The Office of Federal Housing Enterprise Oversight (OFHEO), an independent office within the Department of Housing and Urban Development (HUD), is the exclusive financial safety and soundness regulator of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises) under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Act), as amended. 1 The Enterprises are government-sponsored corporations chartered to provide liquidity to the residential mortgage market and to promote the availability of mortgage credit by investing in residential mortgages and guaranteeing securities backed by residential mortgages. 2 OFHEO oversees the Enterprises to ensure that they remain adequately capitalized and operate in a safe and sound manner and in accordance with applicable laws, rules and regulations. To that end OFHEO is vested with broad supervisory discretion and specific civil administrative enforcement powers, similar to such authority granted by Congress to the Federal bank regulatory agencies. 3 In particular, section 1376 of the Act (12 U.S.C. 4636) empowers OFHEO to impose civil money penalties under specific conditions. OFHEO's Rules of Practice and Procedure (12 CFR part 1780) govern cease and desist proceedings, civil money penalty assessment proceedings and other administrative adjudications. 4

The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 (the Inflation Adjustment Act) requires OFHEO, as well as other Federal agencies with the authority to issue civil money penalties (CMPs), to publish regulations to adjust the maximum amount of each CMP authorized by law that the agency has jurisdiction to administer. 5 The Inflation Adjustment Act required agencies to make an initial adjustment of their CMPs upon the statute's enactment, and further requires agencies to make additional adjustments on an ongoing basis, every four years following the initial adjustment. The purpose of these periodic adjustments is to maintain the deterrent effect of CMPs and promote compliance with the law. Subpart E of OFHEO's Rules of Practice and Procedure sets forth the Civil Money Penalty Inflation Adjustment amounts and discusses their applicability. See 12 CFR parts 1780.80-81.

As required, OFHEO made the initial adjustment to the maximum civil money penalty amounts in 1997, and provided that such adjustments were applicable to any violation occurring after October 23, 1996 (the effective date of the Inflation Adjustment Act). 6 The last adjustment was made in 2000, effective January 4, 2001. 7 OFHEO again is amending the maximum civil money penalty amount for each tier that OFHEO has authority to impose under 12 U.S.C. 4636 in accordance with the Inflation Adjustment Act.

Under the Inflation Adjustment Act, the inflation adjustment for each applicable CMP is determined by increasing the maximum CMP amount per violation by a cost-of-living adjustment. As is described in detail below, the Inflation Adjustment Act provides that this cost-of-living adjustment is to reflect the percentage increase in the Consumer Price Index since the CMPs were last adjusted or established, and rounded in accordance with rules provided in the statute. 8

This final rule adjusts the maximum penalty amount within each of the three tiers specified in 12 U.S.C. 4636 by amending the table contained in 12 CFR part 1780.80 to reflect the new adjusted maximum penalty amount that OFHEO may impose upon an executive officer or director or an Enterprise within each tier. The increases in maximum penalty amounts contained in this final rule may not necessarily affect the amount of any CMP that OFHEO may seek for a particular violation; OFHEO would calculate each CMP on a case-by-case basis in light of a variety of factors. 9

The Inflation Adjustment Act directs federal agencies to calculate each CMP adjustment as the percentage by which the CPI-U for June of the calendar year preceding the adjustment exceeds the CPI-U for June of the calendar year in which the amount of each CMP was last adjusted. The CMP for Third Tier penalties by an Enterprise was adjusted in 2000, and every other CMP was last adjusted in 1997. 10 Since OFHEO is making this round of adjustments in calendar year 2005, and OFHEO made the last round of adjustments in calendar year 2000, the inflation adjustment amount for each CMP that was adjusted in 2000 was calculated by comparing the CPI-U for June 2000 (172.4) with the CPI-U for June 2004 (189.7), resulting in an inflation adjustment of 10.0 percent. 11 For each CMP that was last adjusted in 1997, the inflation adjustment amount was calculated by comparing the CPI-U for June 1997 (160.3) with the CPI-U for June 2004 (189.7), resulting in an inflation adjustment of 18.3 percent. For each CMP, the product of this inflation adjustment and the previous maximum penalty amount was then rounded in accordance with the specific requirements of the Inflation Adjustment Act, and was then summed with the previous maximum penalty amount to determine the new adjusted maximum penalty amount. 12 The table below sets out these items accordingly.

Section 1780.81 states that the adjustments made in § 1780.80 apply only to violations that occur after the effective date, August 30, 2005.

OFHEO finds good cause that notice and an opportunity to comment on this document are unnecessary under the Administrative Procedure Act, 5 U.S.C. 551-559, as amended (APA). This rulemaking conforms with and is consistent with the statutory directive set forth in the Inflation Adjustment Act, with no issues of policy discretion, and public comment is impracticable and unnecessary. Accordingly, OFHEO is issuing the amendments as a final rule.

In addition, OFHEO finds good cause to make this rule effective upon publication of this document in the Federal Register under the APA. See 5 U.S.C. 553(d). This final rule does not impose any additional responsibilities on any entity. Instead, it simply adjusts the amount of each CMP tier as dictated by the Inflation Adjustment Act.

This final rule is not classified as a significant rule under Executive Order 12866 because it will not result in an annual effect on the economy of $100 million or more or a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based Enterprises to compete with foreign-based enterprises in domestic or foreign markets.

Accordingly, no regulatory impact assessment is required and this final rule has not been submitted to the Office of Management and Budget for review.

This final rule does not include a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year. As a result, the final rule does not warrant the preparation of an assessment statement in accordance with the Unfunded Mandates Reform Act of 1995.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) only applies to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b) ( see 5 U.S.C. 601(2)). OFHEO has determined for good cause that the APA does not require a general notice of proposed rulemaking for this regulatory action. The Regulatory Flexibility Act does not apply to this final rule.

The rule contains no information collection requirements that require the approval of the Office of Management and Budget pursuant to the Paperwork Reduction Act, 44 U.S.C. 3501-3520.

On December 8, 2004, the President signed into law the Consolidated Appropriations Act, 2005, Public Law 108-447 which contained the Small Business Reauthorization and Manufacturing Assistance Act of 2004 (the Reauthorization Act). Subtitle E of the Reauthorization Act amended certain provisions of the Small Business Act, 15 U.S.C. 631 et. seq., that govern the HUBZone program and the definition of small agricultural cooperative.

In particular, Section 151 of the Reauthorization Act relaxed the statutory requirement that a HUBZone small business concern (SBC) must be entirely owned by U.S. citizens. Congress concluded that this statutory mandate precluded small business owners from taking advantage of available forms of business organizations that limit the personal liability of business owners. It also precluded ownership by small agricultural cooperatives that operate in rural HUBZones, and thereby deprived those communities of the economic benefits of increased HUBZone contracting opportunities.

As a result, Section 151 of the Reauthorization Act amended the definition of “HUBZone SBC” in section 3(p)(3)(A) of the Small Business Act, 15 U.S.C 632(p)(3)(A), to require that SBCs eligible for HUBZone certification be 51 percent (instead of 100 percent) owned and controlled by U.S. citizens. It also added a new section 3(p)(3)(E) to the Small Business Act, 15 U.S.C 632(p)(3)(E), to include as HUBZone SBCs small agricultural cooperatives or SBCs wholly or partially-owned by small agricultural cooperatives organized and incorporated in the United States. Also in connection with agricultural cooperatives, Section 151 further amended Section 3(j) of the Small Business Act, 15 U.S.C. 632(j), to require that small agricultural cooperatives be treated as business concerns for purposes of the Small Business Act. This section also states that when determining size, SBA should not include the income or employees of the underlying members of the cooperative. Because SBA's programs and services were created for the benefit of the small business community, SBA interprets this section to mean that the members of any small agricultural cooperative applying for SBA assistance must also qualify as a small business concern or small agricultural cooperative in order to qualify for SBA assistance. To interpret the statute otherwise would circumvent the Agency's mission.

In addition, Section 151 of the Reauthorization Act expanded the employee residency requirement for tribally-owned HUBZone SBCs. Previously, the Small Business Act did not mandate that tribally-owned concerns maintain a principal office in a qualified HUBZone and hire at least 35 percent of their employees from any HUBZone area, as is the requirement for other HUBZone SBCs. Instead, section 3(p)(5)(A)(i)(I)(bb) of the Small Business Act, 15 U.S.C. 632(p)(5)(A)(i)(I)(bb), required that at least 35 percent of the tribally-owned HUBZone SBC's employees performing a HUBZone contract must reside within an Indian Reservation governed by one or more of the tribal government owners or an adjoining HUBZone. Although that requirement was originally intended to encourage economic development of tribes, Congress determined that, over time, it had the unintended consequence of limiting the kinds of contracts that tribally-owned concerns could perform and of inhibiting their potential synergies with other business organizations.

To remedy the disparity this separate employee residency requirement created for tribally-owned HUBZone SBCs (as compared to other HUBZone SBCs), Section 151 of the Reauthorization Act added as an option for tribally-owned concerns the same residency and principal office requirement that applies to other HUBZone SBCs. As amended, Section 3(p)(5)(A)(i)(I)(aa) of the Small Business Act, 15 U.S.C. 632(p)(5)(A)(i)(I)(aa), now allows tribally-owned concerns the option of either maintaining their principal office in a HUBZone and hiring at least 35 percent of their employees from any HUBZone area, or complying with the existing separate requirement that 35 percent of their employees performing a HUBZone contract reside within an Indian Reservation governed by one or more of the tribal government owners or adjoining HUBZone.

In Section 152 of the Reauthorization Act, Congress provided three basic amendments to expand the areas that qualify as HUBZones. First, Section 152 added new Sections 3(p)(1)(E) and 3(p)(4)(D) to the Small Business Act, 15 U.S.C. 632(p)(1)(E), 632(p)(4)(D), to authorize military base closure areas that have undergone final closure to be treated as qualified HUBZones for a period of five years. Congress recognized that many base closure areas are not located in qualified HUBZones, and therefore do not benefit from the job creation and economic revitalization potential of the HUBZone program.

Second, Section 152 revised the statutory definition of “qualified non-metropolitan county” in Section 3(p)(4)(B)(ii)(II) of the Small Business Act, 15 U.S.C. 632(p)(4)(B)(ii)(II). Under the previous definition, some of the poorest rural communities in states with high unemployment did not qualify as a HUBZone based on unemployment because the unemployment qualification was based solely on the statewide unemployment average. Accordingly, Section 152 revised the definition of “qualified non-metropolitan county” to allow for a comparison of a county's unemployment rate to the lower of the statewide or the national average, in determining eligibility.

Third, Section 152 of the Reauthorization Act expanded qualified HUBZones by extending the redesignation period for HUBZone areas through the public release of the 2010 census data. The previous statutory definition of “redesignated area” in Section 3(p)(4)(C) of the Small Business Act, 15 U.S.C. 632(p)(4)(C), allowed those areas that no longer qualify as HUBZones to remain in the program for a period of three years. Congress determined that this three-year grandfather period did not provide sufficient time for firms to recoup a return on their investment in locating their businesses in qualified HUBZone areas, adjusting their ownership structure, and recruiting HUBZone residents as employees. To allow firms additional time to reap the benefits of their HUBZone investment, Section 152 extended the redesignation period until the later of the date on which the Census Bureau publicly releases the first results from the 2010 decennial census or 3 years after the date on which the area ceased to qualify as a HUBZone.

Finally, in Section 153 of the Reauthorization Act, Congress provided a five percent HUBZone evaluation price preference in international food aid procurements by the Secretary of Agriculture. Congress explained that the previously authorized price evaluation preference regime may have made it more difficult for non-HUBZone SBCs to compete in food aid tender auctions and, in turn, may have had the unintended effect of diminishing the competitive supplier base. Section 153 therefore amended Section 31(b)(3) of the Small Business Act, 15 U.S.C. 657a(b)(3), to apply a five percent price evaluation preference on the first 20 percent of U.S. Department of Agriculture's procurements of commodities used for international food aid export operations.

This interim rule amends Parts 121, 124, 125 and 126 of SBA's regulations to adopt the specific statutory changes provided under Subtitle E of the Reauthorization Act. In accordance with the express statutory language and declared legislative purposes of those changes, this interim rule amends the exceptions to SBA's affiliation rules in 13 CFR 121.103 and the definition of business concern in § 121.105; for consistency purposes, amends §§ 124.503 and 126.607 to incorporate the preference for HUBZone, 8(a) and service disabled veterans (SDV) over small business set-asides set forth in SBA's SDV regulations, clarifies the definition of “employee” for the HUBZone program in § 125.6; adds new definitions and amends existing definitions in § 126.103; amends the employee residency requirement for tribally-owned HUBZone SBCs and adds the requirements for small agricultural cooperatives to be considered qualified HUBZone SBCs in § 126.200; amends the corporate stock ownership example to reflect the change in ownership requirements in § 126.201; amends § 126.204 to include agricultural cooperatives; clarifies the application of requirements for SBCs applying for HUBZone status based on a location in a qualified base closure area in § 126.304; amends the price evaluation preference for agricultural commodities in § 126.613 and reorganizes and clarifies § 126.700 to make it consistent with SBA's other regulations regarding contractor performance requirements.

Statutory changes to the definition of small agricultural cooperative require SBA to add another exception to its affiliation rule in § 121.103 and to modify its definition of business concern in § 121.105.

To make the HUBZone regulations consistent with SBA's recently published SDV regulations, SBA is adding paragraph (j) to § 124.503 and revising § 126.607 to incorporate contracting preferences for HUBZone, 8(a) and SDV over small business set-asides. This change will ensure consistent guidance throughout 13 CFR Chapter 1.

To clarify the definition of “employee” as it relates to the HUBZone program, SBA is adding more explicit language to § 125.6(e)(6) to indicate that for purposes of the HUBZone program, the definition of “employee” in § 126.103 controls.

SBA is adding several new definitions in § 126.103 to implement the statutory changes under the Reauthorization Act. To incorporate the new statutory requirement for the treatment of military base closure areas as qualified HUBZones, SBA is adding a definition for the terms “base closure area” and “qualified base closure area” in § 126.103. With respect to the term “base closure area,” the interim rule adopts the identical definition of that term provided in the amended Section 3(p)(4)(D) of the Small Business Act, 15 U.S.C. 632(p)(4)(D). Under that definition, a “base closure area” means lands within the external boundaries of a military installation that were closed through a privatization process under specified authority. To accommodate the statutory five-year period in which a base closure area qualifies as a HUBZone, the interim rule adds the new term “qualified base closure area,” which limits the qualifying period of a base closure area to five years from the date of final closure of the base or five years from the date of signing of the legislation, December 8, 2004. SBA will rely on the Department of Defense, Office of Economic Adjustment, as the authority to determine whether a base is closed.

