Sections 901-905 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 1901 note) authorize the Secretary of Agriculture to issue guidelines for the regulation of commercial transportation of equines for slaughter by persons regularly engaged in that activity within the United States. To fulfill this responsibility, the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture established regulations in title 9, part 88, of the Code of Federal Regulations.

The purpose of the regulations in 9 CFR part 88, “Commercial Transportation of Equines for Slaughter,” is to establish minimum standards to ensure the humane movement of equines to slaughtering facilities via commercial transportation. As directed by Congress, the regulations cover, among other things, the food, water, and rest provided to such equines prior to their being loaded for transportation, the condition of the conveyance in which they are transported, and the responsibilities of the owner/shipper of the equines upon arrival at the slaughtering plant. The regulations also require the owner/shipper of the equines to take certain actions in loading and transporting the equines to ensure that the equines are transported safely and humanely and require that the owner/shipper of the equines prepare and maintain paperwork certifying that the commercial transportation meets certain requirements. In addition, the regulations prohibit the use of electric prods on equines in commercial transportation to slaughter, and, after December 7, 2006, the use of double-deck trailers for commercial transportation of equines to slaughtering facilities.

In its final rule establishing the regulations in 9 CFR part 88 (see 66 FR 63588-63617), APHIS also amended its regulations in 9 CFR part 70, “Rules of Practice Governing Proceedings under Certain Acts,” to indicate that the uniform rules of practice for the Department of Agriculture promulgated in 7 CFR part 1, subpart II, would be applicable to adjudicatory, administrative proceedings under the equines for slaughter regulations.

Although the APHIS regulations were amended to indicate the applicability of those rules of practice, a corresponding amendment was not made in the administrative regulations of the Office of the Secretary in 7 CFR part 1, subpart II, “Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes” (7 CFR 1.130 through 1.151). Therefore, in this final rule we are attending § 1.131, “Scope and applicability of this subpart,” to provide that the rules of practice contained in subpart II shall be applicable to adjudicatory proceedings under the regulations in 9 CFR part 88 pertaining to the commercial transportation of equines to slaughtering facilities.

This rule relates to internal agency management. Therefore, this rule is exempt from the provisions of Executive Orders 12866 and 12988. Moreover, pursuant to 5 U.S.C. 553, notice of proposed rulemaking and opportunity for comment are not required for this rule, and it may be made effective less than 30 days after publication in the Federal Register . In addition, under 5 U.S.C. 804, this rule is not subject to congressional review under the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121. Finally, this action is not a rule as defined by 5 U.S.C. 601 et seq ., the Regulatory Flexibility Act, and thus is exempt from the provisions of that Act.

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

We published in the Federal Register on July 22, 2005 (70 FR 42259-42261, Docket No. 04-068-1), an interim rule that amended the bovine tuberculosis regulations (9 CFR part 77) by removing New Mexico from the list of modified accredited advanced States in § 77.9(a) and adding part of New Mexico to the list of modified accredited advanced zones in § 77.9(b) and the remainder of New Mexico to the list of accredited free zones in § 77.9(b).

There is one error in that document. In § 77.9, paragraph (a) lists the States which meet the criteria for modified accredited advanced States. When we set out the revised § 77.9(a), we inadvertently included California on the list of modified accredited advanced States. California was designated as an accredited free State in an interim rule published in the Federal Register on April 15, 2005 (70 FR 19877-19878, Docket No. 05-010-1). This document corrects that error by removing California from the list in § 77.9(a).

Brucellosis is a contagious disease caused by bacteria of the genus Brucella. The disease mainly affects cattle, bison, and swine, but goats, sheep, horses, and even humans are susceptible. In its principal animal hosts, it causes loss of young through spontaneous abortion or birth of weak offspring, reduced milk production, and infertility. There is no economically feasible treatment for brucellosis in livestock. In humans, brucellosis initially causes flu-like symptoms, but the disease may develop into a variety of chronic conditions, including arthritis. Humans can be treated for brucellosis with antibiotics.

The brucellosis regulations in 9 CFR part 78 (referred to below as the regulations) contain specific provisions for cattle, bison, and swine. Under the regulations, States, herds, and individual animals are classified according to their brucellosis status. Interstate movement requirements for animals are based upon the disease status of the individual animals or the herd or State from which the animal originates.

In an interim rule effective and published in the Federal Register on May 2, 2005 (70 FR 22588-22589, Docket No. 05-009-1), we amended the regulations by adding Florida to the list of validated swine brucellosis-free States in § 78.43.

Comments on the interim rule were required to be received on or before July 1, 2005. We did not receive any comments. Therefore, for the reasons given in the interim rule, we are adopting the interim rule as a final rule.

This action also affirms the information contained in the interim rule concerning Executive Order 12866 and the Regulatory Flexibility Act, Executive Orders 12372 and 12988, and the Paperwork Reduction Act.

Further, for this action, the Office of Management and Budget has waived its review under Executive Order 12866.

The proposed rule was published in the December 29, 2004 Federal Register (69 FR 77956) for a six-week public comment period. A copy of the proposed rule was also posted on the Board's Web site and on the Federal Rulemaking Portal.

This rule sets forth the procedures for members of the public to request records from the U.S. Nuclear Waste Technical Review Board under both the Freedom of Information Act and the Electronic Freedom of Information Act Amendments of 1996. The rule also describes the procedures that the Board will use when responding to such requests. It sets up the time frames for responses and the current fee schedule for applicable charges for information. The rule also supplies information about Board materials available to the public through both the Board's reading room and its Web site.

The Board received several comments on the proposed rule. Its responses to those comments are detailed below.

1. The Board modified § 1303.106 Responsibility, form, and content of responses. To ensure that its record search was not inappropriately limited, the Board substituted “When determining which records are responsive to a request, the Board will include only records in its possession as of the date of the search.” for “When determining which records are responsive to a request, the Board will include only records in its possession as of the date receipt of the request.”

2. The Board added additional language to § 1303.106(c) Responsibility, form, and content of responses to clarify its procedure for dealing with records containing nonpublic information obtained from other federal agencies.

3. The Board modified § 1303.107(e)(3) Timing of responses to requests. To make explicit its intent to expedite a broad range of requests, the Board substituted “[A] requestor under § 1303.108 must demonstrate that their professional activity involves news reporting or otherwise disseminating information to the public,” for “[A] requestor under § 1303.108 must establish that his/her professional activity is news reporting.”

4. The board modified § 1303.109(a) Restrictions of charging fees. To clarify that it would not charge fees for certain searches, the Board substituted “No search or review fee shall be charged for requests by educational institutions, noncommercial scientific institutions, and representatives of the news media.” for “No review fee shall be charged for requests by educational institutions, noncommercial scientific institutions, and representatives of the news media.”

The Board has made two additional changes to the rule not considered to be substantive.

1. The mailing address for § 1303.105(a)(2) Requests for Board records was incorrect. It has been corrected to read, “Send an e-mail request to foia@nwtrb.gov. ”

2. Because of problems with the receipt of excessive e-mails to foia@nwtrb.gov not relating to the regulation, the Board has decided to amend § 130.105(a)(2) Requests for Board records and § 1303.114(a)(ii) Appeals by specifying that the acronym FOIA or words Freedom of Information Act must appear in the subject line.

These proposed regulations do not meet the criteria for a significant regulatory action under Executive Order 12866. Thus, review by the Office of Management and Budget is not required.

These proposed regulations will not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis as provided by the Regulatory Flexibility Act, as amended, is not required.

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 appendix A amendments set forth in this notice relate to one phase of the overall restructuring plan. The Board will issue separate notices for each subsequent phase of the restructuring. 3

As part of the restructuring process, the Portland branch office of the Federal Reserve Bank of San Francisco will cease processing checks on October 22, 2005, and banks with routing symbols currently assigned to that office for check processing purposes will be reassigned to the Seattle branch office of the Federal Reserve Bank of San Francisco. 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.

To assist banks in identifying local and nonlocal banks, the Board accordingly is amending the list of routing symbols associated with the Federal Reserve Bank of San Francisco to conform to the transfer of operations from the Reserve Bank's Portland branch office to the Seattle branch office. To coincide with the effective date of the underlying check processing changes, the amendments are effective October 22, 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, if necessary, to amend their availability schedules and related disclosures 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 delete the reference to the Portland branch office of the Federal Reserve Bank of San Francisco and reassign the routing symbols listed under that office to the Seattle branch office of the Federal Reserve Bank of San Francisco. 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.

The FAA proposed to amend 14 CFR part 39 with an AD for certain Boeing transport category airplanes. That action, published in the Federal Register on February 10, 2005 (70 FR 7052), proposed to require repetitive inspections for cracks of the upper surface of the aft lower spar web of the inboard and outboard struts, as applicable; and repetitive inspections for cracks of the upper surface of the intermediate web bay of the aft lower spar. That action also proposed to require repetitive inspections and torque checks of the bolts common to the aft lower spar chords and the fitting of the rear engine mount bulkhead for missing, loose, or fractured bolts, as applicable; and corrective action, if necessary.

We provided the public the opportunity to participate in the development of this AD. We have considered the comments that have been submitted on the proposed AD.

One commenter requests that the applicability be revised to read:

The commenter contends that retired airplanes are not included in the applicability of the proposed AD and states that strut assemblies may be interchanged between airplanes.

We do not agree to revise the applicability. Retired airplanes are included by variable number in Boeing Alert Service Bulletin 747-54A2212, dated May 1, 2003 (referenced as the appropriate source of information for the applicability of the proposed AD). Also, it is our policy to not write the applicability of ADs against a part of the airframe, such as the strut. Section 39.3 (“Definition of airworthiness directives”) of the Federal Aviation Regulations (14 CFR 39.3) specifies that airworthiness directives apply to the following products: aircraft, aircraft engine, propeller, or appliance (which is not part of the airframe). We have not changed the final rule in this regard.

The same commenter requests that a clause be added to advise operators that the strut assemblies are interchangeable and that, if a strut assembly is installed on another airplane, that airplane must be evaluated to determine if it is applicable to the proposed AD.

We agree that the strut assembly is an interchangeable part. However, we do not agree to revise the final rule to advise operators that the strut assemblies are interchangeable because the strut is a serialized part that can be tracked. Operators should note that they are responsible for maintaining the configuration of its airplanes, especially in an area affected by an AD. As required by section 39.17 of the Federal Aviation Regulations (14 CFR 39.17), for airplanes that have been modified, altered, or repaired so that the accomplishment of the requirements of this final rule is affected, the operator must request approval for an alternative method of compliance according to paragraph (q) of this AD.

One commenter requests that the airplane groups be defined solely by pylon web thickness. The commenter states that the groups identified in the service bulletin do not reflect its airplane configuration. The commenter notes that it has Group 1 airplanes with 0.032-inch pylon webs, Group 3 airplanes with 0.025-inch pylon webs, and some airplanes with mixed 0.025-inch pylon webs and 0.032-inch pylon webs.

We acknowledge that the service bulletin may not reflect an operator's current aircraft configuration because of post-delivery modifications. Since the groupings are not only defined by web thickness but also by the location of web stiffeners and the web material; we do not agree to revise the final rule to define airplane groups by pylon web thickness. Operators are responsible for maintaining the configuration of its airplanes. If the configuration of an airplane has been changed in an area affected by this final rule and the accomplishment of the requirements of this final rule is affected, operators must request approval for an alternative method of compliance according to paragraph (q) of this AD as required by 14 CFR 39.19.

We have revised the applicability of the proposed AD to identify model designations as published in the most recent type certificate data sheet for the affected models.

We have carefully reviewed the available data, including the comments that have been submitted, and determined that air safety and the public interest require adopting the AD with the change described previously. We have determined that this change will neither increase the economic burden on any operator nor increase the scope of the AD.

There are about 244 airplanes of the affected design in the worldwide fleet. This AD will affect about 82 airplanes of U.S. registry. The following table provides the estimated costs for U.S. operators to comply with this AD.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in subtitle VII, part A, subpart III, section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

For the reasons discussed above, I certify that this AD:

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

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

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

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

This amendment to Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), establishes, amends, suspends, or revokes SIAPs and/or Weather Takeoff Minimums. The complete regulatory description of each SIAP and/or Weather Takeoff Minimums is contained in official FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms are identified as FAA Forms 8260-3, 8260-4, 8260-5 and 8260-15A. Materials incorporated by reference are available for examination or purchase as stated above.

The large number of SIAPs and/or Weather Takeoff Minimums, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs and/or Weather Takeoff Minimums but refer to their depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP and/or Weather Takeoff Minimums contained in FAA form documents is unnecessary. The provisions of this amendment state the affected CFR sections, with the types and effective dates of the SIAPs and/or Weather Takeoff Minimums. This amendment also identifies the airport, its location, the procedure identification and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and/or Weather Takeoff Minimums as contained in the transmittal. Some SIAP and/or Weather Takeoff Minimums amendments may have been previously issued by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP, and/or Weather Takeoff Minimums amendments may require making them effective in less than 30 days. For the remaining SIAPs and/or Weather Takeoff Minimums, an effective date at least 30 days after publication is provided.

Further, the SIAPs and/or Weather Takeoff Minimums contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and/or Weather Takeoff Minimums, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs and/or Weather Takeoff Minimums and safety in air commerce, I find that notice and public procedure before adopting these SIAPs and/or Weather Takeoff Minimums are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs and/or Weather Takeoff Minimums effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

1. On August 4, 2005, the American Wind Energy Association (AWEA) and the North American Electric Reliability Council (NERC) filed a request for extension of the effective date of the Commission's Final Rule, issued June 2, 2005 in this docket. 1 AWEA and NERC state that they have initiated discussions to address the low voltage ride-through provisions of the Commission's Final Rule. They request a 60-day extension of the effective date of the Final Rule to October 14, 2005.

