The regulations in “Subpart—Fruits and Vegetables” (7 CFR 319.56 through 319.56-8, referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and spread of plant pests that are new to or not widely distributed within the United States.

On March 31, 2005, we published in the Federal Register (70 FR 16431-16445, Docket No. 03-048-1) a proposal to amend the regulations to list a number of fruits and vegetables from certain parts of the world as eligible, under specified conditions, for importation into the United States. Many of these fruits and vegetables have been eligible for importation under permit, but were not specifically listed in the regulations. We also proposed to recognize areas in several countries as free from certain fruit flies; add an alternative treatment for specified commodities; provide for the importation of untreated citrus from Mexico for processing under certain conditions; eliminate or modify existing treatment requirements for specified commodities; and to add, modify, or remove certain definitions and make other miscellaneous changes.

We solicited comments concerning our proposal for 60 days ending May 31, 2005. We received 29 comments by that date. They were from representatives of State governments, industry organizations, importers and exporters, producers, scientists, and individuals. Eight of the commenters wrote specifically to support the addition of two new areas of Brazil to the list of localities eligible to export papayas to the United States, and a ninth commenter supported the proposed rule in general. Another commenter wrote to oppose the proposed rule in general, but offered no specific information for our consideration. The remaining comments are discussed below by topic.

Several of the commenters raised concerns regarding the proposed provisions that would have allowed the importation of untreated citrus from Mexico into the United States for processing. In order to give us additional time to consider the issues raised by the commenters regarding untreated Mexican citrus without delaying final action on the other aspects of the proposed rule, we will not be finalizing the provisions regarding the importation of untreated citrus from Mexico into the United States for processing in this final rule. We will issue another document in the Federal Register in the future regarding the importation of untreated citrus from Mexico into the United States for processing.

Under the regulations in § 319.56-2x, blueberries ( Vaccinium spp.) from Argentina, Bolivia, Ecuador, and Peru may be imported into the United States provided that they are treated with methyl bromide or irradiation to mitigate the risk presented by the Mediterranean fruit fly (Medfly, Ceratitis capitata ).

We proposed to remove the treatment requirement for blueberries from those countries based on research and reports indicating that blueberries were not a host for Medfly in South America. In addition, we proposed to add Colombia, a country where Medfly is present, to the list of countries eligible to export blueberries to the United States. The pest risk assessment we prepared with regard to the importation of blueberries from Colombia concluded that there are no quarantine pests associated with blueberries from Colombia that are likely to follow the import pathway (although Medfly is present in Colombia, the pest risk assessment reflected the research and reports indicating that blueberries were not a host for Medfly in South America). Therefore, we proposed to allow blueberries to be imported from Colombia without treatment.

In response to our proposed rule, we received several comments indicating that there is a credible possibility that blueberries are in fact a host for Medfly in South America. Among the commenters were several South American blueberry producers who urged us to delay final action regarding the Medfly host status of blueberries until additional research can be conducted. These commenters stated they wished to avoid the market disruptions that would occur if blueberries were imported into the United States without treatment and subsequently found to be infested with Medfly.

Based on these comments, we have decided not to finalize our proposed removal of the treatment requirement for blueberries from Argentina, Bolivia, Ecuador, and Peru. With respect to blueberries from Colombia, this final rule will authorize their importation under § 319.56-2x ( i.e. , as a commodity enterable with treatment) rather than under § 319.56-2t as we had proposed. We believe that the pest risk assessment prepared for blueberries from Colombia still provides a basis for allowing their entry; however, our change in approach with respect to the Medfly host status of blueberries necessitates that the fruit be treated as a condition of entry. The treatment for blueberries from Colombia will be the same as for blueberries from Argentina, Bolivia, Ecuador, and Peru, i.e. , fumigation with methyl bromide or irradiation; this final rule also amends the list of treatments in § 305.2(h)(2)(i) of the phytosanitary treatments regulations to indicate the applicability of those treatments.

We intend to work with the Department's Agricultural Research Service on studies that will allow us to determine with greater certainty the Medfly host status of blueberries in South America as well as research into the efficacy of alternatives, such as cold treatment, to methyl bromide fumigation and irradiation.

One commenter stated he was interested in knowing which data sources were used to determine the pest status of blueberries in Colombia and whether or not that information will be considered prior to these blueberries entering the United States.

As mentioned previously, we did prepare a pest risk assessment relative to the importation of blueberries from Colombia. That risk assessment, titled “Importation of Fresh Blueberry ( Vaccinium spp.) into the Continental United States from Colombia,” was made available to the public in the proposed rule. The pest risk assessment cites the sources of the data used in the document and was, as noted above, considered in the preparation of the proposed rule and this final rule.

We proposed to add Swiss chard ( Beta vulgaris var. cicla ) from Mexico and ginger root ( Zingiber officinale ) from China to the list in § 319.56-2t of fruits and vegetables that may be imported into the United States in accordance with the inspection and disinfection requirements of § 319.56-6 and all other applicable requirements of the regulations. The proposed admissible plants parts were “whole plant” for Swiss chard from Mexico and “root” for ginger root from China. We noted that both of these commodities have been imported into the United States under permit since before 1992 and that their addition to the list in § 319.56-2t would serve to improve the transparency of our regulations.

One commenter stated that the potato pathotype of the false root-knot nematode ( Nacobbus aberrans ) is of concern with regard to Swiss chard imported from Mexico. The false root-knot nematode is a quarantine pest present in Mexico and is known to infest Swiss chard.

In response to this comment, this final rule provides that the admissible plant parts of Swiss chard from Mexico will be leaves and stem, rather than the whole plant as we proposed. Since the false root-knot nematode only infests the roots of Swiss chard and other plants and is not known to be carried in either the leaves or stem in trade or transport, this measure will be sufficient to prevent the introduction of false root-knot nematode in shipments of Swiss chard from Mexico.

The same commenter further stated that ginger root from China is an excellent host of the burrowing nematode ( Radopholus similis ) and root-knot nematodes of the genus Meloidogyne , and that root-knot nematode species that attack citrus are present in China and may infest ginger root as well. The commenter stated that evidence of infestation by such nematodes is more difficult to detect than evidence of arthropod infestation.

A review of our port interception records for the past 20 years reveals seven interceptions of root-knot nematodes in ginger root. Those interceptions were made in shipments from Jamaica, Haiti, Thailand, and Korea. There have been no interceptions of root-knot nematodes in ginger root from China.

Furthermore, both the burrowing nematode and root-knot nematodes exhibit symptoms that are macroscopic and detectable upon visual inspection. Specifically:

• Infestation by burrowing nematodes is evidenced by small, shallow, sunken, water-soaked lesions on the root.

• Root-knot nematodes cause galling of the root system which is often accompanied by a proliferation of small roots at the site of the gall.

Our interception records coupled with these macroscopic symptoms of infestation lead us to believe that port of entry inspection is adequate to mitigate the risk posed by burrowing nematode and root-knot nematodes in ginger root from China.

Finally, the commenter recommended that a complete risk analysis be conducted with regard to the possible introduction of these nematodes with commodities from Mexico and China.

As noted previously and in the proposed rule, both of these commodities have been enterable under permit since before 1992. Before those permits were issued, APHIS staff assessed the risk associated with each commodity and documented the results of that assessment in a decision sheet, 1 which was the reporting tool we used before we began routinely preparing pest risk assessments according to the guidelines provided by the Food and Agriculture Organization and the North American Plant Protection Organization. Given that we have already assessed the risks associated with the two commodities and numerous subsequent inspections of consignments of those commodities from Mexico and China have yielded no interceptions of quarantine pests, we do not believe an additional risk analysis is necessary.

The regulations in § 319.56-2w provide that papayas from certain areas in Central America and Brazil may be imported into the United States if they are grown, treated, packed, labeled, and shipped according to certain specifications to prevent the introduction of fruit flies into the United States. Papayas from those areas listed in § 319.56-2w(a) may be imported into the United States only if they meet a series of 10 conditions which we have determined to be sufficient to prevent the introduction of fruit flies into the United States (those conditions can be found in paragraphs (b) through (k) of § 319.56-2w). We proposed to amend § 319.56-2w(a) by adding two new areas of Brazil and one new area of Nicaragua to the list of localities eligible to export papayas to the United States.

One commenter stated that Medfly and South American fruit fly ( Anastrepha fraterculus ) are present in Brazil and Medfly is present in Nicaragua, and that both pests are known to attack papaya. The commenter stated that before he could endorse the proposal to allow papaya from Brazil and Nicaragua to be imported into the United States, he would like the opportunity to review the 10 conditions under which fruit will be acceptable as uninfested.

As noted above and in the proposed rule, the 10 conditions can be found in paragraphs (b) through (k) of the regulations § 319.56-2w. Those provisions were added to the regulations in March 1998 and have been successfully used since that time to provide for the importation of papayas from various countries in Central America and South America.

We proposed to add several citrus fruits (grapefruit, lemon, orange, sour lime, and tangerine) from the Dominican Republic to the list in § 319.56-2t of fruits and vegetables that may be imported into the United States in accordance with the inspection and disinfection requirements of § 319.56-6 and all other applicable requirements of the regulations. As is the case with the Swiss chard and ginger discussed earlier in this final rule, those citrus fruits have been imported into the United States under permit since before 1992 and their addition to the list in § 319.56-2t would serve to improve the transparency of our regulations.

One commenter noted that the State of California maintains an exterior quarantine and an ongoing detection program for Caribbean fruit fly ( Anastrepha suspensa ), a pest known to occur in the Dominican Republic. The commenter noted that an approved and certified treatment is necessary to prevent host fruit infested with Caribbean fruit fly from entering California and asked that APHIS recognize this special local need when developing its final rule.

Under the International Plant Protection Convention (IPPC), to which the United States is a signatory, and our regulations in § 319.56, a quarantine pest is defined as “a pest of potential economic importance to the area endangered thereby and not yet present there, or present but not widely distributed and being officially controlled.” Caribbean fruit fly is present in Florida, where a State protocol provides for the establishment of specific A. suspensa controlled areas (designated areas) from which fresh fruits may be certified for export. However, that protocol is not currently regarded as an official control program and APHIS does not consider Caribbean fruit fly to be a quarantine pest. Therefore, we do not regulate imports of citrus from the Dominican Republic to protect against entry of this pest.

We proposed to recognize the Patagonia region of Argentina as free of Medfly and Anastrepha spp. fruit flies. The Patagonia region includes those areas along the valleys of the Rio Colorado and Rio Negro rivers and includes the provinces of Neuquen, Rio Negro, Chubut, Santa Cruz, and Tierra del Fuego.

One commenter, apparently believing that this aspect of the proposal was limited to recognizing only Medfly-free areas, asked if the Patagonia region was also free of South American fruit fly ( Anastrepha fraterculus ). The commenter stated that if this has not been verified, he would recommend that this aspect of the proposal not be finalized.

In the proposed rule, we explained that Argentina had provided us with fruit fly survey data that demonstrates that the Patagonia region meets the criteria of § 319.56-2(f) for area freedom from Medfly and other fruit flies ( i.e., Anastrepha spp. fruit flies). Those survey data were made available for review in the proposed rule. We also explained that, through site visits by APHIS officials, we had successfully verified this area's status as a fruit fly-free zone. In response to the commenter's specific question, we have verified that the Patagonia region of Argentina is free of South American fruit fly.

On the same subject, another commenter stated that carving out a Medfly-free area within a pest-infested area is questionable, given that pests do not read signs nor do they understand boundaries. The commenter further maintained that the Argentine Government has a history of not reporting pests or disease issues in a timely manner.

As noted above, the fruit fly-free status of the Patagonia region was demonstrated through survey data provided by the Argentine Government and verified during site visits by APHIS officials. Through those means, we determined that the Patagonia region of Argentina meets the criteria of § 319.56-2(f) for area freedom from Medfly and Anastrepha spp. fruit flies. Under § 319.56-2(f), the Administrator determines that an area is free of a pest or pests in accordance with the criteria for establishing freedom found in International Standard for Phytosanitary Measures Publication No. 4, “Requirements for the Establishment of Pest Free Areas.” That international standard was established by the IPPC and is incorporated by reference into our regulations. APHIS must approve the survey protocol used to determine pest-free status, and pest-free areas are subject to audit by APHIS to verify their status. We would hope that the active involvement of APHIS in approving survey protocols and auditing pest-free areas would allay the commenter's misgivings about the Argentine Government's reporting history.

Two commenters raised concerns related to the transfer of port inspection responsibilities from APHIS to the Department of Homeland Security's (DHS) Bureau of Customs and Border Protection (CBP). These commenters stated that staffing levels for pest exclusion programs were too low, that there had not been sufficient pest exclusion training provided for those CBP personnel who came from agencies other than APHIS, and that CBP inspectors are more focused on security issues than phytosanitary inspection. The commenters stated that these issues must be addressed before APHIS issues new regulations that could overwhelm what they perceive to be an already weakened system.

With respect to staffing levels, there was an initial drop in the number of inspectors following the transfer of port inspection responsibilities from APHIS to DHS in June 2003: APHIS transferred 1,507 agriculture inspectors to DHS, but by October 2004, the number of inspectors had decreased to 1,452. However, the loss of those 55 inspectors was more than offset by February 2005, at which time 109 new agricultural specialists had completed New Officer Training and were working at ports of entry. In addition, DHS has approved 14 training classes for new officers which began in the summer of 2004 and will continue through January 2006. DHS estimates that these training classes will result in a total of 720 new officers.

With respect to training, there was a need to provide pest exclusion training to those Immigration and Naturalization Service, U.S. Border Patrol, and U.S. Customs Service personnel who were transferred to CBP, just as the mission of CBP dictated the need to provide cross-training in other specialties to those APHIS personnel who were transferred to CBP. Planning and delivering training for all these personnel necessarily had to be accomplished over time, but all CBP inspection personnel have now been fully and satisfactorily trained in pest exclusion.

Finally, security issues are certainly a focus for CBP personnel, but that does not come at the expense of phytosanitary inspections. While CBP conducts a majority of inspections of agricultural commodities at the ports of first arrival, inspectors follow established and effective APHIS protocols regarding inspection rates and procedures. APHIS continues to work with CBP to ensure that the United States is protected against pests of concern that may be associated with agricultural imports.