In addition, since the amended Section 3(p)(3)(E) of the Small Business Act, 15 U.S.C. 632(p)(3)(E), now authorizes ownership in a HUBZone SBC by small agricultural cooperatives organized or incorporated in the U.S., this interim rule adds a definition for the term “small agricultural cooperative.” Amended § 126.103 adopts the existing definition of a “small agricultural cooperative” provided in Section 3(j) of the Small Business Act, 15 U.S.C. 632(j). That definition makes clear that in determining size, an agricultural cooperative is considered a “business concern” and that the income or employees of any member of the cooperative is not included in the calculation of size. The definition of “small agricultural cooperative” in § 126.103 further indicates that any entity other than an SBC, small cooperative or U.S. citizen may not be a member of a small agricultural cooperative.

SBA is also revising the definition of several existing terms in § 126.103. With respect to base closure areas, SBA is amending the definition of “HUBZone” in § 126.103, to include a “qualified base closure area” as a designated HUBZone. In implementing the statutory changes regarding ownership of HUBZone SBCs by U.S. citizens and by small agricultural cooperatives, SBA is amending the definition of a “HUBZone small business concern.” As expressly provided in the amended Section 3(p)(3)(A) of the Small Business Act, 15 U.S.C. 632(p)(3)(A), SBA is amending the definition of a “HUBZone SBC” in § 126.103, to include a SBC that is at least 51 percent owned and controlled by one or more U.S. citizens. Likewise, as expressly provided in the amended Section 3(p)(3)(E) of the Small Business Act, 15 U.S.C. 632(p)(3)(E), the interim rule amends the definition of “HUBZone SBC” to include SBCs that are small agricultural cooperatives organized or incorporated in the United States, wholly owned by one or more small agricultural cooperatives or partially owned by one or more small agricultural cooperatives organized or incorporated in the United States, provided that all other owners are small business concerns or U.S. citizens.

Also in connection with § 126.103, SBA is amending the definition of the term “qualified non-metropolitan county,” to incorporate the new statutory definition of the term in Section 3(p)(4)(B)(ii)(II) of the Small Business Act, 15 U.S.C. 632(p)(4)(B)(ii)(II). Consistent with that definition, the interim rule revises the definition of a “qualified non-metropolitan county” to allow a comparison between the statewide unemployment average and the national average in determining whether a non-metropolitan county qualifies as a HUBZone based on unemployment.

SBA is also amending the definition of “redesignated area” in § 126.103, in accordance with the statutory amendments of the term in Section 3(p)(4)(C) of the Small Business Act, 15 U.S.C. 632(p)(4)(C). Under the revised § 126.103, a “redesignated area” is defined as the later of the date on which the Census Bureau publicly releases the first results from the 2010 decennial census or three years after the date on which the area ceased to qualify as a HUBZone.

With respect to the new eligibility requirements for tribally-owned concerns under Section 3(p)(5)(A)(i)(I) of the Small Business Act, 15 U.S.C. 632(p)(5)(A)(i)(I), SBA is amending § 126.200, which provides the eligibility requirements for such concerns. As amended, § 126.200 now allows tribally-owned concerns located in qualified HUBZones the option of either maintaining their principal office in a HUBZone and hiring at least 35 percent of their employees from any HUBZone area, or of complying with the existing separate requirement that 35 percent of their employees performing a HUBZone contract reside within an Indian Reservation governed by one or more of the tribal government owners or adjoining HUBZone.

SBA is also adding the requirements for small agricultural cooperatives to § 126.200(c) in accordance with Section 3(p)(5)(A)(i)(I) of the Small Business Act, 15 U.S.C. 632(p)(5)(A)(i)(I). To be a qualified HUBZone SBC, a small agricultural cooperative must meet the ownership requirements of 15 U.S.C. 632(p)(3)(E), have a principal office located in a HUBZone and employ at least 35% of its employees from a HUBZone.

The examples in §§ 126.200(b)(1) and 126.201(a) have also been amended to reflect the new requirement that SBCs be at least 51% owned and controlled by U.S. citizens.

Section 126.204, relating to SBA's consideration of affiliates when determining qualified HUBZone SBC's, has also been amended to provide an exception for agricultural cooperatives in accordance with Section 3(j) of the Small Business Act, 15 U.S.C. 632(j). The statutory definition of agricultural cooperative in the Small Business Act provides that when determining the size of a cooperative, SBA may not include the income or employees of the cooperative members. 15 U.S.C. 632(j). This means the cooperative and its members are not considered affiliated by virtue of their membership in the cooperative.

SBA is amending § 126.304 to describe the process for verifying the specific areas that are considered “qualified base closure areas.” The interim rule adds a new § 126.304(d), which explains that concerns applying for HUBZone status based on a location within a qualified base closure area must use SBA's List of Qualified Base Closure Areas to verify that the location is within a qualified base closure area. The HUBZone map will be modified to reflect these areas. It also describes the information concerns may submit to SBA if they believe the List fails to identify a particular location as a qualified base closure area.

SBA is making a technical correction to § 126.503 by changing the word “may,” found in subparagraph (c), to “will” in order to be consistent with the language of § 126.803(d). Section 126.503(c) cross references § 126.803, therefore the language in both sections needs to be consistent.

SBA is amending § 126.613 to incorporate the new statutory price evaluation preference for international food aid procurements provided under Section 31(b)(3) of the Small Business Act, 15 U.S.C. 657a(b)(3). The amended § 126.613 provides a 5% price evaluation preference on the first 20% of the USDA procurements for commodities used for international food aid export operations.

Finally, SBA is making a technical correction to § 126.700 by changing the citation from § 125.6(b) to § 125.6(c) and further clarifying the section by reorganizing the paragraphs and adding more explicit language in order to be consistent with § 125.6(c) and the Small Business Act. As currently drafted, § 126.700 is a source of confusion for many SBCs and this confusion may lead to misapplication of SBA's regulations resulting in the award of subcontracts to non-qualified HUBZone concerns. It is also inconsistent with § 125.6 and § 3(p)(5)(C) of the Small Business Act as it incorrectly requires that for construction contracts a qualified HUBZone SBC must perform 50% of the cost of the contract and at least 15% (or 25% depending on type of contract) of the cost of contract for personnel. As currently drafted, the two percentages do not measure the same base, that is, one relates to the overall cost of the contract and one to the cost of the contract incurred for personnel. This discrepancy was never intended and is not consistent with the requirements of the Small Business Act. To clarify this inconsistency, this rule changes the current performance of work requirement for construction contracts from “at least 50% of the contract” to “at least 50% of the cost of contract incurred for personnel.” This standard is what is referenced throughout the Small Business Act ( see §§ 3(p)(5)(C), 8(a)(14)(A) and 15(o)) and in § 125.6 of SBA's regulations, and the change to one standard ensures consistency throughout SBA's regulations. More explicit language was also added to clarify the relationship between the prime and subcontracting performance of work requirements by stating that not more than 50% of the cost of contract incurred for personnel may be subcontracted to a non-qualified HUBZone SBC.

Although SBA is issuing this rule as an interim rule with an immediate effective date, it encourages public comments on these regulatory amendments. In developing the final rule, SBA will consider all timely comments received.

In general, SBA publishes a proposed rule for public comment before issuing a final rule, in accordance with the Administrative Procedure Act and SBA regulations. 5 U.S.C. 553, and 13 CFR 101.108. The Administrative Procedure Act provides an exception to this standard rulemaking process when an agency finds good cause to adopt a rule without prior public participation. 5 U.S.C 553(b)(3)(B). The good cause requirement is satisfied when prior public participation is impracticable, unnecessary, or contrary to the public interest. Under such circumstances, an agency may publish an interim rule without soliciting prior public comment.

SBA has determined that there is good cause to issue this rule without prior notice and opportunity for public comment because it is impracticable, unnecessary, and contrary to the public interest to do so under the present circumstances. As discussed above, Congress amended several HUBZone provisions in the Small Business Act to expand the program's reach over the Nation's economically distressed communities and to eliminate unduly restrictive HUBZone requirements that impede the achievement of the HUBZone goals. These statutory changes became effective on December 8, 2004.

As a result of these recent legislative amendments, important provisions of SBA's existing HUBZone, Government Contracting, 8(a) Business Development and Size Standard regulations are now inconsistent with governing sections of the Small Business Act. It is both unnecessary and impracticable to provide advance notice and public participation in implementing the recent statutory changes because SBA is simply adopting the identical amendments mandated by the Reauthorization Act and ensuring consistency with existing provisions of the Small Business Act, and any delay in revising the inconsistent provisions in SBA's existing regulations will hamper the proper application of important HUBZone requirements. In addition, immediate implementation of the statute is in the public interest, since the legislative amendments expand the opportunities for HUBZone contracting. Specifically, the time it will take to afford prior public participation in this rulemaking will deprive newly eligible firms and economically depressed communities of the needed economic benefits of the HUBZone program, and will frustrate the ability of Federal contracting agencies to utilize the expanded program to achieve the statutory HUBZone procurement goal.

Accordingly, SBA has determined that there is good cause to issue this rule without prior public participation. SBA does, however, encourage the public to comment on the interim rule, especially the clarifications to § 126.700 and will consider all timely comments in preparing the final rule.

The Administrative Procedure Act requires that “publication or service of a substantive rule shall be made not less than 30 days before its effective date, except * * * as otherwise provided by the agency for good cause found and published with the rule.” 5 U.S.C. 553(d)(3). SBA has determined that there is good cause for an immediate effective date of this interim rule, instead of observing the 30-day period between publication and effective date. As discussed more fully above in the Justification of Publication of Interim Rule, any delay in the effective date of this interim rule will unduly perpetuate existing inconsistencies between certain provisions of SBA's HUBZone regulations and sections of the Small Business Act. It will also hinder the accomplishment of the HUBZone goals.

OMB determined that this rule constitutes a “significant regulatory action” under Executive Order 12866. SBA's Regulatory Impact Analysis is set forth below.

a. Is there a need for the regulatory action?

SBA has determined that this regulatory action is necessary. SBA is statutorily authorized to administer the HUBZone program and is required to implement all statutory changes to the program. The Reauthorization Act amended several provisions of the Small Business Act governing the HUBZone program. To implement these statutory changes, SBA must amend its existing HUBZone regulations. The amendments are also necessary and appropriate to better serve the needs of small business concerns (SBCs) and the statutory goals of the HUBZone program. There are no practical alternatives to this implementation of the statutory changes.

b. What is the baseline?

SBA considered several baselines in formulating this interim rule. These include the existing HUBZone program regulations and definitions that the interim rule revises; the estimated universe of potential HUBZone SBCs; the existing statutory requirements; the achievement of the three percent HUBZone contracting goal; and the current procurement practices of Federal agencies.

It is difficult to obtain precise quantitative estimates of the impact these changes might have on these baseline criteria. However, SBA estimates that adoption of this interim rule will increase the number of HUBZone SBCs, increase the number of HUBZone procurement actions by Federal agencies, and result in better and more efficient administration of the program. Ultimately, the program would move closer to meeting its statutory objectives of creating jobs and infusing capital into distressed communities.

c. Were there any alternatives?

There are no alternatives to implementing the statutorily mandated provisions detailed in the interim rule. The amendments of the Reauthorization Act, require SBA to amend the HUBZone regulations so that they will conform to the new statutory provisions. The regulatory amendments also facilitate the growth of the program to Congressionally-established levels, better serve the program's small business participants, and assist in accommodating the procurement needs of Federal agencies.

The most significant benefits to implementing the changes included in this interim rule are:

a. Increased benefits to both small businesses and Federal agencies.

SBA believes that the changes in this interim rule will increase the base number of small businesses in the HUBZone program and increase the program's viability and utilization by Federal agencies. These two effects are mutually dependent in that the more firms that are in the program, the more Federal agencies will use the program. Furthermore, when more Federal agencies use the program, more concerns will want to take advantage of the contract assistance available under the program. According to available data, there are an estimated 220 counties to be added as a result of this new legislation. In addition, over 150 locations may be designated as HUBZone locations as a result of military base closures. As these areas are defined by the Department of Defense, they will be posted on the HUBZone Web site and map.

b. Greater administrative efficiency and program integrity.

Because the amendments in this interim rule relax some of the previous program requirements, the interim rule will likely streamline and improve the effective administration of the HUBZone program. It will also enhance SBA's ability to administer the program with existing resources and better focus the program benefits on the businesses that operate in areas of low income or high unemployment.

c. Greater contracting efficiency for Federal agencies.

SBA believes that by increasing the level of activity and participation in the HUBZone program, it will increase economic savings to the Federal government on HUBZone awards. In particular, an increase in the number of eligible HUBZone concerns will provide procuring agencies with a larger base of HUBZone vendors. This will ultimately reduce the cost of HUBZone contracts through increased competition among HUBZone SBCs.

SBA expects that as a result of this interim rule, there will be significant increases in the number of concerns participating in the HUBZone program and in the number of HUBZone contract dollars. To the extent that this materializes, there may be attendant cost increases to the government in terms of the costs of goods and services and slightly increased administrative costs. However, existing provisions of the Federal Acquisition Regulation concerning the determination of “fair and reasonable” pricing will mitigate any significant monetary costs to the government as a result of this interim rule. SBA does not believe these changes will result in significantly higher costs to HUBZone SBCs because the amendments do not create additional burdens or restrictions on SBCs.

SBA anticipates that the distribution of contracts among different procurement vehicles will change. Non-HUBZone concerns currently participating in the Federal marketplace will be affected economically as a result of their ineligibility to compete for HUBZone contracts. These costs will vary based on the goods and services provided by newly eligible HUBZone SBCs. In some industries there may be very little impact, while in other industries there may be a substantial impact.

Large Federal prime contractors may experience some decrease in contract opportunities as Federal agencies increase their utilization of the HUBZone program. However, these changes are insignificant in light of the magnitude of Federal procurement versus HUBZone procurement. The Federal government spent $277 billion on goods and services in fiscal year 2003. Of this amount, $3.4 billion, or 1.23% of total procurements, was awarded to HUBZone firms. This level is significantly lower than the $8.3 billion that would have been awarded to HUBZone firms if the 3% goal set by Congress for the program had been achieved.

Most of the benefits of this interim rule will accrue to HUBZone communities. Expanded eligibility for SBCs and designated areas and increased HUBZone contacting should result in more Federal contract dollars going to distressed communities.

Overall, SBA believes that increasing the efficiency and access to the HUBZone program to both Federal agencies and small businesses will result in increased use of the program and a higher probability that the HUBZone program will meet its objectives to create jobs and increase capital investment in HUBZone communities.

SBA has determined that this interim rule does not impose additional reporting or recordkeeping requirements under the Paperwork Reduction Act, 44 U.S.C., chapter 35.

This interim rule meets applicable standards set forth in §§ 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. This action does not have retroactive or preemptive effect.

This interim rule will not have substantial direct effects on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, for the purposes of Executive Order 13132, SBA determines that this rule has no federalism implications warranting preparation of a federalism assessment.

Because this rule has been issued as an interim final, there is no requirement for SBA to prepare a Regulatory Flexibility Act analysis.

(b) * * *

(7) The member shareholders of a small agricultural cooperative, as defined in the Agricultural Marketing Act (12 U.S.C. 1141j), are not considered affiliated with the cooperative by virtue of their membership in the cooperative.

