This final rule is issued under Marketing Order No. 920 as amended (7 CFR part 920), regulating the handling of kiwifruit grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

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

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

This final rule revises pack and container requirements currently prescribed for California kiwifruit under the order. This rule: (1) Adds a new size designation to the allowable size designations for packs of kiwifruit; (2) revises the standard packaging requirements to require volume filled containers of kiwifruit designated by weight to hold 19.8-pounds (9-kilograms) net weight of kiwifruit, unless such containers hold less than 15 pounds or more than 35 pounds net weight of kiwifruit; (3) requires the quantity statement to be indicated in terms of both “count” and “size” for all kiwifruit packed into cell compartments, cardboard fillers, or molded trays; and (4) exempts all varieties of kiwifruit from the “tightly packed” standard pack requirement.

The committee recommended these changes at its March 10, 2004 meeting. This rule is expected to help handlers compete more effectively in the marketplace, better meet the needs of retailers, and reduce packing costs. This rule is also expected to improve handler and grower returns.

Under the terms of the order, fresh market shipments of kiwifruit grown in California are required to be inspected and meet grade, size, maturity, pack, and container requirements.

Section 920.52 authorizes the establishment of pack requirements. Section 920.302(a)(4) of the order's administrative rules and regulations specifies pack requirements for fresh shipments of California kiwifruit.

Section 920.302(a)(4)(ii)(B) provides that kiwifruit packed in individual consumer packages, bags, volume filled, or bulk containers, may not vary more than 1/2 -inch in diameter for size designations 30 or larger.

Section 920.302(a)(4)(iii) contains a table commonly referred to as the “Size Designation Chart.” This chart specifies numerical count size designations and the maximum number of fruit per 8-pound sample for each numerical count size designation for fruit packed in individual consumer packages, bags, volume filled, or bulk containers.

In 1985, the committee recommended and the USDA approved establishment of the first numerical count size designation chart by publishing a final rule in the Federal Register on September 9, 1985 (50 FR 36567). This regulation established size designation 49 defined as a maximum of 64 pieces of fruit in an 8-pound sample, as the minimum size. It also established four other size designations and required that kiwifruit packed in bags, volume filled, or bulk containers be “fairly uniform in size.” At that time, “fairly uniform in size” meant that size designation 30 or larger could not vary more than 1/2 inch in diameter, size designations 33 and 36 could not vary more than 3/8 of an inch, and size designations 39 and smaller could not vary more than 1/4 inch in diameter. Diameter was defined to mean the greatest dimension measured at right angles to a line from stem to blossom end. Some tolerances were provided.

Over the years, numerical count size designations have been added, removed, and the maximum number of fruit per numerical count size designation has been revised to accommodate new packaging and changing market conditions. The committee recommended and the USDA approved revisions to the size designation chart by publishing the following interim and final rules in the Federal Register: August 16, 1993 (58 FR 43243); September 2, 1994 (59 FR 45617); September 3, 1998 (63 FR 46861); December 1, 1988 (53 FR 48513); July 29, 1999 (64 FR 41010); October 29, 2001 (66 FR 1413); March 14, 2002 (67 FR 11396); and August 22, 2002 (67 FR 54327).

In recent years, many California growers have increased the size of California kiwifruit through various cultural practices. During the 2003-2004 season, growers produced a crop with unusually large sizes. Handlers experienced difficulty staying within the size variation tolerance allowed for the largest size, size 20. Kiwifruit larger than size 20 had to be blended into the size 20 designation, as there was no larger size designation established for the 2003-04 season. This blending required handlers to take special care to stay within the size variation tolerance and reduced the uniformity of the pack size. Handlers also incurred additional costs in meeting the requirements.

Thus, the committee, at its March 10, 2004, meeting, unanimously recommended adding size designation 18, defined as a maximum of 25 pieces of fruit per 8-pound sample, to the size designation chart. This change provides handlers with a total of eleven numerical count size designations as follows:

Additionally, for clarification, the title “Size Designation Chart” is added to the top of the chart.

The new size designation is expected to ease packing requirements, by allowing handlers to stay within size variances for larger sized fruit and is expected to improve handler and grower returns, as larger-sized fruit commands higher prices. This action does not affect import requirements.

Section 920.52(a)(3) of the order authorizes the establishment of weight requirements for containers of California kiwifruit.

Section 920.302(a)(4) of the order's administrative rules and regulations outlines pack requirements for fresh shipments of California kiwifruit.

In a volume filled container, fairly uniform size kiwifruit are loosely packed without cell compartments, cardboard fillers, or molded trays. Handlers may ship volume filled containers marked with either the appropriate count (number of pieces of fruit) or net weight (total weight of pieces of fruit in the container). Handler shipments are based upon the preference of the receiver.

In 1994, the committee unanimously recommended and USDA established standard packaging for certain volume filled containers designated by weight, as published in the Federal Register on October 25, 1994 (59 FR 53563). At that time, 52 percent of the total crop was packed into volume filled containers. The percentage of the total crop packed into volume filled containers increased to 85 percent during the 2001-02 season.

In the 2001-02 season, imports from the Northern hemisphere (Greece, Italy, and France) totaled approximately 17 percent of the U.S. market share. The majority of imported kiwifruit was shipped in 19.8-pound (9-kilogram) volume filled containers; whereas the order limited California handlers to 22-pound (10-kilogram) net weight volume filled containers. With the 22-pound provisions, handlers could not meet buyer demands for other types of packaging.

In an effort to meet buyer demands for other types of packaging, the standardized packaging requirement of 22-pounds (10-kilograms) net weight for certain volume filled containers was suspended for the 2002-2003 and 2003-2004 seasons. These suspensions were implemented by an interim final rule published in the Federal Register on August 22, 2002 (67 FR 54327); a final rule published on November 21, 2002 (67 FR 76140); and another final rule published in the Federal Register on July 28, 2003 (68 FR 44191). The suspension published in the Federal Register on July 28, 2003 was in effect until July 31, 2004. Additionally, the final rule published in the Federal Register on July 28, 2003 (68 FR 44191) removed a pack requirement in § 920.302(a)(4)(iv) and paragraph (a)(4)(v) was redesignated as paragraph (a)(4)(iv).

However, during the 2002-2003 and 2003-2004 seasons, since handlers and retailers were not limited to a specific net weight for volume filled containers designated by weight, some confusion appeared in the marketplace. Without a specific net weight for volume filled containers, more than one net weight was packed by handlers.

In an effort to determine the best means of ensuring more orderly marketing, the committee conducted a survey of kiwifruit handlers and growers during the 2003-2004 season. The survey results clearly showed that the industry favored establishment of a standardized packaging requirement for volume filled containers of kiwifruit designated by weight to hold 19.8-pound (9-kilograms) net weight of kiwifruit, unless such containers hold less than 15 pounds or more than 35 pounds net weight of kiwifruit.

Accordingly, the committee, on March 10, 2004, unanimously recommended revising the standard packaging requirements for volume filled containers of kiwifruit designated by weight to hold 19.8-pounds (9-kilograms) net weight of kiwifruit, unless such containers hold less than 15 pounds or more than 35 pounds net weight of kiwifruit.

This recommended change is expected to allow the industry to compete more effectively in the marketplace with its foreign competition, allow continued packing of the new variety of kiwifruit in 14-pound containers, and may improve grower returns. This action does not affect import requirements.

Section 920.52 authorizes the establishment of pack, and container requirements for California kiwifruit.

Section 920.303 of the order's administrative rules and regulations outlines specific container marking requirements for fresh shipments of California kiwifruit.

Section 920.303(c)(1) provides that the quantity statement shall be indicated in terms of count for kiwifruit packed in cell compartments, cardboard fillers, or molded trays, and the contents shall conform to the count.

Historically, the industry and buyers have associated count (number of pieces of fruit) with fruit size designations (maximum number of pieces of fruit in an 8-pound sample). Molded trays were originally designed in the early 1980's to accommodate fruit of the corresponding size from the numerical count size designation chart. For example, count 36 trays (trays that held 36 pieces of fruit) would accommodate size designation 36 fruit.

As previously mentioned, numerous changes have been made to the size designation chart over the years. Other changes have included removal of the minimum tray weight requirements, published in the Federal Register on July 30, 2001 (66 FR 39270), and the addition of the new molded tray inserts with smaller cup sizes. Currently, handlers can pack five sizes of fruit (33, 36, 39, 42, and 45) into three tray counts (33, 36, and 39), with the tray weighing as little as 5 pounds. These differences may cause confusion in the marketplace, especially if buyers assume that count is equivalent to size.