2. For good cause shown, the Commission will extend the effective date of the Final Rule 60 days from the current effective date (August 15, 2005) to October 14, 2005. Additionally, we will extend to November 15, 2005, the date by which all public utilities that own, control, or operate transmission facilities in interstate commerce are to adopt the Final Rule Appendix G as amendments to the Large Generator Interconnection Procedures and Large Generator Interconnection Agreements (LGIAs) in their Open Access Transmission Tariffs. 2 The transition period adopted in the Final Rule (which states that the low voltage ride-through, reactive power and supervisory control and data acquisition (SCADA) provisions apply only to LGIAs signed, filed with the Commission in executed form, or filed as non-conforming agreements, on or after January 1, 2006, or the date six months after publication of the Final Rule in the Federal Register ) remains unchanged.

3. NERC and AWEA state that they will file a report with the Commission on or before September 14, 2005, describing the final results of their discussions and any recommended revisions to the low voltage ride-through provisions in the Final Rule. The Commission accepts this commitment, and will take any such recommended revisions submitted on or before September 14, 2005 into consideration as it considers the requests for rehearing filed in this proceeding. Additionally, the Commission will consider any supplemental comments related to the low voltage ride-through provisions of the Final Rule that are filed on or before September 14, 2005. However, the Commission will not consider comments that simply rehash prior arguments.

The Commission orders:

(A) The effective date of the Final Rule on Interconnection for Wind Energy is hereby extended to October 14, 2005, as discussed in the body of this order.

(B) The date by which all public utilities that own, control, or operate transmission facilities in interstate commerce are to adopt the Final Rule Appendix G as amendments to the Large Generator Interconnection Procedures and Large Generator Interconnection Agreements in their Open Access Transmission Tariffs is hereby extended to November 14, 2005, as discussed in the body of this order.

(C) The Secretary shall promptly publish a copy of this order in the Federal Register .

I. Background DEA's Legal Authority

DEA implements the Controlled Substances Act (21 U.S.C. 801-971) (CSA), as amended. DEA publishes the implementing regulations for this statute in Title 21 of the Code of Federal Regulations (CFR), Part 1300 to 1399. These regulations are designed to ensure that there is a sufficient supply of these substances for legitimate medical purposes and deter the diversion of controlled substances to illegal purposes. The CSA mandates that DEA establish a closed system of control for manufacturing, distribution, and dispensing of controlled substances. As part of these regulations, DEA requires that registrants have systems to maintain security for controlled substances and to report thefts or losses.

Section 1301.74(c), “Other security controls for non-practitioners; narcotic treatment programs and compounders for narcotic treatment programs.” states that “[t]he registrant shall notify the Field Division Office of the Administration in his area of any theft or significant loss of any controlled substances upon discovery of such theft or loss. The supplier shall be responsible for reporting in-transit losses of controlled substances by the common or contract carrier selected pursuant to § 1301.74(e), upon discovery of such theft or loss. The registrant shall also complete DEA Form 106 regarding such theft or loss. Thefts must be reported whether or not the controlled substances are subsequently recovered and/or the responsible parties are identified and action taken against them.”

Section 1301.76(b), “Other security controls for practitioners.” requires that “[t]he registrant shall notify the Field Division Office of the Administration in his area of the theft or significant loss of any controlled substances upon discovery of such loss or theft. The registrant shall also complete DEA (or BND) Form 106 regarding such loss or theft.”

On July 8, 2003, DEA published a notice of proposed rulemaking (NPRM) (68 FR 40576) to address confusion that exists within the regulated industry as to the exact meaning of the phrases “upon discovery” and “significant loss.”

DEA has always viewed “upon discovery” to mean that notification should occur immediately and without delay. The purpose of immediate notification is to provide an opportunity for DEA, state, or local participation in the investigative process when warranted and to create a record that the theft or significant loss was properly reported. It also alerts law enforcement personnel to more broadly based circumstances or patterns of which the individual registrant may be unaware. This notification is considered part of a good-faith effort on the part of the regulated industries to maintain effective controls against the diversion of controlled substances, as required by § 1301.71(a). Lack of prompt notification could prevent effective investigation and prosecution of individuals involved in the diversion of controlled substances. DEA proposed to insert the word “immediately” before the phrase “upon discovery” to clarify this point.

Regarding “significant loss,” there is no single objective standard that can be established and applied to all registrants to determine whether a loss is “significant.” Any unexplained loss or discrepancy should be reviewed within the context of a registrant's business activity and environment. What constitutes a significant loss for one registrant may be construed as comparatively insignificant for another. A manufacturer may experience continuous losses in the manufacturing process due to, for example, atmospheric changes or mixing procedures. Such losses may not be deemed by the registrant to be significant and may be recorded in batch records. Conversely, for registrants other than manufacturers, the repeated loss of small quantities of controlled substances over a period of time may indicate a significant aggregate problem that must be reported to DEA, even though the individual quantity of each occurrence is not significant.

Individual registrants should examine both their business activities and the external environment in which those business activities are conducted to determine whether unexplained losses of controlled substances are significant. When in doubt, registrants should err on the side of caution in alerting the appropriate law enforcement authorities, including DEA, of thefts and losses of controlled substances. DEA proposed to amend the regulations by inserting a list of factors that registrants should consider when determining whether a loss of controlled substances is significant.

DEA received eight comments in response to the NPRM. In general, the comments were supportive of DEA efforts to clarify current regulations and provide guidance regarding reporting of theft or significant loss of controlled substances. At the same time, commenters offered a number of suggestions that, in their view, would provide even greater clarity and certainty to the regulations. These comments are addressed below.

Regarding the timing of initial theft or loss reports, DEA proposed to insert the word “immediately” before the phrase “upon discovery.” DEA also suggested in the proposed rule preamble that submission of the DEA Form 106 itself is not immediately necessary if the registrant needs time to investigate the facts surrounding the theft or significant loss, but that updates should be provided to DEA if the investigation takes more than two months. One commenter recommended that the regulations provide an objective standard regarding the time frame when reports must be made (while retaining the subjective standard for registrants to decide when a report is necessary). Specifically, the commenter suggested that initial reports be required within one business day and that DEA Form 106 must be filed within 30 days.

DEA agrees with the commenter that an objective standard for initial notification would be useful and believes the one-business-day suggestion is consistent with its proposed addition of the word “immediately.” Regarding the 30-day requirement for submission of the Form 106, however, DEA believes that may be difficult to comply with in some cases, so prefers to retain the registrant flexibility provided by the approach outlined in the proposed rule preamble, i.e. , DEA Form 106 should be submitted once the circumstances surrounding the theft or significant loss are clear, but updates should be provided to DEA if the investigation takes more than two months.

Related to this change, several commenters requested clarification or proposed changes to what constitutes “discovery.” They suggested this was more a source of confusion to the regulated community than was the timing issue. According to these commenters, DEA should explicitly recognize that “discovery” may well occur in increments, therefore, knowing when to make a report becomes complex. One commenter suggested that the addition of objective standards for submitting reports would resolve much of the confusion, while another suggested adding “and verification” after the phrase “upon discovery.”

DEA does not disagree with these commenters and recognized the incremental nature of discovery in the preamble to the proposed rule when it suggested that an update be provided to DEA within 60 days of initial notification, if the investigation into the theft or significant loss is still ongoing, and that the Form 106 need not be filed at all if the registrant ultimately determines that no theft or significant loss occurred. DEA's overriding interest here is in obtaining immediate notification of suspected or actual theft or significant loss and accepts the one-business-day suggestion as a clear standard for making that required initial notification.

One commenter questioned the nature of the initial notification itself, seeking clarification on whether a telephone call would suffice. In the preamble to the proposed rule, DEA recommended that the initial notification be a short statement provided by fax, which would avoid delays that might be associated with using regular U.S. mail. Faxing is not the only option a registrant may use, but DEA does believe that the notification should be in writing. Not only does this eliminate any misunderstanding that could arise in an oral communication, but it also provides the registrant with a record of what was provided, when it was provided, and to whom it was provided.

A final area of comments on the notification process raised issues about the purpose of Form 106 and offered suggestions that the commenters believed would make it a more useful report. While DEA appreciates these comments and suggestions, DEA considers them beyond the scope of this rulemaking. DEA Form 106 is scheduled to be revised within the next year, and DEA will consider these comments during that process.

In reviewing the existing regulation and DEA Form 106, DEA noted that while the form itself specified that the form should be completed and submitted to DEA, the regulations merely required that the form be completed and did not contain a requirement that the form be submitted. Therefore, DEA is amending the regulations to explicitly acknowledge the requirement, currently contained only in the DEA Form 106 instructions, that the completed DEA Form 106 be submitted to DEA.

In the proposed rulemaking, DEA included a change that would add a list of factors to be considered in determining whether a loss is “significant.” DEA recognizes there is no single objective standard that can be applied to all registrants—what constitutes a significant loss for one registrant may be construed as comparatively insignificant for another. Any unexplained loss or discrepancy must be reviewed within the context of a registrant's business activity and environment. Several commenters thought the list of factors is a helpful addition. One commenter disagreed, stating that “none of these factors or questions is particularly useful in determining whether initial notification should be provided to DEA to satisfy the requirement of reporting” and suggested that confusion over what constitutes a significant loss exists not only among DEA registrants, but also among DEA field offices, which results in differences in interpretation and enforcement.

DEA recognizes that there has been confusion within the regulated community regarding the application of this standard and for that very reason proposed the list of factors to clarify for all parties what registrants should be considering—at a minimum—when determining whether a loss is significant. As DEA noted in the proposed rule preamble, “individual registrants should examine both their business activities and the external environment in which those business activities are conducted to determine whether unexplained losses of controlled substances are significant. When in doubt, registrants should err on the side of caution in alerting the appropriate law enforcement authorities, including DEA, of thefts and losses of controlled substances.” DEA encourages registrants to use additional factors beyond what DEA suggests in the evaluation of whether a loss is significant. DEA believes, however, that it has provided as much direction on this matter as it reasonably can, given the case-by-case nature of this determination.

One commenter also suggested the insertion of the word “significant” before the phrase “in-transit losses of controlled substances” in § 1301.74(c), unless DEA intends for all in-transit losses to be reported. DEA does, in fact, intend for all in-transit losses to be reported, not just significant losses. Therefore, to clarify this point, and based on the comment received, DEA is amending the regulatory text to reflect that “all” in-transit losses must be reported to DEA.

Several commenters requested additional clarification and guidance on reporting and recordkeeping, particularly with regard to breakage and spillage and the submission of Form 41.

In the preamble to the proposed rulemaking, DEA did provide guidance on this topic, both to distinguish it from reporting of thefts or significant losses of controlled substances (and the use of DEA Form 106) and to restate the disposal and documentation obligations when breakage, spillage, or other damage to controlled substances occurs. DEA believes this guidance is adequate and sufficiently clear and does not wish to expand on the topic as a part of this rulemaking on theft and significant loss. Registrants should continue to employ common sense, good faith approaches to their reporting and recordkeeping obligations in the case of breakage and spillage.

Finally, DEA received a request for clarification of the reporting of thefts and losses to DEA's Automation of Reports and Consolidated Orders System (ARCOS). DEA wishes to reiterate that thefts and losses are reported to ARCOS. Thefts are reported using transaction codes based on the type of theft, e.g. , theft from premises, in-transit loss, etc. Losses are reported to ARCOS simply as losses. DEA did not propose any regulatory change regarding this reporting, nor is it making a regulatory change at this time.

The Deputy Assistant Administrator hereby certifies that this rulemaking has been drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation, and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small entities. This regulation seeks to clarify existing DEA regulations regarding the reporting of thefts and significant losses of controlled substances. No new recordkeeping or reporting requirements are imposed by this rulemaking.

The Deputy Assistant Administrator further certifies that this rulemaking has been drafted in accordance with the principles in Executive Order 12866 Section 1(b). DEA has determined that this is not a significant rulemaking action. Therefore, this action has not been reviewed by the Office of Management and Budget. This rulemaking merely seeks to clarify existing DEA regulations, policies and procedures.

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

This rulemaking does not preempt or modify any provision of state law; nor does it impose enforcement responsibilities on any state; nor does it diminish the power of any state to enforce its own laws. Accordingly, this rulemaking does not have federalism implications warranting the application of Executive Order 13132.

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $115 million or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

On January 5, 1999, the Commission first published its Minimum Internal Control Standards (MICS) as a Final Rule. As gaming Tribes and the Commission gained practical experience applying the MICS, it became apparent that some of the standards required clarification or modification to operate as the Commission had intended and to accommodate changes and advances that had occurred over the years in Tribal gaming technology and methods. Consequently, the Commission, working with an Advisory Committee composed of Commission and Tribal representatives, published the revised MICS rule on June 27, 2002, and has subsequently made less comprehensive revisions thereto. As the result of the practical experience of the Commission and Tribes working with the revised MICS, it has once again become apparent that additional corrections, clarifications, and modifications are needed to ensure that the MICS continue to operate as the Commission intended. To identify which of the current MICS need correction, clarification or modification, the Commission initially solicited input and guidance from NIGC employees, who have extensive gaming regulatory expertise and experience and who work closely with Tribal gaming regulators in monitoring the implementation, operation, and effect of the MICS in Tribal gaming operations. The resulting input from NIGC staff convinced the Commission that the MICS require continuing review and prompt revision on an ongoing basis to keep them effective and up-to-date. To address this need, the Commission decided to establish a Standing MICS Advisory Committee to assist it in both identifying and developing necessary MICS revisions on an ongoing basis. In recognition of its government-to-government relationship with Tribes and related commitment to meaningful Tribal consultation, the Commission requested gaming Tribes, in January 2004, for nominations of Tribal representatives to serve on its Standing MICS Advisory Committee. From the 27 Tribal nominations that it received, the Commission selected 9 Tribal representatives in March 2004 to serve on the Committee. The Commission's Tribal Committee member selections were based on several factors, including the regulatory experience and background of the individuals nominated, the size(s) of their affiliated Tribal gaming operation(s), the types of games played at their affiliated Tribal gaming operation(s), and the areas of the country in which their affiliated Tribal gaming operation(s) are located. The selection process was very difficult, because numerous highly qualified Tribal representatives were nominated to serve on this important Committee.