The FAA published this direct final rule with a request for comments in the Federal Register on July 21, 2005 (70 FR 41949). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on October 27, 2005. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

In November 2001, the Indian Prime Minister and the President of the United States committed India and the United States to a strategic partnership. Since then, the two countries have significantly strengthened bilateral cooperation and commerce in space, civil nuclear energy, and dual-use technology. On January 12, 2004, the two leaders announced the NSSP with the aim of implementing a shared vision to expand cooperation, deepening the ties of commerce and friendship between the two nations, and increasing stability in Asia and beyond.

The proposed cooperation has progressed through a series of reciprocal steps that built on one another. It included expanded engagement on nuclear regulatory and safety issues and missile defense, ways to enhance cooperation regarding peaceful uses of space technology, and steps to create the appropriate environment for successful high-technology commerce. In bringing the NSSP to completion, the United States and India resolve to transform their relationship by establishing a global partnership, with the mutual commitment to promoting stability, democracy, prosperity, and peace throughout the world. This rule implements revisions to the Export Administration Regulations (EAR) as part of the completion of the NSSP.

This rule removes export and reexport license requirements for items controlled unilaterally by the United States for nuclear nonproliferation reasons ( i.e. , items that are not subject to the Nuclear Suppliers Group regime). The rule accomplishes this change by revising § 742.3(a)(2) to except India from this license requirement and by removing the “X” from the box at the intersection of the row for India and the column labeled NP 2 of the Commerce Country Chart (Supplement No. 1 to Part 738 of the EAR). Removal of export license requirements for these items is expected to reduce the number of license applications for exports and reexports to India.

This rule also removes six Indian entities from the Entity List (Supplement No. 4 to Part 744 of the EAR). Three of these entities are Department of Atomic Energy entities, “Tarapur (TAPS 1 & 2),” “Rajasthan (RAPS 1& 2),” and “Kudankulam (1 & 2).” TAPS 1 & 2 and RAPS 1 & 2 are under International Atomic Energy Agency (IAEA) safeguards. Kudankulam 1 & 2 is under construction. The Government of India and the IAEA have agreed that this facility will be subject to IAEA safeguards upon completion. The other three entities are Indian Space Research Organization (ISRO) subordinate entities, specifically, “ISRO Telemetry, Tracking and Command Network (ISTRAC),” “ISRO Inertial Systems Unit (IISU), Thiruvananthapuram,” and “Space Applications Center (SAC), Ahmadabad.”

Neither the removal of the unilateral nuclear nonproliferation license requirement nor the removal of the entities from the Entity List by this rule removes any other license requirements imposed by the EAR. Among others, the end use license requirements of part 744, including the license requirements for the nuclear end uses specified in §§ 744.2, 744.5 and 744.6, and missile end use license requirements specified in §§ 744.3 and 744.6, continue to apply. This rule also does not affect license requirements related to entities that remain on the Entity List. For certain of those entities, a license is required for all items subject to the EAR; for others, a license is required for items with a classification other than (1) EAR99 or (2) where the third through fifth digits of the ECCN are “999.” BIS strongly urges parties to consult Supplement No. 3 to part 732 of the EAR, “BIS's “Know Your Customer” Guidance and Red Flags,” when exporting or reexporting items to India.

Although the Export Administration Act of 1979 (EAA), as amended, expired on August 20, 2001, Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp., p. 783 (2002)) as extended by the Notice of August 2, 2005, 70 FR 45273 (August 5, 2005), continues the EAR in effect under the International Emergency Economic Powers Act (IEEPA).

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

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by the OMB under control numbers 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. Total burden hours associated with the Paperwork Reduction Act and Office and Management and Budget control number 0694-0088 are expected to decrease because of this regulation. BIS anticipates that this rule will reduce the number of license applications for exports and reexports to India by about 150 to 200 annually.

Send comments regarding these burden estimates or any other aspect of this collection of information, including suggestions for reducing the burden, to David Rostker, OMB Desk Officer, by e-mail at david_rostker@omb.eop.gov or by fax to (202) 395-7285; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, P.O. Box 273, Washington, DC 20044.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States (see 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. , are not applicable.

We are revising and making final the rules we proposed in the Notice of Proposed Rulemaking (NPRM) published in the Federal Register on December 23, 2002 (67 FR 78196). We provide a summary of the provisions of the final rules below, with an explanation of the changes we have made from the proposed rules. We then provide a summary of the public comments and our reasons for adopting or not adopting the recommendations in the summaries of the comments in the section, “Public Comments.” The text of the final rules follows the preamble.

These final rules affect disability determinations and decisions that we make under title II and title XVI of the Act. In addition, to the extent that Medicare entitlement and Medicaid eligibility are based on whether you qualify for disability benefits under title II or title XVI, these final rules also affect the Medicare and Medicaid programs.

Under title II of the Act, we provide for the payment of disability benefits if you are disabled and belong to one of the following three groups:

• Workers insured under the Act,

• Children of insured workers, and

• Widows, widowers, and surviving divorced spouses (see § 404.336) of insured workers.

Under title XVI of the Act, we provide for Supplemental Security Income (SSI) payments on the basis of disability if you are disabled and have limited income and resources.

Under both the title II and title XVI programs, disability must be the result of any medically determinable physical or mental impairment or combination of impairments that is expected to result in death or which has lasted or can be expected to last for a continuous period of at least 12 months. Our definitions of disability are shown in the following table:

If you are seeking benefits under title II of the Act, or if you are an adult seeking benefits under title XVI of the Act, we use a five-step “sequential evaluation process” to decide whether you are disabled. We describe this five-step process in our regulations at §§ 404.1520 and 416.920. We follow the five steps in order and stop as soon as we can make a determination or decision. The steps are:

1. Are you working, and is the work you are doing substantial gainful activity? If you are working and the work you are doing is substantial gainful activity, we will find that you are not disabled, regardless of your medical condition or your age, education, and work experience. If you are not, we will go on to step 2.

2. Do you have a “severe” impairment? If you do not have an impairment or combination of impairments that significantly limits your physical or mental ability to do basic work activities, we will find that you are not disabled. If you do, we will go on to step 3.

3. Do you have an impairment(s) that meets or medically equals the severity of an impairment in the listings? If you do, and the impairment(s) meets the duration requirement, we will find that you are disabled. If you do not, we will go on to step 4.

4. Do you have the residual functional capacity to do your past relevant work? If you do, we will find that you are not disabled. If you do not, we will go on to step 5.

5. Does your impairment(s) prevent you from doing any other work that exists in significant numbers in the national economy, considering your residual functional capacity, age, education, and work experience? If it does, and it meets the duration requirement, we will find that you are disabled. If it does not, we will find that you are not disabled.

We use a different sequential evaluation process for children who apply for payments based on disability under SSI. If you are already receiving benefits, we also use a different sequential evaluation process when we decide whether your disability continues. See §§ 404.1594, 416.424, 416.994, and 416.994a of our regulations. However, all of these processes include steps at which we consider whether your impairment(s) meets or medically equals one of our listings.

The listings are examples of impairments that we consider severe enough to prevent you as an adult from doing any gainful activity. If you are a child seeking SSI benefits based on disability, the listings describe impairments that we consider severe enough to result in marked and severe functional limitations. Although the listings are contained only in appendix 1 to subpart P of part 404 of our regulations, we incorporate them by reference in the SSI program in § 416.925 of our regulations and apply them to claims under both title II and title XVI of the Act.

The listings are in two parts. There are listings for adults (part A) and for children (part B). If you are an individual age 18 or over, we apply the listings in part A when we assess your claim, and we never use the listings in part B.

If you are an individual under age 18, we first use the criteria in part B of the listings. If the listings in part B do not apply, and the specific disease process(es) has a similar effect on adults and children, we then use the criteria in part A. (See §§ 404.1525 and 416.925.)

If your impairment(s) does not meet any listing, we will also consider whether it medically equals any listing; that is, whether it is as medically severe as an impairment in the listings. (See §§ 404.1526 and 416.926.)

We use the listings only to decide that individuals are disabled or that they are still disabled. We will not deny your claim or decide that you no longer qualify for benefits because your impairment(s) does not meet or medically equal a listing. If you are not working and you have a severe impairment(s) that does not meet or medically equal any listing, we may still find you disabled based on other rules in the “sequential evaluation process.” Likewise, we will not decide that your disability has ended only because your impairment(s) does not meet or medically equal a listing.

Also, when we conduct reviews to determine whether your disability continues, we will not find that your disability has ended because we have changed a listing. Our regulations explain that, when we change our listings, we continue to use our prior listings when we review your case, if you qualified for disability benefits or SSI payments based on our determination or decision that your impairment(s) met or medically equaled a listing. In these cases, we determine whether you have experienced medical improvement, and if so, whether the medical improvement is related to the ability to work. If your condition(s) has medically improved so that you no longer meet or medically equal the prior listing, we evaluate your case further to determine whether you are currently disabled. We may find that you are currently disabled, depending on the full circumstances of your case. See §§ 404.1594(c)(3)(i) and 416.994(b)(2)(iv)(A). If you are a child who is eligible for SSI payments, we follow a similar rule when we decide that you have experienced medical improvement in your condition(s). (See § 416.994a(b)(2).)

We are updating the listings for impairments that affect multiple body systems to update the medical criteria in the listings, to provide more information about how we evaluate impairments that affect multiple body systems, and to reflect our adjudicative experience. We last published final rules revising the adult listings for impairments that affect multiple body systems in the Federal Register on May 19, 2000 (65 FR 31800); the rules were effective on June 19, 2000. We last published final rules revising the childhood listings for impairments that affect multiple body systems in the Federal Register on December 12, 1990 (55 FR 51204).

Even though these rules will not go into effect until 60 days after publication of this notice, for clarity we refer to the changes we are making here as the “final rules” and to the rules that will be changed by these final rules as the “prior rules.”

We will start to use these final rules on their effective date. We will continue to use our prior rules until the effective date of these final rules. When these final rules become effective, we will apply them to new applications filed on or after the effective date of these rules and to claims pending before us, as we describe below.

As is our usual practice when we make changes to our regulations, we will apply these final rules on or after their effective date when we make a determination or decision, including those claims in which we make a determination or decision after remand to us from a Federal court. With respect to claims in which we have made a final decision, and that are pending judicial review in Federal court, we expect that the court's review of the Commissioner's final decision would be made in accordance with the rules in effect at the time of the administrative law judge's (ALJ's) decision if the ALJ's decision is the final decision of the Commissioner. If the court determines that the Commissioner's final decision is not supported by substantial evidence, or contains an error of law, we would expect that the court would reverse the final decision and remand the case for further administrative proceedings pursuant to the fourth sentence of section 205(g) of the Act, except in those few instances in which the court determines that it is appropriate to reverse the final decision and award benefits without remanding the case for further administrative proceedings. In those cases decided by a court after the effective date of the rules, where the court reverses the Commissioner's final decision and remands the case for further administrative proceedings, on remand, we will apply the provisions of these final rules to the entire period at issue in the claim.

These final rules will no longer be effective 8 years after the date on which they become effective, unless we extend them, or revise and issue them again.

We are:

• Changing the name of this body system from “Multiple Body Systems” to “Impairments That Affect Multiple Body Systems”;

• Expanding, updating, and reorganizing the guidance in the introductory text to the listings;

• Removing prior listing 110.07;

• Making conforming changes in related regulations; and

• Making nonsubstantive editorial changes.

We are changing the name of this body system from “Multiple Body Systems” to “Impairments That Affect Multiple Body Systems” to more accurately indicate that we use the listings in this body system to evaluate single impairments that affect two or more body systems.

We are expanding, updating, and reorganizing the introductory text to provide additional guidance for evaluating impairments under this body system. A detailed description of the revised introductory text follows.

In this section, we are expanding and clarifying prior 10.00A, “Down syndrome (except for mosaic Down syndrome),” and provide a description of Down syndrome. There are four subsections:

• In final 10.00A1, we explain that we evaluate non-mosaic Down syndrome under this body system.

• Final 10.00A2 is a new paragraph that describes Down syndrome and explains that it exists in “non-mosaic” and “mosaic” forms. We are revising the language we proposed in the NPRM for medical accuracy, clarity, and consistency with final 10.00A3. However, there are no substantive changes from the NPRM.

• In final 10.00A3a, we describe non-mosaic Down syndrome. Similar to the changes in final 10.00A2, we are making minor editorial revisions from the NPRM for medical accuracy and clarity. In final 10.00A3b, we explain that we evaluate non-mosaic Down syndrome under final listing 10.06. We also explain that, if you have confirmed non-mosaic Down syndrome, we consider you disabled from birth. This provision was part of prior listing 10.06, but we are moving it to the introductory text because it is not a criterion for meeting the listing. It explains only when your disability began. We are also moving the examples of common impairments associated with Down syndrome from proposed 10.00A2 to this section and revising them slightly for clarity.

• We describe mosaic Down syndrome in final 10.00A4a. In final 10.00A4b, we explain that we evaluate adults with confirmed mosaic Down syndrome under the listing criteria in any affected body system(s) on an individual case basis, and we refer to 10.00C for an explanation of how we adjudicate claims involving mosaic Down syndrome. We are making minor editorial revisions from the NPRM consistent with the changes we are making in final 10.00A2 and A3.

In this section, we are expanding and modifying prior 10.00B. We explain the documentation we need to establish that you have non-mosaic Down syndrome. We are also revising this section as we proposed it in the NPRM to reflect our adjudicative experience, to eliminate an unnecessary requirement in the prior rules, and to reflect modern medical practices. We are also making minor revisions for clarity.

We proposed two paragraphs in 10.00B in the NPRM; there are three paragraphs in these final rules. In final 10.00B1, we explain the basic requirement in our disability programs that the documentation we need to establish the existence of a medically determinable impairment must come from an acceptable medical source, as defined in §§ 404.1513(a) and 416.913(a) of our regulations.

In final 10.00B2, we provide that we will find that you have non-mosaic Down syndrome based only on a report from an acceptable medical source indicating that you have the impairment when that report includes the actual laboratory report of definitive chromosomal analysis showing that you have non-mosaic Down syndrome. We define the phrase “definitive chromosomal analysis” as meaning karyotype analysis. Karyotype analysis is currently the most accurate and reliable indicator of the existence of non-mosaic Down syndrome. It is also the kind of analysis that is used most often and the test we refer to in our internal operating instructions.

Based on our adjudicative experience, we have determined that a report from an acceptable medical source indicating that you have non-mosaic Down syndrome that is supported by definitive chromosomal karyotype analysis is sufficient to establish the existence of non-mosaic Down syndrome. We do not additionally require a clinical description of the diagnostic physical features of the impairment when we have this evidence, as we required under the prior rules and in the NPRM, because karyotype analysis shows definitively whether you have non-mosaic Down syndrome. Chromosomal analysis has become much more common in recent years and is often in the medical evidence we obtain. This was not the case in 1990 when we published the original rules for children, the rules we used as a basis for the adult listing we first published on May 19, 2000. See 65 FR 31800. Moreover, physicians generally order chromosomal testing for Down syndrome when their clinical findings suggest that an individual might have Down syndrome, so we believe that we can reasonably presume that the diagnostic physical features are present.