Thus, the committee, at its March 10, 2004 meeting, recommended that both “count” and “size” be marked on containers with cell compartments, cardboard fillers, or molded trays. Under this recommendation, containers will be marked with the size of the fruit as specified in the size designation chart and the number of pieces of fruit in the box. For example, a tray marked with size designation 45 could hold 36 pieces of fruit. Retailers can clearly discern the number of pieces of fruit packed into the container and the size of that fruit. Of the eleven members present at that meeting, ten voted for this change, and one voted against it. The one member who voted against this recommendation believes that requiring both “count” and “size” to be marked on containers of California kiwifruit would impose additional inspection requirements on California handlers. This member believes that this recommendation would place the California handler at a disadvantage in competing against imported kiwifruit, as importers do not have to comply with container marking requirements.

In its deliberations, the committee discussed inspection requirements. Committee members mentioned that currently inspectors count the number of fruit in the container. Others mentioned that requiring the quantity statement to be indicated in terms of both “count” and “size” for all kiwifruit packed into cell compartments, cardboard fillers, or molded trays would require inspectors to also verify the size markings. An analysis of inspection costs indicates there would likely be an overall increase for the industry of 1.5 percent or about $2,529. Handlers in the industry contract with the USDA Inspection Service to perform either a block or an in-line inspection. Inspectors that perform in-line inspection inspect the fruit at the time of packing; whereas, block inspections occur after the fruit has been packed and prior to shipment. The additional costs would be incurred by handlers who use the block inspection method for their initial inspections, and those handlers who have fruit reinspected prior to shipment. The block inspection method is used for 13 percent of initial inspections and for all reinspections. In recent seasons, in-line inspections accounted for 87 percent of all initial inspections. Reinspections are required if fruit is restyled or repacked.

The committee believes that marking both “count” and “size” on containers eliminates possible confusion in the marketplace. This action does not affect import requirements.

Section 920.52(a)(2) of the order authorizes the establishment of grade standards.

Section 920.302(a)(1) of the order's administrative rules and regulations states the minimum grade shall be at least KAC No. 1 quality.

Section 920.302(b) defines the term KAC No. 1 quality as kiwifruit that meets the requirements of U.S. No. 1 grade as defined in 7 CFR 51.2335 through 51.2340 of the United States Standards for Grades of Kiwifruit (standards), except that the kiwifruit shall be “not badly misshapen,” and an additional 7 percent tolerance is provided for “badly misshapen.” In addition, the “Hort16A” variety of kiwifruit is exempt from the “tightly packed” standard as defined in § 51.2338(a) of the standards.

The standards define standard pack requirements, require containers to be well filled, and require the contents to be tightly packed, but not excessively or unnecessarily bruised by overfilling or oversizing for fruit packed in cell compartments, cardboard fillers, or molded trays. This is commonly referred to in the industry as the “tight-fill” requirement.

In 1990, these “tight-fill” provisions were established in § 920.302(b) to ensure that “Hayward” variety kiwifruit (the predominant kiwifruit variety produced in the production area) fit tightly into the tray-liner cups, as published in the Federal Register on October 18, 1990 (55 FR 42179). Some kiwifruit handlers believe that kiwifruit packed tightly into the cups of the tray-liners are less subject to movement, and, therefore, less damage.

A new kiwifruit cultivar, the Actinidia chinensis “Hort16A,” commonly referred to as “gold” kiwifruit, was recently introduced in California and is being sold commercially. The “Hort16A” variety is currently packed into a special shallow molded tray with a notch for the beak, which minimizes damage to the fruit. This variety, when packed in the shallow tray, may not meet the “tightly packed” requirement for standard pack under the standards. Therefore, on March 12, 2003, the committee unanimously recommended, and USDA subsequently approved, an exemption for all “gold” kiwifruit varieties from the order's “tightly filled” requirement. This exemption was implemented through a final rule published in the Federal Register on July 28, 2003 (68 FR 44191).

During the last several years, the value of the “tight-fill” requirement has decreased due to manufacturer changes in the shape and cuts of the molded trays.

Thus, the committee, at its March 10, 2004, meeting, recommended eliminating the “tight-fill” requirement. The majority of the committee members agreed that the tight-fill requirement is no longer necessary, as they believe handlers would continue to pack fruit that tightly fits into the cup of the molded tray to prevent damage to the fruit and to meet buyer demands for uniformly-sized kiwifruit packs. Of the eleven members present, ten voted for this change. The one member voting against this recommendation preferred keeping the “tight-fill” requirement, because he believes that handlers would be disadvantaged in the market place by loose packs. The committee discussed leaving the “tight-fill” requirement in place, but concluded that elimination of the “tight-fill” pack requirement would relax handler pack and inspection requirements, and increase handler and grower returns. This action does not affect import requirements.

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

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

There are approximately 45 handlers of California kiwifruit subject to regulation under the marketing order and approximately 270 growers in the production area. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those whose annual receipts are less than $5,000,000, and small agricultural producers are defined as those whose annual receipts are less than $750,000. None of the 45 handlers subject to regulation have annual kiwifruit sales of at least $5,000,000. In addition, six growers subject to regulation have annual sales exceeding $750,000. Therefore, a majority of the kiwifruit handlers and growers may be classified as small entities.

This rule revises pack requirements prescribed under the California kiwifruit order. This rule: (1) Adds a new size designation to the allowable size designations for packs of kiwifruit; (2) revises the standard packaging requirements to require volume filled containers of kiwifruit designated by weight to hold 19.8-pounds (9-kilograms) net weight of kiwifruit, unless such containers hold less than 15 pounds or more than 35 pounds net weight of kiwifruit; (3) requires the quantity statement to be indicated in terms of “count” and “size” for kiwifruit packed in cell compartments, cardboard fillers, or molded trays; and (4) exempts all varieties of kiwifruit from the “tightly packed” standard pack requirement. The committee recommended these changes at its March 10, 2004, meeting. These changes are expected to help handlers compete more effectively in the marketplace, better meet the needs of retailers, and to improve grower returns.

Authority for these actions is provided in § 920.52 of the order.

Under the terms of the order, fresh market shipments of kiwifruit grown in California are required to be inspected and meet grade, size, maturity, pack, and container requirements.

Section 920.302(a)(4) of the order's administrative rules and regulations specifies pack requirements for fresh shipments of California kiwifruit.

Section 920.302(a)(4)(ii)(B) provides that kiwifruit packed in individual consumer packages, bags, volume fill, or bulk containers, may not vary more than 1/2 -inch in diameter for size designations 30 or larger.

Section 920.302(a)(4)(iii) contains a table commonly referred to as the “Size Designation Chart.” This chart specifies numerical count size designations and the maximum number of fruit per 8-pound sample for each numerical count size designation for fruit packed in individual consumer packages, bags, volume filled, or bulk containers.

In 1985, the committee recommended and the USDA approved establishment of the first numerical count size designations by publishing a final rule in the Federal Register on September 9, 1985 (50 FR 36567). This regulation established size designation 49 defined as a maximum of 64 pieces of fruit in an 8-pound sample, as the minimum size. It also established four other size designations and required that kiwifruit packed in bags, volume filled, or bulk containers be “fairly uniform in size.” At that time, “fairly uniform in size” meant that size designation 30 or larger could not vary more than 1/2 inch in diameter, size designations 33 and 36 could not vary more than 3/8 of an inch, and size designations 39 and smaller could not vary more than 1/4 inch in diameter. “Diameter” was defined to mean the greatest dimension measured at right angles to a line from stem to blossom end; with some tolerances provided.

Over the years, numerical count size designations have been added, deleted, and the maximum number of fruit per numerical count size designation has been revised to accommodate new packaging and changing market conditions. The committee recommended and the USDA approved revisions to the size designation chart by publishing the following interim and final rules in the Federal Register: August 16, 1993 (58 FR 43243); September 2, 1994 (59 FR 45617); September 3, 1998 (63 FR 46861); December 1, 1988 (53 FR 48513); July 29, 1999 (64 FR 41010); October 29, 2001 (66 FR 1413); March 14, 2002 (67 FR 11396); and August 22, 2002 (67 FR 54327).

In recent years, many California growers have increased the size of California kiwifruit through various cultural practices. During the 2003-2004 season, growers produced a crop with unusually large sizes. Handlers experienced difficulty staying within the size variation tolerance allowed for the largest size, size designation 20. Kiwifruit larger than size 20 had to be blended into the size 20 designation, as there was no larger size designation established for the 2003-04 season. This blending requires handlers to take special care to stay within the size variation tolerance and reduces the uniformity of the pack size.

Thus, the committee, at its March 10, 2004, meeting, unanimously recommended adding size designation 18, defined as a maximum of 25 pieces of fruit per 8-pound sample, to the size designation chart. This change provides handlers with a total of eleven numerical count size designations as follows:

Additionally, for clarification, the title “Size Designation Chart” will be added to the top of the chart.

