable year) is based upon the facts and circumstances of the particular case. Treasury and the IRS invite taxpayers to provide comments on whether alternative bases for determining the source of such multi-year compensation are appropriate.

One comment questioned whether a day was the only time period upon which to apply the time basis of sourcing compensation. In response to this comment, the new proposed regulations provide at § 1.861-4(b)(2)(ii)(E) that, although the time basis is generally determined by comparing the number of days of performance of the labor or personal services by the individual within the United States to his or her total number of days of performance of labor or personal services, use of a unit of time less than a day may be appropriate for purposes of this calculation. For example, it may be more appropriate to source compensation paid to an airline flight crewmember based on a time unit of less than a day.

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

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

The principal author of these proposed regulations is David Bergkuist of the Office of Associate Chief Counsel (International). However, other personnel from the IRS and Treasury participated in their development.

Accordingly, under the authority of 26 U.S.C. 7805, the notice of proposed rulemaking published in the Federal Register on January 21, 2000, (65 FR 3401), REG-208254-90 is withdrawn.

Accordingly, 26 CFR Part 1 is proposed to be amended as follows:

This document contains proposed amendments to 26 CFR part 1 under section 951(a) of the Code relating to the determination of a United States shareholder's pro rata share of a CFC's subpart F income, previously excluded subpart F income withdrawn from investment in less developed countries, previously excluded subpart F income withdrawn from foreign base company shipping operations, and amounts determined under section 956 (collectively, section 951(a)(1) amounts).

In general, section 951(a)(1) requires a United States shareholder that owns stock in a CFC to include its pro rata share of such section 951(a)(1) amounts in its gross income. Pro rata share is defined in section 951(a)(2) of the Code as the amount:

The current regulations provide rules for determining a United States shareholder's pro rata share of a CFC's section 951(a)(1) amounts in the case where the CFC has more than one class of stock outstanding. These regulations have remained unchanged since 1965. In the 39 years since the rules were issued, international business arrangements have become much more complex than contemplated in 1965, reflecting in particular more complex structures for determining return on capital. The current regulations do not take into account these developments. The IRS and Treasury Department, therefore, believe that updated guidance is necessary to ensure results that are more consistent with the economic interests of shareholders in a CFC.

Section 1.951-1(e) defines pro rata share for purposes of section 951(a) of the Code. These proposed regulations replace existing § 1.951-1(e)(2) through (4) and are intended to provide allocations that are more consistent with the economic interests of shareholders in a CFC. The proposed regulations also include a conforming change to § 1.951-1(e)(1) to reflect the 1993 legislative amendment to section 956 of the Code.

Proposed § 1.951-1(e)(2) adds an explicit rule to clarify the method by which a United States shareholder's pro rata share of a CFC's section 951(a)(1) amounts is determined in the case where the CFC has only one class of stock outstanding. In such a case, each United States shareholder's share of the CFC's section 951(a)(1) amounts shall be determined on a per share basis. Example 1 of proposed § 1.951-1(e)(6) illustrates the application of this rule.

Proposed § 1.951-1(e)(3) provides rules for determining a United States shareholder's pro rata share of a CFC's section 951(a)(1) amounts in the case where the CFC has more than one class of stock outstanding. Proposed § 1.951-1(e)(3)(i) retains the general rule in the current regulations, which provides that the amount of subpart F income, withdrawals, or amounts determined under section 956 which shall be taken into account with respect to any one class of stock shall be that amount which bears the same ratio to the total of such subpart F income, withdrawals, or amounts determined under section 956 for such year as the earnings and profits which would be distributed with respect to such class of stock if all earnings and profits of such corporation for such year were distributed on the last day of such corporation's taxable year on which such corporation is a CFC (the hypothetical distribution date) bear to the total earnings and profits of such corporation for such taxable year. Examples 2 and 8 of proposed § 1.951-1(e)(6) illustrate the application of this general rule.

This general rule applies in cases where a CFC has more than one class of stock outstanding and where the allocation of the amount of the CFC's earnings and profits between or among different classes of stock does not depend upon the exercise of discretion by the board of directors or similar governing body of the CFC. The IRS and Treasury Department believe that this general rule, in practice, will apply in most cases in which a CFC has more than one class of stock outstanding.

In the case where the allocation of the amount of a CFC's earnings and profits for the taxable year between two or more classes of stock depends upon the exercise of discretion by the board of directors or a similar governing body of the CFC, proposed § 1.951-1(e)(3)(ii)(A) provides a new general rule that determines the pro rata share of the CFC's section 951(a)(1) amounts. This new general rule allocates earnings and profits to classes of shares with discretionary distribution rights by reference to the relative values of such classes of shares on the hypothetical distribution date. Under this new rule, the allocation of earnings and profits to each class of stock with discretionary distribution rights generally will be the amount of earnings and profits that bears the same ratio to the total earnings and profits allocated to all classes of stock with discretionary distribution rights as the value of all shares of such class determined on the hypothetical distribution date bears to the total value of all classes of stock with discretionary distribution rights. This allocation approach is analogous to the approach used for allocating adjustments among classes of stock for consolidated return purposes. See § 1.1502-32(c). For guidance with respect to the valuation of stock, see, e.g., Framatome Connectors USA, Inc. v. Comm'r, 118 T.C. 32 (2002) (establishing factors to be used to value stock of a CFC for purposes of determining whether the foreign corporation was a CFC pursuant to the value test in section 957(a)(2)); compare Rev. Rul. 59-60, 1959-1 C.B. 237 (valuing privately held stock for estate tax purposes). ( See § 601.601(d)(2)(ii)( b )). In cases where the value of each share of two or more classes of stock with discretionary distribution rights is substantially the same, the allocation of earnings and profits to each class of stock shall be made as if such classes constituted one class of stock. Examples 3 and 4 of proposed § 1.951-1(e)(6) illustrate the application of these rules.

The general rules of proposed § 1.951-1(e)(3)(i) and (ii)(A) both apply in certain cases where a CFC has more than two classes of stock outstanding. Specifically, these rules both apply where a CFC has at least two classes of stock with discretionary distribution rights and at least one class of stock with non-discretionary distribution rights. In general, a United States shareholder's pro rata share of a CFC's section 951(a)(1) amounts is determined by allocating earnings and profits to classes of shares with non-discretionary distribution rights ( e.g. , nonparticipating preferred stock) in accordance with the rules of proposed paragraph (e)(3)(i), and then allocating the remaining earnings and profits, if any, to each remaining class of stock in accordance with the relative value rules of proposed paragraph (e)(3)(ii)(A).

The new rule in proposed § 1.951-1(e)(3)(ii)(A) is intended to ensure that the determination of a United States shareholder's pro rata share of a CFC's section 951(a)(1) amounts in cases where the United States shareholder's stock has discretionary distribution rights properly reflects the true economics of the shareholder's investment in the CFC. The IRS and Treasury Department believe that in the case of multiple classes of stock with discretionary distribution rights, the relative value of the classes of stock better reflects the economics of the investment in a CFC, and thus provides a better mechanism for determining a United States shareholder's pro rata share of a CFC's section 951(a)(1) amounts.

Proposed § 1.951-1(e)(3)(ii)(B) provides that the right to redeem stock of a CFC will not be considered a discretionary distribution right for purposes of determining a shareholder's pro rata share under proposed § 1.951-1(e)(3)(ii)(A), even if the resulting redemption would be treated as a distribution of property to which section 301 applies pursuant to section 302(d). Example 7 of proposed § 1.951-1(e)(6) illustrates the application of this rule.

Proposed § 1.951-1(e)(3)(iii) provides a specific rule that applies the general rules of proposed § 1.951-1(e)(3)(i) and (ii)(A) in cases where a class of stock provides for both non-discretionary distribution rights and discretionary distribution rights ( e.g. , participating preferred stock). In such a case, the proposed regulations require separate allocations of earnings and profits based upon the non-discretionary distribution rights and the relative value of the discretionary distribution rights. Example 5 of proposed § 1.951-1(e)(6) illustrates the application of this rule.

Proposed § 1.951-1(e)(3)(iv) retains the existing rule with respect to arrearages in dividends with respect to classes of preferred stock of the CFC. The earnings and profits for the taxable year shall be attributable to such arrearage only to the extent the arrearage exceeds the earnings and profits remaining from prior taxable years beginning after December 31, 1962.

Proposed § 1.951-1(e)(4) sets forth a special rule that provides that no amount shall be considered to be distributed with respect to a particular class of stock under proposed § 1.951-1(e)(3) to the extent that such a distribution would constitute a distribution in redemption of stock, a distribution in liquidation, or a return of capital. This rule would apply notwithstanding the terms of any class of stock of the CFC or any arrangement involving the CFC. Thus, for purposes of determining the allocation of earnings and profits to a class of stock of a CFC based on the earnings and profits which would be distributed with respect to such class of stock if all earnings and profits were distributed pro rata to its shareholders on the hypothetical distribution date, taxpayers may not consider any part of the hypothetical distribution as a distribution in redemption of stock (even if such redemption would be treated as a distribution of property to which section 301 applies pursuant to section 302(d)), a distribution in liquidation, or a return of capital. The IRS and Treasury Department believe that such characterizations of the hypothetical distribution would not properly reflect a United States shareholder's economic interest in the CFC and thus should not be considered in determining a United States shareholder's pro rata share of section 951(a)(1) amounts. Example 7 of proposed § 1.951-1(e)(6) illustrates the application of this rule.

Proposed § 1.951-1(e)(5) provides that, except in the case of a governmental restriction described in section 964(b) of the Code, a restriction or other limitation on the distribution of earnings and profits to a United States shareholder by a CFC will not be taken into account for purposes of determining the amount of earnings and profits allocated to a class of stock of a CFC or the amount of the United States shareholder's pro rata share of the CFC's section 951(a)(1) amounts. This rule applies in all cases, including cases where the restriction or limitation is the result of an arrangement between unrelated parties or an arrangement that has a non-tax motivated business purpose and economic substance. The IRS and Treasury Department believe that taking into account such restrictions or limitations in determining a United States shareholder's pro rata share is contrary to the purpose of section 951(a) and would not properly reflect a United States shareholder's economic interest in the CFC. Example 6 of proposed § 1.951-1(e)(6) illustrates the application of this rule.

