This rule is issued under Marketing Agreement No. 156 and Order No. 979 (7 CFR part 979), regulating the handling of melons grown in South Texas, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

USDA is issuing this rule in conformance with Executive Order 12866.

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

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

This rule continues in effect the action that suspends, for the remainder of the 2004-05 fiscal period, the minimum grade, quality, maturity, container, pack, inspection, and other related requirements previously prescribed under the South Texas melon order. For the purpose of this rule, these requirements are referred to as handling requirements. It also continues in effect the suspension of the assessment collection and all reporting requirements, with the exception of the acreage planting reports, which continue to be required during the suspension period. This rule reduces industry expenses, while the industry evaluates whether the marketing order should be continued.

Section 979.52 of the order provides authority for grade, size, maturity, quality, and pack regulations for any variety of melons grown in the production area during any period. Section 979.52 also authorizes the modification, suspension, or termination of regulations issued under the order. Authority to terminate or suspend provisions of the order is specified in § 979.84.

Section 979.60 provides that whenever melons are regulated pursuant to § 979.52, such melons must be inspected by the Federal-State Inspection Service, and certified as meeting the applicable requirements of such regulations. The cost of such inspection and certification is borne by handlers.

Prior to November 27, 2004, fresh market shipments of South Texas melons were required to be inspected and were subject to minimum grade, quality, maturity, and container and pack requirements. Section 979.304 Handling regulation (7 CFR part 979.304) stated that no handler could handle cantaloupes grown in the production area unless such cantaloupes met the requirements specified for U.S. Commercial grade or better, except that not more than 8 percent serious damage including not more than 5 percent decay would be permitted. Honeydew melons were also required to meet the requirements of U.S. Commercial grade except that not more than 20 percent serious damage was allowed including not more than 10 percent for melons affected by decay. In addition, the combined juice from the edible portion of a sample of honeydews selected at random could contain not less than 8 percent soluble solids as determined by an approved hand refractometer. Individual containers of honeydew melons could contain no less than 25 percent U.S. Commercial grade or better quality. Individual containers of cantaloupe and honeydew melons could contain not more than double the specified lot tolerance for scorable defects.

The order's container and pack requirements were also specified in § 979.304. Cantaloupes and honeydew melons were required to be packed in fiberboard cartons of specified dimensions. Each carton was required to be marked to indicate the count; the name, address, and zip code of the shipper; the name of the product; and the words “Produce of U.S.A.” or “Product of U.S.A.” Additionally, if the carton was not clean and bright in appearance without marks, stains, or other evidence of previous use, the carton was required to be marked with the words “USED BOX.” Honeydew melons were also required to be packed in bulk containers with specified dimensions.

Section 979.304 further included a minimum quantity exemption of 120 pounds per day, and reporting and safeguard requirements for special purpose and experimental shipments. Related provisions appeared in the regulations in § 979.106 Registered handler ; § 979.152 Handling of culls ; and § 979.155 Safeguards .

The Committee meets prior to and during each season to consider recommendations for modification, suspension, or termination of the regulatory requirements that have been issued on a continuing basis for South Texas melons. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA reviews Committee recommendations and information submitted by the Committee and other available information, and determines whether modification, suspension, or termination of the regulatory requirements would tend to effectuate the declared policy of the Act.

At its September 16, 2004, meeting, the Committee unanimously recommended suspending, for the 2004-05 fiscal period, the handling, assessment collection, and all reporting requirements, except for the acreage planting reporting requirement. The 2004-05 fiscal period began October 1, 2004, and ends September 30, 2005.

The objective of the handling and inspection requirements is to ensure that only acceptable quality cantaloupe and honeydew melons enter fresh market channels, thereby ensuring consumer satisfaction, increasing sales, and improving returns to growers. While the industry continues to believe that quality is an important factor in maintaining sales, the Committee believes that the cost of inspection and certification (mandated when minimum requirements are in effect) would exceed the benefits derived, especially in view of reduced melon acreage and yields in recent years.

The South Texas cantaloupe and honeydew melon industry has been shrinking due to the inability to provide dependable supplies because of adverse weather conditions, a lack of success in breeding improved quality melons buyers desire, and intense foreign and domestic competition. South Texas historically had enjoyed a marketing window of approximately six weeks beginning about May 1 each season. That window has steadily eroded in recent years due to strong competition and quality problems with Texas melons. As a result, acreage has decreased dramatically from a high of 27,463 acres in 1987 to 4,780 in 2004. The number of producers and handlers also has declined.

The Committee recommended suspending the regulations and assessment collections for one fiscal period in hopes that new plants might be developed and help revive the industry. Some in the industry believe that the order is no longer needed. The suspensions are designed to decrease handler costs, while the industry evaluates whether the marketing order should be continued.

Underlying economics for the South Texas melon industry did not justify continuing the regulations for 2004-05. Too little revenue would be generated for an effective marketing and promotion program, and buyer demands have superseded the regulations in dictating quality requirements. Buyers have been requesting better quality melons.

This rule continues in effect the action that enables handlers to ship melons without regard to the minimum grade, quality, maturity, container, pack, inspection, and related requirements for the remainder of the 2004-05 fiscal period. It continues in effect the action that decreases industry expenses associated with inspection and assessments. This rule does not restrict handlers from seeking inspection on a voluntary basis.

Consistent with the temporary suspension of § 979.304, this rule also continues in effect the action that suspends § 979.106, § 979.152, and § 979.155 of the rules and regulations in effect under the order for the 2004-05 fiscal period. Section 979.106 provided for the registration of handlers, § 979.152 detailed procedures for the handling of cull melons, and § 979.155 provided safeguard requirements for special purpose shipments and established reporting and recordkeeping requirements when such exemptions were in place.

In addition, this rule also continues in effect the action that temporarily suspends § 979.219 requiring that an assessment rate of $0.09 per carton of melons be collected from South Texas melon handlers. Consistent with suspension of § 979.219, § 979.112 specifying late payment charges on delinquent assessments is also suspended. Authorization to assess melon handlers enables the Committee to incur expenses that are necessary to administer the marketing order. With the suspension of handling, inspection, and assessment requirements, a limited Committee budget is needed for program administration and the collection of the acreage planting reports.

For the period of the suspension, the Committee recommended a reduced budget of $70,959 to cover anticipated expenses. Adequate funds to cover these expenses are currently in the Committee's reserves.

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

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

There are approximately 16 handlers of South Texas melons who are subject to regulation under the marketing order and approximately 29 melon growers in the regulated area. Small agricultural service firms are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural growers are defined as those having annual receipts of less than $750,000.

Most of the handlers are vertically integrated corporations involved in growing, shipping, and marketing melons. For the 2003-04 marketing year, the industry's 16 handlers shipped melons produced on 4,780 acres with the average and median volume handled being 89,012 and 10,655 containers, respectively. In terms of production value, total revenue for the 16 handlers was estimated to be $12,175,919, with the average and median revenues being $760,996 and $91,094, respectively.

The South Texas melon industry is characterized by growers and handlers whose farming operations generally involve more than one commodity, and whose income from farming operations is not exclusively dependent on the production of melons. Alternative crops provide an opportunity to utilize many of the same facilities and equipment not in use when the melon production season is complete. For this reason, typical melon growers and handlers either double-crop melons during other times of the year or produce alternative crops, like onions.

Based on the SBA's definition of small entities, the Committee estimates that all of the 16 handlers regulated by the order would be considered small entities if only their spring melon revenues are considered. However, revenues from other productive enterprises might push a number of these handlers above the $5,000,000 annual receipt threshold. Of the 29 growers within the production area, few have sufficient acreage to generate sales in excess of $750,000; therefore, the majority of growers may be classified as small entities.

At its September 16, 2004, meeting, the Committee unanimously recommended suspending, for the 2004-05 fiscal period, the handling, assessment collection, and all reporting requirements, except for the acreage planting reporting requirement. The Committee requested that the rule be effective for the 2004-05 fiscal period, which began October 1, 2004, and ends September 30, 2005.

The objective of the handling and inspection requirements was to ensure that only acceptable quality cantaloupe and honeydew melons entered fresh market channels, thereby ensuring consumer satisfaction, increasing sales, and improving returns to growers. While the industry continues to believe that quality is an important factor in maintaining sales, the Committee believes that the cost of inspection and certification (mandated when minimum requirements are in effect) would exceed the benefits derived, especially in view of reduced melon acreage and yields in recent years. This results in reduced melon shipments and reduced assessment income.

The South Texas cantaloupe and honeydew melon industry has been shrinking due to the inability to provide dependable supplies because of adverse weather conditions, a lack of success in breeding improved quality melons buyers desire, and intense foreign and domestic competition. South Texas historically had enjoyed a marketing window of approximately six weeks beginning about May 1 each season. That window has steadily eroded in recent years due to strong competition and quality problems in Texas melons. As a result, acreage has decreased dramatically from a high of 27,463 acres in 1987 to 4,780 in 2004. The number of producers and handlers also has declined. Some in the industry believe that the marketing order is no longer needed.

Underlying economics for the South Texas melon industry did not justify continuing the regulations for 2004-05. Too little assessment revenue would be generated for an effective marketing and promotion program, and buyer demands have superseded the regulations in dictating quality requirements.

This rule continues in effect the action that enables handlers to ship melons without regard to the minimum grade, quality, maturity, container, pack, inspection, and related requirements for the remainder of the 2004-05 fiscal period. It decreases industry expenses associated with inspection and assessments. This rule does not restrict handlers from seeking inspection on a voluntary basis.

In addition, this rule also continues in effect the action that suspends § 979.219 requiring that an assessment rate of $0.09 per carton of melons be collected from South Texas melon handlers. Consistent with the suspension of § 979.219, § 979.112 specifying late payment charges on delinquent assessments continues to be suspended. Authorization to assess melon handlers enables the Committee to incur expenses that are necessary to administer the marketing order.

With the suspension of handling, inspection, and assessment requirements, a limited Committee budget is needed for program administration and collection of acreage planting reports. For the period of the suspension, the Committee recommended a reduced budget of $70,959 to cover anticipated expenses. Adequate funds to cover these expenses are currently in the Committee's reserves.

The Committee anticipates that this rule will not negatively impact small businesses. This rule continues in effect the action that suspends minimum grade, quality, maturity, container, pack, inspection, assessment collection, some reporting, and other related requirements. Further, this rule continues in effect the action that allows handlers and growers the choice to obtain inspection for melons, as needed, thereby reducing costs for the industry. The total cost of inspection and certification for fresh shipments of South Texas melons during the 2003-04 marketing season was $46,000. These costs will not be incurred during the 2004-05 season.

The suspension of the assessment collection requirements for the 2004-05 season also results in some cost savings. Assessment collections during the 2003-04 season totaled $102,988. Absent the suspension of § 979.219, assessments collected during the 2004-05 season would have been about $292,840.

The Committee considered suspension of the marketing order, but wished to continue receiving data on plantings for a one-year period before deciding whether the order should be continued.

It is possible that the Committee might recommend that the order be terminated after the 2004-05 fiscal period if conditions do not improve. Some Committee members felt that termination was premature, while others felt the order should be immediately eliminated. The Committee recommended the suspension of regulations for one fiscal period as an orderly and reasonable compromise. This will enable the Committee to study the impact of suspension, allow the continued collection of data on acreage projections, and minimize disruption if the Committee chooses to recommend termination after the 2004-05 fiscal period.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection requirements being suspended by this rule were approved previously by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0178. Suspension of some of the reporting requirements is expected to reduce the reporting burden on small or large South Texas melon handlers by 6.12 hours, and should further reduce industry expenses. During the suspension period, handlers will not have to file the following forms with the Committee: Application for Registered Handler (1.74 burden hours); Certification for Handling Melons for Processing (0.70 burden hours); Relief or Charity Certification for Handling Melons Which Fail to Meet the South Texas Rules and Regulations (0.35 burden hours); Certificate of Privilege (0.83 burden hours); and Special Purpose Shipment (2.50 hours). This rule will not impose any additional reporting or recordkeeping requirements on either small or large melon handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. In addition, as noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.

Further, the Committee's meeting was widely publicized throughout the melon industry and all interested persons were invited to attend the meeting and participate in Committee deliberations. Like all Committee meetings, the September 16, 2004, meeting was a public meeting and all entities, both large and small, were able to express their views on this issue.

An interim final rule concerning this action was published in the Federal Register on November 26, 2004. Copies of the rule were mailed by the Committee's staff to all Committee members and melon 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 January 25, 2005. One comment was received during that period. The comment concerned melon imports from Mexico and is, therefore, not applicable to this rulemaking action because the South Texas melon marketing order does not impact melon imports. The comment also stated that the Committee should be disbanded. The Committee is authorized under the marketing order and the Act. No changes are made as a result of the comment.

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

After consideration of all relevant material presented, including the Committee's recommendation, and other information, it is found that the regulations suspended in this final rule, which adopts, without change, the interim final rule, as published in the Federal Register (69 FR 68761, November 26, 2004), no longer tend to effectuate the declared policy of the Act.

This rule is issued under Marketing Order No. 985, as amended (7 CFR part 985), regulating the handling of spearmint oil produced in the Far West (Washington, Idaho, Oregon, and designated parts of Nevada and Utah), 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. A handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule amends an interim final rule that was published in the Federal Register on October 21, 2004 (69 FR 61755). That rule, which was based on two unanimous Committee recommendations increased the quantity of Native spearmint oil that handlers may purchase from, or handle for, producers during the 2004-2005 marketing year, which ends on May 31, 2005. Pursuant to authority contained in §§ 985.50, 985.51, and 985.52 of the order, at its September 13, 2004, meeting, the Committee unanimously recommended that the allotment percentage for Native spearmint oil for the 2004-2005 marketing year be increased by 12 percent from 36 percent to 48 percent. The Committee held another meeting on October 6, 2004, where, based on an unanticipated increase in demand, they unanimously recommended that the allotment percentage for Native spearmint oil for the 2004-2005 marketing year be increased by an additional 3 percent from 48 percent to 51 percent. Specifically, that rule increased the salable quantity from 773,474 pounds to 1,095,689 pounds, and the allotment percentage from 36 percent to 51 percent for Native spearmint oil for the 2004-2005 marketing year.

This amended interim final rule, which is based on a unanimous Committee recommendation made at a meeting on January 20, 2005, increases the salable quantity an additional 171,873 pounds from 1,095,689 pounds to 1,267,562 pounds, and the allotment percentage an additional 8 percent from 51 percent to 59 percent for Native spearmint oil for the 2004-2005 marketing year.

The initial salable quantity and allotment percentages for Scotch and Native spearmint oils for the 2004-2005 marketing year were recommended by the Committee at its October 8, 2003, meeting. The Committee recommended salable quantities of 766,880 pounds and 773,474 pounds, and allotment percentages of 40 percent and 36 percent, respectively, for Scotch and Native spearmint oils. A proposed rule was published in the Federal Register on January 23, 2004 (69 FR 3272). Comments on the proposed rule were solicited from interested persons until February 23, 2004. No comments were received. Subsequently, a final rule establishing the salable quantities and allotment percentages for Scotch and Native spearmint oils for the 2004-2005 marketing year was published in the Federal Register on March 22, 2004 (69 FR 13213). Subsequently, an interim final rule made more Native spearmint oil available for the 2004-2005 marketing year. This rule was published in the Federal Register on October 21, 2004 (69 FR 61755). No timely comments were received in response to the interim final rule.

The salable quantity is the total quantity of each class of oil that handlers may purchase from, or handle for, producers during a marketing year. The total salable quantity is divided by the total industry allotment base to determine an allotment percentage. Each producer is allotted a share of the salable quantity by applying the allotment percentage to the producer's individual allotment base for the applicable class of spearmint oil.

Taking into consideration the following discussion on adjustments to the Native spearmint oil salable quantity, the 2004-2005 marketing year salable quantity of 1,095,689 pounds will therefore be increased to 1,267,562 pounds.