The committee discussed alternatives to this change including not adding size 18 to the order's administrative rules and regulations, but concluded that this change provides an additional pack option to handlers and might help increase handler and grower returns. Almost 10 percent (over 4,000 tray equivalents) of the fruit packed as size 20 as of March 31, 2004, could have been packed as the new proposed size 18. Packing 4,000 tray equivalents (te) as size 18 could have increased grower returns approximately 5 cents per pound more than size 20 kiwifruit (4000 te × 7 pounds/te equals 28,000 pounds × $.05 FOB per pound equals $1,400). This change does not affect import requirements.

Section 920.302(a)(4) of the order's administrative rules and regulations outlines pack requirements for fresh shipments of California kiwifruit.

In a volume filled container, fairly uniform size kiwifruit are loosely packed without cell compartments, cardboard fillers, or molded trays. Handlers may ship volume filled containers marked by either the appropriate count (number of pieces of fruit) or net weight (total weight of pieces of fruit in the container). Handler shipments are based upon the preference of the receiver.

In 1994, the committee unanimously recommended and USDA established standard packaging for certain volume filled containers designated by weight, as published in the Federal Register on October 25, 1994 (59 FR 53563). At that time, 52 percent of the total crop was packed into volume filled containers. The percentage of the total crop packed into volume filled containers increased to 85 percent during the 2001-02 season.

In 2001-02, imports from the Northern Hemisphere (Greece, Italy, and France) totaled approximately 17 percent of the U.S. market share. The majority of imported kiwifruit was shipped in 19.8-pound (9-kilogram) volume filled containers; whereas the order limited California handlers to 22-pound (10-kilogram) net weight volume filled containers. With the 22-pound provisions, handlers could not meet buyer demands for other types of packaging.

In an effort to meet buyer demands for other types of packaging, the standardized packaging requirement of 22-pounds (10-kilograms) net weight for certain volume filled containers was suspended for the 2002-2003 and 2003-2004 seasons. These suspensions were implemented by an interim final rule published in the Federal Register on August 22, 2002 (67 FR 54327); a final rule published on November 21, 2002 (67 FR 76140); and another final rule published in the Federal Register on July 28, 2003 (68 FR 44191). The suspension published in the Federal Register on July 28, 2003, was in effect until July 31, 2004. Additionally, the final rule published in the Federal Register on July 28, 2003 (68 FR 44191) removed a pack requirement in § 920.302 (a)(4)(iv) and paragraph (a)(4)(v) was redesignated as paragraph (a)(4)(iv). The provisions removed required containers to hold a quantity of kiwifruit equal to 3 times the size designation marked on the container. For example, if a container was marked as “size 33,” the container had to hold 99 pieces of fruit.

However, during the 2002-2003 and 2003-2004 seasons, since handlers were not limited to a specified net weight for volume fill containers, some confusion appeared in the market place. Without a specific net weight for volume filled containers, more than one net weight was packed by handlers.

In an effort to determine the best means of ensuring more orderly marketing, the committee conducted a survey of kiwifruit handlers and growers during the 2003-2004 season. The survey results clearly showed that the industry favored establishment of a standardized packaging requirement for volume filled containers of kiwifruit designated by weight of 19.8-pound (9-kilograms) net weight of kiwifruit, unless such containers hold less than 15 pounds or more than 35 pounds net weight of kiwifruit.

Thus, the committee, on March 10, 2004, unanimously recommended revising the standard packaging requirements for volume filled containers of kiwifruit designated by weight to hold 19.8-pounds (9-kilograms) net weight of kiwifruit, unless such containers hold less than 15 pounds or more than 35 pounds net weight of kiwifruit.

The committee discussed alternatives to the recommended change, including removing the standardized volume fill net weight requirement from the order's administrative rules and regulations but did not adopt this alternative, as it believes that a standardized volume fill is necessary to achieve orderly marketing of California kiwifruit.

The committee also discussed establishing a standard packing requirement that would require volume filled containers of kiwifruit designated by weight to hold 19.8-pounds (9 kilograms) net weight of kiwifruit, unless such containers hold less than 10-pounds or more than 35-pounds net weight of kiwifruit. The committee did not adopt this suggestion, as it believes that it is important to accommodate the “Hort16A” variety which is packed in a 14-pound volume filled container.

Finally, the committee discussed reinstating the 22-pound (10-kilogram) net weight standard packaging requirement for volume filled containers. The committee calculated that utilizing a 19.8-pound (9-kilo) net weight standard volume fill pack would increase the cost of packaging by 10 percent, generate approximately 10 percent more total volume filled boxes than the 22-pound standard; would increase the grower return by 20 percent, thereby offsetting the 10 percent increase in packaging costs; and would better serve the industry.

This recommended change will allow the industry to compete more effectively in the market place with its foreign competition, to continue packing the new variety of kiwifruit in 14-pound containers, and is expected to improve grower returns. This change does not affect import requirements.

Section 920.303 of the order's administrative rules and regulations outlines specific container marking requirements for fresh shipments of California kiwifruit.

Section 920.303(c)(1) provides that the quantity shall be indicated in terms of count for kiwifruit packed in cell compartments, cardboard fillers, or molded trays, and the contents shall conform to the count.

Historically, the industry and buyers have associated count (number of pieces of fruit) with fruit size designations (maximum number of pieces of fruit in an 8-pound sample). Molded trays were originally designed in the early 1980's to accommodate fruit of the corresponding size from the numerical count size designation chart. For example, count 36 trays (trays that held 36 pieces of fruit) would accommodate size designation 36 fruit.

As previously mentioned, numerous changes have been made to the size designation chart over the years. Other changes have included removal of the minimum tray weight requirements (66 FR 39270; July 30, 2001), and the addition of the new molded tray inserts with smaller cup sizes. Currently, handlers can pack five sizes of fruit (33, 36, 39, 42, and 45) into three tray counts (33, 36, and 39), with the tray weighing as little as 5 pounds. These differences may cause confusion in the market place, especially if buyers assume that count is equivalent to size.

Thus, committee at its March 10, 2004, meeting recommended that both “count” and “size” be marked on containers with cell compartments, cardboard fillers, or molded trays. The committee discussed several alternatives to this change. The first alternative considered was to reinstitute tray weights. The committee felt this requirement would be too restrictive as it would dictate what size fruit had to be packed into a specific tray and that this might result in handlers having to repack kiwifruit that did not meet established minimum tray weight requirements. They were concerned that reinstituting minimum tray weights might result in increased handler costs.

The second alternative discussed by the committee was to regulate the size of the molded cup. However, the committee determined that regulating the size of the molded cup would not be feasible at this time and could result in higher packing costs.

Finally, the committee discussed not changing the container marking requirements to include both “count” and “size” for kiwifruit packed in cell compartments, cardboard fillers, or molded trays. However, the committee agreed that it was important to specify both “count” and “size” to ensure that fruit size was clearly specified. Under this recommendation, containers will be marked with the size of the fruit as specified in the size designation chart and the number of pieces of fruit in the box. For example, a tray marked with size designation 45 and could hold 36 pieces of fruit. Retailers will be able to clearly discern the number of pieces of fruit packed into the container and the size of that fruit. Of the eleven members present, ten voted for this change. The one member voting against this recommendation believes that requiring both “count” and “size” to be marked on containers of California kiwifruit would result in additional inspection requirements and increased inspection costs for California handlers. This member believes that this recommendation would place California handlers at a disadvantage in competing against imported kiwifruit, as importers do not have to comply with container marking requirements.

In its deliberations, the committee discussed inspection requirements. Committee members mentioned that currently inspectors count the number of fruit in the container. Others mentioned that requiring the quantity statement to be indicated in terms of both “count” and “size” for all kiwifruit packed into cell compartments, cardboard fillers, or molded trays would require inspectors to also verify the size markings.

An analysis of inspection costs indicates that there would likely be an overall increase for the industry of 1.5 percent or about $2,529. Handlers in the industry contract with the USDA Inspection Service to perform either a block or an in-line inspection. Inspectors that perform in-line inspection inspect the fruit at the time of packing, whereas, block inspections occur after the fruit has been packed, just prior to shipment. The additional costs would be incurred by handlers who use the block inspection method for their initial inspections, and those handlers who have fruit reinspected prior to shipment. The block inspection method is used for 13 percent of initial inspections and for all reinspections. In recent seasons, in-line inspections accounted for 87 percent of all initial inspections. Reinspections are required if fruit is restyled or repacked.

Additionally, the committee mentioned that the recommended change does not mandate that the “count” and the “size” be the same, as a tray marked with size designation 45 could still hold count 36 fruit and still weigh as little as 5 pounds.

This change is expected to eliminate any confusion in the marketplace and does not affect import requirements.

Section 920.302(a)(1) of the order's administrative rules and regulations states the minimum grade shall be at least KAC No. 1 quality.