As expected, the benefit of including Tribal representatives on the Committee who work daily with the MICS has proved to be invaluable. Through their advice and recommendations to the Commission, the Tribal Committee members provide early Tribal perspective and input in assisting the Commission in identifying and developing needed MICS revisions, without binding their nominating Tribes in any way regarding the resulting revisions promulgated by the Commission. This, in turn, helps facilitate and implement the Commission's policy commitment to early and meaningful consultation concerning changes to the MICS and other Commission regulatory policies and procedures that affect gaming Tribes.

Tribal representatives selected to serve on the Commission's Standing MICS Advisory Committee are: Tracy Burris, Gaming Commissioner, Chickasaw Nation Gaming Commission, Chickasaw Nation of Oklahoma; Jack Crawford, Chairman, Umatilla Gaming Commission, Confederated Tribes of the Umatilla Indian Reservation; Patrick Darden, Executive Director, Chitimacha Gaming Commission, Chitimacha Indian Tribe of Louisiana; Mark N. Fox, Compliance Director, Four Bears Casino, Three Affiliated Tribes of the Fort Berthold Reservation; Sherrilyn Kie, Senior Internal Auditor, Pueblo of Laguna Gaming Authority, Pueblo of Laguna; Patrick Lambert, Executive Director, Eastern Band of Cherokee Gaming Commission, Eastern Band of Cherokee Indians; John Meskill, Director, Mohegan Tribal Gaming Commission, Mohegan Indian Tribe; Jerome Schultze, Executive Director, Morongo Gaming Agency, Morongo Band of Mission Indians; and Lorna Skenandore, Assistant Gaming Manager, Support Services, Oneida Bingo and Casino, formerly Gaming Compliance Manager, Oneida Gaming Commission, Oneida Tribe of Indians of Wisconsin. The Advisory Committee also includes the following Commission representatives: Philip N. Hogen, Chairman; Nelson Westrin, Vice-Chairman; Cloyce V. Choney, Associate Commissioner; Joe H. Smith, Acting Director of Audits; Ken Billingsley, Region III Director; Nicole Peveler, Field Auditor; Ron Ray, Field Investigator; and Sandra Ashton, Staff Attorney, Office of General Counsel.

In the past, the MICS were comprehensively revised on a wholesale basis. Such large-scale revisions proved to be difficult for Tribes to implement in a timely manner and unnecessarily disruptive to Tribal gaming operations. The purpose of the Commission's Standing Committee is to conduct a continuing review of the operation and effectiveness of the existing MICS, in order to promptly identify and develop needed revisions of the MICS, on a manageable incremental basis, as they become necessary to revise and keep the MICS practical and effective. By making more manageable incremental changes to the MICS on an ongoing basis, the Commission hopes to be more prompt in developing needed revisions and avoid larger-scale MICS revisions which take longer to implement and may be disruptive to Tribal gaming operations. In accordance with this approach, the Commission has developed the following set of final MICS rule revisions, with the assistance of the Standing MICS Advisory Committee. In doing so, the Commission is carrying out its statutory mandate under the Indian Gaming Regulatory Act, 25 U.S.C. Section 2706(b)(10), to promulgate necessary and appropriate regulations to implement the provisions of the Act. In particular, the following final MICS rule revisions are intended to address Congress' purpose and concern stated in Section 2702(2) of the Act, that the Act “provide a statutory basis for the regulation of gaming by an Indian Tribe adequate to shield it from organized crime and other corrupting influences, to ensure the Indian Tribe is the primary beneficiary of the gaming operation, and to ensure the gaming is conducted fairly and honestly by both the operator and the players.”

The Commission, with the Committee's assistance, identified three specific objectives for the following final MICS rule revisions: (1) To ensure that the MICS are reasonably comparable to the internal control standards of established gaming jurisdictions; (2) to ensure that the interests of the Tribal stakeholders are adequately safeguarded; and (3) to ensure that the interests of the gaming public are adequately protected.

The Standing Advisory Committee met on October 24, 2004, January 25, 2005, and May 10, 2005, to discuss the revisions set forth in the following set of final MICS revisions. The input received from the Committee Members has been invaluable to the Commission in its development of these revisions.

In furtherance of the Commission's established Government-to-Government Tribal Consultation Policy, the Commission also provided a preliminary working draft of the entire final MICS rule revisions contained herein to gaming Tribes on November 24, 2004, for a 30-day informal review and comment period, before formulation of the proposed rule. The proposed rule was published in the Federal Register on March 10, 2005, and comments were accepted for 48 days. In response to its requests for comments, the Commission received 40 comments from Commission and Tribal Advisory Committee members, individual Tribes, and other interested parties regarding the final revisions. A summary of these comments is presented below in the discussion of each revision to which they relate.

For reasons stated above in this preamble, the National Indian Gaming Commission is revising the following specific sections of its MICS rule, 25 CFR part 542. The following discussion includes the Commission's responses to general comments concerning the MICS and is followed by a discussion regarding each of the specific final revisions, along with previously submitted informal comments to the final revisions and the Commission's responses to those comments. As noted above, prior commenters include Commission and Tribal Advisory Committee members, gaming Tribes, and others.

Many of the previous informal comments to the preliminary working draft of the MICS revisions pertained to the Commission's authority to promulgate rules governing the conduct of Class III gaming. Positions were expressed asserting that Congress intended the NIGC's Class III gaming regulatory authority to be limited exclusively to the approval of Tribal gaming ordinances and management contracts. Similar comments were received concerning the first proposed MICS regulations in 1999. At that time, the Commission determined in its publication of the original MICS that it possessed the statutory authority to promulgate Class III MICS. As stated in the preamble to those MICS: “The Commission believes that it does have the authority to promulgate this final rule. * * * [T]he Commission's promulgation of MICS is consistent with its responsibilities as the Federal regulator of Indian gaming.” 64 FR 509 (Jan. 5, 1999). The current Commission reaffirms that determination. The Indian Gaming Regulatory Act, which established the regulatory structure for all classes of Indian gaming, expressly provides that the Commission “shall promulgate such regulations as it deems appropriate to implement the provisions of (the Act).” 25 U.S.C. 2707(b)(10).

Pursuant to this clearly stated statutory duty and authority under the Act, the Commission has determined that MICS are necessary and appropriate to implement and enforce the regulatory provisions of the Act governing the conduct of both Class II and Class III gaming and accomplish the purposes of the Act.

The Commission believes that the importance of internal control systems in the casino operating environment cannot be overemphasized. While this is true of any industry, it is particularly true and relevant to the revenue generation processes of a gaming enterprise, which, because of the physical and technical aspects of the games and their operation and the randomness of game outcomes, makes exacting internal controls mandatory. The internal control systems are the primary management procedures used to protect the operational integrity of gambling games, account for and protect gaming assets and revenues, and assure the reliability of the financial statements for Class II and Class III gaming operations. Consequently, internal control systems are a vitally important part of properly regulated gaming. Effective internal control systems are dependent upon the gaming enterprise's governing board, management, and other personnel who are responsible for providing reasonable assurance regarding the achievement of the enterprise's objectives. These objectives typically include operational integrity, effectiveness, and efficiency, reliable financial statement reporting, and compliance with all applicable laws and regulations. The Commission believes that strict regulations, such as the MICS, are not only appropriate but necessary for it to fulfill its responsibilities under the IGRA to establish necessary baseline, or minimum, Federal standards for all Tribal gaming operations on Indian lands. 25 U.S.C. 2702(3). Although the Commission recognizes that many Tribes had sophisticated internal control standards in place prior to the Commission's original promulgation of its MICS, the Commission also continues to strongly believe that promulgation and revision of these standards is necessary and appropriate to effectively implement the provisions of the Indian Gaming Regulatory Act and, therefore, within the Commission's clearly expressed statutory power and duty under Section 2706(b)(10) of the Act.

Comments were also received suggesting that the NIGC should re-issue the MICS as a bulletin or guideline for Tribes to use voluntarily, at their discretion, in developing and implementing their own Tribal gaming ordinances and internal control standards. The Commission disagrees. The MICS are common in established gaming jurisdictions and, to be effective in establishing a minimum baseline for the internal operating procedures of Tribal gaming enterprises, the rule must be concise, explicit, and uniform for all Tribal gaming operations to which they apply. Furthermore, to nurture and promote public confidence in the integrity and regulation of Indian gaming and ensure its adequate regulation to protect Tribal gaming assets and the interests of Tribal stakeholders and the public, the Commission's MICS regulations must be reasonably uniform in their implementation and application and regularly monitored and enforced by Tribal regulators and the NIGC to ensure Tribal compliance.

The Commission has revised the referenced regulation to clarify the type of report being requested and more accurately define the scope and function of the process deemed necessary to ensure consistency and reliability of the reports produced. The text of the final revision is set forth following the conclusion of this preamble in which all of the final revisions to the Commission's MICS rule, 25 CFR part 542, are discussed.

Since the MICS were initially adopted, the CPA testing standard has been the subject of much concern and question due to its lack of specificity. Numerous inquiries have been received from Tribal regulators, gaming operators and accounting practitioners. As a result of the issues raised, in June 2000, guidelines were issued by the Commission to aid in the interpretation of the regulation; however, questions and inconsistencies in the reports continue to exist. Therefore, the final revision is intended to clarify or define (1) the type of reporting required of the independent accountant, (2) that the Commission does not possess an expectation that the independent accountant render an opinion regarding the overall quality of the gaming operation's internal control systems, (3) more accurately the scope and breath of the testing and observations to be performed by the practitioner in conjunction with the engagement, and (4) that reliance by the CPA upon the work of the internal auditor is an acceptable option, subject to satisfaction of certain conditions and the determination by the practitioner that the work product of the internal auditor is sufficient to justify reliance.

Comments were received acknowledging the need to define explicitly the regulation's expectations. Furthermore, it was stated that the final revision may result in a reduction in costs to many Tribes and will likely improve the quality of the data produced by the CPA.

As initially drafted, the proposed revision contained rather exacting criteria that the CPA should consider in determining whether to rely on the work of the internal auditor. The criteria addressed such items as education, professional certification, and experience. Several commenters misinterpreted the noted conditions as establishing minimum criteria for hiring an internal auditor; practitioners noted that even though an internal auditor or internal audit department failed to satisfy the criteria the work product produced might still be of sufficient quality to warrant reliance. The Commission reconsidered the explicit criteria and deleted them. As reflected in the final revision, the CPA is advised that reliance is at the discretion of the practitioner provided the internal audit department can demonstrate satisfaction of the MICS requirements contained within the internal audit sections, as applicable.

One commenter noted that the current regulation requires the CPA to test for material compliance; whereas, the final revision indicates that all instances of procedural noncompliance be reported, without regard to materiality. A concern was expressed whether the change represents a more stringent condition. Although the Commission appreciates the concern, we do not believe the striking of the reference to material compliance should have a significant impact on the work performed by practitioners. The term “material” has a financial connotation that is misplaced in a regulation possessing the intent of measuring regulatory compliance with a codified set of minimum internal control procedures. In essence, the term is simply ambiguous when utilized in the context of compliance testing. However, it is important to recognize that the ultimate beneficiary of the information is the gaming operation's management. The report produced is intended to provide compliance data to the operator that will facilitate the initiation of a proactive response to the findings. Obviously, inherent in the merit of disclosing compliance exceptions is the need for corrective action. We do not believe the final regulation precludes the CPA from exercising professional judgment in determining whether an exception warrants disclosure. For example, the Commission would not consider a report to be noncompliant if, during the sampling of a large number of items, the CPA detected a minimal number of compliance exceptions and determined that they represented only isolated incidents of noncompliance, which did not justify a remedial response.

Furthermore, if during testing of transactions at the beginning of an audit period items of noncompliance were detected but the CPA was able to confirm that corrective action had been effectively implemented by the end of the period, it would be entirely appropriate for the practitioner to exercise professional judgment in deciding whether there was any worthwhile benefit to disclosure.

Since initial adoption, concerns have been expressed regarding the regulation because it stipulates the benchmark for measuring compliance to the internal control standards adopted by the Tribal gaming regulatory authority. Specifically, it was noted that it is not uncommon for Tribal standards to be more stringent than the federal rule or require procedures not in the MICS. The propriety of requiring the CPA to report incidences of noncompliance on standards not representing noncompliance with the NIGC MICS was questioned. In consideration of the Commission's stated objective of creating a minimum baseline for internal control systems, we concur with the expressed concern. Therefore, in conjunction with the revision of the section, it was changed to require compliance testing against the federal rule; however, at the discretion of the Tribe, the Tribe may opt to engage the external accountant to audit for compliance against the standards adopted by the Tribal gaming regulatory authority. If the alternative testing criteria are desired, the final revision require the CPA to first confirm that the applicable Tribal regulations provide a level of control that equals or exceed those set forth in part 542.

One commenter objected to the explicit nature of the testing criteria contained within the final revision. The concern was specific as to whether any deviation from the stipulated testing would be permissible: the Tribal gaming regulatory authority should have the latitude to require testing of greater scope and depth, and the CPA should be able to expand or contract testing based on a risk analysis.