The original total industry allotment base for Native spearmint oil for the 2004-2005 marketing year was established at 2,148,539 pounds and was revised at the beginning of the 2004-2005 marketing year to 2,148,410 pounds to reflect a 2003-2004 marketing year loss of 129 pounds of base due to non-production of some producers' total annual allotments. When the revised total allotment base of 2,148,410 pounds is applied to the originally established allotment percentage of 36 percent, the 2004-2005 marketing year salable quantity of 773,474 pounds is effectively modified to 773,428 pounds.

By increasing the salable quantity and allotment percentage, this amended interim final rule makes an additional amount of Native spearmint oil available by releasing oil from the reserve pool. When applied to each individual producer, the 8 percent allotment percentage increase allows each producer to take up to an amount equal to 8 percent of their allotment base from their Native spearmint oil reserve. This action makes an additional 118,990 pounds of Native spearmint oil available to the market.

The following table summarizes the Committee recommendation:

(A) Estimated 2004-2005 Allotment Base—2,148,539 pounds. This is the estimate that the original 2004-2005 Native spearmint oil salable quantity and allotment percentage was based on.

(B) Revised 2004-2005 Allotment Base—2,148,410 pounds. This is 129 pounds less than the estimated allotment base of 2,148,539 pounds. This is less because some producers failed to produce all of their 2003-2004 allotment.

(C) Initial 2004-2005 Allotment Percentage—36 percent. This was recommended by the Committee on October 8, 2003.

(D) Initial 2004-2005 Salable Quantity—773,474. This figure is 36 percent of 2,148,539 pounds.

(E) Initial Adjustment to the 2004-2005 Salable Quantity—773,428 pounds. This figure reflects the salable quantity initially available after the beginning of the 2004-2005 marketing year due to the 129 pound reduction in the industry allotment base to 2,148,410 pounds.

(F) First Revised Increase in Allotment Percentage—15 percent. The Committee recommended a 12 percent increase at its September 13, 2004, meeting and an additional 3 percent increase at its October 6, 2004, meeting, for a total increase of 15 percent which was effective on October 21, 2004.

(G) Second Revised Increase in Allotment Percentage—8 percent. This was recommended by the Committee on January 20, 2005.

(H) First Revised 2004-2005 Allotment Percentage—51 percent. This figure was derived by adding the first revised increase of 15 percent to the initial 2004-2005 allotment percentage of 36 percent.

(I) Second Revised 2004-2005 Allotment Percentage—59 percent. This figure was derived by adding the 8 percent to the first revised 2004-2005 allotment percentage of 51 percent.

(J) First Revised Calculated 2004-2005 Salable Quantity—1,095,689 pounds. This figure is 51 percent of the revised 2004-2005 allotment base of 2,148,410 pounds.

(K) Second Revised Calculated 2004-2005 Salable Quantity—1,267,562 pounds. This figure is 59 percent of the revised 2004-2005 allotment base of 2,148,410 pounds.

(L) First Revised Computed Increase in the 2004-2005 Salable Quantity—322,262 pounds. This figure is 15 percent of the revised 2004-2005 allotment base of 2,148,410 pounds.

(M) Second Revised Computed Increase in the 2004-2005 Salable Quantity—171,873 pounds. This figure is 8 percent of the revised 2004-2005 allotment base of 2,148,410 pounds.

In making this second revision recommendation, the Committee considered all available information on price, supply, and demand. The Committee also considered reports and other information from handlers and producers in attendance at the meeting and the report given by the Committee manager from handlers and producers who were not in attendance. The 2004-2005 marketing year began on June 1, 2004. Handlers have reported purchases of 1,055,641 pounds of Native spearmint oil for the period of June 1, 2004, through January 20, 2005. This amount exceeds the five-year average of 852,259 pounds for this period by 203,352 pounds. On average, handlers indicated that the estimated total demand for the 2004-2005 marketing year could range from a minimum of 1,212,000 pounds to as much as 1,242,000 pounds. This amount exceeds the five-year average for an entire marketing year of 973,456 pounds by as little as 238,544 pounds and as much as 268,544 pounds. Therefore, based on past history, the industry may not be able to meet market demand without this increase. When the Committee made its initial recommendation for the establishment of the Native spearmint oil salable quantity and allotment percentage for the 2004-2005 marketing year, it had anticipated that the year would end with an ample available supply.

Based on its analysis of available information, USDA has determined that the salable quantity and allotment percentage for Native spearmint oil for the 2004-2005 marketing year should be increased to 1,267,562 pounds and 59 percent, respectively.

This amended rule further relaxes the regulation of Native spearmint oil and will allow for market needs and improve producer returns. In conjunction with the issuance of this rule, the Committee's revised marketing policy statement for the 2004-2005 marketing year has been reviewed by USDA. The Committee's marketing policy statement, a requirement whenever the Committee recommends implementing volume regulations or recommends revisions to existing volume regulations, meets the intent of § 985.50 of the order. During its discussion of revising the 2004-2005 salable quantities and allotment percentages, the Committee considered: (1) The estimated quantity of salable oil of each class held by producers and handlers; (2) the estimated demand for each class of oil; (3) prospective production of each class of oil; (4) total of allotment bases of each class of oil for the current marketing year and the estimated total of allotment bases of each class for the ensuing marketing year; (5) the quantity of reserve oil, by class, in storage; (6) producer prices of oil, including prices for each class of oil; and (7) general market conditions for each class of oil, including whether the estimated season average price to producers is likely to exceed parity. Conformity with USDA's “Guidelines for Fruit, Vegetable, and Specialty Crop Marketing Orders” has also been reviewed and confirmed.

The increase in the Native spearmint oil salable quantity and allotment percentage allows for anticipated market needs for this class of oil. In determining anticipated market needs, consideration by the Committee was given to historical sales, and changes and trends in production and demand.

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

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

There are approximately 8 handlers of spearmint oil who are subject to regulation under the marketing order and approximately 98 producers of Class 3 (Native) spearmint oil in the regulated area. Small agricultural service firms are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000.

Based on SBA's definition of small entities, the Committee estimates that 2 of the 8 handlers regulated by the order could be considered small entities. Most of the handlers are large corporations involved in the international trading of essential oils and the products of essential oils. In addition, the Committee estimates that 15 of the 98 Native spearmint oil producers could be classified as small entities under the SBA definition. Thus, a majority of handlers and producers of Far West spearmint oil may not be classified as small entities.

The Far West spearmint oil industry is characterized by producers whose farming operations generally involve more than one commodity, and whose income from farming operations is not exclusively dependent on the production of spearmint oil. A typical spearmint oil-producing operation has enough acreage for rotation such that the total acreage required to produce the crop is about one-third spearmint and two-thirds rotational crops. Thus, the typical spearmint oil producer has to have considerably more acreage than is planted to spearmint during any given season. Crop rotation is an essential cultural practice in the production of spearmint oil for weed, insect, and disease control. To remain economically viable with the added costs associated with spearmint oil production, most spearmint oil-producing farms fall into the SBA category of large businesses.

Small spearmint oil producers generally are not as extensively diversified as larger ones and as such are more at risk to market fluctuations. Such small producers generally need to market their entire annual crop and do not have the luxury of having other crops to cushion seasons with poor spearmint oil returns. Conversely, large diversified producers have the potential to endure one or more seasons of poor spearmint oil markets because income from alternate crops could support the operation for a period of time. Being reasonably assured of a stable price and market provides small producing entities with the ability to maintain proper cash flow and to meet annual expenses. Thus, the market and price stability provided by the order potentially benefit the small producer more than such provisions benefit large producers. Even though a majority of handlers and producers of spearmint oil may not be classified as small entities, the volume control feature of this order has small entity orientation.

This rule amends an interim final rule that was published in the Federal Register on October 21, 2004 (69 FR 61755). That rule, which was based on two unanimous Committee recommendations, increased the quantity of Native spearmint oil that handlers may purchase from, or handle for, producers during the 2004-2005 marketing year, which ends on May 31, 2005. Pursuant to authority contained in §§ 985.50, 985.51, and 985.52 of the order, at its September 13, 2004, meeting, the Committee unanimously recommended that the allotment percentage for Native spearmint oil for the 2004-2005 marketing year be increased by 12 percent from 36 percent to 48 percent. The Committee held another meeting on October 6, 2004, where, based on an unanticipated increase in demand, they unanimously recommended that the allotment percentage for Native spearmint oil for the 2004-2005 marketing year be increased by an additional 3 percent from 48 percent to 51 percent. Specifically, that rule increased the salable quantity from 773,474 pounds to 1,095,689 pounds, and the allotment percentage from 36 percent to 51 percent for Native spearmint oil for the 2004-2005 marketing year.

This amended interim final rule, which is based on a unanimous Committee recommendation made at a meeting on January 20, 2005, increases the salable quantity an additional 171,873 pounds from 1,095,689 pounds to 1,267,562 pounds, and the allotment percentage an additional 8 percent from 51 percent to 59 percent for Native spearmint oil for the 2004-2005 marketing year. This rule relaxes the regulation of Native spearmint oil and will allow producers to meet market needs and improve returns.

An econometric model was used to assess the impact that volume control has on the prices producers receive for their commodity. Without volume control, spearmint oil markets would likely be over-supplied, resulting in low producer prices and a large volume of oil stored and carried over to the next crop year. The model estimates how much lower producer prices would likely be in the absence of volume controls.

The recommended salable percentages, upon which 2004-2005 producer allotments are based, are 40 percent for Scotch and 59 percent for Native (a 23 percentage point increase from the original salable percentage of 36 percent). Without volume controls, producers would not be limited to these allotment levels, and could produce and sell additional spearmint. The econometric model estimated a $1.35 decline in the season average producer price per pound (from both classes of spearmint oil) resulting from the higher quantities that would be produced and marketed if volume controls were not used ( i.e. , if the salable percentages were set at 100 percent). A previous price decline estimate of $1.71 per pound was based on the 2004-2005 salable percentages (40 percent for Scotch and 36 percent for Native) published in the Federal Register on March 22, 2004 (69 FR 13213).

The 2003 Far West producer price for both classes of spearmint oil was $9.50 per pound, which is below the average of $11.33 for the period of 1980 through 2002, based on National Agricultural Statistics Service data. The surplus situation for the spearmint oil market that would exist without volume controls in 2004-2005 also would likely dampen prospects for improved producer prices in future years because of the buildup in stocks.

The use of volume controls allows the industry to fully supply spearmint oil markets while avoiding the negative consequences of over-supplying these markets. The use of volume controls is believed to have little or no effect on consumer prices of products containing spearmint oil and will not result in fewer retail sales of such products.

Based on projections available at the meetings, the Committee considered alternatives to the 8 percent increase. The Committee not only considered leaving the salable quantity and allotment percentage unchanged, but also looked at various increases ranging from 7 percent to 10 percent. The Committee reached its recommendation to increase the salable quantity and allotment percentage for Native spearmint oil after careful consideration of all available information, and believes that the level recommended will achieve the objectives sought. Without the increase, the Committee believes the industry would not be able to meet market needs.

This rule will not impose any additional reporting or recordkeeping requirements on either small or large spearmint oil 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, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.

Further, the Committee meetings were widely publicized throughout the spearmint oil industry and all interested persons were invited to attend the meetings and participate in Committee deliberations. Like all Committee meetings, the September 13, 2004, October 6, 2004, and the January 20, 2005, meetings were public meetings and all entities, both large and small, were able to express their views on this issue.

Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.

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

This rule invites comments on a revision to the salable quantity and allotment percentage for Native spearmint oil for the 2004-2005 marketing year. A 60-day comment period is provided. Any comments received will be considered prior to finalization of this rule.

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

Pursuant to 5 U.S.C. 553, it is also found and determined upon good cause that it is impracticable, unnecessary, and contrary to the public interest to give preliminary notice prior to putting this rule into effect and that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because: (1) This rule increases the quantity of Native spearmint oil that may be marketed during the marketing year which ends on May 31, 2005; (2) the current quantity of Native spearmint oil may be inadequate to meet demand for the remainder of the marketing year, thus making the additional oil available as soon as is practicable is beneficial to both handlers and producers; (3) the Committee unanimously recommended these changes at public meetings and interested parties had an opportunity to provide input; and (4) this rule provides a 60-day comment period and any comments received will be considered prior to finalization of this rule.

This document makes a correction to a final rule that was published in the Federal Register on January 26, 2005 (67 FR 3599).

In rule document FR Doc. 05-1303, appearing on page 3599, in the issue of Wednesday, January 26, 2005, the following correction is made.

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 September 28, 2004, the Federal Reserve Banks have decided to reduce further the number of locations at which they process checks. 2 The amendments set forth in this notice are part of a series of appendix A amendments related to that decision, and the Board will issue separate notices for each phase of the restructuring. 3

As part of the restructuring process, the Detroit branch office of the Federal Reserve Bank of Chicago will cease processing checks on April 16, 2005, and banks with routing symbols currently assigned to that office for check processing purposes will be reassigned to the Federal Reserve Bank of Cleveland's head office. The Houston branch office of the Federal Reserve Bank of Dallas will cease processing checks on April 23, 2005, and banks with routing symbols currently assigned to that office for check processing purposes will be reassigned to the Federal Reserve Bank of Dallas's head office. As a result of these changes, 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 Cleveland check processing region will serve banks located in more than one Federal Reserve District, banks located in the expanded Cleveland 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 banks, the Board accordingly is amending the lists of routing symbols associated with the Federal Reserve Banks of Cleveland, Chicago, and Dallas to conform to the transfer of operations (1) from the Chicago Reserve Bank's Detroit branch office to the Cleveland Reserve Bank's head office and (2) from the Dallas Reserve Bank's Houston branch office to that Reserve Bank's head office. To coincide with the effective date of the underlying check processing changes, the amendments affecting the Federal Reserve Banks of Cleveland and Chicago are effective April 16, 2005, and the amendments affecting the Federal Reserve Bank of Dallas are effective April 23, 2005. The Board is providing advance notice of these amendments to give affected banks ample time to make any needed processing changes. The advance notice also will enable affected banks to amend their availability schedules and related disclosures, if necessary, and provide their customers with notice of these changes. 4 The Federal Reserve routing symbols assigned to all other Federal Reserve branches and offices will remain the same at this time. The Board of Governors, however, intends to issue similar notices at least sixty days prior to the elimination of check operations at some other Reserve Bank offices, as described in the September 2004 Federal Register document.

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 this final rule. The revisions to the appendix are technical in nature, and the routing symbol revisions are required by the statutory and regulatory definitions of “check-processing region.” Because there is no substantive change on which to seek public input, the Board has determined that the § 553(b) notice and comment procedures are unnecessary.

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. These technical amendments to appendix A of Regulation CC will (1) delete the reference to the Detroit branch office of the Federal Reserve Bank of Chicago and reassign the routing symbols listed under that office to the head office of the Federal Reserve Bank of Cleveland and (2) delete the reference to the Houston branch office of the Federal Reserve Bank of Dallas and reassign the routing symbols listed under that office to the Dallas Reserve Bank's head office. 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, because all paperwork collection procedures associated with Regulation CC already are in place, the Board anticipates that no additional burden will be imposed as a result of this rulemaking.

In the unofficial loose-leaf version of the Export Administration Regulations (EAR) that is available by subscription from the U.S. Government Printing Office, the Bureau of Industry and Security (BIS) currently publishes, on a quarterly basis, the list of persons denied export privileges pursuant to Parts 764 and 766 of the EAR (“Denied Persons List” (DPL)) and a copy of the “Specially Designated Nationals and Blocked Persons” (SDN) List, which is published by the U.S. Treasury Department, Office of Foreign Assets Control (OFAC). In the loose-leaf edition of the EAR, the DPL and the SDN List have been designated as Supplements No. 2 and 3, respectively, to Part 764. However, no such supplements exist in the Code of Federal Regulations, Title 15 Part 764.