One commenter stated that APHIS must do more to provide market access to developing nations. To that end, the commenter suggested that APHIS should create pre-approval locations overseas, which the commenter stated CBP has already done, and allow returning travelers to bring pre-screened fruits and vegetables back to the United States with them. APHIS could then approve or discard the items and issue permits on the spot, which the commenter stated CBP is already doing.

It appears that the commenter is unclear regarding the respective roles of APHIS and CBP in the scenario he describes. CBP has the primary responsibility for agricultural inspections at ports of entry, not APHIS, and it appears that the commenter is satisfied with CBP's approach to travelers returning to the United States with fruits or vegetables. There is no need—nor is there any authority—for APHIS to establish a parallel system.

The same commenter stated that APHIS should guarantee market access to fruit and vegetable producers in developing countries.

We cannot guarantee blanket access to the U.S. market to producers in any country. In order to maintain the safeguards necessary to protect American agriculture, we must first assess the phytosanitary risks associated with the importation of a particular fruit or vegetable from a potential exporting country. Only after such an assessment would we be able to make a decision to allow the importation of that commodity.

We proposed to remove the specific treatment schedules presented in §§ 319.56-2k(d), 319.56-2m(b), and 319.56-2n(b) and replace them with references to the Plant Protection and Quarantine (PPQ) Treatment Manual. Those schedules were found in both the regulations and the PPQ Treatment Manual, so our proposed changes were intended to eliminate that duplicative presentation. Since the proposed rule was published, however, we have moved those treatment schedules out of the PPQ Treatment Manual and into the regulations in 7 CFR part 305. Therefore, where the proposed rule would have added a reference to the PPQ Treatment Manual, this final rule adds a reference to 7 CFR part 305.

In § 319.56-2x, the entries we proposed to add under Argentina all included the statement “Treatment for Mediterranean fruit fly (Medfly) not required if fruit is grown in a Medfly-free area (see § 319.56-2(j)).” As indicated in the table of treatments in § 305.2(h)(2)(i), the fruits we proposed to add are treated for species of Anastrepha (other than A. ludens ) in addition to Medfly. As discussed earlier in this document, we are amending § 319.56-2(j) to recognize the Patagonia region of Argentina as free of Medfly and Anastrepha spp. fruit flies. Therefore, in § 319.56-2x in this final rule, the entries we are adding under Argentina include the more accurate statement “Treatment for Anastrepha spp. fruit flies and Medfly not required if fruit is grown in a fruit fly-free area (see § 319.56-2(j)).” Because we will not be removing the entry for blueberries from Argentina from § 319.56-2x as we had proposed, we have amended that entry to include a statement that treatment for Medfly is not required if the fruit is grown in a fruit fly-free area listed in § 319.56-2(j).

Also in § 319.56-2x, in the entry for Israel, we proposed to change the common name for “cactus” to “tuna.” The proposed new entry for tuna included a statement that treatment for Medfly is not required if the fruit is grown in a Medfly-free area listed in § 319.56-2(j). However, there are no Medfly-free areas of Israel listed in § 319.56-2(j), so that statement does not appear in this final rule.

We proposed to amend § 319.56-2c by removing a reference to the Deputy Administrator of PPQ and adding a reference to the Administrator in its place. After the proposed rule was published, § 319.56-2c was revised by another rule and the change we had proposed is no longer necessary.

Finally, the additional restrictions in § 319.56-2t(b)(1)(ii) have referred to Medfly-free areas listed in § 319.56-2(j). Because this rule amends § 319.56-2(j) to list areas of Argentina that are free of both Medfly and Anastrepha spp. fruit flies, we have amended paragraph (b)(1)(ii) in § 319.56-2t so that it uses the more generic term “fruit-fly free areas.”

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, with the changes discussed in this document.

This is a substantive rule that relieves restrictions and, pursuant to the provisions of 5 U.S.C. 553, may be made effective less than 30 days after publication in the Federal Register .

This rule relieves restrictions on the importation of certain fruits and vegetables from certain countries while continuing to protect against the introduction of plant pests into the United States. Immediate implementation of this rule is necessary to provide relief to those persons who are adversely affected by restrictions we no longer find warranted. Making this rule effective immediately will allow interested producers, importers, shippers, and others to benefit immediately from the relieved restrictions. Therefore, the Administrator of the Animal and Plant Health Inspection Service has determined that this rule should be effective upon publication in the Federal Register .

This rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with 5 U.S.C. 604, we have performed a final regulatory flexibility analysis, which is set out below, regarding the economic effects of this rule on small entities.

This final rule amends the fruits and vegetables regulations to list a number of fruits and vegetables from certain parts of the world as eligible, under specified conditions, for importation into the United States. Many of these fruits and vegetables have been eligible for importation under permit, but were not specifically listed in the regulations. This final rule also recognizes areas in several countries as free from certain fruit flies; adds, modifies, or removes certain definitions; modifies existing treatment requirements for specified commodities; and makes other miscellaneous changes.

We have used all available data to estimate the potential economic effects of allowing the fruits and vegetables specified in this rule to be imported into the United States. However, some of the data we believe would be helpful in making this determination have not been available. Specifically, data are not available on: (1) The quantity of certain fruits and vegetables produced domestically; (2) the quantity of potential imports; and (3) the degree to which imported fruits and vegetables will displace existing imported or domestic products. In our proposed rule, we asked the public to provide such data for specific commodities. In addition, we invited the public to comment on the potential effects of the proposed rule on small entities, in particular the number and kind of small entities that may incur benefits or costs from the implementation of the proposed rule. However, we did not receive any additional information or data in response to those requests.

The Regulatory Flexibility Act requires agencies to consider the economic impact of their regulations on small entities and to use flexibility to provide regulatory relief when regulations create economic disparities between differently sized entities. Data on the number and size of U.S. producers of the various commodities proposed for importation into the United States in this document are not available. However, since most fruit and vegetable farms are small by Small Business Administration standards, it is likely that the majority of U.S. farms producing the commodities listed below are small.

As discussed in the proposed rule and in this final rule, many of the commodities listed in this document may currently enter the United States under permit. Therefore, we do not expect the amount of commodities submitted for importation to increase beyond current levels. Additionally, in many cases, importation of certain commodities is necessary given that the commodities are not grown extensively in the United States ( e.g. , bananas, breadfruits, cassavas, chicory, dasheens, genip, kiwis, papayas, pineapples, jicama, and tomatillos). In other instances, importation augments domestic supplies that are not sufficient to meet consumer demand ( e.g. , apples, blackberries, blueberries, carrots, cherries, cucumbers, garlic, onions, pears, raspberries, and strawberries). We believe that the economic effects of this rule in general will be small, and that the benefits that will accrue to consumers from greater trade will outweigh the costs to domestic producers.

With respect to those articles for which we have specific data, the potential economic effects of this final rule are discussed below by commodity and country of origin.

Blueberries from Colombia. The United States is the world's largest producer of blueberries, supplying more than half of the world's production. Maine and Michigan account for more than half of all U.S. domestic blueberry production. According to the 1997 Census of Agriculture, there were 637 farms in Maine and 623 farms in Michigan harvesting blueberries. (The 2002 Census of Agriculture does not provide information on the number or location of blueberry farms.) Average annual U.S. production, imports, and exports of blueberries for the period 2000-2003 were 123,832 metric tons (MT), 20,820 MT, and 18,933 MT, respectively ( http://faostat.fao.org ).

Demand for blueberries in the United States has generally been on the rise: Per capita fresh blueberry consumption averaged 0.20 pound annually during the early 1990s and increased to 0.34 pound during 2000-2003. Imports have provided U.S. consumers access to fresh blueberries at retail grocery stores during the domestic off-season.

There are no official data available on blueberry production or trade by Colombia. Colombia has never exported blueberries to the United States before. However, a prospective Colombian exporter has projected blueberry exports to the United States over the next 6 years (table 1). Based on these numbers, Colombia could export 10.2 metric tons of blueberries to the United States in 2006, an amount equal to 0.05 percent of average annual U.S. imports during the period 2000-2003 of 20,820 MT. The same set of projections indicates that blueberry imports from Colombia could increase to about 251 MT per year by 2011, which would represent 1.2 percent of U.S. annual imports, 2000-2003. We do not expect that the economic effects resulting from imports at those levels would be substantial.

Papayas from Brazil and Central America. We are listing two additional growing areas in Brazil (the States of Bahia and Rio Grande del Norte) and one additional area in Nicaragua (the Department of Leon) as eligible to export papayas into the United States. Brazil is currently eligible to export papayas into the United States from the State of Espirito Santo. Nicaragua is currently eligible to export papayas into the United States from the Departments of Carazo, Granada, Managua, Masaya, and Rivas.

Papaya production levels in the United States are small, with a majority of papaya production occurring in Florida. Between 2000 and 2003, Brazil represented, on average, 9 percent of the total U.S. imports of papayas. The addition of two more Brazilian States to the list of areas eligible for export is expected to increase the Brazilian share in the U.S. market for imported papayas. Brazil is a major producer of papayas, however only 1.6 percent of its production is exported. The rest is reserved for domestic consumption.

The United States imports four times the amount of papayas produced domestically, while, as stated previously, the amount of Brazilian papayas imported into the United States accounts for, on average, 9 percent of the total U.S. imports of papayas. Even if Brazil greatly increases its exports to the United States, it is more likely to displace other countries' shares of total U.S. imports than to affect the overall level of U.S. consumption. The economic impact resulting from this change will not be substantial.

There are no official production data available for papayas produced in Nicaragua. However, the existing trade data show that Nicaragua has historically exported papayas very sporadically. For example, between 1997 and 2001, Nicaragua did not export any papayas. In 2002, 203 metric tons were exported to the world; the following year, 18 metric tons were exported. Nicaragua did not export any papayas to the United States over that time period despite the fact that there are five approved exporting regions in Nicaragua. Therefore, the addition of one more eligible exporting area to the list should not have any substantial impact on the U.S. papaya market.

Fruit Fly Free Areas. We are allowing fruits to be imported into the United States from a new Medfly-free area in Argentina. We have determined that the Patagonia region of Argentina is free of those pests. The Patagonia region includes those areas along the valleys of the Rio Colorado and Rio Negro rivers and includes the provinces of Neuquen, Rio Negro, Chubut, Santa Cruz, and Tierra del Fuego.

Fruits from Argentina (apple, apricot, cherry, kiwi, nectarine, peach, pear, plum, pomegranate, and quince) are already admissible into the United States under permit from Argentina. The creation of a Medfly-free area would lessen certain treatment requirements, thus lowering the cost for exporters. This may, in turn, result in a lower cost for consumers. Further, as a country in the Southern Hemisphere, Argentina's growing seasons are the opposite of those in the United States. An increased supply of Argentine fruit supplements the U.S. winter fruit market. However, we do not anticipate that this potentially increased supply will be large enough to have any substantial impact on small entities.

This rule contains various recordkeeping requirements, which were described in our proposed rule, and which have been approved by the Office of Management and Budget (see “Paperwork Reduction Act” below).

This final rule allows certain fruits and vegetables to be imported into the United States from certain parts of the world. State and local laws and regulations regarding the importation of fruits and vegetables under this rule will be preempted while the fruit is in foreign commerce. Fresh fruits and vegetables are generally imported for immediate distribution and sale to the consuming public, and remain in foreign commerce until sold to the ultimate consumer. No retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the information collection or recordkeeping requirements included in this rule have been approved by the Office of Management and Budget (OMB) under OMB control number 0579-0264.

The Animal and Plant Health Inspection Service is committed to compliance with the Government Paperwork Elimination Act (GPEA), which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. For information pertinent to GPEA compliance related to this rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477.

This rule is issued under Marketing Agreement and Order No. 984, both as amended (7 CFR part 984), regulating the handling of walnuts grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, California walnut handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable walnuts beginning on August 1, 2005, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

This rule increases the assessment rate established for the Board for the 2005-06 and subsequent marketing years from $0.0094 to $0.0096 per kernelweight pound of assessable walnuts.

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

For the 2004-05 and subsequent marketing years, the Board recommended, and USDA approved, an assessment rate of $0.0094 per kernelweight of assessable walnuts that continued in effect from year to year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Board or other information available to USDA.

The Board met on September 9, 2005, and unanimously recommended 2005-06 expenditures of $2,937,600 and an assessment rate of $0.0096 per kernelweight pound of assessable walnuts. In comparison, last year's budgeted expenditures were $2,749,500. The assessment rate of $0.0096 per kernelweight pound of assessable walnuts is $0.0002 per pound higher than the rate currently in effect. The increased assessment rate is necessary because this year's crop is estimated by the California Agricultural Statistics Service (CASS) to be 340,000 tons (306,000,000 kernelweight pounds merchantable), and the budget is about 6.4 percent more than last year's budget. The crop is smaller than expected due to sunburn caused by warmer than normal temperatures during the growing season. The higher assessment rate should generate sufficient income to cover anticipated 2005-06 expenses.

The following table compares major budget expenditures recommended by the Board for the 2004-05 and 2005-06 marketing years:

The assessment rate recommended by the Board was derived by dividing anticipated expenses by expected shipments of California walnuts certified as merchantable. Merchantable shipments for the year are estimated at 306,000,000 kernelweight pounds which should provide $2,937,600 in assessment income and allow the Board to cover its expenses. Unexpended funds may be used temporarily to defray expenses of the subsequent marketing year, but must be made available to the handlers from whom collected within 5 months after the end of the year, according to § 984.69.

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

Although this assessment rate will be in effect for an indefinite period, the Board will continue to meet prior to or during each marketing year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Board meetings are available from the Board or USDA. Board meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Board recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Board's 2005-06 budget and those for subsequent marketing years would be reviewed and, as appropriate, approved by USDA.

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

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

There are approximately 50 handlers of California walnuts subject to regulation under the marketing order and approximately 5,500 growers in the production area. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those whose annual receipts are less than $6,000,000, and small agricultural producers are defined as those whose annual receipts are less than $750,000.