Section 920.302(b) defines the term KAC No. 1 quality as kiwifruit that meets the requirements of U.S. No. 1 grade as defined in 7 CFR 51.2335 through 51.2340 of the standards, except that the kiwifruit shall be “not badly misshapen” and an additional 7 percent tolerance is provided for badly misshapen fruit and except that the “Hort16A” variety of kiwifruit is exempt from the “tightly packed” standard as defined in § 51.2338(a) of the standards.

The standards define standard pack requirements, require containers to be well filled, and require the contents to be tightly packed, but not excessively or unnecessarily bruised by overfilling or oversizing for fruit packed in cell compartments, cardboard fillers, or molded trays. This is commonly referred to in the industry as the “tight-fill” requirement.

These “tight-fill” provisions were established under the order to ensure that the “Hayward” variety (the predominant kiwifruit variety produced in the production area) fits tightly into the tray-liner cups (55 FR 42179, October 18, 1990). Some kiwifruit handlers believe that kiwifruit packed tightly into the cups of the tray-liners are less subject to movement and therefore less damage.

A new kiwifruit cultivar, the Actinidia chinensis “Hort16A,” commonly referred to as “gold” kiwifruit, was recently introduced in California and is being harvested and sold commercially. To minimize damage, the “Hort16A” variety is packed into a special shallow molded tray with a notch for the beak. The “Hort16A” kiwifruit, when packed in this shallow tray, may not meet the “tightly packed” requirement for standard pack under the standards. Therefore, on March 12, 2003, the committee unanimously recommended an exemption for all “gold” kiwifruit varieties from the order's “tightly packed” requirement. This recommendation was implemented by USDA through a final rule published in the Federal Register on July 28, 2003 (68 FR 44191).

During the last several years, the value of the “tight-fill” requirement has decreased due to manufacturer changes in the shape and cuts of the molded trays.

Thus, the committee, at its March 10, 2004, meeting, recommended that the “tight-fill” requirement be eliminated. The majority of the committee members agreed that the tight-fill requirement is no longer necessary, as they believe handlers would continue to pack fruit that is tightly fit into the cup of the molded tray to prevent damage to the fruit and to meet buyer demands for uniform sized kiwifruit packs. Of the eleven members present, ten voted for this change. The one member voting against this recommendation preferred keeping the “tight-fill” requirement, because he believes that handlers would be disadvantaged in the market place by loose packs.

The committee discussed leaving the “tight-fill” requirement in place, but concluded that handlers would continue to pack fruit that is tightly fit into the cup of the molded tray to prevent damage to the fruit and to meet buyer demands for uniform sized kiwifruit packs without the “tight-fill” pack requirement. This revision relaxes handler pack and inspection requirements, and may increase handler and grower returns. This revision does not impact import regulations, as pack and container requirements are not regulated under import regulations.

This final rule relaxes pack and container requirements under the kiwifruit order. Accordingly, these actions will not impose any additional reporting or recordkeeping requirements on either small or large kiwifruit handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sectors.

As noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule. However, as previously stated, California kiwifruit must meet the “tight-fill” requirements, as specified in the standards (7 CFR 51.2335 through 51.2340) issued under the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 through 1627).

In addition, the committee's meeting was widely publicized throughout the kiwifruit industry and all interested persons were invited to attend the meeting and participate in committee deliberations on all issues. Like all committee meetings, the March 12, 2003, meeting, was a public meeting and all entities, both large and small, were able to express their views on these issues. Finally, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses, as requested in the proposed rule.

A proposed rule concerning this action was published in the Federal Register on July 28, 2004 (69 FR 44975). Copies of the rule were provided to all committee members and kiwifruit handlers. The rule was also made available through the Internet by USDA and the Office of the Federal Register. A 15-day comment period, which ended on August 12, 2004, was provided to allow interested persons to respond to the proposal. No comments were received; and, thus, no changes will be made to the rule as proposed.

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

After consideration of all relevant matters presented, including the information and recommendation of the committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C. 553) because shipments of 2004 crop kiwifruit are expected to begin in early September and these changes should be effective by that time. Moreover, prompt implementation will provide handlers time to plan accordingly.

This rule is issued under Marketing Agreement and Order No. 924 (7 CFR 924), regulating the handling of fresh prunes grown in designated counties in Washington and in Umatilla County, Oregon, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, Washington-Oregon prune handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable prunes beginning April 1, 2004, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

This rule increases the assessment rate established for the Committee for the 2004-2005 and subsequent fiscal periods from $1.50 to $1.75 per ton of prunes handled.

The order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers and handlers in designated counties in Washington and in Umatilla County, Oregon. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate was formulated and discussed at a public meeting, thus all directly affected persons had an opportunity to participate and provide input.

For the 2003-2004 and subsequent fiscal periods, the Committee recommended, and USDA approved, an assessment rate of $1.50 per ton of fresh prunes handled. This assessment rate continues in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.

The Committee met on May 25, 2004, and unanimously recommended 2004-2005 expenditures of $7,454 and an increased assessment rate of $1.75 per ton of prunes. In comparison, last year's budgeted expenditures were $7,411. The assessment rate of $1.75 is $0.25 higher than the rate currently in effect. The Committee recommended the higher assessment rate to cover budgeted expenses and to maintain its monetary reserve at a satisfactory level.

The major expenditures recommended by the Committee for the 2004-2005 fiscal period include $3,928 for employee salaries, $576 for rent and maintenance, $500 for Committee travel, and $475 for the annual financial audit. These budgeted expenses are the same as those approved for the 2003-2004 fiscal period.

The assessment rate recommended by the Committee was derived by dividing anticipated expenses by expected shipments of Washington-Oregon prunes. Applying the $1.75 per ton assessment rate to the Committee's 4,500 ton crop estimate should provide $7,875 in assessment income. Thus, income derived from handler assessments should be adequate to cover the recommended $7,454 budget for 2004-2005. Funds in the reserve ($4,900 as of March 31, 2004), will be kept within the maximum permitted by the order of approximately one fiscal period's operational expenses (§ 924.42.)

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

Although the assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate the Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2004-2005 budget and those for subsequent fiscal periods will be reviewed and, as appropriate, approved by USDA.

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

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

There are approximately 215 producers of fresh prunes in the regulated production area and approximately 10 handlers subject to regulation under the order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $5,000,000.

Based on the total number of producers (215), the most recent three- year average fresh prune production of 4,359 tons (from Committee records), and the most recent three-year average producer price of $303 per ton as reported by the National Agricultural Statistics Service, the average annual revenue from the sale of fresh prunes is approximately $6,143 per producer. In addition, based on Committee records and 2003 f.o.b. prices ranging from $8.50 to $9.50 per 30-pound container as reported by the AMS Market News Service, the entire Washington-Oregon fresh prune industry handles less than $5,000,000 worth of prunes. In view of the foregoing, the majority of Washington-Oregon fresh prune producers and handlers may be classified as small entities.

This rule increases the assessment rate established for the Committee and collected from handlers for the 2004-2005 and subsequent fiscal periods from $1.50 to $1.75 per ton for prunes. The Committee unanimously recommended 2004-2005 expenditures of $7,454 and the $1.75 per ton assessment rate. The assessment rate of $1.75 is $0.25 higher than the 2003-2004 rate. With an estimated 2004-2005 prune crop of 4,500 tons, the $1.75 rate should provide the Committee with $7,875 in assessment income and be adequate to cover budgeted expenses. The Committee recommended the higher assessment rate to help ensure that budgeted expenses are covered and that its monetary reserve will not have to be used. Funds in the reserve ($4,900 as of March 31, 2004), will be kept within the maximum permitted by the order of approximately one fiscal period's operational expenses (§ 924.42).

The major expenditures recommended by the Committee for the 2004-2005 fiscal period include $3,928 for employee salaries, $576 for rent and maintenance, $500 for Committee travel, and $475 for the annual financial audit. These budgeted expenses are the same as those approved for the 2003-2004 fiscal period.

The Committee discussed alternatives to this rule, including alternative expenditure levels. Lower assessment rates were considered, but not recommended because they would not have generated the income necessary to administer the program with an adequate reserve.

A review of historical information and preliminary information pertaining to the upcoming crop year indicates that the producer price for the 2004-2005 season could range from about $273 per ton to about $351 per ton. Therefore, the estimated assessment revenue for the 2004-2005 fiscal period as a percentage of total producer revenue could range between 0.50 and 0.64 percent.