Proposed § 1.951-1(e)(5)(ii) provides a broad definition of restrictions or other limitations on distributions that are covered by this rule. Under proposed § 1.951-1(e)(5)(iii), the right to receive a preferred dividend is not considered a restriction or other limitation on the distribution of earnings and profits with respect to other classes of stock. Proposed § 1.951-1(e)(5)(iv) lists some instances where restrictions or other limitations will not be taken into account.

These regulations are proposed to apply for taxable years of a controlled foreign corporation beginning on or after January 1, 2005.

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

Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing has been scheduled for November 18, 2004, at 10 a.m. in the auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble.

The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments and an outline of the topics to be discussed and the time to be devoted to each topic (signed original and eight (8) copies) by November 4, 2004. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.

Comments are requested on all aspects of the proposed regulations, including those aspects for which specific requests for comments are set forth above.

The principal author of these regulations is Jonathan A. Sambur, Office of Associate Chief Counsel (International). However, other personnel from the IRS and Treasury Department participated in their development.

Accordingly, 26 CFR part 1 is proposed to be amended as follows:

Detailed background information describing the rulemaking may be found in two previously published notices:

1. Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Interstate Air Quality Rule); Proposed Rule 69 FR 4566, January 30, 2004;

2. Supplemental Proposal for the Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Proposed Rule 69 FR 32684, June 10, 2004.

The information placed in the docket is also available for public review on the Web site for this rulemaking at http://www.epa.gov/interstateairquality. If additional relevant supporting information becomes available in the future, EPA will place this information in the docket and make it available for public review on this Web site.

To expedite review of your comments by Agency staff, you are encouraged to send a separate copy of your comments, in addition to the copy you submit to the official docket, to Douglas Solomon, U.S. EPA, Office of Air Quality Planning and Standards, Emissions Modeling and Analysis Division, Mail Code C304-01, Research Triangle Park, NC 27711, telephone (919) 541-4132, e-mail iaqrcomments@epa.gov.

1. Submitting CBI. Do not submit this information to EPA through EDOCKET, regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI only to the following address: Roberto Morales, U.S. EPA, Office of Air Quality Planning and Standards, Mail Code C404-02, Research Triangle Park, NC 27711, telephone (919) 541-0880, e-mail at morales.roberto@epa.gov, Attention Docket ID No. OAR-2003-0053.

2. Tips for Preparing Your Comments. When submitting comments, remember to:

i. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

ii. Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

iii. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

iv. Describe any assumptions and provide any technical information and/or data that you used.

v. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

vi. Provide specific examples to illustrate your concerns, and suggest alternatives.

vii. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

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

The EPA has also established a Web site for this rulemaking at http://www.epa.gov/interstateairquality. The Web site includes the rulemaking actions and other related information that the public may find useful.

The EPA has placed the information described below in the CAIR docket OAR-2003-0053.

• CAIR Emissions Inventory Overview. This item provides an overview of the development of the updated 2001, 2010, and 2015 emissions inventories.

• Non-Electric Generating Unit (EGU) Nonpoint Control Development. This item describes the development of future base case emissions controls for stationary sources other than utilities.

• Non-EGU Nonpoint Growth Development. This item describes the development of growth factors used to project 2001 emissions for future-year scenarios for stationary sources other than utilities.

• Commercial Marine, Airports, and Trains Approach. This item describes the development of emissions estimates for these three nonroad mobile categories.

• Commercial Marine, Airports, and Trains Data. This file contains the supporting data used in developing emissions estimates for commercial marine vessels, airports and trains.

• Fire Temporal Documentation. This item describes the development of temporal profiles used in estimating emissions from fires.

• 2001 EGU Documentation. This item describes the development of 2001 emissions estimates for sources in the utility sector.

• BEIS3.12 Documentation. This item describes the Biogenic Emissions Inventory System (BEIS) version 3.12, with modifications used in developing the biogenic emissions estimates.

• Mobile NMIM Documentation. This item describes the National Mobile Inventory Model (NMIM).

• Mobile NMIM Usage for CAIR. This file describes how the National Mobile Inventory Model (NMIM) was used for CAIR air quality modeling.

• NEI 2001 to NEEDS Matches. This file contains data on how utilities contained in the 2001 National Emissions Inventory (NEI) were matched to those in the National Electric Energy Database System (NEEDS) 2003 database.

• PM 2.5 Emissions Speciation Updates. This file contains updated factors used to divide emissions of PM 2.5 into component species and a description of the sources of this information.

• Emissions Summary State-Sector-Speciation 2001-2010-2015. This file contains annual emissions of VOC, CO SO 2 , NO X , NH 3 , PM 10 and PM 2.5 model species. Data are presented by State and by major sector for the 2001 Base Year, 2010 Base Case, and 2015 Base Case, not including 2010 and 2015 emissions from electric generating units.

• Emissions Summary State-Sector 2001-2010-2015. This file contains annual emissions of VOC, CO, SO 2 , NO X , NH 3 , and PM 2.5 . Data are presented by State and by major sector for the 2001 Base Year, 2010 Base Case, and 2015 Base Case, not including 2010 and 2015 emissions from electric generating units.

• Report on 2001 MM-5 Simulations. This report documents the simulations of the Mesoscale Meteorological Model (MM-5) for 2001 and includes an evaluation of selected MM-5 output meteorological data.

• Peer Review of the Community Multiscale Air Quality (CMAQ) Model. This report contains a summary by the peer review panel of the December 2003 external peer review of CMAQ.

• Community Multiscale Air Quality (CMAQ) Model Documentation Reference. This item identifies publically available references for CMAQ.

• Use of Goddard Earth Observing System—CHEMistry (GEOS-CHEM) Model for CMAQ Boundary Conditions. This item is a presentation on the procedures for developing initial and boundary conditions for the Community Multiscale Air Quality (CMAQ) model from the GEOS-CHEM global chemistry model.

• Disk drive containing selected model input data sets and model codes for the updated CAIR modeling platform. The data on this disk are also available for ftp download. Contact Warren Peters at peters.warren@epa.gov to access these data.

• Configuration of CMAQ for CAIR Annual Simulations. This item identifies the horizontal and vertical configuration of CMAQ as applied by EPA for simulating the CAIR emissions scenarios.

• EPA_OAQPS CMAQ Evaluation for 2001. This report describes an evaluation by the EPA Office of Air Quality Planning and Standards of CMAQ, as applied for 2001.

• EPA_ORD Evaluation of CMAQ for 2001. This item contains a presentation on the evaluation by the EPA Office of Research and Development of CMAQ, as applied for 2001.

• Revised Speciated Model Attainment Test. This item describes the revised procedures for the Speciated Modeled Attainment Test (SMAT) and Design Value (DV) averaging technique.

• National Electric Energy Database System (NEEDS), which contains unit level data used in EPA modeling applications.

• Correction to State NO X Budgets.

The EPA may place additional documents in the docket, and if EPA does so, EPA will announce their availability by posting a notice on the CAIR Web site http://www.epa.gov/interstateairquality.

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

These proposed BFEs and modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, State, or regional entities. These proposed elevations are used to meet the floodplain management requirements of the NFIP and are also used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in these buildings.

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

Regulatory Flexibility Act. The Mitigation Division Director of the Emergency Preparedness and Response Directorate certifies that this rule is exempt from the requirements of the Regulatory Flexibility Act because modified BFEs are required by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are required to maintain community eligibility in the NFIP. No regulatory flexibility analysis has been prepared.

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

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

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

Accordingly, 44 CFR part 67 is proposed to be amended as follows:

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

These proposed BFEs and modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, State, or regional entities. These proposed elevations are used to meet the floodplain management requirements of the NFIP and are also used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in these buildings.

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

Regulatory Flexibility Act. The Mitigation Division Director of the Emergency Preparedness and Response Directorate certifies that this rule is exempt from the requirements of the Regulatory Flexibility Act because modified base flood elevations are required by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are required to maintain community eligibility in the NFIP. No regulatory flexibility analysis has been prepared.

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

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

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

Accordingly, 44 CFR part 67 is proposed to be amended as follows:

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

These proposed BFEs and modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, State, or regional entities. These proposed elevations are used to meet the floodplain management requirements of the NFIP and are also used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in these buildings.

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

Regulatory Flexibility Act. The Mitigation Division Director of the Emergency Preparedness and Response Directorate certifies that this rule is exempt from the requirements of the Regulatory Flexibility Act because modified base flood elevations are required by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are required to maintain community eligibility in the NFIP. No regulatory flexibility analysis has been prepared.

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

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

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

Accordingly, 44 CFR part 67 is proposed to be amended as follows:

We intend that any final action resulting from this proposal will be as accurate and as effective as possible. Therefore, comments or suggestions from the public, other concerned governmental agencies, the scientific community, industry, or any other interested party concerning this proposed rule are hereby solicited. Comments particularly are sought concerning:

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

(2) Specific information on the amount and distribution of Gaura neomexicana ssp. coloradensis habitat, and what habitat is essential to the conservation of the species and why;

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

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

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

If you wish to comment, you may submit your comments and materials concerning this proposal by any one of several methods ( see ADDRESSES section). Please submit Internet comments to fw6_cobutterflyplant@fws.gov in ASCII file format and avoid the use of special characters or any form of encryption. Please also include “Attn: Gaura neomexicana ssp. coloradensis ” in your e-mail subject header and your name and return address in the body of your message. If you do not receive a confirmation from the system that we have received your Internet message, contact us directly by calling our Cheyenne Ecological Services Field Office at phone number 307/772-2374. Please note that the Internet address fw6_cobutterflyplant@fws.gov will be closed out at the termination of the public comment period.

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

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

While attention to and protection of habitat is paramount to successful conservation actions, we have consistently found that, in most circumstances, the designation of critical habitat is of little additional value for most listed species, yet it consumes large amounts of conservation resources. Sidle (1987) stated, “Because the Act can protect species with and without critical habitat designation, critical habitat designation may be redundant to the other consultation requirements of section 7.” Currently, only 445 species or 36 percent of the 1,244 listed species in the United States under the jurisdiction of the Service have designated critical habitat. We address the habitat needs of all listed species through conservation mechanisms such as listing, section 7 consultations, the section 4 recovery planning process, the section 9 protective prohibitions of unauthorized take, section 6 funding to the States, and the section 10 incidental take permit process. The Service believes that it is these measures that may make the difference between extinction and survival for many species.

