This rule is issued under Marketing Agreement No. 89 and Order No. 927, both as amended (7 CFR part 927), regulating the handling of winter pears grown in Oregon and Washington, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, Oregon and Washington winter pear handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the supplemental assessment rate will be applicable to all assessable d'Anjou pears, excluding organically produced d'Anjou pears, beginning on July 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 decreases the supplemental assessment rate established for the Committee for the 2004-2005 and subsequent fiscal periods from $0.03 to $0.01 per 44-pound standard box or container equivalent of d'Anjou pears, excluding organically produced d'Anjou pears. The $0.01 supplemental assessment rate on conventionally produced (pears that are not organically produced) and handled d'Anjou pears is in addition to the continuing base assessment rate of $0.49 per 44-pound standard box or container equivalent established for the 1998-1999 and subsequent fiscal periods, which pertains to all winter pears handled under the order (63 FR 46633; September 2, 1998). The supplemental rate of $0.03 per 44-pound standard box or container equivalent was established at 67 FR 5438; February 6, 2002.

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 order also provides authority to fix supplemental rates of assessment on individual varieties or subvarieties to secure sufficient funds to provide for projects authorized under § 927.47. Section 927.47 provides authority for the establishment of production research, or marketing research and development projects designed to assist, improve, or promote the marketing, distribution, and consumption of pears. The members of the Committee are growers and handlers of Oregon and Washington winter pears. 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 rates. The assessment rates are formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

The Committee met on June 4, 2004, and unanimously recommended 2004-2005 expenditures of $7,302,905 and reconfirmed the continuing base assessment rate of $0.49 per 44-pound standard box or container equivalent of winter pears established for the 1998-1999 and subsequent fiscal periods. The Committee also recommended a supplemental assessment rate of $0.01 per 44-pound standard box or container equivalent of d'Anjou pears, excluding organically produced d'Anjou pears. In comparison, last year's budgeted expenditures were $8,320,989.

The Committee shares management and other expenses with the Pear Bureau Northwest and the Northwest Fresh Bartlett Pear Marketing Committee (7 CFR part 931) under a management agreement. The major expenditures recommended by the Committee for the 2004-2005 fiscal period include $339,905 for shared expenses (salaries and benefits, insurance, office rent, equipment rental and maintenance, office supplies, telephone, postage, and similar expenses); $290,000 for production research, and market research and development; $110,000 for Ethoxyquin data research; $183,000 for program expenses (compliance and education, committee meetings, office equipment purchases, industry development, and computer programs); and $6,380,000 for paid advertising. Budgeted expenses for these items in 2003-2004 were $329,989, $324,000, $360,000, $179,000, and $7,128,000, respectively.

Under this final rule, conventionally produced and handled d'Anjou pears will be assessed at a total rate of $0.50 per 44-pound standard box or container equivalent, while all other varieties of winter pears, including organically produced d'Anjou pears, will be assessed at the currently established rate of $0.49 per 44-pound standard box or container equivalent. The Committee estimates that of the 14,500,000 44-pound standard boxes or container equivalents of winter pears projected for utilization during the 2004-2005 fiscal period, 11,000,000 44-pound standard boxes or container equivalents will be conventionally produced pears of the d'Anjou variety. While the income derived from the base assessment rate will continue to fund the Committee's administrative and promotional activities, income derived from the supplemental assessment rate will be used exclusively to fund the collection of data on Ethoxyquin residue on stored d'Anjou pears. Ethoxyquin is an antioxidant that is registered for use on pears for controlling superficial scald, a physiological disease affecting the appearance of certain varieties of stored pears. The supplemental assessment rate will not be applicable to d'Anjou pears that are organically produced, because Ethoxyquin is not used in their handling and storage.

Assessment income for the 2004-2005 fiscal period is expected to total $7,215,000. Income from the $0.49 base assessment rate is estimated at $7,105,000, calculated on estimated shipments of 14,500,000 44-pound standard boxes or container equivalents. In addition, income from the $0.01 supplemental assessment rate is estimated at $110,000, calculated on estimated shipments of 11,000,000 44-pound standard boxes or container equivalents. The supplemental assessment rate of $0.01 is $0.02 lower than the rate currently in effect. The Committee recommended a decreased supplemental assessment rate due to the projected reduced cost for the final stage of the Ethoxyquin data research. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve will be adequate to cover budgeted expenses. Funds in the reserve (currently $440,550) will be kept within the maximum permitted by the order of approximately one fiscal period's expenses (§ 927.42).

The continuing base assessment rate and the decreased supplemental assessment rate of $0.01 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 supplemental assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Committee recommendations and other available information to determine whether modification of either the base assessment rate or the supplemental assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2004-2005 budget and those for subsequent fiscal periods would 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 1,753 growers of winter pears in Oregon and Washington and approximately 50 handlers subject to regulation under the marketing order. Small agricultural growers 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.

According to the Noncitrus Fruits and Nuts, 2003 Preliminary Summary issued in January 2004 by the National Agricultural Statistics Service, the total farm gate value of winter pears in the regulated production area for 2003 was $135,492,000. Therefore, the 2003 average gross revenue for a winter pear grower in the regulated production area was $77,292. Further, based on Committee records and recent f.o.b. prices for winter pears, over 76 percent of the regulated handlers ship less than $5,000,000 worth of winter pears on an annual basis. Based on this information it can be concluded that the majority of growers and handlers of winter pears in the States of Oregon and Washington may be classified as small entities.

This rule decreases the supplemental assessment rate established for the Committee and collected from handlers for the 2004-2005 and subsequent fiscal periods from $0.03 to $0.01 per 44-pound standard box or container equivalent of d'Anjou pears, excluding organically produced d'Anjou pears. The Committee unanimously recommended the supplemental assessment rate decrease and 2004-2005 expenditures of $7,302,905, and reconfirmed the continuing base assessment rate of $0.49 per 44-pound standard box or container equivalent of winter pears established for the 1998-1999 and subsequent fiscal periods.

The Committee shares management and other expenses with the Pear Bureau Northwest and the Northwest Fresh Bartlett Pear Marketing Committee (7 CFR part 931) under a management agreement. The major expenditures recommended by the Committee for the 2004-2005 fiscal period include $339,905 for shared expenses (salaries and benefits, insurance, office rent, equipment rental and maintenance, office supplies, telephone, postage, and similar expenses); $290,000 for production research, and market research and development; $110,000 for Ethoxyquin data research; $183,000 for program expenses (compliance and education, committee meetings, office equipment purchases, industry development, and computer programs); and $6,380,000 for paid advertising. Budgeted expenses for these items in 2003-2004 were $329,989, $324,000, $360,000, $179,000, and $7,128,000, respectively.

Assessment income for the 2004-2005 fiscal period is expected to total $7,215,000. Income from the $0.49 base assessment rate is estimated at $7,105,000, calculated on estimated shipments of 14,500,000 44-pound standard boxes or container equivalents. In addition, income from the $0.01 supplemental assessment rate is estimated at $110,000, calculated on estimated shipments of 11,000,000 44-pound standard boxes or container equivalents. The supplemental assessment rate of $0.01 is $0.02 lower than the rate in effect prior to this action. The Committee recommended a decreased supplemental assessment rate due to the projected reduced cost for the final stage of the Ethoxyquin data research. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve will be adequate to cover budgeted expenses. Funds in the reserve (currently $440,550) will be kept within the maximum permitted by the order of approximately one fiscal period's expenses (§ 927.42).

The Committee reviewed and unanimously recommended 2004-2005 expenditures of $7,302,905 which includes increases in shared expenses and program expenses, and decreases in production research, and market research and development, Ethoxyquin data research, and paid advertising expenses. Prior to arriving at this budget, alternative expenditure and assessment levels were discussed by the Committee. Based upon the projected reduced cost for the final stage of the Ethoxyquin data research, the Committee recommended a reduction in the supplemental assessment rate. Ethoxyquin is not used in the handling and storage of organically produced d'Anjou pears, thus they were excluded from the Committee's supplemental assessment rate recommendation.

A review of historical information and preliminary information pertaining to the upcoming fiscal period indicates that the grower price for the 2004-2005 fiscal period could range between $5.80 and $7.35 per standard box of winter pears. Therefore, the estimated assessment revenue for the 2004-2005 fiscal period, inclusive of revenue from both the base assessment rate and the supplemental assessment rate, as a percentage of total grower revenue could range between 6.8 and 8.6 percent.

This action will decrease the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to growers. However, the decreased supplemental assessment rate should reduce the burden on handlers, and may reduce the burden on growers. In addition, the Committee's meeting was widely publicized throughout the Oregon and Washington winter pear industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the June 4, 2004, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses.

This rule will impose no additional reporting or recordkeeping requirements on either small or large Oregon and Washington winter pear 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 August 16, 2004 (69 FR 50334). Copies of the proposed rule were also mailed or sent via facsimile to all winter pear handlers. Finally, the proposal was made available through the Internet by the Office of Federal Register and USDA. A 20-day comment period ending September 7, 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.ams.usda.gov/fv/moab.html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the information and recommendation submitted by the Committee 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: (1) The 2004-2005 fiscal period began on July 1, 2004, and the marketing order requires that the rates of assessment for each fiscal period apply to all assessable winter pears handled during such fiscal period; (2) this rule decreases the supplemental assessment rate for assessable d'Anjou pears beginning with the 2004-2005 fiscal period; and (3) handlers are aware of this action which was unanimously recommended by the Committee at a public meeting and is similar to other assessment rate actions issued in past years. Also, a 20-day comment period was provided for in the proposed rule and no comments were received.

This rule is issued under Marketing Agreement and Order No. 930 (7 CFR part 930), regulating the handling of tart cherries grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin, hereinafter referred to as the “order.” The marketing agreement and order are 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. 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 continues in effect procedures for handlers to receive exempt use/diversion credit in meeting their volume regulation obligations as follows: (1) It continues to provide more specific criteria to help handlers take better advantage of exempt use/diversion credit activities and to help the Board better assess the validity of handler requests for diversion credit; (2) it continues to clarify the current definitions of “new product development” and “new market development” activities eligible diversion credit, and adds “market expansion” to the definition of “new market development”; (3) it also continues to specify an industry-wide limit for market expansion activities totaling 10 million pounds per crop year. This limitation reflects the Board's concern that these activities should be developed gradually. The limitation will be allocated on a pro rata basis among the handlers who request diversion credit for market expansion activities and are approved by the Board; and (4) handlers requesting diversion credit under these provisions will have to provide evidence to the Board that they have been actively involved in the development of the new product, new market, or market expansion activity, or have financially supported the development efforts. This is to assure that the handlers initiating such efforts are the ones who earn the resulting diversion credits.

Handler diversion is authorized under § 930.59 of the order and, when volume regulation is in effect, handlers may fulfill restricted percentage requirements by diverting cherries or cherry products rather than placing tart cherries in an inventory reserve. Volume regulation is intended to help the tart cherry industry stabilize supplies and prices in years of excess production. The volume regulation provisions of the order provide for a combination of processor owned inventory reserves and grower or handler diversion of excess tart cherries. Reserve cherries may be released for sale into commercial outlets when the current crop is not expected to fill demand. Under certain circumstances, such cherries may also be used for charity, experimental purposes, nonhuman use, and other approved purposes.

Section 930.59(b) of the order provides for the designation of allowable forms of handler diversion. These include: uses exempt under § 930.62; contribution to a Board approved food bank or other approved charitable organization; acquisition of grower diversion certificates that have been issued in accordance with § 930.58; or other uses, including diversion by destruction of the cherries at the handler's facilities. Section 930.62 provides that the Board, with the approval of the Secretary, may exempt from the provisions of §§ 930.41 (Assessments), 930.44 (Quality control), 930.51 (Issuance of volume regulations), 930.53 (Modification, suspension, or termination of regulations), and 930.55 through 930.57 (Reserve regulations) cherries which are diverted in accordance with § 930.59, which are used for new product and new market development, which are used for experimental purposes, or which are used for any other purpose designated by the Board, including cherries processed into products for markets for which less then 5 percent of the preceding 5-year average production of cherries were utilized.

When applying to the Board to receive exemptions for cherries or cherry products used for exempt purposes, the handler must detail the nature of the product or market, how it differs from the current, existing products and/or markets, and the estimated short and long term sales volume for the exemption. In addition, in order to obtain diversion credit for cherries used for exempt purposes, the application must also contain an agreement that the proposed exempt use diversion is to be carried out under the supervision of the Board, and that the cost of any such supervision that is needed is paid by the applicant. The fees for such USDA or Board supervision as previously stated, will be the current hourly rate of $41.00, which is subject to change, under USDA's inspection fee schedule (7 CFR 54.42).

The information that is provided allows the Board to assess the request for exemption and render a determination concerning its approval or disapproval. Any information received by the Board, which is of a confidential, and/or proprietary nature is protected from disclosure pursuant to § 930.73 of the order.

Each handler that is granted an exemption must submit to the Board an annual progress report, due May 1 of each year. The progress report shall include the results of the exemption activity (comparison of intended activity with actual activity) for the year in its entirety, the volume of exempted fruit, an analysis of the success of the exemption program, and such other information the Board may request.

For the purposes of regulation concerning exempt uses and diversion credit, assisting handlers in obtaining exempt use/diversion credit under § 930.162, and assisting the Board in properly administering these provisions, the terms “new product development”, “new market development”, “development of export markets”, and “experimental purposes” are defined. Previously, “new product development” was defined as the production or processing of new tart cherry products or foods or other products in which tart cherries or tart cherry products are incorporated which are not presently being produced on a commercial basis. New product development could also include the production or processing of a tart cherry product using a technique not presently being utilized commercially in the tart cherry industry. For example, a handler might ask for an exemption for a product such as ground meat in combination with raw tart cherries to form a leaner meat product. When a new product is commercially viable, which is defined as the time when total industry utilization for the product exceeds 2 percent of the 5-year average production of tart cherries, the product is no longer eligible for a new product development exemption and diversion credit.

“New market development” previously meant the development of markets for cherry products which are not commercially established markets and which are not competitive with commercial outlets presently utilized by the tart cherry industry (including the development of new export markets). For example, a handler might seek to establish sales of cherry preserves to India or China, currently undeveloped markets. New markets become commercially established when the total industry utilization in the market exceeds 2 percent of the 5-year average production of tart cherries. When the new markets become commercially viable they are no longer eligible as an exempt use outlet and diversion credit.

“Development of export markets” is defined as the sale of cherries or cherry products, including the development of sales for new or different tart cherry products or the expansion of sales for existing tart cherry products, to countries other than Canada and Mexico. An example of development of sales for new or different tart cherry products could be a handler seeking to establish sales of dried cherries in Germany, which is primarily a hot pack market (canned tart cherries). No quantity limitations are specified for the development of export markets. The Board did not want to put any constraints on handlers seeking to establish export markets. Moreover, the optimum supply formula, which is used by the Board to calculate the desirable volume of tart cherries that should be available for sale, does not apply to product that can be diverted or used in exempt outlets. Thus, the Board felt that handlers in meeting their restricted percentage obligations during volume regulation seasons, should be free to move exempted/diverted cherries to export markets without constraints.

“Experimental purposes” is defined as the use of cherries or cherry products in preliminary and/or developmental activities intended to result in new products, new applications and/or new markets for tart cherry products, such as a handler working with cereal companies to develop a cereal using dried cherries. Any exemption for experimental work must be limited in scope, duration, and volume based on information supplied by the applicant at the time a request for exemption is made. In no case, shall an individual exemption for experimental purposes last longer than 5 years or exceed 100,000 pounds raw product equivalent of tart cherries.

To improve the administration of the exempt use/diversion credit procedures, the Board recommended that the previous definitions of what constitutes new product development and new market development be clarified, and that a definition for market expansion should be included in the definition of “new market development” in § 930.162(b). It also recommended that an industry-wide limit for market expansion activities be established totaling 10 million pounds per crop year to be allocated pro rata among the approved handler applicants.

Under the recommended procedures, handlers applying for exempt use/diversion credit would have to provide the Board evidence that they have been actively involved in the development of the new product, new market, or market expansion activities, or have financially supported the development efforts. A definition of the term “involvement” has been added to the provisions specifying these conditions in § 930.162(c)(5).

The Board believes that these changes will provide handlers better guidance in making marketing decisions and in earning exempt use/diversion credits, and help the Board in assessing handler applications and in determining when handlers have satisfactorily accomplished diversion and rightfully earned credits against their restricted percentage obligations during a crop year with volume regulation percentages. No changes were recommended in the definitions of the terms “development of export markets” or “experimental purposes”.

These issues were discussed at the Board's January 2003 meeting, they were then reconsidered at an April 2003 meeting, and a final recommendation was reached at the Board's June 26, 2003, meeting.

There have been differences of opinion between industry members and the Board concerning the existing provisions. The Board developed the recommended changes to provide handlers with clearer and more detailed guidelines to help them better understand the procedures when applying for such credits, and to provide the Board members on the New Product/New Market (NPNM) subcommittee with more specific guidance on granting and denying applications for such diversion credits.

The Board believes that it is important to expand the demand for tart cherries to better keep supplies in line with market needs. To accomplish this, the Board thinks that the development of new markets and products and that the expansion of current markets for tart cherries and tart cherry products should be encouraged to the fullest extent possible. The changes to the exempt use/diversion credit procedures continued in effect by this rule are expected to help the tart cherry industry further the Board's objectives and help producers and handlers accordingly.

This rule continues to specify revised definitions for “new product development,” and “new market development,” continues to add the concept of “market expansion” to the definition of “new market development,” and continues to add a new condition of participation in obtaining exempt use/diversion credit for new product development, new market development, and market expansion referred to as “involvement”.

As previously stated, “new product development” was previously defined as the production or processing of new tart cherry products or foods or other products in which tart cherries or tart cherry products are incorporated which are not presently being produced on a commercial basis. New product development can also include the production or processing of a tart cherry product using a technique not presently being utilized commercially in the tart cherry industry. Once total industry utilization for the product exceeds 2 percent of the 5-year average production of tart cherries, the product will no longer be eligible for a new product development exemption.

This action continues to add to the definition of “new product development” the following clarification: (1) New product development can also include an end product of the processing of raw tart cherries created by handlers at pack time either for resale or for re-manufacturing which has not previously been manufactured by handlers in the industry (for example, dried tart cherries (dehydrated) were marketed as a new product after first undergoing processing as a five plus one product (25 pounds of cherries topped with 5 pounds of sugar)); or (2) a processed, value-added, item that includes tart cherry products as an ingredient which has never been marketed to consumers either by a handler within the industry or by a food manufacturer. For example, during the 2002-03 crop year, a new cookie with a tart cherry filling was sold in retail markets for the first time.

As previously mentioned, language within § 930.162(b)(1) provides a volume limit of 2 percent of the five year average of production of tart cherries. Once this total industry utilization for a new product exceeds this amount, the product is no longer considered under development and is not eligible for a new product development exemption and diversion credit. This limitation remains the same. However, an additional limitation recommended by the Board for new product and new market development continues to limit the duration of any diversion credit to three years from the first date of shipment of the new product. The Board believes that limiting the eligibility of the exemption for 3 years from the first date of shipment of the new product provides a handler time to adequately develop the market for the product. After 3 years, regardless whether markets have been developed for the new product or not, the product will no longer qualify for an exemption and diversion credit.

Continuing to add such references and volume limitations to the current definition of “new product development” clarifies what new product activities can qualify for exempt use/diversion credit and how long such credit can be obtained by the handler once the Board approves the handler's application and sales and shipments of the product are made.

Under the order, “new market development” was previously defined as the development of markets for tart cherry products which are not commercially established markets and which are not competitive with commercial outlets presently utilized by the tart cherry industry (including the development of new export markets). For instance, a handler who developed a new market for tart cherries that is also an export market would get credit for either the new market development or development of the export market but could not get credit for both. A new market becomes commercially established, when total industry utilization in the market exceeds 2 percent of the five year average production of tart cherries, and is not eligible for exempt use/diversion credit.

This action also continues to clarify the definition of “new market development” by adding to that definition a proviso that “new market development” should be a geographic area into which tart cherries or products derived from them have not previously been sold. Included within the revised “new market development” definition are “market expansion activities”, which are defined as activities that incrementally expand the sale of either tart cherries or the products in which tart cherries are an ingredient. Such activities include, but are not limited to: (1) Expansions of the geographic areas in which products are marketed; (2) product line extensions; (3) significant improvements to or revisions of existing products; (4) packaging innovations; (5) segmentation of markets along geographic, demographic, or other definable characteristics; and (6) product repositionings.

Examples of these activities follow: (1) Expansions of the geographic areas in which products are marketed would include shipping tart cherries to the Ukraine and then on to Uzbekistan; (2) product line extensions would include taking tart cherry pie and making it an apple-cherry-berry pie; (3) significant improvements to or revisions of existing products would include using non-sugar sweeteners or reduced sugar content in processed tart cherry products; (4) packaging innovations would include using square containers instead of round 2.5 pound poly bags; (5) an example of segmentation of markets along geographic, demographic, or other definable characteristics would include tart cherry juice concentrate marketed specifically to consumers who suffer with arthritis or gout; and (6) product repositionings would mean that retailers would move pie-fill out of the dessert category to be used as a topping. These examples are intended to provide guidance of potential marketing opportunities and not to limit the marketing creativity of the handlers in the tart cherry industry.

To earn new market development or new product development exempt use/diversion credits for cherries or cherry products a handler must demonstrate involvement in the activity for which credits are sought. To demonstrate involvement for the purpose of earning market development or new product development diversion credits, the requesting handler must either (1) be or have been involved in development of the product or the market for which the credits are sought or (2) have had financial involvement in these processes. This involvement must be demonstrated and established to the satisfaction of the NPNM subcommittee by the handler requesting the diversion credits.

This action also continues a conforming change to § 930.162(a) to be consistent with a formal rulemaking order amendment completed in 2002. Language within § 930.162(a) previously stated, in summary, that tart cherry juice and juice concentrate products are not eligible for exempt use/diversion credit in domestic markets but such products for export can receive exempt use/diversion credit. This language was no longer correct because juice and juice concentrate shipped into domestic markets can now receive exempt use/diversion credit as provided by the 2002 order amendment.

The Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities and has prepared this final regulatory flexibility analysis. The Regulatory Flexibility Act (RFA) allows AMS to certify that regulations do not have a significant economic impact on a substantial number of small entities. However, as a matter of general policy, AMS' Fruit and Vegetable Programs (Programs) no longer opts for such certification, but rather performs regulatory flexibility analyses for any rulemaking that would generate the interest of a significant number of small entities. Performing such analyses shifts the Programs' efforts from determining whether regulatory flexibility analyses are required to the consideration of regulatory options and economic or regulatory impacts.

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 40 handlers of tart cherries who are subject to regulation under the order and approximately 900 producers of tart cherries in the regulated area. Small agricultural service firms have been defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts less than $5,000,000, and small agricultural producers are those whose annual receipts are less than $750,000. A majority of the tart cherry handlers and producers may be classified as small entities.

Pursuant to a unanimous recommendation of the Board, this rule continues to specify revised definitions for “new product development” and “new market development,” the addition of the concept of “market expansion” to the definition of “new market development,” the addition of a condition of handler participation in obtaining exempt use/diversion credit for new product development, new market development, and market expansion referred to as “involvement”, and to specify an industry-wide limit on market expansion activities for exempt use/diversion credit.

The rule continues to provide more specific criteria to help handlers take better advantage of exempt use/diversion credit activities and to help the Board better assess the validity of handler requests for diversion credit. It continues to clarify the definitions of “new product development” and “new market development” activities eligible for exempt use/diversion credit, and adds “market expansion” to the definition of “new market development”. It also continues an industry-wide limit for market expansion activities totaling 10 million pounds per crop year. This limitation reflects the Board's concern that these activities should be developed gradually. The limitation would be allocated on a pro rata basis among the handlers who requested diversion credit for market expansion activities and were approved by the Board. Handlers requesting exempt use/diversion credit under these provisions would have to provide evidence to the Board that they have been actively involved in the development of the new product, new market, or market expansion activity, or have financially supported the development efforts. This is to assure that the handlers initiating such efforts are the ones earning the diversion credits.

With regard to alternatives, the Board discussed leaving the exempt use/diversion credit procedures unchanged. However, the Board determined that this course of action would not be satisfactory and recommended adding specific guidelines for consideration when reviewing handler applications for exempt use/diversion credit activities.

The principal demand for tart cherries is in the form of processed products. Tart cherries are dried, frozen, canned, juiced, and pureed. During the period 1998/99 through 2002/03, approximately 91 percent of the U.S. tart cherry crop, or 240.6 million pounds, was processed annually. Of the 240.6 million pounds of tart cherries processed, 55 percent was frozen, 30 percent was canned, and 15 percent was utilized for juice and other products.

Based on National Agricultural Statistics Service data, acreage in the United States devoted to tart cherry production has been trending downward. Bearing acreage has declined from a high of 50,050 acres in 1987/88 to 36,900 acres in 2002/03. This represents a 26 percent decrease in total bearing acres. Michigan leads the nation in tart cherry acreage with 70 percent of the total and produces about 75 percent of the U.S. tart cherry crop each year.

The 2003/04 crop is moderate in size at 222.1 million pounds. The largest crop occurred in 1995 with production in the regulated districts reaching a record 395.6 million pounds. The price per pound received by tart cherry growers ranged from a low of 7.3 cents in 1987 to a high of 46.4 cents in 1991.

This action will not impose additional costs on handlers, regardless of size, because the changes are intended to clarify and improve the Board's current procedures on approving exempt use/diversion credit requests. The recommended changes are intended to assure that all exempt use/diversion credit requests are handled in a more consistent and equitable manner.