This action increases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the additional costs may be passed on to producers. However, these costs are offset by the benefits derived by the operation of the order. In addition, the Committee's meeting was widely publicized throughout the Washington-Oregon fresh prune industry and all interested persons were invited to attend and participate in the Committee's deliberations on all issues. Like all Committee meetings, the May 25, 2004, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

This rule imposes no additional reporting or recordkeeping requirements on either small or large Washington-Oregon fresh prune handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

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

A proposed rule concerning this action was published in the Federal Register on July 19, 2004 (69 FR 42899). Copies of the proposed rule were also mailed or sent via facsimile to Committee members. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 15-day comment period ending August 3, 2004, was provided for interested persons to respond to the proposal. No comments were received.

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

After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because handlers are already receiving 2004 crop fresh prunes from growers. The 2004-2005 fiscal period began on April 1, and the marketing order requires that the rate of assessment for each fiscal period apply to all assessable Washington-Oregon fresh prunes handled during such fiscal period. The Committee needs to have sufficient funds to pay for expenses which are incurred on a continuous basis. Further, handlers are aware of this action which was unanimously recommended by the Committee at a public meeting. Also, a 15-day comment period was provided for in the proposed rule, and no comments were received.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain McDonnell Douglas Model DC-9-14, DC-9-15, and DC-9-15F airplanes; and Model DC-9-20, DC-9-30, DC-9-40, and DC-9-50 series airplanes; was published in the Federal Register on January 29, 2004 (69 FR 4259). That action proposed to require, among other actions, performing repetitive inspections for cracking of the counterbore of the two lower mounting holes and the lower forward edge of the outboard idler hinge fitting of the left and right wing flap at station Xw=333.148, and replacing the flap idler hinge fitting with a new or serviceable part.

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

One commenter supports the proposed rule.

The other commenter, an operator, requests that we revise the cost estimates listed in the proposed rule. The commenter states that the inspection, based on similar inspections it is currently conducting for another AD, will take four work hours per airplane (two work hours per fitting, two fittings per airplane) instead of the two work hours estimated in the proposed rule. The commenter points out that Boeing Service Bulletin DC9-57-225 (referenced as the appropriate source of service information in the proposed rule) specifies 2.7 work hours per fitting, 5.4 work hours per airplane. The commenter further states that the proposed rule does not include the cost of replacement parts required at each inspection interval, at the cost of $1,122.20 per airplane (for Group 1 airplanes within its fleet). Therefore, the commenter declares that the proposed inspection will actually cost $1,365 per airplane, per inspection cycle for Group 1 airplanes, and $667 per airplane, per inspection cycle for Group 2 airplanes—not $130 per airplane, per inspection cycle, as proposed.

The commenter also states that the replacement will take nine work hours per fitting, instead of the two work hours estimated in the proposed rule. The commenter points out that Boeing Service Bulletin DC9-57-225 specifies 7.6 work hours per fitting for the replacement. Therefore, the commenter declares the proposed replacement will cost $6,005 per airplane for Group 1 airplanes, and $10,397 per airplane for Group 2 airplanes—instead of between $2,024 and $4,569 per airplane, as proposed.

We agree with part of the commenter's request. We have reviewed data provided by the airplane manufacturer and agree that replacement of some additional parts may be necessary during the required inspection and replacement. We do not agree, however, with the cost provided by the commenter for those parts. We have revised the cost information below to include the costs of those additional parts, based on the information provided to us by the airplane manufacturer.

We do not agree to revise the work hour estimate for the inspection or replacement. The commenter supplied no data to support its estimate of nine work hours for the replacement. The referenced service bulletin specifies two work hours per fitting for the replacement, which corresponds with the cost information below. We acknowledge that the referenced service bulletin specifies 2.7 work hours per fitting for the inspection—not two (one work hour per fitting, two fittings per airplane) as proposed. However, that figure includes costs for actions associated with access and close up. The cost information below describes only the direct costs of those specific actions required by this AD. We recognize that, in doing the actions required by an AD, operators may incur incidental costs in addition to the direct costs. As explained in the proposed rule, the cost analysis in AD rulemaking actions typically does not include incidental costs such as the time required to gain access and close up, time necessary for planning, or time necessitated by other administrative actions. Those incidental costs, which may vary significantly among operators, are almost impossible to calculate. We have not changed the work-hour estimates in this final rule.

After careful review of the available data, including the comments noted above, we have determined that air safety and the public interest require the adoption of the rule with the change previously described. We have determined that this change will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 708 airplanes of the affected design in the worldwide fleet. We estimate that 411 airplanes of U.S. registry will be affected by this AD, that it will take approximately 2 work hours per airplane to accomplish the required inspection, and that the average labor rate is $65 per work hour. The cost of certain parts required to be replaced during this inspection will be between $212 and $585 per airplane. Based on these figures, the cost impact of the required inspection on U.S. operators is estimated to be between $140,562 and $293,865, or between $342 and $715 per airplane, per inspection cycle.

We estimate that it will take approximately 2 work hours per fitting to accomplish the required replacement, and that the average labor rate is $65 per work hour. The cost of each required replacement fitting will be $1,894 per Group 1 airplane and $4,439 per Group 2 airplane. The cost of certain other parts required to be replaced during this replacement will be $292 per Group 1 airplane and $106 per Group 2 airplane. Based on these figures, the cost impact of the required replacement per fitting on U.S. operators is estimated to be between $951,876 and $1,921,425, or $2,316 per Group 1 airplane and $4,675 per Group 2 airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) by superseding AD 2001-15-23, amendment 39-12358 (66 FR 40864, August 6, 2001), which is applicable to certain BAE Systems (Operations) Limited Model BAe 146 and Avro 146-RJ series airplanes, was published in the Federal Register on June 21, 2004 (69 FR 34312). The action proposed to continue to require identifying the part numbers of discharge valves and cabin pressure controllers, and related investigative and corrective actions if necessary. The action also proposed to require identifying the part number of an additional cabin pressure controller, and related investigative and corrective actions if necessary.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were submitted in response to the proposal or the FAA's determination of the cost to the public.

The FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

We inadvertently omitted a paragraph identifier in the proposed AD. We have revised this final rule to identify that paragraph as paragraph (d) of this AD, and have reidentified subsequent paragraphs accordingly.

There are approximately 20 airplanes of U.S. registry that will be affected by this AD.

The actions that are currently required by AD 2001-15-23 and continued in this AD take approximately 3 work hours per airplane to accomplish, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of the currently required actions on U.S. operators is estimated to be $3,900, or $195 per airplane.

The new actions that are required in this AD will take approximately 3 work hours to accomplish, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of the new requirements on U.S. operators is estimated to be $3,900, or $195 per airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Boeing Model 737-200, -200C, -300, -400, and -500 series airplanes was published in the Federal Register on June 18, 2003 (68 FR 36515). That action proposed to require repetitive inspections to find fatigue cracking of certain upper and lower skin panels of the fuselage, and follow-on and corrective actions, if necessary. That action also includes terminating action for the repetitive inspections of certain modified or repaired areas only.

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

One commenter generally agrees with the proposed rule.

Several commenters request clarification of the repetitive eddy current inspections required by paragraph (a) of the proposed rule. The commenters note that the proposed rule differs from the service bulletin in that the proposed rule requires both external detailed and eddy current inspections every 4,500 flight cycles, while the service bulletin only specifies to repeat the detailed inspections. One commenter asks if the repetitive eddy current inspections are mandatory. Another commenter points out that no explanation is given in the preamble of the proposed rule in the “Differences” paragraph. Because no technical reason is given for this change, the commenter believes the proposed rule's intent was not to include repetitive eddy current inspections that are beyond the scope of the service bulletin.

Another commenter, the manufacturer, agrees with the proposed rule that the eddy current inspections should be repetitive. The commenter states that because of recent upper row cracks found on a Model 737 series airplane with disbonded waffle doublers, it seems prudent to use the more sensitive eddy current inspection at repetitive intervals of 4,500 flight cycles. The commenter notes that only external detailed inspections were originally used because it was assumed that the tear straps were bonded and functioning to slow down the cracks until they could easily be detected using visual methods. The commenter states that in the case of a disbonded panel, it is unclear if the chem-mill type crack would slow down as it approaches the tear straps. The commenter believes that if it is assumed that tear straps do not slow the growth of the cracks, then the repetitive external detailed inspections every 4,500 flight cycles would allow more than two inspection opportunities to pass as cracks detectable by eddy current inspections become critical.

We agree with the request to clarify the repetitive eddy current inspections required by paragraph (a) of the final rule. Paragraph (a) of the proposed rule did specify repetitive external detailed and eddy current inspections but stated this as “repeat the inspections.” Because the service bulletin only specifies repetitive detailed inspections, we should have explained the difference in the “Differences” paragraph of the proposed rule for the reasons stated by the last commenter ( i.e. because of the recent upper row cracks found on an airplane with disbonded waffle doublers). However the “Differences” paragraph of the proposed rule is not repeated in the final rule. We have clarified the repetitive eddy current inspections by revising paragraph (a) of the final rule to state, “Repeat the external detailed and eddy current inspections * * *.”