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

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

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

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

We discuss only those topics directly relevant to the designation of critical habitat in this proposed rule. For more information on Gaura neomexicana ssp. coloradensis , refer to the final listing rule published in the Federal Register on October 18, 2000 (65 FR 62302).

Gaura neomexicana ssp. coloradensis is a perennial herb that lives vegetatively for several years before bearing fruit once and then dying. Gaura neomexicana ssp. coloradensis occurs on subirrigated, alluvial (stream deposited) soils on level or slightly sloping floodplains and drainage bottoms at elevations of 1,524-1,951 meters (5,000-6,400 ft). Colonies are often found in low depressions or along bends in wide, active, meandering stream channels a short distance upslope of the actual channel. The plant requires early- to mid-succession riparian (river bank) habitat. Gaura neomexicana ssp. coloradensis is an early successional plant (although probably not a pioneer) adapted to use stream channel sites that are periodically disturbed. Historically, flooding was probably the main cause of disturbances in the plant's habitat, although wildfire and grazing by native herbivores also may have been important.

Little is known about the historical distribution of Gaura neomexicana ssp. coloradensis . Prior to 1984, no extensive documentation of the plant's range had been conducted. In 1979, the total known population size was estimated in the low hundreds (Dorn 1979). Intensive range-wide surveys from 1984 to 1986 resulted in the discovery or confirmation of more than 20 populations in Wyoming, Colorado, and Nebraska, containing approximately 20,000 flowering individuals (Marriott 1987). Additional surveys since 1992 have resulted in the discovery of additional populations in Wyoming and Colorado (Fertig 1994; Floyd 1995b).

Gaura neomexicana ssp. coloradensis is distributed throughout its occupied range into patchy groups of subpopulations, some of which are isolated with little or no possibility of interbreeding with other local populations. The spatial structuring of this subspecies is commonly referred to as a metapopulation. Local populations exist on a patch of suitable habitat, and although each has its own, relatively independent population dynamics, the long-term persistence and stability of the metapopulation arise from a balance of population extinctions and colonization to unoccupied patches through dispersal events (Hanski 1989, Olivieri et al. 1990, Hastings and Harrison 1994).

Balancing local population extinction with new colonization events is problematic for Gaura neomexicana ssp. coloradensis since naturally occurring disturbance associated with creation of suitable habitat for colonization, such as seasonal floods, has been largely curtailed by water development and flood control. Consequently, what once may have been a dynamic, but stable, metapopulation, may now be characterized by a series of local populations with a very low probability of colonizing new patches, and little opportunity to replace populations that go extinct. Biological characteristics that may serve to reduce these negative consequences at least in the short-term for G. n. ssp. coloradensis include seed banks, delay of stage transition from rosette to flowering adults under poor habitat conditions, and self-compatibility. However, the regional persistence of a metapopulation has been shown to be possible only when the rate of colonization exceeds the local rate of extinction (Lande 2002). Consequently, the removal of opportunities for future colonization events poses a significant threat to long-term metapopulation persistence and species viability. This highlights the importance of maintaining viability of as many local populations as possible through conservation.

Most of what is known about Gaura neomexicana ssp. coloradensis and its conservation is based on surveys and research conducted on populations located on the WAFB in Cheyenne, Wyoming, from 1984 to 2003. Floyd and Ranker (1998) studied three G. n. ssp. coloradensis subpopulations at WAFB, Crow Creek, Diamond Creek, and Unnamed Drainage, from 1992 to 1994. The purpose of their study was to examine population growth, demographic variability, demographic stage transition dynamics and the probability of population extinction. Results suggested that each of the three subpopulations was not stable but exhibited significant demographic variability both spatially and temporally, and population growth values were not useful parameters to describe long-term population dynamics (Floyd and Ranker 1998).

Annual census of flowering plants at WAFB began in 1986, and continued from 1988 to 2003, within subpopulations located at Crow Creek, Diamond Creek, and Unnamed Drainage. Census summaries provided by Heidel (2004a) based on these data show that subpopulations within these three drainages are characterized by dramatic fluctuations in size.

Most populations of Gaura neomexicana ssp. coloradensis for which census or demographic data have been collected exhibit substantial demographic uncertainty. Some of the observed temporal variation in subpopulations at WAFB has been correlated with unpredictable environmental factors such as temperature and precipitation (Floyd and Ranker 1998; Laursen and Heidel 2003; and Heidel 2004a), and spatial variation may be attributable, in part, to fine-scale microhabitat differences in light availability or competition with other herbaceous vegetation or noxious weeds (Munk et al. 2002; Laursen and Heidel 2003; and Heidel 2004b). Similar factors may be correlated with some of the observed demographic variability in less-well-studied populations throughout the subspecies' range. However, even for the well-studied subpopulations at WAFB, no clear cause-and-effect relationships have been found to explain the observed fluctuations in population numbers, and studies have not accounted for the majority of the observed demographic uncertainty. Demographic uncertainty, or stochasticity, is variability in survival and reproduction of individuals due, at least in part, to chance or random events (Frankel et al. 1995); although some chance events may actually be deterministic factors that are currently not understood (Shaffer 1987).

Some researchers suggest that demographic uncertainty becomes an important hazard only for small populations (in the range of tens to hundreds of individuals). While there is no managerial solution for threats due to stochastic factors, the magnitude of effect of these threats decreases as population size increases (Shaffer 1987; Frankel et al. 1995; Lande 2002). Maintaining the maximum number of individuals within each population, and maintaining the maximum number of populations within the Gaura neomexicana ssp. coloradensis metapopulation as a whole, may be the only means with which to maintain long-term species persistence.

Of the known populations of Gaura neomexicana ssp. coloradensis , the vast majority occur on private lands managed primarily for agriculture and livestock. Haying and mowing at certain times of the year, water development, land conversion for cultivation, competition with exotic plants, non-selective use of herbicides, and loss of habitat to urban development are the main threats to these populations (Mountain West Environmental Services 1985, Marriott 1987, Fertig 1994).

Because of the small, isolated nature of populations and few numbers present in many of them, the subspecies is much more susceptible to random events such as fires, insect or disease outbreaks, or other unpredictable events that could easily eliminate local populations.

On October 18, 2000, Gaura neomexicana ssp. coloradensis was designated as threatened throughout its entire range under the Act (65 FR 62302). On October 4, 2000, the Center for Biological Diversity and the Biodiversity Legal Foundation filed a complaint in the Federal District Court for the District of Colorado concerning our failure to designate critical habitat for the Colorado butterfly plant ( Center for Biological Diversity, et al. v. Norton, et al. (Civ. Action No. 00-D-1980)). On March 19, 2001, the Court approved a settlement agreement requiring us to submit a final critical habitat designation for the Colorado butterfly plant to the Federal Register on or before December 31, 2004. For more information on previous Federal actions concerning G. n. ssp. coloradensis , refer to the final listing rule (65 FR 62302).

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

Critical habitat receives protection under section 7 of the Act through the prohibition against destruction or adverse modification of critical habitat with regard to actions carried out, funded, or authorized by a Federal agency. Section 7 requires consultation on Federal actions that are likely to result in the destruction or adverse modification of critical habitat.

To be included in a critical habitat designation, the habitat must first be “essential to the conservation of the species.” Critical habitat designations identify, to the extent known using the best scientific and commercial data available, habitat areas that provide essential life-cycle needs of the species ( i.e. , areas on which are found the primary constituent elements, as defined at 50 CFR 424.12(b)).

Occupied habitat may be included in critical habitat only if the essential features thereon may require special management or protection. Thus, we do not include areas where existing management is sufficient to conserve the species. As discussed below, such areas also may be excluded from critical habitat pursuant to section 4(b)(2).

Our regulations state that, “The Secretary shall designate as critical habitat areas outside the geographic area presently occupied by the species only when a designation limited to its present range would be inadequate to ensure the conservation of the species” (50 CFR 424.12(e)). Accordingly, when the best available scientific and commercial data do not demonstrate that the conservation needs of the species so require, we will not designate critical habitat in areas outside the geographic area occupied by the species.

Our Policy on Information Standards under the Act, published in the Federal Register on July 1, 1994 (59 FR 34271), provides criteria, establishes procedures, and provides guidance to ensure that decisions made by the Service represent the best scientific and commercial data available. It requires Service biologists, to the extent consistent with the Act and with the use of the best scientific and commercial data available, to use primary and original sources of information as the basis for recommendations to designate critical habitat.

Critical habitat designations do not signal that habitat outside the designation is unimportant to Gaura neomexicana ssp. coloradensis . Areas outside the critical habitat designation will continue to be subject to conservation actions that may be implemented under section 7(a)(1), and to the regulatory protections afforded by the section 7(a)(2) jeopardy standard and the section 9 take prohibition, as determined on the basis of the best available information at the time of the action. We specifically anticipate that federally funded or assisted projects affecting listed species outside their designated critical habitat areas may still result in jeopardy findings in some cases. Similarly, critical habitat designations made on the basis of the best available information at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans, or other species conservation planning efforts if new information available to these planning efforts calls for a different outcome.

As required by the Act and regulations (section 4(b)(2) and 50 CFR 424.12), we used the best scientific and commercial data available in determining areas that contain the physical and biological features that are essential to the conservation of Gaura neomexicana ssp. coloradensis . This information included data from our files that we used for listing the species; geologic maps, recent biological surveys and reports; information funded by the Air Force and other interested parties, and discussions with botanists.

The long-term probability of the conservation of Gaura neomexicana ssp. coloradensis is dependent upon the protection of existing populations, and the maintenance of ecologic functions within these sites, including connectivity within and between populations within close geographic proximity to facilitate pollen flow and population expansion. G. n. ssp. coloradensis is fragmented and patchy in nature and occurs as a metapopulation. The areas we are proposing to designate as critical habitat provide some or all of the habitat components essential for the conservation of G. n. ssp. coloradensis .