The Board's meetings were widely publicized throughout the tart cherry industry and all interested persons were invited to attend the meeting and participate in Board deliberations on all issues. Like all Board meetings, the January 23, April 24, and June 26, 2003, meetings were public meetings and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.

This action will impose no additional reporting or recordkeeping requirements on either small or large tart cherry 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.

An interim final rule concerning this action was published in the Federal Register on June 22, 2004. The Board's staff mailed copies of the rule to all Board members and tart cherry handlers. In addition, the rule was made available through the Internet by the Office of the Federal Register and USDA. That rule provided a 60-day comment period that ended August 23, 2004. No comments were received.

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

After consideration of all relevant material presented, including the Board's recommendation, and other information, it is found that finalizing the interim final rule, without change, as published in the Federal Register (69 FR 34549) will tend to effectuate the declared policy of the Act.

This rule is issued under Marketing Order No. 981, as amended (7 CFR part 981), regulating the handling of almonds 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 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. 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 continues in effect revisions to the quality control provisions under the order. Under the order, handlers receiving almonds from growers must have them inspected to determine the percentage of inedible almonds in each lot. Based on these inspections, handlers incur an inedible disposition obligation. This obligation is calculated by the Board for each variety of almonds, and handlers must satisfy the obligation by disposing of inedible almonds or almond material in outlets such as oil and animal feed. This rule continues to change the varietal classifications of almonds for which inedible obligations are calculated. This will allow the Board to determine handlers' inedible disposition obligations by varietal classifications consistent with handler reporting requirements and current industry harvesting and marketing practices. This action was unanimously recommended by the Board at a meeting on May 20, 2004.

Section 981.42 of the almond marketing order provides authority for quality control regulations, including a requirement that almonds must be inspected prior to processing (incoming inspection) to determine, by variety, the percentage of inedible kernels in each lot received. The percentage of inedible kernels are reported to individual handlers and the Board, by variety, as determined by the incoming inspection. The Board then calculates each handler's inedible disposition obligation by variety, and handlers are required to dispose of a quantity of almonds equal to their inedible weight obligation.

Section 981.442(a)(2) of the order's rules and regulations defines “variety” for the purpose of calculating handlers' inedible disposition obligations. Prior to implementation of the interim final rule (69 FR 40534; July 6, 2004), “variety” was defined as that variety of almonds which constituted at least 90 percent of the almonds in a lot. Further, if no variety constituted at least 90 percent of the almonds in a lot, the lot was classified as “mixed.”

One such mixture is the combination of the Butte and Padre varieties of almonds, which have very similar characteristics. It has become common practice within the industry to harvest the two varieties together and sell them under the marketing classification known as “California”. In addition to harvesting and marketing these varieties together, handlers also present them for inspection and report them as “Butte-Padre”, rather than “mixed”, regardless of the percentages of each variety that comprise the lot. Previously, mixtures of the Butte and Padre varieties were classified by the Board as “mixed” for purposes of calculating inedible disposition obligations if neither variety constituted at least 90 percent of the lot. To be consistent with the harvesting, reporting, and marketing of the Butte and Padre varieties, mixtures of these varieties are now classified as “Butte-Padre” for the purpose of determining handlers' inedible disposition obligations.

Prior to implementation of the interim final rule, § 981.442(a)(2) also specified that in cases where it was not known which variety constituted at least 90 percent of a mixed lot, the lot should be classified as “unknown.” In the past, very small “door lot” deliveries were accumulated by gathering almonds from isolated trees of unknown varieties. This practice is no longer common in the industry, and virtually all almond deliveries consist of known varieties of almonds. Thus, the use of “unknown” is no longer necessary or appropriate.

Harvesting, marketing, and reporting mixtures of Butte and Padre varieties of almonds together as one varietal type and reporting lots of unknown varieties of almonds as “mixed” are now common practices in the industry. In order for the Board to calculate handlers' inedible disposition obligations by variety and to be consistent with current industry practices, it was necessary to implement changes to the administrative rules and regulations. Thus, the Board recommended that the rules and regulations be revised.

Section 981.442(a)(2) of the quality control regulations regarding the classification of varietal types for the purpose of determining handlers' inedible disposition obligations was therefore revised to add “Butte-Padre” as the varietal classification for mixed lots of the Butte and Padre varieties of almonds, regardless of the percentage of each variety in the lot. Other mixed variety lots that do not contain at least 90 percent of one variety will continue to be classified as “mixed.” Lots of almonds for which the variety or varieties are not specified will also be classified as “mixed.” Accordingly, the “unknown” varietal classification was eliminated.

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 6,000 producers of almonds in the production area and approximately 119 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $5,000,000.

Data for the most recently completed crop year indicate that about 38 percent of the handlers shipped over $5,000,000 worth of almonds and about 62 percent of the handlers shipped under $5,000,000 worth of almonds. In addition, based on production and grower price data reported by the California Agricultural Statistics Service, and the total number of almond growers, the average annual grower revenue is estimated to be approximately $199,000. Based on the foregoing, the majority of handlers and producers of almonds may be classified as small entities.

This rule continues to revise the quality control provisions under the order. Under the order, handlers receiving almonds from growers must have them inspected to determine the percentage of inedible almonds in each lot. Based on these inspections, handlers incur an inedible disposition obligation. This obligation is calculated by the Board for each variety of almonds, and handlers must satisfy the obligation by disposing of inedible almonds or almond material in outlets such as oil and animal feed. This rule continues to change the varietal types of almonds for which inedible obligations are calculated.

Specifically, this rule continues to revise § 981.442(a)(2) of the regulations by adding “Butte-Padre” as the varietal classification for mixed lots of Butte and Padre almonds, regardless of the percentage of each variety in the lot. This rule also continues to designate “mixed” as the varietal classification for lots of unidentified varieties of almonds. Finally, the “unknown” classification continues to be removed. These revisions will permit the Board to calculate handlers' inedible disposition obligations consistent with current industry harvesting and marketing practices, and handler reporting requirements. This action was reviewed and unanimously recommended by the Food Quality and Safety Committee (FQSC) at its April 27, 2004, meeting, and by the Board at its meeting held on May 20, 2004.

These revisions are not expected to have a financial impact on handlers, including small businesses. The regulations are applied uniformly on all handlers, regardless of size. This action imposes no additional reporting or recordkeeping requirements on either small or large California almond handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. In addition, as noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

The meetings of the FQSC and the Board were both widely publicized throughout the California almond industry and all interested persons were invited to attend the meetings and participate in deliberations on all issues. Like all committee and Board meetings, those held on April 27 and May 20, 2004, were public meetings and all entities, both large and small, were able to express views on this issue.

An interim final rule concerning this action was published in the Federal Register on July 6, 2004. Copies of the rule were mailed by the Board's staff to all Board members and almond handlers. In addition the rule was made available through the Internet by USDA and the Office of the Federal Register. That rule provided for a 60-day comment period which ended September 7, 2004. One comment was received during that period, but that comment concerned forest fires and was not relevant to this rulemaking action.

Accordingly, no changes were made to the rule, based on the comment received.

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

After consideration of all relevant material presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that finalizing the interim final rule, without change, as published in the Federal Register , will tend to effectuate the declared policy of the Act.

This rule is issued under Marketing Agreement and Order No. 989 (7 CFR part 989), both as amended, regulating the handling of raisins produced from grapes grown in California, hereinafter referred to as the “order.” The marketing agreement and order are 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. 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. 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 continues in effect revisions to the reporting requirements regarding OS raisins under the order. The order provides authority for volume and quality regulations and reporting requirements by varietal type of raisin. The OS varietal type includes raisins produced from Flames and other red grapes. This rule continues to require handlers to report to the RAC information on acquisitions, shipments, inventories, and inter-handler transfers of the different types of OS raisins, including Flames. The RAC will evaluate this data to determine whether segregating Flames into a separate varietal type is warranted. This action was unanimously recommended by the RAC at a meeting on April 13, 2004.

Section 989.73 of the order provides authority for the RAC to collect reports from handlers. Paragraph (d) of that section provides that, upon request of the RAC, with approval by the Secretary, handlers shall furnish to the RAC other information as may be necessary to enable it to exercise its powers and perform its duties. The RAC meets routinely to make decisions on various programs authorized under the order such as volume regulation and quality control. The RAC utilizes information collected under the order in its decisionmaking. Section 989.173 of the order's administrative rules and regulations specifies certain reports that handlers are currently required to submit to the RAC.

Many of the reports submitted by handlers under the order require information to be segregated by varietal type of raisin. Section 989.10 defines varietal type to mean raisins generally recognized as possessing characteristics differing from other raisins in a degree sufficient enough to warrant separate identification and classification. Section 989.110 of the order's administrative rules and regulations contains a list and description of the nine varietal types currently segregated under the order.

One of these varietal types, OS raisins, includes raisins produced from Flames and other similar seedless red grapes. There has been some discussion in recent years regarding whether Flames should be segregated into a separate varietal type. Between the 1995-96 and 2000-01 crop years, volume regulation had not been implemented for OS raisins, and handlers were able to market all of the OS raisins they acquired. During this period, some handlers had expanded their market for Flames. When volume regulation was in effect for OS raisins for the 2001-02 crop year, some Flame handlers had difficulty meeting their market needs.

Thus, the RAC recommended revising the order's regulations to require handlers to report data on acquisitions, shipments (dispositions), inventories, and inter-handler transfers of Flames and other OS raisins to the RAC beginning with the 2004-05 crop year, which started on August 1, 2004. The RAC will review this information and determine whether segregating Flames into a separate varietal type is warranted. A separate varietal type would allow the RAC to consider the application of the order's volume regulation provisions for Flames separate from the other types of OS raisins. Accordingly, paragraphs (a) (inventory), (b) (acquisitions), (c) dispositions, and (d) inter-handler transfers in § 989.173 continue to be revised. Paragraph (g) in § 989.173 regarding similar reports for organic raisins also continues to be revised.

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

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

There are approximately 20 handlers of California raisins who are subject to regulation under the order and approximately 4,500 raisin producers in the regulated area. Small agricultural firms are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000. Thirteen of the 20 handlers subject to regulation have annual sales estimated to be at least $5,000,000, and the remaining 7 handlers have sales less than $5,000,000. No more than 7 handlers, and a majority of producers, of California raisins may be classified as small entities.

This rule continues to revise § 989.173 to require handlers to report acquisitions, shipments, inventories, and inter-handler transfers of the different types of raisins within the OS varietal type. This action is needed so that the RAC can collect accurate data on Flames, a particular type of OS raisin, and evaluate this information to determine whether Flames should be segregated into a separate varietal type under the order. This would permit the RAC to consider application of the order's volume regulation provisions to Flames separate from the other types of OS raisins. Authority for this action is provided in § 989.73 of the order.

Regarding the impact of this action on affected entities, this action imposes no measurable burden on OS raisin handlers. OS handlers will be required to separate out different types of OS raisins on reports that they are already submitting to the RAC. Most handlers have been doing this voluntarily in recent years. This action has no impact on raisin producers.

The RAC considered alternatives to the recommended action. The RAC formed a work group to review the concerns raised by Flame handlers. One alternative considered was to proceed with informal rulemaking to establish a separate varietal type for Flames. Another alternative considered was to try to have all handlers voluntarily separate Flames from the other OS raisins on certain reports. After much discussion, the work group determined that the best course of action would be to collect data on Flames, evaluate the data, and then determine whether segregating Flames into a separate varietal type was warranted.

This rule continues to slightly modify the reporting requirements on small and large raisin handlers. All raisin handlers are required to submit various reports to the RAC where the data collected are segregated by varietal type of raisin. These reports include:

This rule continues to require that an extra line item be added to these 10 forms so that handlers can separate out Flames from the other types of OS raisins. Handlers will also continue to be required to indicate the type of OS raisin on the Inter-Handler Transfers of Free Tonnage Raisins (RAC-6), the Monthly Free Tonnage Exports by Country of Destination (RAC-21), and the Monthly Free Organic Tonnage Exports by Country of Destination (RAC-21 CO); no change to these forms is needed. The current total annual burden for all 13 of these forms is 873.48 hours. This rule will not add to this burden on handlers.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection requirements referenced above have been approved by the Office of Management and Budget (OMB) under OMB Control No. 0581-0178, Vegetable and Specialty Crops. 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. Finally, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.

Further, the RAC's work group meetings on February 12 and March 4, 2004, the Administrative Issues Subcommittee and RAC meetings on April 13, 2004, and the RAC's Executive Committee meeting on May 4, 2004, where this action was deliberated were all public meetings widely publicized throughout the raisin industry. All interested persons were invited to attend the meetings and participate in the industry's deliberations.

An interim final rule concerning this action was published in the Federal Register on July 9, 2004. Copies of the rule were mailed by RAC staff to all RAC members and raisin handlers. In addition, the rule was made available through the Internet by USDA and the Office of the Federal Register. That rule provided for a 60-day comment period which ended September 7, 2004. No comments were received.

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

After consideration of all relevant material presented, including the information and recommendation submitted by the RAC and other available information, it is hereby found that finalizing the interim rule, without change, as published in the Federal Register (69 FR 41385, July 9, 2004) will tend to effectuate the declared policy of the Act.

This rule is issued under Marketing Agreement and Order No. 993, both as amended (7 CFR part 993), regulating the handling of dried prunes grown in California, hereinafter referred to as the “order.” The marketing agreement and order are 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, California dried 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 dried prunes beginning on August 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 2004-05 and subsequent crop years from $2.00 to $4.00 per ton of salable dried prunes.

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

For the 2003-04 and subsequent crop years, the committee recommended, and USDA approved, an assessment rate that would continue in effect from crop year to crop year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committee or other information available to USDA.

The committee met on June 23, 2004, and unanimously recommended 2004-05 expenditures of $275,800 and an increased assessment rate of $4.00 per ton of salable dried prunes. In comparison, last year's budgeted expenditures were $322,022 and the assessment rate was $2.00 per ton of salable dried prunes. The recommended assessment rate of $4.00 per ton is $2.00 higher than the rate currently in effect. The committee recommended a higher assessment rate because a very small crop is expected this year. The salable prune production this year is expected to be 68,950 tons, the smallest crop since the early 1900's. The assessment rate of $4.00 per ton is expected to provide sufficient funds for committee operations this year. The following table compares major budget expenditures recommended by the committee on June 23, 2004, and major budget expenditures in the 2003-04 budget.

The assessment rate recommended by the committee was derived by dividing anticipated expenses by the estimated salable tons of California dried prunes. Production of dried prunes for the year is estimated at 68,950 salable tons, which should provide $275,800 in assessment income. Income derived from handler assessments will be adequate to cover budgeted expenses. Interest income also will be available if assessment income is reduced for some reason. The committee is authorized to use excess assessment funds from the 2003-04 crop year (currently estimated at $105,000) for up to 5 months beyond the end of the crop year to meet 2004-05 crop year expenses. At the end of the 5 months, the committee either refunds or credits the excess funds to handlers (§ 993.81(c)).

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

Although this assessment rate will be in effect for an indefinite period, the committee will continue to meet prior to or during each crop year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of committee meetings are available from the committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The committee's 2004-05 budget and those for subsequent crop years 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 1,100 producers of dried prunes in the production area and approximately 22 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $5,000,000.

Eight of the 22 handlers (36.4 percent) shipped over $5,000,000 of dried prunes and could be considered large handlers by the Small Business Administration. Fourteen of the 22 handlers (63.6 percent) shipped under $5,000,000 of dried prunes and could be considered small handlers. An estimated 32 producers, or less than 3 percent of the 1,100 total producers, would be considered large growers with annual income over $750,000. The majority of handlers and producers of California dried prunes may be classified as small entities.

This rule increases the assessment rate established for the committee and collected from handlers for the 2004-05 and subsequent crop years from $2.00 to $4.00 per ton of salable dried prunes. The committee unanimously recommended 2004-05 expenditures of $275,800 and an assessment rate of $4.00 per ton of salable dried prunes. The assessment rate of $4.00 per ton is $2.00 higher than the current rate. The quantity of assessable dried prunes for the 2004-05 crop year is now estimated at 68,950 salable tons. Thus, the $4.00 rate should provide $275,800 in assessment income and be adequate to meet this year's expenses. Interest income also will be available to cover budgeted expenses if the 2004-05 expected assessment income falls short.

The following table compares major budget expenditures recommended by the committee on June 23, 2004, and major budget expenditures in the 2003-04 budget.

Prior to arriving at its budget of $275,800, the committee considered information from various sources, such as the committee's Executive Subcommittee. An alternative to this action would be to continue with the $2.00 per ton assessment rate. However, an assessment rate of $2.00 per ton in combination with the estimated crop of 68,950 salable tons would not generate sufficient monies needed to fund all the budget items for 2004-05. The assessment rate of $4.00 per ton of salable dried prunes was determined by dividing the total recommended budget by the estimated salable dried prunes. The committee is authorized to use excess assessment funds from the 2003-04 crop year (currently estimated at $105,000) for up to 5 months beyond the end of the crop year to fund 2003-04 crop year expenses. At the end of the 5 months, the committee either refunds or credits the excess funds to handlers (§ 993.81(c)). Anticipated assessment income and interest income during 2004-05 would be adequate to cover authorized expenses.

The grower price for the 2004-05 season is expected to average above the estimated 2003-04 average grower price of about $750 per salable ton of dried prunes. Based on an estimated 68,950 salable tons of dried prunes, assessment revenue during the 2004-05 crop year is expected to be less than 1 percent of the total expected grower revenue.

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 marketing order. In addition, the committee's meeting was widely publicized throughout the California dried prune industry and all interested persons were invited to attend the meeting and encouraged to participate in committee deliberations on all issues. Like all committee meetings, the June 23, 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 California dried 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 August 16, 2004 (69 FR 50337). Copies of the proposed rule were also mailed or sent via facsimile to all prune handlers. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 20-day comment period ending September 7, 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.ams.usda.gov/fv/moab/html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

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

Pursuant to 5 U.S.C. 553, it also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because the 2004-05 crop year began August 1, 2004, and the marketing order requires that the rate of assessment for each crop year apply to all assessable prunes handled during such period. Further, handlers are aware of this rule which was unanimously recommended at a public meeting. Also, a 20-day comment period was provided for in the proposed rule, and no comments were received.

Introduction Response to Comments Received A. Ineligibility of Aliens Outside the United States B. Ineligibility of Aliens Convicted After a Trial C. Stay of Deportation or Removal D. The 180-Day Deadline To File a Special Motion To Seek Section 212(c) Relief E. Date of the Plea Agreement F. Retroactivity of IIRIRA's Definition of “Aggravated felony” G. Applicability of AEDPA H. The Accrual of Seven Consecutive Years of Lawful Unrelinquished Domicile I. Eligibility for Aliens Who Are Deportable on Grounds for Which There Do Not Exist Corresponding Grounds of Exclusion or Inadmissibility J. Notification to Affected Individuals K. Proof of Permanent Residence L. Applicability of the Soriano Rule M. Filing New Motions To Reopen After Previously Filing Motions To Reopen Introduction

On August 13, 2002, the Department of Justice (Department) published a proposed rule to permit certain lawful permanent residents (LPRs) to apply for relief under former section 212(c) of the Immigration and Nationality Act, 8 U.S.C. 1182(c) (1994 Supp. II 1996), from deportation or removal based on certain criminal convictions before April 1, 1997 (“section 212(c) relief”). 67 FR 52627. The proposed rule described procedures implementing the Supreme Court's decision in INS v. St. Cyr, 533 U.S. 289 (2001).

This final rule adopts the proposed rule without substantial change. Certain LPRs who pleaded guilty or nolo contendere to crimes before April 1, 1997, may seek section 212(c) relief from being deported or removed from the United States on account of those pleas. Under this rule, eligible LPRs currently in immigration proceedings (and former LPRs under a final order of deportation or removal) who have not departed from the United States may file a request to apply for relief under former section 212(c) of the Act, as in effect on the date of their plea, regardless of the date the plea agreement was entered by the court. This rule is applicable only to certain eligible aliens who were convicted pursuant to plea agreements made prior to April 1, 1997.

The Department reiterates and adopts the Supplementary Information in the proposed rule, and the subsequent correction to the proposed rule published on August 22, 2002, as explaining the final rule. 67 FR 52627; 67 FR 54360. The following sections respond to the public comments, and provide additional discussion explaining the final rule and some clarifying amendments.

In addition, this final rule reflects several technical and structural changes as a result of the establishment of the Department of Homeland Security (DHS), the transfer of the functions of the Immigration and Naturalization Service (INS) to DHS, and the abolition of the INS. On March 1, 2003, the functions of the former INS were transferred from the Department of Justice to DHS pursuant to the Homeland Security Act of 2002 (HSA), Pub. L. 107-296, 116 Stat, 2135, 2178 (Nov. 25, 2002). The HSA also provided that the functions of the immigration judges and the Board of Immigration Appeals within the Executive Office for Immigration Review (EOIR) remain in the Department of Justice under the authority of the Attorney General. The technical changes in this final rule comport with the structural reorganization of the regulations accomplished by the Department of Justice in previous rulemakings establishing a new 8 CFR chapter V containing the regulations relating to immigration adjudications before the immigration judges and the Board of Immigration Appeals, and the administrative functions of EOIR. 1 The final rule also eliminates from 8 CFR 1212.3 the current provisions in paragraphs (a)(1) and (c), which relate to the authority of a district director to grant section 212(c) relief. To the extent that those provisions are still relevant at this time, they are already codified in DHS regulations at 8 CFR 212.3(a)(1) and (c). Consistent with the process for reducing the overlapping regulations between the Department and DHS, the Department is eliminating unnecessary regulations in § 1212.3 that relate solely to the authority of DHS.

The final rule also makes some stylistic changes to simplify the language of the existing regulations—for example, revising the language of 8 CFR 1212.3(e)(2) from “grant or deny an application for advance permission to return to an unrelinquished domicile under section 212(c)” to read “grant or deny an application for section 212(c) relief”. Lastly, as explained in the proposed rule, if the Board has jurisdiction and grants a special motion to seek section 212(c) relief, it will remand the case to an immigration judge solely for a determination of the section 212(c) application. The Department recognizes that an alien who files a special motion to seek section 212(c) relief under this rule may have a petition for review pending before a Federal court of appeals. If the Board grants the alien's special motion to seek section 212(c) relief while the case is pending before a Federal court of appeals, the Department anticipates that the government will request that the court hold the case in abeyance pending the resolution of the alien's section 212(c) application before EOIR.

The Department received 60 comments on the proposed rule and will respond to them by subject matter. The Department appreciates the analytical detail of these comments, which were received from aliens and their family members, community organizations and special interest groups, immigration attorneys, professors, and other members of the public. The issues raised in the submissions were largely devoted to eligibility concerns, with a majority of the commenters recommending that eligibility for section 212(c) relief be broadened to encompass several categories of aliens who were not eligible for relief under the proposed rule. Other recurring issues raised by the commenters dealt with procedural concerns, such as the need for an automatic stay provision, in addition to concerns about the 180-day deadline applicable to aliens subject to a final order of deportation or removal.

Approximately 80 percent of the commenters stated that aliens who have already been deported and are currently outside the United States should be eligible to apply for section 212(c) relief. Of these comments, virtually all argued that many aliens were deported without being given a hearing with respect to their eligibility for a waiver under section 212(c). These comments state that because these individuals did not have a “sufficient opportunity” to challenge their deportation order, and since the Supreme Court mandated such a hearing for section 212(c) eligibility in the St. Cyr decision, their deportation cannot be conceived as lawful. Accordingly, these commenters recommended that the Department rectify this situation by allowing such aliens who are abroad as a result of deportation to apply for section 212(c) relief, in order to avoid what they see as a continuing impermissible retroactive effect. Other commenters asserted that because such aliens were improperly removed, they should be paroled or admitted into the United States in order to reinitiate their application process for section 212(c) relief. One commenter also argued that the Equal Protection Clause requires that both aliens who are currently in the United States and those abroad be allowed to apply for section 212(c) relief.

Under the proposed rule, aliens would have been ineligible for section 212(c) relief if they: (1) Departed the United States and are currently outside the United States; (2) returned illegally to the United States after being issued a final order of deportation or removal; or (3) are present in the United States without having been admitted or paroled. As previously stated in the proposed rule, the Department finds that as a general rule, aliens who have been deported or departed, and for whom the period of time for filing a petition for review of their removal orders closed may not challenge their prior immigration proceedings. See 8 U.S.C. 1231(a)(5); 8 CFR 1003.2(d); 67 FR at 52629.

After considering the public comments, the Department adheres to the position stated in the proposed rule. Under 8 CFR 1003.2(d), a motion to reopen or to reconsider “shall not be made by or on behalf of a person who is the subject of deportation or removal proceedings subsequent to his or her departure from the United States.” The existing regulations thus treat an executed deportation or removal order as administratively complete, thereby eliminating any possibility of challenging a proceeding that resulted in the departure of an alien.

Similarly, the Department believes that this distinction is reasonable and fair because aliens who have been deported had a sufficient opportunity to challenge the denial of their applications for section 212(c) relief in administrative and judicial proceedings. See 67 FR at 52629. Generally, aliens who were deported prior to the Supreme Court's decision in St. Cyr had an opportunity to challenge the denial of their section 212(c) application before the Board or a Federal court. These aliens also had the opportunity to apply for stays of deportation in anticipation of the Supreme Court's ruling in St. Cyr . Therefore, aliens who were deported had the opportunity to continue to exhaust administrative and judicial remedies that could have enabled them to remain in the United States. Accordingly, the Department finds the distinction precluding section 212(c) eligibility for aliens abroad as a result of a deportation or removal order to be fair and reasonable.