Orders affecting export privileges under the EAR and revisions to the SDN List are issued on such a frequent basis as to make the quarterly, hard-copy versions of the DPL and the SDN List inaccurate. As such, BIS is discontinuing quarterly reprints of these lists in the loose-leaf edition of the EAR. The removal of these lists from the loose-leaf edition of the EAR will minimize any potential that parties to a transaction might rely on an outdated list of persons denied export privileges under the EAR. BIS maintains a current compilation of persons denied export privileges under the EAR on its Web site, and OFAC maintains a current list of specially designated nationals on its Web site. Export privileges are denied by written order of the Department of Commerce; such orders are published in the Federal Register . These orders are the official source of information about denied persons, and are controlling documents in accordance with their terms.

This rule removes from § 736.2(b)(4)(i) and paragraph (a)(1) of Supplement No. 1 to Part 764 language stating that BIS provides the DPL in the loose-leaf edition of the EAR. This rule also revises § 736.2(a)(3) to clarify that, with respect to the end-user, General Prohibition Four (§ 736.2(b)(4)) and Supplement No. 1 to Part 764 of the EAR should be consulted for references to persons with whom transactions may not be permitted, and General Prohibition Five (§ 736.2(b)(5)) should be consulted for references to end-users for whom an export or reexport license may be required. General Prohibition Four prohibits actions that are prohibited by a denial order issued under Part 766 of the EAR. General Prohibition Five prohibits any exports and reexports to an end-user prohibited by Part 744 of the EAR, which contains end-user and end-use based controls. Supplement No. 1 to Part 764 describes denial orders, which prohibit certain transactions with named parties involving items that are subject to the EAR. Supplement No. 1 to Part 764 also references the list of persons denied export privileges.

This rule also makes necessary conforming changes by removing references to Supplement No. 2 to Part 764 from §§ 752.11(c)(3), 752.11(c)(4), and 752.12(a). Finally, this rule revises §§ 752.9(a)(3)(ii)(G) and 752.12(a) by removing the procedural requirement of distributing and retaining copies of the DPL. Instead, each Special Comprehensive License (SCL) holder and each consignee must maintain a record of its procedures for screening transactions to prevent violations of orders denying export privileges. By making this requirement functional and results-oriented, this revision will increase the effectiveness of screening and reduce the burden on SCL holders and consignees.

Although the Export Administration Act expired on August 20, 2001, Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp., p. 783 (2002)), as extended most recently by the Notice of August 6, 2004, (69 FR 48763 (August 10, 2004)) continues the Regulations in effect under the International Emergency Economic Powers Act.

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

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule involves a collection of information subject to the PRA. This collection has been approved by OMB under control number 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes for a manual or electronic submission. Send comments regarding these burden estimates or any other aspect of these collections of information, including suggestions for reducing the burden, to Dave Rostker, OMB Desk Officer, New Executive Office Building, 725 17th Street, NW., Washington, DC 20503; and to the Office of Administration, Bureau of Industry and Security, Department of Commerce, 14th and Pennsylvania Avenue, NW., Room 6092, Washington, DC 20230.

3. This rule does not contain policies with Federalism implications as that term is defined under E.O. 13132.

4. The Department finds that there is good cause under 5 U.S.C. 553(b)(B) to waive the provisions of the Administrative Procedure Act requiring a notice of proposed rulemaking and the opportunity for public comment. This rule makes changes to Parts 736, 752, and 764 of the EAR that are non-substantive and do not affect the rights or obligations of the public. This rule removes references in the EAR to the DPL and notifies the public that it BIS is discontinuing its practice of including the DPL and SDN List in the loose-leaf version of the EAR. Because these revisions are not substantive changes to the EAR, it is unnecessary to provide notice and opportunity for public comment. In addition, because this is not a substantive rule, the delay in effective date pursuant to 5 U.S.C. 553(d)(3) is not applicable. No other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are not applicable. Therefore, this regulation is issued in final form.

1. On June 23, 2004, the Commission issued a Notice of Proposed Rulemaking (NOPR) requesting comments on proposed revisions to its regulations regarding service of documents. Electronic Notification of Commission Issuances, 107 FERC ¶ 61,311, FERC Stats. & Regs. ¶ 32,574 (2004). The Commission, in the NOPR, proposed to begin serving notice of Commission issuances to persons on service and mailing lists via e-mail rather than postal mail, with exemptions for persons unable to receive notice electronically. The NOPR also proposed to make service by electronic means the standard form of service in Commission proceedings, and to clarify the Commission's regulations to ensure that documents with signature certification or verification requirements could be filed electronically.

2. The NOPR's proposal, which this Final Rule adopts, was to initiate in early 2005 an eService program that will require each person on a service list to provide an e-mail address, registered through the Commission's eRegistration system, at which that person can receive notification of Commission issuances. The Commission views this program as an important element in its efforts to reduce the use of paper in compliance with the Government Paperwork Elimination Act. 1 This revision is intended to provide faster notification to participants in Commission proceedings while also reducing the Commission's mailing costs.

3. This Final Rule implements the eService system by amending Rule 2010  2 to require persons eligible to receive service to eRegister pursuant to 18 CFR 390.1 (2004). This requirement applies only to proceedings initiated on or after March 21, 2005. A person submitting an initial filing on behalf of one or more participants will designate the official contact for those participants on the service list. That person will, however, be able to designate additional contacts who will also be included on the service list if they are eRegistered. Persons for whom electronic notification is impractical may apply for a waiver and register by a paper form, as provided in 18 CFR 390.3 (2004). Such persons will receive postal mail notification.

4. As a backup in the early stages of the eService system, the Secretary will continue to send copies of Commission issuances by postal mail. This will continue for three months from the time this Final Rule becomes effective, after which notification will be solely by e-mail to contacts who are fully eRegistered, unless a waiver or exemption applies.

5. In addition to service by the Commission, this final rule adopts the NOPR's proposal to make electronic service the standard form of service under Rule 2010(f). 3 The Commission is amending its service rule to provide that, with the exception of those who are unable to receive such service, senders and recipients will serve documents upon one another by electronic means unless they agree otherwise.

6. The Commission will not at this time be implementing the system, proposed in the NOPR, of electronic notification for persons on the Commission's various mailing lists. It will, however, do so in the future. As explained in the NOPR, the Commission maintains a variety of mailing lists that it utilizes to inform potentially affected persons of certain developments in proceedings related to hydroelectric projects and natural gas facilities. Recipients include state and federal agencies, elected officials, Indian tribes, landowners, and other potentially interested persons and entities. The Commission intends to institute a system whereby mailing list recipients are given the ability to sign up to receive e-mail notifications of matters in which they might have an interest. There will be an option for receipt of postal notification for persons for whom electronic notification is impractical. The Commission will provide further information to the public once the manner in which this system will operate has been established.

7. The Commission is adopting in this Final Rule the regulatory revisions that the NOPR proposed to facilitate electronic notification to mailing list recipients. These revisions do not place any requirements on such recipients and thus can be adopted now, without need for a further rulemaking once the Commission has determined the precise manner in which electronic notification will work. The Commission is revising the following sections of 18 CFR:

• § 5.4(b)(1)(iii)—Request for acceleration of license expiration date.

• § 5.8(e)(3)—Commencement of proceeding and scoping document, or approval to use traditional licensing process or alternative procedures.

• § 5.19(c)(2)—Tendering notice and schedule.

• § 16.6(d)(1)(iii)—Notification under Section 15 of the Federal Power Act.

• §§ 16.9(d)(1)(iii), (d)(2)(ii)—License applications under Sections 14 and 15 of the Federal Power Act.

• § 156.8—Applications for orders under Section 7(a) of the Natural Gas Act.

• § 157.9—Applications for certificates of public convenience and necessity and for orders approving abandonment under Section 7 of the Natural Gas Act.

8. Finally, the Commission is adopting the NOPR's proposal to revise Rule 2003(c)  4 to provide specifically that any requirement for certification, notarization, verification, or any similar means by which a witness represents that his statement is true, may be satisfied through the provisions of 28 U.S.C. 1746. Consequently, a declaration under penalty of perjury will suffice for verification purposes. Under Rule 2005(c), 5 the typed characters of the signer's name are sufficient to show that that person signed an eFiled document. These two provisions, taken together, will remove potential barriers to the electronic filing of documents requiring signature and verification. The Commission is requiring, however, that a document with an original signature be maintained by the submitter until the relevant proceeding has been concluded.

9. The Commission received eleven comments on the NOPR. 6 The commenters were uniformly positive about the proposal in general and offered a number of suggestions for features that they believe will improve the utility and efficiency of the system. As explained below, the Commission in some cases has incorporated these suggestions in the system that will become operational by March 21, 2005. In other cases, the Commission intends to add the suggested features, or similar ones, in the future. The eService system that will be released when this rulemaking becomes effective will not be the final iteration, as the Commission will endeavor on an ongoing basis to improve all of its information systems in ways that will add value to the public. The Commission will make public announcements as further enhancements become available. The comments that the Commission received, as well as other forms of input from users of its online systems, will continue to play an important role in its efforts to provide information quickly and efficiently to industry and the public.

10. Some commenters also requested clarification or further explanation of the system's operation. These comments also are addressed below.

11. Several commenters  7 suggest that the system be designed to serve filings automatically upon persons included in the service list. The Commission agrees that this feature would add considerable value to the system by making it unnecessary in most cases for the filer to serve documents. It will not be possible to include this feature in the system by the effective date of this rulemaking, but the Commission may add it via a subsequent rulemaking.

12. One of the more difficult issues presented by the conversion to electronic service, and one addressed by many commenters, 8 is the question whether e-mail notifications should link to a document in the Commission's eLibrary database or, instead, contain the served document as an attachment. Each solution presents a potential difficulty: filed documents are not always available immediately in eLibrary, and attachments may become voluminous and overburden a recipient's e-mail system, particularly in a proceeding in which numerous filings may be due on a specific date.

13. The Commission is revising Rule 2010 to provide that the person responsible for making service may do so by sending a link to the document in the Commission's eLibrary system or by alternate means that are reasonably calculated to make the document available to the recipients. Service of a link to eLibrary will be easy to accomplish. When a document is filed electronically, the person making the filing will receive a confirmation e-mail. The e-mail contains a link to the document. Even though the document will not yet be in eLibrary, the same link will take a viewer to the document once it is in eLibrary. Therefore, the person making the filing may simply forward the confirmation e-mail to the recipients on the service list. In rare instances, there may be some delay before a document becomes available in eLibrary. The revisions therefore provide that, where a document does not become available within two business days, the sender must provide service immediately by alternate means.

14. The revised Rule 2010 leaves open the possibility that participants may wish to employ means of service other than links to eLibrary. In many cases, participants may wish to use means such as service of documents as attachments or service of links to web sites operated by the filing participant. Although the rule will not require participants to agree on alternate means of service, the Commission anticipates that in most proceedings, participants will voluntarily settle upon some mutually acceptable means. Alternate means of service are being employed now in many proceedings before the Commission. In some larger proceedings, Commission staff currently is establishing listservs on which parties may post filings, making them quickly and conveniently available to all parties in a proceeding. Available technology offers numerous means of exchanging documents quickly and efficiently. The Commission is loath to constrain the ability of participants in its proceedings to take advantage of such technology and is confident that participants will cooperate with one another in doing so to the greatest possible degree.

15. Several commenters  9 suggest the use of standardized language in the subject line of e-mails for service both by the Commission and by participants. Such a requirement would make it easier for participants to set e-mail filters to avoid blocking messages relating to Commission proceedings. The Commission agrees that such a requirement is desirable and will include directions for standardized subject lines at a prominent location in the system. Participants will be directed to include the phrase “Document Service” in the subject line of service e-mails.

16. One commenter  10 asked that, if it could do so with little or no delay, the Commission make this rule effective with the start of a new docket year, which would be October 1. The timing has, however, worked out in such a way as to make it impractical. The eService system could not have been functional by October 1, 2004, and the Commission does not wish to delay the benefits of the system until late 2005.

17. One commenter  11 requested that the “default” for service among participants be changed to allow participants to employ electronic service even without advance agreement among the participants. The Commission also received the suggestion  12 that the service rule be clarified to state that, where one participant is unable to receive electronic service, the remaining participants may still serve each other via electronic service. The Commission agrees with both comments. It is revising Rule 2010(f) to provide that service shall be by electronic means unless the participants otherwise agree, except where a participant is unable to receive electronic service. This provision will not be limited to proceedings commenced after the effective date of this Final Rule. In addition, the revised rule will make clear that electronic service is still to be employed among participants who are able to use it. This is what the Commission originally intended.

18. One commenter  13 asked how service of protected documents will be handled. Currently, the Commission's regulations on service do not require that protected documents be served electronically, nor do they prohibit it. The owner of the document retains the ability to decide whether to transmit it electronically to other participants in a proceeding. Obviously, in this situation serving a link to eLibrary will not work, so participants will have to make other arrangements. This Final Rule makes no change on this issue. Participants are best left to assess for themselves the risks and benefits of different methods of transmitting protected information, as the most desirable method undoubtedly will vary from case to case.

19. One commenter  14 states that it has experienced problems with group interventions in the Commission's electronic filing system. The commenter reports that placing more than two representatives on the service list when filing electronically has been difficult and that the system does not always pick up the correct designations of principals and counsel when members of a group intervene jointly. This comment is outside the scope of the NOPR, but the Commission expects the new interface for its eFiling system to resolve this problem.

20. A commenter  15 suggests that the Commission's eSubscription system allow subscription by applicant name. This comment also is outside the scope of the NOPR, but a later revision to the eSubscription system will allow applicant-name-based subscription.

21. The U.S. Postal Service suggests that the Commission utilize its Electronic Postmark (EPM) system to provide security for its eService system. The EPM system requires payment of a fee, however, and the Commission believes that it can achieve sufficient levels of security without EPM.

22. Some commenters  16 suggest that the Commission allow users to employ a second e-mail address, that is, an e-mail address other than the one they use for eRegistration, for eService. Some also suggest the allowance of group e-mail addresses for service purposes. They state that such capability will make it easier for them to route service e-mails within their organizations. The Commission does not consider this approach practical. Part of the Commission's purpose in initiating the eRegistration system was to obtain cleaner service and mailing lists by reducing duplicative and conflicting entries. Creating a system of e-mail addresses that would be separate from the eRegistration would defeat this purpose. In addition, standardizing the subject line of service e-mails—possibly by requiring inclusion of docket numbers—should make it possible for companies and law firms to establish their own internal forwarding rules, which would achieve the same purpose addressed by the comments.

23. One commenter  17 suggested that the Commission employ a format that would allow a downloaded service list to be inserted into e-mail programs. The Commission intends to add a feature of this type in the future. For this release, the eService system will only provide a file download of all the e-mail addresses on a service list. In a later release, however, it should be possible for the user to open a new message in the user's e-mail application so that the “To” field will automatically be populated with all the e-mail addresses on the relevant service list.

24. A commenter  18 suggested that the system provide a drop list of users who are already registered, which the commenter believed might be useful for various purposes. It would not be possible to implement such a functionality in this release of the system. The Commission may revisit this point, however, in designing future releases. One concern is privacy. Obviously, e-mail addresses contained on service lists must be exposed to the view of participants who are eFiling, but the use of a drop list might arguably be an inappropriate level of exposure. The Commission intends to examine the appropriate balance of privacy and ease of use.

25. One commenter  19 suggested that the Commission design the system to alert other participants if a participant receives a waiver of the eRegistration requirement. Such a function should not be necessary, because the identity of persons receiving waivers will be apparent from the service list, which will show their mailing addresses but no e-mail addresses. Similarly, it would be impractical at this time to implement a function that would provide participants with notice that people they added to the service list were receiving service. Generally speaking, failure to receive service would become apparent in the same manner as with postal mail. A person who adds others to the service list would simply need to verify that the others received service of the first document after they were added.