As previously stated in the Background section of the final listing rule (65 FR 62302, October 18, 2000), “Thus, of 26 previously known populations, 9 may be extirpated; 3 are probably small, but have not been surveyed since 1992; 4 are still extant, but declining; and 10 are stable or increasing.” In our delineation of the critical habitat units, we selected areas to provide for the conservation of Gaura neomexicana ssp. coloradensis at the eight sites where all previously known subpopulations are known to occur. Much of what is known about the specific physical and biological requirements of G. n. ssp. coloradensis is described in the Primary Constituent Elements section of this proposed rule.

Our approach to delineating critical habitat units was applied in the following manner:

(1) We obtained records of Gaura neomexicana ssp. coloradensis distribution compiled by the Wyoming Natural Diversity Database (Wyoming Natural Diversity Database 2004) and from the Colorado Natural Heritage Program (Colorado Natural Heritage Program 1995, 2004). Database records were received in the form of shape files formatted for use in ArcView (Environmental Systems Research, Inc. (ESRI)), a computer GIS program. We created polygons by overlaying current and historic plant locations from shape files on digital topographic maps. In other words, we focused on designating units representative of the known current and historical locations of the plant throughout the geographic range of the subspecies.

(2) We then evaluated plant locations in relation to potentially suitable habitat within drainages on the topographic maps. We followed rough boundaries of suitable habitat from which we could identify potential critical habitat, and then further refined these boundaries using corresponding Service National Wetland Inventory maps. A more refined boundary was then created digitally using a second GIS program, ArcMap (ESRI). This boundary was then evaluated in relation to primary constituent elements and adjacent areas containing suitable hydrologic regimes, soils, and vegetation communities. We avoided land areas identified as not suitable for G. n. ssp. coloradensis , i.e. , those areas that do not contain primary constituent elements. Such areas were excluded from the refined boundary to the extent that we could identify these areas on the map.

In order to determine the outward extent of the proposed critical habitat, botanists were consulted who had previously conducted field surveys of Gaura neomexicana ssp. coloradensis and who had a good working knowledge of habitat requirements for the species. Based on the information from botanists, we are using the outward extent of the proposed critical habitat as 300 feet (91 meters) from the center of the stream within a given stream segment.

(3) We eliminated areas that did not contain the appropriate vegetation or associated native plant species, as well as features such as cultivated agriculture fields, housing developments, and other areas that are unlikely to contribute to the conservation of Colorado butterfly plant. We used geographic features (ridge lines, valleys, streams, etc.) or manmade features (roads or obvious land use) that created an obvious boundary for a unit as unit area boundaries.

(4) Critical habitat designations were then described for landowners and the public. We mapped using legal descriptions including township, range, and sections associated with the Public Land Survey System so that private landowners and the public could see the proximity of the designation with where they reside.

The Service is working with, and will continue to work with, the Wyoming Stockgrowers Association, the Wyoming Association of Conservation Districts, the Wyoming Department of Agriculture, the Natural Resources Conservation Service in Wyoming and Nebraska, and the City of Fort Collins in Colorado, to develop conservation agreements with willing landowners to provide for the conservation of Gaura neomexicana ssp. coloradensis . These agreements will include specific on-the-ground actions to alleviate specific threats including—allowing the Service access to private land to conduct annual monitoring of G. n. ssp. coloradensis populations to evaluate success of management actions under the agreement; establishing an adaptive management approach to evaluate success of management actions under the agreement; and facilitating the collection of data needed for future recovery of the species. Through cooperation and communication between landowners and the Service, such agreements will provide for the conservation needs of G. n. ssp. coloradensis above and beyond what would be achievable through the designation of critical habitat on private lands while meeting the needs of individual landowners. Working cooperatively with private landowners to protect habitat for G. n. ssp. coloradensis through conservation agreements is the Service's preferred approach to protecting the species on private lands. The Service will pursue such agreements to the fullest extent practicable prior to finalizing critical habitat. If, prior to finalizing the designation of critical habitat, the Service determines that the benefits of excluding an area subject to one of these agreements outweigh the benefits of including it, the Service will exclude such from the designation. Currently, one such agreement is in place.

The Service will work with landowners to gain access to private lands to survey for plant populations. Most of these populations have not been surveyed since 1998, earlier in some cases, and some may now be extirpated. The Service is in the process of conducting surveys that will continue through August of 2004. We will further refine the designation based on new information.

We propose to designate critical habitat on lands that we have determined are essential to the conservation of Gaura neomexicana ssp. coloradensis . These areas have the primary constituent elements described. While the species was known historically from several additional locations in northern Colorado and southeastern Wyoming, these populations are believed to be extirpated (Fertig 1994) and are not included in the proposed designation.

Much of the survey data on which this proposed designation is based represents the number of flowering individuals during one point in time. Because of the annual fluctuation in population size for this species (ranging from 200 percent), and because the number of flowering individuals each year depends upon local environmental factors that vary substantially year to year ( e.g. , precipitation), it is likely that other individual plants and subpopulations exist but were not identified during previous surveys. This is particularly true for those areas, which contain the primary constituent elements for the species, that occur between subpopulations. Not only are these areas essential to achieving the long-term conservation goal of protecting the maximum number of populations possible, but they are essential in maintaining gene flow between populations via pollen flow to maintain, and potentially increase, local population genetic variation.

In our delineation of the critical habitat units, we selected areas to provide for the conservation of Gaura neomexicana ssp. coloradensis in all areas where it is known to occur, except WAFB ( see discussion below on the WAFB's Integrated Natural Resources Management Plan (INRMP)). All units are essential because G. n. ssp. coloradensis populations exhibit significant demographic uncertainty, contain very low genetic variation, and have very little opportunity to colonize new geographic areas with which to balance local extinction events. We believe the proposed designation is of sufficient size to maintain ecological processes and to minimize secondary impacts resulting from human activities and land management practices occurring in adjacent areas. We mapped the units with a degree of precision commensurate with the available information, the size of the unit, and time allotted to complete this proposal. We anticipate that the boundaries of the units may be refined based on additional information received during the comment period and after surveys are completed in August of this year.

Although we are not proposing sites other than where populations are known to occur, we do not mean to imply that habitat outside the designation is unimportant or may not be required for recovery of the species. Areas that support newly discovered populations in the future, but are outside the critical habitat designation, will continue to be subject to the applicable prohibitions of section 9 of the Act and the regulatory protections afforded by the section 7(a)(2) jeopardy standard. In addition, for such populations discovered on private lands, the Service will consider entering into conservation agreements with the landowners similar to the ones contemplated for currently known populations.

We often exclude non-Federal public lands and private lands that are covered by an existing operative Habitat Conservation Plan (HCP) and executed Implementation Agreement (IA) under section 10(a)(1)(B) of the Act from designated critical habitat because the benefits of exclusion outweigh the benefits of inclusion as discussed in section 4(b)(2) of the Act. There are no HCPs in place for Gaura neomexicana ssp. coloradensis at this time. Department of Defense lands with an approved INRMP also are excluded from critical habitat. We have approved the INRMP for WAFB, which addresses conservation needs of G. n. ssp. coloradensis . Consequently, we did not consider habitat supporting populations located on WAFB for proposed designation as critical habitat.

Designating critical habitat is one mechanism for providing habitat protection for Gaura neomexicana ssp. coloradensis populations. However, the benefits of protecting extant populations through conservation agreements, by partnering with private landowners on whose property populations occur, may well outweigh the benefits of designating critical habitat for this species. Greater protection results from conservation agreements because these agreements address the specific types of actions ( e.g. , indiscriminate application of herbicides; overgrazing; timing of hay cutting) undertaken by private landowners that may adversely impact G. n. ssp. coloradensis or its habitat and that would not involve a Federal nexus subject to consultation under section 7(a)(2) of the Act. A review of the complete consultation history of G. n. ssp. coloradensis has revealed that none of the actions undertaken on private lands resulting in these threats to the species have ever required consultation under the Act.

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

The primary constituent elements for Gaura neomexicana ssp. coloradensis include those habitat components essential for the biological needs of rosette growth and development, flower production, pollination, seed set and fruit production, and genetic exchange. G. n. ssp. coloradensis typically lives and reproduces on subirrigated, stream-deposited soils on level or slightly sloping floodplains and drainage bottoms at elevations of 5,000 to 6,400 feet (1,524 to 1,951 meters). Most colonies are found in low depressions or along bends in wide, active, meandering stream channels a short distance upslope of the active channel, and may occur at the base of alluvial ridges at the interface between riparian meadows and drier grasslands (Fertig 2001). Average annual precipitation within its range is 13 to 16 in (33 to 41 cm) primarily in the form of rainfall (Fertig 2000). Soils in G. n. ssp. coloradensis habitat are derived from conglomerates, sandstones, and tufaceous mudstones and siltstones ( i.e. , derived from spongy, porous limestone formed by the precipitation of calcite from the water of streams and springs) of the Tertiary White River, Arikaree, and Ogallala formations (Fertig 2000).

Ecological processes that create and maintain Gaura neomexicana ssp. coloradensis habitat are important primary constituent elements. Essential habitat components to G. n. ssp. coloradensis occur in areas where past and present hydrological and geological processes have created streams, floodplains, and conditions supporting favorable plant communities. Historically, G. n. ssp. coloradensis habitat has been maintained along streams by natural flooding cycles that periodically scour riparian vegetation, rework stream channels and floodplains, and redistribute sediments to create vegetation patterns favorable to G. n. ssp. coloradensis . G. n. ssp. coloradensis commonly occurs in communities including Agrostis stolonifera (redtop) and Poa pratensis (Kentucky bluegrass) on wetter sites, or Glycyrrhiza lepidota (wild licorice), Cirsium flodmanii (Flodman's thistle), Grindelia squarrosa (curlytop gumweed), and Equisetum laevigatum (smooth scouring rush) on drier sites (Fertig 1994). Both of these habitat types are usually intermediate in moisture between wet, streamside communities dominated by Carex spp. (sedges), Juncus spp. (rushes), and Typha spp. (cattails), and dry upland shortgrass prairie. Where hydrological flows are controlled to preclude a natural pattern of habitat development, and other forms of disturbance are curtailed or eliminated, a less favorable mature successional stage of vegetation will develop, resulting in the loss of many of these plant associates.