The Department also believes that the decision to distinguish between those aliens who are in the United States and those aliens who have been deported is reasonable and consistent with the plenary authority of the political branches of the government in the immigration area. See Fiallo v. Bell , 430 U.S. 787, 792 (1977); Mathews v. Diaz , 426 U.S. 67, 80-82 (1976). As previously noted in the proposed rule, this distinction is reasonable because the aliens who never departed from the United States are not “similarly situated” to those who have had their deportation or removal orders executed, since the administrative deportation process with the latter group has been completed (and aliens in this category are further subject to at least a five-year bar against reentry).

The Department believes that declining to allow aliens who have been deported from the United States to obtain relief under the regulation is consistent with Congress's intent as demonstrated by the language in former section 212(c). See 67 FR at 52629. Former section 212(c) of the Act explicitly made aliens under a deportation order ineligible for relief: “[a]liens * * * not under an order of deportation * * * may be admitted in the discretion of the Attorney General * * *” 8 U.S.C. 1182(c) (1994) (emphasis added). Thus, Congress stated unequivocally whom it sought to benefit in legislating the section 212(c) waiver. Accordingly, the decision to preclude aliens under a deportation or removal order from obtaining section 212(c) relief is grounded in Congress's intent to limit its availability to those not under deportation orders.

Moreover, the United States Court of Appeals for the Ninth Circuit has upheld this distinction against constitutional challenge in the context of addressing the identical distinction under 8 CFR 1003.44(i). Alvarenga-Villalobos v. Ashcroft, 271 F.3d 1169 (9th Cir. 2001). In upholding the distinction from an equal protection challenge, the court reasoned that “the government has a legitimate interest in discouraging aliens who have already been deported from illegally reentering,” and concluded that “this distinction is rationally related to that purpose.” Id. at 1174. See also Robledo-Gonzales v. Ashcroft, 342 F.3d 667, 676-683 (7th Cir. 2003) (equal protection challenge to 8 CFR 1003.44 fails because distinction between illegal reentrants from those eligible under regulation was rational). Thus, the Department declines to grant eligibility to those who have departed the United States and are currently outside the United States, returned illegally to the United States after being issued a final order of deportation or removal, or are present in the United States without having been admitted or paroled. Other LPRs who are currently in the country, however, are allowed to apply for such relief.

Approximately 25 percent of commenters recommended that the rule should provide eligibility for those aliens who were convicted as a result of a trial, in addition to those who made plea agreements. Of these commenters, most argued that the reliance interests of those who went to trial rather than accept plea bargains should be similarly respected. Specifically, these commenters suggested that, because the Supreme Court in St. Cyr recognized the reliance interests of those aliens who made plea agreements with prosecutors while relying on the availability of the existing waiver of deportation under the former section 212(c), a similar analysis for those who decided to go to trial with the expectation that they would be eligible to apply for section 212(c) relief should result in preserving their interests. For example, one commenter suggested that because “an immigrant who chose not to enter a plea * * * may have relied upon the availability of section 212(c) when deciding how to proceed,” the Supreme Court's reasoning in St. Cyr “applies in both [the trial and plea agreement] cases.” Other commenters under this category argued that a fundamental unfairness would result to aliens who were unrepresented or detained because they were not aware of the possible consequences of a conviction from a plea agreement, as opposed to that from a trial.

The Supreme Court in St. Cyr specifically focused on plea agreements in deciding that section 212(c) relief remained available for aliens “who, notwithstanding those convictions, would have been eligible for section 212(c) relief at the time of their plea under the law then in effect.” 533 U.S. at 326. The Court recognized that plea agreements involve a quid pro quo between the defendant and the government, and that defendants who waive several of their constitutional rights (including the right to a trial) and consequently grant the government numerous tangible benefits are likely doing so in reliance on the availability of section 212(c) relief. Id. at 325. As a result of the benefit to the prosecutor bestowed by a plea agreement, and the reliance interest in seeking section 212(c) relief that an alien develops at the time of the guilty plea, it would be contrary to “ ‘familiar considerations of fair notice, reasonable reliance, and settled expectations” ’ to deprive him or her of the benefit due from the quasi-contractual exchange of benefits entered into with the government. Id. at 323-24 ( quoting Landgraf v. USI Film Products, 511 U.S. 244 (1994)). Thus, according to St. Cyr, only the reliance interests of those aliens pleading guilty to crimes when section 212(c) was available were sufficiently strong to warrant continued eligibility for such relief.

This issue has been heavily litigated in the federal courts, and every circuit that has addressed the question has held that an alien who is convicted after trial is not eligible for section 212(c) relief under St. Cyr. Rankine v. Reno, 319 F.3d 93, 100 (2d Cir. 2003); Theodoropoulos v. INS, 313 F.3d 732, 739-40 (2d Cir. 2002); Dias v. INS, 311 F.3d 456, 458 (1st Cir. 2002); Chambers v. Reno, 307 F.3d 284, 293 (4th Cir. 2002), reh'g denied (April 1, 2003); Armendariz-Montoya v. Sonchik, 291 F.3d 1116, 1121-22 (9th Cir. 2002), cert. denied, 539 U.S. 902 (2003); see also Lara-Ruiz v. INS, 241 F.3d 934, 945 (7th Cir. 2001) (pre- St. Cyr decision distinguishing between aliens who pleaded guilty and those who are convicted after trial). These courts have recognized that aliens who exercise their constitutional right to go to trial do not have the kind of reliance interests that the Supreme Court focused on in St. Cyr.

Accordingly, the Department has determined to retain the distinction between ineligible aliens who were convicted after criminal trials, and those convicted through plea agreements.

Approximately 15 percent of commenters recommended that an automatic stay provision should be inserted into the final rule. One commenter stated that a motion to reopen to file for section 212(c) relief should automatically stay the deportation or removal of the alien, while others said that any alien who is eligible for section 212(c) relief should have his or her removal stayed. Further, another commenter proposed that filing a special motion to seek section 212(c) relief should “also serve as an application for a stay” of removal, while another contended that it should be treated “in the same way that a motion to reopen in absentia proceedings is currently treated,” thereby automatically staying the execution of a final order of deportation or removal upon filing. The general rationale of these commenters was that the consequence of the lack of an automatic stay provision in the final rule would lead to the deportation of eligible aliens before they had the opportunity to apply for section 212(c) relief.

The proposed rule laid out procedures for applying for a stay of deportation or removal for aliens seeking to apply for section 212(c) relief. Requests for a stay of the execution of a final order must be made in accordance with the prevailing regulatory requirements in 8 CFR 241.6, if made with DHS, or 8 CFR 1003.2(f) or 1003.23(b)(1)(v), if made with EOIR. The Department does not find the application of prevailing regulatory requirements to section 212(c) applicants to be unreasonably burdensome. Accordingly, the Department does not find it necessary to include an automatic stay provision under this rule.

Approximately 15 percent of the commenters recommended that the 180-day period to file a special motion to seek section 212(c) relief for aliens under a final order of deportation or removal be extended or eliminated. One commenter stated that this time period allotted to file a special motion is “unreasonably short,” given that many LPRs will likely not be aware of this time constraint. Another commenter stated that this time period is inadequate and the Department should “provide additional time to apply,” particularly if the Department does not “individually notify affected people.” Similarly, another commenter stated simply that the time period is “insufficient,” and should be extended to one year.

The Department finds the 180-day requirement in which to file a special motion to seek section 212(c) relief for those aliens subject to a final administrative order of deportation or removal to be a reasonable time constraint. Publication in the Federal Register unequivocally constitutes sufficient notice for due process purposes. Congress has specified this form of notice and made that notice binding on all who are within the jurisdiction of the United States. 44 U.S.C. 1507 (publication in Federal Register “is sufficient to give notice of the contents of the document to a person subject to or affected by it”). The courts have clearly relied upon the adequacy of notice by publication in the Federal Register since the Federal Register 's inception. See, e.g. , Lyng v. Payne, 476 U.S. 926, 942-943 (1986); Dixson v. United States, 465 U.S. 482, 489 n.6 (1984); Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 385 (1947). The Department rejects the notion that more notice is required as a matter of law. The Department does not accept the premise of the commenters' arguments that it, or any other agency, is required to provide individual notice of the content of the law. Like citizens, aliens have a duty to know the law and abide by the law. The Department does note, moreover, that the immigrant community and immigrant advocacy organizations possess a well-established network for providing information to the immigrant community. Additionally, the Department notes that the 180-day deadline is double the normal amount of time within which an immigration judge or the Board has jurisdiction over motions to reopen. 8 CFR 1003.2, 1003.23. This is in addition to the 30-day effective date delay period mandated by the Administrative Procedure Act. 5 U.S.C. 553. Accordingly, the Department is not persuaded that more time is appropriate and will retain the 180-day deadline as stated in the proposed rule.

One commenter argued that proposed § 1003.44(b) would create “proof problems” for the immigration judges and the Board with respect to the date on which an alien made a plea agreement. Proposed § 1003.44(b) lists the eligibility requirements that an alien must establish in seeking section 212(c) relief. Paragraph (b)(4) of this section states that an alien must be “otherwise eligible to apply for section 212(c) relief under the standards that were in effect at the time the alien's plea was made, regardless of when the plea was entered by the court.” The commenter suggested that it would be difficult for the immigration judges or the Board to determine when the alien made his or her plea, as the record of criminal proceedings “often does not include [this] information.” Instead, the commenter suggested that the date the court accepted the plea should be the operative date. The commenter contended that a defendant in criminal proceedings, both at the State and Federal level, has an absolute right to withdraw a plea until it is accepted, and accordingly, he or she has no legitimate expectations of entitlement to section 212(c) relief until the court accepts it.

The Department declines to accept the commenter's recommendation. The operative language for section 212(c) eligibility—throughout the rule, not just for filing special motions to seek section 212(c) relief—focuses on the “date the plea was agreed to by the parties.” 67 FR at 52633. The Department finds that, consistent with the Supreme Court's decision in St. Cyr, the key in deciding the extent to which an alien is eligible for section 212(c) relief rests on the available relief at the time the alien and the prosecutor made the plea agreement. The Court stressed the importance of respecting the quasi-contractual agreement between the alien and prosecutor in deciding that the alien's reliance interests in making a plea agreement for a “perceived [immigration] benefit” must be preserved. St. Cyr, 533 U.S. at 322. In doing so, the Court did not conclude that the date the criminal court accepts the plea agreement is the time to determine whether the alien is eligible for section 212(c) relief. Thus, the commenter's proposal is not supported by the Supreme Court's ruling in St. Cyr. The Department intends to continue to rely on this judicial interpretation.

Further, in any plea agreement in which the government receives “numerous ‘tangible benefits * * * without the expenditure of prosecutorial resources,’ ” the benefits acquired by the prosecutor occur at the moment that the agreement is made given that he or she is relieved of the burdens of preparing the case for trial. St. Cyr, 533 U.S. at 322 (quoting Newton v. Rumery, 480 U.S. 386, 393 n.3 (1987)). Similarly, the moment when the alien enters into an agreement for the exchange of benefits with the prosecutor in reliance on section 212(c) relief eligibility should be the time at which the alien can begin accruing the benefit of the agreement. Accordingly, the Department disagrees with the commenter and will retain the language in the proposed rule specifying that the date the plea was agreed to by the parties will be the time to determine whether an alien is eligible for section 212(c) relief.

The alien seeking section 212(c) relief has the burden of establishing his or her eligibility. This burden of proof includes establishing the date on which the alien entered into a plea agreement with the prosecution that resulted in the conviction from which section 212(c) relief is sought. The nature of the comment concerning “proof problems,” however, underscores the need to make clear that the alien seeking section 212(c) relief has the burden of establishing the plea agreement date, and the alien is in the best position to do so because the alien was present (not DHS or the immigration judge) and is most likely to possess the documents reflecting the plea agreement. Accordingly, the Department has inserted a specific statement of that burden in section 1003.44(b) to make this clear. The Department does not believe that the requirement will impose a burden on the immigration judges or the Board.

One commenter suggested that the Department's implementation of the St. Cyr decision should preclude a retroactive application of the definition of an aggravated felony as expanded by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), Pub. L. 104-208, Div. C, 110 Stat. 3009-546. The commenter suggested that the Department allow a section 212(c) applicant to “invoke the law as it was at the time” when the applicant made his or her plea, thereby using the then-existing definitions of aggravated felonies rather than applying retroactively the expanded definitions enacted in IIRIRA. In support of this suggestion, the commenter asserted that “Congress has never had and could not have had the intent to subject [section] 212(c) to the retroactive application of the expanded version of the definition of aggravated felony under IIRIRA.” The commenter also asserted that “if the retroactive application of the new definition of aggravated felony would be extended to relief under the pre-IIRIRA regime then the [DHS] could reopen cases to remove aliens who had been granted relief pre-IIRIRA.”

The Department disagrees with this analysis. St. Cyr makes clear that the Court accepted the retroactive application of the definition of aggravated felony in connection with the availability of section 212(c) relief. In contrast to its finding that there was no unmistakable congressional intent to apply the repeal of section 212(c) retroactively, the Supreme Court in St. Cyr clearly reiterated that Congress indicated unambiguously its intention to apply the definition of “aggravated felony” retroactively under IIRIRA section 321(b). 533 U.S. at 319. Thus, IIRIRA's amended definition of “aggravated felony” applies to all convictions, regardless of when they occurred, in determining whether the alien is deportable on account of committing an aggravated felony. Further, as noted in the proposed rule, this amended definition “also applies to determine the eligibility for section 212(c) relief in those cases where an alien is deportable as an aggravated felon. See Matter of Fortiz, 21 I&N Dec. 1199 (BIA 1998).” 67 FR at 52630. Accordingly, the Department disagrees with the commenter's contention that the IIRIRA's expanded definition of aggravated felony should not apply to pre-IIRIRA convictions or for purposes of section 212(c) eligibility.

This rule, however, retains the position of the proposed rule that aliens who have not been charged and found deportable as aggravated felons would not be affected by the retroactivity of the aggravated felony definition under IIRIRA section 321. The Department agrees with the Board's finding in Fortiz that “in order for an alien to qualify as one who is ‘deportable’ under [AEDPA's] amendment to section 212(c), he or she must be charged with, and found deportable, on the requisite ground of deportability.” Fortiz, 21 I&N Dec. at 1212 n.3. Therefore, the expanded definition of aggravated felony enacted in IIRIRA renders ineligible for section 212(c) relief only those aliens who were charged with an aggravated felony as the basis for their deportability. For clarity, this rule revises § 1212.3(f)(4) to reflect the Department's interpretation of the aggravated felony definition, in addition to retaining the language of the proposed rule in amending § 1003.44.

With respect to the commenter's further assertion that the DHS could reopen cases to remove aliens who were granted relief before IIRIRA's effective date if IIRIRA's amended definition of aggravated felony is retroactively applied, the regulations are clear in prohibiting such a result. 8 CFR 1212.3(d) states that “[o]nce an application [for section 212(c) relief] is approved, that approval is valid indefinitely.” Thus, unless an exception relating to omissions in the application for section 212(c) applies (as described in 8 CFR 1212.3(d)), an approved section 212(c) application cannot be subsequently revoked. Accordingly, the Department will not incorporate the suggestions from this commenter.

It is also worth noting here that the effect of section 212(c) relief is very limited. For example, a single criminal conviction for a crime involving moral turpitude waived under section 212(c) may still be relied upon at a later date as one of two crimes to establish excludability under section 212(a)(2)(A)(II) of the Act (8 U.S.C. 1182(a)(2)(A)(II)). Matter of Balderas, 20 I&N Dec. 389 (BIA 1991). Thus, section 212(c) relief should not be considered a “pardon” and does not eliminate the conviction for any other purpose, such as later applications for discretionary relief. Balderas, at 391.

However, the Department has made a change in the final rule in response to the Ninth Circuit's recent decision in Toia v. Fasano, 334 F.3d 917 (9th Cir. 2003). In Toia, the court of appeals concluded that the amendment made by the Immigration Act of 1990, Pub. L. 101-649, section 511(a), 104 Stat. 4978, 5052 (1990)—which rendered aliens ineligible for section 212(c) relief if they had been convicted of an aggravated felony and had served a term of imprisonment of at least five years—did not apply to an alien who had pleaded guilty to a criminal offense prior to the enactment of that amendment. The court of appeals, in reliance on St. Cyr, overruled its own prior precedent, Samaniego-Meraz v. INS, 53 F.3d 254 (9th Cir. 1995), which had previously held that the 1990 limitation on the availability of section 212(c) relief properly applied to convictions entered prior to its enactment.

Although the Department does not concede that Toia is the better interpretation of the 1990 amendment, and the issue has been the subject of conflicting interpretations as the court acknowledged ( see Toia, 334 F.3d at 919-920), the Department recognizes that, because the issue is one of only limited practical significance, it is unlikely that this issue will reach the Supreme Court in the future. In Toia the plea agreement and the entry of the plea agreement occurred prior to the 1990 Act, and the only issue was the applicability of the 1990 Act. Accordingly, in order to apply a uniform rule in the implementation of section 212(c), the Department will acquiesce in the result of Toia. The final rule is amended to provide that the 1990 amendment barring the availability of section 212(c) relief for aggravated felons who have served a term of at least five years for one or more aggravated felonies will not be applied to bar the eligibility of aliens with respect to any aggravated felony conviction pursuant to a plea agreement that was made prior to November 29, 1990, the date that amendment was enacted. However, the immigration judges and the Board retain the authority to consider the nature and circumstances of any such aggravated felony or felonies as a substantial negative factor weighing against granting relief under former section 212(c) as a matter of discretion. See e.g., Matter of Marin, 16 I&N Dec. 581 (BIA 1978); Matter of Arrequin, 21 I&N Dec. 38 (BIA 1995); Matter of Burbano, 20 I&N Dec. 872 (BIA 1994); see also Matter of Jean, 23 I&N Dec. 373 (AG 2002); cf., Matter of Y-L, A-G-, R-S-R-, 23 I&N Dec. 270 (AG 2002).

In making this change, the Department is limiting its effect to those cases in which the alien was convicted pursuant to a plea agreement. Aliens who were convicted of one or more aggravated felonies after trial, whether before or after the enactment of the Immigration Act of 1990, will continue to be subject to the limitations on eligibility for section 212(c) relief. As discussed above, the Supreme Court in St. Cyr was careful to limit the impact of its decision only to aliens who had entered into a plea agreement, since only those individuals had sufficient reliance interests to be able to insist on the benefit of their bargain. The Ninth Circuit's decision in Toia was based exclusively on the same retroactivity analysis as in St. Cyr, and limited its holding to the availability of section 212(c) relief for “aliens who pleaded guilty with the expectation that they would be eligible for such relief.” 334 F.3d at 920.

This change is reflected in § 1212.3(f)(4)(ii). This rule also revises the language of § 1212.3(f)(4)(i) to conform to the language of section 212(c) of the Act, regarding aliens who have served a term of imprisonment of five years or more for one or more aggravated felonies.

Finally, the language of § 1212.3(f)(5) has been clarified. The final rule adjusts the language to specifically cite the relevant statutory provisions to make clear that there must be a statutory counterpart in proceedings under section 237 or former section 241 of the Act for section 212(c) relief to reach those convictions.

Several commenters suggested that the proposed rule should be modified so that the date the alien committed the crime rather than the date of conviction is used to determine the applicability of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), Pub. L. 104-132, 110 Stat. 1214. One commenter asserted that “LPRs * * * had a right to know that they were endangering their entire future with their family in the United States by breaking the law, but the gravity of their acts was impossible to predict before the passage of the 1996 laws.” The commenter continued, “[t]hose whose crimes occurred before the enactment of AEDPA face the exact same situation as those who were convicted before that date: they could not have been aware of the immigration consequences of their crimes.”

The Department disagrees with the commenters. The effect of section 440(d) of AEDPA rendered aliens ineligible for section 212(c) relief if they became deportable for certain criminal convictions. The Department adheres to the interpretation set forth in the proposed rule: “This narrower version of section 212(c) relief is available to aliens who made pleas on or after April 24, 1996, and before April 1, 1997, regardless of when the plea was entered by the court.” 67 FR at 52629. It should be noted that the date of the plea agreement, not the conviction date, is the operative date to determine the availability of section 212(c), as well as the applicability of AEDPA. Thus, if an alien makes a plea agreement on or after April 24, 1996 (the effective date of AEDPA), and before April 1, 1997 (the effective date of IIRIRA), he or she may be eligible for section 212(c) relief, as the plea agreement was made before IIRIRA eliminated this form of relief, but he or she is subject to the narrower version of section 212(c) relief as implemented by AEDPA.

To hold the date the crime was committed as the operational date would be contrary to the St. Cyr decision, as the Court was explicit in preserving the reliance interests of those aliens that made guilty pleas when section 212(c) was still available. See St. Cyr, 533 U.S. at 326 (“We therefore hold that § 212(c) relief remains available for aliens * * * who * * * would have been eligible for § 212(c) relief at the time of their plea under the law then in effect.”). The phrase “under the law then in effect” clearly conditions the scope of section 212(c) relief that remains available, thereby giving effect to AEDPA and consequently its narrowed availability of section 212(c) relief. Id. Accordingly, the Department will retain the date of the plea agreement as the operational date in determining both the availability and scope of section 212(c) relief for an alien.

Several commenters criticized § 1003.44(b), relating to how the requisite seven years of lawful unrelinquished domicile should be calculated in order to determine eligibility for section 212(c) relief. They asserted that § 1003.44(b)(3) should be amended to provide that an alien must have seven consecutive years of lawful unrelinquished domicile in the United States as determined “at the time the plea was entered,” rather than as of “the date of the final administrative order of deportation or removal.” They argued that an alien who did not have the requisite seven years of lawful unrelinquished domicile at the time of making the plea could not have relied upon the availability of section 212(c) relief because he or she would not have been eligible for such relief at that time.

The Department disagrees with these comments. The Board has long held that an alien's lawful domicile terminates upon the entry of the final administrative order of deportation. See Matter of Cerna, 20 I&N Dec. 399 (BIA 1991). Although Congress has altered a number of provisions of the Act to limit eligibility for relief by the occurrence of specific events, the Department declines the commenters' suggestion to alter the rule in this limited class of cases.

One commenter stated that the proposed rule should clarify that an alien charged and found deportable as an aggravated felon is not eligible for section 212(c) relief “if there is no comparable ground of inadmissibility for the specific category of aggravated felony charged.” The commenter continues, “[f]or example, the rule should not apply to aggravated felons charged with deportability under specific types or categories of aggravated felonies such as ‘ Murder, Rape, or Sexual Abuse of a Minor ’ or ‘ Crime of Violence ’ aggravated felonies.” Thus, the commenter states that § 1212.3(f)(4) should include those aliens who have been charged with aggravated felonies for which there is no corresponding ground of inadmissibility as being ineligible for section 212(c) relief.

The commenter is correct in stating this limitation on the scope of relief available under section 212(c). Matter of Granados, 16 I&N Dec. 726, 728 (BIA 1979) (“[I]f a ground of deportation is also a ground of inadmissibility, section 212(c) can be invoked in a deportation hearing.”); Cabasug v. INS, 847 F.2d 1321 (9th Cir. 1988); Matter of Hernandez-Casillas, 20 I&N Dec. 262 (BIA 1990; A.G. 1991). In describing the eligibility requirements, the supplementary information of the proposed rule noted that “[a]n applicant must, at a minimum, meet the following criteria to be considered for a waiver under section 212(c): * * * [t]he alien is deportable or removable on a ground that has a corresponding ground of exclusion or inadmissibility * * *” 67 FR at 52628-52629. However, this requirement was not included in the regulatory language of the proposed rule. As a result, the Department will effectuate the commenter's suggestion by adding this requirement for section 212(c) eligibility. Accordingly, the final rule provides that an alien who is deportable or removable on a ground that does not have a corresponding ground of exclusion or inadmissibility is ineligible for section 212(c) relief.

Several commenters suggested that the proposed rule is flawed because it does not provide a mechanism for identifying and notifying LPRs who are eligible to apply for section 212(c) relief. For example, one commenter proposed that the Department “identify individuals who were denied an opportunity to apply for relief on the basis of St. Cyr and notify them of this change [because otherwise] many affected individuals will not learn of these rules and will miss the opportunity to resolve their cases.”

The Department disagrees with these recommendations. As noted above in relation to other comments, the Department finds that publishing the current rule in the Federal Register is the well-established and accepted method of informing the entire public of a change in the law. See Federal Crop Ins. Corporation, 332 U.S. at 384-85 (“Just as everyone is charged with knowledge of the United States Statutes at Large, Congress has provided that the appearance of rules and regulations in the Federal Register gives legal notice of their contents.”) ( citing 44 U.S.C. 307). The Department does not accept the premise of these arguments that it, or any other agency, is required to provide individual notice of the content of the law. Like citizens, aliens have a duty to know the law and abide by the law.

Immigration judges routinely inform aliens who appear before them of the types of relief for which they may be eligible. 8 CFR 1240.11(a)(2); cf. 8 CFR 1240.49(a) (narrower provision applicable to deportation proceedings). Thus, the Department finds that there exist ample opportunities for aliens affected by this final rule to become aware of its contents. Therefore, the Department declines to accept these recommendations.

One commenter stated that the Department should eliminate the “burdensome paperwork requirements” of compelling potentially eligible aliens to submit proof of permanent residence. The commenter suggested that “[i]t is inappropriate and impractical to require an individual to provide proof of permanent residence or a copy of the Form I-90 when the EOIR and/or the [DHS] have that information and control access to it.”

The Department disagrees with the commenter. Similar to other avenues of petitioning for relief, the alien has the burden of proving that he or she is eligible for, and merits, a form of relief. In the context of section 212(c) in particular, the alien bears the burden of proof to demonstrate LPR status as an essential element of establishing eligibility for such relief. The language of the rule merely reflects the fact that the alien bears this burden of proof.