Current industry information shows that 15 of the 50 handlers (30 percent) shipped over $6,000,000 of merchantable walnuts and could be considered large handlers by the Small Business Administration. Thirty-five of the 50 walnut handlers (70 percent) shipped under $6,000,000 of merchantable walnuts and could be considered small handlers.

The number of large walnut growers (annual walnut revenue greater than $750,000) can be estimated as follows. According to the National Agricultural Statistics Service (NASS), the average yield per acre for 2002-04 is 1.457 tons. A grower with 420 acres would produce approximately 612 tons. The average of grower prices for 2002-04 (published by NASS) is $1,227 per ton. At that average price, the 612 tons produced on 420 acres would yield approximately $750,000 in annual revenue. The 2002 Agricultural Census indicated 56 percent of walnut farms were 500 acres or larger, which is close to the 420 acres required to produce $750,000 in revenue. Thus, it can be concluded that the number of large walnut farms in 2005 is still likely to be under one percent. Based on the foregoing, it can be concluded that the majority of California walnut handlers and producers may be classified as small entities.

This rule increases the assessment rate established for the Board and collected from handlers for the 2005-06 and subsequent marketing years from $0.0094 per kernelweight pound of assessable walnuts to $0.0096 per kernelweight pound of assessable walnuts. The Board unanimously recommended 2005-06 expenditures of $2,937,600 and an assessment rate of $0.0096 per kernelweight pound of assessable walnuts. The assessment rate of $0.0096 is $0.0002 higher than the rate currently in effect. The quantity of assessable walnuts for the 2005-06 marketing year is estimated at 340,000 tons (306,000,000 merchantable kernelweight pounds. Thus, the $0.0096 rate should provide $2,937,600 in assessment income and be adequate to meet this year's expenses. The increased assessment rate is primarily due to increased budget expenditures and based on an estimated crop of 340,000 tons for the year (306,000,000 kernelweight pounds estimated merchantable).

The following table compares major budget expenditures recommended by the Board for the 2004-05 and 2005-06 fiscal years:

The Board reviewed and unanimously recommended 2005-06 expenditures of $2,937,600, which included increases in several expense categories. Prior to arriving at this budget, the Board considered alternative expenditure levels, but ultimately decided that the recommended levels were reasonable to properly administer the order. The assessment rate recommended by the Board was derived by dividing anticipated expenses by expected shipments of California walnuts certified as merchantable. Merchantable shipments for the year are estimated at 306,000,000 kernelweight pounds which should provide $2,937,600 in assessment income and allow the Board to cover its expenses. Unexpended funds may be used temporarily to defray expenses of the subsequent marketing year, but must be made available to the handlers from whom collected within 5 months after the end of the year, according to § 984.69.

According to NASS, the season average grower prices for years 2003 and 2004 were $1,160 and $1,350 per ton respectively. Dividing these average grower prices by 2,000 pounds per ton provides an inshell price per pound range of between $.58 and $.68. Adjusting by a few cents above and below those prices ($0.55 to $0.70 per inshell pound) provides a reasonable price range within which the 2005-06 season average price is likely to fall. Dividing these inshell prices per pound by the 0.45 conversion factor designated in the order yields a 2005-06 price range estimate of $1.22 and $1.56 per kernelweight pound of assessable walnuts.

To calculate the percentage of grower revenue represented by the assessment rate, the assessment rate of $0.0096 (per kernelweight pound) is divided into the low and high estimates of the price range. The estimated assessment revenue for the 2005-06 marketing year as a percentage of total grower revenue would likely range between .8 and .6 percent.

This action increases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the additional costs may be passed on to producers. However, these costs would be offset by the benefits derived by the operation of the marketing order. In addition, the Board's meeting was widely publicized throughout the California walnut industry and all interested persons were invited to attend the meeting and participate in Board deliberations on all issues. Like all Board meetings, the September 9, 2005, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

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

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

A proposed rule concerning this action was published in the Federal Register on November 4, 2005 (70 FR 67096). Copies of the proposed rule were also mailed or sent via facsimile to all walnut handlers. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 10-day comment period ending on November 14, 2005, was provided for interested persons to respond to the proposal. No comments were received.

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

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

Pursuant to 5 U.S.C 553, it also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because handlers are already receiving the 2005 walnut crop from growers. The marketing year began on August 1, 2005, and the assessment rate applies to all walnuts received during the 2005-06 and subsequent seasons. The Board needs to have sufficient funds to pay its expenses which are incurred on a continuous basis. Further, handlers are aware of this rule which was recommended at a public meeting. Also a 10-day comment period was provided in the proposed rule and no comments were received.

In November 2002, the Board of Governors of the Federal Reserve System (Federal Reserve) solicited comment about financial institutions' current overdraft services to determine the need for guidance to depository institutions under 12 CFR part 226 (Regulation Z) and other laws. 67 FR 72618 (December 6, 2002). Based on comments it received, the Federal Reserve amended 12 CFR part 230 (Regulation DD), and its staff commentary in May 2005. 70 FR 29582 (May 24, 2005). Regulation DD, the Federal Reserve's implementation of the Truth in Savings Act (TISA), now requires banks to disclose rates and fees charged as a part of “bounced-check protection” or “courtesy overdraft protection” programs offered as an alternative to traditional overdraft lines of credit. The Federal Reserve's final rule also requires financial institutions that promote the payment of overdrafts in an advertisement to: (1) Disclose the total fees imposed for paying overdrafts and returning unpaid items on periodic statements for both the statement period and the calendar year to date and (2) include certain other disclosures in advertisements of overdraft services.

TISA requires NCUA to promulgate regulations substantially similar to those promulgated by the Federal Reserve within 90 days of the effective date of the Federal Reserve's rules. 12 U.S.C. 4311(b). In doing so, NCUA is to take into account the unique nature of credit unions and the limitations under which they may pay dividends on member accounts. In compliance with TISA, NCUA is issuing this interim final rule with request for comments that is substantially similar to the Federal Reserve's May 2005 final rule.

Part 707 of NCUA's regulations implements TISA for credit unions. 12 CFR part 707. Part 707 requires, among other things, disclosure of yields, fees and other terms concerning share accounts to members before an account is opened, upon a member's request, before an adverse change in account terms occurs, before the renewal of certificates of deposit, and in periodic statements. Credit unions are not required to provide periodic statements, but if they do, statements must have the disclosures TISA requires.

Part 707 and TISA have rules for advertising share accounts and prohibit advertisements, announcements, or solicitations that are inaccurate or misleading, or that misrepresent the credit union's account contract. 12 CFR 707.8(a). For example, credit unions are prohibited from describing an account as “free” or using words of similar meaning if any maintenance or activity fee may be imposed. Id .

To comply with the Board's obligation under TISA, it is adopting interim final revisions to part 707 and the accompanying official staff interpretation that are substantially similar to the Federal Reserve's final rule in May 2005. NCUA has made some modifications to the rule to account for the unique nature of credit unions. The interim final rule consolidates the guidance for credit unions that promote the payment of overdrafts in a new § 707.11 to facilitate compliance. To give credit unions sufficient time to implement the necessary system changes to comply with the regulation, compliance with the interim final rule will not become mandatory until July 1, 2006.

The NCUA Board is issuing this rule as an interim final rule because there is a strong public interest in having in place consumer-oriented rules that are consistent with those recently promulgated by the Federal Reserve. Additionally, as discussed above, NCUA is statutorily required to issue rules substantively similar to those of the Federal Reserve within 90 days of the effective date of the Federal Reserve's rules. Although the Federal Reserve's rule will not be effective until July 1, 2006, credit unions and their accounting software providers will need to adapt their current systems to accommodate these changes. The Board wants to provide adequate lead time for these changes. Accordingly, for good cause, the Board finds that, pursuant to 5 U.S.C. 553(b)(3)(B), notice and public procedures are impracticable, unnecessary, and contrary to the public interest; and, pursuant to 5 U.S.C. 553(d)(3), the rule will be effective immediately and without 30 days advance notice of publication. Although the rule is being issued as an interim final rule and is effective immediately, compliance will not become mandatory until July 1, 2006 to give credit unions sufficient time to implement the necessary system changes to comply with the regulation. Even so, the NCUA Board encourages interested parties to submit comments.

The following is a summary of the interim final rule. This interim final rule tracks closely the Federal Reserve's recent amendments to Regulation DD. A section-by-section analysis of the regulatory language and staff commentary is in the Federal Reserve's final rule. 70 FR 29582 (May 24, 2005).

Courtesy overdraft protection allows the payment of a check or debit transaction that would otherwise be rejected for non-sufficient funds (NSF). Payment of the item overdraws the member's account, and a fee is charged for paying the NSF item. Under overdraft protection programs, there is no written agreement between the member and credit union to pay NSF items. Instead, payment is made at the discretion of the credit union, and a fee is charged for each item paid. Generally, overdraft protection services allowed the occasional, manual payment of an overdraft. Some financial institutions have automated the decision and payment process however.

Credit unions that provide courtesy overdraft protection must separately disclose on their periodic statements the total amount of fees or charges imposed on the share account for paying overdrafts and returning items unpaid. These disclosures must be provided for the statement period and for the calendar year to date. Credit unions that do not provide this service would not be required to provide the new disclosures.

Credit unions must specify in account-opening disclosures the categories of transactions for which an overdraft fee may be imposed. An exhaustive list of transactions is not required. It is sufficient to state that the fee is imposed for overdrafts created by checks, in-person withdrawals, ATM withdrawals, or by other electronic means, as applicable. This requirement applies to all credit unions, including credit unions that do not promote the payment of overdrafts in an advertisement.

To avoid confusion with traditional lines of credit, credit unions that promote the payment of overdrafts must include certain disclosures in their advertisements about the service:

(1) The applicable fees or charges, the categories of transactions covered;

(2) The time period members have to repay or cover any overdraft; and

(3) The circumstances under which the credit union would not pay an overdraft.

Stating the available overdraft limit or the amount of funds available on a periodic statement would be considered an advertisement triggering the required disclosures.

The interim final rule provides safe harbors from the advertising requirements similar to those for the periodic statement disclosure requirements. For example, the advertising disclosure requirements would not apply to credit unions when they provide educational materials, respond to a member-initiated inquiry about overdrafts or share accounts, or notify a member about a specific overdraft in their account.

Advertising disclosures are not required on ATM receipts, due to space limitations. Similarly, advertising disclosures are not required for advertisements using broadcast media, billboards, or telephone response systems. This parallels an exemption in part 707 for other types of advertising disclosures. Limited advertising disclosures are required on ATM screens, telephone response machines, and indoor signs. For example, a sign in a credit union lobby advertising courtesy overdraft protection must state that fees may apply and direct members to contact a credit union employee for more information.

TISA's prohibition against advertisements, announcements, or solicitations that are misleading or misrepresent the deposit contract is extended to communications with members about the terms of their existing accounts.

The staff interpretation is revised to provide five examples of advertisements that would ordinarily be deemed misleading:

(1) Representing an overdraft service as a “line of credit”;

(2) Representing that the credit union will honor all checks or transactions if the credit union in fact retains discretion not to honor a transaction;

(3) Representing that members with an overdrawn account can maintain a negative balance if the overdraft service requires members to return the share account to a positive balance promptly;

(4) Describing an overdraft service solely as protection against bounced checks, if the credit union also permits and charges a fee for ATM withdrawals and other electronic fund transfers that permit members to overdraw their account; and

(5) Describing an account as “free” or “no cost” in an advertisement that also promotes a service for which there is a fee, including an overdraft service, unless the advertisement clearly and conspicuously indicates the cost associated with the service.

The amendments to part 707 recognize that an overdraft service is a feature and term of a share account, and that the fees associated with the service are assessed against the share account. The adoption of interim final rules under part 707 does not preclude a future determination by the Federal Reserve that TILA disclosures would also benefit consumers.

The Board has prepared a final regulatory flexibility analysis as required by the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). TISA was enacted, in part, for the purpose of requiring clear and uniform disclosures regarding deposit account terms and fees assessable against these accounts. Such disclosures allow members to make meaningful comparisons between different accounts and also allow members to make informed judgments about the use of their accounts. 12 U.S.C. 4301. TISA requires the Board to prescribe regulations to carry out the purpose and provisions of the statute. 12 U.S.C. 4308(a)(1), 4311(b). The Board is adopting revisions to part 707 to address the uniformity and adequacy of credit unions' disclosure of fees associated with overdraft services generally and to address concerns about advertised overdraft services in particular. The existing regulation is amended to require credit unions offering certain overdraft services to provide more complete information regarding those services. The Board believes that the revisions to part 707 are within the Board's authority to adopt provisions that carry out the purposes of the statute.

There are other laws that credit unions must consider when administering an overdraft protection program. Although other laws and regulations may apply to credit unions' payment of overdrafts, the final revisions to part 707 do not duplicate or conflict with the requirements imposed by these laws. The Board has also considered the interagency guidance on overdraft protection programs issued in February 2005, and has determined that issuance of the final revisions to part 707 is consistent with the interagency guidance. 70 FR 9127 (February 24, 2005).

Approximately 2,666 of the credit unions in the United States that must comply with TISA have assets of $10 million or less and thus are considered small entities for purposes of the Regulatory Flexibility Act, based on 2004 call report data. The Board believes that almost all small credit unions that offer accounts where overdraft or returned-item fees are imposed currently send periodic statements on those accounts, although the number of small credit unions that promote their overdraft services is unknown. For those credit unions that promote the payment of overdrafts in an advertisement, periodic statement disclosures will need to be revised to display aggregate overdraft and aggregate returned-item fees for the statement period and year to date. All small credit unions will have to review, and perhaps revise account-opening disclosures and marketing materials.

The revisions to part 707 require all credit unions to provide more complete information to members regarding overdraft services. Account-opening disclosures and marketing materials would describe more completely how fees may be triggered. Credit unions that provide overdraft services must separately disclose on periodic statements the total dollar amount of fees and charges imposed on the account for paying overdrafts and the total dollar amount for returning items unpaid. These disclosures must be provided for the statement period and for the calendar year to date for each account to which the service is provided. Certain advertising practices are prohibited, and additional disclosures on advertisements of overdraft services are required.