Hydrological processes, and their importance in maintaining the moisture regime of habitat preferred by Gaura neomexicana ssp. coloradensis , also have an important direct effect on seed germination and seedling recruitment. Analysis by Heidel (2004a) demonstrated a significant positive correlation between census number and net growing season precipitation 2 years prior to census. Important direct effects of moisture on G. n. ssp. coloradensis establishment and recruitment also have been demonstrated by the appearance of high numbers of new vegetative plants within 27 days after a 100-year flood event at WAFB on August 1, 1985 (Rocky Mountain Heritage Task Force 1987 cited in Heidel 2004a).

The long-term availability of favorable Gaura neomexicana ssp. coloradensis habitat also depends on impacts of drought, fires, windstorms, herbivory, and other natural events. G. n. ssp. coloradensis requires open, early- to mid-succession riparian habitat experiencing periodic disturbance. Periodic disturbance is necessary to control competing vegetation, and to create open, bare ground for seedling establishment (Fertig 2001). Salix exigua (coyote willow) and Cirsium arvense (Canada thistle) may become locally dominant in G. n. ssp. coloradensis habitat that is not periodically flooded or otherwise disturbed, resulting in decline of the species. Research has demonstrated negative impacts on G. n. ssp. coloradensis populations from competition with locally abundant noxious weeds, forbs, and grasses (Munk et al. 2002, Heidel 2004b).

Based on our knowledge to date, the primary constituent elements for Gaura neomexicana ssp. coloradensis consist of, but are not limited to:

(1) Subirrigated, alluvial soils on level or low-gradient floodplains and drainage bottoms at elevations of 5,000 to 6,400 feet (1,524 to 1,951 meters).

(2) A mesic moisture regime, intermediate in moisture between wet, streamside communities dominated by sedges, rushes, and cattails, and dry upland shortgrass prairie.

(3) Early- to mid-succession riparian (streambank or riverbank) plant communities that are open and without dense or overgrown vegetation (including hayed fields, grazed pasture, other agricultural lands that are not plowed or disced regularly, areas that have been restored after past aggregate extraction, areas supporting recreation trails, and urban/wildland interfaces).

(4) Hydrological and geological conditions that serve to create and maintain stream channels, floodplains, floodplain benches, and wet meadows that support patterns of plant communities associated with G. n. ssp. coloradensis .

Existing features and structures within the boundaries of the mapped units, such as buildings, roads, parking lots, other paved areas, lawns, other urban and suburban landscaped areas, regularly plowed or disced agricultural areas, and other features not containing any of the primary constituent elements are not considered critical habitat.

When designating critical habitat, we assess whether the areas determined to be essential for conservation may require special management considerations or protections. For Gaura neomexicana ssp. coloradensis special management considerations include maintaining surface or subsurface water flows that provide the essential hydrological regime that supports the species; appropriate constraints on application of herbicides used to control noxious weeds; preventing habitat degradation caused by plant community succession; and preventing harmful habitat fragmentation from residential and urban development that detrimentally affects plant-pollinator interactions, leads to a decline in species reproduction, and increases susceptibility to non-native plant species. While excessive grazing can lead to changes in essential habitat conditions ( e.g. , increases in soil temperature resulting in loss of moisture, decreases in plant cover, and increases in non-native species), managing for appropriate levels of grazing provides an important management tool with which to maintain open habitat needed by the species.

We are proposing eight units as critical habitat for Gaura neomexicana ssp. coloradensis. The critical habitat areas described below constitute our best assessment at this time of the areas essential for the conservation of G. n. ssp. coloradensis that may require special management. The eight proposed units are: (1) Tepee Ring Creek in Wyoming; (2) Bear Creek East in Wyoming; (3) Bear Creek West in Wyoming; (4) Little Bear Creek/Horse Creek in Wyoming; (5) Lodgepole Creek West in Wyoming; (6) Lodgepole Creek East in Wyoming and Nebraska; (7) Borie in Wyoming; and (8) Meadow Springs Ranch in Colorado.

The approximate area encompassed within each proposed critical habitat unit is shown in Table 1.

We present brief descriptions of all units, and reasons why they are essential for the conservation of Gaura neomexicana ssp. coloradensis , below.

Unit 1 consists of 107 ac (43 ha) along 1.5 stream mi (2.4 km) of Tepee Ring Creek in Platte County, Wyoming, and is under private ownership. One subpopulation of Gaura neomexicana ssp. coloradensis has been found along Tepee Ring Creek in the lower SE corner of T21N R68W Section 2. Habitat occupied by G. n. ssp. coloradensis is moist meadow along the stream. Habitat along this stream reach throughout this unit is primarily identified as PEMA (palustrine emergent temporarily flooded) wetland intermixed with PEMC (palustrine emergent seasonally flooded) wetland, according to National Wetlands Inventory terminology (U.S. Fish and Wildlife Service 1993). Habitat containing primary constituent elements extends throughout this entire reach, and it is likely that G. n. ssp. coloradensis occurs in Section 1 downstream of the subpopulation in Section 2. This unit is essential to the conservation of the species because it represents the northernmost extent of the subspecies' known range of occurrence, separated by approximately 25 mi (40.3 km) from the closest population, and likely contains unique genetic variability not found in other populations.

Unit 2 consists of 801 ac (324 ha) along 11.2 stream mi (18 km) of the South Fork of the Bear Creek and the Bear Creek in Laramie County, Wyoming. Colonies of Gaura neomexicana ssp. coloradensis have been found throughout the South Fork Bear Creek from T19N67W Section 25, extending northeast approximately 13 mi (21 km) to the far eastern edge of T19N66W Section 11. This unit is primarily under private ownership but includes some Wyoming State lands. Three main habitat types occur in this unit—(1) hay field adjacent to streams; (2) upper stream banks with snowberry; and (3) willow thickets (WNDD 2004). Much of the habitat in this unit is mowed for hay. Habitat within this stream reach is primarily identified as PEMC intermixed with PEMA. The primary constituent elements extend throughout this entire reach in which several subpopulations of G. n. ssp. coloradensis have been found. While there are no known locations for G. n. ssp. coloradensis within Section 36, it is likely that subpopulations occur there because it is adjacent to, and just upstream of, Section 25 to the north, where a subpopulation occurs very close to the section border. Proposed critical habitat on the northern and eastern end of the unit was extended to include T19N R66W Section 12 because: (a) suitable habitat with primary constituent elements continues throughout Section 12; (b) there is a subpopulation of plants at the eastern end of Section 11 very close to Section 12 from which colonization is likely to have occurred; and (c) Section 12 is downstream of several other populations serving as likely seed sources. This unit has historically supported a number of G. n. ssp. coloradensis populations in a variety of habitat types, and is located at the furthest point downstream within the Bear Creek drainage. Disconnected from other population gene pools, subpopulations within this unit likely contain genotypes unique to this drainage. This unit is essential to the overall objective of maintaining the maximum number of populations possible for future species conservation.

Unit 3 consists of three stream reaches encompassing a total of 500 ac (202 ha) along 7.3 stream mi (11.8 km) within the Bear Creek drainage in Laramie County, Wyoming. This unit is primarily under private ownership, but includes some Wyoming State lands.

Reach 1: Habitat within this reach is semi-moist meadows on flat benches and streambanks along an intermittent stream. Plants are most abundant in areas with low thistle density and heavily browsed willow, and are absent from adjacent, ungrazed areas with dense willow thickets (WNDD 2004). Subpopulations of Gaura neomexicana ssp. coloradensis have been found throughout this reach in T18N R68W Sections 8 and 9. Habitat is primarily PEMC containing primary constituent elements and extends through Sections 8, 9, and 4 to the northwest. Proposed critical habitat on the northern and eastern end of the unit was extended to include Section 4 because: (a) Suitable habitat with primary constituent elements continues throughout Section 4; (b) there is a subpopulation of plants at the northern end of Section 9 very close to Section 4; and (c) Section 4 is downstream of 8 and 9 and it is likely that these upstream subpopulations have already dispersed seeds into Section 4. This reach is an important location that has always supported a large population with good reproduction, and this site has remained in very good condition with few impacts compared with other occupied sites.

Reach 2: Habitat within this reach consists of hummocky banks of loamy clay soil and gravelly, sloping terraces in semi-moist, closely grazed Poa pratensis (Kentucky bluegrass) / Elymus spp. (wild rye) streamside meadow at the edge of dense Carex aquatilis (Nebraska sedge) / Juncus balticus (Baltic rush) community (WNDD 2004). It is likely that grazing maintains open habitat for Gaura neomexicana ssp. coloradensis (WNDD 2004). Subpopulations of G. n. ssp. coloradensis have been found throughout this reach in T18N R68W Sections 16 and 17. Habitat is primarily PEMC containing primary constituent elements and extends through both sections. Nimmo Reservoir in Section 15, adjacent to Section 16, is likely a barrier to seed dispersal downstream. Therefore, proposed critical habitat was not extended further. This location represents the uppermost elevation within the species' known range of occurrence. Historically it has supported a large population located in habitat with few threats to its good condition.

Reach 3: Habitat within this reach consists of three types: (1) Seasonally wet Juncus balticus / Agrostis stolonifera (redtop) / Poa pratensis community on subirrigated gravelly-sandy soil in low depressions a distance from the current stream channel; (2) streambank terraces of dark-brown loamy clay in dense Helianthus nuttallii (Nuttall's sunflower) / Solidago canadensis (Canada goldenrod ) / Phleum pratense (timothy) grass community; and (3) grassy terrace dominated by Agrostis stolonifera, Poa pratensis, Elymus smithii (wild rye), and Melilotus albus (white sweetclover) on brown clay-loam (WNDD 2004). Populations are small and inside fenced areas where bulls are kept, but much more common in surrounding upland sites where grazing is moderate and willow and thistle are not well established; the plants are less abundant where growth of snowberry is thick (WNDD 2004). The population within this reach has been growing in years leading up to the last survey date and is located in habitat in good condition.