One commenter expressed concern that the proposed rule would delete a previous rule issued by the Department that created a procedure for eligible aliens to apply for section 212(c) relief. The previous rule, sometimes referred to as the “ Soriano rule,” was published on January 22, 2001, at 66 FR 6436, and is presently codified at 8 CFR 1212.3(g) (and the related motion to reopen rule, which is being replaced by this final rule, is presently codified at 8 CFR 1003.44). The Department adopted the Soriano rule in response to the substantial judicial precedent rejecting the interpretation of section 212(c) set forth in Matter of Soriano, 21 I&N Dec. 516 (BIA 1996, A.G. 1997).

Briefly, the Soriano rule provided that the limitations of section 440(d) of AEDPA are not applicable to section 212(c) applicants whose deportation proceedings commenced prior to April 24, 1996, the effective date of AEDPA. Under the Soriano rule, such section 212(c) applicants may apply for relief, if eligible, under the pre-AEDPA version of section 212(c), irrespective of whether their convictions resulted from plea agreements or criminal trials. The commenter suggested that the “provision set forth in 8 CFR [1]212.3(g) should be retained in its entirety” because of pending cases before the immigration judges and the Board that were commenced based on the Soriano rule.

In this rule, the Department is implementing the Supreme Court's ruling in St. Cyr by providing eligibility and procedural requirements for section 212(c) relief for aliens whose convictions were entered after a plea agreement. This rule both amends 8 CFR 1212.3 and replaces the special motion to reopen provisions adopted at the time of the Soriano rule, 8 CFR 1003.44 (which is no longer relevant since the time to submit a motion to reopen under that rule has long since expired).

The commenter is correct in observing that the issue addressed in current § 1212.3(g) continues to be relevant to aliens whose deportation proceedings were commenced prior to the enactment of AEDPA. The Department will therefore leave intact the existing provision of 8 CFR 1212.3(g), which will continue to govern cases falling within its parameters.

Any motions that were filed pursuant to the Soriano rule that are still pending before the immigration judges or the Board will be adjudicated under the requirements of either the Soriano rule or this final rule. However, if a motion under Soriano was denied, and the alien desires to seek section 212(c) relief under this rule, he or she will need to file a new special motion, as described in 8 CFR 1003.44, as revised. Even if the motion was denied because the alien did not satisfy the requirements of 8 CFR 1212.3(g) (for deportation proceedings commenced prior to April 24, 1996), that ineligibility will not bar him or her from timely applying for section 212(c) relief under this rule if he or she is eligible under 8 CFR 1003.44 and 1212.3, as revised.

Aliens who were eligible to file for section 212(c) relief under the Soriano rule but failed to do so will be able to file for section 212(c) relief under this rule, but only if they meet the eligibility requirements contained in this final rule—that is, with respect to convictions entered pursuant to a plea agreement made prior to April 1, 1997. This rule does not provide any additional relief to aliens whose convictions were entered after a trial. Accordingly, this rule does not extend the deadline of July 23, 2001, for aliens to submit a motion to reopen to apply for section 212(c) relief pursuant to the pre-existing provisions of § 1003.44, with respect to convictions entered after a trial.

One commenter inquired whether attorneys representing aliens should file new special motions to seek section 212(c) relief under this rule if they previously filed a motion to reopen under 8 CFR 1003.2 or 1003.23 in order to seek relief based on the St. Cyr decision.

The Department does not require an alien to file a new special motion to seek section 212(c) relief if he or she previously filed a motion to reopen under 8 CFR 1003.2 or 1003.23 based on the St. Cyr decision and the previous motion is still pending. An eligible alien who has already filed a motion with an immigration judge or the Board based on the St. Cyr decision may supplement that motion if it is still pending.

If the alien's previous motion to reopen based on the St. Cyr decision was found to be barred solely because of time or number limits on motions to reopen, this rule makes clear that an eligible alien will be able to file a special motion under this rule to address the merits of the alien's St. Cyr claims. However, if the previous motion to reopen under St. Cyr was denied for any reason other than because of the time or number limitations for motions to reopen, § 1003.44(g)(3) precludes the filing of a new special motion under this rule. In that instance, the alien has already had the opportunity to raise the St. Cyr issues on the merits through a motion to reopen, and there is no reason to give the respondent a second opportunity to raise issues related to St. Cyr through another motion to reopen. See also 8 CFR 1003.44(d).

Moreover, as stated in the proposed rule, if the alien under a final order of deportation or removal previously filed a motion to reopen or a motion to reconsider with EOIR on “other grounds,” he or she is still required to file a separate special motion to seek section 212(c) relief to receive the benefits under this rule as provided in § 1003.44(g)(1).

In view of the fact-specific nature of the determination whether or not to grant section 212(c) relief, this final rule provides that, if the Board grants a special motion to seek section 212(c) relief in a case in which it last had jurisdiction, the Board will remand the case to an immigration judge for adjudication of those issues. 8 CFR 1003.44(j); see also 8 CFR 1003.1(d)(3).

The Attorney General, in accordance with 5 U.S.C. 605(b), has reviewed this rule and, by approving it, certifies that it affects only Departmental employees and aliens or their representatives who appear in proceedings before the immigration judges or the Board. Therefore, this rule does not have a significant economic impact on a substantial number of small entities.

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

This rule has been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Department has determined that this rule is a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review. Accordingly, this rule has been submitted to the Office of Management and Budget (OMB) for review.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, the Department has determined that this rule does not have sufficient federalism implications to warrant a federalism summary impact statement.

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

Under the Paperwork Reduction Act of 1995, Pub. L. 104-13, all Departments are required to submit to OMB for review and approval any reporting requirements inherent in a final rule. This rule does not impose any new reporting or recordkeeping requirements under the Paperwork Reduction Act.

The Federal Reserve Banks make primary and secondary credit available to depository institutions as a backup source of funding on a short-term basis, usually overnight. The primary and secondary credit rates are the interest rates that the twelve Federal Reserve Banks charge for extensions of credit under these programs. In accordance with the Federal Reserve Act, the primary and secondary credit rates are established by the boards of directors of the Federal Reserve Banks, subject to the review and determination of the Board.

The Board approved requests by the Reserve Banks to increase by 25 basis points the primary credit rate in effect at each of the twelve Federal Reserve Banks, thereby increasing from 2.50 percent to 2.75 percent the rate that each Reserve Bank charges for extensions of primary credit. As a result of the Board's action on the primary credit rate, the rate that each Reserve Bank charges for extensions of secondary credit automatically increased from 3.00 percent to 3.25 percent under the secondary credit rate formula. The final amendments to Regulation A reflect these rate changes.

The 25-basis-point increase in the primary credit rate was associated with a similar increase in the target for the federal funds rate (from 1.50 percent to 1.75 percent) approved by the Federal Open Market Committee (Committee) and announced at the same time. A press release announcing these actions indicated that:

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Board certifies that the new primary and secondary credit rates will not have a significantly adverse economic impact on a substantial number of small entities because the final rule does not impose any additional requirements on entities affected by the regulation.

The Board did not follow the provisions of 5 U.S.C. 553(b) relating to notice and public participation in connection with the adoption of these amendments because the Board for good cause determined that delaying implementation of the new primary and secondary credit rates in order to allow notice and public comment would be unnecessary and contrary to the public interest in fostering price stability and sustainable economic growth. For these same reasons, the Board also has not provided 30 days prior notice of the effective date of the rule under section 553(d).

Regulation CC establishes the maximum period a depositary bank may wait between receiving a deposit and making the deposited funds available for withdrawal. 1 A depositary bank generally must provide faster availability for funds deposited by a “local check” than by a “nonlocal check.” A check drawn on a bank is considered local if it is payable by or at a bank located in the same Federal Reserve check processing region as the depositary bank. A check drawn on a nonbank is considered local if it is payable through a bank located in the same Federal Reserve check processing region as the depositary bank. Checks that do not meet the requirements for “local” checks are considered “nonlocal.”

Appendix A to Regulation CC contains a routing number guide that assists banks in identifying local and nonlocal banks and thereby determining the maximum permissible hold periods for most deposited checks. The appendix includes a list of each Federal Reserve check processing office and the first four digits of the routing number, known as the Federal Reserve routing symbol, of each bank that is served by that office for check processing purposes. Banks whose Federal Reserve routing symbols are grouped under the same office are in the same check processing region and thus are local to one another.

As explained in detail in the Board's final rule published in the Federal Register on May 28, 2003, the Federal Reserve Banks decided in early 2003 to reduce the number of locations at which they process checks. 2 As part of this restructuring process, effective October 30, 2004, the Indianapolis office of the Federal Reserve Bank of Chicago will cease processing checks and banks with routing symbols currently assigned to that office for check processing purposes will be reassigned to the Cincinnati branch of the Federal Reserve Bank of Cleveland. This is the last stage of the restructuring process announced in 2003. Some checks that are drawn on and deposited at banks located in the affected check processing regions and that currently are nonlocal checks will become local checks subject to faster availability schedules. Because the Cincinnati check processing region serves banks located in multiple Federal Reserve districts, banks located in the expanded Cincinnati check processing region cannot determine that a check is nonlocal solely because the paying bank for that check is located in another Federal Reserve district.

To assist banks in identifying local and nonlocal checks and making funds availability decisions, the Board is amending the lists of routing symbols associated with the Federal Reserve Banks of Cleveland and Chicago to reflect the transfer of operations from the Chicago Reserve Bank's Indianapolis office to the Cleveland Reserve Bank's Cincinnati branch. To coincide with the effective date of the underlying check processing changes, the amendments are effective October 30, 2004. The Board is providing advance notice of these amendments to give affected banks ample time to make any needed processing changes. The advance notice will also enable affected banks to amend their availability schedules and related disclosures, if necessary, and provide their customers with notice of these changes. 3 The Federal Reserve routing symbols assigned to all other Federal Reserve branches and offices will remain the same at this time.

As the Federal Reserve Banks announced on August 2, 2004, 4 in response to the continued nationwide decline in check usage and to position themselves more effectively to meet the cost recovery requirements of the Monetary Control Act of 1980, the Reserve Banks have decided to reduce further the number of locations at which they process checks. The Reserve Banks plan to stop processing checks at nine offices, and the checks currently processed at those offices will be processed at other nearby offices, as follows:

The restructuring of Reserve Bank check processing operations will take place in several stages over the course of 2005 and early 2006 and collectively will reduce the number of check processing regions from 32 to 23. The Board will amend appendix A in connection with each stage of the restructuring to delete the name of the office(s) that will no longer process checks and transfer the affected Federal Reserve routing symbols to another check processing office. The Board intends to announce each stage of the restructuring and the associated amendments to appendix A at least 60 days prior to the effective date of the amendment in order to give affected banks ample time to make processing changes and, if necessary, amend their availability schedules and related disclosures and provide their customers with notice of any changes to their availability schedules.

Some affected banks might prefer to make or to plan for some or all of their processing and availability changes prior to the effective dates of the relevant amendments. For the information and planning needs of affected banks, the Board today is describing below the Federal Reserve routing symbol changes to appendix A that will be made between January 1, 2005, and early 2006.

The operations of the Boston head office will be transferred such that banks with the following Federal Reserve routing symbols will be local to the Windsor Locks office:

The operations of the Columbus office and the Detroit branch will be transferred such that banks with the following Federal Reserve routing symbols will be local to the Cleveland head office:

The operations of the Birmingham and Nashville branches will be transferred such that banks with the following Federal Reserve routing symbols will be local to the Atlanta head office:

The operations of the Salt Lake City branch will be transferred such that banks with the following Federal Reserve routing symbols will be local to the Denver branch:

The operations of the Oklahoma City and Houston branches will be transferred such that banks with the following Federal Reserve routing symbols will be local to the Dallas head office:

The operations of the Portland branch will be transferred such that banks with the following Federal Reserve routing symbols will be local to the Seattle branch:

The Federal Reserve routing symbols assigned to all other Federal Reserve branches and offices will remain the same.

The Board has not followed the provisions of 5 U.S.C. 553(b) relating to notice and public participation in connection with the adoption of the final rule. The revisions to the appendix are technical in nature and are required by the statutory and regulatory definitions of “check-processing region.” Thus, the Board has determined that the section 553(b) notice and comment procedures are unnecessary.

Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Board certifies that the final rule will not have a significantly adverse economic impact on a substantial number of small entities. These amendments are technical, and the routing number changes are required by law. Moreover, these amendments apply to all banks regardless of their size. Many small banks generally provide next-day availability for all checks and will not be affected by this amendment. For the subset of small banks that does distinguish between checks subject to next-day availability and those subject to longer holds, the final rule should necessitate only minimal programming changes. Some of these affected banks might also have to modify their funds availability disclosures and notify both new and existing customers of the modified funds availability schedules.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board has reviewed the final rule under authority delegated to the Board by the Office of Management and Budget. This technical amendment to appendix A of Regulation CC will delete the reference to the Indianapolis office of the Federal Reserve Bank of Chicago and reassign the routing symbols listed under that office to the Cincinnati office of the Federal Reserve Bank of Cleveland. The depository institutions that are located in the affected check processing regions and that include the routing numbers in their disclosure statements would be required to notify customers of the resulting change in availability under § 229.18(e). However, all paperwork collection procedures associated with Regulation CC already are in place, and the Board accordingly anticipates that no additional burden will be imposed as a result of this rulemaking.

This amendment to 14 CFR 71 modifies the Class E airspace area extending upward from 700 feet above the surface at Kennett, MO. An examination of controlled airspace for Kennett Memorial Airport revealed it does not meet the criteria for 700 feet AGL airspace required for diverse departures as specified in FAA Order 7400.2E, Procedures for Handling Airspace Matters. The criteria in FAA Order 7400.2E for an aircraft to reach 1200 feet AGL is based on a standard climb gradient of 200 feet per mile plus the distance from the airport reference point (ARP) to the end of the outermost runway. Any fractional part of a mile is converted to the next higher tenth of a mile. Additionally, the examination revealed the dimensions of the extension to the airspace areas were not in compliance with FAA Order 8260.19C, Flight Procedures and Airspace, and the bearing from the Kennett NDB used to define the extension to the airspace area was incorrect. The examination also identified discrepancies in the Kennett Memorial Airport ARP and the location of the Kennett nondirectional radio beacon (NDB) used in the Class E airspace legal description. This amendment expands the airspace area from a 6-mile radius to a 6.4-mile radius of Kennett Memorial Airport, redefines the extension to the Class E airspace area in terms of the 000° bearing from the Kennett NDB vs. the current 360° bearing, decreases the length of the extension from 7.4 miles to 7 miles, decreases the width of the extension from 2.6 miles each side of the centerline to 2.5 miles, corrects the ARP and location of the NDB in the legal description and brings the legal description of the Kennett, MO Class E airspace area into compliance with FAA Orders 7400.2E and 8260.19C. This area will be depicted on appropriate aeronautical charts. Class E airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005 of FAA Order 7400.9M, Airspace Designations and Reporting Points, dated August 30, 2004, and effective September 16, 2004, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

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

Interested parties are invited to participate in this rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2004-18820/Airspace Docket No. 04-ACE-46.” The postcard will be date/time stamped and returned to the commenter.

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

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

History

On Wednesday, June 9, 2004, the FAA proposed to revise part 71 of the Federal Aviation Regulations (14 CFR part 71) to create new Class E airspace upward from 700 ft. and 1,200 ft. above the surface at Teller, AK (69 FR 32291). An error in the coordinates describing the airspace upward from 1,200 above the surface was detected and corrected on Friday, September 2, 2004 (69 FR 53661). The action was proposed in order to add Class E airspace sufficient in size to contain aircraft while executing two new Standard Instrument Approach Procedures for the Teller Airport. The new approaches are Area Navigation-Global Positioning System (RNAV GPS) Runway (RWY) 7, original and (2) RNAV (GPS) Runway 25, original. New Class E controlled airspace extending upward from 700 feet and 1,200 feet above the surface in the Teller Airport area is established by this action. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed.

The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 of FAA Order 7400.9M, Airspace Designations and Reporting Points, dated September 2, 2004, and effective September 16, 2004, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

This revision to 14 CFR part 71 establishes Class E airspace at Teller, Alaska. This additional Class E airspace was created to accommodate aircraft executing two new SIAPs and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at Teller Airport, Teller, Alaska.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(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) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

On August 5, 2004, Airspace Docket No. 02-AEA-19 (69 FR 47358) was published in the Federal Register establishing R-5802C, R-5802D, and R-5802E, at Fort Indiantown Gap, PA (69 FR 47358). The descriptions for R-5802C, D, and E contained an inadvertent error in the time of designation. The time of designation for the period “February 15 through May 10 and September 1 through December 15” was incorrectly listed in the rule as “0800-2400 local time.” The correct time for that period should have read “0800-2300 local time.” All other time periods listed in the rule are correct.

A. Why Are Revisions to State Programs Necessary?

States with final authorization under section 3006(b) of RCRA, 42 U.S.C. 6926(b), have a continuing obligation to maintain a hazardous waste program that is equivalent to, consistent with, and no less stringent than the Federal hazardous waste program. As the Federal hazardous waste program changes, the States must revise their programs and apply for authorization of the revisions. Revisions to State hazardous waste programs may be necessary when Federal or State statutory or regulatory authority is modified or when certain other changes occur. Most commonly, States must revise their programs because of changes to EPA's regulations in 40 Code of Federal Regulations (CFR) parts 124, 260 through 266, 268, 270, 273 and 279.

The State of Connecticut received Final Authorization on December 17, 1990, effective December 31, 1990 (55 FR 51707), to implement its base hazardous waste management program. This previously authorized program generally tracks Federal hazardous waste requirements through July 1, 1989.

EPA proposed to authorize the revisions to the Connecticut program at 69 FR 40568 (July 6, 2004). EPA received written comments from two commenters during the public comment period on EPA's proposed rule. Today's action responds to those comments and publishes EPA's final determination granting Connecticut final authorization for its program revisions. EPA would like to thank the commenters for their interest in this action. The issues raised by the commenters are summarized and responded to below. For the reasons explained below, EPA was not persuaded by the comments to reconsider the authorization of this Connecticut RCRA program update.

This commenter submitted comments opposing EPA's proposed action. The commenter has concerns relating to the way the Connecticut Department of Environmental Protection (CTDEP) implements its hazardous waste program, as summarized below:

Comment #1: The commenter opposes the State spending resources to create its own regulations, but, rather, suggests the money would be better spent by the State adopting and enforcing the existing Federal hazardous waste regulations. The commenter suggests that having State requirements that differ from Federal ones may cause confusion among the regulated community.

EPA's Response: The Resource and Recovery Act (RCRA) mandates that in order for State hazardous waste programs to be authorized, they must be equivalent, consistent and no less stringent than the Federal program. There is nothing under this authority than prohibits a State from enacting laws or adopting regulations that are more stringent than the Federal hazardous waste program. Under State and Federal law, it is a State's prerogative to do so. This flexibility allows States to adapt programs to address specific needs or concerns in a given State which may result in more stringent requirements. The rules relating to this authorization have been subject to Connecticut's public notice and rulemaking procedures which gave fair notice regarding what the State regulations require. Raising State issues to EPA only after a State has adopted its rules at the State level is unfair to the State. This Federal authorization action is not the appropriate forum for this comment.

Comment #2: Relating to CTDEP's approach to compliance, the commenter believes there is more emphasis on using enforcement to achieve compliance rather than outreach and education which would foster improved, longer lasting compliance, particularly with small businesses. According to the commenter, this kind of approach promotes a polarized, disharmonious enforcement environment which adds to financial and operational burdens, and, thus, contributes to a declining manufacturing base in the State. Also, the commenter suggests the CTDEP is more concerned with the issuance of enforcement actions and levying fines than improvements in the environment, especially as it relates to those who are resource challenged, and that improvements in Connecticut's environment, according to data provided by the Connecticut Council on Environmental Quality, have been marginal at best.

EPA Response: Pursuant to the requirements for State authorized programs, i.e., 40 CFR 271.15 and 40 CFR 271.16, the CTDEP has the necessary compliance monitoring and enforcement components for an authorized State hazardous waste regulatory program. Also, as described in CTDEP's Program Description, its hazardous waste compliance program includes education and outreach regarding safe waste management and new and existing regulations as well as pollution prevention activities. As agreed to in the Memorandum of Agreement between EPA and the CTDEP, Connecticut must ensure that compliance monitoring activities and priorities shall be consistent with all applicable Federal requirements and with the State's Program Description and will be negotiated in the PPA (Performance Partnership Agreement) with EPA. The EPA disagrees with the commenter's criticisms of the Connecticut program. In addition, the current rulemaking involves authorizing an update to the Connecticut program. Not authorizing the update would in no way address the commenter's concerns, but would simply mean that for purposes of Federal enforcement, the Connecticut program would remain out of date.

Comment #3: In conclusion, the commenter urges EPA to reconsider the authorization of Connecticut's hazardous waste program at this time and suggests EPA meet with various stakeholders to determine a better approach to meet the “global” needs of Connecticut and EPA's mandate and responsibility, emphasizing that consistency with Federal regulation would be a major step in this direction.

EPA Response: See “EPA response” to comment #1 and #2 above. Also, Connecticut has established a Commissioner's Advisory Subcommittee, which includes consultants, attorneys, environmental interest groups, and members of the regulated community, to provide input during the development of the proposed revisions. In addition, as referenced in EPA's proposed rule for the Connecticut authorization, EPA and the CTDEP conducted an informational meeting on July 21, 2004, in order to address questions the public may have had relating to this action.

This organization filed a comment letter objecting to the proposed authorization of the updated Connecticut RCRA regulations for the following reasons.

Comment #1: The commenter states that there has not been an adequate review of the State regulations because the “Express RCRA Authorization Process” has been used by the State and EPA. The commenter states that 40 CFR 271.7 requires that there be a review by the State Attorney General's Office of each State regulation to determine if it is consistent with State statutes and that this was not done in this case.

EPA Response: Actually, each State regulation has been carefully reviewed in accordance with § 271.7. The Attorney General's Statement (page 1) submitted as part of the State's application for authorization certifies that the State has the statutory authority to “carry out the hazardous waste program set forth in the application.” This Statement was submitted following a review by that Office of all of the State regulations which determined (as reflected in the certification) that they all are consistent with the State statutes. In addition, the Attorney General's Statement is accompanied by a Statutory Checklist which lists the statutory authority on which the different kinds of State regulations are based. For example, under section XVII, item 1, the Checklist explains that the State Department of Environmental Protection (DEP) has the statutory authority pursuant to C.G.S. sections 22a-6(a) and 22a-449(c) to grant variances and exemptions that are no less stringent than allowed by the EPA in the Federal RCRA program. Finally, under C.G.S. section 4-169, no regulation can take effect in Connecticut until the regulation has been reviewed and approved by the Attorney General's Office. This State-law mandated review of the regulations also occurred in this case.

The only way in which this process has been “expedited” is that the EPA has not required that the State statutory authority be separately listed for each of the State regulations, but rather has accepted the determinations by the Attorney General that certain groups of regulations all are supported by the same statutory authority. For example, the EPA has not required the State to list C.G.S. sections 22a-6(a) and 22a-449(c) next to each exemption that is being adopted, but rather has allowed the Attorney General to certify that those provisions support all of the exemptions that are being adopted. This in no way has reduced the thoroughness with which the regulations have been reviewed by the State Attorney General (or by EPA), but rather has simply avoided duplication and saved paper.

Comment #2: The commenter also states that the updated State regulations (22a-449(c)-106) incorporate by reference Federal regulations (40 CFR 266.20) which allow “the use of hazardous waste as fertilizer,” and that this violates a State statute (22a-209f) which specifies that the DEP Commissioner may issue general permits covering the beneficial use of solid wastes but that such permits shall not apply to the reuse of hazardous wastes.

EPA Response: First, the EPA does not have regulations which allow “the use of hazardous waste as fertilizer.” Rather, the EPA regulations allow (subject to strict standards) the use of certain fertilizers which have been produced as a result of the recycling of hazardous wastes.

Second, the updated State regulations do not incorporate by reference the EPA regulation (40 CFR 266.20(d)(1)) allowing for the use of zinc fertilizers produced from hazardous wastes. This exemption was adopted by the EPA on July 24, 2002. The updated State regulations incorporate EPA requirements through January 1, 2001, and thus do not incorporate this exemption. Thus, there is no need for the EPA to address in this rulemaking whether the 40 CFR 266.20(d)(1) exemption would be consistent with Connecticut statutory requirements. The EPA suggests that the commenter raise any concerns it has about Connecticut adopting this rule only if and when Connecticut proposes in a State rulemaking to adopt the rule. Raising the issue now is premature, and raising State law issues to EPA only after a State has adopted the exemption at the State level would be unfair to the State.

The updated State regulations do continue to incorporate by reference the EPA regulations (in 40 CFR 266.20) which allow “use constituting disposal” of products made from hazardous wastes, if the hazardous wastes first have been treated to the point of meeting all applicable treatment standards in 40 CFR part 268. This includes allowing use of fertilizers made from hazardous wastes, if they have first been treated to the point of meeting those standards. However, this exemption was first adopted by the State in 1989 and authorized by the EPA in 1990. While the updated State regulations incorporate updated clarifying language, they make no substantive change. Thus whether or not Connecticut may allow products made from hazardous wastes to be utilized as fertilizers is not a part of the current rulemaking. It is far too late for the commenter to challenge the State's decision in 1989 to adopt the EPA regulations regarding “use constituting disposal.”