26. One commenter  20 requested that the Commission clarify what would happen if the Commission serves an issuance on a person after that person has been prompted by the system to eRegister but before the person has had a chance to do so. This scenario will not arise because the system, as designed, will require that all contacts listed by a filer be eRegistered. The system will not send out notifications to persons (who are not eRegistered) inviting them to eRegister. The signer or counsel of record would be responsible for serving other contacts who are not eRegistered.

27. One commenter  21 requested an explanation of the statement in the NOPR that the person submitting the initial filing on behalf of a participant would by default become the representative contact on the service list. The commenter asked whether a paralegal filing for an attorney would need to log in as the attorney to ensure that the attorney was the representative. Another commenter  22 suggested that the signer of the document be the “default” contact. The new system will address this issue. Until now, the field for the “signer” of a document defaulted to the login ID— i.e. , the paralegal—so that if the paralegal did not enter the attorney's e-mail address, the paralegal would become the contact. In the new system, there will be no default, so the paralegal will be required to enter an e-mail address, which will be the attorney's e-mail address.

28. One commenter  23 asked for clarification of whether programs used by some organizations to download and clean up service lists will still function despite the security measures that the Commission will have to implement to ensure that e-mail addresses remain available only to persons who are eRegistered. Currently, third party programs of this nature access contact information such as street addresses, but not e-mail addresses. The initial release of the eService system will continue to allow access by third party software to contacts' information such as street addresses, but will not allow access to their e-mail addresses.

29. One commenter  24 suggested that the Commission include an ID number on mailings in hydroelectric and natural gas proceedings— i.e. , to mailing lists as opposed to service lists—to eliminate the need for a private link or a complicated URL to allow the recipient to access Non-Internet Public (NIP) documents. The Commission cannot, consistent with its security requirements, provide IDs to eLibrary to allow access to non-public documents.

30. One commenter  25 preferred that the Commission not adopt the requirement, proposed in the NOPR, that a participant retain physically signed copies of electronically served, signature-required documents. The commenter stated that it is attempting to go entirely “paperless.” The Commission does not wish to impede the commenter's efforts, but believes this requirement will have very limited impact. The requirement is needed to ensure that a signature's validity will not be subject to challenge in later administrative or judicial proceedings.

31. One commenter  26 suggested that the Commission maintain service lists in hydroelectric proceedings for the separate proceedings and not for entire dockets. This comment is outside the scope of the NOPR. The Commission will, however, investigate the possibility of making such a change at a later time.

32. One commenter  27 stated that the Commission should recognize facsimile transmissions, commonly called “fax” transmissions, as electronic transmissions within this rulemaking. The Commission does not consider facsimile transmissions to be electronic transmissions in the same manner as, for instance, e-mails. Although a facsimile transmission is an electronic means of sending a document, it produces only a paper document. Thus, it does not adequately further the Commission's, and Congress', goal of reducing the use of paper. The Commission therefore does not regard it as an alternative form of electronic transmission for purposes of this Final Rule.

33. Office of Management and Budget (OMB) regulations require OMB to approve certain information collection requirements imposed by agency rule. 28 This Final Rule does not contain any information collection requirements and compliance with the OMB regulations is thus not required.

34. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment. 29 The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended. 30 This Final Rule is procedural in nature and therefore falls under this exception; consequently, no environmental consideration is necessary.

35. The Regulatory Flexibility Act of 1980  31 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. The Commission is not required to make such analyses if a rule would not have such an effect. The Commission certifies that this Final Rule will not have such an impact on small entities.

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

37. From FERC's home page on the Internet, this information is available in the Commission's document management system, eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.

38. User assistance is available for eLibrary and the FERC's Web site during normal business hours. For assistance, please contact FERC Online Support at 1-866-208-3676 (toll free) or 202-502-6652 (e-mail at FERCOnlineSupport@FERC.gov), or the Public Reference Room at 202-502-8371, TTY 202-502-8659 (e-mail at public.referenceroom@ferc.gov ).

39. These regulations are effective on March 21, 2005.

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

In FR Doc. 04-26929, appearing on page 71562 in the Federal Register of Thursday, December 9, 2004, the following corrections are made to the SUPPLEMENTARY INFORMATION :

1. On page 71562, in the first column, under DATES after “Compliance Dates” the phrase “except that for small businesses employing fewer than 500, but more than 10 full-time equivalent employees, the compliance date is June 9, 2005;” is corrected to read “except that for small businesses employing fewer than 500, but more than 10 full-time equivalent employees, the compliance date is June 9, 2006;”.

2. On page 71564, in the second column, the sixth bullet, beginning in the 4 th line, the phrase “except that the compliance date for small businesses employing fewer that 500, but more than 10 full-time equivalent employees is June 9, 2005,” is corrected to read “except that the compliance date for small businesses employing fewer than 500, but more than 10 full-time equivalent employees is June 9, 2006,”.

3. On page 71565, in the second column, the last bullet, second sentence, the sentence “Small businesses have June 9, 2005, of this final rule to come into compliance with these regulations, and very small businesses have December 11, 2006, of this final rule to come into compliance with these regulations.” is corrected to read “Small businesses have until June 9, 2006, to come into compliance with these regulations, and very small businesses have until December 11, 2006, to come into compliance with these regulations.”

4. On page 71609, in the third column, in the 1 st complete paragraph, the sentences “Section 1.368 of the final rule requires large businesses (500 or more full-time equivalent employees) to be in compliance within December 9, 2005. Small businesses (those with fewer than 500, but more than 10 full-time equivalent employees) must be in compliance within June 9, 2005, and very small businesses that employ 10 or fewer full-time equivalent employees must be in compliance within December 11, 2006.” are corrected to read “Section 1.368 of the final rule requires large businesses (500 or more full-time equivalent employees) to be in compliance by December 9, 2005. Small businesses (those with fewer than 500, but more than 10 full-time equivalent employees) must be in compliance by June 9, 2006, and very small businesses that employ 10 or fewer full-time equivalent employees must be in compliance by December 11, 2006.”

5. On page 71627, in the third column, beginning in the 12 th line from the bottom, the sentence “For example, from CA, LA, and TX alone, DOT reports over 12 percent of intrastate truck tonnage is from FDA-regulated products (ref. 18).” is corrected to read “For example, for California in 1997, DOT reports 12.8 percent of revenue from specialized freight transportation is for intrastate traffic in agricultural products (ref. 18).”

6. On page 71651, in the first column, in Reference 18, the phrase “U.S. Department of Transportation, available at http://www.transtats.bts.gov , accessed on April 6, 2004.” is corrected to read “1997 Economic Census, Transportation and Warehousing, Geographic Area Series, California 1997, issued January 2000, U.S. Department of Commerce.”

This document contains amendments to Income Tax Regulations (26 CFR part 1) under section 1374 of the Internal Revenue Code (Code), relating to the tax imposed on certain recognized built-in gains of S corporations. Section 1374 imposes a tax on an S corporation's net recognized built-in gain attributable to assets that it held on the date it converted from a C corporation to an S corporation for the 10-year period beginning on the first day the corporation is an S corporation and assets that it acquired from a C corporation in a carryover basis transaction for the 10-year period beginning on the day of the acquisition. A separate determination of the amount subject to tax under section 1374 is required for those assets the S corporation held on the date it converted to C status and each pool of assets the S corporation acquired in a carryover basis transaction from a C corporation. The total amount subject to tax under section 1374 for each pool of assets is limited to that pool's net unrealized built-in gain (NUBIG) on the date of the conversion or acquisition.

Under the current rules, if X, a C corporation, elects to be an S corporation when it owns some or all of the stock of Y, a C corporation, and Y subsequently transfers its assets to X in a liquidation to which sections 332 and 337(a) apply or in a reorganization described in section 368(a), the built-in gain or built-in loss in Y's assets may be wholly or partially reflected twice: once in the NUBIG attributable to the assets X owned on the date of its conversion (including the Y stock) and a second time in the NUBIG attributable to Y's former assets acquired by X in the liquidation of Y. The IRS and Treasury Department recognize that continuing to reflect the built-in gain or the built-in loss in the Y stock at the time of X's conversion after the liquidation or reorganization is inconsistent with the fact that such liquidation or reorganization has the effect of eliminating that built-in gain or built-in loss. Therefore, on June 25, 2004, the IRS and Treasury Department published in the Federal Register (69 FR 35544) a notice of proposed rulemaking (REG-131486-03) that includes regulations proposing an adjustment to the NUBIG in these cases. In particular, the proposed regulations generally provide that, if an S corporation acquires assets of a C corporation in a carryover basis transaction, some or all of the stock of the C corporation from which such assets were acquired was taken into account in the computation of NUBIG for a pool of assets of the S corporation, and some or all of such stock is redeemed or canceled in such transaction, then, subject to certain limitations, such NUBIG is adjusted to eliminate any effect any built-in gain or built-in loss in the redeemed or canceled stock had on the initial computation of NUBIG for that pool of assets. These regulations are proposed to apply for taxable years beginning after the date they are published as final regulations in the Federal Register .

No public hearing was requested or held regarding the proposed regulations. One written comment, however, was received. That comment requested that the proposed regulations be made effective as soon as possible.

These final regulations adopt the proposed regulations without substantive change as final regulations. However, the final regulations do modify the proposed effective date of the regulations. The final regulations apply to section 1374(d)(8) transactions that occur in taxable years beginning after February 23, 2005. The final regulations also provide that an S corporation may apply the regulations to section 1374(d)(8) transactions that occur in taxable years beginning on or before February 23, 2005, if the S corporation (and any predecessors or successors) and all affected shareholders file original or amended returns that are consistent with the regulations for taxable years of the S corporation during the recognition period of the pool of assets the NUBIG of which would be adjusted pursuant to the regulations that are not closed as of the first date after February 23, 2005, that the S corporation files an original or amended return.

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

The principal author of these regulations is Jennifer D. Sledge of the Office of Associate Chief Counsel (Corporate). Other personnel from Treasury and the IRS participated in their development.

This document contains amendments to 26 CFR part 1. On May 20, 2004, the IRS and Treasury Department published in the Federal Register a notice of proposed rulemaking (REG-148399-02; 69 FR 29113) by cross reference to temporary regulations (TD 9129; 69 FR 29066) under section 263A(f) of the Internal Revenue Code (Code). These amendments pertain to the treatment of certain interest expense incurred by the lessor in a sale and leaseback transaction under the ERTA safe harbor leasing provisions (former section 168(f)(8), as enacted by section 201(a) of ERTA, Public Law 97-34, 95 Stat. 214). No comments in response to the proposed regulations or requests to speak at a public hearing were received, and no hearing was held. The proposed regulations under section 263A(f) are adopted by this Treasury decision.

These final regulations generally apply to interest incurred in taxable years beginning on or after May 20, 2004. In the case of property that is inventory in the hands of the taxpayer, these regulations apply to taxable years beginning on or after May 20, 2004. Taxpayers may elect to apply these regulations to interest incurred in taxable years beginning on or after January 1, 1995, or, in the case of property that is inventory in the hands of the taxpayer, to taxable years beginning on or after January 1, 1995 (the general effective date of the interest capitalization regulations).

In addition, for purposes of § 1.263A-15(a)(2), the exclusion of purchase money obligations given by the lessor to the lessee (or a party related to the lessee) in a sale and leaseback transaction under former section 168(f)(8) as enacted by ERTA will be considered to be a reasonable position for the application of section 263A(f) in taxable years beginning before January 1, 1995. Consequently, a taxpayer changing a method of accounting for property that is not inventory in the hands of the taxpayer to conform to these regulations may elect to include interest incurred after December 31, 1986, in taxable years beginning on or after December 31, 1986 (the general effective date of section 263A), and before January 1, 1995, in the determination of its adjustment under section 481(a). A taxpayer changing a method of accounting for property that is inventory in the hands of the taxpayer to conform to these regulations must compute a section 481(a) adjustment and revalue its beginning inventory in the year of change as if the new method of accounting had been in effect during all prior years.

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

The principal authors of these regulations are Christian Wood and Grant Anderson of the Office of Associate Chief Counsel (Income Tax & Accounting). However, other personnel from the IRS and Treasury Department participated in their development.

The Union Pacific Railroad Company requested to secure the I Street Drawbridge, mile 59.4, Sacramento River, at Sacramento, CA, in the closed-to-navigation position from 8 a.m. March 10, 2005, through 5 p.m. on March 17, 2005, during essential operating machinery repair, to prevent unexpected failure of the draw span. The drawbridge provides 109 ft. vertical clearance in the full open-to-navigation position, and 30 ft. vertical clearance above Mean High Water when closed. The drawbridge normally opens on signal from approaching vessels, as required by 33 CFR 117.189.

The proposed work was coordinated with waterway users. It was determined that potential navigational impacts will be reduced if the repairs are performed during March 2005, resulting in Coast Guard approval of the proposed work from 8 a.m. March 10, 2005, through 5 p.m. March 17, 2005.

During these times, the drawspan may be secured in the closed-to-navigation position and need not open for vessels.

The drawspan will resume normal operation at the conclusion of the essential repair work. Mariners may contact the I Street Drawbridge by telephone at (916) 444-8999, in advance, to determine conditions at the bridge.

The drawspan will be unable to open during the repair. Vessels that can safely pass through the closed drawbridge may continue to do so at any time.

In accordance with 33 CFR 117.35(c), this work will be performed with all due speed to return the drawbridge to normal operation as soon as possible. This deviation from the operating regulations is approved under the provisions of 33 CFR 117.35.

States which have received Final authorization from EPA under RCRA section 3006(b), 42 U.S.C. 6926(b), must maintain a hazardous waste program that is equivalent to, consistent with, and no less stringent than the Federal program. As the Federal program changes, States must change their programs and ask EPA to authorize the changes. Changes to State programs may be necessary when Federal or State statutory or regulatory authority is modified or when certain other changes occur. Most commonly, States must change 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.

We conclude that Mississippi's applications to revise its authorized program meet all of the statutory and regulatory requirements established by RCRA. Therefore, we grant Mississippi Final authorization to operate its hazardous waste program with the changes described in the authorization application. Mississippi has responsibility for permitting Treatment, Storage, and Disposal Facilities (TSDFs) within its borders (except in Indian Country) and for carrying out the aspects of the RCRA program described in its revised program application, subject to the limitations of the Hazardous and Solid Waste Amendments of 1984 (HSWA). New Federal requirements and prohibitions imposed by Federal regulations that EPA promulgates under the authority of HSWA take effect in authorized States before they are authorized for the requirements. Thus, EPA will implement those requirements and prohibitions in Mississippi, including issuing permits, until the State is granted authorization to do so.

The effect of this decision is that a facility in Mississippi subject to RCRA will now have to comply with the authorized State requirements instead of the equivalent Federal requirements in order to comply with RCRA. Mississippi has enforcement responsibilities under its State hazardous waste program for violations of such program, but EPA retains its authority under RCRA sections 3007, 3008, 3013, and 7003, which include, among others, authority to:

• Do inspections, and require monitoring, tests, analyses or reports;

• Enforce RCRA requirements and suspend or revoke permits;

• Take enforcement actions regardless of whether the State has taken its own actions.

This action does not impose additional requirements on the regulated community because the regulations for which Mississippi is being authorized by today's action are already effective, and are not changed by today's action.

EPA did not publish a proposal before today's rule because we view this as a routine program change and do not expect comments that oppose this approval. We are providing an opportunity for public comment now. In addition to this rule, in the proposed rules section of today's Federal Register , we are publishing a separate document that proposes to authorize the State program changes.

If EPA receives comments that oppose this authorization, we will withdraw this rule by publishing a document in the Federal Register before the rule becomes effective. EPA will base any further decision on the authorization of the State program changes on the proposal mentioned in the previous paragraph. We will then address all public comments in a later final rule. You may not have another opportunity to comment. If you want to comment on this authorization, you must do so at this time.