One subpopulation of Gaura neomexicana ssp. coloradensis has been found on the eastern edge of T18N R68W Section 21. Habitat is primarily PEMA containing primary constituent elements and extends from the middle of Section 21 through the adjacent Section 22 to the east. There is a natural break in habitat approximately in the center of Section 21 at which point the PEMA habitat changes to scrub-shrub and continues upstream (to the southwest) through the remainder of Section 21. We did not propose critical habitat beyond this natural break. Proposed critical habitat includes Section 22 to the east because: (a) Suitable habitat with primary constituent elements continues throughout Section 22; (b) the subpopulation of plants in Section 21 is very close to the border of Section 22; and (c) Section 22 is downstream of 21 and it is likely that this upstream subpopulation has dispersed seeds into Section 22.

Unit 4 consists of two stream reaches encompassing a total of 2,480 ac (1,004 ha) along 36.1 stream mi (58.1 km) within the Little Bear Creek and Horse Creek drainages in Laramie County, Wyoming. This unit is primarily under private ownership, but includes some Wyoming State lands.

Reach 1: Habitat for Gaura neomexicana ssp. coloradensis within this reach occurs in four main types: (1) Moist hay meadows; (2) wild licorice thickets in sandy, dry stream channels; (3) depressions in alluvial meadows away from the main stream channel; and (4) moist meadows and streambanks on alluvium derived from the Ogallala Formation. Plants appear to be more abundant in hay meadow sites than other habitat types (WNDD 2004). Subpopulations of G. n. ssp. coloradensis have been found throughout Little Bear Creek from the southwest end of Unit 4 in T18N R68W Section 36, extending northeast approximately 12 stream mi (19 km) to the southwestern corner of T18N R67W Section 23. It is likely that subpopulations occur within Section 35, the section adjacent to, and just upstream of, Section 36 on Little Bear Creek, where a subpopulation resides very close to the section border. Subpopulations also have been found along the Paulson Branch of Little Bear Creek from T17N R68W Section 2 on the southwest end of Unit 4, extending northwest approximately 5 stream mi (8 km) to Section 31 where it merges with Little Bear Creek. Habitat throughout Little Bear Creek and the Paulson Branch stream reaches is primarily identified as PEMC intermixed with PEMA, containing primary constituent elements throughout. Proposed critical habitat on the northern and eastern end of the unit was extended to include all of Section 23 because suitable habitat with primary constituent elements continues throughout this section and it is likely that the subpopulation in the southwestern corner of this section has dispersed seeds into the remainder of this section. This reach has supported a large number of subpopulations with a moderate to large number of plants over the years. Because this reach is reproductively isolated from any others, it likely harbors genotypes unique to the species that could be important to future species persistence.

Reach 2: Subpopulations occur in several habitat types: (a) Open meadow on the edge of a marshy, spring-fed pond; (b) subirrigated meadows and hay fields in a broad alluvial valley among clumps of Poa pratensis, Equisetum spp . (horsetail), and Carex spp. (sedges); and (c) Solidago spp . (goldenrod ) / Glycyrrhiza lepidota (wild licorice ) / Schizachyrium scoparium (little bluestem) community near the creek; and (d) on the edges of willow thickets and semi-moist meadows, extending into a right-of-way. The species is absent from wet sites dominated by Glyceria spp . (mannagrass) and Carex rostrata (beaked sedge) and from stream banks where vegetation is overgrown by willow, thistle, sunflower and goldenrod from succession. Land within this reach is used extensively for hay production. Subpopulations located downstream of Brunyansky Draw are large and occupy habitat in good condition where threats are low (WNDD 2004).

Subpopulations of Gaura neomexicana ssp. coloradensis have been found along Horse Creek from T17N R67W Section 7 on the west end of this reach, for approximately 4 mi (6 km) to the east into Section 3. There is an approximate 3-mi (5-km) stretch encompassing Sections 2, 1, and 6, in which plants have not been found; however, continuing downstream to the east subpopulations have been found in the following 3 mi (5 km) in T17N R66W Sections 5, 4, and 3, as well as in Section 10 adjacent (to the south) to Section 3. Habitat throughout the majority of the reach is PEMC and PEMA, intermixed with scrub-shrub through Sections 2, 1, and 6. It is likely that subpopulations occur within Sections 2, 1, and 6 since there are several subpopulations both upstream and downstream of these sections, and habitat with primary constituent elements also is present; therefore, these sections were included in the critical habitat proposal. Including these sections also is important to maintain connection ( i.e. , gene flow in terms of pollen dispersal) between subpopulations upstream and downstream.

Proposed critical habitat was not extended beyond the center of Section 10 on the east end of the reach because primary constituent elements are no longer present because of changes in habitat. Subpopulations have been found in Section 16 along a tributary to Horse Creek. It is likely that other subpopulations of Gaura neomexicana ssp. coloradensis also occur downstream of Section 16 closer to its point of merging with Horse Creek, since habitat and primary constituent elements are present throughout this tributary. Horse Creek is important to the species because it harbors several subpopulations throughout many miles of habitat, contributing considerably to the objective of maximizing the number of individuals and populations for species conservation.

Unit 5 consists of 1,067 ac (432 ha) along 15 stream mi (24.2 km) of Lodgepole Creek in Laramie County, Wyoming. This unit is primarily under private ownership, but includes some Wyoming State lands. Occupied habitat within this unit includes moist meadows, streambanks, and hayfields and pastures along the creek, primarily areas where the land slopes gently down to the creek, creating flat, alluvial deposits below the surrounding hills (WNDD 2004). Some sites are becoming choked with willows and other vegetation. Ungrazed habitat west of Interstate 25 is being invaded by Salix exigua (sandbar willow) and other forbs. Subpopulations of Gaura neomexicana ssp. coloradensis have been found along Lodgepole Creek from T16N 68W Section 24 on the western edge of this unit, extending 12 stream mi (19 km) east to T15N R66W Section 3. Habitat throughout this stream reach is primarily identified as PEMC intermixed with PEMA, containing primary constituent elements throughout its entirety. Therefore, it is likely that the plant also occurs in Sections 27 and 28 which occur in the middle of the reach, adjacent to sections upstream and downstream in which subpopulations have been found, and in Section 2 on the eastern end just downstream of a subpopulation in the adjacent Section 3. This unit has supported a large number of small, and a few large, subpopulations over the years in a variety of habitat types and land management practices. The number of subpopulations within the variety of habitat may represent a number of locally selected genotypes existing under unique conditions, providing an important contribution to the long-term conservation of the species.

Unit 6 consists of two stream reaches encompassing a total of 1,683 ac (681 ha) along 24.8 stream mi (40 km) of Lodgepole Creek in Laramie County, Wyoming, and in Kimball County, Nebraska. This unit is primarily under private ownership with some Wyoming State lands.

Reach 1: Habitat occupied by subpopulations within this reach is sandy and silty loam alluvium along the creek in mowed and grazed hay fields and horse pastures. The area is managed for livestock grazing and hay production, mowed late in the season and used for winter pasture. The largest subpopulation was found on a heavily grazed meadow. Although little impact from exotic plant species was found in 1997, spraying herbicides for weed control is likely the greatest threat to habitat at this site (WNDD 2004).

Subpopulations of Gaura neomexicana ssp. coloradensis have been found along Lodgepole Creek from Thompson Reservoir Number 2 in T14N R62W Section 4 on the eastern edge of this unit, extending approximately 13 mi (21 km) west to T15N R64W Section 27 on the reach's western edge. Habitat throughout this stream reach is primarily identified as PEMC with sparse amounts of PEMA, containing primary constituent elements throughout its entirety. The only section in which subpopulations have not been located is T15N 63W Section 28, approximately in the middle of the reach. Because this section contains primary constituent elements and populations occur both upstream and downstream, it is likely that the plant also occurs here. A natural break in habitat type occurs within the westernmost Section 27, beyond which primary constituent elements are no longer found and subpopulations have not been located, providing a logical western boundary for proposed critical habitat designation. On the eastern boundary of this reach, subpopulations have been found 0.5 mi (0.8 km) upstream of Thompson Reservoir Number 2, and, because this portion of the reach also contains primary constituent elements, plants likely occur throughout this portion of Section 4 as well. Subpopulations have not been found downstream of the reservoir, which provides a natural eastern boundary for the proposed critical habitat. This reach supports some of the largest populations surveyed, on some of the best habitat with the fewest impacts.

Reach 2: Habitat within this reach is described as hay meadows with silty loam alluvium along the creek (WNDD 2004). The site is mowed for hay, sprayed for Canada thistle, and used for winter grazing. Subpopulations of Gaura neomexicana ssp. coloradensis have been found along Lodgepole Creek from T14N R58W Section 8 in western Nebraska, extending west approximately 4.4 mi (7.1 km) to T14N 60W Section 10 in Wyoming. One subpopulation was found along Spring Creek approximately 0.75 mi (1.2 km) upstream of its confluence with Lodgepole Creek in Section 10. Habitat throughout the entire reach is primarily identified as PEMA intermixed with PEMC, containing primary constituent elements throughout. It is likely that the plant occurs throughout Section 8 in Nebraska, just downstream of subpopulations found within the western portion of this section. Similar to Reach 1, this reach supports some of the larger populations located on some of the best habitat.

Unit 7 consists of three stream reaches encompassing a total of 1,141 ac (462 ha) along 17.2 stream mi (27.7 km) along Diamond Creek, Spring Creek, and Lone Tree Creek in Laramie County, Wyoming. This unit is primarily under private ownership, with some Wyoming State lands and lands owned by the city of Cheyenne, Wyoming.

Reach 1: Habitat within this reach is described as silty loam alluvium along Diamond Creek and a small reservoir in a residential greenbelt, hayfields, and pastures (WNDD 2004). This site is in close proximity to a number of roads, a dam, and a housing subdivision, and is subject to livestock grazing. This population is confluent with another population downstream along Diamond Creek on WAFB. Hay fields are intensively plowed and fertilized, and herbicide has been used in the greenbelt to help control a serious thistle problem. Some plant mortality has been observed due to herbicide spraying. Subpopulations of Gaura neomexicana ssp. coloradensis have been found along Diamond Creek from the eastern boundary of this reach within T14N R67W Section 33, adjacent to WAFB, approximately 3.5 mi (5.6 km) southwest to T13N R67W Section 6. Subpopulations also have been found along smaller, unnamed tributaries to Diamond Creek from the eastern edge of T14N 67W Section 32 approximately 2 mi (3 km) upstream within several small tributaries in Section 31 and T13N R67W Section 6. Habitat throughout this entire reach is PEMC intermixed with PEMA, containing primary constituent elements throughout. Section boundaries on the western edge of this reach provide easily identifiable boundaries, as does WAFB on the eastern edge. This reach supports a large number of plants within several subpopulations, likely harboring considerable genetic variation contributing to the long-term conservation of this species.