Although the issue is not part of this rulemaking, the EPA notes that it seems clear that the State does have the statutory authority to allow the use of recycled materials as fertilizer. In particular, C.G.S. section 22a-449(c) specifies that the DEP Commissioner may adopt “such regulations as he deems necessary to carry out the intent of * * * Subtitle C of the Resource Conservation and Recovery Act * * *” The regulations regarding “use constituting disposal” are a part of the Federal RCRA program, which the statute gives the DEP the power to implement. Moreover, C.G.S. 22a-209f does not prohibit the use of recycled materials. It simply specifies that general permits issued under the State's solid waste program may not be used to cover hazardous wastes. When adopting the “use constituting disposal” regulations, the DEP did not violate this provision since it did not issue any general permits. Indeed, it should be noted that under the use constituting disposal regulations, all applicable individual permit requirements continue to apply to the companies which recycle the hazardous wastes.

Comment 3: The commenter also objects to the State adopting the “Bevill exemption” and asserts that this exemption is not authorized by any State statute.

EPA Response: The “Bevill exemption” in 40 CFR 261.4(b)(7) was adopted by Connecticut in 1989 and the State regulations were authorized by the EPA in 1990. It is again too late for these decisions to be challenged. The EPA notes, however, that it seems clear that the State has the statutory authority to adopt this exemption under C.G.S. section 22a-449(c). The commenter notes that there are specific State statutes creating exemptions and approved disposal methods for wood wastes and waste sands from casting metals, but that no such similar statutes exist for Bevill wastes or for hazardous wastes recycled to make fertilizers. However, the absence of a statute that creates a specific exemption for Bevill wastes or for fertilizers does not mean that the DEP lacks the authority to adopt these Federal RCRA program provisions, since the DEP has been granted the general statutory authority to implement the Federal RCRA program.

In this program update, the State has adopted the provisions in 40 CFR 266.112 which restrict the use of the Bevill exemption. The commenter has not shown any reason why the EPA should not authorize this more environmentally protective provision. If the EPA was to deny authorization of this revision, this would simply mean that for purposes of Federal enforcement, the older less protective requirements would remain in place. The EPA is approving this revision because it tracks the current more protective Federal requirements relating to the Bevill exemption.

We believe that the State of Connecticut's application to revise its authorized program meets all of the statutory and regulatory requirements established by RCRA. Therefore, we grant Connecticut Final authorization to operate its hazardous waste program with the changes described in the authorization application.

The EPA authorizes Connecticut regulations which update the State's hazardous waste program to meet Federal requirements through January 1, 2001. The revisions track the following Federal rules in RCRA Clusters Non-HSWA VI, HSWA I, HSWA II, and RCRA I through XI:

The revisions also include other State regulations which address Federal requirements, including the State provisions identified in Table 3 in the Program Description and including changes that the State has made to its base program regulations that were authorized in 1990.

The specific State regulations that the EPA is proposing to authorize are listed in the table below. State provisions listed as “analogous” may be equivalent or may be more stringent/go beyond the Federal regulations. The Federal requirements in the table are identified by reference to the Code of Federal Regulations (CFR). The following abbreviation is used in defining corresponding state authority: R.C.S.A. (Regulations of Connecticut State Agencies). Note that the table below has been slightly revised from the table in the proposed rulemaking due to ongoing State and Federal legal review.

Following review of the Connecticut regulations, the EPA has determined that they are equivalent to, no less stringent than and consistent with the Federal program. The reasons for these determinations are set forth in the Administrative Docket, which is available for public review. Many of the State regulations incorporate Federal requirements by reference and are virtually identical. In some cases, the State regulations add clarifying language, and the EPA considers the clarifications to be equivalent to the Federal regulations. Finally, there are some State regulations which are more stringent than, broader in scope than, or different but equivalent to the Federal regulations, as described in the Program Description and summarized below.

The most significant differences between the authorized State rules and the Federal rules are summarized below. It should be noted that this summary does not describe every difference, or every detail regarding the differences that are described. Members of the regulated community are advised to read the complete regulations to ensure that they understand all of the requirements with which they will need to comply.

There are aspects of the Connecticut program which are more stringent than the Federal program. All of these more stringent requirements are becoming part of the federally enforceable RCRA program when authorized by the EPA, and must be complied with in addition to the State requirements which track the minimum Federal requirements. These more stringent requirements include the following, which are more fully described in the Program Description:

There also are aspects of the Connecticut program which are broader in scope than the Federal program. The State requirements which are broader in scope are not considered to be part of the federally enforceable RCRA program. However, they are fully enforceable under State law and must be complied with by sources within Connecticut. These broader-in-scope requirements include the following, which are more fully described in the Program Description:

There also are some Connecticut regulations which differ from, but have been determined to be equivalent to, the Federal regulations. These authorized State regulations are becoming part of the federally enforceable RCRA program. These different but equivalent requirements include some requirements related to Corrective Action described in the next section, and also the following:

As part of this program update, the State is assuming responsibility for operating the Federal Corrective Action program. The authorized program covers all Treatment Storage and Disposal Facilities (TSDFs) subject to 40 CFR 264.101, which includes (i) active facilities which need permits to conduct ongoing treatment, storage or disposal, and (ii) interim status land disposal facilities which have been required to seek post closure permits under the EPA regulations.

The State regulations incorporate 40 CFR 264.101 by reference with certain more stringent changes and thus meet the Federal Corrective Action requirements with respect to all facilities which have been or will be permitted. In addition, the State has adopted regulations (R.C.S.A. 22a-449(c)-105(h) and 22a-449(c)-110(a)(2)(RR)) which will accelerate Corrective Action at the interim status land disposal facilities, prior to permitting. Under these regulations, all of the interim status land disposal facilities have been required to submit Environmental Condition Assessment Forms (ECAFs) to the CTDEP. Following review by the CTDEP of the ECAFs, the regulations require that Corrective Action occur either under the direct supervision of the CTDEP or under the direction of a Licensed Environmental Professional (LEP). Whether sites are remediated under the direction of the CTDEP or under the direction of a LEP, the regulations specify that there will be a review of the remediation by the CTDEP prior to any determination that remediation is complete. Sites will remain in interim status until there is such a completeness determination. The regulations further provide for opportunities for public comment for all sites both at the time of remedy selection and prior to any completeness determination.

The State's regulations also recognize that some sites have or will undertake Corrective Action pursuant to Connecticut General Statutes sections 22a-134 to 22a-134e (the “Transfer Act”). Corrective Action at such sites will be subject to the same requirements for CTDEP review (including review of LEP determinations) and the same public comment procedures as specified above.

The EPA believes that the State program is “equivalent” to the EPA Corrective Action program, for the reasons explained below, and further explained in the January 30, 2002, Memorandum entitled “Connecticut Corrective Action Regulations” by EPA Assistant Regional Counsel Jeffry Fowley (in the docket). The EPA regulations contemplate that Corrective Action will occur at sites subject to 40 CFR 264.101, pursuant to permits (or orders). Under the State program, permits similarly will be issued to active facilities and ultimately to some interim status facilities requiring long-term operation and maintenance ( e.g. , closed landfills). While other interim status facilities may satisfy their closure obligations at regulated units and achieve full remediation pursuant to the State regulations and the Transfer Act prior to being issued post closure permits, and thus may never need to be issued post closure permits, this involves an acceleration of effort which is environmentally beneficial. The EPA believes that the State's approach—of having the State agency review whether Corrective Action is complete, after Corrective Action has been carried out under the State regulations and the Transfer Act (sometimes under the direction of a LEP)—is equivalent to the EPA approach of carrying out Corrective Action under the direction of the EPA through a permit. Also, the opportunities for public comment required by the State regulations are equivalent to the public comment procedures applicable to EPA permits. Finally, the State has the needed enforcement authority to ensure that Corrective Action is promptly and fully carried out at sites subject to the State regulations and Transfer Act.

In determining whether remediation is complete, the State and EPA will utilize the Connecticut Remediation Standard Regulations (RSRs), R.C.S.A. 22a-133k-1 et seq. , as their primary tool. The EPA believes that the State's approach meets the Federal (40 CFR 264.101) requirement for protection of human health and the environment for the reasons explained below, and further explained in the June 2, 2004, Memorandum entitled “CT Remediation Standard Regulations” by David Lim, CT State Coordinator, EPA RCRA Corrective Action Section (in the docket). The RSRs contain numeric standards for the remediation of soil and groundwater which generally are at least as protective as what would be achieved through site-specific assessments in EPA directed cleanups. For those rare situations where the general standards of the RSRs might not be sufficient, the RSRs contain “Omnibus” provisions (sections 22a-133k-2(i) and 22a-133k-3(i)) that allow the State to require additional measures. In the Memorandum of Agreement, the EPA and CTDEP have identified particular situations in which this Omnibus authority will be used at Corrective Action sites.

In addition to the sites subject to 40 CFR 264.101, there are other sites in Connecticut subject to Corrective Action under RCRA section 3008(h). These are former non-land disposal facilities (mostly container storage areas and tanks) which may no longer need permits. However, under the Federal Corrective Action program, as permit applicants initially, these facilities acquired site-wide Corrective Action obligations that must be met. The EPA has not established a mechanism for authorizing States to administer the Corrective Action program for such sites. However, in the Memorandum of Agreement (MOA), the EPA and CTDEP have agreed on a coordinated approach to avoid duplication of effort with respect to such sites. In particular, the EPA and CTDEP expect that many of these sites will undertake Corrective Action under the Transfer Act. The CTDEP has agreed in the MOA to utilize the same governmental review and public comment procedures with respect to these non-land disposal facilities as it follows for the land disposal facilities. As also specified in the MOA, the EPA will retain all of its statutory enforcement authority with respect to the non-land disposal facilities, just as it retains its statutory enforcement authority even with respect to the sites subject to the formal authorization. However, the EPA generally does not anticipate taking enforcement action against non-land disposal facilities which promptly and fully carry out Corrective Action pursuant to the Transfer Act, just as the EPA generally does not anticipate taking enforcement action against land disposal facilities which promptly and fully carry out Corrective Action pursuant to the State regulations described above and the Transfer Act. This agreement entered into by the EPA and CTDEP to avoid duplication of effort is further described in the MOA. While the statements in the MOA (and in this Federal Register notice) do not create any legal rights or defenses, the EPA hopes that the agreed upon coordination between the EPA and the CTDEP will foster site cleanups using a One-Cleanup approach.

It is the long-term goal of the EPA and CTDEP that the CTDEP will be the lead overseeing agency for all sites subject to Corrective Action in Connecticut. However, the EPA will continue to be the lead agency for certain sites for a variety of reasons that could include maximizing the Federal and State resources available to oversee the program, implementing special initiatives such as achieving environmental indicators or enhancing enforcement. Further, the EPA and CTDEP will at times provide technical and/or logistical support to one another.

At the Federal level, the effect of this authorization decision is that entities in Connecticut subject to RCRA will be able to comply with the authorized State requirements instead of the Federal requirements, with respect to the matters covered by the authorized State requirements, in order to comply with RCRA. However, there will continue to be a dual Federal RCRA program in Connecticut for the few HSWA rules (adopted since January 1, 2001) for which the state is not presently seeking authorization, and for any self-implementing HSWA statutory requirements for which the State has not adopted regulations ( e.g. , RCRA section 3005(j), 42 U.S.C. 6925(j)). RCRA was amended by the Hazardous and Solid Waste Amendments (“HSWA”) in 1984. Section 3006(g) of RCRA, 42 U.S.C. 6906(g), provides that when the EPA promulgates new regulatory requirements pursuant to HSWA, the EPA shall directly carry out these requirements in states authorized to administer the underlying base hazardous waste program, until the states are authorized to administer these new requirements. The EPA has established a few new regulatory requirements pursuant to HSWA which are not yet proposed to be authorized to be administered by Connecticut. Regulated entities will need to comply with these HSWA requirements as set out in the Federal regulations and statute in addition to authorized State program requirements. A complete list of HSWA requirements is set out in 40 CFR 271.1, Tables 1 and 2.

With respect to TSDF permitting, Connecticut will continue to issue permits for all the provisions for which it is authorized and will administer the permits it issues. The EPA will continue to administer any RCRA hazardous waste permits or portions of permits it has issued. The EPA also will continue to issue permits or portions of permits covering HSWA requirements for which Connecticut is not authorized.

Connecticut is not authorized to carry out its hazardous waste program in Indian country within the State (lands of the Mohegan Nation and the Mashantucket Pequot Tribal Nation). Today's action will have no effect on Indian country. The EPA will continue to implement and administer the RCRA program in these lands.

The EPA is authorizing but not codifying the enumerated revisions to the Connecticut program. Codification is the process of placing the State's statutes and regulations that comprise the State's authorized hazardous waste program into the Code of Federal Regulations. The EPA does this by referencing the authorized State rules in 40 CFR part 272. The EPA reserves the amendment of 40 CFR part 272, subpart H for the codification of Connecticut's program until a later date.

The EPA has examined the effects of the State authorization decision discussed above and reached the conclusions set out below.

The Office of Management and Budget has exempted this action from the requirements of Executive Order 12866 (58 FR 51735, October 4, 1993), and therefore this action is not subject to review by OMB.

This action authorizes State requirements for the purpose of RCRA 3006 and imposes no additional requirements beyond those imposed by State law. Accordingly, the EPA certifies that this action 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 action authorizes pre-existing requirements under State law and does not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate, or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). For the same reason, this action also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely authorizes State requirements as part of the State RCRA hazardous waste program without altering the relationship or the distribution of power and responsibilities established by RCRA.

This action also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant and it does not make decisions based on environmental health or safety risks. This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)) because it is not a significant regulatory action under Executive Order 12866.

Under RCRA 3006(b), EPA grants a State's application for authorization as long as the State meets the criteria required by RCRA. It would thus be inconsistent with applicable law for EPA, when it reviews a State authorization application, to require the use of any particular voluntary consensus standard in place of another standard that otherwise satisfies the requirements of RCRA. 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.

As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA also has complied with Executive Order 12630 (53 F.R. 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings issued under the Executive Order.

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 is submitting a report containing this document 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 in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined in 5 U.S.C. 804(2). This action will be effective immediately upon today's publication in the Federal Register .

This rule does not impose any information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

In Title 42 of the Code of Federal Regulations, Part 430 to End, revised as of October 1, 2003, on page 1027, in § 493.945, in the table in paragraph (b)(3)(ii)(C), the entry in row D, column B is corrected to read −5.

This is a summary of the Federal Communications Commission's Report and Order, FCC 04-75, adopted on March 30, 2004 and released on April 14, 2004. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street, SW., Washington, DC 20554. The complete text may be purchased from the Commission's copy contractor, Qualex International, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. The full text may also be downloaded at: http://www.fcc.gov. Alternative formats are available to persons with disabilities by contacting Brian Millin at (202) 418-7426 or TTY (202) 418-7365 or at Brian.Millin@fcc.gov.

The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose no new or modified reporting and recordkeeping requirements or burdens on the public.

1. In the Report and Order the Commission is adopting measurement techniques that both protect safety of life and permit the operation of analog and digital cable systems. By further defining the measurement techniques for digital signals to protect EPIRBs and ELTs, cable operators with digital cable systems will be able to deploy new digital services without undue power limitations on cable channel 54. By extending interference protection to all frequencies in the COSPAS-SARSAT 406 MHz Management Plan, the Commission is protecting all current beacon models as well as known future beacon models. These modifications will protect public safety interests while adapting to changes in digital technology.

2. Digital cable systems must limit their average power levels between 405.925 MHz and 406.176 MHz to 10 −5 watts, measured using an RMS detector, over any 30 kHz bandwidth in any 2.5 millisecond interval. This rule is tailored specifically for the protection of EPIRBs and ELTs only. Should the Commission adopt measurement standards for digital cable signals in the broader context in the future, we will consider the full set of parameters surrounding digital signals. Analog signals, however, are prohibited from delivering peak power levels equal to or greater than 10 −5 watts from 405.925 MHz to 406.176 MHz.

3. Paperwork Reduction Act: The action contained in this Report and Order has been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose no new or modified reporting and recordkeeping requirements or burdens on the public.

4. Final Regulatory Flexibility Analysis: As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice. The Commission sought written public comments on the possible significant economic impact of the proposed policies and rules on small entities in the Notice, including comments on the IRFA. Pursuant to the RFA, a Final Regulatory Flexibility Analysis is contained herein.

5. Ordering Clauses: Accordingly, it is ordered that, pursuant to authority found in Sections 4(i)-(j) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i)-(j), 303(c), (f), and (r), and 309(j), the Commission's rules are hereby amended as set forth herein, and shall become effective 30 days after publication in the Federal Register .

6. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

7. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking (NPRM) in MB Docket No. 03-50, FCC 03-37. The Commission sought written public comment on the proposals in the Notice, including comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

8. Need for, and Objectives of, this Report and Order. We have adopted rules to provide interference protection to the international digital emergency and distress frequencies in the COSPAS-SARSAT 406 MHz Frequency Management Plan. Digital distress beacons are becoming more widely used as the analog beacons are slowly being phased out. In the interest of public safety, our rules will eliminate potential interference from cable systems to the frequencies used by these digital beacons. All frequencies used by the digital beacons, according to the 406 Frequency Management Plan, will be added to those frequencies which are already protected from cable signal leakage. This addition covers all foreseeable digital beacon frequencies and should not pose any greater burden on small businesses. In addition to these rules, this Order updates, streamlines, and revises parts 76 and 78 of the Commission's rules by fixing typographical errors, removing grandfathered dates that have already passed, etc. These changes should have no differential impact on small businesses.

9. Summary of Significant Issues Raised by Public Comments in Response to IRFA. No one commented in direct response to the IRFA. We received comments from the NCTA, RCN, NOAA, and RTCM and reply comments from the NTIA and NCTA. None of the parties commented on the IRFA. Many of the comments concerned extending the interference protection as well as differentiating between analog and digital cable systems. No parties commented on small business related issues.

10. Description and Estimate of the Number of Small Entities to Which the Rules Will Apply. The RFA directs the Commission to provide a description of and, where feasible, an estimate of the number of small entities that will be affected by the rules adopted herein. The RFA defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction” under Section 3 of the Small Business Act. Under the Small Business Act, a small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

11. Cable and Other Programming Distribution. The SBA has developed a definition of small entities for cable and other pay television services, which includes such companies generating $12.5 million or less in annual receipts. This definition includes cable system operators, closed circuit television services, direct broadcast satellite services, multipoint distribution systems, satellite master antenna systems, and subscription television services. According to the Census Bureau data for 1997, there were a total of 1,311 firms in this category, total, that had operated for the entire year. Consequently, the Commission estimates that the majority of providers in this service category are small businesses that may be affected by the rules and policies adopted herein. We address below services individually to provide a more precise estimate of small entities.

12. Open Video System (OVS). The Commission has certified eleven OVS operators. Of these eleven, only two are providing service. Affiliates of residential Communications Network, Inc. (RCN) received approval to operate OVS systems in New York City, Boston, Washington, DC, and other areas. RCN has sufficient revenues to assure us that they do not qualify as small business entities. Little financial information is available for the other entities authorized to provide OVS service that are not yet operational. Given that other entities have been authorized to provide OVS service but have not yet begun to generate revenues, we conclude that at least some of the OVS operators qualify as small entities.

13. Cable System Operators (Rate Regulation Standard). The Commission has developed a size standard for small cable system operators for the purposes of rate regulation. Under the Commission's rules, a “small cable company” is one serving fewer than 400,000 subscribers nationwide. Based on our most recent information, we estimate that there were 1439 cable operators that qualified as small cable companies at the end of 1995. Since then, some of those companies may have grown to serve over 400,000 subscribers, and others may have been involved in transactions that caused them to be combined with other cable operators. The Commission's rules define a “small system,” for the purposes of rate regulation, as a cable system with 15,000 or fewer subscribers. The Commission does not request nor does the Commission collect information concerning cable systems serving 15,000 or fewer subscribers and thus is unable to estimate, at this time, the number of small cable systems nationwide.

14. Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as amended, also contains a definition of a small cable system operator, which is “a cable operator that, directly of through an affiliate, serves in the aggregate fewer than 1% of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” The Commission has determined that there are 61,700,000 subscribers in the United States. Therefore, a cable operator serving fewer than 617,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all of its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that the number of cable operators serving 617,000 subscribers or less totals approximately 1450. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under definition in the Communications Act of 1934.

15. Private Cable Operators. Based on our most recent information, we estimate that there are 3400 private cable operators serving multiple dwelling units that qualify as small cable companies as characterized by the standard set forth in the Telecommunications Act. Some of those companies may have grown to serve from 800,000 to 1.6 million subscribers, and others may have been involved in transactions that caused them to be combined with other cable operators. Consequently, we estimate that there are fewer than 3,400 small entity private cable system operators that may be affected by the decisions and rules we are adopting.

16. Description of Projected Reporting, Record Keeping and other Compliance Requirements. This Report and Order creates no additional reporting, record keeping, or other compliance requirements. Rather, makes reporting easier and more efficient by permitting filing by electronic means via the Internet. It also simplifies reporting by standardizing forms and deleting duplicate and unnecessary data collections.

17. Steps Taken to Minimize the Impact on Small Entities, and Significant Alternatives Considered. The RFA requires an agency to describe any significant alternatives that it has considered in developing its approach, which may include the following four alternatives (among others): “(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”

18. It was considered whether providing interference protection to the digital beacons would differentially affect small businesses. However, examination of the record shows that the restricted power levels would still allow operations to continue without causing any harm or loss to smaller entities. No alternative power levels were considered because on this issue there were no questions raised in the NPRM or comments regarding small businesses, and because there is no evidence that the rules establishing these power levels would affect smaller entities either adversely or differently than larger entities.

19. Report to Congress. We will send a copy of this Report and Order, including this FRFA, in a report to Congress pursuant to the Congressional Review Act of 1996, 5 U.S.C. 801(a)(1)(A). A copy of this Report and Order and FRFA (or summary thereof) will also be published in the Federal Register , pursuant to 5 U.S.C. 604(b), and will be sent to the Chief Counsel for Advocacy of the Small Business Administration.

20. Accordingly, it is ordered that, pursuant to authority found in Sections 4(i)-(j) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i)-(j), 303(c), (f), and (r), and 309(j), the Commission's rules are hereby amended as set forth in Appendix A, and shall become effective 30 days after publication in the Federal Register .

21. It is further ordered that the Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

The Federal Communications Commission published a document in the Federal Register of September 19, 2003, (68 FR 54855), which amended § 73.202(b), the FM Table of Allotments under Alabama by removing Channel 295C and adding Channel 295C0 at Birmingham. However, Channel 295C at Birmingham was reallotted to Homewood, Alabama in a prior rulemaking proceeding. See 68 FR 33654, published June 5, 2003.

Part 73 of title 47 of the Code of Federal Regulations currently contains under § 73.202(b), the FM Table of Allotments under Alabama Channel 295C0 at Birmingham, therefore Channel 295C0 at Birmingham needs to be removed from the Code of Federal Regulations.

This is a summary of the Commission's Report and Order, adopted September 15, 2004 and released September 17, 2004. The full text of this Commission decision is available for inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20054, telephone 1-800-378-3160 or http://www.BCPIWEB.com. The Commission will not send a copy of the Report & Order in this proceeding pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), because the adopted rules are rules of particular applicability.

Background

In order to preserve the remedial impact of civil penalties and to foster compliance with the law, the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990 (28 U.S.C. 2461 Notes, Pub. L. 101-410), as amended by the Debt Collection Improvement Act of 1996, Pub. L. 104-134 (referred to collectively as the “Adjustment Act” or, in context, the “Act”), requires us and other Federal agencies to regularly adjust civil penalties for inflation. Under the Adjustment Act, following an initial adjustment that was capped by the Act, these agencies must make further adjustments, as warranted, to the amounts of penalties in statutes they administer at least once every four years.

NHTSA's initial adjustment of civil penalties under the Adjustment Act was published on February 4, 1997. 62 FR 5167. At that time, we codified the adjustments in 49 CFR part 578, Civil Penalties. On July 14, 1999, we further adjusted certain penalties involving odometer requirements and disclosure, consumer information, motor vehicle safety, and bumper standards. 64 FR 37876. On August 7, 2001, we also adjusted certain penalty amounts pertaining to odometer requirements and disclosure and vehicle theft prevention. 66 FR 41149. In addition to increases in authorized penalties under the Adjustment Act, the Transportation Recall Enhancement, Accountability, and Documentation (“TREAD”) Act increased penalties under the National Traffic and Motor Vehicle Safety Act as amended (sometimes referred to as the “Motor Vehicle Safety Act”). We codified those amendments in a notice published on November 14, 2000. 65 FR 68108.

On June 14, 2004, based on our review of the amounts of civil penalties authorized in part 578, we proposed to adjust those penalties where warranted under the Adjustment Act. 69 FR 32963. Our proposal addressed violations pertaining to motor vehicle safety, bumper standards, and consumer information regarding crashworthiness and damage susceptibility.

Under the Adjustment Act, we determine the inflation adjustment for each applicable civil penalty by increasing the maximum civil penalty amount per violation by a cost-of-living adjustment, and then applying a rounding factor. Section 5(b) of the Adjustment Act defines the “cost-of-living” adjustment as:

The percentage (if any) for each civil monetary penalty by which—

(1) The Consumer Price Index for the month of June of the calendar year preceding the adjustment exceeds

(2) The Consumer Price Index for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law.