The Commission does not concur with the concern expressed. To ensure consistency and reliability of the reports produced, it is necessary that a minimum level of testing be performed by practitioners. Although the final revision states that the NIGC MICS compliance checklist or other comparable testing procedures be performed, the Commission does not believe the final regulation should be so narrowly interpreted as to preclude any deviation. For example, a Tribal gaming regulatory authority might require the CPA to conduct more in depth testing of gaming machines located in a high stakes area or might permit a lesser level of testing for table games possessing exceedingly low bet limits. Such determinations would simply be based on an analysis of the risk posed by specific games. Furthermore, the CPA has the latitude to exercise professional judgment in determining sample size and scope. For example, a firm possessing several years of experience with a client that has had an exemplary record of addressing compliance exceptions might result in the external accountant's contraction of testing. Whereas, if the converse situation existed in which management had been non-responsive to exceptions, the external accountant might deem it prudent to expand testing since the control environment would likely be at a higher risk of compromise.

Another commenter questioned whether it would be permissible for a CPA to perform the required observations subsequent to the fiscal year end. Although the Commission questions the wisdom of performing observations at a time outside the period subject to review, we do not believe the final regulation explicitly prohibits it. However, recognizing that the results of such observation would have diminished value, expanded compensating document testing relevant to the audit period would seem to be a logical action.

One commenter recommended that the Commission should codify in the rule that the CPA testing period be the fiscal year of the gaming enterprise. The Commission disagrees with the need to stipulate in the rule that the period subject to audit must be the fiscal year. Inherent in the filing requirement that the report be submitted within 120 days of the gaming operation's fiscal year end, it is the presumption that the period subject to review will be the business year. The Commission is unaware of this concern being of any significance within the industry.

A commenter suggested that the final revisions require the CPA to submit a copy of internal audit reports when there is reliance. Furthermore, the commenter represented that in accordance with the referenced Agreed- Upon-Procedures pronouncement, the practitioner is precluded from extracting data from the internal audit reports. Other commenters have not agreed with this position when the CPA has performed such testing as necessary to gain sufficient assurance in the quality of the internal audit work to rely thereon. Although the Commission has received internal audit reports from CPA firms, we do not concur that such submissions should be required. Our position is founded upon the fact that the filings frequently include findings unrelated to the MICS, i.e. incidents of noncompliance with internal policies and procedures such as personnel or recommendations to management regarding productivity and efficiency.

Another commenter recommended that the final revisions require the inclusion of management responses to the compliance audit findings. Although occasionally submissions do include comments or anticipated remedial actions plans from management, the Commission believes that including such a requirement in the rule would unduly hinder satisfaction of the filing deadline of 120 days past fiscal year end. It is important to note that the primary beneficiary of the independent report is management, who should require, as a component of the enterprise's overall operational objectives, compliance with all applicable laws and regulations. Although the Commission utilizes the data submitted to evaluate the internal control systems and their compliance with the federal rule, the CPA testing report is only one of several sources of information drawn upon to perform the analysis. It is the position of the Commission that the lack of management responses will not significantly impede that evaluation.

A commenter suggested that the CPA, in testing of internal audit work performed, be allowed to accept digital copies or facsimile of original documents. The Commission concurs with the suggestion. It is not uncommon for such reproductions to carry the same weight as the original, and the final regulation is not intended to preclude the procedure.

Another commenter suggested that the count observations be required to be initiated at the beginning of the drop/count process, as such a procedure would facilitate observation of the key control and surveillance notification functions.

The Commission disagrees with the suggestion. The objective of entering the count room after commencement of the count is to detect irregularities and internal control deficiencies, which would not be as likely if count personnel were aware that observations were going to be performed. Furthermore, with regards to the required key controls and notification of surveillance, documentation of such events is mandated by the MICS, which enables a subsequent audit.

One commenter raised a concern that the final revisions will supersede the authority of the Tribe to determine the scope and depth of the testing to be performed in accordance with the Agreed-Upon-Procedures pronouncement and, in effect, transfer accountability of the CPA to the Commission. The Commission disagrees with the commenter's interpretation of the final revision. Contained therein is the representation that an independent Certified Public Accountant shall be engage to perform the compliance testing. The statement is purposeful in its lack of specificity regarding the entity within the Tribe that would assume responsibility for executing the engagement letter. It is the position of the Commission that such a decision should be left to the discretion of the Tribe. Although in practice most engagement letters are signed by an authorized management person or audit committee representative, the Commission has also noted engagements originating with the Tribal gaming regulatory authority. Without regard to the entity or individual possessing the authority to engage the independent accountant, there should be no misunderstanding that the objective of the final revision is to establish only the minimum criteria that must be incorporated in the engagement letter. Furthermore, the CPA should be well aware that their client is the engaging party, not the Commission.

Another commenter noted that the auditing profession has established methods and procedures to guide CPA firms in documenting and conducting their reviews through the AICPA's Casino Audit and Accounting Guide and the Auditing Standards Board's Statement on Standards for Attestation Engagements, specifically SSAE10. The commenter observed that these standards provide CPA firms pertinent guidance regarding the process, procedures, and reporting format and requirements to be employed.

The Commission disagrees with the commenter; not because we believe the Audit and Accounting Guide for casinos conflicts with any standard contained within the MICS, but because the professional pronouncement simply lacks sufficient specificity to effectively confirm compliance with the federal rule or the Tribal internal control standards. With regard to the pronouncement relevant to performance of attestation engagements, the Commission embraces the concepts contained therein and considers the final revision to complement the directive. However, we do not accept the premise that the professional directive is adequate to ensure reliability and consistency in the reports; considering the report's objective of identifying incidences of noncompliance with a codified set of control procedures, which can be rather exacting.

Another commenter objected to the CPA firm's personnel performing observations in the count room while the count is in progress because they would have potential access to unaccounted for funds. Although the Commission appreciates the concern expressed, it is our position that for the practitioner to effectively test the internal control systems for compliance there must be unfettered access to all applicable areas and records of the gaming operation. Of course, the Commission would consider it prudent for management or the Tribal regulatory authority to initiate compensating controls to offset the risk posed by persons external to the casino being in areas in which access is restricted; however, in consideration of such controls, they should not unduly interfere with the objectives of the engagement.

Initial drafts of the final rule contained a requirement that the gaming operation must provide the CPA with written assurance regarding compliance by the internal auditor or internal audit department with applicable standards contained within the internal audit sections of the MICS. Comments were received questioning the need for the CPA to receive such written assurance since the external accountant would still be expected to confirm the representation. The Commission concurs with the commenter and has struck the noted requirement from the final rule.

One commenter suggested that any additional procedures performed at the request of the Tribal gaming regulatory authority or management be limited to gaming related transactions or activities. The Commission disagrees with the suggestion. The anticipated scope of testing reflected in the final revisions to Section 542.3(f) is well defined, and no additional clarification is necessary. Furthermore, the Tribal gaming regulatory authority or management should have the discretion to expand the scope of testing as they deem warranted.

Another commenter recommended that the CPA reperformance of internal audit testing criteria, such as the three percent sample selection for the gaming machine and table games departments, include a minimum number of tests to be reperformed or a minimum number of transactions to retest. The Commission disagrees with the recommendation. In determining sample size, the objective is to gain reasonable assurance regarding the true characteristics of the population being tested. The conceptual basis for determining sample size does not change based on the size of the population, assuming consistency is maintained within the population. Considering that absolute assurance is not an expectation, the sample selection criteria contained in the final revision should produce acceptable results.

Revisions to the referenced sections of the MICS are intended to clarify the respective existing regulations. Specifically, the change is to state explicitly that unverified transfers of cash or cash equivalents accountability are prohibited.

Initially, the proposed revision stated that blind drops are prohibited but several commenters noted that the term had rather diverse interpretations. It was recommended that the revision would be more precise to state, “Unverified transfers of cash and/or cash equivalents are prohibited.” The Commission concurs with the recommendation and revised the initial draft accordingly.

Comment was received recommending that the final revision also be added to the relevant standards contained within the MICS drop and count sections. The Commission disagrees with the recommendation. The standards contained within the drop and count sections are sufficiently clear that no additional clarification is needed. The standards are effective in precluding unverified transfers.

Based on the result of compliance audits conducted by the Commission and research performed, it has been determined that the referenced standard is incorrect with respect to its placement within the MICS. The standards were intended to codify the minimum components of the cage/vault accountability. Unfortunately, included within the list of items is gaming machine hopper loads. Generally accepted gaming regulatory standards and common industry practice would dictate that the value of the hoppers be reflected in a general ledger account, not the cage/vault accountability. To correct the error, the Commission is striking the referenced control.

No comments were received concerning the final revision.

In June 2002, a revision was made to the referenced section in which a stated value of 50 dollars was replaced by a non-specified amount that was required to be merely reasonable. The threshold dictates when a complimentary “comp” transaction must be included in a report for review by management. The objective of the report is to facilitate supervisory oversight of the comps process for the purpose of ensuring compliance with the gaming operation's comp policy.

Unfortunately, confusion and conflict have resulted from the 2002 revision. Therefore, the Commission is revising the regulation to require that individual comp transactions equal to or exceeding 100 dollars be included in the report, unless the Tribal gaming regulatory authority determines that the threshold should be a lesser amount.

As initially drafted, the proposed revision did not acknowledge that the Tribal gaming regulatory authorities had the latitude of establishing an amount less than 100 dollars. A commenter recommended that the draft be revised to grant such an option. The Commission has accepted and effectuated the recommendation.

Other comments were received supporting the revision.

The referenced standards represent duplicate controls to identical requirements contained within the respective sections Gaming Machine Bill Acceptor Drop Standards, Sections 542.21(e)(4), 542.31(e)(5), and 542.41(e)(5). Specifically, the standard requires that each bill acceptor canister be posted with a number corresponding to that of the machine from which it was extracted. The subject control pertains to a drop function, as opposed to the count process. Therefore, the Commission is deleting the above subsections.

No comments were received concerning the final revision.

The Commission is deleting the referenced standards, which require a second count of the gaming machine bill acceptor drop by a count team member who did not perform the first count. In justification of the final revision, it is important to note that the Commission has attempted to rely on the advice and experience of the established gaming jurisdictions in defining its minimum internal control regulation. Such a methodology is deemed to be not only efficient but prudent. Generally, the MICS represent a rather simplistic abbreviation of commensurate controls of the established gaming jurisdictions, which has left much room for Tribal gaming regulators to complement. However, consistent with such a concept is the need for the Commission to be cognizant of any standards enacted that are overreaching. In other words, before requiring a control more stringent than the established gaming jurisdictions, the Commission should have a compelling reason for its action. The deletion of the noted standards is founded upon the premise that they are inconsistent with the established gaming jurisdictions and are lacking in a compelling reason justifying a more stringent procedure for Tribal gaming. Unlike the drop originating with table games, meter data should be available to confirm the gaming machine bill acceptor count, which sufficiently mitigates the risk of compromise associated with that process. Based on research performed, it is the belief of the Commission that the double count requirement resulted from a drafting error in June 2002, which originated from the reformatting of the drop and count sections. Therefore, it is the position of the Commission that the standards in question should be struck.

One commenter expressed the position that the second count of the currency is appropriate and should remain in the MICS. The Commission disagrees with the commenter for the reasons previously stated. However, as echoed throughout the MICS and within the preamble, the Tribal gaming regulatory authorities have primary responsibility for the regulation of their respective gaming operation(s) and have the latitude of requiring controls more stringent than those of the federal rule.

Another commenter suggested that the rule should be made conditional such that only when the gaming operation employs an effective on-line accounting system should the second count be foregone. The Commission disagrees, since verification of the drop to the currency in meter reading is required by the MICS, without regard to whether the meter data is collected electronically or manually.

One commenter questioned the consistency of the Commission's action to delete the subject standards with its position regarding the prohibition against unverified transfers of an individual's accountability. The Commission does not recognize an inconsistency. The count team takes possession of the drop proceeds and is responsible for those funds until they are transferred to the cage/vault (buy process). The count team executes a count of the monies and, in conjunction with the transfer of the accountability, the vault or cage supervisory performs another count to verify the amount being conveyed to their accountability. Consequently, no cash inventories are being transferred from one person to another without mutual verification and acceptance.

The Commission added the referenced regulations to the MICS, which represents a simple notification to internal auditors and internal audit departments that the Commission will provide recommended guidelines to aid in satisfaction of the testing requirements contained within the internal audit sections of the MICS. The guidelines do not represent a rule requiring adherence but an aid for internal auditors to take advantage of as they deem appropriate.

No comments were received concerning the final revision.

Prior to June 2002, the referenced regulations required certain dedicated camera coverage over wide area progressive machines with a potential payout of 3 million dollars or more. In conjunction with the revisions of 2002, the standards were revised to require the additional camera coverage over the noted machines if the base amount was more than 1.5 million dollars, irrespective of potential payout.

Based on the experience gained by the Commission, it has been determined that the referenced revision negated the effectiveness of the regulation, which is to require a heightened level of surveillance coverage over wide area progressive devices commensurate with the risk posed to Tribal assets and operational integrity. Such risk is directly related to the size of the potential awards but is mitigated somewhat by the fact that a third party, the wide area progressive vendor, is involved in the transaction.

The final revision is intended to regain the effectiveness of the original regulation, consistent with the industry's regulatory standards. Specifically, the threshold is being lowered to a starting base amount of 1 million dollars or more.

One commenter concurred with the final revision and acknowledged the limited effectiveness of the 1.5 million dollar base threshold. Another commenter recommended that the control be modified to require surveillance to utilize a real time standard for monitoring and recording a video of the activity in question. The Commission enthusiastically supports the position expressed by the commenter, since it is our belief that this critical function should require a surveillance standard employing a sufficient clarity criterion and be observed and recorded at 30 frames or images per second, as applicable. However, the MICS currently defines sufficient clarity as requiring only 20 frames per second. Since we believe that the term “real time” is generally understood to mean at least 30 frames per second, injecting it into the final revision would likely create an ambiguity within the MICS.