The Board is soliciting comment on how the burden of disclosures on credit unions could be minimized. The interim final rule limits the requirement to disclose aggregate totals for overdraft and returned-item fees for the statement period and the calendar year to date to credit unions that provide ad hoc payments of overdrafts or promote the payment of overdrafts in an advertisement, thereby encouraging the routine use of the service. It also specifies certain practices that would not trigger the new overdraft disclosures. The safe harbors provide additional certainty to credit unions in determining whether compliance with the rule is required in particular circumstances. Consistent with the rule requiring periodic statement disclosures, the interim final rule also provides safe harbors to specify circumstances when a credit union would not be required to provide additional advertising disclosures.

Under the interim final rule, credit unions are permitted to provide an illustrative list of categories by which overdrafts may be created to generally eliminate the need to provide a change-in-terms notice each time a new channel for creating overdrafts is added. The interim final rule also provides additional guidance regarding the types of fees that should be included in the total dollar amount of fees and charges imposed on the account for paying overdrafts and in the total dollar amount for returning items unpaid.

In accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. , the Board has submitted the information collection requirements contained in this interim final rule to the Office of Management and Budget (OMB). The NCUA may not conduct or sponsor, and an organization is not required to respond to, this information collection unless it displays a currently valid OMB control number. The current OMB control number for the Truth in Savings program is 3133-0134. This information collection will be revised to include the requirements of this interim final rule.

The collection of information that is revised by this rulemaking is found in 12 CFR part 707 and Appendix C. This collection is mandatory to evidence compliance with the requirements of part 707 and TISA. 15 U.S.C. 4301 et seq. Credit unions must retain records for twenty-four months. This regulation applies to all types of credit unions, not just federally-insured credit unions.

The revisions provide that credit unions offering certain overdraft payment services must provide more complete information regarding those services. Account-opening disclosures and other marketing materials describe more completely how fees may be triggered. Credit unions that promote the payment of overdrafts must separately disclose on periodic statements the total dollar amount of fees and charges imposed on the account for paying overdrafts and the total dollar amount of fees charged to the account for returning items unpaid. These disclosures must be provided for the statement period and for the calendar year to date for each account to which an advertisement applies. Certain advertising practices are prohibited, and additional disclosures in advertisements for the payment of overdrafts are required. Although the interim final rule adds these requirements, it is expected that these revisions would not significantly increase the ongoing paperwork burden of credit unions. However, respondents would face a one-time burden to reprogram and update their systems to include these new notice requirements.

There are an estimated 9,128 credit unions. The NCUA estimates that it will take the respondents, on average, 8 hours or one business day to make these one-time system changes. Additionally, Respondents would also face a one-time burden to revise and update their advertising materials. NCUA estimates that it will take approximately 40 hours, one business week to update these materials. NCUA estimates respondents will incur a burden of 12,514,201 hours meeting the requirements of this interim final rule. NCUA estimates that the total, continuing annual burden for the Truth in Savings program to be 12,076,057 hours. Prior to this interim final rule, NCUA estimated the annual burden to be 10,467,679 hours. The annual burden under this interim final rule will increase 1,608,378 burden hours.

NCUA invites comment on:

(1) The accuracy of NCUA's estimate of the burden of the information collection;

(2) Ways to minimize the burden of the information collection on credit unions, including the use of automated collection techniques or other forms of information technology; and

(3) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Interested may submit comments regarding the information collection requirements in this rule. Comments must be received within 30 days from the publication of this interim final rule. Include “Comments on Part 707 Truth in Savings” in the comments header and send them to NCUA using one of the methods described above and to: NCUA Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503, Fax number: (202) 395-6974.

The Departmento de Aviacao Civil (DAC), which is the airworthiness authority for Brazil, notified us that an unsafe condition may exist on all EMBRAER Model EMB-135BJ, -135ER, -135KE, -135KL, -135LR, -145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP airplanes. The DAC advises that it has received reports of rudder vibration. Investigation revealed wear in the attachment flange bushings of rudder II that progressed over the hinge fittings of rudder II. Investigation also revealed excessive freeplay of the end-to-rod attachment of the lower control rod on rudder II. Failure of multiple hinge fittings could result in severe vibration, and failure of the rudder control rods could result in jamming of the rudder II. These conditions, if not corrected, could result in possible structural failure and reduced controllability of the airplane.

EMBRAER has issued Alert Service Bulletins 145LEG-55-A010, dated August 26, 2005, and 145-55-A036, Revision 01, dated September 5, 2005. The following table identifies the actions described in the service bulletins, which are divided into six parts.

On June 28, 2005, Airspace Docket No. 05-AWP-1 was published in Federal Register (70 FR 37028), establishing Class D airspace at Front Range Airport, Denver, CO. In that rule, the airspace altitude description was not correct. This action corrects that error.

On October 4, 2005, the FAA published in the Federal Register a notice of proposed rulemaking to revise J-158 between the Malad City, ID, VOR/DME and the Muddy Mountain, WY, VORTAC (70 FR 57806). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. No comments were received. With the exception of editorial changes, this amendment is the same as that proposed in the notice.

This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 to revise a segment of J-158. This amendment would insert a segment extending from Malad City, ID, VOR/DME to Big Piney, WY, VOR/DME to Muddy Mountain, WY, VORTAC, and restores the use of J-158 between Malad City and Muddy Mountain.

Domestic Jet Routes are published in paragraph 2004 of FAA Order 7400.9N dated September 1, 2005, and effective September 15, 2005, which is incorporated by reference in 14 CFR 71.1. The domestic Jet Route listed in this document will be published subsequently in the order.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

In a notice published in the Federal Register of May 26, 1994 (59 FR 27281), FDA announced that a food additive petition (FAP 4A4419) had been filed by Kuraray International Corp., c/o 1001 G St. NW., Washington, DC 20001. The petition proposed to amend the food additive regulations in § 172.864 Synthetic fatty alcohols (21 CFR 172.864) to provide for the safe use of n -octanol produced by a new manufacturing process, the hydrodimerization of 1,3-butadiene. Subsequently, Kuraray America, Inc., notified the agency of the merging of Kuraray International Corp., into Kuraray America, Inc., and the transfer of ownership of the petition (FAP 4A4419) to Kuraray America, Inc.

n -Octanol ( n -octyl alcohol) synthesized by the proposed manufacturing process is intended for use in the same manner as n -octanol prepared by other manufacturing processes under § 172.864.

In evaluating the safety of n -octanol synthesized by the proposed manufacturing process, FDA has reviewed the safety of the additive and the chemical impurities that may be present in it resulting from its manufacturing process. Although n -octanol has not been shown to cause cancer, it may contain minute amounts of residual precursor as an impurity resulting from its method of production. In particular, n -octanol may contain traces of the precursor, 1,3-butadiene, which has been shown to cause cancer in test animals. Residual amounts of reactants and their impurities are commonly found as contaminants of chemical products, including food additives.

Under the general safety standard in section 409 of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 348), a food additive cannot be approved for a particular use unless a fair evaluation of the data available to FDA establishes that the additive is safe for that use. FDA's food additive regulations (21 CFR 170.3(i)) define safe as a “reasonable certainty in the minds of competent scientists that the substance is not harmful under the intended conditions of use.”

The food additives anticancer, or Delaney, clause of the act (section 409(c)(3)(A)) provides that no food additive shall be deemed safe if it is found to induce cancer when ingested by man or animal, or if it is found, after tests which are appropriate for the evaluation of the safety of food additives, to induce cancer in man or animal. Importantly, however, the Delaney clause applies to the additive itself and not to impurities in the additive. That is, where an additive itself has not been shown to cause cancer, but contains a carcinogenic impurity, the additive is evaluated properly under the general safety standard using risk assessment procedures to determine whether there is reasonable certainty that no harm will result from the intended use of the additive ( Scott v. FDA, 728 F.2d 322 (6th Cir. 1984) ).

In evaluating the safety of a food additive, FDA customarily reviews the available data on each relevant chemical impurity to determine whether the chemical induces tumors in animals or humans. If FDA concludes that the chemical impurity causes cancer in animals or humans, the agency calculates the unit cancer risk for the chemical and the upper-bound limit of lifetime human cancer risk from the chemical's presence in the additive.

In some instances, the available data and information may not allow the agency to determine whether a particular chemical impurity in a food additive is a carcinogen via ingestion. However, the available data may suggest, but not establish definitively, that the impurity poses a human cancer risk via this route. In such circumstances, the agency may perform a risk assessment based upon the available data and the assumption that the impurity is carcinogenic via ingestion. This approach permits the agency to determine whether there is a reasonable certainty that no harm will result from the petitioned use of the food additive, even though the carcinogenic status of the impurity is not clearly established. FDA followed this approach to determine whether there is a reasonable certainty that no harm will result from the food additive use of n -octanol synthesized by hydrodimerization of 1,3-butadiene. In doing so, FDA assumed that 1,3-butadiene, an impurity in the additive, would also be carcinogenic when administered by ingestion.

n -Octanol produced by the proposed manufacturing process, the hydrodimerization of 1,3-butadiene, is intended to be used in the same manner as currently permitted synthetic and naturally derived n -octanol. Therefore, FDA concludes that the proposed amendment to the regulation providing for the petitioned manufacturing process for n -octanol will not result in a change in the daily intake of the additive n -octanol because no new uses are proposed. Thus, the only new issue is human exposure to 1,3-butadiene from food containing n -octanol produced by the new manufacturing process.

FDA has evaluated the safety of n -octanol produced by the new manufacturing process, under the general safety standard, and concludes that the use of the resulting additive is safe. In reaching this conclusion, FDA reviewed relevant toxicological data on 1,3-butadiene and used risk assessment procedures to estimate the upper-bound limit of lifetime human risk presented by levels that may be present in the petitioned additive.

The risk evaluation of 1,3-butadiene has two aspects: (1) Assessment of exposure to 1,3-butadiene from the petitioned use of n -octanol produced by the new manufacturing process and (2) extrapolation of the risk observed in the animal bioassays to the conditions of exposure to humans.

In one long-term inhalation study in mice, 1,3-butadiene has been reported to induce a variety of tumors, including in the hematopoietic system, heart, lung, forestomach, liver, Harderian gland, brain, and kidney in both sexes and tumors of the ovaries and mammary gland in female mice (Ref. 1). 1,3-Butadiene also has been reported to induce tumors of the pancreas and testis in male rats and tumors of the uterus, mammary gland, and thyroid in female rats in another long-term inhalation study (Refs. 2 and 3). FDA does not believe, however, that these inhalation studies are necessarily determinative of the carcinogenic potential of 1,3-butadiene when administered orally, the route of human exposure to food additives.

No long-term studies are available in which 1,3-butadiene was administered to test animals orally. Therefore, the agency has performed a carcinogenicity risk assessment for 1,3-butadiene based on the assumption that 1,3-butadiene would induce tumors in animals and humans if administered orally and that its potency by the oral route of exposure would be no greater than its potency by the inhalation route of exposure (the predominant route of exposure). In this risk assessment the agency utilized data on female mice from an inhalation study of 1,3-butadiene to calculate a unit cancer risk of 1.4 (milligrams per kilograms (kg) body weight per day) −1 for 1,3-butadiene (Ref. 4).

1,3-Butadiene was not detected in the product. However, based on the limit of detection, FDA has estimated the exposure to 1,3-butadiene from the petitioned use of the subject additive would not exceed 0.63 parts per trillion in the daily diet (3 kg), or 1.9 nanograms per person per day (Refs. 5 and 6). Based on this estimate and the assumption that 1,3-butadiene would induce tumors with the same potency in an oral study as it did in the mouse inhalation study, FDA estimates that the upper-bound limit of lifetime human risk from butadiene exposure as a result of the petitioned used of the subject additive would be 4.4 x 10 −8 (Ref. 4). Because of the numerous conservative assumptions used in calculating the exposure estimate, the actual lifetime-averaged individual exposure to 1,3-butadiene is likely to be substantially less than the estimated exposure, and therefore, the probable lifetime human risk would be less than the upper-bound limit of lifetime human risk. Thus, the agency concludes that there is reasonable certainty that no harm from exposure to 1,3-butadiene would result from the petitioned use of the additive.

The agency also has considered whether specifications are necessary to control the amount of 1,3-butadiene present as an impurity in the food additive. The agency finds that specifications are not necessary for the following reasons: (1) The agency would not expect 1,3-butadiene to become a component of food at other than extremely low levels because of its volatility and the low levels at which 1,3-butadiene (below detection limit) may be expected to remain as an impurity following production and purification of the additive and (2) the upper-bound limit of lifetime human risk from exposure to 1,3-butadiene is very low, 4.4 x 10 −8 .

FDA has evaluated data in the petition and other relevant material. Based on this information, the agency concludes that the proposed use of the additive produced by the new manufacturing process is safe, and, therefore, the regulations in § 172.864 should be amended as set forth in this document.

In accordance with § 171.1(h) (21 CFR 171.1(h)), the petition and the documents that FDA considered and relied upon in reaching its decision to approve the petition are available for inspection at the Center for Food Safety and Applied Nutrition by appointment with the information contact person (see FOR FURTHER INFORMATION CONTACT ). As provided in § 171.1(h), the agency will delete from the documents any materials that are not available for public disclosure before making the documents available for inspection.

In Title 24 of the Code of Federal Regulations, parts 700 to 1699, revised as of April 1, 2005, on page 381, § 941.207 is corrected by removing the parenthetical statement at the end of the section.

These temporary regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). For this reason, the collection of information contained in these regulations has been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-1965. Responses to this collection of information are required to obtain a tax benefit.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

For further information concerning this collection of information, and where to submit comments on the collection of information and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble of the cross-referencing notice of proposed rulemaking published in the Proposed Rules section of this issue of the Federal Register .

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

This document contains amendments to regulations under sections 1291(d)(2), 1297(e) and 1298(b)(1). The temporary regulations provide rules for a shareholder of a foreign corporation to make a deemed sale or a deemed dividend election under section 1298(b)(1) when section 1297(e) applies to a portion of the holding period. The temporary regulations also provide rules for such shareholders, or shareholders of foreign corporations that no longer meet the income or asset tests of section 1297(a), to make late deemed sale or deemed dividend elections.