One commenter requests to revise the text in paragraph (a) of the proposed rule from “crown area” to “crown area and other known areas of cracking.” The commenter states that the inspections in Part 1 and Figure 1 of Boeing Alert Service Bulletin 737-53A1210, Revision 1, dated October 25, 2001 (referenced as the appropriate source of service information in the proposed rule), include areas of known cracking outside the crown. The commenter believes that since paragraph (a) of the proposed rule states to inspect only the “crown area,” then the areas of known cracking outside the crown as specified in the service bulletin may not get inspected. In addition, another commenter notes that it reported a crack at S12L on a Boeing Model 737-300 series airplane.

The FAA agrees with the commenter that the text to describe the area of inspection should be revised. While the heading of Part 1 of the service bulletin (like the proposed rule) makes reference only to the crown area, Part 1 includes inspections outside that area, as stated by the commenter. We proposed to require all of the actions specified in Part 1 and Figure 1 of the service bulletin. For the reasons stated by that commenter, we have clarified paragraph (a) of the final rule to state, “* * * crown area and other known areas of fuselage skin cracking, per Part 1 and Figure 1 * * *.” This clarification does not expand the inspection locations specified in Part 1 and Figure 1.

One commenter requests reducing the area of the eddy current inspection required by paragraph (a) of the proposed rule from body station (BS) 360 to BS 1016 to the area BS 460 to BS 787. The commenter contends that the cracking reported in the upper crown at locations ranging from BS 480 to BS 777, per Boeing Service Bulletin 737-53A1210, Revision 1, does not warrant accomplishing both a visual and an eddy current inspection of areas BS 360 to BS 1016. The commenter recommends a visual inspection for areas BS 360 to BS 1016 and an eddy current inspection for areas BS 460 to BS 787.

We do not agree with the request to reduce the area of the eddy current inspection required by paragraph (a) of the final rule. Since the issuance of the service bulletin, we have received new reports of cracking. To address the identified unsafe condition, detailed and eddy current inspections are required by paragraph (a) of the final rule for areas BS 360 to BS 1016 identified in the service bulletin. No change is made to the final rule in this regard.

Two commenters request clarification of inspections for chem-mill areas covered by FAA-approved or accepted repairs other than external repair doublers that extend a minimum of three rows of fasteners above and below the chem-mill steps. One commenter, the manufacturer, requests that an inspection be added to the proposed rule for areas that are covered by external repair doublers that do not extend a minimum of three rows of fasteners above and below the chem-mill steps because paragraph (a) of the proposed rule does not address inspecting these areas. The commenter states that Boeing has developed a new internal inspection method for chem-mill cracks under the external repair doublers, as specified in Boeing 737 Non-Destructive Test (NDT) Manual, Part 6, Subject 53-30-20. The commenter contends that this inspection method can be used as a substitute for the external inspections with no change in the proposed compliance times. The commenter believes that chem-mill cracks under a repair doubler that do not extend beyond the chem-mill step are just as critical because three rows are required to carry failsafe loads. However, the commenter believes the cracks in this area are inspected less than cracks addressed by the proposed rule, and that it is likely repairs have been installed over undetected chem-mill cracks. The other commenter recommends that a general visual inspection of the repair for chem-milled areas covered by other FAA-approved or accepted repairs be added to the proposed rule, or that the areas be exempted from the inspections required by paragraphs (a) and (b) of the proposed rule.

We agree that inspections of the chem-mill areas should be clarified. Inspections are not required in areas that are spanned by an FAA-approved repair that has a minimum of 3 rows of fasteners above and below the chem-milled step. If an external doubler covers the chem-milled step, but does not span it by a minimum of 3 rows of fasteners above and below, operators must request an alternative method of compliance (AMOC) as required by section 39.17 of the Federal Aviation Regulations (14 CFR 39.17). In lieu of requesting an AMOC, one method of compliance with the inspection requirement of paragraphs (a) and (b) of this final rule is to inspect all chem-milled steps covered by the repair using internal nondestructive test (NDT) methods in accordance with Boeing 737 NDT Manual, Part 6, Subject 53-30-20. We have included new paragraph (i) of this final rule to provide inspection procedures, in lieu of requesting an AMOC, as one method of compliance with the requirements of paragraphs (a) and (b) of this final rule.

One commenter requests that an inspection method be specified for the area of the internal doubler at the emergency exit surround structure as shown in Figure 5 of the service bulletin, or that the requirement to inspect this area be removed. The commenter notes that inspecting the area between BS 540 and BS 727 would require a different inspection procedure than the Boeing 737 NDT Manual, Part 6, Subject 53-30-18 or 53-30-19 procedures which are specified in Figure 5 of Boeing Alert Service Bulletin 737-53A1210, Revision 1, dated October 25, 2001.

We agree with the commenter that there should not be a requirement to inspect this area because the internal doubler that extends above S-10 stabilizes the skin in this area and eliminates this area as a cracking concern. However, there is not a need to clarify this in the final rule because the service bulletin does not specify to inspect this area. This area is shown with a dotted line in Figure 5 of the service bulletin and is excluded from the inspections in Figure 5. Therefore, no change to the final rule is necessary.

Two commenters request that the terminating action for the repetitive inspections required by paragraph (a) of the proposed rule be clarified. One commenter states that the proposed rule requires to “Repeat the inspections at least every 4,500 flight cycles until paragraph (c) or (d)(1)(ii) of this AD has been done, as applicable.” The commenter notes that paragraph (c) and (d)(1)(ii) of the proposed rule do not cover the joint cutout modification per paragraph (g) of AD 2002-07-08, amendment 39-12702 (67 FR 17917). The commenter contends that the lap joint repair per paragraph (g) of AD 2002-07-08 ends the repetitive inspections for those lap joints, and therefore, should be included as a terminating action in paragraph (a) of the proposed rule. The other commenter questions if the statement “Installation of the lap joint repair * * * is considered acceptable for compliance with * * *” in paragraph (d)(1) of the proposed AD ends the repetitive inspections per paragraph (a) of the proposed AD for those lap joints.

We agree with the commenters that we should clarify the terminating actions for the repetitive actions for the reasons stated by the first commenter. The lap joint modification (repair) is an alternate method of compliance for the repetitive requirements of paragraph (a) of the final rule. There is language in paragraph (d)(1) of the AD that does specify, “Installation of the lap joint repair specified in paragraph (g) of AD 2002-07-08, amendment 39-12702, is considered acceptable for compliance with the corresponding action specified in this paragraph for the lap joint areas only.” We have moved this language to paragraph (d)(1)(ii) of the final rule to clarify that modifications performed in accordance with paragraph (g) of AD 2002-07-08 are considered a terminating modification for the chem-mill step areas within the modified areas.

One commenter requests that a new repair option be added to paragraph (d) of the proposed rule. Paragraph (d) of the proposed rule provides two options for repair if cracking is found. The commenter points out that general skin repairs have been added to Boeing 737 structural repair manuals, and that these repairs meet or exceed the requirements as stated in paragraph (d) of the proposed rule. The commenter suggests adding paragraph (d)(3) to the proposed rule stating, “For cracking in any area within the limitations of 737-100/200 SRM 53-30-3 Figure 48 for -100's and -200 aircraft, 737-300 SRM 53-00-01 Figure 229 for -300 aircraft, 737-400 SRM 53-00-01 Figure 231 for -400 aircraft, and 737-500 SRM 53-00-01 Figure 229 for -500 aircraft, cracks can be repaired per these SRM figures as applicable. Accomplishment of these repairs ends the repetitive inspections required by paragraph (b) of this AD for the repaired area only.” The commenter also suggests revising the first sentence of paragraph (d) of the proposed rule to state, “ * * * specified in paragraphs (d)(1), (d)(2), and (d)(3) of this AD, as applicable * * *.” The commenter points out that these SRM repairs are being used extensively within the industry to repair skin damage, including chem-mill cracks.

We agree with the commenter that the new repair option should be added and concur with its justification. Accordingly, we have added paragraph (e) to the final rule as follows: “For cracking in any area specified in paragraphs (d)(1) and (d)(2) of this AD within the limitations of Chapter 53, Subject 53-30-3, Figure 48 (for Model 737-100 and -200 series airplanes), of the Boeing 737-100 and -200 Structural Repair Manual (SRM); Chapter 53, Subject 53-00-01, Figure 229 (for Model 737-300 airplanes), of the Boeing 737-300 SRM; Chapter 53, Subject 53-00-01, Figure 231 (for Model 737-400 series airplanes), of the Boeing 737-400 SRM; and Chapter 53, Subject 53-00-01, Figure 229 (for Model 737-500 series airplanes), of the Boeing 737-500 SRM; repair cracks per the applicable SRM. Accomplishment of the applicable repair terminates the repetitive inspections required by paragraphs (a) and (b) of this AD for the repaired area only.” We also revised paragraphs (a) and (b) of the final rule to include paragraph (e) of the final rule as an optional terminating action for the repaired area only. In addition, we revised paragraphs (d)(1) and (d)(2) of the final rule by adding paragraph (e) of the final rule as a repair option.