Since the adjustment will be effective before December 31, 2004, the “Consumer Price Index [CPI] for the month of June of the calendar year preceding the adjustment” is the CPI for June 2003. This figure, based on the Adjustment Act's requirement of using the CPI “for all-urban consumers published by the Department of Labor” is 550.4. 1 The penalty amounts that NHTSA is adjusting based on the Act's requirements were last adjusted in 1999 for violations related to bumper standards and consumer information regarding crashworthiness and damage susceptibility and in 2000 for violations related to motor vehicle safety. The CPI figures for June 1999 and June 2000 were 497.9 and 516.5, respectively. Accordingly, the factors that we used in calculating the increase are 1.10 (550.4/497.9) for adjustments to the bumper standard and consumer information penalties and 1.07 (550.4/516.5) for adjustments to the motor vehicle safety penalties. Using 1.10 and 1.07 as the inflation factors, calculated increases under these adjustments are then subject to a specific rounding formula set forth in section 5(a) of the Adjustment Act. 28 U.S.C. 2461, Notes. Under that formula:

Any increase shall be rounded to the nearest:

(1) Multiple of $10 in the case of penalties less than or equal to $100;

(2) Multiple of $100 in the case of penalties greater than $100 but less than or equal to $1,000;

(3) Multiple of $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000;

(4) Multiple of $5,000 in the case of penalties greater than $10,000 but less than or equal to $100,000;

(5) Multiple of $10,000 in the case of penalties greater than $100,000 but less than or equal to $200,000; and

(6) Multiple of $25,000 in the case of penalties greater than $200,000.

In the Notice of Proposed Rulemaking, we reviewed penalties in section 578.6, calculated updated penalties using the appropriate CPI figures, considered the nearest higher multiple specified in the rounding provisions, and proposed that the penalties discussed below may be increased.

We received one comment on our proposal from a private individual who recommended that the agency impose no penalty under $500 and that a maximum penalty of $150,000,000 be imposed on violators of the provisions that we proposed to adjust. We are not modifying our proposal based on this comment because it is inconsistent with the penalty provisions in the statutes addressed in this notice and with the Adjustment Act. We are adjusting the penalties as proposed and as addressed below.

The maximum civil penalty for a related series of violations of sections 30112, 30115, 30117 through 30122, 30123(d), 30125(c), 30127, or 30141 through 30147 of title 49 of the United States Code or a regulation thereunder is $15,000,000, as specified in 49 CFR 578.6(a)(1). Likewise, the maximum penalty for a related series of daily violations of 49 U.S.C. 30166 or a regulation thereunder is $15,000,000, as specified in 49 CFR 578.6(a)(2). Under the rounding formula set by the Adjustment Act, any increase in a penalty shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. Applying the formula using the appropriate inflation factor (1.07) and the accompanying rounding rules, the increase in the penalty amounts would be $1,050,000. Accordingly, we are amending 49 CFR 578.6(a)(1) and (a)(2) to increase the maximum civil penalty to $16,050,000 for a related series of motor vehicle safety violations. However, the maximum civil penalties for a single violation will remain at $5,000 under 49 CFR 578.6(a) because the inflation-adjusted figures are not yet at a level to be increased under the Adjustment Act.

The agency last adjusted its civil penalties for violations of bumper requirements under 49 U.S.C. chapter 325 in 1999. The maximum civil penalty for a related series of violations of 49 U.S.C. 32506(a) is $925,000, as specified in 49 CFR 578.6(c)(2). Applying the appropriate inflation factor (1.10) to the calculation raises this figure to $1,017,500, an increase of $92,500. Under the rounding formula, any increase in a penalty's amount shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. In this case, the increase would be $100,000. Accordingly, we are amending section 576.8(c)(2) to increase the maximum civil penalty to $1,025,000 for a related series of violations of the bumper standard provisions. However, the maximum civil penalty for a single violation remains at $1,100 because the inflation-adjusted figure is not yet at a level to be increased.

The civil penalties related to consumer information regarding crashworthiness and damage susceptibility were last adjusted in 1999. Under 49 CFR 578.6(d), the maximum civil penalty for a related series of violations of 49 U.S.C. 32308(a) is $450,000. Applying the appropriate inflation factor (1.10) raises this figure to $495,000, which is an increase of $45,000. Under the formula, any increase in a penalty's amount shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. In this instance, the rounding rules provide for an increase of $50,000. Accordingly, we are amending section 576.8(d) to increase the maximum civil penalty to $500,000 for a related series of violations that pertain to NHTSA's crashworthiness and damage susceptibility consumer information provisions. However, the maximum penalty for a single violation remains at $1,100 because the inflation-adjusted figure is not yet at a level to be increased.

Executive Order 12866, “Regulatory Planning and Review,” provides for making determinations whether a regulatory action is “significant” and therefore subject to OMB review and to the requirements of the Executive Order. The Order defines a “significant regulatory action” as one that is likely to result in a rule that may:

NHTSA has considered the impact of this final rule under E.O. 12866 and the Department of Transportation's regulatory policies and procedures and has determined that it is not significant. This action is limited to the adoption of statutorily mandated adjustments of civil penalties under statutes that the agency enforces, raises no novel issues, and does not otherwise interfere with other actions. This final rule does not impose any costs that would exceed the $100 million threshold or otherwise materially impact entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof. The agency has therefore determined this final rule to be not “significant” under the Department of Transportation's regulatory policies and procedures.

We have also considered the impacts of this notice under the Regulatory Flexibility Act. I certify that this rule will not have a significant economic impact on a substantial number of small entities. The following provides the factual basis for this certification under 5 U.S.C. 605(b). The amendments almost entirely potentially affect manufacturers of motor vehicles and motor vehicle equipment.

The Small Business Administration's regulations define a small business in part as a business entity “which operates primarily within the United States.” 13 CFR 121.105(a). SBA's size standards were previously organized according to Standard Industrial Classification Codes (“SIC”), SIC Code 3711 “Motor Vehicles and Passenger Car Bodies,” which used a small business size standard of 1,000 employees or fewer. SBA uses size standards based on the North American Industry Classification System (“NAICS”), Subsector 336—Transportation Equipment Manufacturing, which provides a small business size standard of 1,000 employees or fewer for automobile manufacturing businesses. Other motor vehicle-related industries have lower size requirements that range between 500 and 750 employees. 2

Many small businesses are subject to the penalty provisions of 49 U.S.C. Chapters 301 (motor vehicle safety), 325 (bumpers) or 323 (consumer information) and therefore may be affected by the adjustments made by this rule. For example, based on comprehensive reporting pursuant to the early warning reporting (EWR) rule under the Motor Vehicle Safety Act, 49 CFR part 579, out of 72 reporting we are aware of approximately 50 light vehicle manufacturers that are small businesses. In addition, there are other, relatively low production light vehicle manufacturers that are not subject to comprehensive EWR reporting. Additionally, many of the more than 70 manufacturers of medium-heavy vehicles and buses, the more than 150 trailer manufacturers, and the 12 motorcycle manufacturers providing comprehensive EWR reports are small businesses and there are numerous others that are below the production threshold for comprehensive reporting. There are over 6 manufacturers of child restraints and 18 tire manufacturers that are reporting pursuant to the EWR rule. Also, there are numerous other low-volume specialty tire manufacturers that do not provide comprehensive EWR reports. Furthermore, there are about 160 registered importers. Equipment manufacturers are also subject to penalties under 49 U.S.C. 30165.

The bumper and consumer information statutes addressed by this rule cover passenger motor vehicles, which are within the compass of the Motor Vehicle Safety Act. As a result, the discussion of the numbers and sizes of light vehicle manufacturers above also covers those statutes. As noted throughout this preamble, this rule increases only the maximum penalty amounts that the agency could obtain for violations of provisions related to motor vehicle safety, bumper standards, and certain consumer information. The rule does not set the amount of penalties for any particular violation or series of violations. Under the motor vehicle safety and consumer information statutes, the penalty provisions require the agency to take into account the size of a business when determining the appropriate penalty in an individual case. See 49 U.S.C. 30165(b) (motor vehicle safety) and 49 U.S.C. 32308(b)(3) (consumer information). While the bumper standards penalty provision does not specifically require the agency to consider the size of the business, the agency would consider business size under its civil penalty policy when determining the appropriate civil penalty amount. See 62 FR 37115 (July 10, 1997) (NHTSA's civil penalty policy under the Small Business Regulatory Enforcement Fairness Act (“SBREFA”)). The penalty adjustments in today's rule will not affect our civil penalty policy under SBREFA. As a matter of policy, we intend to continue to consider the appropriateness of the penalty amount to the size of the business charged.

Since this regulation does not establish penalty amounts, this rule will not have a significant economic impact on small businesses.

Further, small organizations and governmental jurisdictions will not be significantly affected as the price of motor vehicles and equipment ought not to change as the result of this rule. As explained above, this action is limited to the adoption of a statutory directive, and has been determined to be not “significant” under the Department of Transportation's regulatory policies and procedures.

In accordance with the Paperwork Reduction Act of 1980, as amended, we state that there are no requirements for information collection associated with this rulemaking action.

We have also analyzed this rulemaking action under the National Environmental Policy Act and determined that it has no significant impact on the human environment.

We have analyzed this rule in accordance with the principles and criteria contained in Executive Order 12612, and have determined that it has no significant federalism implications to warrant the preparation of a Federalism Assessment.

This rule does not have a retroactive or preemptive effect. A petition for reconsideration need not be filed prior to seeking judicial review, when available.

The Unfunded Mandates Reform Act of 1995, Pub. L. 104-4 requires agencies to prepare a written assessment of the cost, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually. Because this rule will not have a $100 million effect, no Unfunded Mandates assessment will be prepared.

I. Background

On July 10, 2002, NHTSA published a final rule implementing the early warning reporting (EWR) provisions of the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, 49 U.S.C. 30166(m) 67 FR 45822. The EWR final rule established a schedule for the reporting of information and submission of copies of certain field reports required by the rule. The first calendar quarter for which reports were required was the second calendar quarter of 2003. See 49 CFR 579.28(a)(2002). For the quarterly reporting periods in 2003, the reports were due within 60 days after the end of the quarter. Thereafter, starting in 2004, reports were to be due within 30 days after the end of the quarter. See 49 CFR 579.28(b) (2002).

In response to a petition for reconsideration of the final rule, on June 11, 2003, NHTSA amended the reporting dates. 68 FR 35145. Under the revised rule, the initial reporting period for all quarterly data  1 other than historical reports and copies of non-dealer field reports was the third quarter of 2003. Reports covering the last two quarters of 2003 and the first quarter of 2004 were due to NHTSA within 60 days after the close of the reporting period. Thereafter, reports currently are due within 30 days after the close of the quarter. NHTSA also amended the requirements for submission of copies of non-dealer field reports. The initial reporting period for the submission of copies of non-dealer field reports was the first calendar quarter of 2004. Under that amendment, the dealer field reports are due within 30 days after the quarterly data are due. 49 CFR 579.28(b), (n) (2003); see 68 FR 35145.

In response to a petition for rulemaking filed by the Alliance of Automobile Manufacturers (Alliance), on June 29, 2004, NHTSA published a proposal to amend the date by which quarterly early warning reports are to be submitted to the agency from 30 days following the end of a calendar quarter to 60 days following the end of a calendar quarter. In addition, the agency proposed to amend the date by which copies of non-dealer field reports are to be submitted from 30 days after the quarterly reports are due to 15 days after those reports are due. 69 FR 38860. In the NPRM, the agency stated that based upon the experience of the Alliance's members, it appeared that manufacturers need more than 30 days to provide complete and accurate EWR reports to NHTSA. The agency further explained that complete reports best serve its EWR program because its analysts use the quarterly reports to assist in the identification of possible defect trends, and incomplete reports would disrupt the analytical process.

We received comments from industry trade associations and the public. For the industry, the Rubber Manufacturers Association (RMA), the Motor & Equipment Manufacturers Association (MEMA), the Association of International Automobile Manufacturers, Inc. (AIAM), the Alliance, and the Truck Manufacturers Association (TMA) submitted comments. In general, the industry supported the proposal and urged NHTSA to adopt it. Specifically, RMA indicated that its members report that the process of gathering information and completing the reports has been more complex than anticipated. In addition, MEMA commented that some of its members are part of large multi-national organizations that require more time to identify EWR information, translate it to English and prepare the applicable EWR report. Lastly, the Alliance and AIAM stated that the additional time to provide reports would ensure that its members provide complete and accurate reports to NHTSA.

We also received one comment against the proposal from a private citizen. That individual commented that 60 days to report EWR information is unreasonable since computers have the ability to quickly collate information.

When we issued the EWR final rule, and when we postponed the initial reporting period on reconsideration, we believed that after manufacturers had three opportunities to gain experience in making EWR submissions, 30 days after the end of each calendar quarter would be a sufficient amount of time for submitting EWR information. However, based upon the comments received from the industry, we are adopting the proposed revision to section 579.28(b) to permit manufacturers to submit EWR quarterly data not later than 60 days after the end of each calendar quarter.

As we stated in the NPRM, the EWR rule requires manufacturers to submit large amounts of data that are stored in a variety of locations. As manufacturers have compiled and reported EWR information, they have gained a better understanding of the amount of time it takes them to collect, collate, and report the information. Based upon the experience of commenters, it appears that, at least for the foreseeable future, manufacturers need more than 30 days to collect, collate, and provide complete and accurate EWR reports to NHTSA.

We do not believe that extending the due date for EWR reports will be a detriment to the interests of motor vehicle safety. Incomplete or inaccurate data would not serve NHTSA well. In fact, incomplete reports could lead the agency to fail to identify potential defects or to examine issues unnecessarily, thereby wasting agency resources.

As we have stated in earlier Federal Register notices on the early warning reporting program, we plan to begin reviewing the EWR regulation after two years of reporting experience. During the course of this review, we will assess whether the appropriate time for quarterly reporting should be 30, 60 or some other number of days after the end of the reporting period.

Under the current regulations, copies of non-dealer field reports are due to NHTSA within 30 days after the other quarterly reports are due. 49 CFR 579.28(n) (2003). In essence, beginning with the second quarter of 2004, these reports are now due 60 days after the end of the quarter. Given the structure of the regulation, which bases the due date for non-dealer field reports on the due date for quarterly reports, if we were to change the due date for the quarterly reports and make no other changes, the non-dealer field reports would be due 90 days after the end of the quarter. We do not see any need for a delay of that length. However, to avoid any possibility that the submission of the field reports could interfere with the submission of the quarterly data, we proposed to continue to stagger the two dates. We proposed a 15 day difference between reporting dates for this purpose. We did not receive any comments to the contrary. Therefore, we will adopt the proposal to change the language of subsection 579.28(n) to require non-dealer field reports to be submitted not later than 15 days after the quarterly data is due, which would be 75 days after the end of the calendar quarter.

Regulatory Policies and Procedures. Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993) provides for making determinations whether a regulatory action is “significant” and therefore subject to Office of Management and Budget (OMB) review and to the requirements of the Executive Order. The Order defines as “significant regulatory action” as one that is likely to result in a rule that may:

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

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

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

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

Today's final rule was not reviewed under E.O. 12866 or the Department of Transportation's regulatory policies and procedures. This rulemaking action is not significant under Department of Transportation policies and procedures. The impacts of today's final rule are expected to be so minimal as not to warrant preparation of a full regulatory evaluation because the final rule only revises the time period for reporting certain EWR data from 30 days to 60 days after the calendar quarter ends and revises the date for submission of certain field reports by 15 days. This document does not otherwise change the substance of the reports.

Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq. ) requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. This was addressed in the EWR final rule and in response to petitions for reconsideration. See 67 FR 45870-71 and 69 FR 3292, 3297 respectively. Today's final rule simply extends dates for reporting information under the early warning program and does not impose any new burdens on small businesses. Based on the analyses performed in the EWR final rule (67 FR 45870-71) and the response to petitions for rulemaking (69 FR 3292, 3297), I certify that this proposed rule will not have a significant economic impact on a substantial number of small entities.

Executive Order 13132 (Federalism) Executive Order 13132 on “Federalism” requires us to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of “regulatory policies that have federalism implications.” The Executive Order defines this phrase to include regulations “that have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” The agency has analyzed this final rule in accordance with the principles and criteria set forth in Executive Order 13132 and has determined that it will not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. Today's final rule is a rule that regulates the manufacturers of motor vehicles and motor vehicle equipment, which does not have 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, as specified in Executive Order 13132.

Civil Justice Reform. This final rule will not have a retroactive or preemptive effect, and judicial review of it may be obtained pursuant to 5 U.S.C. 702. That section does not require that a petition for reconsideration be filed prior to seeking judicial review.

Paperwork Reduction Act. Today's final rule simply extends the reporting period for the submission of EWR data. It does not create new information collection requirements, as that term is defined by the Office of Management and Budget (OMB) in 5 CFR part 1320. To the extent that this final rule implicates the Paperwork Reduction Act, we will rely upon our previous clearance from OMB. To obtain a three-year clearance for information collection for the EWR rule, we published a Paperwork Reduction Act notice on June 25, 2002 (67 FR 42843) pursuant to the requirements of that Act (44 U.S.C. 3501 et seq. ). We received clearance from OMB on December 20, 2002, which will expire on December 31, 2005. The clearance number is 2127-0616. The amendments adopted by this document do not change the overall paperwork burden. They simply extend the dates for reporting certain information pursuant to the EWR rule.

Data Quality Act. Section 515 of the FY 2001 Treasury and General Government Appropriations Act (Public Law 106-554, § 515, codified at 44 U.S.C. 3516 historical and statutory note), commonly referred to as the Data Quality Act, directed OMB to establish government-wide standards in the form of guidelines designed to maximize the “quality,” “objectivity,” “utility,” and “integrity” of information that Federal agencies disseminate to the public. As noted in the EWR final rule (67 FR 45822), NHTSA has reviewed its data collection, generation, and dissemination processes in order to ensure that agency information meets the standards articulated in the OMB and DOT guidelines. The changes adopted by today's final rule simply extends the reporting period for submission of data pursuant to the EWR rule and do not have any effects on the quality of the date disseminated by the agency.

Unfunded Mandates Reform Act. The Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in expenditures by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted annually for inflation with base year of 1995). The EWR final rule did not have unfunded mandates implications. 67 FR 49263. Today's final rule simply extends the reporting period for submission of data pursuant to the EWR rule and does not create any unfunded mandates within the meaning of this Act.

The amendments we are adopting in this rule increase the fees for the registration of a new registered importer (RI) from $655 to $830 and the annual fee for renewing an existing registration from $455 to $745. These fees include the costs of maintaining the RI program. We are also increasing, from $550 to $827, the fee for inspecting a vehicle that is the subject of an import eligibility petition when we are asked to conduct such an inspection by the petitioner. The fee required to reimburse the U.S. Department of Homeland Security (Customs) for conformance bond processing costs will increase from $6.20 to $9.30 per bond. We are also increasing the fees assessed against the importer of each vehicle covered by the decision to grant import eligibility. For vehicles determined eligible based on their substantial similarity to a U.S. certified vehicle, the fee is increased from $105 to $150. For vehicles determined eligible based on their capability of being modified to comply with all applicable FMVSS, the fee is increased from $125 to $150. The fee that a RI must pay as a processing cost for review of each conformity package that it submits to NHTSA will remain at $18 per certificate. If the vehicle has been entered electronically with Customs through the Automated Broker Interface and the registered importer has an e-mail address, the fee for processing the conformity package will continue to be $6, provided the fee is paid by credit card. However, if NHTSA finds that the information in the entry or the conformity package is incorrect, the processing fee will increase from $18 to $48.

This rule was preceded by a notice of proposed rulemaking (NPRM) that NHTSA published in the Federal Register on June 9, 2004 (69 FR 32312). The National Traffic and Motor Vehicle Safety Act, as amended by the Imported Vehicle Safety Compliance Act of 1988, and recodified as 49 U.S.C. 30141-30147 (“the Act”), provides for fees to cover the costs of the importer registration program, the cost of making import eligibility determinations, and the cost of processing the bonds furnished to Customs. Certain fees became effective on January 31, 1990, and have been in effect, with modifications, since then. On June 24, 1996, we published a notice at 61 FR 32411 that discussed the rulemaking history of 49 CFR Part 594 and the fees authorized by the Act. The reader is referred to that notice for background information relating to this rulemaking action.

We last amended the fee schedule in 2002. See final rule published on September 26, 2002, at 67 FR 60596 (corrected on October 9, 2002, at 67 FR 62897). Those fees applied to Fiscal Years 2003 and 2004.

The fees adopted by this final rule are based on actual time and costs associated with the tasks for which the fees are assessed and reflect the slight increase in hourly costs in the past two fiscal years attributable to the approximately 4.27 and 4.42 percent raises (including the locality adjustment for Washington, D.C.) in salaries of employees on the General Schedule that became effective on January 1, 2003, and on January 1, 2004, respectively.

Two comments were submitted in response to the notice of proposed rulemaking. The first of these was from Ms. Barb Sachau. In her comments, Ms. Sachau expressed the opinion that the proposed fees should cover the entire costs of the RI program and that taxpayers should not be burdened with any share of those costs. Ms. Sachau generally recommended that the RI program fees be tripled. She also specifically proposed an increase in the fee for reviewing certificates of conformity to a minimum of $200, and an increase in the fee for a vehicle inspection to $2,127. Ms. Sachau also recommended that an importer who petitions the agency to determine a vehicle eligible for importation should pay all costs associated with processing the petition, rather than sharing those costs with the importers of the vehicle.

Ms. Sachau's concern that taxpayers should not be burdened with the costs of the RI program is consistent with the statute on which the program is based and the manner in which it is conducted by NHTSA. Section 30141(a)(3) of Title 49, U.S. Code requires registered importers to pay “for the costs of carrying out the registration program * * * and any other fees the Secretary of Transportation establishes to pay for the costs of (A) processing bonds * * * and (B) making [import eligibility] decisions * * *” As reflected in the agency's regulations at 49 CFR 594.2, the purpose of these fees is “to ensure that NHTSA is reimbursed for costs incurred in administering the RI program” and carrying out associated functions.

Ms. Sachau did not provide the calculations that served as the basis for her proposal to triple the RI program fees, and the specific amounts that she recommended for reviewing certificates of conformity and performing vehicle inspections. In preparing the NPRM, we calculated the costs incurred in administering the RI program and proposed fees that would reimburse the Federal government for its actual expenses.

To avoid burdening a single RI with all costs associated with making an import eligibility decision, NHTSA decided in 1990 to allocate those costs, on a pro rata basis, among all RIs who import the vehicle to which the decision relates. In that manner, the agency's costs for making an import eligibility decision are borne in part by the petitioner and in part by the importers of vehicles imported under the petition. This approach accomplishes what Ms. Sachau desires in that it provides ample means for the agency to recover the costs incurred for the eligibility decisions that it makes.

The second comment was submitted by Mr. Jeffrey A. Beyer, Vice President, BCB International, Incorporated, a Customs Broker in Buffalo, New York. Mr. Beyer objected to the proposed fee increase for processing a conformity package in situations where an error is committed in submitting information through the Automated Broker Interface (ABI). Mr. Beyer stated that when an RI is charged increased fees for such an error, the RI, in turn, expects to be compensated for the extra fee by the Customs Broker who made the entry. Mr. Beyer expressed the belief that it is unfair to increase the fees in this circumstance because no mechanism is presently available in the Customs ABI system to correct or update an entry.

Mr. Beyer's concerns relate to his business dealings with Customs and the ABI system that Customs controls. While we are sensitive to Mr. Beyer's professed inability to correct or update an entry made into the Customs software, once an error is made, NHTSA must expend a considerable amount of additional effort to correct the entry. These efforts result in significantly greater costs to the agency. Consistent with the statutory requirement for the agency to recover the actual costs it incurs in administering the RI program, it is entirely appropriate for NHTSA to increase its fee for processing submissions in which errors are made.

Section 30141(a)(3) of Title 49, U.S. Code provides that RIs must pay the annual fee the Secretary of Transportation establishes “* * * to pay for the costs of carrying out the registration program for importers. * * *” This fee is payable both by new applicants and by existing RIs. To maintain its registration, each RI, at the time it submits its annual fee, must also file a statement affirming that the information it furnished in its registration application (or in later submissions amending that information) remains correct (49 CFR 592.5(e)).

In compliance with the statutory directive, we reviewed the existing fees and their bases in an attempt to establish fees that would be sufficient to recover the costs of carrying out the registration program for importers for at least the next two fiscal years. The initial component of the Registration Program Fee is the fee attributable to processing and acting upon registration applications. We will decrease this fee from $395 to $293 for new applications. We have also determined that the fee for the review of the annual statement will be increased from $195 to $208. These fee adjustments reflect our time expenditures in reviewing both new applications and annual statements with accompanying documentation, as well as the inflation factor attributable to Federal salary increases and locality adjustments in the two years since the regulation was last amended.

We must also recover costs attributable to maintenance of the registration program that arise from the need for us to review a registrant's annual statement and to verify the continuing validity of information already submitted. These costs also include anticipated costs attributable to the possible revocation or suspension of registrations and reflect the amount of time that we have devoted to those matters in the past two years.

Based upon our review of these costs, the portion of the fee attributable to the maintenance of the registration program is approximately $537 for each RI, an increase of $277. When this $537 is added to the $293 representing the registration application component, the cost to an applicant comes to $830, which is the fee we are adopting. This represents an increase of $186 over the existing fee. When the $537 is added to the $208 representing the annual statement component, the total cost to the RI comes to $745, which represents an increase of $290.

Section 594.6(h) enumerates indirect costs associated with processing the annual renewal of RI registrations. The provision states that these costs represent a pro rata allocation of the average salary and benefits of employees who process the annual statements and perform related functions, and “a pro rata allocation of the costs attributable to maintaining the office space, and the computer or word processor.” The indirect costs that were previously calculated at $14.85 per man-hour are being increased by $5.22, to $20.07.

Section 30141(a)(3) also requires registered importers to pay other fees the Secretary of Transportation establishes to cover the costs of “* * * (B) making the decisions under this subchapter.” This includes decisions on whether the vehicle sought to be imported is substantially similar to a motor vehicle that was originally manufactured for importation into and sale in the United States and certified by its original manufacturer as complying with all applicable FMVSS, and whether the vehicle is capable of being readily altered to meet those standards. Alternatively, where there is no substantially similar U.S. certified motor vehicle, the decision is whether the safety features of the vehicle comply with or are capable of being altered to comply with the FMVSS based on destructive test information or such other evidence NHTSA deems to be adequate. These decisions are made in response to petitions submitted by RIs or manufacturers, or on the Administrator's own initiative.