Section 1297(e), added by the Taxpayer Relief Act of 1997 (Pub. L. 105-34, 111 Stat. 708), provides that a foreign corporation generally is not treated as a PFIC with respect to a shareholder during the qualified portion of the shareholder's holding period in the stock of the foreign corporation. The “qualified portion” is the portion of the shareholder's holding period which is after December 31, 1997, and during which the shareholder is a U.S. shareholder (as defined in section 951(b)) and the foreign corporation is a controlled foreign corporation. If the qualified portion of the U.S. shareholder's holding period in the stock of the foreign corporation is less than the shareholder's entire holding period, then, notwithstanding section 1297(e), section 1298(b)(1) will apply to treat the foreign corporation as a PFIC with respect to the shareholder if at any time during the shareholder's holding period of the stock, the corporation was a PFIC that was not a QEF, and the shareholder has not made an election under section 1298(b)(1) to purge the PFIC taint under rules similar to the rules of section 1291(d)(2).

Section 1298(b)(1) provides that if a shareholder owns stock in a foreign corporation that, at any time during the shareholder's holding period with respect to such stock, was a PFIC that was not a QEF, the stock will retain its character as PFIC stock, even if the corporation later ceases to qualify as a PFIC under section 1297(a), unless the shareholder elects to purge the PFIC taint under rules similar to the rules of section 1291(d)(2).

On March 2, 1988, the IRS and Treasury Department published temporary regulations (TD 8178, 1988-1 CB 313 [53 FR 6770]), and proposed regulations that cross-referenced the temporary regulations (INTL 941-86 [53 FR 6781]), concerning the election under section 1298(b)(1) (then section 1297(b)(1)) (1988 temporary regulations). The 1988 temporary regulations permitted a shareholder of a former PFIC, as defined in § 1.1291-9(j)(2)(iv), to purge the PFIC taint by making a deemed sale election. On January 2, 1998, the IRS and Treasury Department published temporary regulations (TD 8750; 1998-8 IRB 4 [63 FR 6]) and proposed regulations that cross-referenced the temporary regulations (REG 115795-97 [63 FR 39-01]) that amended the 1988 temporary regulations. The 1998 temporary regulations provided that a shareholder of a former PFIC that was a controlled foreign corporation (as defined in section 957(a)) (CFC) during its last taxable year as a PFIC under section 1297(a), may apply the rules of the deemed dividend election under section 1291(d)(2)(B) and § 1.1291-9 to its section 1298(b)(1) election. The 1998 temporary regulations expired on January 2, 2001, pursuant to section 7805(e)(2).

The regulations contained in this document provide guidance on making a deemed sale or a deemed dividend election for a shareholder of a section 1297(e) PFIC. Section 1.1291-9T(j)(2)(v) defines a section 1297(e) PFIC as a foreign corporation that qualifies as a PFIC under section 1297(a) on the first day of the qualified portion of the shareholder's holding period under section 1297(e), and is also treated as a PFIC with respect to the shareholder under section 1298(b)(1) because at any time during the shareholder's holding period of the stock, other than the qualified portion, the foreign corporation was a PFIC that was not a QEF.

The deemed sale and deemed dividend election rules contained herein generally conform to the deemed sale and deemed dividend election provisions under §§ 1.1291-9 and -10, which apply to shareholders making a purging election in conjunction with a QEF election. The deemed sale and deemed dividend election rules contained in these regulations, which apply to shareholders of section 1297(e) PFICs, however, differ from those contained in §§ 1.1291-9 and -10 in several minor respects.

First, under the deemed dividend or deemed sale election rules contained in §§ 1.1291-9 and -10, the deemed dividend or the gain recognized on the deemed sale, is taxed as an excess distribution received by the shareholder on the qualification date, defined as the first day of the PFIC's first taxable year as a QEF. See § 1.1291-9T(e). Under these regulations, for purposes of a deemed dividend or deemed sale election made by a shareholder of a section 1297(e) PFIC, the deemed dividend, or the gain recognized on the deemed sale, is taxed as an excess distribution received on the CFC qualification date. The “CFC qualification date” is defined in § 1.1297-3T(d) as the first day on which the qualified portion of the shareholder's holding period in the Section 1297(e) PFIC begins, as determined under section 1297(e)(3).

Second, under § 1.1291-9(a)(2), the term “post-1986 earnings and profits” is defined as certain undistributed earnings and profits as of the day before the qualification date. These regulations contain a similar rule. Section 1.1297-3T(c) provides, in general, that “post-1986 earnings and profits” means certain undistributed earnings as of the day before the CFC qualification date. Unlike the qualification date under § 1.1291-9, which is the first day of the taxable year, the CFC qualification date may be a day after the first day of the taxable year. Thus, § 1.1297-3T(c)(3)(i)(B) also contains a special rule for determining post-1986 earnings and profits when the CFC qualification date is a day after the first day of the taxable year. In such instances, the undistributed earnings and profits will be determined at the close of the taxable year that includes the CFC qualification date.

Finally, taxpayers have commented that, if a foreign corporation is a PFIC under the “once a PFIC, always a PFIC” rule of section 1298(b)(1) but the corporation has ceased to qualify as a PFIC under section 1297(a) or is a corporation to which section 1297(e) applies, and if the shareholder fails to make a timely purging election, the shareholder has no way to remove the PFIC taint. To address this situation, the IRS and Treasury Department also have included late election relief provisions in the regulations. These provisions, contained in §§ 1.1297-3T(e) and 1.1298-3T(e), allow shareholders of a section 1297(e) PFIC or a former PFIC to make a late deemed dividend or deemed sale election with the consent of the Commissioner, provided certain requirements are met. Under this provision, the shareholder applies the rules of §§ 1.1297-3T and 1.1298-3T as if its purging election were timely made. If the taxable year for which the purging election is made ( i.e. , the taxable year that includes the CFC qualification date or the termination date) is a closed taxable year, the taxpayer must enter into a closing agreement to agree to eliminate any prejudice to the interests of the U.S. government as a consequence of the taxpayer's inability to file an amended return.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. For applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), please refer to the Special Analyses section of the preamble of the cross-reference notice of proposed rulemaking published in the Proposed Rules section in this issue of the Federal Register . Pursuant to section 7805(f) of the Code, this regulation will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these regulations is Ethan Atticks, Office of Associate Chief Counsel (International). However, other personnel from the IRS and Treasury Department participated in their development.

The collection of information contained in these final regulations has been previously reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1028, which was later incorporated into control number 1545-1507.

The collection of information in these final regulations is in § 1.1298-3(c)(5). This information is required to enable the IRS to verify that a taxpayer is reporting the correct amount of income, gain or loss from that taxpayer's interest in the foreign corporation.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

This document contains final regulations under section 1298(b)(1). Section 1298(b)(1) was originally enacted as section 1297 by the Tax Reform Act of 1986 (Pub. L. 99-514, 100 Stat. 2085) and was redesignated as section 1298 by the Taxpayer Relief Act of 1997 (Pub. L. 105-34, 111 Stat. 788).

Section 1298(b)(1) provides that if a shareholder owns stock in a foreign corporation that, at any time during the shareholder's holding period with respect to such stock, was a PFIC that was not a qualified electing fund (QEF), the stock will retain its character as PFIC stock, even if the corporation later ceases to qualify as a PFIC under section 1297(a), unless the shareholder elects to purge the PFIC taint under rules similar to the rules of section 1291(d)(2).

On March 2, 1988, the IRS and Treasury Department published temporary regulations (TD 8178, 1988-1 CB 313 [53 FR 6770]), and proposed regulations that cross-referenced the temporary regulations (INTL 941-86 [53 FR 6781]), concerning the election under section 1298(b)(1) (then section 1297(b)(1)) (1988 temporary regulations). The 1988 temporary regulations permitted a shareholder of a former PFIC, as defined in § 1.1291-9(j)(2)(iv), to purge the PFIC taint by making a deemed sale election. On January 2, 1998, the IRS and Treasury Department published temporary regulations (TD 8750; 1998-8 IRB 4 [63 FR 6]) and proposed regulations that cross-referenced the temporary regulations (REG 115795-97 [63 FR 39-01]) that amended the 1988 temporary regulations. The 1998 temporary regulations provided that a shareholder of a former PFIC that was a controlled foreign corporation (as defined in section 957(a)) during its last taxable year as a PFIC under section 1297(a), may apply the rules of the deemed dividend election under section 1291(d)(2)(B) and § 1.1291-9 to its section 1298(b)(1) election. The 1998 temporary regulations expired on January 2, 2001, pursuant to section 7805(e)(2).

One written comment was received regarding the deemed sale election in response to the notice of proposed rulemaking published by cross-reference to the 1988 regulations. No public hearing was requested or held on the notice of proposed rulemaking. After consideration of the comment, the 1988 temporary regulations, as modified by the 1998 temporary regulations that permit a deemed dividend election in certain circumstances, are adopted as final regulations with the changes discussed below.

One comment was received on the 1988 temporary regulations regarding the deemed sale election under § 1.1297-3T. The comment recommended that the regulations permit a shareholder to make a deemed sale election without having to file an amended return in instances where an election could be filed by the due date of the shareholder's original return for the last taxable year during which the foreign corporation continued to qualify as a PFIC under section 1297(a). This suggestion was adopted with respect to both the deemed sale and deemed dividend elections, and the regulations have been revised accordingly.

Additional revisions were made to the final regulations to reflect the redesignation of certain Code sections pursuant to the Taxpayer Relief Act of 1997 (Pub. L. 105-34, 111 Stat. 788). Similar revisions were made to the definition of former PFIC contained in § 1.1291-9(j)(2)(iv). In addition, the deemed dividend election provisions were added and the deemed sale election provisions were revised to conform generally the elections under section 1298(b)(1) to the deemed dividend and deemed sale election provisions contained in §§ 1.1291-9 and −10 (purging elections in connection with election to treat PFIC as a QEF).

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

The principal author of this regulation is Ethan Atticks, Office of Associate Chief Counsel (International). However, other personnel from the IRS and Treasury Department participated in their development.

EPA is publishing this rule without a prior proposal because we view this action as noncontroversial and anticipate no adverse comment. 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 adopt the provisions in this Direct Final Rule if adverse comments are filed. We may address all adverse 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. Any distinct amendment, paragraph, or section of today's rulemaking for which we do not receive adverse comment will become effective on the date set out above, notwithstanding any adverse comment on any other distinct amendment, paragraph, or section of today's rule.

Today's action is available electronically on the date of publication from EPA's Federal Register Internet Web site listed below. Electronic copies of this preamble, regulatory language, and other documents associated with today's final rule are available from the EPA Office of Transportation and Air Quality Web site, listed below, shortly after the rule is signed by the Administrator. These services are free of charge, except any cost that you already incur for connecting to the Internet.

EPA Federal Register Web site: http://www.epa.gov/docs/fedrgstr/epa-air/ (either select a desired date or use the Search feature).

EPA Office of Transportation and Air Quality Web site: http://www.epa.gov/otaq/ (look in What's New or under specific rulemaking topic).

Please note that due to differences between the software used to develop the documents and the software into which the documents may be downloaded, changes in format, page length, etc., may occur.

Regulated Entities: Entities potentially affected by this action are those that manufacture and sell motor vehicles in the United States. The table below gives some examples of entities that may have to comply with the regulations. However, since these are only examples, you should carefully examine these and other existing regulations in 40 CFR part 86. If you have any questions, please call the person listed in the FOR FURTHER INFORMATION CONTACT section above.

Today's action pertains to the Evaporative Emissions Test Procedure (58 FR 16002, March 24, 1992) and the Onboard Refueling Vapor Recovery Procedure (59 FR 16262, April 6, 1994) for light-duty vehicles, light duty trucks, and heavy-duty gasoline vehicles up to 14,000 GVWR; the dynamometer test provisions (40 CFR 86.135-90, 40 CFR 86.159-00, 40 CFR 86.160-00); and the Vehicle Labeling requirements (40 CFR 86.098-35, 40 CFR 86.1807-01). Today's action includes minor revisions to the evaporative test procedures, which are intended to reduce testing burden associated with conducting evaporative test procedures without affecting the level of stringency. Today's action includes minor revisions to clarify evaporative emissions testing regulations; to harmonize EPA and California evaporative requirements; to allow use of a four-wheel drive dynamometer; and to no longer require out-dated information on vehicle labels. Although we provide some context in the following discussions, a full discussion of the evaporative test procedures is outside the scope of this direct final rule. Readers are advised to consult the documents associated with these rulemakings to obtain the details of these rules.

The remainder of this document is divided into the following sections: Section II provides a detailed description of today's action. Sections III through IV describe the Statutory and Executive Order Reviews and Statutory Provisions and Legal Authority.

The enhanced evaporative emission test procedure for 1996 model year and later passenger cars, light-duty trucks and heavy-duty vehicles measures emissions from fuel evaporation during simulated overnight parking experiences (diurnal emissions), during vehicle operations (running loss emissions), and immediately following a drive (hot soak emissions).

The enhanced evaporative test procedure includes a sequence of three basic elements: (1) An initial loading of the evaporative canister with fuel vapor; (2) a period of driving to provide an opportunity to purge the canister; and (3) a simulation of repeated hot days of parking. By following this sequence and sampling evaporative emissions during hot soak, running loss and parking simulation, the test ensures that the vehicle can quickly regain canister storage capacity during driving and provides further assurance that vehicles will effectively control evaporative emissions for most in-use events. The enhanced evaporative test procedure also includes a test procedure to measure fuel spillage during refueling, called spitback. The 1996 and later model year enhanced evaporative test procedures follow.

a. Three-Day Diurnal-plus-Hot-Soak Test Sequence . Each of the three-day diurnal plus hot-soak (three-diurnal) test elements corresponds to an aspect of in-use vehicle operation in ozone-prone summertime conditions. The exhaust emission test following vehicle preconditioning corresponds to vehicle operation while vapors from a loaded evaporative canister are purged into the engine, as might occur during driving after a prolonged period of parking. The running loss test element corresponds to sustained vehicle operation on a hot day. The hot soak element corresponds to the emission-prone period immediately following engine shut-off. The diurnal heat builds correspond to successive days of parking in hot weather and also serve to control fuel system permeation emissions, called resting losses.