Reach 2: Habitat within this reach is described as the edge of a field mowed for hay (WNDD 2004). One subpopulation of Gaura neomexicana ssp. coloradensis has been found along Spring Creek within T13N R67W Section 18 along the border with Section 17 to the east. Habitat throughout both sections is PEMC intermixed with PEMA, containing primary constituent elements throughout. Therefore, it is likely that plants occur within habitat containing primary constituent elements upstream of the known subpopulation within Section 18, as well downstream of the known subpopulation and extend eastward into Section 17. This is the only population within this stream reach, and may harbor locally adapted genotypes important to the long-term conservation of the species.

Reach 3: The habitat within this reach is described as marginal within a meadow that is grazed, and includes an area by a road crossing that is sprayed for weed control (WNDD 2004). Subpopulations of Gaura neomexicana ssp. coloradensis have been found along Lone Tree Creek, from the northwest corner of T13N R67W Section 31, to 5 km (3 mi) upstream to T13N R68W Section 26. Habitat within this reach is PEMC, containing primary constituent elements throughout. Section lines provide a readily identifiable boundary for proposed critical habitat on the western edge of this reach. Habitat containing primary constituent elements along Lone Tree Creek extends downstream to the confluence with Goose Creek within Section 31, and it is likely that plants occupy this reach or may do so in the future. The confluence with Goose Creek provides a readily identifiable boundary for proposed critical habitat on the eastern edge of this reach. Little is known about this subpopulation that was last surveyed over two decades ago. However, it is the only population within this creek drainage and occurs at the southernmost point of the plant's distribution within Wyoming. It is likely that genetic exchange has not occurred with other populations, and, therefore, that this population harbors some unique, locally adapted genotypes that may be important to the species' persistence.

Unit 8 consists of 707 ac (286 ha) within a wet meadow supported by groundwater within the Meadow Springs Ranch in Weld County, Colorado, under ownership of the City of Fort Collins, Colorado. Part of the ranch is used for sewage sludge treatment, and part is used for livestock grazing by a lease holder. Colonies of plants have been found throughout the grazed, subirrigated wetland meadow. Several small groups of Gaura neomexicana ssp. coloradensis have been found on Meadow Springs Ranch (T11N R67W Section 19), approximately 0.5 mi (0.8 km) south of Exit #293 on the east frontage road off of Interstate 25. This population occurs approximately 8 mi (13 km) from the southernmost population within Wyoming. This geographically and reproductively isolated population represents the only known naturally- occurring population in Colorado. Therefore, this population represents a unique group of subpopulations at the periphery of the species' range, and this area is considered essential to the conservation of the species.

The vast majority, approximately 90 percent, of proposed critical habitat is in private ownership. The private lands are primarily used for grazing and agriculture. Additionally there are small scattered tracts of State, county and city lands.

Section 7 of the Act requires Federal agencies, including the Service, to ensure that actions they fund, authorize, or carry out are not likely to destroy or adversely modify critical habitat. In our regulations at 50 CFR 402.2, we define destruction or adverse modification as “a direct or indirect alteration that appreciably diminishes the value of critical habitat for both the survival and recovery of a listed species. Such alterations include, but are not limited to: Alterations adversely modifying any of those physical or biological features that were the basis for determining the habitat to be critical.” However, in a March 15, 2001, decision of the United States Court Appeals for the Fifth Circuit ( Sierra Club v. U.S. Fish and Wildlife Service et al. , F.3d 434), the court found our definition of adverse modification to be invalid. In response to this decision, we are reviewing the regulatory definition of adverse modification in relation to the conservation of the species.

Section 7(a) of the Act requires Federal agencies, including the Service, to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened and with respect to its critical habitat, if any is proposed or designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) of the Act requires Federal agencies to confer with us on any action that is likely to jeopardize the continued existence of a proposed species or result in destruction or adverse modification of proposed critical habitat. Conference reports provide conservation recommendations to assist the agency in eliminating conflicts that may be caused by the proposed action. The conservation recommendations in a conference report are advisory. If a species is listed or critical habitat is designated, section 7(a)(2) requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of such a species or to destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us. Through this consultation, the action agency ensures that the permitted actions do not destroy or adversely modify critical habitat.

When we issue a biological opinion concluding that a project is likely to result in the destruction or adverse modification of critical habitat, we also provide reasonable and prudent alternatives to the project, if any are identifiable. “Reasonable and prudent alternatives” are defined at 50 CFR 402.02 as alternative actions identified during consultation that can be implemented in a manner consistent with the intended purpose of the action, that are consistent with the scope of the Federal agency's legal authority and jurisdiction, that are economically and technologically feasible, and that the Director believes would avoid destruction or adverse modification of critical habitat. Reasonable and prudent alternatives can vary from slight project modifications to extensive redesign or relocation of the project. Costs associated with implementing a reasonable and prudent alternative are similarly variable.

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

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

Activities on Federal lands that may affect Gaura neomexicana ssp. coloradensis or its critical habitat will require section 7 consultation. Activities on private or State lands requiring a permit from a Federal agency, such as a permit from the Army Corps under section 404 of the Clean Water Act, a section 10(a)(1)(B) permit from the Service, or some other Federal action, including funding ( e.g. , Federal Highway Administration or Federal Emergency Management Agency funding), also will continue to be subject to the section 7 consultation process. Federal actions not affecting listed species or critical habitat and actions on non-Federal and private lands that are not federally funded, authorized, or permitted do not require section 7 consultation.

Section 4(b)(8) of the Act requires us to briefly evaluate and describe in any proposed or final regulation that designates critical habitat those activities involving a Federal action that may destroy or adversely modify such habitat, or that may be affected by such designation. Activities that may destroy or adversely modify critical habitat include those that appreciably reduce the value of critical habitat to Gaura neomexicana ssp. coloradensis. We note that such activities also may jeopardize the continued existence of the species.

Federal agencies already consult with us on activities in areas currently occupied by the species to ensure that their actions do not jeopardize the continued existence of the species. These actions include, but are not limited to:

(1) Regulation of activities affecting waters of the United States by the Army Corps under section 404 of the Clean Water Act;

(2) Regulation of water flows, damming, diversion, and channelization by any Federal agency;

(3) Road construction and maintenance, right-of-way designation, and regulation funded or permitted by the Federal Highway Administration;

(4) Voluntary conservation measures by private landowners funded by the Natural Resources Conservation Service;

(5) Licensing of construction of communication sites by the Federal Communications Commission;

(6) Funding of activities by the U.S. Environmental Protection Agency, Department of Energy, Federal Emergency Management Agency, Federal Highway Administration, or any other Federal agency;

(7) Permitting of natural gas pipeline rights-of-way by the Federal Energy Regulatory Commission; and,

(8) Management and research activities undertaken on the WAFB by the U.S. Department of Defense.

We consider all critical habitat units to be occupied by the species based on the most recent survey data collected for populations of Gaura neomexicana ssp. coloradensis . To ensure that their actions do not jeopardize the continued existence of the species, Federal agencies already consult with us on activities in areas currently occupied by the species or if the species may be affected by the action.

Section 3(5)(A) of the Act defines critical habitat as the specific areas within the geographic area occupied by the species on which are found those physical and biological features (I) essential to the conservation of the species and (II) which may require special management considerations and protection. Therefore, areas within the geographic area occupied by the species that do not contain the features essential for the conservation of the species are not, by definition, critical habitat. Similarly, areas within the geographic area occupied by the species that do not require special management also are not, by definition, critical habitat. To determine whether an area requires special management, we first determine if the essential features located there generally require special management to address applicable threats. If those features do not require special management, or if they do in general but not for the particular area in question because of the existence of an adequate management plan or for some other reason, then the area does not require special management.

We consider a current plan to provide adequate management or protection if it meets three criteria: (1) The plan is complete and provides a conservation benefit to the species ( i.e. , the plan must maintain or provide for an increase in the species' population, or the enhancement or restoration of its habitat within the area covered by the plan); (2) the plan provides assurances that the conservation management strategies and actions will be implemented ( i.e. , those responsible for implementing the plan are capable of accomplishing the objectives, and have an implementation schedule or adequate funding for implementing the management plan); and (3) the plan provides assurances that the conservation strategies and measures will be effective ( i.e. , it identifies biological goals, has provisions for reporting progress, and is of a duration sufficient to implement the plan and achieve the plan's goals and objectives).

Section 318 of fiscal year 2004 National Defense Authorization Act (Pub. L. 108-136) amended section 4 of the Act. This provision prohibits us from designating as critical habitat any lands or other geographical areas owned or controlled by the Department of Defense, or designated for its use, that are subject to an INRMP prepared under section 101 of the Sikes Act (16 U.S.C. 670a), if we determine in writing that such plan provides a benefit to the species for which critical habitat is proposed for designation.