One commenter requests that the repair instructions in paragraph (d)(2) of the proposed rule be revised. The commenter notes that paragraph (d)(2) gives instructions to “* * * repair per Part 2 of the Work Instructions of the service bulletin * * *,” and the service bulletin specifies to ask Boeing for repair data. The commenter contends that an operator may interpret paragraph (d)(2) of the proposed rule as requiring them to contact Boeing for all repairs in the lower lobe and section 41. The commenter suggests revising paragraph (d)(2) of the proposed rule to state, “For cracking of the lower lobe area and Section 41, repair per paragraph (d)(3) of this AD before further flight * * *.”

We disagree with the commenter to revise paragraph (d)(3) of the final rule per its suggested wording. As stated earlier, paragraph (d)(2) of the final rule has been revised by adding paragraph (e) of the final rule as an option to the repair of the cracking of the lower lobe and Section 41 done per Part 2 of the Work Instructions of the service bulletin. Operators should note that while the service bulletin does specify to contact Boeing for repair, paragraph (d) of the final rule requires operators to contact the FAA or a Designated Engineering Representative (DER) if the service bulletin specifies to contact Boeing for repair instructions. No change is made to the final rule in this regard.

One commenter requests that the external subsurface inspection of the chem-mill steps in adjacent bays per step 2 of Figure 18 of the service bulletin be added to paragraph (e)(2) of the proposed rule. The commenter notes that paragraph (e)(2) of the proposed rule requires an “internal eddy current inspection of the skin, tear straps, and lap joint * * *” The commenter states that, while this agrees with the service bulletin, the service bulletin also specifies an external subsurface inspection of the chem-mill steps in adjacent bays. The commenter points out that when the time-limited repair required by paragraph (e) of the proposed rule is accomplished at remote sites, it may not be possible to do an NDT inspection of the adjacent chem-mill steps. The commenter states that, often times in service, the bays adjacent to the cracked bay will also have cracks. The commenter also notes that inspection of the adjacent bays within 4,000 flight cycles after doing the repair is recommended by the service bulletin as a precautionary measure.

We agree with the commenter that the service bulletin also specifies external subsurface inspection of the chem-mill steps in adjacent bays. In our effort to describe the types of inspections referenced in Part 4 of the service bulletin, we inadvertently omitted the one mentioned by the commenter. We had no intention of deviating from the service bulletin. To clarify this intent, the final rule has been revised to track the precise wording of Part 4 of the service bulletin: “Do inspections of the repaired area * * *.”

One commenter requests that the words “tear straps” be removed from paragraph (e)(2) of the proposed rule. The commenter notes that the internal inspection shown in Figure 18 of the service bulletin looks for cracks in the skin under the tear strap and does not look for cracks in the tear straps.

We agree with the commenter that the words “tear straps” be removed from paragraph (f)(2) of the final rule (specified as paragraph (e)(2) of the proposed rule). As stated previously, paragraph (f)(2) of the final rule (specified as paragraph (e)(2) of the proposed rule) has been changed to state, “Do the inspections of the repaired area * * *.”

One commenter requests that an inspection for disbonding be added that would terminate the repetitive eddy current inspections required by paragraph (a) of the proposed rule. The commenter recommends that the inspection for disbonding specified in Boeing Service Bulletin 737-53-1179, Revision 2, dated October 25, 2001, be added as a terminating action for the repetitive eddy current inspections required by paragraph (a) of the proposed rule, and then only repetitive detailed inspections would be needed to ensure safety.

We agree that an inspection for disbonding should be added to terminate the repetitive eddy current inspections required by paragraph (a) of the final rule. The inspection for disbonding specified in Boeing Service Bulletin 737-53-1179, Revision 2, dated October 25, 2001, will verify the integrity of the doublers, and therefore, the repetitive eddy current inspections will no longer be required. The service bulletin is the source of service information for paragraphs (b) and (c) of AD 2003-14-06, amendment 39-13225. That AD requires repetitive inspections for cracking of certain lap splices, and corrective action if necessary. We have added paragraph (g) to the final rule as follows: “Accomplishment of paragraph (b) or (c), as applicable, of AD 2003-14-06, amendment 39-13225, terminates the repetitive eddy current inspections required by paragraph (a) of this AD; however the repetitive detailed inspections required by paragraph (a) of this AD are still required.”

Two commenters request that the phrase “including Appendix A” in paragraphs (a) through (e) of the proposed rule either be removed or changed to “excluding Appendix A.” One commenter notes that Appendix A of the service bulletin is an optional cost benefit analysis worksheet that is included in the service bulletin for the benefit of the operators if they elect to use it and that it has no effect on the repair, modification, or compliance instructions of the referenced service bulletin. The other commenter questions why Appendix A is mandatory and what operators should do with it if it is not excluded from the proposed rule.

We agree that Appendix A should be excluded from the service bulletin references for the reasons stated by the first commenter. We removed the wording “including Appendix A” from paragraphs (a) through (d) of the final rule and paragraph (f) of the final rule (specified as paragraph (e) of the proposed rule). We also removed the wording “excluding Evaluation Form.”

We have revised certain wording regarding the compliance times of the repetitive inspection requirements specified in paragraphs (a), (b), and (f)(1) (specified as paragraph (e)(1) of the proposed rule) of the final rule. Instead of specifying that the repetitive inspections be repeated “at least every,” as stated in paragraphs (a), (b), and (e)(1) of the proposed rule, this final rule specifies that the inspections be repeated “at intervals not to exceed.”

We have clarified one of the inspection requirements contained in the proposed rule. Whereas paragraph (f)(1) of the proposed rule specifies a general visual inspection, we have revised paragraph (f)(1) of the final rule to clarify that our intent is to require a detailed inspection, as specified in the service bulletin.

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

On July 10, 2002, the FAA issued a new version of 14 CFR part 39 (67 FR 47997, July 22, 2002), which governs the FAA's airworthiness directives system. The regulation now includes material that relates to altered products, special flight permits, and alternative methods of compliance. However, for clarity and consistency in this final rule, we have retained the language of the NPRM regarding that material.

We have reviewed the figures we have used over the past several years to calculate AD costs to operators. To account for various inflationary costs in the airline industry, we find it necessary to increase the labor rate used in these calculations from $60 per work hour to $65 per work hour. The cost impact information, below, reflects this increase in the specified hourly labor rate.

This is considered to be interim action for Group 7 airplanes. Although the service bulletin described previously does not include the inspection of the crown area (upper lobe) for Group 7 airplanes, as specified in paragraph (a) of this final rule, the manufacturer has advised that it currently is developing a new service bulletin to address those airplanes. Once the FAA has reviewed and approved the service bulletin, we may consider additional rulemaking to mandate those inspections.

There are approximately 2,200 airplanes of the affected design in the worldwide fleet. The FAA estimates that 903 airplanes of U.S. registry will be affected by this proposed AD.

It will take approximately 94 work hours per airplane to accomplish the inspections of the crown area, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of these inspections on U.S. operators is estimated to be $5,517,330, or $6,110 per airplane, per inspection cycle.

It will take approximately 96 work hours per airplane to accomplish the inspections of the lower lobe area, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of these inspections on U.S. operators is estimated to be $5,634,720, or $6,240 per airplane, per inspection cycle.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

Should an operator elect to install the preventive modification, it will take approximately 108 work hours to accomplish, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of the preventive modification is estimated to be $7,020 per airplane.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Boeing Model 727, 727C, 727-100, -100C, and -200 series airplanes was published in the Federal Register on June 16, 2004 (69 FR 33587). That action proposed to require an inspection of the forward trunnion attach fittings of the main landing gear, inspections of the attach fitting holes of the forward trunnion attach fittings if necessary, replacement of the forward trunnion attach fittings if necessary, and corrective actions if necessary.

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

The commenter supports the proposed rule.

After careful review of the available data, including the comment noted above, the FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

There are approximately 523 airplanes of the affected design in the worldwide fleet. The FAA estimates that 309 airplanes of U.S. registry will be affected by this AD, that it will take approximately 1 work hour per airplane to accomplish the required inspection, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be $20,085, or $65 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Bombardier Model DHC-8-102, -103, -106, -201, -202, -301, -311, and -315 airplanes was published in the Federal Register on December 31, 2003 (68 FR 75471). That action proposed to require inspection of the fitting assemblies located on the vent and scavenge lines routed immediately below the fuel tank access covers on both wings for proper installation, and corrective actions if necessary. That action also proposed to require inspection of the stiffeners on the underside of fuel tank access covers on both wings for signs of chafing damage caused by incorrect orientation of the lockwire tail, and removal of damage.