The purpose of the running loss test is to measure evaporative emissions during vehicle operation to assure that vehicles can control fuel vapors generated in use. In order to perform the running loss test, auto manufacturers must separately develop a fuel temperature profile for the running loss test. The fuel temperature profile is used as a target during the running loss test to duplicate the heating of the vehicle's fuel tank during onroad driving in representative summer conditions. Each fuel temperature profile is generated by obtaining a fuel temperature versus time trace as the vehicle is driven over the prescribed running loss driving cycle, during sunny, summertime conditions, e.g. at 95 °F ambient temperature, on the road. During the running loss test, thermocouples are placed inside the fuel tank to measure and monitor the fuel temperature.

b. Two-Day Diurnal-plus-Hot-Soak Test Sequence. The two-day diurnal-plus-hot-soak (two-diurnal) test sequence is a supplemental evaporative test procedure, consisting of vehicle preconditioning, canister preconditioning, FTP exhaust test, hot soak at 68-86 °F, and two diurnal heat builds. The two-diurnal test sequence is similar to the three-diurnal but excludes the running loss test. Instead, without the running loss portion of the test procedure, the two diurnal heat builds after the exhaust emission test verify that the evaporative canister is sufficiently purged during the exhaust emission test, which simulates short trips (58 FR 16003, March 23, 1993). “Eliminating a diurnal heat build, initially loading the evaporative canister only to breakthrough, measuring a moderate temperature hot soak, and increasing the standard from 2 to 2.5 grams all contribute significantly to making the [two-diurnal test] procedure effective in its limited objective of ensuring proper purge without requiring additional design modifications” (58 FR 16001, March 24, 1993). The three-diurnal test sequence does not test for canister purge as effectively as the two-diurnal test sequence due to the addition of the running loss test, which occurs between the FTP exhaust test and diurnal heat builds. Since exhaust emissions are not measured during running loss, it cannot be determined if canister purging occurred only during the FTP exhaust cycle (58 FR 16001, March 24, 1993).

c. Spitback Test Procedure. The spitback test procedure assures that vehicles' fuel fill necks are adequately designed to accommodate in-use fuel fill rates, so as to limit fuel spillage when refueling a vehicle.

A separate evaporative test procedure, the Onboard Refueling Vapor Recovery (ORVR) test procedure, was developed to measure refueling emissions from vehicles. On January 24, 1994, EPA adopted onboard vehicle refueling requirements for passenger cars and light-duty trucks (59 FR 16262, April 6, 1994). EPA also adopted similar ORVR requirements for complete heavy-duty vehicles less than 10,000 lbs. GVWR (65 FR 59896, October 6, 2000). The main purpose of the ORVR test is to limit hydrocarbon vapors released during refueling events. The ORVR test procedure also accounts for spitback emissions in the overall emission measurements, reducing the necessity for a separate spitback test procedure (59 FR 16262, April 6, 1994).

The enhanced evaporative test procedure is important for measuring evaporative emissions from vehicles under numerous drive and park conditions, and the ORVR test is important for measuring refueling emissions from vehicles. In some cases, similar parameters are tested by these test procedures. The two-diurnal and three-diurnal test sequences both test canister capacity, permeation control, and canister purge capacity. The three-diurnal test sequence also tests hot drive vapor generation (running loss) and high temperature vapor generation. The ORVR test procedure tests canister capacity and canister purge capacity, in addition to refueling vapor generation and fill pipe losses. The two-diurnal test procedure takes approximately four days; the three-diurnal takes five days; the spitback takes one day; and the ORVR takes three days. Thus, performing all four test procedures requires a minimum of 12 days since the spitback test is often waived. EPA believes it is appropriate to streamline the evaporative test procedure to reduce testing burden and to reduce overlapping procedures without affecting the level of stringency.

EPA, California Air Resources Board (ARB), and the automobile industry have collaborated since 1996 to identify portions of these test procedures that can be streamlined and/or harmonized, and the discussions culminated in EPA Guidance Letter CCD-02-20, December 31, 2002, available on the Internet at http://www.epa.gov/otaq/cert/dearmfr/dearmfr.htm. The Guidance Letter clarified portions of evaporative emission test procedure and also suggested minor modifications to the test procedure which could be made via a direct rulemaking. Today's action codifies the suggested modifications and finalizes the clarifications to the evaporative and refueling test procedures. Today's action does not affect the stringency of the current requirements.

The current dynamometer test procedures (86.139-90, 86.159-00, and 86.160-00) date from a time when four-wheel drive dynamometers were not widely available for measurement of exhaust emissions and fuel economy. Changes in technology for modern four-wheel and all-wheel drive vehicles have heightened the need for testing these vehicles on a four-wheel drive dynamometer. It is no longer easy to configure certain four-wheel or all-wheel drive certification vehicles for testing on a two-wheel drive dynamometer. The need for four-wheel drive dynamometer tests also includes hybrid vehicles with sophisticated regenerative braking systems that cannot receive a representative test on a two-wheel drive dynamometer.

86.1807-01 contains the labeling requirements for vehicles, which include light-duty vehicles, light-duty trucks, medium-duty passenger vehicles, and heavy-duty vehicles which are chassis certified. 86.098-35 previously applied to vehicle and engine labeling, but since the 2001 model year apply only to heavy-duty engine labeling. The labels' basic content requirements date from a time when vehicles were designed with manually adjustable tune-up settings, including idle speed(s), ignition timing, air-fuel mixture, injection timing, and valve lash, and did not use an exhaust catalyst. Modern vehicles and engines are electronically controlled, making a listing of tune-up specifications unnecessary. As well, leaded fuel was still widely available in the U.S. at the time of the label requirements. The labels have not been updated since the introduction of catalyst technology almost 30 years ago.

Today's action describes minor modifications and clarifications made to the evaporative test procedures, dynamometer regulations, and vehicle labeling requirements. Explanation and, where appropriate, EPA's interpretation of the resulting regulatory language is provided.

a. Current Procedure. The current two-diurnal enhanced evaporative test procedure is part of the overall enhanced evaporative emission test procedure (58 FR 16001, March 24, 1993). Currently, manufacturers are expected to complete three-diurnal, two-diurnal, and ORVR tests on certification vehicles.

b. Today's Action. Today's action provides manufacturers with an option which will allow a waiver from the two-day diurnal-plus-hot-soak evaporative emission certification test. Manufacturers must still perform three-diurnal and ORVR tests for certification vehicles and perform the two-diurnal and ORVR test on vehicles for the In-Use Verification Program (40 CFR 1845-01, 1845-04). EPA may perform at its discretion confirmatory two-diurnal evaporative emission testing on certification test vehicles which are certified using this option, even though the manufacturer may not have performed a two-diurnal test during the certification process.

Manufacturers may use the waiver based on good engineering judgement that the canister will be adequately purged during the FTP exhaust test and comply with the two-diurnal emission standard. Manufacturers will need to provide a statement in the certification application stating: “Based on the manufacturer's engineering evaluation of appropriate evaporative emission testing, all vehicles in [a specific evaporative/refueling family] will comply with the applicable two-day evaporative emission standard.”

EPA may request data from the manufacturers demonstrating that the purge flow rate calibration on the two-diurnal tests adequately purges the canister to comply with the evaporative emission standard for the supplemental two-day test in lieu of actual two-day evaporative test data. Such information may include, but is not limited to, canister type, canister volume, canister working capacity, fuel tank volume, fuel tank geometry, the type of fuel delivery system (return, returnless, variable flow fuel pump, etc.), a description of the input parameters and software strategy used to control the evaporative canister purge, the nominal purge flow volume (in bed volumes) when vehicles are driven over the 2-day (FTP) driving cycle, the nominal purge flow volume (in bed volumes) when vehicles are driven over the 3-diurnal (FTP + running loss) driving cycle, and other supporting information as necessary. This information will address EPA's concerns about vehicles sufficiently purging the canister, as expressed in 58 FR 16009-11, March 24, 1993. As well, this information will be useful in selecting EPA in-class testing vehicles and be helpful for determining potential evaporative defeat devices.

This testing waiver option will only be available to current technology gasoline-fueled and ethanol-fueled vehicles which use conventional evaporative emission control systems, e.g. vehicles equipped with conventional fuel tank materials, liquid seal ORVR systems, and carbon canister(s). Currently all light-duty and heavy-duty up to 14,000 GVWR vehicles certified in the U.S. use an integrated evaporative/refueling emission control system. For this reason, EPA does not expect the waiver to be used for non-integrated evaporative/refueling emission control system. If non-integrated systems become more common and in-use data can demonstrate with confidence that the vast majority of such vehicles are in compliance with evaporative emission standards, then testing waivers may be used for non-integrated systems as well in the future.

c. Reason for Action. EPA believes that there will be very little risk of noncompliance for several reasons.

Manufacturers will continue to be responsible for meeting the two-day diurnal-plus-hot-soak emission standards even if they waive the two-diurnal certification test procedure. In addition, vehicles must still meet the three-diurnal and ORVR test requirements which provide data to EPA on many aspects of the two-diurnal test procedure since the three-diurnal test procedure is similar to the two-diurnal test procedure, except for canister purge. However canister purge assurance is an inherent part of the ORVR test procedure. Thus the combination of three-diurnal and ORVR certification data assure adequate canister purge.

EPA believes that compliance with the two-diurnal standards is further assured because EPA may perform at its discretion confirmatory two-diurnal evaporative emission testing on certification test vehicles which are certified using this option. In addition to EPA's confirmatory testing, a vehicle randomly selected from each evaporative family will be tested using the two-diurnal evaporative test procedure under the In-Use Verification Program, as required in provisions 40 CFR 86.1845-01(a)(5)(ii) and 86.1845-04(a)(5)(ii). If data shows noncompliance, EPA will not normally grant subsequent waivers for the applicable evaporative family. The In-Use vehicle recall program also conducts two-diurnal evaporative testing as an additional compliance check.

This provision reduces testing burden by reducing overlapping requirements of the two-diurnal, three-diurnal and ORVR test procedures. In addition, performing all three tests is time consuming, taking a minimum of 12 days to complete if there are no voids. The evaporative test procedures are very complex and detailed, with specified times for completing each section and, when voids occur, they result in additional time to complete the tests.

a. Current Procedure. The purpose of the running loss test is to measure evaporative emissions during vehicle operation to assure that vehicles can control fuel vapors generated in use, in urban driving and low-speed or idle conditions. The current regulations require the installation of two temperature sensors (thermocouples) in the fuel tank to provide an average liquid fuel temperature. This average fuel temperature is used to control the fuel tank temperature profile (FTTP) during the running loss drive portion of the three-day test. This current method can be invasive to a vehicle's fuel system and requires thermocouples to be accurately positioned in the fuel tank.

b. Today's Action. Today's action amends the regulations to allow manufacturers the option for using an alternative running loss test procedure. Prior EPA approval is needed for this option. This provision also allows EPA to conduct certification and in-use testing for a specific vehicle using the alternative method for the running loss test procedure.

In order to obtain EPA approval of an alternative method for the running loss test procedure, manufacturers will be required to provide EPA with data that demonstrates that the alternative method is equal to or more stringent than the current method. Data should include, but is not limited to, multiple tests comparing running loss, hot soak, and diurnal emissions using the current test procedure and the alternative test procedure. The test vehicles used to provide comparison are expected to cover the types of technology for the population of vehicles approved to use the alternative method, including, but not limited to, in-tank fuel return and fuel tank parameters, such as tank material, insulation, size, geometry, and location. If a vehicle fails the running loss portion of the three-diurnal test procedure, the manufacturer normally would not be allowed to treat the failure as an invalid test or request a retest using the standard running loss procedure outlined in 40 CFR 86.134-96.

c. Reasons for Action. Today's action allows an alternative method for the running loss test procedure for several reasons.

The allowance of an alternative method addresses specific concerns related to controlling the fuel tank temperature profile (FTTP) during the running loss portion of the three-diurnal test. Thermocouple installment is especially difficult (and often invasive) to perform for in-use running loss and three-day tests on customer-owned vehicles. To perform in-use tests, the fuel tank often needs to be removed and/or a hole is made in the fuel tank, resulting in having to replace the fuel tank on the customer-owned vehicle, which can jeopardize the integrity of the fuel system and the ability of a capable system to demonstrate compliance. If thermocouples are not properly placed in the fuel tank, they can cause the vehicle to fail the running loss test and, consequently, test results are subject to variability.