In these final rules, we require the laboratory report to be submitted by an acceptable medical source because in this situation it will be the objective medical evidence we rely on to establish the existence of the medically determinable impairment. This does not mean that an acceptable medical source must conduct the actual karyotype analysis, only that an acceptable medical source must submit the evidence together with an opinion that you have non-mosaic Down syndrome.

In final 10.00B3, we explain that, when we do not have the actual laboratory report of definitive chromosomal analysis, we need evidence from an acceptable medical source that includes a clinical description of the diagnostic physical features of Down syndrome, and that is persuasive that a positive diagnosis has been confirmed by definitive chromosomal analysis at some time prior to our evaluation. This is essentially the same alternative provision that we included in prior 10.00B and in proposed 10.00B2 of the NPRM. The section includes the guidance in prior 10.00B about what we mean by medical evidence that is “persuasive.”

We are also making other changes from proposed 10.00B2 in final 10.00B3. As in the NPRM, we include examples of other evidence that may help to establish that you have the impairment, such as your educational history or the results of psychological testing. In response to a comment, we are adding references to limitations in adaptive functioning and to mental disorders that may be associated with non-mosaic Down syndrome in these final rules because these findings are frequently in the evidence we obtain and are useful for establishing the diagnosis. We are also revising the proposed examples to remove the reference to “the description of abnormal physical findings” we included in the NPRM because it might be confused with the requirement for “a clinical description of the diagnostic physical features of Down syndrome” we included earlier in the same paragraph. Finally, we are making a number of editorial changes for clarity and for consistency with other changes that we are making in these final rules.

We are also making other nonsubstantive editorial changes throughout final 10.00B. For example, we are changing the heading of the section to refer specifically to non-mosaic Down syndrome because that is the only impairment we list in this body system. (We are not making the same change to the heading in 110.00B because the childhood listings include other multiple body system impairments.) In final 10.00B3 (proposed 10.00B2), we are also removing the phrase “if available,” referring to the example of psychological testing, because it is unnecessary. It is self-evident that the results of psychological testing would have to be available or we would not be able to use them.

In this section, we expand and clarify prior 10.00C, “Other chromosomal abnormalities; e.g. , mosaic Down syndrome.” We explain how we evaluate impairments that affect multiple body systems other than non-mosaic Down syndrome. There are three subsections:

• In final 10.00C1, we explain that, if you have a severe impairment(s) other than non-mosaic Down syndrome that affects multiple body systems, we must consider whether your impairment(s) meets the criteria of a listing in another body system. In these final rules, we are making minor editorial changes from the NPRM for clarity. For example, instead of referring to non-mosaic Down syndrome as a “common impairment” that affects multiple body systems, we are clarifying that it is an impairment that “commonly affects” multiple body systems. Although Down syndrome occurs more commonly than other genetic disorders, it still occurs relatively rarely, in only one out of every 750-800 live births in the United States. We are also changing the word “severe” in the first sentence to “significant” because the word “severe” has a special meaning in our rules and this will remove any confusion about our intent.

• In final 10.00C2, we give some examples of the many other impairments that can affect multiple body systems, such as triple X syndrome (XXX syndrome), fragile X syndrome, phenylketonuria (PKU), caudal regression syndrome, and fetal alcohol syndrome. (In an editorial change from the NPRM, we revised the reference to “trisomy X syndrome” from the NPRM to refer to two of the more commonly used names of the syndrome: “triple X syndrome” and “XXX syndrome.”) We also explain that, because these impairments can affect various body systems, and the effects on each person can vary widely, we evaluate these impairments under the listing criteria in any affected body system on an individual case basis. Final 10.00C2 generally corresponds to prior 10.00C.

• In final 10.00C3, we explain that, if you have a severe medically determinable impairment(s) that does not meet a listing, we will consider whether your impairment(s) medically equals a listing. If it does not, we will proceed to the fourth and, if necessary, fifth steps of the sequential evaluation process in §§ 404.1520 and 416.920. We also explain that we follow the rules in §§ 404.1594 and 416.994, as appropriate, when we decide whether you continue to be disabled.

As in final 10.00B, we are also making nonsubstantive editorial changes from the NPRM throughout final 10.00C.

We are simplifying the heading to make it clear that we evaluate only non-mosaic Down syndrome under this listing. As already noted, we are also moving the last sentence of prior listing 10.06 to final 10.00A3b. Because of the changes we are making in final 10.00B2, we are revising the proposed rule toremove the requirement for “clinical and laboratory” findings in every case. Instead, we are requiring that you show that you have non-mosaic Down syndrome “established as described in 10.00B.”

The following is an explanation of the changes we are making in part B, the listings for individuals who are under age 18. Except as described below, if we use the same criteria in both the adult and childhood rules, we are making these changes in the childhood rules for the same reasons we made the changes in the adult rules.

We describe below only the changes in the final rules in part B that are substantively different from the changes in part A. We do not describe minor, nonsubstantive differences in the language of the final rules specifically to address children.

In final 110.00A1, we provide a general description of the kinds of impairments we evaluate under this body system. We also provide a brief description of the effects that these impairments generally have on a child's ability to perform age-appropriate activities. We also explain that, when we use the term “very seriously” in these listings, we mean an “extreme” limitation as we define it in § 416.926a(e)(3) of our regulation for functional equivalence. To correct an error in the NPRM, we deleted the reference to mosaic Down syndrome as one of the impairments we evaluate under these listings. There is no listing for mosaic Down syndrome in these final rules.

In final 110.00A5a, we describe what we mean by “catastrophic congenital abnormalities or diseases.” We explain that they are present at birth and that it is reasonably certain that they will result in early death or interfere very seriously with development. In final 110.00A5b, we explain that we evaluate catastrophic congenital abnormalities or diseases under final listing 110.08.

We are making the same change in final 110.00B2 that we made in final 10.00B2, which provides that we will find that you have non-mosaic Down syndrome based on definitive chromosomal analysis (that is, karyotype analysis) if we have a copy of the laboratory report and it is submitted by an acceptable medical source who tells us that you have non-mosaic Down syndrome. In such cases, as in the final adult rules, we do not additionally require a clinical description of the diagnostic physical features of Down syndrome. As in final 10.00B3, we are also expanding the list of examples in final 110.00B3 to include examples of limitations in adaptive functioning or signs of a mental disorder.

Final 110.00B differs from final 10.00 because the listings in final 110.00 include other kinds of multiple body system impairments besides non-mosaic Down syndrome. Final 110.00B2a and 110.00B2b correspond to final 10.00B2 and 10.00B3. They explain we need to establish the existence of non-mosaic Down syndrome under final listing 110.06. Final 110.00B3 explains the evidence we need to establish the existence of the catastrophic congenital abnormalities and diseases we evaluate under final listing 110.08. Final 110.00B3a, explains how we document genetic disorders (such as Trisomy 13 or 18, chromosomal deletion syndromes, and genetic metabolic disorders) under final listing 110.08. Final 110.00B3b explains how we document other kinds of catastrophic congenital abnormalities (such as anencephaly and cyclopia) under final listing 110.08. In both cases, we need a clinical description of the physical abnormalities that are diagnostic for the impairments. In the case of genetic disorders under final listing 110.08, we also need the report of the definitive laboratory testing (for example, genetic analysis or evidence of biochemical abnormalities) appropriate to the impairment. However, as in the case of non-mosaic Down syndrome, we can also use a report from an acceptable medical source that is persuasive that appropriate testing was done in the past and that is consistent with the other information in the case record. In response to a comment, we are also including in final 110.00B3a examples of genetic disorders that we evaluate under final listing 110.08.

Final 110.00B is also different from final 10.00B in other ways. For example, we are not changing the heading of final 110.00B even though we changed the heading in 10.00B because we list a number of different impairments in 110.00 in addition to non-mosaic Down syndrome.

In final 110.00C2, as in the final adult rules and the NPRM, we explain that there are many other impairments that affect multiple body systems apart from the ones we include in these listings. However, because these impairments can vary widely in their effects on children, we need to evaluate their particular effects under the body system or body systems appropriate to those effects. In response to a comment about our proposed deletion of listing 110.07, we are also expanding final 110.00C2 to refer to specific categories of impairments involving multiple body systems, such as congenital anomalies, chromosomal disorders, and dysmorphic syndromes. As in the NPRM, we are also including some examples of specific impairments that can affect multiple body systems, such as triple X syndrome (XXX syndrome), fragile X syndrome, PKU, caudal regression syndrome, and fetal alcohol syndrome.

In final 110.00C3, we explain that, if you have a severe medically determinable impairment(s) that does not meet a listing, we will consider whether your impairment(s) medically equals a listing. If your impairment(s) does not meet or medically equal a listing, we will consider whether it functionally equals the listings. In the last sentence of final 110.00C3, we explain that we use the rules in § 416.994a when we consider whether you continue to be disabled. In a change from the NPRM, we are deleting the phrase “If you are receiving SSI payments,” which we proposed for the beginning of the last sentence. This will clarify that we use the rules in § 416.994a whenever we consider whether you continue to be disabled. This may occur, for example, when we make a “closed period” determination or decision; that is, a determination or decision that you were disabled and eligible for payments at the time you filed your application for SSI but, at the same time, that you are now no longer disabled. In such a situation you will not yet have received any SSI payments.

If the same criteria exist in both the adult and childhood rules, we are making the same changes in the childhood rules that we made for the adult rules for the same reasons we made the changes in the adult rules. The following is an explanation of the changes where they differ substantively from the final adult rules.

We are removing prior listing 110.07 for two reasons.

• First, we established listing 110.07A in 1990 to help us evaluate physical impairments in infants and young children. However, we wrote this listing before we had the policy of functional equivalence in § 416.926a, which we first published in 1991 and have updated several times, and before we updated several listings to better evaluate impairments in such children. All children who could qualify under any of the provisions of prior listing 110.07 will continue to qualify under other listings or the rules for functional equivalence. Therefore, prior listing 110.07A has become outdated and unnecessary.

• Second, the remaining criteria, prior listings 110.07B through F, were solely reference listings that referred adjudicators to other listings in other body systems. As we update the listings in each of the body systems in the Listing of Impairments, we are removing reference listings because they are redundant.

In the final rules, we provide listings for two kinds of catastrophic congenital abnormalities or diseases:

• Ones in which death usually is expected within the first months of life, and the rare individuals who survive longer are profoundly impaired (final listing 110.08A); and

• Ones that interfere very seriously with development (final listing 110.08B).

In the final listing, we are changing the references to incompatibility with “extrauterine life” in prior listing 110.08A and “life outside of the uterus” in the proposed listing to recognize that some children with the kinds of abnormalities listed may live for months or even a few years. The final language, “Death usually is expected within the first months of life, and the rare individuals who survive longer are profoundly impaired,” explains our intent more clearly.

In final listing 110.08B, we are changing the phrase “attainment of the growth and development of 2 years is not expected to occur” from the prior listing to “interferes very seriously with development.” This language in the final listing takes into consideration advances in the evaluation and management of these abnormalities and diseases, and will include under the listing some children with very serious limitations in development who were not included under the prior listing. This revised language is also consistent with our definition of “extreme” limitation in § 416.926a(e)(3). We are also clarifying in response to a comment that, for those diseases that have both infantile-onset and later-onset forms (for example, Tay-Sachs disease), only the earlier onset forms, which tend to be associated with more serious outcomes, are included under this listing.

Finally, we are making final listing 110.08 clearer and easier to understand by:

• Changing the word “abnormalities” from prior listing 110.08 to “abnormality” to emphasize that there need be only a single abnormality or disease involved.

• Removing the requirement for “a positive diagnosis” from prior listings 110.08A and B and instead cross-referring to 110.00B in the opening statement of final listing 110.08. This is a nonsubstantive change from the provision we proposed in the NPRM, which continued to use the phrase “a positive diagnosis.” We believe the phrase is unnecessary because 110.00B describes the evidence we need to establish whether a child has an impairment listed under 110.08.

• Updating, in response to a comment, the examples of “trisomy D and trisomy E” in final listing 110.08A to their more modern and medically accurate names, “trisomy 13” and “trisomy 18,” and updating and clarifying the examples in final listing 110.08B.

We are revising sections 8.00E3 and 108.00E3 in our skin body system listings for consistency with the changes we are making in final sections 10.00B and 110.00B. We recently published these final rules in the Federal Register . See 69 FR 32260 (June 9, 2004). In the final skin listings, we established new listings 8.07A and 108.07A for xeroderma pigmentosum (XP), and listings 8.07B and 108.07B for other genetic photosensitivity disorders. In 8.00E3 and 108.00E3 in the introductory text to those listings, we provided rules for establishing the existence of XP and other genetic photosensitivity disorders that we based on the prior rules for establishing the existence of non-mosaic Down syndrome. Under those rules, we required both a clinical description of the impairment and evidence of definitive genetic laboratory studies establishing the impairment. See 69 FR 32263. Our reasons for the changes in these final rules for establishing the existence of non-mosaic Down syndrome apply equally to our rules for establishing the existence of XP and other genetic photosensitivity disorders. Therefore, we are revising 8.00E3 and 108.00E3 for consistency with final 10.00B and 110.00B. As in the final multiple body system listings, the changes will simplify our rules for establishing the existence of the impairments.

We are also replacing the last sentence of 101.00B2c(2), “How we assess inability to perform fine and gross movements in very young children,” in the introductory text of the childhood musculoskeletal body system listings, because it refers adjudicators to prior 110.07A, which we are removing from the multiple body system listings. The final provision is based on the language of 101.00B2b(2), which addresses the assessment of the ability to ambulate effectively in very young children, but in terms relevant to the inability to perform fine and gross movements in such children.

We are making a number of editorial changes from the NPRM in these final rules. The changes simplify and clarify language, change some sentences to active voice, and improve consistency between the provisions of part A and part B. These are not substantive changes, and we do not intend for them to change the meaning of the language we proposed in the NPRM.

In the NPRM, we proposed to change prior § 416.934(g), which was a provision in one of our regulations about presumptive disability and presumptive blindness payments under SSI. The prior provision used language that was out-of-date. However, on August 28, 2003, we published final rules that made this change. (See “Revised Medical Criteria for Evaluating Amyotrophic Lateral Sclerosis,” 68 FR 51689, 51692.) Therefore, we are not including the change in these final rules because we have already made it. We did not receive any public comments about the proposed change.

In the NPRM we published on December 23, 2002 (67 FR 78196), we provided the public with a 60-day period in which to comment. The period ended on February 21, 2003. We mailed electronic copies to national medical organizations and professionals who have expertise in the evaluation of impairments that affect multiple body systems. As a part of our outreach efforts, we invited comments from advocacy groups and legal services organizations.

We received comments from six commenters. We carefully considered all of the comments. Because some of the comments were long, we have condensed, summarized, and paraphrased them. We have tried to summarize the commenters' views accurately, and to respond to all of the significant issues raised by the commenters that were within the scope of these rules.