If we receive comments that oppose only the authorization of a particular change to the State hazardous waste program, we will withdraw that part of this rule but the authorization of the program changes that the comments do not oppose will become effective on the date specified above. The Federal Register withdrawal document will specify which part of the authorization will become effective, and which part is being withdrawn.

Mississippi initially received final authorization on June 13, 1984, effective June 27, 1984 (49 FR 24377) to implement the RCRA hazardous waste management program. We granted authorization for changes to Mississippi's program on August 17, 1988, effective October 17, 1988 (53 FR 31000), August 10, 1990, effective October 9, 1990 (55 FR 32624), March 29, 1991, effective May 28, 1991 (56 FR 13079), June 28, 1991, effective August 27, 1991 (56 FR 29589), May 11, 1992 effective July 10, 1992 (57 FR 20056), on April 8, 1993, effective June 7, 1993 (58 FR 18162), on October 20, 1993, effective December 20, 1993 (58 FR 54044), on March 18, 1994, effective May 17, 1994 (59 FR 12857), on June 1, 1995, effective July 31, 1995 (60 FR 28539), and on August 30, 1995, effective October 30, 1995 (60 FR 45071).

On March 26, 1996, and June 1, 2004, Mississippi submitted final complete program revision applications, seeking authorization of its changes in accordance with 40 CFR 271.21. We now make an immediate final decision, subject to receipt of comments that oppose this action, that Mississippi's hazardous waste program revisions satisfy all of the requirements necessary to qualify for final authorization. Therefore, we grant final authorization for the following program changes:

There are no State requirements that are more stringent or broader in scope than the Federal requirements.

Mississippi will issue permits for all the provisions for which it is authorized and will administer the permits it issues. EPA will continue to administer any RCRA hazardous waste permits or portions of permits which we issued prior to the effective date of this authorization. At the time the State program is approved, EPA will suspend issuance of Federal permits in the State. EPA will transfer any pending permit applications, completed permits or pertinent file information to the State within thirty days of the approval of the State program. We will not issue any more new permits or new portions of permits for the provisions listed in the Table above after the effective date of this authorization. EPA will continue to implement and issue permits for HSWA requirements for which Mississippi is not yet authorized.

The State of Mississippi's Hazardous Waste Program is not being authorized to operate in Indian Country.

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. We do this by referencing the authorized State rules in 40 CFR part 272. We reserve the amendment of 40 CFR part 272, subpart RR for this authorization of Mississippi's program changes until a later date.

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 section 3006 and imposes no additional requirements beyond those imposed by State law. Accordingly, I certify 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 (Pub. L. 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 13084 (63 FR 27655, May 10, 1998). 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.

Under RCRA section 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 has complied with Executive Order 12630 (53 FR 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. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this 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 by 5 U.S.C. 804(2). This action will be effective April 25, 2005.

Section 1321(j)(5) of the FWPCA (33 U.S.C. 1251 et seq. ), as amended by OPA 90 (Pub. L. 101-380, 104 Stat. 484), requires an operator of an onshore pipeline facility to prepare and submit an oil spill response plan when, because of its location, the facility could reasonably be expected to cause substantial harm to the environment if it were to discharge oil into navigable waters or adjoining shorelines.

On January 5, 1993, OPS published an interim final rule (58 FR 244) that created part 194 of Title 49 of the Code of Federal Regulations. The interim final rule implemented the requirements of OPA 90 and required all onshore oil pipeline operators to submit response plans for pipelines located where they could reasonably be expected to cause substantial harm or significant and substantial harm to the environment by discharging oil.

Under part 194, each response plan must include a core plan that provides an information summary ( e.g. , operator address; description of response zones; contact information for designated spill response manager), and additional detail on immediate notification procedures; spill detection and mitigation procedures; the applicable response organization; response activities and response resources; government agencies that will provide support; training procedures; equipment testing; drill types, schedules, and procedures; and plan review and update procedures. In addition, each response plan must be consistent with the National Contingency Plan (NCP) (40 CFR part 300) and each applicable Area Contingency Plan (ACP).

Part 194 also requires each operator to identify and ensure, by contract or other approved means, the resources necessary to respond, to the maximum extent practicable, to a worst case discharge (including a discharge resulting from fire or explosion), and to mitigate or prevent a substantial threat of a worst case discharge.

Furthermore, the part 194 requires each operator to conduct specialized training for its personnel, particularly those responsible for reporting and responding to spills. Each response plan also must address equipment testing and provide for periodic unannounced drills. Operators must participate in any unannounced drills conducted by Federal officials, including activation of the appropriate oil spill removal organization and spill management team identified in the response plan. Since 1993 OPS has led over 100 exercises.

Pipeline facilities subject to part 194 include those that transport any of the following products: crude oil; refined petroleum products ( e.g. , gasoline, diesel fuel, heating and fuel oils, kerosene, and jet fuel); vegetable and animal oil; sludge; oil refuse; and/or oil mixed with wastes other than dredged spoil. To date, 367 onshore pipeline facilities have submitted response plans in compliance with the interim final rule that established part 194.

There are two categories of onshore pipeline response plans, those involving pipelines capable of causing “substantial” harm to the environment and those capable of causing “significant and substantial” harm to the environment. OPA 90 does not define substantial harm or significant and substantial harm. The OPA 90 Conference Report (H.R. Conf. Report No. 653, 101st Cong., 2d Sess., 101, reprinted in 1990 U.S. Code Cong. & Admin. News 779) states that nationwide criteria should be developed to determine those facilities which could reasonably be expected to cause “substantial harm” and are therefore required to submit response plans (OPA Conference Report, p. 829). It discussed oil storage capacity, environmentally sensitive areas, and drinking water supplies as relevant factors, and cautioned that facility age and oil storage capacity should not be the only criteria. The report states that the criteria should result in a broad requirement for facility owners and operators to prepare and submit plans, but that only a subset of these plans ( i.e. , those addressing significant and substantial harm) will be reviewed and approved (OPA Conference Report, p. 829). The criteria for this subset are set forth in 49 CFR 194.103(c).

In order to gain a further understanding on implementing the regulation and on potential revisions to the part 194, OPS conducted a public meeting on January 29, 1997, in New Orleans, LA, to receive comments from interested parties. A copy of the transcript of the public meeting is in the docket for this rulemaking.

In 1999, major pipeline spills occurred in Simpsonville, SC; Atchison, KS; and Knoxville, TN. In 2000, a major pipeline spill occurred in Aquasco, MD. These spills illustrated the importance of spill prevention and response planning; adequate response equipment and workers; and, the mastery and effective use of incident command systems.

Investigations and analyses of major pipeline incidents by the National Transportation Safety Board (NTSB) and OPS have emphasized the importance of protecting people and the environment, particularly in densely populated areas and in areas that are unusually sensitive to environmental damage. This final rule incorporates lessons OPS has learned from reviewing these plans, leading oil spill exercises, and, responding to oil spills, as well as the comments received. The following is a summary of the clarifications and minor changes made by this final rule to the response planning regulations:

(1) Clarifies definition of “adverse weather” and makes it more consistent with the U.S. Coast Guard definition;

(2) Deletes four definitions as obsolete because they are not used in the rule;

(3) Deletes expired and no longer significant dates from §§ 194.7(a), (b), (c) and 194.119(e);

(4) Clarifies wording in § 194.101(a) to address which operators are required to submit response plans;

(5) Specifies the secondary containment credits for use of secondary containment and other spill prevention measures when calculating the worst case discharge based on breakout tank capacity in § 194.105(b)(3);

(6) Clarifies the “substantial threat” term and requirement in § 194.107(a) and allows operators to incorporate by reference certain procedures from the operator's maintenance and emergencies manuals, required under 49 CFR 195.402, to meet the requirement;

(7) Deletes § 194.107(b) to eliminate English language requirements;

(8) Revised § 194.107(c) to provide additional guidance on consistency of response plans with the NCP and ACPs;

(9) Revises § 194.107(d)(1)(ix) to clarify that the drill requirements can be met by following PREP or developing a functionally equivalent program;

(10) Add new § 194.107(d)(3) to clarify requirements for an operator's Incident Command System (ICS);

(11) Revises §§ 194.109(b)(2) and 194.113(b)(2) to allow operators the additional flexibility to use either the name or the title of the qualified individual. The revised sections also clarify the requirement for operators to list the name or title of an alternate qualified individual;

(12) Revises § 194.111(a) to allow operators to keep response plans where they are most likely to need them;

(13) Revises §§ 194.119(d) and (f) to clarify the authority of OPS to make a final determination where a Federal on-scene coordinator (FOSC) has concerns about the operator's response capability; to clarify that OPS may consider FOSC comments on response techniques, protecting fish, wildlife and sensitive environments and on consistency with the NCP; and to clarify that OPS remains the approving authority for the response plan;

(14) Revises § 194.121(a) to clarify that the resubmission of plans to OPS on a five-year cycle is from the date of submission or from the date of last approval; and

(15) Augments the guidelines in Appendix A with three, web-based government references. Because these changes are minor and technical in nature, and generally reflect existing industry practice, no additional burden will be placed on operators or the public.

A summary of the written comments OPS received in connection with the issuance of the interim rule is available in the docket. OPS received additional comments in response to a notice of public meeting and request for comments held in January 1997 in New Orleans. A transcript of the public meeting is also in the docket.

The comments were generally supportive of the need for oil spill response planning requirements although many suggested modifications to the existing provisions in various sections. OPS reviewed these comments and the records of the public meeting and used them in developing this final rule.

No comments were received on § 194.1 and the section is unchanged.

Several commenters requested that OPS clarify those pipelines that are considered to transport oil under 49 CFR part 194. The commenters questioned the applicability of the response planning regulations to commodities such as natural gas and unstabilized condensate from natural gas wells.

OPS believes a clarification is unnecessary. The FWPCA (33 U.S.C. 1321) does not specify substances considered to be oil. Rather, the FWPCA broadly defines oil and Federal agencies rely on the broad definition to determine substances that are regulated under the Act. The existing definition of “oil” in § 194.5 is consistent with this broad definition. Because the definition does not include highly volatile liquids (HVL), natural gas liquids (NGL), liquefied natural gas (LNG), or liquefied petroleum gas (LPG), OPS believes that it is clear that they are not considered to be oil under 49 CFR part 194.

Several commenters noted that the terms Coastal zone, Inland area, Inland zone, and Response area are defined, but that these terms are not used in the regulations.

OPS agrees and is removing these definitions as obsolete.

Some commenters stated that OPS should provide more specific guidelines or criteria on what constitutes adverse weather, noting that the U.S. Coast Guard (USCG) and the Environmental Protection Agency (EPA) have specific criteria for significant wave height within the area in which recovery equipment and booms are expected to operate.

In the interests of interagency consistency, OPS is adopting, in modified form, the USCG definition of adverse weather in 33 CFR 154.1020.

OPS received comments discussing the definition of contract or other approved means for insuring that the operator will have oil spill response resources. Some commenters said the definition was too restrictive.

OPS disagrees and believes that the existing definition is consistent with the intent of the law. A fundamental requirement in response planning is to establish the operator's ability to have the personnel and equipment to respond to a discharge of oil or a substantial threat of a discharge of oil on to the navigable waters. Requiring an operator to have a written or other legally binding agreement between the operator and a response contractor or other spill response organization identifying is consistent with this intent.

OPS received several comments on the definition of environmentally sensitive areas. Commenters suggested that the term should be revised to reflect the specific areas that would be especially sensitive to oil discharges. Some commenters stated that the definition should be limited to areas where spills are likely to create significant long-term environmental harm. Others suggested that the definition should be consistent with the National Contingency Plan (NCP).

In the years since Part 194 was established, all of the Area Contingency Plans (ACPs) have been published. The Area Contingency Plans include detailed information about resources in the area. OPS believes that the NCP and ACPs provide sufficient guidance to operators on environmentally sensitive areas. Because the definition is consistent with the ACP's and the NCP, OPS is not making any changes based on these comments.

OPS received several comments stating that the existing definition of high-volume areas (HVAs) did not make clear whether high volume areas must have both high river velocity and heavy vessel traffic or only one of the listed criteria. One commenter stated that the interim final rule did not have enough information for an operator to determine what constitutes an HVA and suggested that the current definition be modified to allow operators to use their discretion. One commenter suggested that the concept was inappropriate because it was developed for vessel response plans and assumed that the risk of a spill was greater in busy ports with more vessel traffic. Another commenter suggested that the concept of HVA does not relate to the likelihood of a discharge.

OPS believes the list of specific high-volume rivers in Appendix B of 49 CFR Part 194 provides sufficient guidance to pipeline operators. The list includes areas that not only have high vessel traffic and high river velocity but also have concentrations of pipelines. The list differs from the USCG list of high volume port areas in 33 CFR 154.1020 because the OPS list also includes the concentrations of pipelines.

OPS received three comments on the definition of “major river.” Two commenters stated that OPS should list major rivers in an appendix to the rule rather than refer to a list in a book. One of the commenters noted that the referenced book was not readily available.

OPS agrees. We are deleting the definition of major river. A listing of major rivers can be found in Appendix B, High Volume Areas.

One commenter noted that the definition of “maximum extent practicable” should consider the economics involved and the intent of Congress to create a system in which the private sector provided most of the response resources.

The definition in this rule is similar to the definition in the USCG and EPA's response planning rules. By maintaining the definition from the interim final rule, we are being consistent with the response planning regulations of other Federal agencies. No change is made to this definition.

One commenter suggested that the definition of “navigable waters” was too broad and would result in an increase in pipeline operational and administrative costs, including costs to the Federal Government associated with implementing these regulations. There was also concern that the broad definition of “navigable waters” in Part 194 would be applied to 49 CFR Part 195.412(b), requiring costly inspection and increased risk to pipeline personnel associated with inspecting pipeline crossings in navigable waterways.

Two commenters said that waters used for recreation should not be included in the definition. One commenter suggested that referring to waters with vessel traffic leads to a belief that a risk exists only where watercraft and pipelines are both present. The commenter also stated that part 194 should not attempt to address all areas of risk but only those where pipelines and vessels coexist. The commenters stated that the full intent of OPA 90 can be met by eliminating the definition of “navigable waters” and by focusing on areas where the environment or public drinking water supply can be damaged.

Two commenters stated that OPS should publish a list of navigable waters or major streams. One commenter stated that the definition was inconsistent with the preamble language and the definition was ambiguous because of the use of the terminology “recreation” and “waters from which fish or shell fish are taken and sold.” They suggested using the USCG definition in 33 CFR 2.05-25 because that definition is tied to the FWPCA and the regulated community is familiar with that definition. One commenter stated that the terms “recreation” and “fisheries” should be removed or considered under the definition of sensitive areas.

The definition of navigable waters in part 194 is a slightly modified version of the EPA definition in the NCP at 40 CFR 300.5 and 40 CFR part 110. OPS believes that the regulated community understands this definition because it is based on the FWPCA definition of navigable waters at 33 U.S.C. 1362. OPS will not develop a list of navigable waters because it is well established that Congress intended to broadly define navigable waters in the FWPCA. In addition, the OPA 90 Conference Report reflects the intent of Congress that facilities near sensitive areas such as public drinking water supplies generally should not be omitted from spill response planning requirements (Conference Report 101-653, p. 829). Accordingly, OPS has decided to retain the current definition.

Several commenters suggested that the definition of “oil” be limited to crude oil and petroleum products that could be recovered. These commenters further suggested excluding petroleum or petroleum products classified as HVLs, NGLs, LNG, or LPG. One commenter suggested that the definition should remain largely unchanged. Another commenter stated that the current definition does not include all the products that Congress intended to fall within the OPA 90 definition.