The fee for a vehicle imported under an eligibility decision made in response to a petition is payable in part by the petitioner and in part by other importers. The fee to be charged for each vehicle is the estimated pro rata share of the costs in making all the eligibility determinations in a fiscal year.

Inflation and General Schedule raises must also be taken into account in the computation of costs. We have reduced processing costs through issuing a single Federal Register notice to announce import eligibility decisions made on multiple vehicles and achieved other efficiencies through improved computerization methods. Despite the cost savings that have accrued from these practices, we have had to devote an increasing share of staff time in the past two years to the review and processing of import eligibility petitions owing to a proportionately greater number of comments being submitted in response to these petitions, as well as complications that result when the petitioner or one or more commenters request confidentiality for information they submit to the agency. Additional staff time is also needed to analyze the petitions and any comments received owning to new requirements being adopted in the FMVSS. Despite the additional resources that are needed to review import eligibility petitions, we are not increasing the current fee of $175 that covers the initial processing of a “substantially similar” petition. Instead, as discussed below, we are addressing these additional costs by increasing the pro-rata share of petition costs that are assessed against the importer of each vehicle covered by the decision to grant import eligibility. Likewise, we are also maintaining the existing fee of $800 to cover the initial costs for processing petitions for vehicles that have no substantially similar U.S.-certified counterpart.

In the event that a petitioner requests an inspection of a vehicle, the fee for such an inspection will increase to $827 from $550 for vehicles that are the subject of either type of petition. This $277 increase reflects current per diem and airfare costs.

Importers of vehicles determined to be eligible for importation pay, upon the importation of those vehicles, a pro-rata share of the total cost for making the eligibility decision. The importation fee varies depending upon the basis on which the vehicle is determined to be eligible. For vehicles covered by an eligibility decision on the agency's own initiative (other than vehicles imported from Canada that are covered by VSA Nos. 80-83, for which no eligibility decision fee is assessed), the fee will remain $125. NHTSA determined that the costs associated with previous eligibility determinations on the agency's own initiative were fully recovered by October 1, 2000. We apply the fee of $125 per vehicle only to vehicles covered by determinations made by the agency on its own initiative on or after October 1, 2000.

The agency's costs for making an import eligibility decision pursuant to a petition are borne in part by the petitioner and in part by the importers of vehicles imported under the petition. In 2003, the most recent year for which complete data exists, the agency expended over $99,000 in making import eligibility decisions based on petitions. The petitioners paid nearly $9,000 of that amount in the processing fees that accompanied the filing of their petitions, leaving the remaining $90,000 to be recovered from the importers of the nearly 600 vehicles imported that year pursuant to petition-based import eligibility decisions. Dividing $90,000 by 600 yields a pro-rata fee of $150 for each vehicle imported pursuant to an eligibility decision that resulted from the granting of a petition. The agency is proposing this as the pro-rata fee to be paid by the importer of each such vehicle. The same $150 fee would be paid regardless of whether the vehicle was petitioned under 49 CFR 593.6(a), based on the substantial similarity of the vehicle to a U.S.-certified model, or was petitioned under 49 CFR 593.6(b), based on the safety features of the vehicle complying with, or being capable of being modified to comply with all applicable FMVSS. This represents an increase of $45 over the $105 that is currently paid by the importers of vehicles determined eligible based on their substantial similarity to a U.S.-certified vehicle, and an increase of $25 over the $125 that is currently paid by the importers of vehicles determined eligible based on their capability of being modified to comply.

Section 30141(a)(3) also requires a registered importer to pay any other fees the Secretary of Transportation establishes “* * * to pay for the costs of—(A) processing bonds provided to the Secretary of the Treasury * * *” upon the importation of a nonconforming vehicle to ensure that the vehicle will be brought into compliance within a reasonable time, or if it is not brought into compliance within such time, that it be exported, without cost to the United States, or abandoned to the United States.

Customs now exercises the functions associated with the processing of these bonds. The statute contemplates that we will make a reasonable determination of the cost that Customs incurs in processing the bonds. In essence, the cost to Customs is based upon an estimate of the time that a GS-9, Step 5 employee spends on each entry, which Customs has judged to be 20 minutes.

Based on General Schedule salary and locality raises that were effective in January 2003 and 2004 and the inclusion of costs for benefits that were previously omitted, we are increasing the processing fee by $3.10, from $6.20 per bond to $9.30. This fee would more closely reflect the direct and indirect costs that are actually associated with processing the bonds.

Each RI is currently required to pay $18 per vehicle to cover the costs the agency incurs in reviewing a certificate of conformity. We have found that these costs continue to average $18 per vehicle for vehicles for which a paper entry and fee payment is made, and we therefore are not changing this fee. However, if a RI enters a vehicle through the Automated Broker Interface (ABI) system, has an e-mail address to receive communications from NHTSA, and pays the fee by credit card, the cost savings that we realize allow us to significantly reduce the fee to $6.00. We are maintaining the fee of $6.00 per vehicle if all the information in the ABI entry is correct. Errors in ABI entries not only eliminate any timesavings, but also require additional staff time to be expended in reconciling the erroneous ABI entry information to the conformity data that is ultimately submitted. Recent experience with these errors has shown that staff members must examine records, make time-consuming long distance telephone calls, and often consult supervisory personnel to resolve the conflicts in the data. We have calculated this staff and supervisory time, as well as the telephone charges, to amount to approximately $42 for each erroneous ABI entry. Adding this to the $6 fee for the review of conformity packages on automated entries yields a total of $48, representing a $30 increase over the fee that is currently charged when there are errors to resolve in the entry or in the statement of conformity. We are adopting this $48 fee to review each conformity package for which there are one or more errors in the ABI entry or in the statement of conformity.

NHTSA is required under 49 U.S.C. 30141(e) to “review and make appropriate adjustments at least every 2 years in the amounts of the fees” relating to the registration of importers, the processing of bonds, and making decisions concerning the importation of nonconforming vehicles. The statute further requires the agency to “establish the fees for each fiscal year before the beginning of that year.” Fiscal year 2005 begins on October 1, 2004. In the NPRM, we proposed to make this rule effective October 1, 2004, and did not receive any comments on this issue. In order to meet the statutory deadline, the agency finds under 5 U.S.C. 553(d)(3) that it has good cause to make this final rule effective less than thirty days after its publication in the Federal Register. Accordingly, the effective date of this final rule is October 1, 2004.

NHTSA has considered the impact of this rulemaking action under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures. This rulemaking is not significant. Accordingly, the Office of Management and Budget has not reviewed this rulemaking document under Executive Order 12886. Further, NHTSA has determined that the rulemaking is not significant under Department of Transportation's regulatory policies and procedures. Based on the level of the fees and the volume of affected vehicles, NHTSA currently anticipates that the costs of the final rule will be so minimal as not to warrant preparation of a full regulatory evaluation. The action does not involve any substantial public interest or controversy. There will be no substantial effect upon State and local governments. There will be no substantial impact upon a major transportation safety program. A regulatory evaluation analyzing the economic impact of the final rule establishing the registered importer program, adopted on September 29, 1989, was prepared, and is available for review in the docket.

The agency has also considered the effects of this rulemaking action under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). I certify that this action will not have a significant economic impact upon a substantial number of small entities.

The following is NHTSA's statement providing the factual basis for the certification (5 U.S.C. 605(b)). The amendments adopted in this final rule will primarily affect entities that currently modify nonconforming vehicles and which are small businesses within the meaning of the Regulatory Flexibility Act; however, the agency has no reason to believe that these companies will face significant problems paying the fees adopted as a result of this action. In most instances, these fees will be only modestly increased (and in some instances decreased) from the fees previously paid by these entities. Moreover, consistent with prevailing industry practices, these fees should be passed through to the ultimate purchasers of the vehicles that are altered and, in most instances, sold by the affected registered importers. The cost to owners or purchasers of nonconforming vehicles that are altered to conform to the FMVSS may be expected to increase (or decrease) to the extent necessary to reimburse the registered importer for the fees payable to the agency for the cost of carrying out the registration program and making eligibility decisions, and to compensate Customs for its bond processing costs.

Governmental jurisdictions will not be affected at all since they are generally neither importers nor purchasers of nonconforming motor vehicles.

Executive Order 13132 on “Federalism” requires NHTSA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications.” Executive Order 13132 defines the term “policies that have federalism implications” to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, NHTSA may not issue a regulation that has federalism implication, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or NHTSA consults with State and local officials early in the process of developing the proposed regulation.

The amendments adopted in this rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government as specified in Executive Order 13132. Thus, the requirements of section 6 of the Executive Order do not apply to this rulemaking action.

NHTSA has analyzed this action for purposes of the National Environmental Policy Act. The action will not have a significant effect upon the environment because it is anticipated that the annual volume of motor vehicles imported through registered importers will not vary significantly from that existing before promulgation of the rule.

This rule will not have any retroactive or preemptive effect. Judicial review of this rule may be obtained pursuant to 5 U.S.C. 702. That section does not require that a petition for reconsideration be filed prior to seeking judicial review.

The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with the base year of 1995). Because this final rule will not require the expenditure of resources beyond $100 million annually, no Unfunded Mandates assessment has been prepared.

Executive Order 12866 and the President's memorandum of June 1, 1998, require each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:

No responses to these questions were included in the comments submitted on the notice of proposed rulemaking. We have endeavored to abide by these principles in the preparation of this final rule.

Under the Paperwork Reduction Act of 1995, a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. This rule requires no information collections.

Executive Order 13045 applies to any rule that (1) is determined to be “economically significant” as defined under E.O. 12866, and (2) concerns an environmental, health, or safety risk that NHTSA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, we must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned rule is preferable to other potentially effective and reasonably feasible alternatives considered by us. This rulemaking is not economically significant.

The proposed and final rules for this action are accessible via the Internet at the Office of the Federal Register's website at http://www.gpoaccess.gov/fr/index.html . Background information and documents are available at the NMFS Northwest Region website at http://www.nwr.noaa.gov/1sustfsh/gdfsh01.htm and at the Council's website at http://www.pcouncil.org .

Amendment 16-3 revised the FMP to include overfished species rebuilding plans for bocaccio, cowcod, widow rockfish, and yelloweye rockfish. This final rule implements Amendment 16-3 by adding two rebuilding parameters, the target year in which the stock would be rebuilt under the adopted rebuilding plan (T TARGET ) and the harvest control rule, to the CFR at 50 CFR 660.365 for each overfished stock.

Amendment 16-3 addressed the requirements of the Magnuson-Stevens Act to protect and rebuild overfished species managed under a Federal FMP. Amendment 16-3 also responded to a Court order in Natural Resources Defense Council, Inc. v. Evans , 168 F. Supp. 2d 1149 (N.D. Cal 2001,), in which NMFS was ordered to provide Pacific Coast groundfish rebuilding plans as FMPs, FMP amendments, or regulations, per the Magnuson-Stevens Act.

A Notice of Availability for Amendment 16-3 was published on June 18, 2004 (69 FR 34116). NMFS requested comments on the amendment under the Magnuson-Stevens Act FMP amendment review provisions for a 60-day comment period, ending August 17, 2004. A proposed rule was published on July 7, 2004 (69 FR 40851), requesting public comment through August 17, 2004. During the Amendment 16-3 and proposed rule comment period, NMFS received three letters of comment. These letters are addressed later in the preamble to this final rule. The preamble to the proposed rule for this action provides additional background information on the fishery and on this final rule. Further detail on Amendment 16-3 also appears in the FEIS/RIR/IRFA for this action, which was prepared by the Council.

After consideration of the public comments received on the amendment, NMFS approved Amendment 16-3 on September 2004. As required by the standards established by Amendment 16-1, the rebuilding plans adopted under Amendment 16-3 for bocaccio, cowcod, widow rockfish, and yelloweye rockfish specified the following rebuilding parameters in the FMP: unfished biomass (B 0 ) and target biomass (B MSY ), the year the stock would be rebuilt in the absence of fishing (T MIN ), the year the stock would be rebuilt if the maximum time period permissible under national standard guidelines were applied (T MAX ), the target year in which the stock would be rebuilt under the adopted rebuilding plan (T TARGET ), and the harvest control rule. Other information relevant to rebuilding was also included, including the probability of the stock attaining B MSY by T MAX (P MAX ). The estimated rebuilding parameters will serve as management benchmarks in the FMP and the FMP will not be amended if the values for these parameters change after new stock assessments and rebuilding analyses are completed, as is likely to happen.

Amendment 16-1 specified two rebuilding parameters, T TARGET and the harvest control rule for the rebuilding period, that are to be codified in Federal regulations for each individual species rebuilding plan. This final rule adds these rebuilding parameters to the CFR at 50 CFR 660.365 for bocaccio, cowcod, widow rockfish, and yelloweye rockfish. T TARGET is the year in which there is a 50-percent likelihood that the stock will have been rebuilt with a given fishing mortality rate. The harvest control rule expresses a given fishing mortality rate that is to be used over the course of rebuilding. These parameters will be used to establish the optimum yields (OYs) for species with rebuilding plans. Conservation and management goals defined in the FMP require the Council and NMFS to manage to the appropriate OY for each species or species groups, including those OYs established for rebuilding overfished species. The OYs and management measures will be set on a biennial basis, and will address the fisheries as a whole. Regulations implemented through the harvest specifications and management measures are based on the most recently available scientific information and are intended to address all of the fisheries that take groundfish and to keep the total catch of groundfish, including overfished species, within their respective OYs. The FMP addresses how the fisheries as a whole are to be managed, whereas rebuilding plans are species-specific and define the parameters that govern the rebuilding of a particular species.

If, after a new stock assessment, the Council and NMFS conclude that either or both of the parameters defined in regulation should be revised, the revision will be implemented through the Federal notice-and-comment rulemaking process, and the updated values codified in the Federal regulations. NMFS believes that the FMP with the newly added rebuilding plans will be sufficient “to end overfishing in the fishery and to rebuild affected stocks of fish” (16 U.S.C. 1854(e)(3)(A).

NMFS received three letters of comment on the proposed rule to implement Amendment 16-3: one letter was received from an environmental advocacy organization, and two letters were received from one member of the public. These comments are addressed here:

Comment 1: The proposed target dates for rebuilding Amendment 16-3 species are inconsistent with the Magnuson-Stevens Act because the rebuilding periods are longer than the statute allows.

Response: The specified rebuilding time periods for the four overfished species are consistent with the legal requirements of the Magnuson-Stevens Act and with the national standard guidelines. The Magnuson-Stevens Act states that rebuilding “shall not exceed 10 years, except in cases where the biology of the stock of fish, or other environmental conditions,...dictate otherwise.” The Magnuson-Stevens Act also states that the time for rebuilding shall be as short as possible, taking into account certain factors. The Magnuson-Stevens Act, section 304 (e)(4)(A), and the national standard guidelines at 50 CFR 600.310 (e)(4)(A) recognize the following factors that enter into the specification of a time period for rebuilding: the status and biology of the stock or stock complex; interactions between stocks or stock complexes and the marine ecosystem; the needs of fishing communities; recommendations of international organizations in which the U.S. is a participant, and; management measures under an international agreement in which the U.S. participates.

According to the national standard guidelines at 50 CFR 600.310(e)(4)(ii)(B)( 3 ), if the time period for rebuilding is 10 years or greater, then the specified time period for rebuilding (T TARGET ) may be adjusted upward to the extent warranted by the needs of fishing communities and recommendations by international organizations in which the U.S. participates, except that no such upward adjustment can exceed the rebuilding period calculated in the absence of fishing mortality (T MIN ), plus one mean generation time or equivalent period based on the species' life-history characteristics (T MAX ). All of the rebuilding periods for bocaccio, cowcod, widow rockfish, and yelloweye rockfish are less than T MAX .

The rebuilding probabilities (P MAX , which are estimated probabilities of rebuilding the stock by T MAX ) range between 60 percent and 80 percent. This represents a better than 50 percent likelihood that each of these stocks will be rebuilt (reach the B MSY biomass) by T MAX , while allowing sufficient access to overfished stocks, so that healthy groundfish stocks that co-occur with overfished species can be harvested. The Council chose a T TARGET closer to T MAX for cowcod and widow rockfish (reflected in the relatively lower 60-percent rebuilding probability). For cowcod, this was the most conservative alternative available under the current stock assessment. A new stock assessment is planned for cowcod in 2005. For widow rockfish, the lower probability of rebuilding was chosen to allow some bycatch in all of the various fisheries that take widow rockfish incidentally, particularly fisheries for Pacific whiting. The FEIS for this amendment has further information on the reasons for the adopted rebuilding periods.

Comment 2: The proposed rebuilding periods should be consistent with NMFS's “Technical Guidance On the Use of Precautionary Approaches to Implementing National Standard 1 of the Magnuson-Stevens Fishery Conservation and Management Act” (Technical Guidance), which recommends rebuilding periods not exceed the midpoint (T MID ) between the minimum and maximum times to rebuild the species.

Response: As explained above in the response to comment 1, if T MIN is 10 years or greater, the national standard guidelines at 50 CFR 600.310(e)(4)(ii)(B)( 3 ), allow T TARGET to be adjusted upward to the extent warranted by the needs of fishing communities and recommendations by international organizations in which the U.S. participates, except that no such upward adjustment can exceed T MAX . The Technical Guidance recommends that T TARGET be set no higher than the midpoint between T MIN and T MAX .

Adopting the midpoint as a binding criterion in all cases would not be consistent with the Magnuson-Stevens Act because it would not allow the factors in the Act at section 304(e)(4) and the national standard guidelines at 50 CFR 600.310(e)(4)(ii), which include the needs of fishing communities, to be taken into account. The Technical Guidance is not a binding regulation that must be followed; the Technical Guidance itself acknowledges that it deals only with biological issues, and not with socioeconomic issues, which fishery management councils must consider, per the Magnuson-Stevens Act.

The Council has not recommended for the Amendment 16-3 species any T TARGET values that exceed T MAX . For bocaccio, the Council recommended a T TARGET of 2023 which is lower than the T MID of 2025. The Council set T TARGET dates to rebuild overfished species within the time allowed, yet recognizes the socio-economic importance of these species to the fishing industry and fishing communities. Each of the Amendment 16-3 species co-occurs with more abundant groundfish stocks. Rebuilding harvest levels allow some targeting of more abundant stocks that co-occur with Amendment 16-3 species. The Council's recommended rebuilding goals comply with the Magnuson-Stevens Act and the national standard guidelines.

Comment 3: NMFS's Technical Guidance recommends that rebuilding plans have at least a 90-percent probability of achieving rebuilding within the maximum allowable time to rebuild (P MAX ) under NMFS's national standard guidelines. None of these rebuilding plans result in a 90-percent or greater likelihood of successfully rebuilding by P MAX .

Response: The Technical Guidance has been provided by NMFS “for those aspects of scientific fishery management advice that have biological underpinnings, such as the response of fish to exploitation. The drafting team recognizes that there are many other important aspects to managing fisheries, such as socioeconomic factors, which are key to defining optimum yield, and which Fishery Management Councils must consider.” As such, the Technical Guidance does not direct NMFS, but rather makes suggestions on how to use scientific information to implement the policy guidance of the Magnuson-Stevens Act and the national standard guidelines to achieve the biological goals of national standard 1.

The Technical Guidance at page 38 suggests addressing uncertainty with the guideline that “rebuilding plans be designed to possess a 50-percent or higher chance of achieving B MSY within T TARGET years, and a 90-percent or higher chance of achieving BMSY within T MAX years.” Harvest levels finalized by this action have been set such that overfished species would have a 50-percent chance of achieving B MSY within T TARGET years. However, none of harvest levels for the overfished species in Amendment 16-3 have been set such that their rebuilding plans would have a greater than 90-percent chance of achieving B MSY within T MAX years. Each species was considered individually in its species-specific rebuilding analysis.

As discussed in the preamble to the proposed rule for this action (69 FR 40851, July 7, 2004), the rebuilding measures for the overfished West Coast groundfish species in Amendment 16-3 have the following probabilities of achieving B MSY within T MAX years: bocaccio, 70 percent; cowcod, 60 percent; widow rockfish, 60 percent; and yelloweye rockfish, 80 percent. These probabilities of rebuilding and the harvest levels associated with them were set to achieve rebuilding, but also to acknowledge that these species are usually taken with other, co-occurring and more abundant species. OY levels for overfished species are set to allow some level of fishing for the more abundant stocks that co-occur with overfished species. At the same time, management measures such as conservation areas and cumulative trip limits are set to minimize opportunities for the vessels targeting more abundant stocks to intercept overfished species. This approach to multi-species management is consistent with the Magnuson-Stevens Act and meets the criteria in the Act at section 304(e)(4) and the national standard guidelines at 600.310(e)(4)(ii).

As discussed in the response to comment 1, according to the national standard guidelines at 50 CFR 600.310(e)(4)(ii)(B)( 3 ), if T MIN is 10 years or greater, “then the specified time period for rebuilding [T TARGET ] may be adjusted upward to the extent warranted by the needs of fishing communities and recommendations by international organizations in which the United States participates, except that no such upward adjustment can exceed the rebuilding period calculated in the absence of fishing mortality, plus one mean generation time or equivalent period based on the species' life-history characteristics [T MAX ].” While the Technical Guidance suggests that rebuilding plans be designed to possess a 90-percent or higher chance of achieving B MSY within T MAX years (P MAX ), adopting that as a binding criterion in all cases would not be consistent with the Magnuson-Stevens Act and the national standard guidelines. It would not be consistent with the Magnuson-Stevens Act because it would not allow the criteria in the Act at section 304(e)(4) and the national standard guidelines at 600.310(e)(4)(ii) to be taken into account. For further discussion on this issue, see the preamble to the Amendment 16-1 final rule (69 FR 8861, February 26, 2004.)

Comment 4: The target rebuilding periods proposed in the rebuilding plans all have only a 50-percent chance of actually being achieved under the plans. This low probability of rebuilding success by the rebuilding dates specified in the plans violates the Magnuson-Stevens Act's requirement to rebuild as quickly as possible and conflicts with NMFS's own guidance to adopt a precautionary approach to rebuilding and species protection. NMFS's response to this comment in the FEIS ignores the fact that this is the result of policy choices that are neither scientifically mandated nor protective of the overfished species. A higher probability of rebuilding success, by both target and maximum periods, would be more precautionary and would accord much better with the statute and NMFS's own guidance.

Response: As stated in the response to comments in the FEIS (Chapter 12), in a rebuilding analysis that uses the probability calculations described by the Council's Scientific and Statistical Committee (SSC) Terms of Reference for Rebuilding Analyses, the target year is defined as the median rebuilding year for a given fishing mortality rate. As described in Section 4.5.2 of the groundfish FMP (and in more detail in Section 1.1.1.2 of Appendix A to the FEIS for this action), the rebuilding analysis methodology uses a Monte Carlo simulation technique in which many simulations project the change in biomass over time for a given fishing mortality rate (F), based on the biological characteristics of the species and known recruitment variability. The target year, or median year, is defined as the year in which half of these simulations show that the population has rebuilt to the target biomass. In this sense, the target year (T TARGET ) is the statistically most likely year in which the population will achieve the target biomass for a given F. Similarly, P MAX , the probability of rebuilding in the maximum allowable time period (T MAX ), represents the proportion of simulations within which the population has rebuilt to the target biomass by T MAX . Even T MIN , the rebuilding period in the absence of fishing, is defined probabilistically as the year in which half of all simulations achieve rebuilding when F is set to zero. These three strategic rebuilding parameters (T TARGET , P MAX , and F) cannot be chosen independently of each other because the choice of one parameter determines the value of the other two parameters. The alternatives in the FEIS are structured around P MAX values. Therefore, in choosing a P MAX as part of the rebuilding strategy for an overfished stock, the Council also chose the values for T TARGET and F for each stock, with T TARGET being defined by the median probability of achieving rebuilding. Although the Council could have chosen the target year directly (as long as it fell between TMIN and T MAX ), within the model it would still be defined as the year with 50-percent probability of stock recovery, and that choice would determine the corresponding values for P MAX and F.

As stated in the response to comment 3, the Technical Guidance at page 38 suggests addressing uncertainty with the guideline that “rebuilding plans be designed to possess a 50-percent or higher chance of achieving B MSY within T TARGET years, ...” Harvest levels finalized by this action have been set such that overfished species would have a 50-percent chance of achieving B MSY within T TARGET years. Therefore, NMFS is following its guidance for setting T TARGET when considering uncertainty in stock dynamics, current stock status and recruitment variability. This approach is consistent with the Magnuson-Stevens Act and national standard guidelines on protecting and rebuilding overfished species while taking into account the socio-economic needs of the fishing industry and fishing communities.

Comment 5: Because the rebuilding plans lack any management requirements designed to achieve a rebuilt fishery, they violate the Magnuson-Stevens Act. To ensure rebuilding goals are met, rebuilding plans need to include management measures to (1) ensure rebuilding targets are met, (2) account for and reduce bycatch, (3) reduce impacts of current fishing on habitats that are important to the overfished stocks and their prey species, and (4) aid in the enforcement of the management measures.

Response: This comment poses two issues: first, the commenter states that rebuilding plans must include management measures to be adequate; second, the commenter provides a list of the types of management measures that the commenter believes are needed within a rebuilding plan. Amendments 16-2 and 16-3 incorporated the overfished species rebuilding plans into the FMP. Rebuilding plans are no longer stand-alone documents. Rebuilding plans are species-specific and list the parameters that govern the rebuilding of a particular species. Most importantly, a rebuilding plan sets the harvest parameters for an overfished species. The primary management measure that is governed by and comes out of a rebuilding plan is the OY, which is implemented through the biennial specifications and management measures process.