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

One commenter requests that the notice of proposed rulemaking (NPRM) be revised to reference Bombardier Alert Service Bulletin A8-28-33, dated June 3, 2002. The commenter notes that the NPRM refers to Bombardier Alert Service Bulletin A8-28-33, Revision “A,” dated October 10, 2002, as the appropriate source of service information for the proposed actions. The commenter states that Revision “A” only removed the eddy current and fluorescent dye penetrant inspections, and that the original service bulletin accomplishes the same intent as Revision “A.” The commenter concludes that including the original service bulletin in the NPRM will eliminate the need to request alternative methods of compliance with the NPRM.

We agree with the commenter that accomplishment of the actions before the effective date of this AD in accordance with Bombardier Alert Service Bulletin A8-28-33, dated June 3, 2002, is acceptable for compliance with the corresponding requirements of this AD. In addition, Canadian airworthiness directive CF-2002-44, dated October 22, 2002, references the original service bulletin as the appropriate source of service information for accomplishing the required actions. Therefore, we have added a new paragraph (f) in the final rule to clarify this point and renumbered subsequent paragraphs.

One commenter requests that the compliance time for the proposed inspection be extended from 12 months to 36 months. This would allow most airplanes to be inspected during scheduled maintenance. The commenter states that the proposed inspections require tank entry, and that its normal tank entry interval is 11,500 flight hours or approximately every 4 years. The commenter considers that the adoption of the proposed compliance time of 12 months would require operators to schedule special times for the accomplishment of the inspections, at additional expense.

We do not agree with the commenter's request to extend the compliance time. In developing an appropriate compliance time for this action, we considered the safety implications, parts availability, and normal maintenance schedules for timely accomplishment of the inspections. In addition, the 12-month compliance time coincides with Canadian airworthiness directive CF-2002-44. In consideration of these items, we have determined that 12 months represents an appropriate interval of time allowable wherein the inspections can be accomplished during scheduled maintenance intervals for the majority of affected operators, and wherein an acceptable level of safety can be maintained. However, under the provisions of paragraph (h) of the final rule, we may approve requests for adjustments to the compliance time if data are submitted to substantiate that such an adjustment would provide an acceptable level of safety.

One commenter requests that paragraph (e) of the NPRM be revised to allow FAA DERs to approve repairs for damage in excess of the given limits. The commenter states that rework of chafing is a relatively minor structural repair, and the repair has no impact on the arcing condition for which the NPRM is being issued.

We do not agree. Authority for this type of approval is normally retained by the responsible Aircraft Certification Office (ACO). We do not anticipate so many requests for this type of approval that delegation would be necessary to provide timely responses. Also, paragraph (e) of the final rule provides two additional sources of repair approval ( i.e. , the TCCA or its delegated agent).

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

The FAA estimates that 172 airplanes of U.S. registry will be affected by this AD, that it will take approximately 1 work hour per airplane to accomplish the required inspections, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be $11,180, or $65 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

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

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

On September 12, 2003, the Coast Guard published a final rule (68 FR 53677) establishing regulations in 33 CFR 165.1318 for the security and safety of large passenger vessels in the navigable waters of Portland, OR and adjacent waters, of Oregon and Washington. These security and safety zones provide for the regulation of vessel traffic in the vicinity of certain large passenger vessels (as defined by the final rule) and exclude persons and vessels from the immediate vicinity of these large passenger vessels. Entry into these zones is prohibited unless otherwise exempted or excluded under the final rule or unless authorized by the Captain of the Port or his designee. The Captain of the Port Portland will begin enforcing the Large Passenger Vessel Safety and Security Zones established in 33 CFR 165.1318 on August 11, 2004. The Captain of the Port may be assisted by other Federal, State, or local agencies in enforcing this security zone.

33 CFR part 277 contains the Corps of Engineers implementing guidance for apportioning costs of bridge alterations made as part of Civil Works projects accomplished under Corps of Engineers authorities. The primary purpose of this correcting amendment is to make it more clear within the text of 33 CFR part 277 that the Corps of Engineers and the U.S. Coast Guard maintain separate cost apportionment implementing procedures, and that each agency uses its own implementing procedures under its respective authorities.

In addition, since 33 CFR part 277 has not been revised since its publication in the Federal Register in 1979, some internal Corps guidance documents referenced in 33 CFR part 277 have changed, as has a referenced U.S. Coast Guard guidance document. These references are updated. A few Corps terms of self-reference are updated.

The change at § 277.6, Basic Policies, paragraph (a), is merely to remove a parenthetical reference to an Engineering Regulation that no longer exists.

The change at § 277.7, Coordination with the U.S. Coast Guard, is to remove the parenthetical instruction to see the referenced Engineering Pamphlet for a copy of a Corps-Coast Guard Memorandum of Agreement. The Pamphlet has been revised and it no longer contains a copy of the agreement. Reference to the Pamphlet is retained as it continues to list the agreement as being in force.

The SIP is a living document which the State can revise as necessary to address the unique air pollution problems. Therefore, EPA from time to time must take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference Federally-approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR). The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997 Federal Register document. On April 21, 2000 (65 FR 21315), EPA published a Federal Register beginning the new IBR procedure for Virginia. In this document EPA is doing the following:

1. Announcing the first update to the IBR'd material.

2. Correcting typographical errors in the text of 40 CFR 52.2420(a).

3. Making corrections to the charts listed in paragraphs 52.2420(c), as described below:

a. General change to Federal Register citation in the “EPA Approval Date” column. For entries in the “EPA Approval Date” column where the EPA approval date is listed as “4/21/00,” the Federal Register citation is revised from “60 FR 21320” to “60 FR 21315.”

b. Chapter 20—Headings are added to indicate that this chapter is divided into two parts: Part I (Administrative) and Part II (Air Quality Programs).

c. Chapter 20, entries 5-20-220 and 5-20-230—The text in the “EPA approval date” column is revised to read “6/27/03, 68 FR 38191”.

d. Chapter 40, Part II—The titles for all Articles are revised.

e. Chapter 40, Article 13, entry 5-40-1750A—In the “Explanation [Former SIP citation]” column, the word “Register” is replaced with the word “federally”.

f. Chapter 50, Part II—The titles for Articles 1 and 4 are revised.

g. Chapter 80, entry VR120-08-01C.1.a; 01C.4.b through d—The date in the “State effective date” column is revised to read “7/31/81; the citation “01C.1.a.” is removed.

h. Chapter 80, Article 5, all entries—The Federal Register citation in the EPA approval date” column is revised to read “6/27/03, 68 FR 38191”; the text in the “Explanation [Former SIP citation] column” is removed.

i. Chapter 80, Article 9, entry 5-80-2030—In the “EPA approval date” column, the Federal Register publication date and page citation are added.

j. Chapter 140—The chapter and “Part I” titles are revised.

k. Chapter 140, all entries—In the “EPA approval date” column, the Federal Register page citation is revised to read “68 FR 40520”.

l. Chapter 140, entry 5-140-620—The date in the “state effective date column is revised to read “7/17/02”.

m. Chapter 160—The Chapter title is revised.

n. Chapter 160, Part I, entry 5-160-10—The text in the “Explanation [Former SIP citation]” column is removed.

o. Chapter 200, entries 5-200-10, 5-200-20 and 5-200-30—The text in the “Explanation [Former SIP citation]” column is removed.

p. 2 VAC 5 Chapter 480, entry 5-480-20—The text in the “Explanation [Former SIP citation]” column is removed.

4. Revising the format and content of paragraph 52.2420(d) as follows:

a. Providing a Federal Register publication date, Federal Register page citation, and 40 CFR part 52 citation for each entry.

b. Revising the names for certain entries in the “Source name” column.

c. Adding additional permit identification numbers which appear in the text of the permit documents in the “Permit/order or registration number” column.

d. Revising the date in the “State effective date” column for the entry “Potomac Electric Power Company (PEPCO)—Potomac River Generating Station”.

e. Revising the date format in the “State effective date” column.

f. Revising the following Federal Register page citations in the “EPA approval date” column—The page citation “66 FR 15” is revised to read “66 FR 8”, and the page citation “68 FR 14545” is revised to read “68 FR 14542”.

g. Adding language in the “40 CFR part 52 citation” column for certain entries.

EPA has determined that today's rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation, and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). Today's rule simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 99 (44 U.S.C. 3501 et seq. ).

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

EPA has also determined that the provisions of section 307(b)(1) of the Clean Air Act pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Virginia SIP compilations had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for these “Identification of plan” reorganization update actions for Virginia.