Several commenters stated that highly volatile liquids such as propane and butane should not be considered oil. Another commenter stated that the definition should be clarified to exclude trace amounts of condensate in gas pipelines. Another commenter stated that OPS should not use the USCG definition and resulting list of substances considered to be oils because the variety of products shipped by barge is much greater than oil products transported by pipeline.

In February 1995, the USCG prepared a list of substances considered oil for response planning. Because HVLs, NGLs, LNG, and LPG are absent from the USCG's list, OPS concluded that these substances are not considered oil under the FWPCA. OPS also believes that in the course of implementing the provisions of part 194, operators gained an understanding of the substances considered to be oil under the rule. OPS is not changing this definition.

OPS received three comments on the definition of the term “oil spill removal organization” (OSRO). One commenter stated that the terminology may imply that OPS is referring to USCG-classified OSROs. Another commenter suggested that because many small contractors have response resources, the definition should be revised to include only those entities engaged exclusively in spill response. Another stated that the definition should be amended to include companies that will use their own resources, and that the definition should refer to “for profit, nonprofit, and in-house resources.”

OPS is retaining the definition because it is sufficiently flexible to apply to different types of organizations that may be called on to respond to a discharge of oil. Narrowing the definition could exclude organizations that can help respond effectively.

Three commenters addressed the definition of “pipeline.” One commenter stated that the definition of pipeline in these regulations should encompass all parts of an onshore pipeline facility OPS regulates.

OPS believes that this definition is sufficiently inclusive. The current definition of pipeline includes all parts of an onshore pipeline facility through which oil moves including, but not limited to, line pipe, valves, and other appurtenances connected to line pipe, pumping units, fabricated assemblies associated with pumping units, metering and delivery stations and fabricated assemblies therein, and breakout tanks. OPS notes that some tanks are used as breakout tanks even though the pipelines transporting oil to and from the tanks have different operators. These tanks are still subject to part 194 under a 1971 Memorandum of Understanding (MOU) between EPA and DOT (36 FR 24080; December 18, 1971). Therefore, OPS is not changing the definition of “pipeline''.

Two commenters stated that the definition of “qualified individual” should be identical to that in 33 CFR 154.1026.

OPS is not revising the definition of qualified individual to be identical to the 33 CFR.154.1026 because the current definition meets the intent of the statute. However, OPS is revising § 194.113(b)(2) to allow the operator to identify one qualified individual and one alternate qualified individual either by title or by name, and list their 24-hour telephone numbers.

OPS received several comments on the definition of “response zones.” One commenter endorsed the response zone concept, which he said was an excellent method of tracking responsibilities and resources. Another commenter said that geographic response plans are valuable because they can contain specific response activities and strategies throughout the geographic area. One commenter suggested that a response zone should be defined in terms of response needs and that the linear distance should be limited to 500 miles. Another commenter suggested that a response zone should be defined by response strategy (the type of response necessary to contain and cleanup the spill). Another commenter suggested that the response zone should be defined by using the time requirements established in the response planning regulations for mobilizing response resources. One commenter suggested that the definition was satisfactory as currently provided in the regulation. Another commenter noted that he had prepared facility-specific response plans for three different Federal agencies and requested that OPS consider allowing a facility to prepare an overall geographic response plan that would facilitate the preparation of shorter response plans specific to the personnel and characteristics of each region. Another commenter endorsed the value of response zones and expressed support for the Integrated Contingency Plan (ICP) format to plan for multiple facilities within a given geographic area or under a single qualified individual but asked for additional flexibility in determining the need for multiple response zones.

OPS intent is to give operators as much flexibility as possible in developing facility response plans. This approach is reflected in the current definition of a response zone. “Response zone means a geographic area either along a length of pipeline or including multiple pipelines, containing one or more adjacent line sections, for which the operator must plan for the deployment of, and provide, spill response capabilities. The size of the zone is determined by the operator after considering available capability, resources, and geographic characteristics.” Although OPS appreciates the logic associated with the preparation of purely geographic plans, OPS believes that the flexibility provided by the definition has proven to be effective in plan development. Therefore, OPS is not revising the definition of response zone.

OPS received comments on the definition of “worst case discharge.” These comments are summarized in the discussions on § 194.105.

No comments were received on § 194.7. However, the February 18 and August 18, 1993, dates listed are no longer significant. As an administrative measure, OPS is removing dates from the section.

OPS received numerous comments seeking clarification on which oil pipelines were subject to part 194's response planning requirements. One commenter contended that the current language in § 194.101(a) was confusing and subject to misinterpretation. OPS received nine comments on the exceptions from plan preparation in paragraph (b) for small and distant pipelines. Two of these commenters expressed concern about the distant pipeline exception, stating that if containment can not be accomplished within four hours for larger lines and twelve hours for smaller lines, the result is likely to be contamination of environmentally sensitive areas and public drinking water supplies obtained from ground water sources—regardless of the distance.

One commenter suggested that OPS define one of the criterion associated with the exception in paragraph (b)(1), the term “proximity to navigable waters”. Another commenter suggested that OPS eliminate the proximity criterion because under the current definition of navigable waters, almost any small pipeline will be in proximity to navigable waters.

One commenter disagreed with the 1,000 barrel discharge within five years criterion and suggested eliminating it because a discharge of 1,000 barrels could cause significant and substantial harm to the environment. Another commenter took issue with using historical spill records as a criterion. He contended that the absence of large spills over five or ten years is not a good measure of the risk of future spills given the age of some pipeline systems. One commenter recommended that § 194.101(b)(1)(ii) be revised to grant an exception to a pipeline that has not had two or more releases greater than 50 barrels resulting in polluting any stream, river, lake, reservoir, or similar body of water that violated applicable water quality standards. Other commenters suggested that inspection and repair records be included as criteria for exemption from preparing a response plan.

OPS agrees that the scope of the exceptions for small and distant pipelines is very limited. With regard to small pipelines, the OPA 90 Conference Report states that the basic requirement to prepare and submit response plans should be broadly applied because under certain circumstances “even discharges from small facilities can result in considerable damage to the environment” (Conference Report 101-653, p. 829). Regardless of their size, the only pipelines that are unlikely to cause substantial harm to navigable waters, adjoining shorelines, public drinking water supplies, and other environmentally sensitive areas in the event of a worst case discharge are pipelines that are not in proximity to these areas. In practice, this means that the small pipeline exception can only apply if the small pipeline is also a distant pipeline. With regard to distant pipelines, the OPA 90 Conference Report pointed out that even “unregulated, low pressure pipelines have leaked significant quantities of oil into our Nation's waterways.” Locations that appear to be distant from open waters may be in proximity to various water resources including drinking water supplies and other sensitive areas and as a result, are likely to cause substantial harm in the event of a worst case discharge. Therefore, consistent with the intent of the statute, the small and distant pipeline exceptions must be narrowly construed and virtually all onshore oil pipelines are considered at least “substantial harm” facilities for purposes of part 194. Accordingly, all onshore oil pipeline operators, with the rare exception of those who can prove that their pipelines meet the strict criteria in § 194.101(b)(1) and (2), are required to prepare and submit oil spill response plans to OPS/OPS in accordance with § 194.119(a).

Although OPS modified paragraph (a) to clarify this point, OPS does not anticipate additional plan submissions because OPS believes all affected operators have already submitted response plans.

OPS received 11 comments on the handling of a Federal on-scene coordinator's (FOSC) request that OPS require a response plan be prepared and submitted for a pipeline or line section that would otherwise be exempt from 49 CFR part 194. These comments are addressed in connection with the discussion on submission and approval procedures in § 194.119 below.

Although, as discussed above, all onshore oil pipeline operators are expected to develop and submit response plans, under OPA 90 only those plans for pipeline facilities that pose both a significant and substantial threat of harm to the environment require OPS approval. Under § 194.103(a), if an operator expects any line section in a response zone to cause both significant and substantial harm, then the operator must submit a statement with its response plan listing the significant and substantial harm line sections. This statement by the operator facilitates our identification of those plans requiring OPS approval. The OPA 90 Conference Report directed the RSPA Administrator to establish criteria by which those plans requiring prior approval would be selected. Report language discussed oil storage capacity, environmentally sensitive areas, and drinking water supplies as relevant factors, and cautioned that facility age and oil storage capacity should not be the only criteria. The significant and substantial harm criteria are currently set forth in § 194.103(c)(1) through (5). Several commenters took issue with various aspects of these criteria.

With respect to § 194.103(c)(1) and (2), we received four comments on the use of historical spill data in determining significant and substantial harm. One commenter recommended that references to historical incidents contained in § 194.103(c)(1) and (2) be omitted because they have little bearing on spill harm or consequence. Another commenter noted that some consideration should be given to the type of corrective action taken as a result of previous spills.

In our view, however, historical spill data is an appropriate factor for us to consider when deciding which response plans are appropriate for the approval process, because it aids in focusing our limited resources on reviewing those plans associated with facilities where known risks may be present.

With respect to § 194.103(c)(3), one commenter contended that there was no scientific basis for establishing significant and substantial harm on the basis of the presence of electric resistance welded (ERW) pipe manufactured prior to 1970, operating at certain stress levels.

OPS disagrees. Our accident statistics clearly show that at certain stress levels, ERW pipe manufactured before 1970 is inherently susceptible to fracture and preferential corrosion. Two studies, along with our accident data for liquid and natural gas transmission pipelines, show that failures in older ERW pipes greatly outnumber those in ERW pipe produced after 1970. Since 1970, pipe manufacturers have changed to high frequency current for fusion heat and improved quality control for ERW pipes. These changes led to a significant decrease in the number of ERW pipe seam failures. This decrease is so significant that it cannot be attributed to any factors other than the change to high frequency current and quality control improvements. Therefore, we are retaining this criterion.

Six comments were received regarding the criterion in § 194.103(c)(4) and (5) establishing “significant and substantial harm” to include a line section located within certain linear distances from drinking water intakes and environmentally sensitive areas. Three of the comments concerned the role of this criterion in the significant and substantial harm determination. One commenter asserted that drinking water intakes and environmentally sensitive areas should be equally protected, noting that the OPA 90 Conference Report made no distinction between the two and requires that both be protected in the event of a spill. This commenter recommended that an operator of any oil pipeline located within 5 miles of an environmentally sensitive area be required to prepare and submit a response plan. One commenter contended that the distances from drinking water intakes and environmentally sensitive areas should only be relevant when the line section crosses a major river or waterway. Another commenter noted that an oil discharge from a pipeline can also affect ground waters and that this should be taken into account in determining the level of harm that could reasonably be expected in the event of a discharge and taken into account for determining which plans should require approval.

In our view, the clear intent of OPA 90 requires us to recognize the potential harmful effects of oil discharges on environmentally sensitive areas and drinking water sources. The fact that most pipelines are located underground, and contamination of ground waters can ultimately impact surface waters and adjoining areas indicates that a response plan must contain response strategies to protect drinking water sources and environmentally sensitive areas. Moreover, the FWPCA requires these areas be identified in the relevant ACP(s) and response plans be consistent with these ACPs. Accordingly, we are retaining the linear distance criteria in § 194.103(c)(4) and (5). Overall, we believe that the § 194.103(c) criteria for determining whether a line section can be expected to cause significant and substantial harm, are appropriate at this time. We may consider revising these criteria in the future if experience indicates that such a change is needed. We reserve the right to check all pipeline facility response plans for completeness, regardless of the level of harm the operator designates.

Under § 194.103(b), if an operator expects a line section in a response zone to cause significant and substantial harm, then the entire response zone must be treated as if it could cause significant and substantial harm. Two comments were received stating that § 194.103(b) should be revised. The commenters contended that pipeline operators should not be burdened with planning for areas within a response zone but relatively distant from the pipeline sections capable of causing significant and substantial harm. Two other commenters questioned the criterion. They suggested that only the line section that met the criterion, rather than the zone, be so designated.

OPS disagrees that a revision is warranted. Response zones are based on geographic and regional considerations including topography, hydrology, climate, and population. OPS requires operators to submit a response plan for each pipeline, not for each line section and requires a separate appendix for each response zone. OPS expects operators to fully analyze the potential impact of a spill throughout each response zone.

RSP/OPS received numerous comments on the practice of reducing the worst case discharge calculation from breakout tanks that have secondary containment dikes, and other prevention measures.

One commenter stated that Washington State does not allow operators to take credit for secondary containment and that the worst case discharge calculation is only to establish a planning volume. Another commenter stated that it was inappropriate to allow for a reduction of the maximum drainage volume calculation because a review of incidents associated with storage tanks shows it is not uncommon to experience at least a partial failure of containment systems.

Commenters also suggested varying amounts of credit for secondary containment, some up to 100 percent, depending on the spill prevention measures an operator has in place. Others opposed predetermined credits, arguing instead that operators should use site-specific risk assessment methods to establish the appropriate containment credit.

In 49 CFR 194.105(b)(3), the rule allows operators to reduce the calculated worst case discharge from a breakout tank due to secondary containment. Reductions in the calculated worst case discharge are referred to as credits. The interim final rule is not specific as to how much credit an operator is allowed.

In 40 CFR Part 112, EPA allows up to 20 percent secondary containment credit in certain cases for tanks under its jurisdiction. Since 1994, our policy has allowed operators to claim up to a 50 percent secondary containment credit in calculating their worst case discharge for facilities with breakout tanks. The 50 percent credit policy was based on examining tank accident statistics and a 1992 position paper from the American Petroleum Institute.

Under certain circumstances, we approved claims for credit of up to 75 percent where operators were able to demonstrate that more spill prevention measures were in place. OPS believes, based on our analysis, that routine spill prevention credits higher than 75 percent are not justified.

OPS reviewed incidents from 1987 to 1999 involving spills from breakout tanks. During that period, 189 breakout tank spills were reported. Of the 179,606 barrels of oil spilled, 139,015 barrels of oil were recovered. A variety of factors may have contributed to the amount of oil lost, including oil volatility and whether there was a fire. However, over 12 years, only 77 percent of the oil spilled from breakout tanks was recovered. In addition, although secondary containment at breakout tanks generally prevented loss of the entire tank volume, there are documented cases of accidents in which the secondary containment system partially failed.

OPS's goal is to focus breakout tank operators' efforts on prevention, so that there are fewer spills. OPS believes that if the credits for preventing spills from breakout tanks are too small, operators may shift their planning emphasis from higher-risk areas along their rights-of-way, to tank farms that may pose smaller environmental risks.

Accordingly, the following table which specifies the amount of prevention credit an operator can routinely claim has been incorporated as a new subparagraph (b)(4).

OPS will entertain higher credits only on a case-by-case basis upon petition for waiver by a pipeline operator.

A commenter suggested OPS consider giving pipelines equipped with a supervisory control and data acquisition (SCADA) systems with a leak detection capability containment credits on a tiered basis, noting that since the use of SCADA systems was not mandatory, tiered credits would promote the use of such systems.

OPS is not granting specific credit for reducing worst case discharge based on the use of SCADA systems because these systems are highly variable in their leak detection capabilities. In addition, the SCADA systems are for data collection and system control rather than part of a secondary containment system. However, we have seen significant improvement in these systems since they were first introduced. Operator's may now use leak detection systems enhancements as a mitigative measure in their integrity management programs and we may revisit the issue of granting response planning credits pending further advances in leak detection.

OPS received several comments on the role of weather in calculating the worst case discharge. One commenter noted that weather conditions would have a great effect on response capability. Other commenters noted that although the basic method for calculating worst case discharge was satisfactory, the rule should also include specific guidelines for planning for discharges that occur in adverse weather, at night, or that result from natural disasters, such as hurricanes and earthquakes.

The current definition of worst case discharge requires consideration of adverse weather conditions. Although we have not specified how these effects must be weighed, operators are required to consider the weather history for the area surrounding the pipeline and the effects of adverse weather on the time needed to shut down a pipeline. OPS does not find a benefit by adding the new or additional terminology.