Comment: One commenter stated that the provisions of prior 10.00B and 110.00B did not permit the use of mental and adaptive behaviors to be used in conjunction with laboratory tests to confirm a probable positive diagnosis of Down syndrome. The commenter said that the wording appeared to require the description of abnormal physical findings to confirm the diagnosis in all cases. The commenter suggested that when we consider the full range of signs, symptoms, and laboratory findings we include, in addition to physical findings, mental and adaptive clinical evidence.

Response: We adopted the comment in final 10.00B3 and 110.00B2b.

Comment: A commenter said that the proposed listings were silent on the issues of how many biopsies and chromosome evaluations, and of how many different body tissues, would be necessary to absolutely and definitively rule out the presence of mosaicism. The commenter believed that we should specify how non-mosaicism must be established. The commenter asked whether a treating physician's assertion would be sufficient or a chromosomal analysis of only one body tissue and, if so, of which tissue.

Response: The standard diagnostic test for Down syndrome in both the non-mosaic and mosaic forms is a blood chromosomal (karyotype) analysis, and the great majority of people with Down syndrome have the non-mosaic form. Mosaic Down syndrome is rare: only about 1 to 2 percent of people who have Down syndrome have the mosaic form.

In these final rules, we are making clear in response to this comment that a treating physician's statement alone is not sufficient to establish whether Down syndrome is mosaic or non-mosaic, although a treating physician's statement, supported by karyotype analysis, as outlined in 10.00B2 and 110.00B2a, will be sufficient to establish that you have non-mosaic Down syndrome. Under final listings 10.06 and 110.06, either a report of definitive chromosomal analysis alone or a physician's statement that there was chromosomal testing together with the physician's description of the diagnostic physical findings will support a finding of disability.

Comment: One commenter said that, although prior listing 110.07 was basically a reference listing, it served to reinforce the need to assess multiple body dysfunction regardless of the underlying condition. The commenter believed that the listing served as a valuable reminder of this basic concept, and that we should retain it, especially for adjudicators who are less experienced.

Response: We did not adopt the comment. We do not agree that the prior reference listing would be especially helpful to adjudicators, even newer ones. All children who could qualify under any of the provisions of prior listing 110.07 will continue to qualify under other listings or the rules for functional equivalence. Also, as we have already noted, because reference listings are redundant, we are removing them from all the body systems as we revise them; therefore, retaining one reference listing in this body system would be anomalous.

We did include information about the SSI childhood disability regulations in the introductory text to these final listings as a reminder about our other rules. Additionally, because the last sentence of 101.00B2c(2) in the introductory text of the childhood musculoskeletal listings referred adjudicators to prior 110.07A, we are replacing that sentence with clearer guidance for assessing extreme limitation of fine and gross movements in very young children, similar to the guidance in 101.00B2b(2).

Comment: One commenter asked whether proposed listings 110.08A and B would include trisomies 8, 9, 13, and 18, as well as 21. The commenter also asked if the deletions listed under proposed listing 110.08B included the deletions for chromosomes 5, 8, 11, 13, 18, 21, and 22. Finally, the commenter asked whether our example of Tay-Sachs disease was meant to suggest that other conditions, such as medium- and long-chain dehydrogenase deficiencies, Zellweger syndrome, Niemann-Pick disease, Krabbe disease and mucolipidosis, should also be included in this category.

Response: We clarified the listing in response to this comment. We also included similar clarifications in final 110.00B3a of the introductory text.

In 110.08A, we changed the examples of trisomy D and E to their more currently accepted names, trisomy 13 and 18, respectively. Most children born with trisomy 13 or 18 die relatively shortly after birth. Trisomy 21 is Down syndrome, so it is covered under final listing 110.06.

Most of the other non-mosaic trisomy syndromes in which a lifespan beyond age 1 is generally expected are associated with profound developmental retardation, and so would be included under final listing 110.08B. However, when the clinical course of a trisomy syndrome is variable, we will evaluate the impairment under the affected body system(s).

With regard to deletion syndromes, we clarified in final 110.08B that the example of “5p-syndrome” (cri du chat syndrome) was an example of a deletion syndrome: “deletion 5p syndrome.” Any of the other chromosomal deletion syndromes that are associated with profound developmental retardation will also meet the requirements of final listing 110.08B. When the clinical course of a deletion syndrome is more variable, we will evaluate the impairment under the affected body system(s).

In response to this comment, we are also clarifying our intent in final listing 110.08B. We are clarifying that the example of Tay-Sachs disease—which is a metabolic disease (beta-hexosaminidase deficiency)—refers to the infantile onset form; we will evaluate the later onset forms of Tay-Sachs disease under the affected body systems. This policy principle will also apply to other deficiency/storage diseases, such as medium-chain dehydrogenase deficiency, Niemann-Pick disease, and Krabbe disease. The infantile onset forms, which are associated with the most serious outcomes, will meet listing 110.08B, and we will evaluate the effects of other forms under the appropriate body systems.

Comment: Two commenters wrote to us about impairments that they wanted us to add to the multiple body systems listings. The first commenter wanted us to include chronic granulomatous disease (CGD), which he described as an impairment that, with proper treatment, does not cause any visible manifestations but that, without treatment, can be fatal in just a few years. Because of the characteristics of the disease, the commenter believed we should make determinations of disability based on how serious a person's condition is, regardless of whether he or she receives treatment.

Similarly, the second commenter asked us to include Beckwith-Wiedemann syndrome in our listings for children. He expressed a concern that, without a listing to go by, we would have a harder time finding out the severity of the disorder.

Response: Although we agree that these impairments can be disabling, we did not adopt the comments asking us to add them to the listings. CGD exists in multiple forms with variable effects and prognoses. Beckwith-Wiedemann syndrome also varies in its clinical course and its effects on different individuals.

We have consulted with the Office of Management and Budget (OMB) and determined that these final rules meet the criteria for a significant regulatory action under E.O. 12866, as amended by E.O. 13258. Thus, they were subject to Office of Management and Budget review.

We certify that these final rules will not have a significant economic impact on a substantial number of small entities because they affect only individuals. Thus, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.

The Paperwork Reduction Act of 1995 says that no persons are required to respond to a collection of information unless it displays a valid Office of Management and Budget control number. In accordance with the Paperwork Reduction Act, SSA is providing notice that the Office of Management and Budget has approved the information collection requirements contained in sections 10.00B, 10.00C, 110.00B, and 110.00C. The Office of Management and Budget Control Number for this (these) collection(s) is 0960-0642, expiring March 31, 2008.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. This safety zone is temporary in nature and limited time existed for an NPRM. The Coast Guard was not made aware that this event was to take place with sufficient time to allow for publication of an NPRM followed by a final rule. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying this rule would be impracticable and immediate action is necessary to ensure the safety of personnel and vessels during the operational period. During the enforcement of this safety zone, comments will be accepted and reviewed and may result in a modification to the rule.

A temporary safety zone is necessary to ensure the safety of vessels and persons from the hazards associated with a construction project on a navigable waterway. The Captain of the Port Lake Michigan has determined this project in close proximity to watercraft (Burnham Harbor) pose significant risks to public safety and property. Blasting operations in close proximity to the water could easily result in serious injuries or fatalities. Establishing a safety zone to control vessel movement around the location of the blasting site will help ensure the safety of persons and property and minimize the associated risks. Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or his designated On-Scene Representative via VHF radio Channel 16.

The safety zone will encompass all waters of Lake Michigan bounded by the arc of a circle with a radius of 150-feet with its center at the shoreline of Northerly Island in the approximate position 41°51′12″ N, 087°36′30″ W. These coordinates are based upon North American Datum 1983 (NAD 1983). The size of this zone was determined using the safety guidelines and safety plan provided by the construction contractor and local knowledge concerning wind, waves, and currents. All commercial and recreational vessels must contact the Coast Guard Patrol Commander via VHF-FM Channel 16 to request permission to transit through the safety zone.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS).

We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary.

This finding is based on the relatively small percentage of vessels that would fall within the applicability of the regulation, the relatively small size of the limited area around the zone, the minimal amount of time that vessels will be restricted when the zone is being enforced. In addition, vessels that will need to enter the zone may request permission on a case-by-case basis from the Captain of the Port or the designated on-scene representative.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule may affect the following entities, some of which might be small entities: The owners or operators of vessels intending to transit through the safety zone in and around the area.

This proposed rule would not have a significant impact on a substantial number of small entities because the restrictions affect only a limited area for a short duration. Further, transit through the zone may be permitted with proper authorization from the Captain of the Port Lake Michigan or his designated representative. Additionally, the opportunity to engage in recreational activities outside the limits of the safety zone will not be disrupted.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-800-734-3247.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, we believe this rule should be categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. This safety zone fits paragraph 34(g) because it establishes a safety zone.

A preliminary “Environmental Analysis Check List” is available in the docket where indicated under ADDRESSES. Comments on this section will be considered before we make the final decision on whether the rule should be excluded from further environmental review.

Pursuant to 5 U.S.C. 553, a notice of rulemaking (NPRM) has not been published for this regulation and good cause exists for making it effective without publication of an NPRM in the Federal Register . Publishing a NPRM would be contrary to public interest since immediate action is necessary to ensure the safety of vessels and persons that transit in the vicinity of the Tacoma Narrows Bridge. If normal notice and comment procedures were followed, this rule would not become effective until after the date of the event.

Temporary safety zones are necessary to ensure the safety of vessels and spectators from the hazards associated with fireworks displays. Based on recent accidents that have occurred in other Captain of the Port zones, and the explosive hazard of fireworks, the Captain of the Port Buffalo has determined fireworks launches in close proximity to watercraft pose significant risks to public safety and property. The likely combination of large numbers of recreational vessels, congested waterways, darkness punctuated by bright flashes of light, alcohol use, and debris falling into the water could easily result in serious injuries or fatalities. Establishing a safety zone to control vessel movement around the locations of the launch platforms will help ensure the safety of persons and property at these events and help minimize the associated risk.

The safety zone consists of all navigable waters of the Seneca River within 800 foot radius of the fireworks barge moored/anchored in approximate position 43°09′27″ N, 076°20′25″ W. All Geographic coordinates are North American Datum of 1983 (NAD 83). The size of this zone was determined using the National Fire Prevention Association guidelines and local knowledge concerning wind, waves, and currents.

The Coast Guard believes this regulation will not pose any new problems for commercial vessels transiting the area. In the unlikely event that shipping is affected by this regulation, commercial vessels may request permission from the Captain of the Port Buffalo to transit through the safety zone.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. The Office of Management and Budget has not reviewed this rule under that order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS) (44 FR 11040, February 26, 1979). We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10(e) of the regulatory policies and procedures of DHS is unnecessary.

This determination is based on the minimal time that vessels will be restricted from the zones, and all of the zones are in areas where the Coast Guard expects insignificant adverse impact to mariners from the zones' activation.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities.

This rule would affect the following entities, some of which might be small entities: The owners or operators of commercial vessels intending to transit a portion of an activated safety zone.

This safety zone would not have a significant economic impact on a substantial number of small entities for the following reasons: This safety zone is only in effect from 10 p.m. (local) until 10:30 p.m. (local) on the day of the event. Vessel traffic can safely pass outside the safety zone during the event. In cases where traffic congestion is greater than expected and/or blocks shipping channels, traffic may be allowed to pass through the safety zone under Coast Guard or assisting agency escort with the permission of the Captain of the Port Buffalo. Additionally, the Coast Guard has not received any negative reports from small entities affected during these displays in previous years.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment ( see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects and participate in the rulemaking process. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact Marine Safety Office Buffalo ( see ADDRESSES ). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule would not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule would not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

The Coast Guard has analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.1D, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, we believe that this rule should be categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. This event establishes a safety zone; therefore, paragraph (34)(g) of the Instruction applies.

A preliminary “Environmental Analysis Check List” is available in the docket where indicated under ADDRESSES. Comments on this section will be considered before we make the final decision on whether the rule should be categorically excluded from further environmental review.

EPA published a document on February 24, 2005 (70 FR 8930) redesignating § 52.1220 as § 52.1222, when § 52.1222 already existed. The intent of the rule was to remove the then existing § 52.1222 titled “EPA-approved Minnesota State regulations” and then redesignate § 52.1220 as § 52.1222. This document corrects the erroneous amendatory language.

In the final rule published in the Federal Register on February 24, 2005 (70 FR 8930), on page 8932 the amendatory instruction is corrected. Section 553 of the Administrative Procedure Act, 5 U.S.C. 553(b)(B), provides that, when an agency for good cause finds that notice and public procedure are impracticable, unnecessary or contrary to the public interest, the agency may issue a rule without providing notice and an opportunity for public comment. We have determined that there is good cause for making today's rule final without prior proposal and opportunity for comment because we are merely correcting an incorrect citation in a previous action. Thus, notice and public procedure are unnecessary. We find that this constitutes good cause under 5 U.S.C. 553(b)(B).

On May 18, 2005 (70 FR 28606), EPA issued a final rule in which EPA promulgated new source performance standards for new coal-fired electric utility steam generating units and emission guidelines for existing coal-fired electric utility steam generating units designed to limit mercury (Hg) emissions from such sources. EPA subsequently determined that certain sections of the final rule were not properly designated, i.e. , the numbering was not correct, and that certain rule text was not properly identified as introductory text. This action corrects those technical errors.

This notice corrects the following errors. In inserting a section to 40 CFR part 60, subpart Da ( e.g. , 40 CFR 60.45a), to incorporate emission limitations for Hg, subsequent sections were renumbered. In so doing, we inadvertently assigned section numbers to 40 CFR part 60, subpart Da, that were already in use in 40 CFR part 60, subpart Ea. To correct this error, it is necessary to renumber all of the sections in 40 CFR part 60, subpart Da, and to correct the associated internal references in the same manner. Further, in revising 40 CFR 75.6, we inadvertently indicated that we were revising entire paragraphs, rather than just the introductory text.

Under Executive Order 12866, Regulatory Planning and Review (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is, therefore, not subject to review by the Office of Management and Budget (OMB). This action is not a “major rule” as defined by 5 U.S.C. 804(2). The technical corrections do not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). Because EPA has made a “good cause” finding that this action is not subject to notice and comment requirements under the APA or any other statute, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104B4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of the UMRA.

The corrections do not have substantial direct effects on the States, or 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, Federalism (64 FR 43255, August 10, 1999).

Today's action also does not significantly or uniquely affect the communities of Tribal governments, as specified in Executive Order 13175, Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000). The technical corrections also are not subject to Executive Order 13045, Protection of Children from Environmental Health and Safety Risks (62 FR 19885, April 23, 1997) because this action is not economically significant.

The corrections are not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001) because this action is not a significant regulatory action under Executive Order 12866.

The corrections do not involve changes to the technical standards related to test methods or monitoring methods; thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272) do not apply.