EPA is not aware of an alternative method at this time, nor any alternative methods of controlling the in-tank fuel temperature. We encourage the automotive industry to work together to develop a technically accurate method of measuring and controlling in-tank fuel temperatures.

a. Current Procedure. The Sealed Housing for Evaporative Determination (SHED) calibration procedure (retention check) is designed to determine that the SHED enclosure does not have leaks that could result in falsely low hydrocarbon readings during the vehicle evaporative testing sequences. The current calibration requirements, outlined in 40 CFR 86.117-96 (c)(1)(vii), which include evaporative SHED retention checks, were designed for vehicles meeting Tier 1 evaporative emission standards. This regulation requires the injection of two to six grams of methanol and/or propane with a five-minute minimum mixing time for enclosure recovery measurements and a 24-hour time period for retention checks. These calibration requirements were not designed for the more stringent Tier 2 evaporative emission standards.

b. Today's Action. Today's action revises the current SHED calibration procedure to an injection of 0.5 to 6 grams for vehicles meeting three-diurnal standards equal to or above 2.0 grams/test. This provision also revises the SHED calibration procedure to specify the injection of 0.5 to 1.0 gram methane and/or propane for a maximum injection of 1.0 grams for vehicles meeting three-diurnal standards below 2.0 grams/test. Both revisions utilize the five-minute minimum mixing time and 96°F.

c. Reason for Action. EPA believes this action will ensure that manufacturer and EPA evaporative SHEDs are properly calibrated in accordance with testing to more stringent evaporative emission standards for Tier 2 vehicles. It will also harmonize the EPA SHED injection amounts with those of California ARB. 1

a. Current Procedure. Current provisions allow EPA to accept California evaporative data based on 40 CFR 86.1811-04(e)(6) for Tier 2 vehicles. However, current regulations do not specifically allow EPA to accept California evaporative data for heavy-duty vehicles and non-Tier 2 vehicles even when the combination of the data, the California test procedures, and the California emission standards are as or more stringent than EPA's requirements.

b. Today's Action. Today's action allows the submission of California evaporative data for heavy-duty vehicles and non-Tier 2 vehicles, which may be submitted in lieu of Federal test data for 50 state evaporative/refueling families and for “carry across” data from a California evaporative/refueling family to a federal family. EPA requests that manufacturers notify EPA of their intention to use California test data to demonstrate compliance with applicable federal evaporative emission standards and include a statement in their certification application that based on good engineering judgement the vehicles in an evaporative/refueling family will comply with the applicable federal evaporative standards if tested using California test conditions and procedures. EPA may request comparative test data on a case-by-base basis which clearly demonstrates that a vehicle meeting the California evaporative standard will also meet the appropriate federal evaporative emission standard.

a. Current Procedure. The current methods for canister loading for the Federal Test Procedure (FTP) are described in provisions 40 CFR 86.132-96(h), (j)(1), and (j)(2). During the canister loading, the canister remains in place, but in situations where the canister is inaccessible, the canister may be removed for loading with special care not to damage any components or the integrity of the fuel system. The canister is then loaded with a butane-nitrogen mixture.

b. Today's Action. Today's action allows manufacturers the option of using alternative canister loading methods that are equivalent or more stringent than the applicable canister loading method. Prior approval by EPA is required in order to use alternative methods to preload the canister(s) during the exhaust and evaporative test sequences. Manufacturers must provide data to EPA to prove that alternative methods maintain the current stringency required through the canister loading procedure. This information includes, but is not limited to, location of canister vent hose and whether the canister is routed to a dummy canister or vented during testing. EPA may also use the manufacturer-specified, EPA-approved alternative canister loading method to conduct confirmatory testing and in-use testing or the appropriate method outlined in 40 CFR 86.132-96(h), 86.132-96(j)(1), or 86.132-96(j)(2).

c. Reasons for Action. EPA recognizes that the use of the current methods for canister loading during the FTP can jeopardize the integrity of the evaporative emission control system and, therefore, the ability of a capable system to demonstrate compliance with lower evaporative emission standards. In cases where the canister is inaccessible, the current canister loading procedure can be quite burdensome and difficult to perform, especially on In-Use Verification Program vehicles.

EPA is clarifying EPA's position regarding the evaporative emission testing requirements for the current In-Use Verification Program (IUVP) (40 CFR 86.1845-01, 86.1845-04). The current provisions imply, but do not specify, that all evaporative tests for all fuel types should be performed, including the two-day diurnal-plus-hot-soak, three-day diurnal-plus-hot-soak, and running loss tests.

As discussed in the preamble to the CAP 2000 Notice of Proposed Rulemaking text (63 FR 39672, July 23, 1998), EPA did not anticipate that more than one evaporative test would be required for IUVP vehicles.

The clarifications for IUVP state that for gasoline- and ethanol-fueled in-use vehicles, running loss and three-day diurnal-plus-hot-soak evaporative emissions tests are not required to be performed. However, while these tests do not have to be performed, gasoline- and ethanol-fueled IUVP vehicles are still required to comply with the applicable standards for the three-diurnal and running loss test procedures. The two-diurnal test procedure must continue to be conducted on gasoline- and ethanol-fueled IUVP vehicles. Note that for compressed natural gas (CNG) and propane (LPG) fueled (also known as gaseous-fueled) vehicles, a three-day diurnal-plus-hot-soak test is required for IUVP testing. However, for gaseous-fueled vehicles the three-diurnal test procedure neither includes a running loss test nor thermocouples placed in the fuel tank, and therefore is not intrusive for IUVP testing of these vehicles. In addition, the two-day test procedure is not applicable to gaseous-fueled vehicles, 40 CFR 86.130-96(a)(2).

Paragraph 86.1810-01 (m) was inadvertently omitted from the July, 2002, Code of Federal Regulations (CFR). This paragraph is necessary as it relates to other modifications and clarification in today's action. Paragraph (m) refers to waivers referenced in today's action.

Today's action resubmits paragraph 86.1810-01 (m) to the CFR, as worded in the original CAP 2000 rule (64 FR 23939, May 4, 1999).

a. Current Procedure. Currently, 40 CFR 86.152-98(b), 40 CFR 86.153-98(d), and 40 CFR 86.153-98(e)(2) require the canister to be disconnected for integrated and non-integrated systems when draining and refueling the fuel tank to the 10 percent level prior to the initial soak, which precedes the actual refueling and measurement portion of the refueling test. The canister is also required to be disconnected when initially filling the fuel tank to 95 percent of nominal tank capacity in the preconditioning portion of the ORVR test for non-integrated systems.

b. Today's Action. Today's action provides manufacturers the option of not disconnecting the evaporative hoses during the ORVR preconditioning step. The manufacturer shall specify whether or not the canister should be disconnected, and EPA will use the manufacturer specified procedure when performing EPA confirmatory testing.

c. Reasons for Action. The option to not disconnect the ORVR hose is a more stringent test procedure than disconnecting the hose because the hose, while in place, will direct all refueling vapors to the canister during the preconditioning portion of the ORVR test, adding an additional load to the canister. The primary reason manufacturers may use this option is to minimize the chance of the test procedure causing vapor leaks in the evaporative system, minimize the chance of damage that may result from disconnecting the hose, and reduce test variability. If the canister hoses are not re-connected properly, the test procedure could result in vapor leaks in the system, leading to variability in the test data.

Paragraph 86.1810-01(1) was inadvertently omitted from the July 2002 Code of Federal Regulations (CFR).

Today's action resubmits paragraph 86.1810-01 (l) to the CFR, as worded in the Heavy-Duty ORVR Final Rule (65 FR 59970, October 6, 2000).

The current dynamometer test procedures only apply to the use of a two-wheel drive dynamometer and do not include provisions for utilizing a four-wheel drive dynamometer.

Today's action revises three sections of 40 CFR Subpart B, all of which have identical wording describing how to test four-wheel drive vehicles on a chassis dynamometer. The three sections which EPA will modify, 86.135-90, 86.159-00, and 86.160-00, all date from a time when four-wheel drive dynamometers were not widely available for measurement of exhaust emissions and fuel economy. EPA has not ruled out future changes in its emission and fuel economy compliance programs, especially as EPA strives to ensure that a dynamometer test for a given vehicle is as representative as possible of the vehicle's actual road experience.

EPA plans to issue a guidance letter prepared by the Certification and Compliance Division announcing in further detail how it will use the four-wheel drive dynamometer in its compliance programs. However, guidance letters are written to clarify EPA policy, and it is not possible to issue a guidance letter on usage of the four-wheel drive dynamometer until the language in the CFR is revised. In the absence of that, EPA has developed the following proposals for the use of four-wheel drive dynamometers in emission and fuel economy compliance programs. The term four-wheel drive vehicle is also meant to include all-wheel drive vehicles.

The regulatory changes described below will give EPA and manufacturers the regulatory authority to test four-wheel drive and all-wheel drive vehicles on four-wheel drive dynamometers. These changes do not impose new stringency in EPA's certification and compliance programs.

Manufacturers may conduct certification testing for four-wheel drive vehicles on either a four-wheel drive or two-wheel drive mode of dynamometer operation. EPA will conduct confirmatory testing on certification and fuel economy test vehicles in the same dynamometer mode of operation, two-wheel drive or four-wheel drive, which the manufacturer used for their vehicle testing.

Manufacturers will normally conduct In-Use Verification Program testing on a four-wheel drive dynamometer for vehicles which were certified in a four-wheel drive test mode. Four-wheel drive vehicles which were certified in a two-wheel drive mode may be tested in either a four-wheel drive or a two-wheel drive mode of operation. Prior approval by EPA is required to test four-wheel drive vehicles, which were certified on a four-wheel drive test mode, on a two-wheel drive dynamometer for the In-Use Verification Program.

EPA conducts in-use surveillance testing on randomly procured vehicles that are not screened with the same rigor that would be used for recall confirmatory class vehicles. EPA may conduct surveillance in-use testing of all-wheel drive vehicles on the four-wheel drive dynamometer as necessary to avoid modifications to the owner's vehicle, regardless of how the vehicles were certified.

If an all-wheel drive vehicle class certified in a two-wheel drive configuration must undergo in-use confirmatory testing, EPA will discuss with the manufacturer options to determine the most practical and appropriate way to conduct the testing. EPA will make the final determination as to whether the vehicles will be tested in the all-wheel drive mode for confirmatory testing.

EPA may conduct defeat device testing in the four-wheel drive mode of operation using four-wheel drive certification and fuel economy vehicles that were tested by the manufacturer on a two-wheel drive dynamometer, and confirmatory tested on a two-wheel drive dynamometer at EPA.

Changes in technology for modern four-wheel and all-wheel drive vehicles have heightened the need for testing these vehicles on a four-wheel drive dynamometer. It is no longer easy to configure certain four-wheel or all-wheel drive certification vehicles for testing on a two-wheel drive dynamometer. The need for four-wheel drive dynamometer tests also includes hybrid vehicles with sophisticated regenerative braking systems that cannot receive a representative test on a two-wheel drive dynamometer.

EPA is also aware of a small but increasing number of in-use vehicles which cannot be modified for testing on a two-wheel drive dynamometer without intrusive modification to the drive line and/or modifications to the vehicle's electronic control systems. Additionally, there are many more four-wheel and all-wheel drive vehicles in the market place today compared to the time when EPA's policy for testing four-wheel drive vehicles was first drafted. Although four-wheel drive dynamometers have been installed at many test facilities worldwide, EPA realizes that individual manufacturers may have limited experience in compliance testing on these dynamometers, in particular for the most sophisticated new all-wheel drive vehicles. EPA understands that users of four-wheel drive dynamometers are, in some cases, still learning how well four-wheel drive dynamometers can simulate actual road operation. EPA and manufacturers will both benefit as more data are collected and examined.

40 CFR 86.1807-01 contains the labeling requirements for vehicles, which include light-duty vehicles, light-duty trucks, medium-duty passenger vehicles, and heavy-duty vehicles which are chassis certified. 40 CFR 86.098-35 previously applied to vehicle and engine labeling, but since the 2001 model year apply only to heavy-duty engine labeling.

Today's action revises the vehicle labeling requirements described in sections 40 CFR 86.1807-01, Vehicle labeling, and 40 CFR 86.098-35, Labeling, for no longer requiring out-dated information to be included on the label.

The Certification and Compliance Division expects to issue a guidance letter after these regulatory changes are completed in order to show an example of an approved label which reflects the new flexibility in label design. Initially, vehicle manufacturers who wish to take advantage of these labeling changes must have their new label designs approved by their EPA vehicle or engine certification representative.

These changes to the regulations allow more flexibility in label content and design, specifically for the objective of improving the labels' clarity and usefulness. This action is desired since the labels' basic content requirements have not been updated since the introduction of catalyst technology almost 30 years ago. Several of the requirements in the labeling sections are no longer necessary or useful for modern vehicles with electronic emission controls. Since modern vehicles and engines are electronically controlled, a listing of tune-up specifications is no longer necessary. Additionally, the requirement for a hose routing diagram dates from pre-electronic controlled vehicles and serves no purpose for modern vehicles and engines. In the unlikely event that vacuum actuated controls are present on modern vehicles, their function and location and routing of hoses are fully described in the vehicle service manual.

By making these changes to the regulations, it is also EPA's expectation that the label designs may be slightly more generic, leading to a reduced number of label types which are required at the time the vehicle or engine is produced, leading to fewer labeling errors. Additionally, by requiring only the necessary information on the label for modern vehicles and engines, it is expected that the size of the label, or the number of them for manufacturers which currently use more than one label to meet the present labeling requirements, may be reduced.

When Tier 2 regulations were implemented, a new vehicle class, medium-duty passenger vehicles, was added. Thus it is necessary to update the regulations so as to clarify that the regulations apply to light-duty vehicle, light-duty trucks, and medium-duty passenger vehicles and heavy duty vehicles.

Accepting alternative labels will permit use of revised formats for heavy-duty engines which are easier to read, while still displaying the important elements of the “Important Engine Information” label. In addition, updating the regulations explicitly adds the heavy-duty class of vehicles that are certified to the chassis standards to this part of the labeling requirement section, making it consistent with the requirements for light-duty vehicles and light-duty trucks in 86.1807-01(c)(1).

EPA has no need for the SAE J1892 bar code to be printed on the Vehicle Emission Control Information (VECI) label. By removing this requirement, EPA will also be harmonizing the label information to be consistent with those of California Air Resources Board. In a letter dated June 26, 2002, the California Air Resources Board issued Mail-Out #MSO 2002-06 waived the requirement to print the SAE bar code on the labels for 2003 model year and newer vehicles and engines.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency is required to determine whether this regulatory action would be “significant” and therefore subject to review by the Office of Management and Budget (OMB) and the requirements of the Executive Order. The order defines a “significant regulatory action” as any regulatory action that is likely to result in a rule that may:

• 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;

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

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

• 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, we have determined that this final rule is not a “significant regulatory action.”

The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq. , and implementing regulations, 5 CFR part 1320, do not apply to this action as it does not involve the collection of information as defined therein.

Today's action may reduce testing and reporting burden by allowing the option for waivers and/or alternative test procedures. The current average annual reporting burden is listed as 542,118 hours and $10,889,000 for 153 respondents by the Office of Management and Budget for light-duty and heavy-duty vehicles. If a manufacturer does not implement any of today's actions, the reporting burden will not change. Otherwise, the burden may be reduced by implementing today's actions but will vary depending upon the options and/or alternative methods chosen. For instance, utilizing the option to waive the two-diurnal diurnal-plus-hot-soak will reduce testing burden by approximately 48 hours and $5,000 per vehicle. Since no alternative procedures for the running loss test or canister loading have been approved at this time, the burden reduction cannot be quantified, but they will, in the future, result in decreases in hours and costs. The other options described in today's action cannot be quantified but would not result in any additional burden.

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, processing and maintaining information, and disclosing and providing 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 in 40 CFR are listed in 40 CFR part 9.

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 as defined by the Small Business Administration regulations at 13 CFR 121.201; (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.