One commenter questioned whether the additional cost resulting from the expansion of the standard's applicability is justified. The Commission appreciates the commenter's concern; however, performance of a cost benefit analysis in conjunction with the evaluation of a control can be a challenging exercise. For example, measuring the economic impact of an irregularity that did not occur because it was deterred by an effective internal control system is a highly speculative endeavor. However, a truism of gaming widely accepted by industry professionals is that as the potential reward increases so does the likelihood of compromise. This characteristic of gaming is not unrelated to the final revision. There is much wisdom within a process that learns from the experience of our peers who are more seasoned in the regulation of gaming. The final revision is founded upon this concept. Therefore, considering that the lowered threshold will only bring the applicability of the control closer to that of the established gaming jurisdictions, the Commission believes the commenter's concern does not justify reconsideration of the final revision.

The Commission certifies that the final rule revisions to the Minimum Internal Control Standards contained within this regulation will not have a significant economic impact on small entities, 5 U.S.C. 605(b). The factual basis for this certification is as follows:

Of the 367 Indian gaming operations across the country, approximately 115 of the operations have annual gross revenues of less than 5 million dollars. Of these, approximately 59 operations have gross revenues of under 1 million dollars. Since the final revisions will not apply to gaming operations with gross revenues under 1 million dollars, only 59 small operations may be affected. While this is a substantial number, the Commission believes that the final revisions will not have a significant economic impact on these operations for several reasons.

Even before implementation of the original MICS, Tribes had internal controls because they are essential to gaming operations in order to protect assets. The costs involved in implementing these controls are part of the regular business costs incurred by such an operation. The Commission believes that many Indian gaming operation internal control standards are more stringent than those contained in these regulations. Further, the final rule revisions are technical and minor in nature.

Under the final revisions, small gaming operations grossing under 1 million dollars are exempt from MICS compliance. Tier A facilities (those with gross revenues between 1 and 5 million dollars) are subject to the yearly requirement that independent certified public accountant testing occur. The purpose of this testing is to measure the gaming operation's compliance with the Tribe's internal control standards. The cost of compliance with this requirement for small gaming operation is estimated at between 3,000 and 5,000 dollars. The cost of this report is minimal and does not create a significant economic effect on gaming operations. What little impact exists is further offset because other regulations require yearly independent financial audits that can be conducted at the same time. For these reasons, the Commission has concluded that the final rule revisions will not have a significant economic impact on those small entities subject to the rule.

These final revisions do not constitute a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. The revisions will not have an annual effect on the economy of 100 million dollars or more. The revisions also will not cause a major increase in costs or prices for consumers, individual industries, federal, state or local government agencies or geographic regions and does not have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of U.S. based enterprises to compete with foreign-based enterprises.

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

The Commission has, however, determined that the final rule revisions may have a unique effect on Tribal governments, as they apply exclusively to Tribal governments, whenever they undertake the ownership, operation, regulation, or licensing of gaming facilities on Indian lands, as defined by the Indian Gaming Regulatory Act. Thus, in accordance with Section 203 of the Unfunded Mandates Reform Act, the Commission undertook several actions to provide Tribal governments with adequate notice, opportunity for “meaningful” consultation, input, and shared information, advice, and education regarding compliance. These actions included the formation of a Tribal Advisory Committee and the request for input from Tribal leaders.

Section 204(b) of the Unfunded Mandates Reform Act exempts from the Federal Advisory Committee Act (5 U.S.C. App.) meetings with Tribal elected officials (or their designees) for the purpose of exchanging views, information, and advice concerning the implementation of intergovernmental responsibilities or administration. In selecting Committee members, consideration was placed on the applicant's experience in this area, as well as the size of the Tribe the nominee represented, geographic location of the gaming operation, and the size and type of gaming conducted. The Commission attempted to assemble a Committee that incorporates diversity and is representative of Tribal gaming interests. The Commission met with the Advisory Committee and discussed the public comments that are received as a result of the publication of the proposed MICS rule revisions and considered all Tribal and public comments and Committee recommendations before formulating the final rule revisions. The Commission also plans to continue its policy of providing necessary technical assistance, information, and support to enable Tribes to implement and comply with the MICS as revised. The Commission also provided the proposed revisions to Tribal leaders for comment prior to publication of this final rule and considered these comments in formulating the final rule.

In accordance with Executive Order 12630, the Commission has determined that the following final MICS rule revisions do not have significant takings implications. A takings implication assessment is not required.

In accordance with Executive Order 12988, the Office of General Counsel has determined that the following final MICS rule revisions do not unduly burden the judicial system and meet the requirements of sections 3(a) and 3(b)(2) of the Order.

The following final MICS rule revisions require information collection under the Paperwork Reduction Act 44 U.S.C. 3501 et seq. , as did the rule it revises. There is no change to the paperwork requirements created by these final revisions. The Commission's OMB Control Number for this regulation is 3141-0009.

The Commission has determined that the following final MICS rule revisions do not constitute a major Federal action significantly affecting the quality of the human environment and that no detailed statement is required pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ).

The temporary regulations (TD 9205) that is the subject of this correction are under section 41(f).

As published, the temporary regulations (TD 9205) contain errors that may prove to be misleading and are in need of clarification.

This document contains amendments to 26 CFR parts 1 and 54 under sections 411(d)(6) and 4980F of the Internal Revenue Code (Code). This Treasury Decision amends § 1.411(d)3 of the Treasury regulations to reflect changes to section 411(d)(6) made by the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16 (155 Stat. 38) (EGTRRA). In addition, this Treasury Decision includes rules relating to changes to section 411(d)(6) made by the Retirement Equity Act of 1984, Public Law 98-397 (98 Stat. 1426) (REA) and makes conforming amendments to § 1.411(d)-4. This Treasury Decision also amends § 54.4980F-1(b), relating to the notice requirement for certain plan amendments that eliminate or significantly reduce early retirement benefits or retirement-type subsidies.

Section 401(a)(7) provides that a trust does not constitute a qualified trust unless its related plan satisfies the requirements of section 411 (relating to minimum vesting standards). Section 411(d)(6)(A) provides that a plan is treated as not satisfying the requirements of section 411 if the accrued benefit of a participant is decreased by an amendment of the plan, other than an amendment described in section 412(c)(8) of the Code or section 4281 of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.

Section 411(a)(7)(A) defines the term accrued benefit. For a defined contribution plan, a participant's accrued benefit is the balance of the participant's account. For a defined benefit plan, a participant's accrued benefit is the participant's benefit under the terms of the plan expressed in the form of an annual benefit commencing at normal retirement age. Under section 411(c)(3), if a participant's accrued benefit under a defined benefit plan is to be determined as an amount other than an annual benefit commencing at normal retirement age, the participant's accrued benefit is the actuarial equivalent of such benefit.

Section 301(a) of REA amended Code section 411(d)(6) to add subparagraph (B), which provides that a plan amendment that has the effect of eliminating or reducing an early retirement benefit or a retirement-type subsidy, or eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment is treated as impermissibly reducing accrued benefits. For a retirement-type subsidy, this protection applies only with respect to an employee who satisfies the preamendment conditions for the subsidy (either before or after the amendment). Section 411(d)(6)(B) also authorizes the Secretary of the Treasury to provide, through regulations, that section 411(d)(6)(B) does not apply to any plan amendment that eliminates optional forms of benefit (other than a plan amendment that has the effect of eliminating or reducing an early retirement benefit or a retirement-type subsidy).

On July 11, 1988, final regulations (TD 8212) under section 411(d)(6) were published in the Federal Register (53 FR 26050) (the 1988 regulations). Under those regulations, section 411(d)(6) protects certain benefits, to the extent they have accrued, so that such benefits cannot be reduced or eliminated by plan amendment, except to the extent permitted by regulations (see § 1.411(d)-4, Q&A-1(a)). Section 1.411(d)-4 specifies circumstances under which a plan is permitted to be amended to reduce or eliminate an optional form of benefit.

Section 645(b)(1) of EGTRRA amended section 411(d)(6)(B) of the Code to direct the Secretary to issue regulations providing that the requirements of section 411(d)(6)(B) do not apply to any amendment that reduces or eliminates early retirement benefits or retirement-type subsidies that create significant burdens or complexities for the plan and plan participants unless such amendment adversely affects the rights of any participant in a more than de minimis manner. As amended by EGTRRA, section 4980F of the Code and section 204(h) of ERISA each require that a plan administrator give notice of a plan amendment to affected plan participants and beneficiaries when the plan amendment provides for a significant reduction in the rate of future benefit accrual or the elimination or significant reduction of an early retirement benefit or a retirement-type subsidy.

Section 204(g) of ERISA contains parallel rules to Code section 411(d)(6), including a similar directive to the Secretary of the Treasury to issue regulations providing that section 204(g) does not apply to any amendment that reduces or eliminates early retirement benefits or retirement-type subsidies that create significant burdens or complexities for the plan and plan participants unless such amendment adversely affects the rights of any participant in a more than de minimis manner. Under section 101 of Reorganization Plan No. 4 of 1978 (43 FR 47713) and section 204(g) of ERISA, the Secretary of the Treasury has interpretive jurisdiction over the subject matter addressed in these regulations for purposes of ERISA, as well as the Code. Thus, these final regulations issued under sections 411(d)(6) of the Code apply as well for purposes of section 204(g) of ERISA.

On March 24, 2004, proposed regulations (REG-128309-03) under sections 411(d)(6) and 4980F of the Code were published in the Federal Register (69 FR 13769). On June 24, 2004, the IRS held a public hearing on the proposed regulations. Written comments responding to the notice of proposed rulemaking were also received. After consideration of all the comments, the proposed regulations are adopted, as amended by this Treasury Decision. The revisions are discussed below.

These regulations provide 2 permitted methods for eliminating or reducing section 411(d)(6)(B) protected benefits under the EGTRRA directive: elimination of redundant optional forms of benefit and elimination of noncore optional forms of benefits where core options are offered. Either of these 2 alternative methods can be applied with respect to any optional form of benefit. A plan sponsor may determine that one method of elimination works for some plan participants or some optional forms of benefit, but not for the remaining plan participants or other optional forms of benefit. However, a plan must satisfy all of the requirements of the applicable method with respect to any optional form of benefit being eliminated.

This Treasury Decision completely replaces the provisions in former § 1.411(d)-3. However, the rules in former § 1.411(d)-3 generally have been carried over to this Treasury Decision, except to the extent needed to reflect statutory changes (such as the elimination of class-year vesting and the enactment of section 411(d)(6)(B)).

These final regulations take into account and respond to judicial decisions interpreting section 411(d)(6) (or its parallel provision at section 204(g) of ERISA). 1 For example, the regulations provide that section 411(d)(6) protection applies to a participant's entire accrued benefit as of the applicable amendment date, without regard to whether the entire accrued benefit was accrued before a participant's severance from employment, or whether some portion of the accrued benefit was the result of an increase pursuant to a plan amendment adopted after the participant's severance from employment. 2

The regulations generally retain the rules from former § 1.411(d)-3. Thus, for purposes of determining whether or not any participant's accrued benefit is decreased, all plan amendments affecting, directly or indirectly, the computation of accrued benefits are taken into account and, in determining whether a reduction has occurred, all plan amendments with the same applicable amendment date (the later of the adoption date or the effective date of the amendment) are treated as one amendment. The regulations also provide that these rules apply to section 411(d)(6)(B) protected benefits. Thus, for example, if there are 2 amendments with the same applicable amendment date, one of which increases accrued benefits and the other of which decreases the early retirement factors that are used to determine the early retirement annuity, the 2 amendments are treated as one amendment and only violate section 411(d)(6) if, after the 2 amendments, the net dollar amount of any early retirement annuity, with respect to the accrued benefit of any participant as of the applicable amendment date, is lower on that applicable amendment date than it would have been without the 2 amendments. 3

The legislative history of REA provides that:

These final regulations reflect the rules in the 1988 regulations (see § 1.411(d)-4, Q&A-1(d)) that ancillary benefits and other rights or features are not protected under section 411(d)(6). In addition, taking the REA legislative history into account, these regulations define the terms early retirement benefit, retirement-type benefit, and retirement-type subsidy. These definitions differ in several respects from the proposed regulations.

The definition of the term ancillary benefit in these regulations reflects changes from the proposed regulations regarding death benefits. Because the account balance is the accrued benefit in a defined contribution plan, the payment of the account balance upon the death of a participant is the payment of the accrued benefit rather than an ancillary benefit. Therefore, in contrast to the proposed regulations, the final regulations do not categorize a right to a death benefit under a defined contribution plan as an ancillary benefit, and this right is protected under section 411(d)(6). For a defined benefit plan, these regulations provide that a death benefit that is not part of an optional form of benefit is an ancillary benefit and, therefore, is not protected under section 411(d)(6), even if paid after retirement. The regulations also clarify when a death benefit under a defined benefit plan is part of an optional form of benefit. The definition of optional form of benefit is defined in § 1.411(d)-3(g)(6)(ii) of these final regulations and in § 1.411(d)-4, Q&A-1(b)(1), which has been revised by this Treasury Decision to coordinate with the definition of optional form of benefit in these final regulations.

The regulations also include changes to the definitions of ancillary benefit and retirement-type benefit , relating to benefits that are not permitted to be in a qualified plan. These changes are relevant for purposes of applying section 204(g) of ERISA (the parallel rule to section 411(d)(6)), which applies to both qualified and nonqualified plans. The final regulations provide that, in addition to social security supplements, disability benefits, life insurance benefits, medical benefits under section 401(h), and certain death benefits, the only other ancillary benefits are plant shutdown benefits and other similar benefits that do not continue past retirement age, do not affect the payment of the accrued benefit, and are permitted to be in a qualified pension plan. These regulations also provide that a retirement-type benefit is either the payment of a distribution alternative with respect to an accrued benefit or the payment of any other benefit under a defined benefit plan (including a QSUPP as defined in § 1.401(a)(4)-12) that is permitted to be in a qualified pension plan, continues after retirement, and is not an ancillary benefit.