OPS received several comments on maximum drainage volume and maximum shutdown response time calculations. These calculations are based on historic discharge date or, in the absence of such historic data, the operator's best estimate, multiplied by the maximum flow rate. One commenter requested definitions for “maximum shutdown response time” and “maximum drainage volume” be inserted into part 194.

OPS believes the existing rule has clear procedures for calculating worst case discharge volumes from line sections and the text explains that worst case means the largest volume. OPS does not find a benefit by adding the new or additional terminology.

OPS received several comments requesting clarification on the requirement for each response plan to identify resources for responding to a worst case discharge or a substantial threat of a worst case discharge. Commenters noted an NTSB report on the 1994 San Jacinto Flood recommended that OPS require liquid pipeline operators to address substantial threats in their facility response plans.

On January 24, 1997, OPS issued a Pipeline Safety Alert Notice (ALN 97-01) to remind the regulated community of the importance of planning not only for a worst case discharge but also for a substantial threat of a worst case discharge. Although OPS does not require response planning for less than a worst case discharge, an operator may nevertheless benefit from planning responses to smaller discharges because they are more likely to occur, and may require different types and quantities of response equipment. OPS is revising § 194.107(a) as a result of these comments.

In order to minimize the burden on the regulated community, operators may incorporate by reference, procedures developed under 49 CFR 195.402 to address these requirements. Operators may refer to the appropriate section of their operations and maintenance manuals required under § 195.405(a). Operators need not submit their entire procedural manuals developed under § 195.402. However, OPS reserves the right to request a copy of the relevant portion of the procedural manual as part of the response plan review.

OPS received one comment requesting that criteria be specified for determining when it is necessary to develop a response plan in a language other than English.

The intent of this provision is to ensure that personnel implementing response plans are able to read the plan. If the personnel implementing a plan can read in English, there is no need to produce the plan in more than one language. If a plan were written in more than one language, only the English version would need to be submitted to us. OPS has not received any plan in a language other than English and expects that response plans will continue to be submitted in English. OPS is deleting § 194.107(b) because it is not necessary.

We received several comments and many operator requests for clarification on how an operator can certify that a plan is consistent with NCP and applicable ACPs.

In the course of OPS’ iterative plan review process we identified detailed information for determining consistency with the NCP and applicable ACPs. We are modifying the text of paragraph (c) and adding a redesignated paragraph (b) to reflect this information.

As a minimum, to be consistent with the NCP a facility response plan must: (1) Demonstrate an operator's clear understanding of the function of the Federal response structure, for example, the plan must contain a procedures to notify the National Response Center and set forth the relationship between the role of the operator's response organization and the role of the FOSC in pollution response; (2) establish provisions to ensure the safety at the response site; and (3) identify the procedures to obtain any required Federal and State permissions for using alternative response strategies, such as in-situ burning and dispersants as provided for in the applicable ACPs.

At a minimum, to be consistent with the applicable ACP, the plan must: (1) Address the removal of a worst case discharge and the mitigation or prevention of a substantial threat of a worst case discharge; (2) identify environmentally and economically sensitive areas; (3) describe the responsibilities of the operator and of Federal, State and local agencies in removing a discharge and in mitigating or preventing a substantial threat of a discharge; and (4) establish the procedures for obtaining an expedited decision on use of dispersants or other chemicals.

OPS received several comments on § 194.107(d)(1)(ix) covering drills and exercises; and on “Guidelines for Developing and Evaluating an Oil Spill Response Exercise: A Handbook for Preparedness for Response Exercises (PREP),” which was developed to support operator compliance with this paragraph. Two commenters wrote that § 194.107(d)(1)(ix) should specifically refer to the PREP guidelines. Two commenters requested that more guidance documents be made available, especially on how to conduct an exercise program. One commenter requested guidance on conducting exercises for multi-zone response plans.

OPS is not making the PREP guidelines mandatory. However, OPS is revising § 194.107(d)(1)(ix) and redesignating this as new paragraph (c) to clarify that an operator will satisfy the requirement for drills by following PREP guidelines. An operator choosing not to follow PREP guidelines must have a drill program that is equivalent to PREP. The operator must describe the drill program in the response plan and OPS will determine if the program is equivalent to PREP. This revision is consistent with the USCG exercise requirements in 33 CFR Part 154. OPS is also providing response plan guidelines in Appendix A by adding a reference to the PREP guidelines.

OPS received two comments on using the National Response Team's Integrated Contingency Plan (ICP) format published in the Federal Register on June 5, 1996 (61 FR 28642). (See discussion under § 194.119 for more comments on ICP format. One commenter stated that OPS should reword or reorganize the format of a response plan to be more consistent with ICP guidelines. He suggested that § 194.107(d) be revised to use the ICP concepts of response plan, core plan, and appendices rather than addressing each zone independently. Another commenter encouraged consistency with the ICP and stated that a format similar to the ICP should simplify the demand on facilities.

OPS strongly endorses using the ICP format to organize a response plan. OPS believes the ICP is a highly functional document that can be used in a variety of emergencies to meet several agencies' requirements, including Part 194. Although the ICP format is the preferred method of response planning to meet federal spill contingency planning regulations using the ICP format is not mandatory because OPS believes an operator should have the flexibility to organize their response in the manner which best fits their operational situation. Operators using the ICP format must include a cross-reference in their response plan. OPS does not find a benefit by adding the new or additional terminology.

A commenter suggested that OPS adopt the National Interagency Incident Management System (NIIMS) and require operators to be trained in NIIMS. The NCP (40 CFR 300.150) requires that response actions comply with the Occupational Health and Safety Administration (OSHA) provisions for worker health and safety in 29 CFR 1910.120(q)(3). The OSHA rule requires implementing an incident command system (ICS), which is further explained in Section 6, Appendix C of 29 CFR 1910.120.

As part of the requirement to be consistent with the NCP and the ACPs, OPS requires operators to use incident command systems (ICS), including unified command system procedures for spill response. OSHA previously required training in the ICS appropriate to the role the participant plays. OPS does not require training in ICS.

OPS fully endorses NIIMS (now called the National Incident Management System (NIMS), but will accept other ICSs if they adequately address the following five functional areas: finance, logistics, operations, planning, and command. More information on NIMS is available on the USCG's Web site, http://www.uscg.mil/USCG.shtm. OPS is adding a new § 194.107(c)(3) to clarify a facility response plan must include a description of the operator's response management system including the five functional areas. The plan must also demonstrate the operator's response management system uses common terminology and has a manageable span of control, a clearly defined chain of command, and sufficient trained personnel to fill each position.

Section 194.107(d)(2), which lists the information required in a response zone appendix, has also been modified to reflect the change from § 194.107(d) to § 194.107(c). Although not the subject of a specific comment, RSPA is also clarifing that an operator submitting a response plan for a single response zone does not have to have a core plan and a response zone appendix. The operator of a single response zone onshore pipeline shall have a single summary in the plan that contains the required information in § 194.113.

OPS received four comments on submitting State response plans and on the plan's format. One commenter requested that OPS retain the provisions that allow operators to submit a response plan originally developed to meet State requirements. The commenter requested that OPS allow a State plan to be submitted to us even before the State approves the plan. Another commenter endorsed using approved State plans and commended our efforts to streamline the response planning requirements. One commenter noted that State agencies may complain that a plan is too large, and requested that OPS consider this criticism when streamlining the plan process. Another commenter stated that all plans should be required to follow the same format to ensure consistency, ease of review and ease of use. He noted that when a pipeline operator submits a State response plan, the supplementary information should follow a consistent format.

OPS is retaining § 194.109 and will continue to accept a response plan prepared for a State when the State plan has equivalent or greater environmental protection, in order to provide maximum flexibility to operators in preparing response plans. Although not the subject of a specific comment, OPS is also revising § 194.109(b)(2) to be consistent with the change to § 194.113(b)(2).

OPS received several comments on retaining response plans. One commenter noted that the requirement to retain a copy of the plan at the operator's headquarters is confusing because there are many different levels of headquarters offices. He suggested that a plan be retained at a designated office of record for the affected facilities and at designated locations where the plan will be activated. One commenter noted that EPA required a plan at the nearest field office. Two commenters noted that it was unnecessary to keep a plan at a pump station because many pump stations were unmanned. One commenter suggested that the regulations be amended to require a plan only at a manned pump station or pipeline facility. Another commenter agreed, adding that requiring a plan at unmanned locations where response activity might take place would be impractical and burdensome. Three commenters suggested that a core plan and appendices be kept at the location from which operator personnel would be dispatched. Another commenter stated that the qualified individual should not be required to have a copy of a plan if copies are available at the locations listed in § 194.111(a). One commenter questioned the need for a qualified individual to have a copy of the entire plan when the qualified individual is responsible for only a portion of the facility.

OPS is revising § 194.111 by deleting § 194.111(a) and its subsections (1),(2), and (3). We are replacing these with a new subsection (a) requirement for operators to maintain relevant portions of their response plans at headquarters and at other locations from which response activities may be conducted, such as in field offices, supervisors' vehicles or spill response trailers. This change will allow operators the discretion to determine the most appropriate locations for copies of the plan.

OPS received 10 comments on the information summary required in § 194.113. One commenter noted that § 194.113(a)(2) should be revised to eliminate the listing of one or more line sections meeting the requirements for significant and substantial harm. Instead, he suggested replacing it with a list and description of the response zones, including all counties and States that each zone encompasses and the level of harm the operator's pipeline poses in that zone.

Two commenters suggested that § 194.113(b)(1) be revised to remove the requirement that the response zone appendix contain the information summary sheet for the core plan. Another commenter took issue with the statement in the preamble to the interim final rule, on the need for an operator to provide a duplicate copy of the information summary sheet from the core plan with each response zone appendix.

Three commenters requested that § 194.113(b)(2) be revised to require only the title of the qualified individual, so that the operator would not have to update the plan when personnel changed. Two commenters stated that the plan should list the name and telephone number of an alternate qualified individual in addition to those of the qualified individual. Another commenter stated that naming specific individuals, along with their phone numbers, contractors, and employees would do little to enhance the pipeline operator's response capability.

OPS believes that the information summary concerns expressed by the commenters are largely resolved through the iterative process of plan review and generally do not require further clarification or change. OPS agrees that the summary should require only the title of the qualified individual, so that the operator would not have to update the plan when personnel change. The plan should also list the name and telephone number of an alternate qualified individual in addition to those of the qualified individual. We are revising §§ 194.113(b)(2) accordingly.

OPS received 22 comments on § 194.115. Several comments concerned the tiering of response resources. Tiering is the concept of having a certain amount of personnel and response equipment on-scene within a specified amount of time. Each increment of time, with its associated level of resources, is called a tier.

Current regulations require operators to identify in their spill response plan the resources that are available to respond for three tiers, that is, within 12, 36, and 60 hours, respectively. For high volume areas, the response times for the three tiers are 6, 30, and 54 hours, respectively. Five commenters endorsed the concept of tiers, including the concept of high volume areas. Another commenter noted that the tier requirements should be planning standards rather than performance standards, because on the day of a discharge circumstances may be different. Another commenter noted that the tiered approach should represent the minimum amount of resources that would be acceptable.

Several commenters offered alternative response times, such as Tier 1, 12 to 24 hours; Tier 2, 30 to 48 hours; and Tier 3, 60 to 80 hours. Another commenter stated that the preamble to the interim final rule offered an example of the tiered approach but that the regulatory text in § 194.115 did not have criteria. He suggested that § 194.115 should clearly explain our approach. Another commenter suggested that operators should have the discretion to identify personnel and equipment to meet the tiered response for the worst case discharge.

Another commenter noted that operators in remote areas need a different strategy because the areas may not be adequately protected under the regulation. One commenter noted that ACPs should be used as a reference in establishing the amount and type of response resources. He said that using ACPs for this task is appropriate because the ACPs would be kept up-to-date and consistency with ACPs is required. Another commenter responded to a statement in the interim final rule preamble on limitations for particular response zones including limitations on the types of equipment suitable for response in ACPs.

Another commenter noted that the regulations do not identify the level of capability that OPS would consider sufficient within the tiers. As a result, operators and response contractors may not be clear on what is required of them. One commenter noted that although the preamble to the interim final rule says that many of the recommendations of the USCG Response Planning Negotiated Rulemaking Committee were adopted, OPS departed from the Committee's recommendations on response times and response equipment. Several commenters stated that OPS should adopt the tiered concept and specify the amount of response equipment required under each tier from the USCG's or the EPA's response planning regulations.

Two commenters addressed the subject of caps on the amount of required equipment that must be under contract, as developed in the USCG's Response Planning Negotiated Rulemaking and used in the USCG and the EPA's response plan rules. Both commenters endorsed the concept but one suggested doubling the caps in the USCG's regulations. The other commenter suggested that because resources may be insufficient in many areas of the country, OPS should specify caps for response resources that must be under contract.

OPS received several comments on specific equipment requirements under § 194.115. One commenter questioned how OPS defines sufficient resources and asked us to define reasonable levels of resources for each of the three tiers. OPS received four comments calling for adopting standards for measuring the adequacy of an operator's response equipment. One commenter noted that adopting requirements parallel to the USCG's and EPA's would be appropriate. Another commenter said that the USCG's and EPA's guidance on response resources were inappropriate because they were developed for industries regulated by those agencies. Some industry representatives suggested that operators should have the discretion to identify personnel and equipment to meet the tiered response for the worst case discharge. They oppose adopting the USCG's response planning standards, because they believe it would result in conflicting and confusing requirements.

In the interim final rule, OPS referred to the USCG Navigation and Vessel Inspection Circular (NAVIC) No. 7-92, Appendix A, as a method an operator could use to determine the type and amount of response resources needed to respond to a worst case discharge. OPS also noted in the interim final rule that many pipeline operators deal with diverse spill risks and response considerations, which is reflected by the comments above. OPS does not believe it is necessary to specify the amount of response resources instead of allowing operators to determine and demonstrate sufficient response resources in their response plans.

The NAVIC included guidance on the tiers of response resources, defined environments in which response equipment must be capable of operating, and accounted for the physical effects of the environment on types of oil. The NAVIC set specific minimum amounts of equipment, and specified times of arrival at the scene of a worst case discharge for which an operator must plan.

Many of the concepts used in the NAVIC are in the USCG's rule for marine transportation-related facility response plans (33 CFR Part 154, Subpart F and Appendix C). Similarly, EPA adopted many of the planning concepts concerning the type and amount of response equipment from the NAVIC and from the USCG Negotiated Rulemaking Committee in its response planning regulation for non-transportation-related facilities (40 CFR Part 112, Appendix E).

OPS recognizes that some pipelines are in remote areas where relatively few response resources are available. If an operator is unable to meet the prescribed tier times in § 194.115(b), it should document why it cannot meet the prescribed tier times and propose alternative tier times. OPS allows an operator to propose alternative response tiers and response resources, methods and strategies to respond to the worst case discharge to the maximum extent practicable. OPS will assess the proposed alternative tier times according to available response contractors, mutual aid resources, feasible pre-staged containment and recovery equipment, and appropriate response techniques in the operator's response plan and corresponding information in the applicable ACP.

Many response plans for pipelines submitted to OPS are complex facility response plans that also address the USCG and the EPA response plan regulations. OPS notes that many of these complex facility response plans, including plans for pipelines only, are already using the USCG's and EPA's methods for planning response resources for a worst case discharge. OPS accepts the use of the assessment method specified in USCG's facility response planning regulations at Appendix C to 33 CFR part 154.

OPS encourages using USCG-classified oil spill response organizations (OSROs). An operator contracting with USCG-classified OSROs in order to have sufficient response resources to respond to the worst case discharge will not have to describe the response resources or the response equipment maintenance program of the USCG-Classified OSROs. Also, the operator will not be required to demonstrate how the equipment will be mobilized to meet the response tier times established in § 194.115, although the operator should take into account the time required for the USCG-Classified OSRO to respond to the spill from wherever the contractor is based.