The corrections also do not involve special consideration of environmental justice-related issues as required by Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the U.S. EPA will submit a report containing today's final action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the U.S. prior to publication of today's action in the Federal Register . Today's action is not a “major rule” as defined by 5 U.S.C. 804(2). The final rule will be effective on May 18, 2005.

EPA's compliance with the above statutes and EO for the underlying rule is discussed in the May 18, 2005 Federal Register notice containing “Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units” (70 FR 28606).

On July 1, 2005, we published a direct final rule (70 FR 38554) and a parallel proposal (70 FR 38562) amending the NESHAP for Miscellaneous Organic Chemical Manufacturing (40 CFR part 63, subpart FFFF). We amended the NESHAP by: Clarifying the compliance requirements for flares and the alternative standard, extending the vapor balancing alternative to cover transfers from barges to storage tanks, amending the procedures for correcting measured concentrations at the outlet of combustion devices to correct for dilution by supplemental gas, and clarifying the signature requirements for the notification of compliance status report. The direct final rule amendments also specified requirements for effluent from control devices, clarified the definition of the term continuous process vent, and corrected several referencing and drafting errors. We stated in the preamble to the direct final rule and parallel proposal that if we received adverse comment by August 1, 2005, (or if a public hearing was requested by July 11, 2005) on one or more distinct provisions of the direct final rule, we would publish a timely notice in the Federal Register specifying which provisions will become effective and which provisions will be withdrawn due to adverse comment. We subsequently received adverse comment from several commenters regarding requirements for effluent from control devices. Commenters also pointed out erroneous changes made to Table 1 of subpart FFFF of part 63.

Accordingly, we are withdrawing the amendments to 40 CFR 63.2485(c)(4) and Table 1 of subpart FFFF of part 63. The amendments are withdrawn as of August 30, 2005. We will take final action on the proposed rule after considering the comments received. We will not institute a second comment period on this action. The provisions for which we did not receive adverse comment will become effective on August 30, 2005, as provided in the preamble to the direct final rule.

EPA is publishing this rule without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comment since EPA is not authorizing any additional new production or import of methyl bromide. The additional authorized amounts must come from inventories produced or imported prior to January 1, 2005. However, in the “Proposed Rules” section of today's Federal Register publication, we are publishing a separate document that will serve as the proposal to authorize 610,665 kilograms of methyl bromide for critical uses if adverse comments are filed. If EPA receives adverse comment, we will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. We will address all public comments in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.

This action concerns regulation of methyl bromide pursuant to the CAA as a class I, Group VI ozone-depleting substance. Under the CAA, methyl bromide production and consumption (defined as production plus imports minus exports) were phased out on January 1, 2005, apart from certain exemptions, including the critical use exemption, which is the subject of today's rule. In a final rule published December 23, 2004 (69 FR 76982), EPA established the framework for the critical use exemption; set forth a list of approved critical uses for 2005; and specified the amount of methyl bromide that could be supplied in 2005 from stocks and new production or import to meet approved critical uses. As part of that rule, EPA issued critical use allowances (CUAs) for new production and import and critical stock allowances (CSAs) for sale of methyl bromide stocks. In today's action, EPA is amending the list of approved critical uses of methyl bromide and issuing additional CSAs for the 2005 control period. These actions are in accordance with Decision XVI/2 of the countries that have ratified the Montreal Protocol (the “Parties”), taken at their November 2004 meeting.

Entities potentially regulated by this action are those associated with the production, import, export, sale, application and authorized use of methyl bromide. Potentially regulated categories and entities include:

The above table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. To determine whether your facility, company, business, or organization is regulated by this action, you should carefully examine the regulations promulgated at 40 CFR Part 82, Subpart A. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

1. Docket. EPA has established an official public docket for this action under the Office of Air and Radiation Docket & Information Center, Electronic Air Docket ID No. OAR-2004-0506. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at EPA West, 1301 Constitution Ave., NW., Room B108, Mail Code 6102T, Washington, DC 20460, Phone: (202) 566-1742, Fax: (202) 566-1741. The materials may be inspected from 8:30 am until 4:30 pm Monday through Friday, excluding legal holidays. A reasonable fee may be charged for copying docket materials.

Additional supporting documents related to this action may be found in EPA's electronic docket system, docket numbers OAR-2002-0018, OAR-2003-0017, OAR-2003-0230, and in EPA's paper docket, Air Docket ID No. A-2000-24.

2. Electronic Access . You may access this Federal Register document electronically through the EPA Internet under the “ Federal Register ” listings at http://www.epa.gov/fedrgstr/ . An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Once in the system, select “search,” then key in the appropriate docket identification number, OAR-2004-0506.

Certain types of information will not be placed in the EPA Dockets. Information claimed as CBI and other information whose disclosure is restricted by statute, which is not included in the official public docket, will not be available for public viewing in EPA's electronic public docket. EPA's policy is that copyrighted material will not be placed in EPA's electronic public docket but will be available only in printed, paper form in the official public docket. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in the ADDRESSES section of this document.

For public commenters, it is important to note that EPA's policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing in EPA's electronic public docket as EPA receives them and without change, unless the comment contains copyrighted material, CBI, or other information whose disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in EPA's electronic public docket. The entire printed comment, including the copyrighted material, will be available in the public docket.

Public comments submitted on computer disks that are mailed or delivered to the docket will be transferred to EPA's electronic public docket. Public comments that are mailed or delivered to the Docket will be scanned and placed in EPA's electronic public docket. Where practical, physical objects will be photographed, and the photograph will be placed in EPA's electronic public docket along with a brief description written by the docket staff.

You may submit comments electronically, by mail, by fax, or through hand delivery/courier. To ensure proper receipt by EPA, identify the appropriate docket identification number in the subject line on the first page of your comment, in this instance OAR-2004-0506. Please ensure that your comments are submitted within the specified comment period. Comments received after the close of comment period will be marked late. EPA is not required to consider these late comments. If you plan to submit comments, please also notify Marta Montoro, U.S. Environmental Protection Agency, Stratospheric Protection Division (6205J), 1200 Pennsylvania Ave., NW., Washington, DC 20460, (202) 343-9321.

Information designated as Confidential Business Information (CBI) under 40 CFR, Part 2, Subpart 2, must be sent directly to the contact person for this notice. However, the Agency is requesting that all respondents submit a non-confidential version of their comments to the docket as well.

Electronically. If you submit an electronic comment as prescribed below, EPA recommends that you include your name, mailing address, and an e-mail address or other contact information in the body of your comment. Also include this contact information on the outside of any disk or CD-ROM you submit, and in any cover letter accompanying the disk or CD-ROM. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. EPA's policy is that EPA will not edit your comment, and any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket, and made available in EPA's electronic public docket. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.

i. EPA Dockets. Your use of EPA's electronic public docket to submit comments to EPA electronically is EPA's preferred method for receiving comments. Go directly to EPA dockets at http://www.epa.gov/edocket , and follow the online instructions for submitting comments to docket OAR-2004-0506.

ii. By Mail. Send one copy of your comments to each of the following two offices: U.S. Environmental Protection Agency, Air and Radiation Docket (6102), Electronic Air Docket ID No. OAR-2003-0230. Washington, DC 20460 and to U.S. Environmental Protection Agency, (6205J) 1200 Pennsylvania Ave., N.W., Washington, DC 20460, attn: Marta Montoro, docket no. OAR-2004-0506.

iii. By Hand Delivery or Courier. Deliver your comments to: Marta Montoro, 1310 L Street NW., Washington, DC 20005, Attention Electronic Air Docket ID No. OAR-2004-0506. Such deliveries are only accepted during the normal hours of operation 9 a.m to 5 p.m.

iv. By Facsimile. Fax your comments to both: (202) 566-1741, Attention Electronic Air Docket ID No. OAR-2003-0230, and to (202) 343-2337 or (202) 343-2338, Attention Marta Montoro, Electronic Air Docket No. OAR-2004-0506.

Do not submit information that you consider to be CBI electronically through EPA's electronic public docket or by e-mail. Send or deliver information identified as CBI only to the mail or courier addresses listed in the FOR FURTHER INFORMATION CONTACT Section, Electronic Air Docket ID No. OAR-2004-0506. You may claim information that you submit to EPA as CBI by marking any part or all of that information as CBI (if you submit CBI on disk or CD-ROM, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is CBI). Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR Part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket and EPA's electronic public docket. If you submit the copy that does not contain CBI on disk or CD-ROM, mark the outside of the disk or CD-ROM clearly that it does not contain CBI. Information not marked as CBI will be included in the public docket and EPA's electronic public docket without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified in the FOR FURTHER INFORMATION CONTACT Section.

The current regulatory requirements of the Stratospheric Ozone Protection Program that limit production and consumption of ozone depleting substances can be found at 40 CFR Part 82 Subpart A. The regulatory program was originally published in the Federal Register on August 12, 1988 (53 FR 30566), in response to the 1987 signing and subsequent ratification of the Montreal Protocol on Substances that Deplete the Ozone Layer (Protocol). The U.S. was one of the original signatories to the 1987 Montreal Protocol and the U.S. ratified the Protocol on April 21, 1988. Congress then enacted, and President Bush signed into law, the Clean Air Act Amendments of 1990 (CAAA of 1990) which included Title VI on Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85, Subchapter VI, to ensure that the United States could satisfy its obligations under the Protocol. EPA issued new regulations to implement this legislation and has made several amendments to the regulations since that time.

Methyl bromide is an odorless, colorless, toxic gas which is used as a broad-spectrum pesticide and is controlled under the CAA as a Class I ozone depleting substance (ODS). Methyl bromide is used in the U.S. and throughout the world as a fumigant to control a wide variety of pests such as insects, weeds, rodents, pathogens, and nematodes. Additional characteristics and details about the uses of methyl bromide can be found in the proposed rule on the phaseout schedule for methyl bromide published in the Federal Register on March 18, 1993 (58 FR 15014) and the final rule published in the Federal Register on December 10, 1993 (58 FR 65018).

The phaseout schedule for methyl bromide production and consumption was revised in a direct final rulemaking on November 28, 2000 (65 FR 70795), which allowed for the phased reduction in methyl bromide consumption and extended the phaseout to 2005. The revised phaseout schedule was again amended to allow for an exemption for quarantine and preshipment purposes on July 19, 2001 (66 FR 37751) with an interim final rule and with a final rule (68 FR 238) on January 2, 2003. Information on methyl bromide can be found at the following sites of the World Wide Web: http://www.epa.gov/ozone/mbr and http://www.unep.org/ozone or by contacting the Stratospheric Ozone Hotline at 1-800-296-1996.

Because it is a pesticide, methyl bromide is also regulated by EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and other statutes and regulatory authority and by States under their own statutes and regulatory authority. Under FIFRA, methyl bromide is a restricted use pesticide. Because of this status, a restricted use pesticide is subject to certain Federal and State requirements governing its sale, distribution, and use. Nothing in this final rule implementing the Clean Air Act is intended to derogate from provisions in any other Federal, State, or Local laws or regulations governing actions including, but not limited to, the sale, distribution, transfer, and use of methyl bromide. All entities that would be affected by provisions of this final rule must continue to comply with FIFRA and other pertinent statutory and regulatory requirements for pesticides (including, but not limited to, requirements pertaining to restricted use pesticides) when importing, exporting, acquiring, selling, distributing, transferring, or using methyl bromide for critical uses. The regulations in today's action are intended only to implement the CAA restrictions on the production, consumption and use of methyl bromide for critical uses exempted from the phaseout of methyl bromide.

Methyl bromide was added to the Protocol as an ozone depleting substance in 1992 through the Copenhagen amendment to the Protocol. The Parties authorize critical use exemptions through their Decisions.

The Parties agreed that each industrialized country's level of methyl bromide production and consumption in 1991 should be the baseline for establishing a freeze in the level of methyl bromide production and consumption for industrialized countries. EPA published a final rule in the Federal Register on December 10, 1993 (58 FR 65018), listing methyl bromide as a class I, Group VI controlled substance, freezing U.S. production and consumption at this 1991 level, and, in Section 82.7 of the rule, setting forth the percentage of baseline allowances for methyl bromide granted to companies in each control period (each calendar year) until the year 2001, when the complete phaseout would occur (58 FR 65018). This phaseout date was established in response to a petition filed in 1991 under sections 602 (c)(3) and 606 (b) of the Clean Air Act Amendments (CAAA) of 1990, requesting that EPA list methyl bromide as a class I substance and phase out its production and consumption. This date was consistent with section 602 (d) of the CAAA of 1990, which for newly listed class I ozone-depleting substances provides that “no extension [of the phaseout schedule in section 604] under this subsection may extend the date for termination of production of any class I substance to a date more than 7 years after January 1 of the year after the year in which the substance is added to the list of class I substances.” EPA based its action on scientific assessments and actions by the Parties to the Montreal Protocol to freeze the level of methyl bromide production and consumption for industrialized countries at the 1992 Meeting of the Parties in Copenhagen.

At their 1995 meeting, the Parties made adjustments to the methyl bromide control measures and agreed to reduction steps and a 2010 phaseout date for industrialized countries with exemptions permitted for critical uses. At this time, the U.S. continued to have a 2001 phaseout date in accordance with the CAAA of 1990 language. At their 1997 meeting, the Parties agreed to further adjustments to the phaseout schedule for methyl bromide in industrialized countries, with reduction steps leading to a 2005 phaseout for industrialized countries. In October 1998, the U.S. Congress amended the CAA to prohibit the termination of production of methyl bromide prior to January 1, 2005, to require EPA to bring the U.S. phaseout of methyl bromide in line with the schedule specified under the Protocol, and to authorize EPA to provide exemptions for critical uses. These amendments were contained in Section 764 of the 1999 Omnibus Consolidated and Emergency Supplemental Appropriations Act (Pub. L. 105-277, October 21, 1998) and were codified in Section 604 of the CAA, 42 U.S.C. 7671c. On November 28, 2000, EPA issued regulations to amend the phaseout schedule for methyl bromide and extend the complete phaseout of production and consumption to 2005 (65 FR 70795).

On December 23, 2004 (69 FR 76982), EPA published a final rule in the Federal Register that established the framework for the critical use exemption; set forth a list of approved critical uses for 2005; and specified the amount of methyl bromide that could be supplied in 2005 from available stocks and new production or import to meet approved critical uses. Today, EPA is authorizing sale of additional amounts of methyl bromide from inventory for critical uses in the 2005 control period. In addition, EPA is amending the existing list of approved critical uses.

Today's action reflects Decision XVI/2, taken at the Parties' Sixteenth Meeting in November 2004. In accordance with Article 2H(5), the Parties have issued several Decisions pertaining to the critical use exemption. These include Decision IX/6, which set forth criteria for review of proposed critical uses; Decision Ex. I/3, which addressed agreed critical uses, critical-use exemption levels, and allowable levels of new production and consumption for critical uses in 2005; and Decision XVI/2, which, in part, supplemented the critical use categories and exemption levels discussed in Decision Ex. I/3.