These regulations include a number of clarifications regarding section 411(d)(6)(B) protected benefits that were included in the proposed regulations with minor modifications. The regulations clarify that if, after a plan amendment, there is another optional form of benefit available to a participant under the plan that is of inherently equal or greater value, the plan amendment is not treated as eliminating an optional form of benefit, or eliminating or reducing an early retirement benefit or a retirement-type subsidy. For example, a change in the method of calculating a joint and survivor annuity from using a 90% adjustment factor on account of the survivorship payment at particular ages for a participant and a spouse to using a 91% adjustment factor at the same ages is treated as not eliminating an optional form of benefit.

Under the proposed regulations, a plan amendment would violate the requirements of section 411(d)(6) if it is one of a series of plan amendments made at different times that, when taken together, have the effect of reducing or eliminating a section 411(d)(6) protected benefit in a manner that would be prohibited under section 411(d)(6) if accomplished through a single amendment. The 1988 regulations contained a similar rule under which a plan amendment that modified an optional form of benefit with respect to benefits already accrued was evaluated in light of previous amendments ( see § 1.411(d)-4, Q&A-2(c), as in effect prior to amendment by these regulations).

Commentators raised concerns about the multiple amendment rule in the proposed regulations, including its complexity and the uncertainty as to when the rule would apply. In response to these comments, this multiple amendment rule has been revised to add an objective rule that generally only combines plan amendments adopted within a 3-year period. The final regulations also retain an application of the multiple amendment rule from the proposed regulations relating to restrictions against creating burdens or complexities. Under this rule, if a plan is amended to add a retirement-type subsidy in order to eliminate another retirement-type subsidy within 3 years, the plan amendment eliminating the retirement-type subsidy will not be treated as reducing or eliminating burdens and complexities for the plan and its participants, even if the elimination of the subsidy would not adversely affect the rights of any plan participant in a more than de minimis manner.

These final regulations also make a conforming change to § 1.411(d)-4, Q&A-2(c), by replacing the serial amendment rule under those regulations with a revised version of the multiple amendment rule. These regulations do not modify the rule in § 1.411(d)-4, Q&A-1(c)(1), which provides that if an employer establishes a pattern of repeated plan amendments providing for similar benefits in similar situations for substantially consecutive, limited periods of time, then those similar benefits will be treated as provided under the terms of the plan, without regard to the limited period of time, to the extent necessary to carry out the purposes of sections 411(d)(6) and, where applicable, the definitely determinable requirement of section 401(a), including section 401(a)(25).

Commentators suggested that the final regulations clarify that a plan is permitted under section 411(d)(6) to eliminate an optional form of benefit that is inconsistent with the plan qualification requirements of section 401(a) ( e.g. , the requirements of section 401(a)(9)). In general, section 411(d)(6) does not permit the elimination or reduction of a section 411(d)(6) protected benefit solely because that benefit violates the plan qualification requirements. However, in the past, the IRS has exercised its authority to issue guidance that, in certain situations, permit certain plan amendments that eliminate or reduce certain optional forms of benefit that violate the plan qualification requirements. For example, § 1.401(a)(9)-8, Q&A-12, provides that a plan will not fail to satisfy section 411(d)(6) merely because the plan is amended to eliminate the availability of an optional form of benefit to the extent that the optional form does not satisfy section 401(a)(9). 5

These regulations generally retain the rule from the proposed regulations that a plan is permitted to be amended to eliminate an optional form of benefit for a participant with respect to benefits accrued before the applicable amendment date if the optional form of benefit is redundant with respect to a retained optional form of benefit and certain conditions are satisfied. An optional form of benefit is considered redundant with respect to a retained optional form of benefit if the retained optional form of benefit is in the same family of optional forms of benefit as the optional form of benefit being eliminated and the participant's rights with respect to the retained optional form of benefit are not subject to materially greater restrictions than those that applied to the optional form of benefit being eliminated.

These regulations also contain new terminology to facilitate the application of certain rules. Various rules in these final regulations use the term annuity commencement date instead of the term annuity starting date , thereby accommodating the elimination of an optional form of benefit that includes a retroactive annuity starting date. The final regulations also define the term generalized optional form , which means a group of optional forms of benefit that are identical except for differences due to the actuarial factors that are used to determine the amount of the distributions under those optional forms of benefit and the annuity starting dates. The concept of a generalized optional form is used in several places in these regulations, including the redundancy rule and the rules concerning burdensome and de minimis benefits.

Under the proposed regulations, among the conditions for eliminating a section 411(d)(6)(B) protected benefit under the redundancy rule is that the plan amendment not apply to an optional form of benefit with an annuity starting date that is earlier than 90 days after the date the amendment is adopted. This 90-day waiting period is based on a rule relating to the timing for the written explanation of a qualified joint and survivor annuity under section 417(a)(3). Under that rule, the explanation cannot be provided more than 90 days before the annuity starting date. See § 1.417(e)-1(b)(3)(ii). A commentator suggested that the regulations be revised to increase the waiting period before the elimination of a redundant optional form of benefit from 90 days after the amendment is adopted to 180 days after the amendment is adopted. The commentator reasoned that this increase would give participants more time to adjust to the elimination of the optional form of benefit and, thus, participants would have more time to select from among the preamendment optional forms of benefit. The commentator also noted that proposed legislation had been introduced that would increase the number of days before the annuity starting date that a QJSA explanation can be provided (the maximum QJSA explanation period) from 90 days to 180 days.

In light of this comment, the final regulations explicitly link the waiting period before the elimination of a redundant optional form of benefit with the maximum QJSA explanation period, which is currently a 90-day period. Thus, these regulations provide that, for purposes of the redundancy rule, a plan amendment cannot be applicable with respect to an optional form of benefit with an annuity commencement date for which a written explanation relating to a QJSA would have satisfied the timing requirements of section 417(a)(3) had it been provided on or before the date that the amendment is adopted. This ensures that no participant will receive a QJSA explanation describing an optional form of benefit which could be eliminated before the election has been made. The waiting period before the elimination of a redundant optional form of benefit under these final regulations would change automatically if, at any future date, the maximum QJSA explanation period were to be altered.

The final regulations retain the rule from the proposed regulations under which a plan is permitted to be amended to eliminate an optional form of benefit for plan participants with respect to benefits accrued before the applicable amendment date if, after the amendment, the plan offers a designated set of core options to plan participants with respect to benefits accrued both before and after the amendment. The core options are defined as a straight life annuity, a 75% joint and contingent annuity, a 10-year term certain and life annuity, and the most valuable option for a participant with a short life expectancy. As under the proposed regulations, the final regulations do not permit a plan amendment to apply to optional forms of benefit with annuity commencement dates that are earlier than 4 years after the date the amendment is adopted. In addition, the final regulations retain the rule that a plan may not be amended to eliminate an optional form of benefit that includes a single-sum distribution that applies with respect to at least 25% of a participant's accrued benefit as of the date the optional form of benefit is eliminated.

Several commentators suggested that the 75% joint and contingent annuity core option be replaced with a 50% joint and contingent annuity core option. One commentator argued that if the 50% joint and contingent annuity option is not available to participants, the higher actuarial charge associated with the 75% joint and contingent annuity option might discourage participants from electing any joint and contingent annuity option. Other commentators pointed out that § 1.411(d)-4, Q&A-2(b)(2)(ii), allows a plan that provides a range of 3 or more actuarially equivalent joint and survivor annuity options to be amended to eliminate any of such options, other than the options with the largest and smallest optional survivor payment percentages (the bookends rule) and argued that the 75% joint and contingent annuity core option rule would require plans to add back the 75% joint and contingent annuity option that was eliminated under the bookends rule. In light of these comments and to accomodate the bookends rule, the final regulations retain the 75% joint and contingent annuity as a core option, but provide a special rule that a plan is permitted to treat both the 50% and 100% joint and contingent annuity options as core options for purposes of the core options rule (in lieu of offering a 75% joint and contingent annuity) if the plan otherwise satisfies the requirements of the core options rule.

As stated above, these regulations retain in the list of core options the most valuable option for a participant with a short life expectancy. This core option is defined as the optional form of benefit that is reasonably expected to result in payments that have the largest actuarial present value in the case of a participant who dies shortly after the annuity starting date. Like the proposed regulations, these regulations provide a safe harbor method for determining which optional form of benefit under the plan is the most valuable option for a participant with a short life expectancy. Under this safe harbor method, a plan is permitted to treat a single-sum distribution option with an actuarial present value that is not less than the actuarial present value of any optional form of benefit being eliminated as the most valuable option for a participant with a short life expectancy. If a plan does not offer such a single-sum distribution option, the plan is permitted to treat a joint and contingent annuity as the most valuable option for a participant with a short life expectancy if the continuation percentage under the amendment is at least 75% and is at least as great as the highest continuation percentage available before the amendment. In the event a plan has neither a single-sum distribution option nor a joint and contingent annuity with a continuation percentage of at least 75%, the plan is permitted to treat a term certain and life annuity with a term certain period of at least 15 years as the most valuable option for a participant with a short life expectancy.

Similar rules were in the proposed regulations, and a commentator argued that the rules would overprotect single-sum distribution options by providing 2 levels of protection: first, by not treating an amendment as satisfying the core options rule if it eliminates an optional form of benefit that includes a single-sum distribution that applies with respect to at least 25% of the participant's accrued benefit as of the date the optional form of benefit is eliminated; and, second, by providing that a plan is permitted to treat a single-sum distribution option with an actuarial present value that is not less than the actuarial present value of any optional form of benefit eliminated by the plan amendment as the most valuable option for a participant with a short life expectancy. This comment is based on the assumption that a single-sum distribution option will always be the most valuable option for a participant with a short life expectancy. However, as illustrated in an example in these regulations, a single-sum option is not always the most valuable option for a participant with a short life expectancy, e.g. , where the single-sum distribution does not take into account an early retirement subsidy available in another optional form of benefit (see § 1.411(d)-3(h), Example 4 ). Accordingly, the final regulations retain the separate protection for single sum-distributions and the most valuable option for a participant with a short life expectancy. However, the final regulations clarify that the safe harbor hierarchy method for determining the most valuable option for a participant with a short life expectancy is available only if the single-sum distribution, joint and contingent annuity, or term certain and life annuity optional forms satisfy the conditions set forth in that rule at all relevant ages. Thus, when the safe harbor hierarchy rule applies, the most valuable option for a participant with a short life expectancy will be the generalized optional form for all participants.

These regulations also retain the requirement in the proposed regulations under which an amendment to eliminate an optional form of benefit under the core options rule cannot apply to an optional form of benefit with an annuity commencement date that is earlier than 4 years after the date the amendment is adopted. Several commentators argued that the waiting period before elimination of a noncore optional form of benefit be shortened, with one commentator suggesting 90 days, similar to the waiting period before the elimination of a redundant optional form of benefit. Other commentators argued that the waiting period before the elimination of a noncore optional form of benefit be increased to 5 years, similar to the 5-year cliff vesting rule. However, no commentator provided evidence that participants evaluate benefit choices over a shorter or longer period. The Treasury Department and the IRS believe that the 4-year waiting period before elimination of a noncore optional form of benefit strikes the right balance between protecting participants' expectations about the various benefit choices in their plans in coordination with decisions relating to retirement planning, while reducing burdens on plans. Thus, the 4-year waiting period before the elimination of a noncore optional form of benefit has been retained in these regulations.

As stated earlier under the heading Multiple amendment rule , the final regulations provide that a plan amendment violates section 411(d)(6) if it is one of a series of plan amendments that, when taken together, have the effect of reducing or eliminating section 411(d)(6) protected benefits in a manner that would violate section 411(d)(6) if accomplished through a single amendment. These final regulations add a rule that, for purposes of the multiple amendment rule, only plan amendments made within a 3-year period are generally taken into account. Notwithstanding this 3-year rule, the final regulations also add a rule that if a plan is amended to eliminate an optional form of benefit using the core option rule, the employer must wait 3 years after the first annuity commencement date for which the optional form of benefit is no longer available before reducing or eliminating any core options offered under the plan.

The final regulations retain from the proposed regulations the additional requirements that a plan amendment must satisfy if the retained optional form of benefit or each core option offered under the plan does not have the same annuity starting date or has a lower actuarial present value than the optional form of benefit being eliminated. In such a case, the plan amendment is only permitted to reduce or eliminate a section 411(d)(6)(B) protected benefit that creates significant burdens or complexities for the plan and its participants, but only if elimination does not adversely affect the rights of any participant in more than a de minimis manner.

The regulations generally retain the rule in the proposed regulations which provides that a reduction in actuarial present value is of no more than a de minimis amount if the reduction does not exceed the greater of 2% of the present value of the retirement-type subsidy under the eliminated optional form of benefit (if any) prior to the amendment or 1% of the participant's compensation for the prior plan year (as defined in section 415(c)(3)). Several commentators offered suggestions to change this de minimis value test. Some commentators suggested that the 2% threshold be increased in order to make the ability to eliminate the subsidy more meaningful. The commentators suggested an increase up to 5% of the retirement-type subsidy. In addition, other commentators argued that 2% threshold should be changed from a percentage of the retirement-type subsidy to a percentage of the eliminated optional form of benefit. Under this suggestion, the margin of difference would be permitted to be significantly greater. Other commentators argued that the 2% threshold should be lowered in order to reflect Congressional intent in the examples illustrating de minimis reductions in the EGTRRA conference report. 6 These suggestions ranged from 1.5% to 1% of the retirement-type subsidy. These commentators also recommended that the 1% of compensation de minimis threshold be reduced. In addition, some commentators suggested that a plan amendment eliminating a retirement-type subsidy should be required to satisfy both tests, instead of the 2 tests being alternatives.