As described above, we identified habitat essential for the conservation of Gaura neomexicana ssp. coloradensis in Laramie and Platte Counties in Wyoming; Kimball County in Nebraska; and Weld County in Colorado. We have examined the INRMP for the WAFB to determine coverage for G. n. ssp. coloradensis . The INRMP identifies management issues related to conservation and enhancement of G. n. ssp. coloradensis and identifies goals and objectives that involve the protection of populations and habitat for this species. Some objectives for achieving those goals include: continue to participate in, and encourage development of, Cooperative Agreements and Memorandum of Understanding activities with Federal, State, and local government and support agencies; promote and support the scientific study and investigation of federally listed species management, conservation, and recovery; restrict public access in existing and potential habitat areas; and increase public education of Federally listed species through management actions, the WAFB Watchable Wildlife Program, and a Prairie Ecosystem Education Center (WAFB 2001). Based on the beneficial measures for G. n . ssp. coloradensis contained in the INRMP for WAFB, we have not included this area in the proposed designation of critical habitat for Gaura neomexicana ssp. coloradensis pursuant section 4(a)(3) of the Act. We will continue to work cooperatively with the Department of the Air Force to assist the WAFB in implementing and refining the programmatic recommendations contained in this plan that provide benefits to Gaura neomexicana ssp. coloradensis . The non-inclusion of WAFB demonstrates the important contributions that approved INRMPs have to the conservation of the species. As with HCP exclusions, a related benefit of excluding Department of Defense lands with approved INRMPs is to encourage continued development of partnerships with other stakeholders, including States, local governments, conservation organizations, and private landowners to develop adequate management plans that conserve and protect Gaura neomexicana ssp. coloradensis habitat. We found the INRMP provides benefits for Gaura neomexicana ssp. coloradensis .

Further, section 4(b)(2) of the Act states that critical habitat shall be designated and revised on the basis of the best available scientific data after taking into consideration the economic impact, national security impact, and any other relevant impact of specifying any particular area as critical habitat. An area may be excluded from critical habitat if it is determined that the benefits of exclusion outweigh the benefits of specifying a particular area as critical habitat, unless the failure to designate such area as critical habitat will result in the extinction of the species.

In our critical habitat designations, we use both the provisions outlined in sections 3(5)(A) and 4(b)(2) of the Act to evaluate those specific areas that are proposed for designation as critical habitat and those areas that are subsequently designated in a final rule. Lands we have found do not meet the definition of critical habitat under section 3(5)(A) or that we have excluded pursuant to section 4(b)(2) include those covered by the following types of plans if they provide assurances that the conservation measures they outline will be implemented and effective: (1) Legally operative HCPs that cover the species, (2) draft HCPs that cover the species and have undergone public review and comment ( i.e. , pending HCPs), (3) Tribal conservation plans that cover the species, (4) State conservation plans that cover the species, and (5) National Wildlife Refuge System Comprehensive Conservation Plans. Currently, no legally operative or draft HCPs, Tribal conservation plans, State conservation plans, or National Wildlife Refuge System Comprehensive Conservation Plans cover Gaura neomexicana ssp. coloradensis .

An analysis of the economic impacts of proposing critical habitat for Gaura neomexicana ssp. coloradensis is being prepared. We will announce the availability of the draft economic analysis as soon as it is completed, at which time we will seek public review and comment. At that time, copies of the draft economic analysis will be available for downloading from the Internet at http://mountainprairie.fws.gov/species/plants/cobutterfly/index.htm , or by contacting the Wyoming Fish and Wildlife Office directly (see ADDRESSES section).

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

We will consider all comments and information received during the comment period on this proposed rule during preparation of a final rulemaking. Accordingly, the final decision may differ from this proposal.

The Act provides for one or more public hearings on this proposal, if requested. Requests for public hearings must be made in writing at least 15 days prior to the close of the public comment period. We will schedule public hearings on this proposal, if any are requested, and announce the dates, times, and places of those hearings in the Federal Register and local newspapers at least 15 days prior to the first hearing.

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

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

This document has not been reviewed by the Office of Management and Budget (OMB), in accordance with Executive Order 12866. The OMB makes the final determination of significance under Executive Order 12866. We are preparing a draft economic analysis of this proposed action, which will be available for public comment, to determine the economic consequences of designating the specific area as critical habitat.

Within these areas, the types of Federal actions or authorized activities that we have identified as potential concerns are listed above in the section on Section 7 Consultation.

The availability of the draft economic analysis will be announced in the Federal Register and in local newspapers so that it is available for public review and comments.

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

At this time, the Service lacks the available economic information necessary to provide an adequate factual basis for the required RFA finding. Therefore, the RFA finding is deferred until completion of the draft economic analysis prepared pursuant to section 4(b)(2) of the Act and Executive Order 12866. This draft economic analysis will provide the required factual basis for the RFA finding. Upon completion of the draft economic analysis, the Service will publish a notice of availability of the draft economic analysis of the proposed designation and reopen the public comment period for the proposed designation for an additional 30 days. The Service will include with the notice of availability, as appropriate, an initial regulatory flexibility analysis or a certification that the rule will not have a significant economic impact on a substantial number of small entities accompanied by the factual basis for that determination. The Service has concluded that deferring the RFA finding until completion of the draft economic analysis is necessary to meet the purposes and requirements of the RFA. Deferring the RFA finding in this manner will ensure that the Service makes a sufficiently informed determination based on adequate economic information and provides the necessary opportunity for public comment.

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

In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq. ), the Service makes the following findings:

(a) This rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute or regulation that would impose an enforceable duty upon State, local, tribal governments, or the private sector and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” These terms are defined in 2 U.S.C. 658(5)-(7). “Federal intergovernmental mandate” includes a regulation that “would impose an enforceable duty upon State, local, or tribal governments” with two exceptions. It excludes “a condition of federal assistance.” It also excludes “a duty arising from participation in a voluntary Federal program,” unless the regulation “relates to a then-existing Federal program under which $500,000,000 or more is provided annually to State, local, and tribal governments under entitlement authority,” if the provision would “increase the stringency of conditions of assistance” or “place caps upon, or otherwise decrease, the Federal Government's responsibility to provide funding” and the State, local, or tribal governments “lack authority” to adjust accordingly. (At the time of enactment, these entitlement programs were: Medicaid; AFDC work programs; Child Nutrition; Food Stamps; Social Services Block Grants; Vocational Rehabilitation State Grants; Foster Care, Adoption Assistance, and Independent Living; Family Support Welfare Services; and Child Support Enforcement.) “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector, except (i) a condition of Federal assistance; or (ii) a duty arising from participation in a voluntary Federal program.”

The designation of critical habitat does not impose a legally binding duty on non-Federal government entities or private parties. Under the Act, the only regulatory effect is that Federal agencies must ensure that their actions do not destroy or adversely modify critical habitat under section 7. While non-Federal entities who receive Federal funding, assistance, permits or otherwise require approval or authorization from a Federal agency for an action may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly impacted because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandates Reform Act would not apply; nor would critical habitat shift the costs of the large entitlement programs listed above on to State governments.

(b) We do not believe that this rule will significantly or uniquely affect small governments. A Small Government Agency Plan is not required. State, city and county lands comprise less than 10 percent of the total proposed designation; the other 90 percent is in private ownership. Small governments will not be affected at all unless they proposed an action requiring Federal funds, permits or other authorization. Any such activity will require that the involved Federal agency ensure that the action is not likely to adversely modify or destroy designated critical habitat. However, as discussed above, Federal agencies are currently required to ensure that such activity is not likely to jeopardize the species, and no further regulatory impacts from this proposed designation of critical habitat are anticipated. We will, however, further evaluate this issue as we conduct our economic analysis and revise this assessment if appropriate.

In accordance with Executive Order 12630, the rule does not have significant takings implications. A takings implication assessment is not required. The designation of critical habitat affects only Federal agency actions. The rule will not increase or decrease the current restrictions on private property concerning take of Gaura neomexicana ssp. coloradensis . Because there is no prohibition of take for this species, and the fact that critical habitat provides no incremental restrictions, we do not anticipate that property values will be affected by the proposed critical habitat designation. While real estate market values may temporarily decline following designation, due to the perception that critical habitat designation may impose additional regulatory burdens on land use, we expect any such impacts to be short term. Additionally, critical habitat designation does not preclude development of HCPs. Owners of areas that are included in the designated critical habitat will continue to have opportunity to use their property in ways consistent with the survival of G. n. ssp. coloradensis .

In accordance with Executive Order 13132, the rule does not have significant Federalism effects. A Federalism assessment is not required. In keeping with DOI policy, we requested information from, and coordinated development of, this proposed critical habitat designation with appropriate State resource agencies in Wyoming, Colorado, and Nebraska. The designation of critical habitat in areas currently occupied by Gaura neomexicana ssp. coloradensis imposes no additional restrictions to those currently in place and, therefore, has little incremental impact on State and local governments and their activities. The designation may have some benefit to these governments in that the areas essential to the conservation of the species are more clearly defined, and the primary constituent elements of the habitat necessary to the survival of the species are specifically identified. While making this definition and identification does not alter where and what federally sponsored activities may occur, it may assist these local governments in long-range planning (rather than waiting for case-by-case section 7 consultations to occur).

In accordance with Executive Order 12988, the Office of the Solicitor has determined that the rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order. We have proposed designating critical habitat in accordance with the provisions of the Act. This proposed rule uses standard property descriptions and identifies the primary constituent elements within the designated areas to assist the public in understanding the habitat needs of Gaura neomexicana ssp. coloradensis .

This rule does not contain any new collections of information that require approval by OMB under the Paperwork Reduction Act. This rule will not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

It is our position that, outside the Tenth Circuit, we do not need to prepare environmental analyses as defined by the NEPA in connection with designating critical habitat under the Act. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244). This assertion was upheld in the courts of the Ninth Circuit ( Douglas County v. Babbitt , 48 F.3d 1495 (9th Cir. Ore. 1995), cert. denied 116 S. Ct. 698 (1996). However, when the range of the species includes States within the Tenth Circuit, such as that of Gaura neomexicana ssp. coloradensis , pursuant to the Tenth Circuit ruling in Catron County Board of Commissioners v. U.S. Fish and Wildlife Service , 75 F.3d 1429 (10th Cir. 1996), we will undertake a NEPA analysis for critical habitat designation and notify the public of the availability of the draft environmental assessment for this proposal when it is finished.

In accordance with the President Clinton's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with federally-recognized Tribes on a government-to-government basis. We have determined that there are no tribal lands essential for the conservation of Gaura neomexicana ssp. coloradensis . Consequently, we have not proposed the designation of critical habitat on Tribal lands and have not undertaken consultation with any federally-recognized Tribes.

A complete list of all references cited in this rulemaking is available upon request from the Field Supervisor, Wyoming Field Office ( see ADDRESSES section).

The primary author of this package is Tyler Abbott ( see ADDRESSES section).

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