For a discussion of the relationship between the relevant provisions of the CAA and Article 2H of the Protocol, and the extent to which EPA takes into account Decisions of the Parties that interpret Article 2H, refer to the December 23, 2004 FR notice (69 FR 76984-76985). Briefly, EPA regards Decisions IX/6, Ex I/3, and XVI/2 as subsequent consensus agreements of the Parties that address the interpretation and application of the critical use provision in Article 2H(5) of the Protocol. In today's action, EPA is following the terms of these Decisions. This will ensure consistency with the Montreal Protocol, 42 U.S.C. 7671c(d)(6).

In Decision XVI/2, taken in November 2004, the Parties to the Protocol agreed as follows: “ Section IA of the Annex to Decision XVI/2 lists the following supplemental critical use categories for the U.S.: Dried fruit and nuts; eggplant field; peppers field; tomato field; dry commodities structures (cocoa); dry commodities—processed foods, herbs, spices, dried milk; ornamentals; smokehouse ham; strawberry fruit”. These are the uses for which the U.S. requested either initial authorization or a higher critical use level in its supplemental request for 2005. EPA is amending the following uses listed in Column A of Appendix L to 40 CFR Part 82; Subpart A to reflect Decision XVI/2: Eggplant; ornamentals; peppers; strawberry fruit; tomatoes; food processing; and commodity storage. Based on the applications underlying the U.S. supplemental request, EPA is modifying Columns B and C of Appendix L to 40 CFR Part 82, Subpart A to add new approved critical users, locations of use, and limiting critical conditions.

Section IB of the Annex to Decision XVI/2 does not list a supplemental level of production or consumption for the U.S. EPA's December 23, 2004 final rule already authorizes the full amount of production and consumption approved in the Parties' prior Decision regarding critical uses in 2005, Decision Ex. I/3. Therefore, EPA is not authorizing any additional production or consumption beyond that already authorized in the December 23, 2004 final rule. Instead, EPA is authorizing sale of additional amounts of methyl bromide from inventory for critical uses in the 2005 control period. This approach is in accordance with the Parties' statement in Decision Ex I/3 that “a Party with a critical-use exemption level in excess of permitted levels of production and consumption for critical uses is to make up any such difference between those levels by using quantities of methyl bromide from stocks that the Party has recognized to be available.”

The December 23, 2004 final rule authorized production of 7,659,000 kilograms (30% of the 1991 consumption baseline) and sale of 1,283,214 kilograms (5% of the 1991 baseline) from pre-phaseout inventories. In today's action, EPA is authorizing the sale of an additional 610,665 kilograms (2.4% of the 1991 baseline) from pre-phaseout inventories for critical uses. Thus, the total critical use amount for 2005 would be 9,552,879 kilograms, with 1,893,879 kilograms coming from pre-phaseout inventories.

Starting in 2002, EPA began notifying applicants as to the availability of an application process for a critical use exemption to the methyl bromide phaseout. The Agency published a notice in the Federal Register (68 FR 24737) announcing the deadline to apply, and directing applicants to announcements posted on EPA's methyl bromide Web site at http://www.epa.gov/ozone/mbr . Applicants were told they may apply as individuals or as part of a group of users (a “consortium”) who face the same limiting critical conditions ( i.e. specific conditions which establish a critical need for methyl bromide). This process has been repeated on an annual basis since then.

In response to the yearly requests for critical use exemption applications published in the Federal Register , applicants have provided information supporting their position that they have no technically and economically feasible alternatives to methyl bromide available to them. Applicants for the exemption have submitted information on their use of methyl bromide, on research into the use of alternatives to methyl bromide, on efforts to minimize use of methyl bromide and efforts to reduce emissions and on the specific technical and economic research results of testing alternatives to methyl bromide.

The CAA allows the Agency to create an exemption for critical uses to the extent consistent with the Protocol. The critical use exemption process is designed to meet the needs of methyl bromide users who do not have technically and economically feasible alternatives available. In EPA's recently published regulation describing the operational framework for the critical use exemption (69 FR 76982) the majority of critical uses for the 2005 calendar year were established. This action authorizes additional uses that the U.S. government submitted to the Protocol's Ozone Secretariat as a supplemental request in February 2004. In addition, EPA is adding to the number of CSAs previously allocated for the 2005 control period.

For this action, the operational framework for authorizing CSAs is described in EPA's recent regulation, published in the Federal Register on December 23, 2004 (69 FR 76982). All elements of the framework, such as the cap, trading provisions, and reporting and recordkeeping obligations, remain the same for this action. However, this rulemaking also allows additional quantities of methyl bromide to be made available from inventory and to augment the list of approved critical uses.

For information on EPA's calculation of CSAs, please see E-Docket OAR-2004-0506.

A detailed explanation of the development of the nomination, including the criteria used by expert reviewers, is available in a memo titled “2003 Nomination Process: Development of 2003 Nomination for a Critical Use Exemption for Methyl Bromide from the United States of America” on E-Docket OAR-2003-0230 (document 104) and E-Docket OAR-2004-0506. This memo applies equally to the 2004 Nomination, which included the supplemental request for 2005. All critical use exemption applications, including those described in the supplemental request for 2005, underwent a rigorous review by highly qualified technical experts. The CUE applications (except to the extent claimed confidential) are available on E-Docket OAR-2004-0506. Data from the applications served as the basis for the nomination and was augmented by multiple other sources, including but not limited to the National Agricultural Statistics Service of the U.S. Department of Agriculture, the State of California Department of Pesticide Regulation, peer-reviewed articles, and crop budgets.

After submission of the first U.S. Nomination for a Critical Use Exemption for Methyl Bromide, (nomination) in February 2003, EPA and other U.S. government agencies decided to make supplemental requests in February 2004 for certain sectors that did not apply for an exemption in time for the 2003 nomination. For example, in some cases the sector consortia did not file an application during the first round of exemption applications in 2002, but instead did so in 2003. In other cases, sector consortia filed additional materials in 2003. Lastly, some sectors were incorrectly characterized in the first nomination, so EPA amended the sector chapters and amount of requests in the form of the 2005 supplemental request. The review process for the supplemental request was rigorous, with technical and economic criteria in place during the review process.

With the second nomination submitted to the Ozone Secretariat in February 2004, most of which was intended for the 2006 control period, the U.S. government included the supplemental request for 2005 in Appendix B. Appendix B was attached to each of the nomination chapters, available on E-Docket OAR-2004-0506 and http://www.epa.gov/mbr/nomination_2006.html . All of the supplemental requests were characterized in the corresponding chapters in the nomination, including explanations of technically and economically infeasible alternatives for each sector. The U.S. originally nominated the following new applicants for the 2005 supplemental request:

This request was subsequently modified. In August 2004, all of the tobacco applicants withdrew their CUE requests for the 2005 control period and beyond. With regard to the strawberry fruit sector, MBTOC initially recommended a reduction to the U.S. request in this sector. After being provided with additional information, MBTOC revised this recommendation, and the United States was granted a supplemental allocation to make up the difference. The U.S. also requested an additional amount for tomatoes, having received new data regarding pest pressure in two California counties. More information on each of these sectors, including calculations of production losses and other technical data, can be found in the annual nomination on E-Docket OAR-2004-0506. Memos explaining the technical contexts and corrections for both of these sectors are available on E-Docket OAR-2004-0506.

This request for a methyl bromide CUE was made on behalf of growers in Florida and members of the California Cut Flower Commission. The ornamentals industry is complex and growers produce multiple species and varieties in a single year. This diversity makes finding methyl bromide alternatives for each crop species very complicated. The nomination for the ornamental sector was for areas with moderate-severe pest pressure and for areas in California where critical users may be prohibited from using 1,3-dichloropropene products because local township caps for this alternative have been reached.

For this sector, EPA received several more CUE applications for the 2006 control period that were also requesting methyl bromide for the 2005 control period. It should be noted that Ozark Country Ham and Wayco Ham in the above table were eventually nominated under the National Country Ham Association. The U.S. government nomination included only facilities where dry cured ham, dry cured country ham, hard salami, pepperoni, and sausage are produced. There are no registered alternatives for this sector. The nomination was for facilities owned by the companies that are members of these associations, and for the Nahunta Pork Center.

California produces most of the domestic supply of dates. The nomination was for peak production periods, because high volumes of dates must be processed in order to enter the market quickly for the holiday season, or if there is limited silo availability for using alternatives. Substantial time and production losses would occur if processors were relying on alternatives alone, as there is a short period after harvest in which to fumigate. The nomination is limited to Riverside county.

The U.S. government nominated commodities and food processing plants treated by members of this association. Commodities included are processed foods, spices and herbs, cocoa, and dried milk, and other commodities that were nominated but not authorized. The nomination for facilities that are older and cannot be properly sealed in order to use a methyl bromide alternative, or for facilities that contain sensitive electronic equipment that is subject to corrosivity as a result of fumigation with a methyl bromide alternative, or in instances where heat treatment would cause a commodity to go rancid.

EPA is including these sectors separately in Appendix L. Initially the request for eggplant and pepper growers in Michigan was included with the request for tomato growers, but the sectors are distinct. The request is for areas where fungal pathogen infestation is moderate to severe.

The U.S. government nominated this group because the currently registered alternatives do not provide adequate treatment for the numerous plant species grown. Research trials for efficacy are ongoing for alternatives not yet registered. The request was for areas where pest pressure is moderate to severe. These growers comprise part of the forest seedling sector but did not submit a CUE application to EPA in 2002, during the first round. They are not currently listed in Column B of Appendix L.

The report prepared by the technical advisory body, discussed further in section V.C., is silent with regard to the 2005 request for Michigan Herbaceous Perennials. Decision XVI/2 did not authorize supplemental amounts for the seedling sector in 2005, nor did it list herbaceous perennials separately as an agreed critical use category. Thus, Decision XVI/2 did not affect the status of Michigan Herbaceous Perennials for 2005.

The criteria for the exemption are delineated in Decision IX/6 of the Parties to the Protocol. In that Decision, the Parties agreed that “a use of methyl bromide should qualify as “critical” only if the nominating Party determines that: (I) The specific use is critical because the lack of availability of methyl bromide for that use would result in a significant market disruption; and (ii) there are no technically and economically feasible alternatives or substitutes available to the user that are acceptable from the standpoint of environment and public health and are suitable to the crops and circumstances of the nomination. The U.S. government reviews applications using these criteria and creates a package for submission to the Ozone Secretariat of the Protocol (the “critical use nomination” or CUN). The CUNs of various countries are then reviewed by the Methyl Bromide Technical Options Committee (MBTOC) and the Technical and Economic Assessment Panel (TEAP), which are independent advisory bodies to the Parties. These bodies make recommendations to the Parties regarding the nominations.

On February 7, 2004, the U.S. government submitted the second U.S. Nomination for a Critical Use Exemption for Methyl Bromide to the Ozone Secretariat of the United Nations Environment Programme. The 2005 supplemental request was submitted as Appendix B to this nomination. This supplemental request, like the remainder of the document, was based on a thorough analysis of the technical and economic feasibility of available alternatives specified by the MBTOC for each critical use and the potential for significant market disruption. The nomination can be found on E-docket on OAR-2004-0506.

In June 2004, the MBTOC sent questions to the U.S. government concerning technical and economic issues in the nomination. These questions, as well as the U.S. government's response, can be accessed on E-docket OAR-2004-0506. The U.S. government's response was transmitted on August 13, 2005. When responding to these questions, the U.S. government explained that critical use exemptions were being sought only in areas with moderate-severe pest pressure, where the use of alternatives would result in substantial yield losses, or where regulatory restrictions or geophysical conditions prohibit the adoption of alternatives. There were questions on all of the sectors described in today's action; however, many questions focused on alternatives in the overall sector instead of the specific supplemental requested amount.

In October, 2004, the MBTOC and the Technical and Economic Assessment Panel (TEAP) issued a final report on critical use nominations for methyl bromide. This report, issued by the United Nations Environment Programme (UNEP) and TEAP, is titled “Critical Use Nominations for Methyl Bromide: Final Report” and can be accessed at http://www.unep.ch/ozone/teap/Reports/MBTOC/MBCUN-october2004.pdf or on E-docket OAR-2004-0506. In Annex I of the report, the advisory bodies recommended an additional 584,093 kilograms of methyl bromide for U.S. critical uses in 2005. The additional kilograms were recommended for the following sectors: Dried fruit and nuts (dates); dry commodities/structures (cocoa beans); dry commodities/structures (processed foods, herbs and spices, dried milk and cheese processing facilities); eggplant; ornamentals; peppers; smokehouse ham; strawberry fruit; and tomatoes.

Based on the recommendations from the advisory bodies, the Parties authorized 610,655 kilograms of methyl bromide for 2005 supplemental uses in the U.S., in Decision XVI/2. The authorization adds 26,562 kilograms to the TEAP recommendation by restoring the full amount of the U.S. request for dry commodities/structures (cocoa beans). The Parties approved the above-mentioned uses referenced in the MBTOC/TEAP report.

In today's action, EPA is adding the new uses to the list of approved critical uses, and allocating additional CSAs for the sale of methyl bromide from inventory for critical uses in 2005.

EPA is also amending the Reporting and Recordkeeping Requirements in 40 CFR part 82 to require that entities report the amount of pre-phaseout methyl bromide inventory, held for sale or transfer to another entity, to the Agency on an annual basis. Entities will be required to differentiate between the amounts owned by them and those owned by other entities. Pre-phaseout refers to inventories of methyl bromide produced or imported prior to January 1, 2005. This additional requirement will allow EPA to track the drawdown of pre-phaseout inventories.

With today's action, EPA is allocating critical stock allowances (CSAs) to producers and importers of methyl bromide, and other entities that hold pre-phaseout quantities of methyl bromide for sale, on a pro-rated basis in relation to an average of their 2003 and 2004 holdings of inventory. Each CSA is equivalent to one kilogram of methyl bromide. Thus, an allowance holder must expend one CSA for each kilogram of methyl bromide sold to an approved critical user for approved critical uses.

The methodology for calculating the amount of CSAs for each entity is explained in a memorandum titled “CSA Description Memo,” available on E-docket OAR-2004-0506. In summary, EPA has used its authority under Section 114 of the CAA to require that certain regulated entities provide EPA with information about their holdings of methyl bromide.

EPA is allocating CSAs on a pro-rated basis, calculated as an average of the entities' December 31, 2003 and August 25, 2004 holdings of pre-phaseout methyl bromide as baseline. This same baseline was also used to calculate CSAs in the allocation framework rule (69 FR 76982).

EPA also notes that due to a slight baseline reporting error, one entity was granted fewer CSAs in the December, 2004 framework rule than they would have been had this reporting error not occurred. The entity has since clarified the data submitted to EPA. Therefore, EPA is granting this entity sufficient CSAs from the 610,665 supplemental amount to make up the difference and is calculating the distribution of the supplemental CSAs based on the revised baseline. The total amount for distribution using the revised baseline is 610,665 kilograms minus the amount granted off the top to correct the earlier distribution.

Allocated CSAs are granted for a specified control period. EPA is allocating CSAs to the following companies for the 2005 supplemental authorized amounts of critical use methyl bromide.