These final regulations do not adopt these suggestions. The examples in the EGTRRA conference report are explicitly expressed as examples, not rules. The percentage thresholds in the de minimis value test are rounded percentages based on the dollar amounts in the EGTRRA conference report, and, thus, they accurately reflect the intent of EGTRRA and the legislative history. Accordingly, the final regulations retain the percentage thresholds from the proposed regulations.

Several commentators also noted that the 1% of compensation test would have no application to terminated vested participants because terminated participants frequently have no current or prior year compensation from the employer. Other commentators argued that the 1% of compensation test does not accurately reflect all employment situations, such as those participants who may take a leave of absence or begin a reduced work schedule. In light of these comments, the regulations provide that the 1% of compensation test is applied using the greater of the participant's compensation (within the meaning of section 415(c)(3)) for the prior plan year or the participant's average compensation for his or her high 3 years (within the meaning of section 415(b)(1)(B) and (b)(3)).

These regulations retain the rule in the proposed regulations under which a facts and circumstances analysis applies to determine whether a plan amendment eliminates section 411(d)(6)(B) protected benefits that create significant burdens and complexities for a plan and its participants. Under this rule, for a plan amendment eliminating a retirement-type subsidy or changing actuarial factors, the facts and circumstances to consider include the number of different retirement-type subsidies and other actuarial factors available under the plan, whether the terms and conditions applicable to the plan's retirement-type subsidies are difficult to summarize in a manner that is concise and readily understandable to the average plan participant, whether those different retirement-type subsidies and other actuarial factors were added to the plan as a result of mergers, acquisitions, or other business transactions, and whether the effect of the plan amendment is to reduce the number of categories of retirement-type subsidies or other actuarial factors.

Several commentators stated that this facts and circumstances standard is vague and subjective. The commentators suggested that the standard should be revised to provide for more objective criteria to determine the circumstances under which a plan amendment is permitted to eliminate a section 411(d)(6)(B) protected benefit that creates significant burdens or complexities for a plan and its participants. The commentators also suggested that the final regulations include examples of the standard.

In light of these comments, the final regulations add 2 new factors to the facts and circumstances analysis for retirement-type subsidies and actuarial factors. These new factors are whether the plan amendment eliminates one or more generalized optional forms and whether the plan amendment replaces a complex optional form of benefit with a simpler form. An example has been added to the final regulations to illustrate this facts and circumstances analysis.

Like the proposed regulations, the final regulations provide a rebuttable presumption for plan amendments that eliminate a set of actuarial factors under the plan that, considered in the aggregate, are burdensome or complex. If this is the case, then the elimination of any set of actuarial factors is presumed to eliminate section 411(d)(6)(B) protected benefits that create significant burdens or complexities for the plan and its participants. However, the regulations also provide that if the effect of a plan amendment with respect to an optional form of benefit is merely to substitute one set of actuarial factors for another set of actuarial factors, without any reduction in the number of different actuarial factors, the plan amendment would not be permitted. Commentators stated that this no substitution rule in the proposed regulations would offer no relief to plans that wish merely to update their plans with actuarial assumptions that reflect more recent experience. Another commentator similarly suggested that the regulations should permit a plan to update its mortality tables. In response to these comments, the final regulations provide an exception to the no substitution rule for situations in which a plan is changing actuarial factors for determining optional forms of benefit with new actuarial factors that are based on more accurate mortality experience or more appropriate interest rates ( e.g., interest rates that reflect more recent rates of returns).

In Notice 2003-10 (2003-1 C.B. 369), the Treasury Department and the IRS announced that regulations would be proposed that would provide guidance on benefits that are treated as early retirement benefits and retirement-type subsidies for purposes of section 411(d)(6)(B). Notice 2003-10 also provided that the regulations will be prospective and the IRS will not treat a plan as failing to satisfy the requirements of section 401 merely because of a plan amendment that eliminates or reduces an early retirement benefit or a retirement-type subsidy that is conditioned on the occurrence of an unpredictable contingent event (within the meaning of section 412(l)) if the amendment is adopted and effective prior to the occurrence of the contingent event and prior to the publication of the final regulations in the Federal Register .

These final regulations generally retain the rule in the proposed regulations which provided that benefits that are contingent on the occurrence of certain events, such as a plant shutdown or involuntary separation, and that continue after retirement are retirement-type subsidies that are protected under section 411(d)(6)(B), both before and after the occurrence of the contingency. 7 However, as noted above under the heading Definitions of section 411(d)(6) protected benefits , this rule is limited to benefits under a defined benefit plan that are permitted to be in a qualified plan. This rule applies to amendments adopted after December 31, 2005. For an amendment adopted before January 1, 2006, the IRS will not treat a plan as failing to be tax qualified under section 401(a) merely because the plan amendment eliminates or reduces an early retirement benefit or a retirement-type subsidy that is conditioned on the occurrence of an unpredictable contingent event (within the meaning of section 412(l)) if the amendment is adopted and effective prior to the occurrence of the contingent event.

Since the issuance of the proposed regulations on March 24, 2004, the Supreme Court issued its opinion in Central Laborers' Pension Fund v. Heinz , 541 U.S. 749 (June 7, 2004). This case addressed an issue that was reserved in the proposed regulations, pending the final decision in Central Laborers' , namely the interaction of the vesting rules in section 411(a) with the anti-cutback rules in section 411(d)(6). This topic is reserved in these final regulations and addressed in proposed regulations (REG-156518-04) that are being published elsewhere in this issue of the Federal Register .

Comments were made prior to the issuance of the proposed regulations requesting relief from section 411(d)(6) to enable plans to eliminate optional forms of benefit that participants rarely use. The preamble to the proposed regulations noted the difficulty in applying a utilization standard for plans where there are few retirements. However, comments on the proposed regulations asked the Treasury Department and the IRS to consider adding a utilization test to the regulations as an acceptable method of eliminating optional forms of benefit, early retirement benefits, and retirement-type subsidies that are rarely used. The commentators argued that rarely used optional forms create a burden both for plans and their participants and that utilization of an optional form of benefit is a good measure of a benefit's value to participants in a plan. In light of these comments, the Treasury Department and IRS are proposing a utilization standard, which is included in proposed regulations (REG-156518-04) being published elsewhere in this issue of the Federal Register . Accordingly, these final regulations provide a reserved paragraph for such a utilization test.

These final regulations apply to amendments adopted and effective after August 12, 2005. However, there is a special effective date for certain plan amendments as described above (under the heading Contingent Event Benefits ). Plan amendments adopted before August 12, 2005 are to be evaluated in light of the applicable authorities without regard to these regulations. No implication is intended concerning whether or not a rule adopted prospectively in these regulations is applicable law before the effective date in these regulations.

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 has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. In addition, because no collection of information is imposed on small entities, the provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply, and therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Small Business Administration for comment on its impact on small business.

The principal author of these regulations is Pamela R. Kinard of the Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities), Internal Revenue Service. However, personnel from other offices of the Internal Revenue Service and Treasury Department participated in their development.

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

This final rule is issued in accordance with Section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and 44 CFR Part 67.

The Federal Emergency Management Agency has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR Part 60.

Interested lessees and owners of real property are encouraged to review the proof Flood Insurance Study and FIRM available at the address cited below for each community.

The BFEs and modified BFEs are made final in the communities listed below. Elevations at selected locations in each community are shown.

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

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

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

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

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

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

This final rule is issued in accordance with Section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and 44 CFR Part 67.

The Federal Emergency Management Agency has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR Part 60.

Interested lessees and owners of real property are encouraged to review the proof Flood Insurance Study and FIRM available at the address cited below for each community.

The BFEs and modified BFEs are made final in the communities listed below. Elevations at selected locations in each community are shown.

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

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

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

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

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

Federal Motor Vehicle Safety Standard (FMVSS) No. 217, Bus emergency exits and window retention and release, (49 CFR 571.217), specifies requirements for the retention of windows other than windshields in buses, and requirements for operating forces, opening dimensions, and markings for bus emergency exits. The purpose of FMVSS No. 217 is to minimize the likelihood of occupants being thrown from the bus in a crash and to provide a means of readily accessible emergency egress.

On April 19, 2002 (67 FR 19343)(DMS Docket No. NHTSA-99-5157), NHTSA published a final rule amending FMVSS No. 217 to reduce the likelihood that wheelchair securement anchorages  1 would be installed such that a wheelchair secured thereto would block access to emergency exit doors. For a side emergency exit door, the final rule restricted these anchorages from being placed in an area bounded by transverse vertical planes 305 mm (12 inches) forward and rearward of the center of the door aisle and a longitudinal vertical plane through the longitudinal centerline of the school bus.

For a rear emergency exit door, the final rule restricted the anchorages from being placed in an area bounded by:

(a) Longitudinal vertical planes tangent to the left and right sides of the door opening;

(b) A horizontal plane 1,145 mm (45 inches) above the bus floor; and

(c) A transverse vertical plane that is either:

(1) 305 mm (12 inches) forward of the bottom edge of the door opening (for school buses with a gross vehicle weight rating (GVWR) over 4,536 kg) (over 10,000 lb), or

(2) 150 mm (6 inches) forward of the bottom edge of the door opening within the bus occupant space (for school buses with a GVWR of 4,536 kg or less)(10,000 lb or less).

The final rule also provided that in school buses with one or more wheelchair securement anchorages, emergency exit doors and emergency exit windows must bear a label stating, “DO NOT BLOCK”. The agency believed that the label was needed to help ensure that access to these doors and exits is not blocked with wheelchairs or other items, such as book bags, knapsacks, sports equipment or band equipment.

The April 19, 2002 final rule specified an effective date of April 21, 2003 for the amendments. Optional early compliance with the final rule was permitted. By way of Federal Register documents published April 22, 2003 (68 FR 19752) and March 12, 2004 (69 FR 11815), NHTSA delayed the effective date to April 21, 2006.

NHTSA received petitions for reconsideration of the April 19, 2002 final rule from three school bus manufacturers: Thomas Built Buses; American Transportation Corporation (now known as IC Corporation); and Blue Bird Body Company. The petitioners requested reconsideration of the final rule's use of transverse vertical and horizontal planes to define the area around the side and rear emergency exit doors where wheelchair anchorages may not be located. All three petitioners stated that the area should instead be defined using “the rectangular parallelepiped fixture” described in S5.4.2.1 of the standard.

The petitioners also asked NHTSA to reconsider the “DO NOT BLOCK” warning label. They requested that the “DO NOT BLOCK” warning label be required for only emergency exit doors, and not emergency exit windows.

Both of these issues are discussed below.

The petitioners disagreed with the agency's decision in the final rule to use transverse vertical and horizontal planes to define the area around the rear emergency exit door where wheelchair anchorages may not be located (S5.4.3.1(b) and (c)). All three petitioners stated that the area should instead be defined using “the rectangular parallelepiped fixture” described in S5.4.2.1(a)(1) of the standard. Blue Bird stated that the parallelepiped is 24 inches in width, whereas the rear emergency door opening on many (if not all) school buses exceeds 24 inches. 2 The petitioners believed that, by requiring that wheelchair securement anchorages must not be located such that any portion of the anchorage is within the space bounded by longitudinal vertical planes tangent to the left and right sides of the door opening, the final rule penalizes manufacturers that provide larger than required emergency door openings ( i.e. , by limiting to a greater extent the placement of wheelchair securement anchorages). AmTran stated that FMVSS No. 217 allows manufacturers to position the rectangular parallelepiped anywhere within the rear emergency exit door opening, and that the final rule should thus specify that the clearance area can be from either the left or right side of the emergency door. Petitioners also stated that the wording of S5.4.3.1(b) and (c) is not in agreement with the diagram in Figure 6C. The figure appears to specify that the shaded region within which no anchorage can be located is 24 inches wide for buses with a GVWR of 10,000 pounds or more, and is not dependent on the distance between the left and right sides of the emergency door opening.

Blue Bird recommended that both sections S5.4.3.1(b) and (c) be replaced by a new S5.4.3.1(b) that states:

Agency response: We are granting the petitioners' requests regarding this issue, with one change.

At present, all school bus manufacturers use rear emergency exit doors that are centered in the rear of the school bus. The rear emergency exit doors are larger than the minimum opening width, to allow for different seating configurations that may change the location of the aisle leading to the rear emergency exit door. In the rulemaking creating S5.4.3.1(b) and (c), the new language referred to the longitudinal vertical planes tangent to the right and left sides of the door opening without taking into consideration that school bus manufacturers could be manufacturing the rear emergency exit doors wider than the minimum required opening. The agency does not believe there is a need to require the clearance area for anchorages to be greater than the clearance area for the exit itself.

The intent of this rulemaking action is to prohibit wheelchair securement anchorages in the rear exit staging area. According to petitioners, the larger rear emergency exit doors give manufacturers the ability to position the placement of the rear exit door in the center of the bus body and the flexibility to maintain the clearance area required by FMVSS No. 217 with different seating configurations. The agency agrees that the parallelepipeds referenced by the standard define the clearance needed to adequately use the emergency exit, and that there is not a safety benefit to require wheelchair securement anchorages to be placed outside the area bounded by the door opening. Therefore, in this final rule NHTSA is amending the language at S5.4.3.1(b) to allow the manufacturers the same flexibility for placing wheelchair securement anchorages as they currently have for maintaining the rear exit door clearance area required by FMVSS No. 217.

The agency generally agrees with the approach suggested by Blue Bird, with one exception. Blue Bird's suggested language would not prohibit wheelchair anchorages that are recessed into the school bus floor. Today's final rule defines the staging area by referencing the parallelepipeds described in S5.4.2.1(a)(1) (for school buses with a GVWR greater than 10,000 lb) and S5.4.2.2 (for school buses with a GVWR of 10,000 lb or less). The parallelepipeds would be positioned flush with the floor, as described in S5.4.2.1(a), and with the rear surface of the parallelepiped tangent to the opening of the rear emergency exit door. Paragraph S5.4.3.1(b) is revised to prohibit the placement of any wheelchair securement anchorage both within the space occupied by the parallelepiped when it is so situated, and anywhere within a downward vertical projection of the parallelepiped. Thus, anchorages that are raised, flush, or recessed into the school bus floor beneath the parallelepiped will not be permitted. 3 This amendment eliminates the need for Figures 6B and 6D of the standard, and thus those figures are removed and reserved.