OPS believes that many of the issues raised by the commenters are resolved through its iterative plan review process, drills, and responses to actual spills. Based upon this belief, OPS is not amending § 194.115 at this time. However, OPS may reexamine this issue.

OPS received comments endorsing the use of hypothetical spill scenarios to determine whether a response plan identifies sufficient response resources. One commenter noted that using scenarios is the best gauge of the capability to respond to a worst case discharge because a scenario gives an idea of what resources are available.

Another commenter suggested that scenarios would be helpful for assessing the ability to respond to a worst case discharge. Another stated that drafting multiple scenarios would be burdensome and would only make the plans larger. One commenter suggested that scenario-based analysis be used with the tiered approach. Two commenters stated that a scenario-based review is preferable to the tiered approach.

OPS recognizes that other Federal and State agencies allow scenarios to be used. However, OPS finds the increased burden of mandatory scenario development in a response plan is not justified by any corresponding increase in response preparedness. OPS is not adopting a scenario-based approach.

OPS received several comments on the training requirements in § 194.117. Three commenters suggested revisions to § 194.117(a)(1) regarding how operators should train personnel to know their responsibilities under the plan. Three commenters noted that the training should be limited to personnel engaged in response or reporting. Two commenters noted that training should be related to each person's role under the response plan and one noted that only OSHA should have across-the-board training requirements. One commented that reporting personnel need only the items enumerated under § 194.117(a)(2) and did not need to know the specific information.

Two commenters requested that § 194.117(b)(1) be revised to require that records for personnel be maintained at a designated office of record for the affected facilities, because this may not be the same as the operator's headquarters.

Another commenter noted that OPS should coordinate the training requirements with the USCG and the EPA to ensure required training performed for one agency will meet the training requirements for all agencies.

OPS is not amending § 194.117. Following the publication of the IFR and the public meeting, the four Federal agencies responsible for implementing OPA 90 worked together to develop the Training Reference for Oil Spill Response (August 1994). Although this document is not a regulation, operators may review it along with specific agency requirements on training. This reference can be found on the USCG's Web page, http://www.CoastGuard.mil , and it is also available from the Government Printing Office, GPO stock number 050-12-00364-5. OPS believes the commenters concerns have been addressed through this document.

One commenter requested that training credit be allowed for responses.

Under the PREP program, RAPS/OPS allows operators to take training credit for responses when the operator can demonstrate the specific training requirements under § 194.117, including individual responsibilities under the plan, were accomplished during the response and that appropriate records are maintained.

Although not the subject of a specific comment OPS made minor clarifications to § 194.119 (a), notifying the operators that submission in electronic format is preferred; and to clarify § 194.119 (e), removing dates that were no longer necessary.

Six comments were on the role of the FOSC in requesting and reviewing a facility response plan for a pipeline. Several commenters took exception to the implication that a FOSC could object to a OPS plan approval because authority to review and approve pipeline response plans was delegated to OPS. Two commenters were concerned about significant delays in plan approval in the event that a FOSC was reviewing a plan. A commenter endorsed the principle of a FOSC reviewing a response plan for a pipeline in the FOSC's area of responsibility, but said that final approval authority should remain with OPS. Two commenters stated that OPS should develop criteria for FOSC determinations of whether to request OPS require a plan submittal.

OPS is committed to interagency cooperation and will continue to allow FOSCs to review response plans under § 194.119(f). OPS takes into consideration comments from a FOSC on response techniques, protecting fish, wildlife, and sensitive environments, and consistency with ACPs. However, OPS remains the approving authority for pipeline facility response plans. OPS determined that it is not necessary to develop criteria governing FOSC reviews of response plans. OPS believes that the requirements of Part 194 are sufficient to guide FOSCs in requesting a response plan be submitted or in reviewing plans. However, OPS made minor modification to §§ 194.119(d) and 194.119(f) to clarify OPS's authority.

Three commenters supported using the National Response Team's ICP format at a facility that was required to prepare and submit a response plan to several Federal agencies. One commenter correctly noted that review and approval should remain with each Federal agency for the portion of the facility over which the agency has jurisdiction. Another commenter suggested that the three agencies involved in response plan review, EPA, OPS and the USCG, should develop an MOU under which only one agency would review and approve response plans for such “complex” facilities.

OPS endorses the National Response Team's ICP as the preferred method of developing response plans (61 FR 28642; June 5, 1996). However, the ICP does not replace Federal agency requirements, redefine agency jurisdiction, or redefine or modify what constitutes a minimally adequate response plan. In addition, RSPA/OPA believes that it is appropriate for another Federal agency to review a response plan governing that portion of a facility over which the agency has expertise and jurisdiction.

OPS received several comments on § 194.121. OPS received four comments concerning the time allowed to revise a plan and submit the revised plan. The commenters stated that 30 days was insufficient time to revise a plan. One commenter suggested that 90 days was sufficient and three commenters suggested 120 days.

Another commenter noted that the lists of changes in operating conditions requiring resubmission are not equally significant. For example, the commenter stated that a change in the OSRO would be considered a substantial change and should require a more rapid revision of the plan. Another commenter suggested that operators should not be required to resubmit a plan because of a change in the qualified individual. Another commenter asked us to clarify whether the entire plan had to be resubmitted or only the affected portions. Another commenter suggested that § 194.121(b)(3) be changed to state that the plan must be resubmitted when a change in the type of oil transported affects the response resources.

Under current regulation, each operator reviews its response plan at least every 5 years from the date of submission and modifies the plan to address new or different operating conditions or information included in the plan. OPS is revising § 194.121(a) to clarify operators are to resubmit the plans to OPS. For significant and substantial harm plans, the approval date is the date on the letter OPS approving the plan. For substantial harm facilities, operators must resubmit the plan to OPS for review five years after the most recent date of submission, because OPS does not issue approval letters to substantial harm facilities.

OPS believes that the concerns raised by these commenters is resolved through the iterative process of plan reviews. OPS requires that significant changes be submitted in accordance with § 194.121(b). An operator need not submit the entire plan if only portions of the plan have changed. If an operator requests an extension, OPS may grant an extension of up to 120 days for operators to submit changes in their plans. OPS notes that operators are required to immediately modify their plans in the event new or different operating conditions or information occur that would substantially affect implementing the response plan.

OPS is supplementing the plan preparation guidance in Appendix A by adding references to publications and materials as follows:

This appendix provides a recommended format for the preparation and submission of the response plans required by 49 CFR Part 194. Operators are referenced to the most current version of the guidance documents listed below. Although these documents contain guidance to assist in preparing response plans, their use is not mandatory:

(1) The “National Preparedness for Response Exercise Program (PREP) Guidelines,” which can be found at the USCG's PREP Web page, http://www.uscg.mil;

(2) The “National Response Team's Integrated Contingency Plan Guidance,” which can be found at the National Response Center's Web site, http://www.nrt.org; and

(3) 33 CFR Part 154, Appendix C, “Guidelines for Determining and Evaluating Required Response Resources for Facility Response Plans.”

The PREP guidelines were published in August of 2002. The Integrated Contingency Plan Guidance was published June 5, 1996, and corrected June 19, 1996.

This action is considered a significant regulatory action under section 3(f) of Executive Order 12866 (“Regulatory Planning and Review”) (58 FR 51735; Oct. 4, 1993) and DOT's regulatory policies and procedures (44 FR 11034; Feb. 26, 1979) because of substantial Congressional and public interest in preventing and mitigating oil spills. This rule was therefore forwarded to the Office of Management and Budget for review. While the technical amendments made by this final rule to the existing response planning regulations in 49 CFR part 194 are not considered to be significant and involve no new costs to regulated entities or the public, because part 194 was established by an interim rule containing only a preliminary regulatory impact analysis, a full up-to-date analysis of the economic impact of the response planning requirements was warranted and prepared in connection with this final rule adopting the interim rule. The Final Regulatory Evaluation is available in the docket. The following section summarizes the Final Regulatory Evaluation's findings with respect to the overall costs and benefits of the oil spill response planning regulations in part 194.

With regard to the costs associated with response planning, operators of onshore oil pipelines incur costs for developing and maintaining a response plan; maintaining the capability to respond to the worst case discharge in each response zone; and conducting training, drills, and exercises related to spill response. The cost analysis in the Final Regulatory Evaluation contains two separate estimates of compliance costs associated with DOT's rule: a retrospective assessment of costs incurred from 1993 through 2004 in response to the interim final rule; and a prospective assessment of the costs likely to be incurred from January 1, 2005 onward in response to the final rule. The costs associated with implementation of the interim final rule, on an annualized basis, were estimated to be $29.1 million. Looking forward, the analysis indicates that the costs associated with implementation of the final rule will be $28.2 million per year.

With respect to benefits, the response plan requirements are designed to reduce the magnitude and severity of spills, thereby reducing the environmental damages and potential human health impacts that spills may cause. The benefits analysis uses historical data on spills to estimate that the response plan requirements reduced the quantity of oil spilled by an average of approximately 806,000 gallons per year. The analysis values this reduction in the quantity of oil spilled in several ways. First, spills can cause a variety of ecological damages ( e.g. , fish kills, bird kills) and may influence human use of natural resources ( e.g. , recreational use). The benefits analysis incorporates information from past natural resource damage assessments to characterize the economic benefits associated with avoiding these types of damages. Second, a reduction in the quantity of oil spilled reduces the costs associated with spill cleanup. Finally, by helping to reduce the volume of oil released in the event of a spill, the response plan requirements reduce the economic losses associated with the value of the lost product. The quantitative annual benefits estimates developed for averted natural resource damages, cleanup costs, and product losses range from $10.4 million to $63.6 million, with a best estimate of about $37.0 million. Averted cleanup costs account for the largest share of the quantified benefits. These estimates do not incorporate several additional categories of benefits (reduced impacts on drinking water systems, reduced health risks, and reduced third party damages) that could not be readily quantified.

In assessing the net cost-effectiveness of the response plan requirements, the Final Regulatory Evaluation compared the estimated annual costs of the rule relative to the estimated annual reduction in the quantity of oil spilled (806,000 gallons per year), using a costs range of approximately $35 to $36 per gallon reduction in the quantity of oil released. Specifically, the net economic effect of the response plan requirements was gauged by comparing the present value of the retrospective and prospective costs to the present value of the retrospective and prospective benefits. The estimated benefits of the response plan requirements exceed the estimated costs in both the retrospective and prospective periods. The net benefits ( i.e. , benefits minus costs) in the retrospective period total approximately $59 million, while net benefits in the prospective period are roughly $125 million. Considering both periods together, the estimated net benefit of the response planning requirements is approximately $184 million.

No additional costs are associated with the technical amendments made by this final rule to the existing response planning regulations. For additional detail on the costs, benefits, and other economic impacts of response planning, see the Final Regulatory Evaluation available in the docket.

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), as amended by the Small Business Regulatory Enforcement Fairness Act, RSPS/OPS must consider whether a rulemaking would have a significant economic impact on a substantial number of small entities. This final rule was developed in accordance with Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”) (67 FR 53461; Aug. 16, 2002) and DOT's procedures and policies to promote compliance with the Regulatory Flexibility Act and ensure that potential impacts of draft rules on small entities are properly considered.

This final rule adopts an interim rule as final and makes minor amendments to existing requirements for facility response plans for onshore oil pipelines. This rule does not expand the number of small entities subject to part 194. More detailed information on small business impacts can be found in Chapter 6 of the Final Regulatory Evaluation which is available for copying and review in the public docket for this final rule.

Based on the facts available which indicate the anticipated minimal impact of this rulemaking action, I certify, pursuant to Section 605 of the Regulatory Flexibility Act (5 U.S.C. 605), that this rulemaking action will not have a significant economic impact on a substantial number of small entities.

This rule will not have substantial direct effects on States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the levels of government. Therefore, in accordance with the Executive Order 13132 (“Federalism”) (64 FR 43255; Aug. 10, 1999), OPS has determined that the action does not have sufficient Federalism implications to warrant consultation with the States.

This rule was analyzed in accordance with the principles and criteria contained in Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”) (63 FR 27655; Nov. 9, 2000). Because this rule will not significantly or uniquely affect the communities of the Indian tribal governments, the funding and consultation requirements of this Executive Order do not apply.

This rule does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532-1538). It does not result in costs of $120,700,000 or more to either State, local, or tribal governments, in the aggregate, or to the private sector, and is the least burdensome alternative that achieves the objective of the rule.

The interim final rule contains information collection requirements subject to the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 109 Stat. 163; May 22, 1995) (PRA). At the time the interim rule was issued, pursuant to 44 U.S.C. 3507(d), DOT submitted a copy of its initial PRA analysis to OMB. Every three years OPS resubmits its PRA analysis of this collection to OMB for review. The OMB control number is 2137-0589. As part of developing this final rule, OPS examined its earlier PRA analyses to assess the accuracy of the earlier estimates. Based on improved data collection, OPS revised its burden estimates. The increased burden estimates, however, reflect an adjustment in producing the estimates rather than a change in the spill response planning requirements.

Therefore, this final rule adds no additional paperwork requirements to those imposed by the interim final rule. Below is a summary of the PRA analysis. The complete PRA analysis can be found in Chapter 7 of the Final Regulatory Evaluation which is available for copying and review in the public docket for this final rule.

Title: Response Plans for Onshore Oil Pipelines.

OMB Number: 2137-0589.

Type of Request: Renewal of an existing information collection.

Respondents: Oil pipeline operators.

Estimated Number of Respondents: 367.

Estimated Total Annual Burden on Respondents: 50,186 hours.

Comments concerning this information collection should include the docket number of this rule. They should be sent within 30 days of the publication of this notice directly to: Office of Management and Budget, Office of Information and Regulatory Affairs, 726 Jackson Place, NW., Washington, DC 20503, ATTN: Desk Officer for the Department of Transportation. Comments are invited on: (a) The need for the proposed collection of information for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques.

According to the Paperwork Reduction Act, no persons are required to respond to a collection of information unless a valid OMB control number is displayed.

We analyzed this action for purposes of the National Environmental Policy Act (42 U.S.C. 4321 et seq. ) and determined that this action will not significantly affect the quality of the human environment. An Environmental Assessment (EA) is in the docket. Notice of the availability of this EA was published in the Federal Register on August 30, 1999 (64 FR 47228).

OPS received only one comment on the EA. It addressed issues specific to the Trans-Alaska Pipeline System (TAPS) that were outside the scope of the EA. OPS made a Finding of No Significant Impact based on the EA published in the Federal Register on October 26, 1999 (64 FR 57694).

Because this final rule makes only administrative and clarification changes to the response planning regulations, this final rule will not have a significant impact on the environment. OPS has prepared a Finding of No Significant Impact and placed it in the public docket.

The Edible Oil Regulatory Reform Act (33 U.S.C. 2720) requires that regulations establishing any interpretation or guideline relating to the transportation, storage, discharge, release, emission, or disposal of a fat, oil, or grease under any Federal law must differentiate between petroleum and non-petroleum oils. This rule does not differentiate between petroleum oils and non-petroleum oils because OPS is not aware of any onshore transportation-related pipelines transporting non-petroleum oils. Should OPS learn of such pipelines, OPS will amend the rule to differentiate between petroleum and non-petroleum oils.

NMFS manages the groundfish fishery in the BSAI according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management 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 interim 2005 TAC of Atka mackerel in the Central Aleutian District of the BSAI is 13,218 metric tons (mt) as established by the interim 2005 harvest specifications for groundfish of the BSAI (69 FR 76780, December 23, 2004).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the interim 2005 TAC specified for Atka mackerel in the Central Aleutian District will be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 13,000 mt, and is setting aside the remaining 218 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 will be 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 § 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 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 fisheries under the interim 2005 TAC of Atka mackerel specified for 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.