EPA has determined that the individual holdings of stocks of methyl bromide are confidential business information. The amount of CSAs allocated to each company could be used to calculate the individual stock holdings if information on aggregate stock holdings were released. EPA has determined that the aggregate stock information is not confidential business information but is currently withholding that information due to the filing of complaints seeking to enjoin the Agency from its release. Because release could occur depending on the outcome of that litigation, EPA is not listing the number of allowances proposed for distribution to each entity. EPA is placing a document listing the proposed allocations and distribution basis of CSAs for each entity in the confidential portion of the docket.

With today's action, EPA is determining that 610,665 kgs of methyl bromide are required to satisfy critical uses for the 2005 supplemental request. As discussed in Section VII, the amount of the U.S. supplemental request is based on applications received, public and private databases, and a rigorous technical review. EPA is authorizing those entities that hold inventories of methyl bromide to sell an additional 610,665 kgs for approved supplemental critical uses during 2005.

EPA is also clarifying 40 CFR 82.4 (p)(2), which was added to § 82.4 by the final allocation framework rule published on December 23, 2004 (69 FR 76982). Specifically, paragraph (p)(2)(vi) states that, with some exceptions: “No person who purchases critical use methyl bromide during the control period shall use that methyl bromide on a field or structure for which that person has used non-critical use methyl bromide for the same use (as defined in Columns A and B of Appendix L) in the same control period.” However, EPA did not intend this prohibition to prevent end users who have been using non-critical use methyl bromide during the first part of 2005 from using critical use methyl bromide on the same field or structure for the same use if they became approved critical users as a result of this supplemental rulemaking. Such a result would deprive those end users of the benefit of the exemption solely as a result of the timing of the rule. Thus, EPA is adding the following exception to paragraph (p)(2)(vi): “or unless, subsequent to that person's use of the non-critical use methyl bromide, that person * * * (b) becomes an approved critical user as a result of rulemaking.” EPA is also proposing to make a corresponding change to § 82.13, paragraph (2)(dd), which describes the self-certification process for approved critical users: “ * * * I am aware that any agricultural commodity within a treatment chamber, facility, or field I fumigate with critical use methyl bromide cannot subsequently be fumigated with non-critical use methyl bromide during the same control period, excepting a QPS treatment or a treatment for a different use * * * unless a local township cap limit now prevents me from using methyl bromide alternatives, or I have now become an approved critical user as a result of rulemaking.”

During the proposal and finalization of EPA's previous regulatory action concerning the operational framework for methyl bromide allocation (69 FR 76982), EPA considered several options for authorizing CSAs and CUAs. For CUAs, EPA co-proposed two options for the cap on critical use methyl bromide: a universal cap where all approved critical uses would purchase critical use methyl bromide and a sector-specific cap where each of the 16 critical use sectors would have their own cap of reserved material. In addition, EPA raised the possibility of adopting various hybrid options. The universal cap was supported by most public commenters because of the ease of implementation and cost savings and efficiencies to the regulated community. In the final rulemaking, EPA established two types of CUAs: one for pre-plant soil uses and the other for post-harvest, structural uses.

However, the portion of critical use methyl bromide to come from stocks was both proposed and finalized as a universal cap. EPA received no adverse comment to the proposal to make the quantities from stocks available in a universal fashion.

Paragraph 3 of Decision XVI/2 states that “Parties should endeavour to ensure that the quantities of methyl bromide recommended by the Technology and Economic Assessment Panel are allocated as listed in Sections IA [2005 quantities] and IIA [2006 quantities] to the annex to the present decision.” Similar language appeared in Decision Ex I/3. As described in the December 23, 2004 Federal Register notice (69 FR 76982), there would be significant administrative and practical difficulties associated with a sector-specific cap. Therefore, EPA has arrived at an allocation system that relies at least partly on the market to allocate quantities on a sectoral basis. EPA anticipates, based on historical use patterns and the research undertaken pursuant to submitting the U.S. nomination, that usage patterns will generally reflect the sectoral quantities found in the relevant annexes to Decisions Ex I/3 and XVI/2.

Therefore, in today's action, EPA is allocating the additional CSAs totaling 610,665 kilograms of critical use methyl bromide, for calendar year 2005, in a universal fashion.

Based on EPA's assessment of the technical and economic feasibility of alternatives and the potential for a significant market disruption if methyl bromide were not available for the uses proposed for addition in Appendix L, and the lack of any new information received since the submission of the U.S. supplemental request that would change EPA's assessment, EPA is adding new uses to Appendix L as reflected in the table below. EPA is authorizing the additional critical uses for the year 2005 as well as conditions that make these uses “critical.” This proposal is based on the data submitted by critical use exemption applicants, as well as public and proprietary data sources.

During the development of the nomination, EPA determined that the following additional uses with the limiting critical conditions specified below qualify to obtain and use critical use methyl bromide. EPA also does not believe that the technical and economic data have changed significantly since submitting the nomination. Therefore EPA believes that the amounts nominated in February 2004 and authorized by the Parties in November 2004 reflect the best available data. However, EPA welcomes submissions of current information regarding substitutes and alternatives for these uses.

In June 2004, MBTOC submitted questions to the U.S. government about the nomination. While these questions did not specifically concern the supplemental request for 2005, the questions concerned all of the sectors in the supplemental request except for dried fruit and nuts (dates). The questions predominately focused on alternatives to methyl bromide and requested further clarification on points made in the nomination. All of the MBTOC questions and the U.S. government responses, submitted on August 13, 2004, are available on E-docket OAR-2004-0506.

The following table shows the additions to Appendix L of CFR Part 82.

Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the Agency must determine whether the regulatory action is “significant” and therefore subject to OMB review and the requirements of the Executive Order. The Order defines “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.

Pursuant to the terms of Executive Order 12866, OMB has notified EPA that it considers this a “significant regulatory action” within the meaning of the Executive Order. EPA has submitted this action to OMB for review. Changes made in response to OMB suggestions will be documented in the public record.

This action will likely have a minor cost savings associated with its implementation, but the Agency did not conduct a formal analysis of savings given that such an analysis would have resulted in negligible savings. This action represents the authorization only 2.5% of 1991 consumption baseline of methyl bromide to be made available for critical uses.

The information collection requirements in this rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The Information Collection Request (ICR) document prepared by EPA has been assigned EPA ICR number 2179.03. This rule supplements the rule published in the Federal Register on December 23, 2004 (69 FR 76982). The information collection under these rules is authorized under Sections 603(b), 603(d) and 614(b) of the Clean Air Act (CAA).

The mandatory reporting requirements included in these rules are intended to:

(1) Satisfy U.S. obligations under the international treaty, The Montreal Protocol on Substances that Deplete the Ozone Layer (Protocol), to report data under Article 7;

(2) Fulfill statutory obligations under Section 603(b) of Title VI of the Clean Air Act Amendments of 1990 (CAA) for reporting and monitoring;

(3) Provide information to report to Congress on the production, use and consumption of class I controlled substances as statutorily required in Section 603(d) of Title VI of the CAA.

In this rule, EPA is amending the Reporting and Recordkeeping Requirements in 40 CFR part 82 to require that entities report the amount of pre-phaseout methyl bromide inventory, held for sale or for transfer to another entity, to the Agency on an annual basis. Pre-phaseout refers to inventories of methyl bromide produced or imported prior to January 1, 2005. This additional requirement will allow EPA to track the drawdown of pre-phaseout inventories.

EPA informs respondents that they may assert claims of business confidentiality for any of the information they submit. Information claimed confidential will be treated in accordance with the procedures for handling information claimed as confidential under 40 CFR Part 2, Subpart B, and will be disclosed only to the extent, and by means of the procedures, set forth in that subpart. If no claim of confidentiality is asserted when the information is received by EPA, it may be made available to the public without further notice to the respondents (40 CFR 2.203).

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information; process and maintain information; disclose and provide information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An Agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR Chapter 15.

When this ICR is approved by OMB, the Agency will publish a technical amendment to 40 CFR part 9 in the Federal Register to display the OMB control number for the approved information collection requirements contained in these rules.

To obtain comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this rule, which includes this ICR, under Electronic Docket ID number OAR-2004-0506. Submit any comments related to the rule ICR for this rule to EPA and OMB. See ADDRESSES Section at the beginning of this notice for where to submit comments to EPA. Send comments to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington DC 20503 attn: Desk Officer for EPA. Include the EPA ICR number 2179.03 in correspondence related to this ICR.

Since OMB is required to make a decision concerning the ICR between 30 and 60 days after August 30, 2005, a comment to OMB is best assured of having its full effect if OMB receives it by September 29, 2005. The final rule will respond to any OMB or public concerns on the information collection requirements contained in this rule.

EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this final rule. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business that is identified by the North American Industry Classification System (NAICS) Code in the Table below; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

Agricultural producers of minor crops and entities that store agricultural commodities are categories of affected entities that contain small entities. This rule only affects entities that applied to EPA for a de-regulatory exemption. In most cases, EPA received aggregated requests for exemptions from industry consortia. On the exemption application, EPA asked consortia to describe the number and size distribution of entities their application covered. Based on the data provided, EPA estimates that there are 3,218 entities that petitioned EPA for an exemption. Since many applicants did not provide information on the distribution of sizes of entities covered in their applications, EPA estimated that between 1/4 to 1/3 of the entities may be small businesses based on the definition given above. In addition, other categories of affected entities do not contain small businesses based on the above description.

After considering the economic impacts of today's rule on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. The small entities directly regulated by this rule are primarily agricultural entities, producers, importers, and distributors of methyl bromide, as well as any entities holding inventory of methyl bromide.

In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on small entities.” (5 U.S.C. 603-604). Thus, an Agency may conclude that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves a regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. Since this rule will make additional methyl bromide available for approved critical uses after the phaseout date of January 1, 2005, this is a de-regulatory action which will confer a benefit to users of methyl bromide. EPA believes the estimated de-regulatory value for users of methyl bromide is between $20 million to $30 million annually, as a result of the entire critical use exemption program over its projected duration. We have therefore concluded that today's final rule will relieve regulatory burden for all small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local and tribal governments and the private sector. Under Section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA 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 EPA to adopt an alternative other than the least-costly, most cost-effective, or least burdensome alternative of the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

EPA has determined that this rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or by the private sector, in any one year. Today's action contains only one new mandate, which is the reporting requirement for the drawdown of pre-phaseout inventories. Today's amendment does not create a Federal mandate resulting in costs of $100 million or more in any one year for State, local, and tribal governments, in the aggregate, or for the private sector. Thus, today's rule is not subject to the requirements of Sections 202 and 205 of the UMRA.

EPA has also determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments; therefore, EPA is not required to develop a plan with regard to small governments under Section 203. Finally, because this rule does not contain a significant intergovernmental mandate, the Agency is not required to develop a process to obtain input from elected State, local, and tribal officials under Section 204.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA 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.”

This rule does not have federalism implications. It 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. Today's rule is expected to primarily affect producers, suppliers, importers and exporters and users of methyl bromide. Thus, Executive Order 13132 does not apply to this rule.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This rule does not have tribal implications, as specified in Executive Order 13175. The rule does not impose any enforceable duties on communities of Indian tribal governments. Thus, Executive Order 13175 does not apply to this rule.

Executive Order 13045: “Protection of Children From Environmental Health Risks and Safety Risks” (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 EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency 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 the Agency.

EPA interprets E.O. 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under Section 5-501 of the Order has the potential to influence the regulation. This rule is not subject to E.O. 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

This rule is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This rule does not pertain to any segment of the energy production economy nor does it regulate any manner of energy use. Further, we have concluded that this rule is not likely to have any adverse energy effects.

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 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do 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. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

The Congressional Review Act, 5, U.S.C 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective October 31, 2005.

Federal Motor Vehicle Safety Standard (FMVSS) No. 123, Motorcycle Controls and Displays, specifies requirements for the location, operation, identification, and illumination of motorcycle controls and displays. The purpose of FMVSS No. 123 is to minimize accidents caused by operator error in responding to the motoring environment, by standardizing certain motorcycle controls and displays.

Among other requirements, FMVSS No. 123 (at S5.2.1, Table 1) requires the control for a motorcycle's rear brakes to be located on the right side of the motorcycle and be operable by the rider's right foot. Section S5.2.1 at Table 1 also requires the control for a motorcycle's front brakes to be located on the right handlebar.

Although the rear brake control is generally operated by the rider's right foot, FMVSS No. 123 permits a “motor-driven cycle”  1 to have its rear brake controlled by a lever on the left handlebar. FMVSS No. 123 also states that, if a motorcycle has an “automatic clutch” ( i.e., a transmission which eliminates the need for a clutch lever) and a supplemental rear brake control (in addition to the right foot control), the supplemental control must be located on the left handlebar. If a motorcycle is equipped with a single control for both the front and rear brakes, that control must be located and operable in the same manner as a rear brake control.

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

The C season allowance of the 2005 TAC of pollock in Statistical Area 620 of the GOA is 4,446 metric tons (mt) as established by the 2005 and 2006 harvest specifications for groundfish of the GOA (70 FR 8958, February 24, 2005). In accordance with § 679.20(a)(5)(iv)(B), the Administrator, Alaska Region, NMFS (Regional Administrator), hereby decreases the C season pollock allowance by 1,357 mt, the amount by which the A and B season allowance of the pollock TAC in Statistical Area 620 was exceeded. The revised C season allowance of the pollock TAC in Statistical Area 620 is therefore 3,089 mt (4,446 mt minus 1,357 mt).

In accordance with § 679.20(d)(1)(i), the Regional Administrator has determined that the C season allowance of the 2005 TAC of pollock in Statistical Area 620 of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 3,039 mt, and is setting aside the remaining 50 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for pollock in Statistical Area 620 of the GOA.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of pollock in Statistical Area 620 of the GOA. NMFS was unable to publish an action providing time for public comment because the most recent, relevant data only became available as of August 22, 2005.

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

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

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

The C season allowance of the 2005 TAC of pollock in Statistical Area 630 of the GOA is 6,274 metric tons (mt) as established by the 2005 and 2006 harvest specifications for groundfish of the GOA (70 FR 8958, February 24, 2005). In accordance with § 679.20(a)(5)(iv)(B), the Administrator, Alaska Region, NMFS (Regional Administrator), hereby decreases the C season pollock allowance by 2,547 mt, the amount by which the A and B season allowance of the pollock TAC in Statistical Area 630 was exceeded. The revised C season allowance of the pollock TAC in Statistical Area 630 is therefore 3,727 mt (6,274 mt minus 2,547 mt).

In accordance with § 679.20(d)(1)(i), the Regional Administrator has determined that the C season allowance of the 2005 TAC of pollock in Statistical Area 630 of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 3,677 mt, and is setting aside the remaining 50 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for pollock in Statistical Area 630 of the GOA.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of pollock in Statistical Area 630 of the GOA. NMFS was unable to publish an action providing time for public comment because the most recent, relevant data only became available as of August 22, 2005.

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

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