In contrast to the species-specific rebuilding plans, the FMP sets policies and principles for the management of the groundfish fisheries as a whole. The FMP must guide the management of over 80 groundfish species, integrating rebuilding policies for overfished species, and harvest policies for species at precautionary harvest levels (B 25% -B 40% ) and more abundant stocks (>B 40% .) The FMP provides this guidance in section 4.6.1.5., which states that “OY recommendations will be consistent with established rebuilding plans and achievement of their goals and objectives. . . . (b) In cases where a stock or stock complex is overfished, Council action will specify OY in a manner that complies with rebuilding plans developed in accordance with Section 4.5.2.” The FMP further states at 5.1.4 “For any stock the Secretary has declared overfished or approaching the overfished condition, or for any stock the Council determines is in need of rebuilding, the Council will implement such periodic management measures as are necessary to rebuild the stock by controlling harvest mortality, habitat impacts, or other effects of fishing activities that are subject to regulation under the biennial process. These management measures will be consistent with any approved rebuilding plan.” Most management measures used in the fishery to rebuild overfished stocks and to allow harvest on more abundant stocks are described in section 6 of the FMP. The FMP, which includes rebuilding plans for the eight overfished groundfish species, is sufficient “to end overfishing in the fishery and to rebuild affected stocks of fish” (16 U.S.C. 1854(e)(3)(A).

The 2004 specifications and management measures, (69 FR 11064, March 9, 2004) implemented the first four rebuilding plans (lingcod, canary rockfish, darkblotched rockfish, and Pacific ocean perch (POP)) with revisions to the harvest control rules for POP and darkblotched rockfish, and the interim rebuilding strategies for the remaining overfished species (bocaccio, cowcod, widow rockfish, and yelloweye rockfish). The proposed rule for groundfish harvest specifications and management measures for 2005-2006, to be published in September 2004, will propose OYs and management measures that implement the remaining rebuilding plans. The Council developed its recommendations for the 2005-2006 fisheries based on and within the constraints of its FMP's policies.

In addition to suggesting that the rebuilding plans are not adequate unless they contain management measures separate from those already provided in the FMP, the commenter listed several types of management measures that the commenter believes are needed within a rebuilding plan. Because the commenter's letter on the Amendment 16-3 proposed rule included more extensive comments on essential fish habitat (EFH) issues, NMFS will respond to those issues below in the responses to Comments 6-8. In addition to requesting that NMFS include measures to protect EFH within the rebuilding plans rather than within the FMP, the commenter suggested that NMFS include within the rebuilding plans measures to: limit fishing effort via capacity reduction, set time/area closures, set a network of no-take marine protected areas, set trip or bag limits, set caps on total mortality, adjust harvest levels in response to the fisheries exceeding OYs, gear modifications to reduce bycatch, implement an observer program, set Federal vessel licensing requirements, and implement enforcement devices and measures such as vessel monitoring systems.

As stated earlier in this response, overfished species rebuilding plans are not stand-alone documents and it is the FMP as a whole that will be used to rebuild overfished species. The FMP and Federal regulations implementing the FMP already include mechanisms to implement, or requirements for, most of the management measures mentioned by the commenter. Chapter 6 of the FMP sets management measures and regulatory programs the Council uses and intends to use to meet its varied fishery management responsibilities, including rebuilding overfished species. Section 6.1 describes a series of management measures that the Council uses to control fishing mortality, including but not limited to: permits, licenses and endorsements; restrictions on trawl mesh size; landing limits and trip frequency limits; quotas, including individual transferable quotas; escape panels or ports for pot gear or trawl or other net gear; size limits; bag limits; time/area closures; other forms of effort control including input controls on fishing gear such as restrictions on trawl size or longline length or number of hooks or pots; allocation of species or species groups between fishing sectors; and a requirement for a Federal observer program. Section 6.2 among other things, authorizes the Council to close fishing seasons or areas, in order to protect overfished species. Section 6.3 of the FMP deals with bycatch management and measures the Council has taken in recent years to reduce bycatch. EFH is addressed in section 6.6. of the FMP. Federal regulations implementing the FMP provide fishery management requirements as follows: gear restrictions at § 660.310; vessel monitoring system requirements at § 660.312; observer program requirements at § 660.314; allocations at §§ 660.320 through 660.324; vessel licensing/permitting requirements (including capacity reduction measures) at §§ 660.331 through 660.341; overfished species rebuilding parameters at § 660.365; general catch restrictions at § 660.370; and Groundfish Conservation Area regulations at § 660.390. In addition to these regulatory programs, NMFS also implemented a trawl permit/vessel buyback program in 2003 that reduced participation in that fleet by 35 percent. Further discussion of management measures used to implement the FMP in order to provide adequate protection of overfished species is provided in the final rule to implement the 2004 specifications and management measures (69 FR 11064, March 9, 2004) and in the proposed rule to implement the 2005-2006 specifications and management measures which will be published in the Federal Register in September 2004.

Comment 6: Scientific evidence confirms that repeated bottom trawling can damage habitat of species such as overfished rockfish. Impacts identified in the few studies conducted on the West Coast and in studies of comparable gears from other areas should inform consideration of habitat protection measures in the rebuilding plans. None of the measures adopted through the biennial specifications and management measures process are designed to address habitat impacts. Management measures, such as gear restrictions and closed areas, are designed and managed for the purpose of reducing bycatch.

Response: As mentioned in the response to comment 5, management measures, including habitat protection measures, are generally not included in rebuilding plans. The groundfish fishery is managed as a whole under the FMP and implementing regulations (50 CFR part 660, subpart G), including the harvest specifications and management measures. [Note: Beginning in 2005, the 2005 through 2006 harvest specification and management measures will be codified as part of 50 CFR part 660, subpart G, after first being published in the Federal Register .]

NMFS agrees that the Groundfish Conservation Areas implemented at 50 CFR 660.390 and through the specifications and management measures process are designed and managed for the purpose of reducing the bycatch of overfished species. The boundaries of these closed areas are based on current information about where overfished species commonly occur. Fishing by different gear types is prohibited within the closed areas, thus, groundfish habitat within these closed areas is protected from groundfish fishing gear impacts. The cowcod rebuilding plan provides protection measures specific to adult cowcod habitat by stating that the Cowcod Conservation Areas (CCAs), first implemented in 2001, will be a primary management measure used for protecting cowcod and cowcod habitat.

In addition to closed areas, Federal regulations at § 660.310 and in the 2004 specifications and management measures provide gear restrictions intended to reduce overfished species bycatch, which may provide some habitat protection. Large footrope gear, which is more likely to damage high relief bottom habitat, is prohibited shoreward of closed areas, in areas that tend to have more rocky relief habitat.

NMFS agrees that the agency needs to review available scientific information to determine whether its closed areas should be revised to provide better targeted protection for overfished species and their habitats. NMFS does not agree, however, that this review needs to occur before the agency approves Amendment 16-3 or the rebuilding plans therein. NMFS is developing an environmental impact statement (EIS) on groundfish EFH. On August 16-18, 2004, the agency held a public meeting to draft alternatives for the EFH EIS. The draft alternatives, which will be reviewed at the Council's September 13-17, 2004, meeting in San Diego, CA address groundfish species habitat needs, including overfished species needs, in three categories of alternatives: alternatives for the designation of EFH, alternatives for the designation of habitat areas of particular concern, and alternatives to minimize adverse impacts on habitat. A draft of the EFH EIS is scheduled for release in February 2005. NMFS expects that the Council will use that EIS to amend its FMP to update its EFH provisions, including management measures for overfished species habitat protection. The agency further expects that scientific information on overfished species and their habitats will continue to improve over time. NMFS and the Council will review that information as it becomes available, and through a public process, to ensure that the FMP continues to provide protection for overfished species based on the best available scientific information.

Comment 7: NMFS has not done the analysis needed to determine whether current measures are adequate to rebuild overfished species because the agency has not analyzed the degree to which closed areas protect critical habitat of overfished species. Further, NMFS has not determined what modifications would be needed in the timing and extent of the closures or gear restrictions to address habitat issues for rebuilding species. The fact that the EFH EIS has not been completed is no excuse for omitting habitat protection measures from rebuilding plans.

Response: As NMFS has stated in its response to Comment 6, the agency is developing a draft EIS on West Coast groundfish EFH. That EIS is intended to provide much needed information on species-specific EFH identification. The EIS will also be used to develop the FMP's overall approach to identifying and reducing the effects of fishing gear on groundfish EFH. Some of the EFH EIS draft alternatives address whether overfished species EFH needs particular protection different from that afforded to EFH of other groundfish species.

Since the first three groundfish species were declared overfished in 1999, NMFS has been revising its various West Coast groundfish management policies and measures to provide better protections for overfished species. Protective fishery management measures vary by species and by the gear types and fisheries known to affect particular species. Adult cowcod, the most sedentary and site-specific of the overfished species, is protected in key habitat with large all-gear area closures off southern California. Lingcod, a shelf species vulnerable to hook-and-line gear during its winter spawning/nesting season, is protected through season closures. The universal policy that guides overfished species rebuilding plans is reducing opportunities for direct and incidental take of overfished species. The rebuilding plans themselves provide parameters for harvest levels that will allow rebuilding. The FMP provides guidance on how to constrain harvest to those levels through reduced landings limits, gear restrictions, season closures, area closures, and/or size limits depending on which measures are most appropriate to each overfished species.

Overfished species allowable total catch (directed and incidental) levels are based on scientific stock assessments. OYs for overfished species are set based on those stock assessments, through the harvest specifications and management measures process. The rebuilding plans dictate each overfished species' rebuilding fishing mortality rate (F), which may only be revised following review via a new stock assessment. NMFS sets management measures intended to constrain the fisheries so that total catch stays within overfished species' OYs. NMFS and the Council review and adjust management measures to ensure that rebuilding harvest goals are met.

The Magnuson-Stevens Act requires the Secretary of Commerce (Secretary) to review the adequacy of rebuilding plans at intervals that may not exceed 2 years. The rebuilding plans for all eight overfished species will be reviewed following their 2005 stock assessments. This fall, the Council's SSC is drafting revisions to its Rebuilding Analyses Terms of Reference to incorporate rebuilding plan adequacy reviews. These reviews will aid NMFS and the Council in determining how and whether harvest targets and management measures need to be revised for the 2007-2008 fishing period. Also during 2005-2006, NMFS will complete its EFH EIS. The completion of that EIS and its implementation through an FMP amendment, if appropriate, and potential Federal regulations will guide how EFH management contributes to overfished species rebuilding measures.

Comment 8: NMFS should evaluate steps like the following to protect vulnerable habitat for overfished species: (1) Close bottom trawling and other damaging bottom gears to all or part of the CCA, Soquel Canyon, and other canyon heads, rocky outcrops, banks and pinnacles that shelter cowcod, (2) close bottom trawling in all or part of sensitive habitats that support or have supported a high abundance of big, old bocaccio, and (3) fine-tune the Rockfish Conservation Area (RCA) and add other areas as needed to take into account sensitive habitat for overfished species.

Response: NMFS will consider steps like those recommended in the EFH EIS process, which will examine habitat for all groundfish species, as described in the response to Comments 6 and 7. Currently bottom trawling for groundfish is prohibited in the CCA and in the trawl RCA, which effectively protects many other rocky relief habitats.

Comment 9: The rebuilding plans contained in Amendment 16-3 lack adequate standards for gauging whether sufficient progress is being made toward rebuilding during the life of the rebuilding plan in compliance with 16 U.S.C. 1854(e)(7). The rebuilding plans also lack requirements for enforcement and data collection. These accountability mechanisms are critical if NMFS is to track accurately its own progress in rebuilding and be able to intervene in order to correct any deficiencies that may develop during the course of rebuilding.

Response: NMFS believes that the rebuilding plans under Amendment 16-3 are consistent with the requirements of the Magnuson-Stevens Act. The Magnuson-Stevens Act requires the Secretary to review rebuilding plans at intervals that may not exceed 2 years. During the Amendment 16-1 process, for the purpose of clarity, NMFS worked with the Council staff to add a sentence to the FMP at the end of section 4.5.3.6 to read, “Regardless of the Council's schedule for reviewing overfished species rebuilding plans, the Secretary, through NMFS, is required to review the progress of overfished species rebuilding plans toward rebuilding goals every 2 years, per the Magnuson-Stevens Act at 16 U.S.C. 304(e)(7).” NMFS's review of the adequacy of progress on rebuilding plans will primarily be done through stock assessment updates and is expected to follow the schedule defined by the Magnuson-Stevens Act.

As noted in the response to Comment 7, the Council's SSC is currently developing rebuilding plan adequacy review standards to be included in their Terms of Reference for Rebuilding Analyses. A draft set of standards are to be provided to the Council for review in September 2004 with final adoption in November 2004. By including the setting of rebuilding plan progress standards in the stock assessment development and review process for overfished species, the NMFS/Council process for developing and reviewing stock assessments would continue the link between stock assessments and rebuilding plans for overfished species. NMFS expects that these standards will be defined before the Secretary's review of Amendment 16-2 species in January 2006.

As mentioned previously in the response to comment 5, management measures to ensure species are rebuilding are included in the harvest specifications and management measures. Accountability mechanisms, like enforcement and data collection, are included as part of the management of the groundfish fishery as a whole, through the FMP and implementing policies and regulations. These programs are designed for multi-species fisheries, wherein overfished species and abundant species co-occur. Therefore, it is not necessary for these measures to be included in rebuilding plans.

With this action, NMFS is updating the list of rockfish species defined in the CFR at § 660.302 to match the list of rockfish species included in the Pacific Coast Groundfish FMP. The FMP and CFR state that, “Rockfish includes all genera and species of the family Scorpaenidae, even if not listed, that occur in the Washington, Oregon, and California area.” These species are already specifically listed in the FMP and will be added to the CFR. The following seven new rockfish species in the family Scorpaenidae will be listed in the CFR as species managed under the FMP: chameleon rockfish, dwarf-red rockfish, freckled rockfish, half-banded rockfish, pinkrose rockfish, pygmy rockfish, and swordspine rockfish. In addition, dusty rockfish is corrected to read dusky rockfish.

NMFS re-arranged the Pacific Coast Groundfish regulations on July 15, 2004 (69 FR 42345) so that they read in a more logical order. This reorganization did not make substantive changes to the existing regulations; rather, it reorganized regulatory measures into a more logical and cohesive order. In publishing the rule on July 15, 2004, NMFS neglected to remove § 660.321, specifications and management measures, which was also added at § 660.370. Therefore, this final rule removes the duplicative and outdated specifications and management measures section at § 660.321. In addition, § 660.334(d)(1)(i) and (ii) were inadvertently removed and are added with this rule.

The observer rule for the whiting at-sea processing fleet (69 FR 31751, June 7, 2004) is corrected so that the paragraphs are numbered according to the proper format. Since the observer rule was published, regulations for the groundfish observer program have moved from § 660.360 to § 660.314 via the re-arranging rule (69 FR 42345, July 15, 2004). Therefore, paragraphs (f)(3)(ii)(B)( i )-( iii ) of § 660.314, groundfish observer program, are corrected to read (f)(3)(ii)(B)( 1 )-( 3 ).

Finally, a reference to the limited entry permit renewal process in § 660.373(h)(3) erroneously refers to § 660.333 and is corrected to refer to § 660.335. These revisions are all housekeeping changes to the regulations and do not alter the effect of Federal groundfish regulations.

The Administrator, Northwest Region, NMFS, has determined that Amendment 16-3 is necessary for the conservation and management of the Pacific Coast groundfish fishery and that it is consistent with the Magnuson-Stevens Act and other applicable laws.

The Council prepared an FEIS that discusses the effects on the environment as a result of this action. The FEIS was filed with the Environmental Protection Agency on July 23, 2004. A notice of availability for this FEIS was published on July 30, 2004 (69 FR 45707). In approving Amendment 16-3, on September 13, 2004, NMFS issued a ROD identifying the selected alternative. A copy of the ROD is available from NMFS (see ADDRESSES ).

This final rule has been determined to be not significant for purposes of Executive Order 12866.

NMFS prepared a final regulatory flexibility analysis (FRFA) as part of the regulatory impact review. The FRFA incorporates the IRFA, the comments and responses to the proposed rule, and a summary of the analyses completed to support the action. A copy of the FRFA is available from NMFS (see ADDRESSES ) and a summary of the FRFA follows:

During the comment period for the proposed rule, NMFS received three letters of comment, but none of these comments addressed the IRFA or economic impacts of the rule on small businesses. There are no recordkeeping, reporting, or other compliance issues forthcoming from the proposed rule. This final rule does not duplicate, overlap, or conflict with other Federal rules.

The purpose of this action is to implement rebuilding plans for four overfished species, bocaccio, cowcod, widow rockfish and yelloweye rockfish. This action is needed because the Magnuson-Stevens Act at 304 (e)(3) requires rebuilding plans to be implemented as FMPs, FMP amendments, or regulations. The objective of this final rule is to implement rebuilding parameters that are intended to result in bocaccio, cowcod, widow rockfish, and yelloweye rockfish stocks rebuilding to their MSY biomass levels.

Amendment 16-3 responds to a Court order in Natural Resources Defense Council, Inc. v. Evans , 168 F. Supp. 2d 1149 (N.D. Cal 2001,), in which NMFS was ordered to provide Pacific Coast groundfish rebuilding plans as FMPs, FMP amendments, or regulations, per the Magnuson-Stevens Act. On October 27, 2003, the Court ordered NMFS to approve rebuilding plans for bocaccio, cowcod, widow rockfish, and yelloweye rockfish by September 15, 2004.

Amendment 16-3 follows the framework established by Amendment 16-1 and amends the FMP to include rebuilding plans for bocaccio, cowcod, widow rockfish, and yelloweye rockfish. For each overfished species rebuilding plan, the following parameters would be specified in the FMP: estimates of unfished biomass (B 0 ) and target biomass (B MSY ), the year the stock would be rebuilt in the absence of fishing (T MIN ), the year the stock would be rebuilt if the maximum time period permissible under national standard guidelines were applied (T MAX ), the target year in which the stock would be rebuilt under the rebuilding plan (T TARGET ), and the harvest control rule. No new management measures are proposed in Amendment 16-3. Amendment 16-1 described and authorized the use of numerous types of management measures intended to achieve rebuilding. These management measures will be implemented through the biennial harvest specifications and management measures process and will be used to constrain fishing to the targets identified in the rebuilding plans.

The FEIS/RIR/IRFA for this final rule defines six alternative actions that were considered for each of the four overfished species. The alternatives present a range of rebuilding strategies in terms of rebuilding probabilities for each species. The no action alternative is based on the “40-10 harvest policy”, which is the default rebuilding policy for setting OYs. Under the 40-10 harvest policy, stocks with biomass levels below B 40% (40 percent of the unfished biomass, a proxy for B MSY ) have OYs set in relation to the biomass level. At B 40% and greater, an OY may be set equal to the ABC. However, if a stock's spawning biomass declines below B 40% , the OY is scaled downward until at 10 percent (B 10% ), the harvest OY is set at zero unless modified for a species-specific rebuilding plan. In comparison to the other alternatives, the 40-10 harvest policy generally results in lower OYs in the short term, when a stock is at a low biomass level, but allows greater harvests when a stock is at higher biomass levels. For further information on the 40-10 harvest policy, see the preamble to the final rule for Amendment 16-1 (February 26, 2004, 69 FR 8861) or Section 5.3 of the FMP. The 40-10 harvest policy alternative would not result in rebuilding for three of the four overfished species (i.e., only bocaccio would be rebuilt within T MAX ) within the maximum allowable rebuilding time. Lack of rebuilding for these species makes this alternative not a legally-viable alternative and increases the risk to long-term productivity of the stock.

The maximum conservation alternative, Alternative 4, specifies the most conservative harvests that would allow these four species to rebuild and has the highest probability, 90 percent, of rebuilding within T MAX (except for cowcod which has a 60-percent probability). Each stock is expected to rebuild fastest under this alternative, but at considerable socioeconomic cost. Short-term socioeconomic costs would be highest under this alternative due to severe restrictions on fishing opportunity to allow the stock to rebuild faster.

The maximum harvest alternative, Alternative 1, for each overfished species was based on a 60 percent probability of rebuilding the stocks to their MSY biomass levels by T MAX , except for cowcod which was based on a 55 percent probability. This alternative would delay rebuilding for the longest period of time with the intent of keeping harvests at the highest allowable levels for the duration of rebuilding. Because this alternative would allow fishermen an opportunity to harvest higher levels in the short-term, this alternative would have the least socioeconomic impact. However, allowing higher harvest levels in the short-term would slow down rebuilding and, thus, have the highest risk among the action alternatives of not rebuilding within T MAX .

Intermediate alternatives, Alternatives 2 and 3, were defined for each overfished species and were based on 70-and 80- percent probabilities of rebuilding the stocks to their MSY biomass by T MAX (except that cowcod was based on a 60-percent probability for Alternatives 2 and 3). The socio-economic impacts of the intermediate alternatives fall within the range of the other alternatives that were fully analyzed in the FEIS. Alternative 2 would have more socio-economic impacts than Alternative 1, but less than Alternative 3. Alternative 3 would have more socio-economic impacts than Alternative 2, but less than Alternative 4. Alternative 2 would have a lower risk of not rebuilding within T MAX than Alternative 1, but higher than Alternative 3. Alternative 3 would have a lower risk of not rebuilding within T MAX than Alternative 2, but higher than Alternative 4.

After the draft EIS was made available by EPA for public review (69 FR 18897, April 9, 2004), the Council selected their preferred alternatives at their April 2004 meeting. The Council-preferred alternative for each species, as analyzed in the FEIS, is as follows: bocaccio, Alternative 2 (using the STATc Model) - 70-percent probability of rebuilding the stock to its MSY biomass by T MAX with a T TARGET of 2023 and a harvest rate of 0.0498; cowcod, Alternatives 2 through 4 (all the same) - 60-percent probability of rebuilding the stock to its MSY biomass by T MAX with a T TARGET of 2090 and a harvest rate of 0.009; widow rockfish, Alternative 1 (using Model 8) - 60-percent probability of rebuilding the stock to its MSY biomass by T MAX with a T TARGET of 2038 and a harvest rate of 0.0093; and yelloweye rockfish, Alternative 3 - 80-percent probability of rebuilding the stock to its MSY biomass by T MAX with a T TARGET of 2058 and a harvest rate of 0.0153. The Council-preferred alternative for each species was chosen by balancing biological and economic risks, maximizing the likelihood of rebuilding the stock while minimizing the socio-economic impacts on the industry.

A fish-harvesting business, including commercial harvesters and charter/party boat operators, is considered a “small” business by the Small Business Administration if it has annual receipts not in excess of $3.5 million. For wholesale businesses, a small business is one that employs not more than 100 people. The economic impact of implementing these rebuilding plans will be shared among commercial harvesters and recreational operators. More detailed information on the groundfish catch in these sectors is provided in the FEIS/IRFA.

There are approximately 4,600 commercial vessels fishing from West Coast ports. Of these, 1,709 vessels had some involvement in West Coast groundfish fisheries, 421 of those held groundfish limited entry permits, and an additional 771 participated in open access groundfish fisheries (if vessels derive more than 5 percent of total revenue from groundfish and do not have a limited entry permit, then they are considered to be participating in open access fisheries). After the buyback program in the fall of 2003, 91 limited entry trawl vessels and their permits were permanently retired, representing a 35 percent reduction in the capacity of the limited entry trawl fleet in terms of permits.

In 2001, there were an estimated 753 recreational fishing charter vessels operating in ocean fisheries on the West Coast: 106 in Washington, 232 in Oregon and 415 in California.

There are about 1,700 commercial vessels and 750 recreational charter operators that may be affected by these actions. Although there is some double counting, most of these entities would probably qualify as small businesses under SBA criteria. No alternatives, other than those considered in the FEIS, have been identified that would reduce the impact on small entities. In addition to an opportunity for public comment on the proposed rule, DEIS and IRFA, the Council process for developing a preferred alternative is conducted in an open forum with industry advisory groups that assist the Council in developing options that meet regulatory objectives and conservation goals, in particular, with the least possible impact on fishing businesses. This rule is not expected to yield disproportionate economic impacts between those small and large entities.

Implementation of specific rebuilding plans may entail substantial economic impacts on some groundfish buyers, commercial harvesters, and in the case of bocaccio, cowcod, and yelloweye rockfish, recreational operators. The economic impact will vary according to their dependency on groundfish-related income, the frequency of overfished species in their area of the coast, and the severity of those species overfished status. The Council-preferred alternative specifies annual OY levels for the overfished species that are sufficient to mitigate some of the adverse economic impacts on these entities, while not compromising the statutory requirement for timely rebuilding. NMFS will implement the Council-preferred alternative.

This action was developed after meaningful consultation and collaboration with tribal representatives on the Council, who have agreed with the provisions that apply to tribal vessels. This action is, therefore, compliant with Executive Order 13175 (Consultation and coordination with Indian tribal governments).

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

The 2004 TAC specified for Atka mackerel in the Central Aleutian District of the BSAI is 28,768 metric tons (mt) as established by the 2004 harvest specifications for groundfish of the BSAI (69 FR 9242, February 27, 2004).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2004 TAC for Atka mackerel in the Central Aleutian District will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 28,650 mt, and is setting aside the remaining 118 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Atka mackerel in the Central Aleutian District of the BSAI.

After the effective date of this closure the maximum retainable amounts at 50 CFR 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such a requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of the directed fishery for Atka mackerel in the Central Aleutian District of the BSAI.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.