All three petitioners opposed the requirement that emergency exits windows be labeled with the words: “DO NOT BLOCK.” The petitioners believed that the standard should include objective criteria for determining whether a window is blocked, and should state whether or to what extent blockage is permitted of an emergency exit window by wheelchairs and other items, such as child restraints, upper tether straps of child restraints, and passenger torso belts.

Agency response: As explained in the April 19, 2002 final rule, the “do not block” label originated in part from NHTSA's concern with track seating. With track systems, the configuration of the seats is determined by the user, not the school bus manufacturer. NHTSA was concerned about modifiers possibly installing anchorages in positions that would result in the blockage of side emergency exits by wheelchairs, so the agency adopted the warning label requirement to alert modifiers and users to the potential hazards of such installation. 67 FR at 19347.

The inadvertent or unknowing blockage of or impeding emergency egress from school buses by persons other than the original manufacturer of the school bus was the potentially unsafe behavior that the label was intended to forestall. The warning label provides the public a heightened awareness about the need for keeping emergency exits clear, from persons installing items such as aftermarket wheelchair securement devices, wheelchairs, or school bus seats, to school bus drivers, monitors, and students. We do not agree with the petitioners that further clarification is needed in the standard on precisely what “do not block” means or how wheelchairs, tether straps, belts or other devices should be situated near emergency exits. The label is simple and clear. The agency believes that requiring more wording to describe how various items that are carried in school buses may or may not partially block an exit could reduce users' desire to read the label or ability to understand it.

Blue Bird believed that the NPRM did not provide notice that the agency was considering a labeling requirement for “emergency windows.” We disagree. At 64 FR 10606 of the NPRM, NHTSA sought comments: on the extent to which school buses have been or are being designed so that wheelchairs can be secured so as to hinder access to any emergency exit (question 1); and on whether NHTSA should both require a warning label and prohibit the installation of wheelchair securement devices that make it possible to secure a wheelchair in an area where it will block access to an emergency exit (question 6). FMVSS No. 217 “emergency exits” includes windows as well as doors. Thus, the NPRM sought comments on labeling requirements for both windows as well as doors. Furthermore, the intent of the rulemaking was to increase the likelihood that emergency exits will not be blocked so as to hamper occupants' ability to leave the bus. Emergency egress takes place through both emergency windows and doors. Thus, improved emergency egress requirements for both windows and doors, including by way of a “do not block” label, was contemplated by the NPRM.

Blue Bird stated that vehicles used by Head Start agencies are required to be equipped with Type 2 seat belts (if the Head Start Allowable Alternative Vehicle's GVWR is 10,000 pounds or less) at each outboard passenger seating position. Blue Bird further stated that manufacturers may be faced with a requirement to install torso restraints at the outboard seating positions such that the belt may cross the area of a side emergency exit window, thereby potentially “blocking” access to the emergency window.

Agency response: If the upper torso belt would block access to an emergency window, we believe that an alternative design—one that does not block access—ought to be considered. Nothing has changed in FMVSS No. 217 concerning the blockage of access to side emergency exit windows. Manufacturers are currently required to take into account the placement of the upper torso belt so that the side emergency exit windows in buses with GVWRs of 10,000 pounds or less can meet the emergency exit-opening requirement now in FMVSS No. 217.

The petitioners objected to a Do Not Block label in part due to a concern that confusion will arise as to how child restraints should be placed adjacent to an emergency exit window. Thomas Built stated that FMVSS No. 225, Child restraint anchorage systems, requires buses under 10,000 pounds GVWR to be equipped with at least two “LATCH”  4 attachments in rear seating positions in certain locations. Thomas Built believed that many customers who operate small buses for day care or Head Start will require LATCH attachments throughout the bus, and believed that customers of larger buses will order the anchorage systems throughout the bus. Blue Bird stated that although FMVSS No. 225 does not require that school buses be equipped with the upper tether anchorage of a LATCH system, several States have indicated to school bus manufacturers that they will want such tether anchorages to be installed. Blue Bird further stated that the known methods of providing tether anchorages in school buses include: (1) Anchoring the tether to the side wall behind the child safety restraint system or, (2) anchoring the tether to the lap belts of the seat behind it. Blue Bird argued that a tether strap in each of these scenarios could possibly constitute a blockage of the side emergency window if there is an emergency exit window at that rearward seating position.

Agency response: In our “Guideline for the Safe Transportation of Pre-school Age Children in School Buses,” we recommend that child restraint systems not be placed next to emergency exit windows in school buses. NHTSA believes that it is possible that placement of a child restraint in the seat next to an emergency exit window could impede occupant exit in an emergency. If a Do Not Block label helps to prevent school bus users from installing child restraints such that the restraints themselves or the tether straps could impede emergency egress from the exit, the label will have achieved its purpose. Accordingly, the agency is not convinced that emergency window exits should not be labeled with the Do Not Block label due to the label's potential effect on the placement of child restraints.

Thomas Built and Blue Bird stated that there are situations where their customers require LATCH attachments at all seating positions in school buses that require emergency exit windows, and therefore, it may be necessary to place child restraint attachments next to emergency exit windows. NHTSA does not believe that there would be a huge demand from customers of the large school buses who would order LATCH in all seating positions throughout the bus. Typically, most school districts would only order school buses with a couple of rows of seating equipped with a mechanism to install child restraint systems. However, if there is a situation where the customer wants a LATCH system installed in every seating position in buses with a seating capacity greater than 46, there is an option to install side emergency exit doors in these buses instead of emergency exit windows.

AmTran believes that the “DO NOT BLOCK” label should be required on emergency exits in all school buses with or without wheelchair anchorages. The agency intended this rulemaking to apply only to new school buses manufactured or sold with one or more wheelchair anchorage positions. To minimize misunderstandings about which new school buses must be labeled, this final rule clarifies S5.5.3(d) to make it clear that the label applies only to “school buses manufactured or sold as new with one or more wheelchair anchorage positions.”

We have issued this final rule pursuant to our statutory authority. Under 49 U.S.C. Chapter 301, Motor Vehicle Safety (49 U.S.C. 30101 et seq. ), the Secretary of Transportation is responsible for prescribing motor vehicle safety standards that are practicable, meet the need for motor vehicle safety, and are stated in objective terms. 49 U.S.C. 30111(a). When prescribing such standards, the Secretary must consider all relevant, available motor vehicle safety information. 49 U.S.C. 30111(b). The Secretary must also consider whether a proposed standard is reasonable, practicable, and appropriate for the type of motor vehicle or motor vehicle equipment for which it is prescribed and the extent to which the standard will further the statutory purpose of reducing traffic accidents and deaths and injuries resulting from traffic accidents. Id. Responsibility for promulgation of Federal motor vehicle safety standards was subsequently delegated to NHTSA. 49 U.S.C. 105 and 322; delegation of authority at 49 CFR 1.50.

As a Federal agency, before promulgating changes to a Federal motor vehicle safety standard, NHTSA also has a statutory responsibility to follow the informal rulemaking procedures mandated in the Administrative Procedure Act at 5 U.S.C. Section 553. Among these requirements are Federal Register publication of a general notice of proposed rulemaking, and giving interested persons an opportunity to participate in the rulemaking through submission of written data, views or arguments. After consideration of the public comments, we must incorporate into the rules adopted, a concise general statement of the rule's basis and purpose.

The agency has carefully considered these statutory requirements in promulgating this final rule; response to petitions for reconsideration to amend FMVSS No. 217. As previously discussed in detail, this document responds to petitions for reconsideration of a final rule that we issued in April 2002. We have carefully considered the petitions before issuing today's document. As a result, we believe that this final rule reflects consideration of all relevant available motor vehicle safety information.

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

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

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

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

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

We have considered the impact of this rulemaking action under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures. This rulemaking document was not reviewed by the Office of Management and Budget under E.O. 12866, “Regulatory Planning and Review.” The rulemaking action is also not considered to be significant under the Department's Regulatory Policies and Procedures (44 FR 11034; February 26, 1979).

For the following reasons, we believe that this final rule; response to petitions for reconsideration will not have any cost effects on school bus manufacturers. When it amended FMVSS No. 222 to specify requirements for wheelchair securement anchorages and devices, NHTSA did not envision that the anchorages would be placed so that wheelchair securement anchorages and devices or secured wheelchairs would block access to any exit door. In analyzing the potential impacts of that rulemaking, NHTSA anticipated that vehicle manufacturers would, if necessary, remove seats to make room for securing wheelchairs in a forward-facing position and that, if necessary, additional buses would be purchased to offset the lost seating capacity.

To the extent that vehicle manufacturers have not removed any seats and have instead installed wheelchair securement anchorages and devices in locations where the securing of wheelchairs will result in the blocking of exits, the agency overestimated the costs of that earlier rulemaking. If securement devices were being so installed, the impact of adopting the amendments made in this notice would be to conform vehicle manufacturer practices to the assumptions made in the analysis of that earlier rulemaking.

Because the economic impacts of this final rule are so minimal (i.e., the annual effect on the economy is less than $100 million), no further regulatory evaluation is necessary.

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

This final rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. The reason is that this final rule, applies to motor vehicle manufacturers, not to the States or local governments. Thus, the requirements of Section 6 of the Executive Order do not apply to this final rule.

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that: (1) is determined to be “economically significant” as defined under E.O. 12866, and (2) concerns an environmental, health or safety risk that NHTSA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, we must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by us.

This final rule is not subject to the Executive Order because it is not economically significant as defined in E.O. 12866. It does involve decisions based on health or safety risks that disproportionately affect children on schoolbuses with wheelchair securement anchorages. However, this rulemaking serves to reduce, rather than increase, that risk.

Pursuant to Executive Order 12778, “Civil Justice Reform,” we have considered whether this final rule has any retroactive effect. We conclude that it does not have such an effect. Under 49 U.S.C. 30103, whenever a Federal motor vehicle safety standard is in effect, a State may not adopt or maintain a safety standard applicable to the same aspect of performance which is not identical to the Federal standard, except to the extent that the state requirement imposes a higher level of performance and applies only to vehicles procured for the State's use.

49 U.S.C. 30161 sets forth a procedure for judicial review of final rules establishing, amending or revoking Federal motor vehicle safety standards. That section does not require submission of a petition for reconsideration or other administrative proceedings before parties may file suit in court.

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

The agency Administrator has considered the effects of this rulemaking action under the Regulatory Flexibility Act (5 U.S.C. § 601 et seq. ) and certifies that this final rule will not have a significant economic impact on a substantial number of small entities. The rationale for this certification is that, as noted immediately above, NHTSA is not aware that any school bus manufacturer, or any small school bus manufacturer, is presently manufacturing school buses with wheelchair securement anchorages or devices that may result in blocking access to an emergency exit, or that any small school or school district has school buses with wheelchair securement anchorages or devices that may result in blocking access to an emergency door. Accordingly, the agency believes that this final rule will not affect the costs of the manufacturers of school buses considered to be small business entities. A small manufacturer could meet the new requirements by placing a wheelchair securement anchorage or device in a location other than in an exit aisle. Changing the placement of a wheelchair securement anchorage or device in this fashion might necessitate the removal of a seat in some cases. In those instances, there will be a small net loss of passenger capacity.

We have analyzed this rule for the purposes of the National Environmental Policy Act and determined that it would not have any significant impact on the quality of the human environment.

Under the Paperwork Reduction Act of 1995 (PRA), a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. This final rule does not impose new collection of information requirements for which a 5 CFR part 1320 clearance must be obtained. The term “collection of information” does not include the “public disclosure of information originally supplied by the Federal government to the recipient for the purpose of disclosure to the public.” (See 5 CFR 1320.3(c)(2).) Since NHTSA is specifying the exact language with which school bus manufacturers must label their emergency exit doors and emergency exit windows, the labels are not collections of information and do not need clearance from OMB.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272) directs us to use voluntary consensus standards in our regulatory activities unless doing so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies, such as the Society of Automotive Engineers (SAE). The NTTAA directs us to provide Congress, through OMB, explanations when we decide not to use available and applicable voluntary consensus standards.

After conducting a search of available sources, we have determined that there are not any voluntary consensus standards that we can use in this final rule. We have searched the SAE's Recommended Practices applicable to buses, and have not found any standards prohibiting placement of wheelchairs in front of emergency exit doors. We have also reviewed the National Standards for School Buses and School Bus Operations (NSSBSBO)(1995 Revised Edition). The NSSBSBO includes a subsection under “Standards for Specially Equipped School Buses” called “Securement and Restraint System for Wheelchair/Mobility Aid and Occupant.” Paragraph 1.k. of this provision (on page 61) states: “The securement and restraint system shall be located and installed such that when an occupied wheelchair/mobility aid is secured, it does not block access to the lift door.” Since this provision does not address blocking access to an emergency exit, we have decided not to use it in the rulemaking at issue.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires Federal agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million in any one year (adjusted for inflation with base year of 1995). Before promulgating a NHTSA rule for which a written statement is needed, section 205 of the UMRA generally requires us to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows us to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if we publish with the final rule an explanation why that alternative was not adopted.

This final rule will not result in costs of $100 million or more to either State, local, or tribal governments, in the aggregate, or to the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 12866 requires each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:

In the March 5, 1999 (64 FR 10604)(DOT Docket No. NHTSA-99-5157) and April 19, 2002 (67 FR 19343)(DOT Docket No. NHTSA-99-5157) final rule, we raised the plain language issues stated above. None of the public commenters addressed plain language concerns in their NPRM comments.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.