After considering the economic impacts of today's final rule on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. 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 proposed rule on small entities.” 5 U.S.C. 603 and 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 regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

Today's rule revises certain provisions of the Evaporative Emissions Compliance Procedure (58 FR 16002, March 24, 1993) and the Onboard Refueling Vapor Recovery Procedure (58 FR 16262, April 6, 1994), such that regulated entities will find it less burdensome to demonstrate compliance with the requirements of the evaporative emissions and ORVR test requirements. More specifically, today's action makes minor revisions to clarify regulations and reduces burdens for manufacturers without reducing stringency. In addition, today's rule revises the dynamometer test provisions (40 CFR 86.135-90, 40 CFR 86.159-00, 40 CFR 86.160-00) and the Vehicle Labeling requirements (40 CFR 86.098-35, 40 CFR 86.1807-01), such that regulated entities will find it less burdensome to test four-wheel drive vehicles and vehicle labels will reflect current information rather than out-dated information. 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, we generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “federal mandates” that may result in expenditures to state, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more for any single year. Before promulgating a rule for which a written statement is needed, section 205 of the UMRA generally requires us to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows us to adopt an alternative that is not the least costly, most cost-effective, or least burdensome alternative if we provide an explanation in the final rule of why such an alternative was adopted.

Before we establish any regulatory requirement that may significantly or uniquely affect small governments, including tribal governments, we must develop a small government plan pursuant to section 203 of the UMRA. Such a plan must provide for notifying potentially affected small governments, and enabling officials of affected small governments to have meaningful and timely input in the development of our regulatory proposals with significant federal intergovernmental mandates. The plan must also provide for informing, educating, and advising small governments on compliance with the regulatory requirements.

Today's action contains no federal mandates for state, local, or tribal governments as defined by the provisions of Title II of the UMRA. The rule imposes no enforceable duties on any of these governmental entities. Nothing in the rule will significantly or uniquely affect small governments.

We have determined that today's action does not contain a federal mandate that may result in estimated expenditures of more than $100 million to the private sector in any single year. This action has the net effect of revising certain provisions of the Evaporative Emissions rule, Dynamometer regulations, and Labeling regulations. Therefore, the requirements of the UMRA do not apply to this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires us to develop an accountable process to ensure “meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the states,” on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Under section 6 of Executive Order 13132, we may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal Government provides the funds necessary to pay the direct compliance costs incurred by state and local governments, or we consult with state and local officials early in the process of developing the proposed regulation. We also may not issue a regulation that has federalism implications and that preempts state law, unless the Agency consults with state and local officials early in the process of developing the proposed regulation.

Section 4 of the Executive Order contains additional requirements for rules that preempt state or local law, even if those rules do not have federalism implications (i.e., the rules 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). Those requirements include providing all affected state and local officials notice and an opportunity for appropriate participation in the development of the regulation. If the preemption is not based on express or implied statutory authority, we also must consult, to the extent practicable, with appropriate state and local officials regarding the conflict between state law and federally protected interests within the Agency's area of regulatory responsibility.

Today's action 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 action revises certain provisions of earlier rules that adopted national standards to control vehicle evaporative emissions, dynamometer test provisions, and labeling requirements. The requirements of the rule will be enforced by the Federal Government at the national level. Thus, the requirements of section 6 of the Executive Order do not apply to today's action.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 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 final rule does not have tribal implications, as specified in Executive Order 13175. Today's action does not uniquely affect the communities of American Indian tribal governments since the motor vehicle requirements for private businesses in today's action will have national applicability. Furthermore, today's action does not impose any direct compliance costs on these communities and no circumstances specific to such communities exist that will cause an impact on these communities beyond those discussed in the other sections of today's document. Thus, Executive Order 13175 does not apply to today's action.

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 Executive Order 12866, and (2) concerns an environmental health or safety risk that we have reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, section 5-501 of the Executive Order directs us to evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by us.

Today's action is not subject to the Executive Order because it is not an economically significant regulatory action as defined by Executive Order 12866. Furthermore, today's action does not concern an environmental health or safety risk that we have reason to believe may have a disproportionate effect on children.

Today's action is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), section 12(d) of Public Law 104-113, directs us to use voluntary consensus standards in our regulatory activities unless it 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) developed or adopted by voluntary consensus standards bodies. The NTTAA directs us to provide Congress, through OMB, explanations when we decide not to use available and applicable voluntary consensus standards. Today's action references technical standards adopted by us through previous rulemakings. No new technical standards are established in today's rule. The standards referenced in today's action involve the measurement of vehicle evaporative emissions, the allowance for four-wheel dynamometer test capabilities in certification and in-use testing, and labeling requirements revisions.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as amended 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 Congress and the comptroller General of the United States. We will submit a report containing today's action 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). Today's action will be effective February 6, 2006.

Statutory authority for today's final rule is found in the Clean Air Act, 42 U.S.C. 7401 et seq. , in particular, sections 202 and 206 of the Act, 42 U.S.C. 7521. Today's action is being promulgated under the administrative and procedural provisions of Clean Air Act section 307(d), 42 U.S.C. 7607(d).

In Title 49 of the Code of Federal Regulations, parts 100 to 185, revised as of October 1, 2004, on page 591, § 173.315 is corrected by adding paragraph (i)(8) to read as follows:

You can get an electronic copy using the Internet by—

(1) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html; or

(2) Visiting TSA's Law and Policy Web page at http://www.tsa.gov and accessing the link for “Law and Policy” at the top of the page.

In addition, copies are available by writing or calling the individual in the FOR FURTHER INFORMATION CONTACT section. Make sure to identify the docket number of this rulemaking.

TSA is responsible for security in all modes of transportation, including aviation. See 49 U.S.C. 114(d). TSA restricts what passengers may carry into the sterile areas of airports and into the cabins of air carrier aircraft. Under TSA's regulation for acceptance and screening of individuals and accessible property, 49 CFR 1540.111, an individual (other than a law enforcement or other authorized individual) may not have a weapon, explosive, or incendiary, on or about the individual's person or accessible property—

• When performance has begun of the inspection of the individual's person or accessible property before entering a sterile area, or before boarding an aircraft for which screening is conducted under § 1544.201 or § 1546.201 of this chapter;

• When the individual is entering or in a sterile area; or

• When the individual is attempting to board or onboard an aircraft for which screening is conducted under § 1544.201 or § 1546.201 of this chapter.

On February 14, 2003, TSA published an interpretive rule that provided guidance to the public on the types of property TSA considers to be weapons, explosives, and incendiaries prohibited on an individual's person or accessible property, items permitted on an individual's person or accessible property, and items prohibited in checked baggage (68 FR 7444). TSA has amended the interpretive rule several times. 1

TSA now is modifying the interpretive rule to allow passengers to carry metal scissors with pointed tips and a cutting edge four inches or less, as measured from the fulcrum, through a passenger screening checkpoint and into the cabin of an aircraft. Metal scissors with pointed tips and a blade length greater than four inches will continue to be prohibited. TSA is also providing an exception for screwdrivers, wrenches, pliers, and other tools seven inches or less in length. However, all tools greater than seven inches in length, as well as all crowbars, drills, hammers and saws, will continue to be prohibited.

In the four years since the terrorist attacks of September 11, 2001, a broad range of interconnected security measures have been established that, in combination, now provide more effective security against threats directed at seizing control of aircraft. These interconnected security measures include the introduction of hardened cockpit doors on commercial aircraft, the increased presence of Federal Air Marshals (FAM) onboard commercial flights, as well as a growing number of Federal Flight Deck Officers (FFDO).

With these security measures presently in place, a disproportionate amount of TSA's limited screening resources are directed each day at objects that no longer pose a significant threat. Amending the prohibited items list to allow certain low threat, high volume, and easily identified items, such as small scissors and tools, through the checkpoint will free up time and resources to allow TSA to implement screening procedures that are better targeted for identifying explosives concealed on individuals and in their accessible property, which pose a higher threat to the security of air transportation and air commerce. TSA is making this modification to the interpretive rule in order to more effectively confront the threat of concealed explosives being successfully taken through a passenger screening checkpoint and into the cabin of an aircraft.

Under the interpretive rule, TSA has considered all metal scissors with pointed tips to be weapons, except ostomy scissors. Therefore, individuals were prohibited from carrying these types of scissors in an airport sterile area or in the cabin of an aircraft. Metal scissors with blunt tips, plastic scissors, and ostomy scissors remain permitted. The interpretive rule as modified in this document allows metal scissors with pointed tips and a cutting edge four inches or less, as measured from the fulcrum, through the passenger screening checkpoint and into the cabin of an aircraft.

While it is possible for an individual or group of individuals to use small scissors as a weapon inside a commercial aircraft, the risk that scissors could be used to seize control of an aircraft is mitigated by the presence of hardened cockpit doors and FAMs, as well as a growing number of FFDOs. Current data shows that, excluding knives and box cutters, sharp objects make up 19 percent of the total number of prohibited items found at the passenger screening checkpoint. During the third and fourth quarters of fiscal year 2005, 1,762,571 sharp objects other than knives and box cutters were found at screening checkpoints. Based on information provided by transportation security officers and other screening experts in the field TSA has determined that scissors make up a large majority of the total number of the sharp objects found at passenger screening checkpoints. Moreover, most of these scissors are small with blades less than four inches in length as measured from the fulcrum.

Under current policy, for each pair of scissors discovered by an x-ray operator, a transportation security officer must perform a physical bag search to locate and remove them. Based on the high number of scissors found at passenger screening checkpoints nationwide, transportation security officers spend a very large amount of their time, attention, and resources focused on finding small scissors. Removing scissors with blades four inches or less in length from the prohibited items list will allow TSA to reallocate screening resources to more effectively search for items at the checkpoint that present a much greater threat, such as explosives.

We believe transportation security officers will be able to easily and immediately adjust to this proposed change in the prohibited items list. Moreover, transportation security officers will continue to improve their performance in identifying scissors on the x-ray and avoid having to resort to labor intensive physical bag searches. This labor and resource savings will allow TSA to employ other security measures to confront the explosives threat more effectively.

Under the prohibited items list, TSA has effectively considered all tools to be weapons and prohibited passengers from carrying them into an airport sterile area and in the cabin of an aircraft. TSA specifically prohibited crowbars, drills, 2 hammers, saws, 3 screwdrivers (except those in eyeglass repair kits), and also had a catchall provision that prohibits all tools including, but not limited to, wrenches and pliers.

We believe the threat of an individual or individuals seizing control of an aircraft using small tools is mitigated by the presence of hardened cockpit doors, FAMs, and FFDOs. This threat does not justify the enormous time and resource investment dedicated towards screening for these items. Transportation security officers found 468,033 tools in the third and fourth quarters of fiscal year 2005. Thus, small tools represent a category of prohibited items that require transportation security officers to spend an amount of time and resources that is disproportionate to the threat presented by allowing them into an airport sterile area and in the cabin of an aircraft.

Based on information provided by TSA screening experts in the field on actual prohibited items found, we believe that small screwdrivers, wrenches, and pliers make up a large majority of the total number of tools found. Based on this same information, we do not believe screeners are finding large numbers of crowbars, drills, hammers, and saws. Thus, there would be minimal transportation security officer time, attention, and resource gains associated with allowing these low volume tools through a passenger screening checkpoint and into the cabin of an aircraft.

Drawing on its screening and security expertise, TSA has determined seven inches to be a practical and logical standard for allowing screwdrivers, wrenches, pliers, and certain other small tools through the passenger screening checkpoint. Not only will the seven inch standard capture a very large percentage of the total number of tools found, it will be easy for transportation security officers to make determinations regarding tools that no longer pose a significant threat and avoid having to spend the time and resources associated with physically searching passengers' bags for all tools. This resource savings will allow TSA to implement more effective and robust screening procedures that can be targeted at screening for explosives.

TSA is modifying the interpretive rule to remove from the prohibited items list screwdrivers, wrenches, pliers, and other tools seven inches or less in length. All tools greater than seven inches in length, as well as all crowbars, drills, hammers, saws, will continue to be prohibited.

TSA also is making a technical change to the interpretive rule. In prior versions of the interpretive rule, the various tools were divided between the Sharp Objects and the Club-Like Items categories. In order to simplify the organization of the prohibited items list, we are creating a new category for Tools (now section I.G) that TSA considers to be weapons.

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866, Regulatory Planning and Review (58 FR 51735, October 4, 1993), directs each Federal agency to propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act of 1996) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Office of Management and Budget directs agencies to assess the effect of regulatory changes on international trade. Fourth, the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation).

This rule explains to the public, airport personnel, screeners, and airlines how TSA interprets certain terms used in an existing rule, 49 CFR 1540.111. This interpretative rule is not considered an economically significant regulatory action for purposes of Executive Order 12866. However, there has been significant public interest in aviation security issues since the terrorist attacks of September 11, 2001. Therefore, this rule is significant for purposes of Executive Order 12866 and has been reviewed by the Office of Management and Budget (OMB).

The Regulatory Flexibility Act (RFA) of 1980 requires that agencies perform a review to determine whether a proposed or final rule will have a significant economic impact on a substantial number of small entities. If the determination is that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA. For purposes of the RFA, small entities include small businesses, not-for-profit organizations, and small governmental jurisdictions. Individuals and States are not included in the definition of a small entity.

The RFA does not apply to this interpretive rule and TSA is not preparing an analysis for the Act, since under 5 U.S.C. 553, TSA is not required to publish a notice of proposed rulemaking. Nonetheless, because this rule will not impose any costs on the public, we have determined and certify that this rule does not have a significant economic impact on a substantial number of small entities.

The Trade Agreement Act of 1979 prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. TSA has assessed the potential effect of this interpretative rule and has determined that it will impose the same costs on domestic and international entities and thus has a neutral trade impact.

The Unfunded Mandates Reform Act of 1995 is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of the Act requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.”

This rulemaking does not contain such a mandate. The requirements of Title II of the Act, therefore, do not apply and TSA has not prepared a statement under the Act.

TSA has analyzed this interpretive rule under the principles and criteria of Executive Order 13132, Federalism. We have determined that this action will not have a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government, and therefore will not have federalism implications.

TSA has reviewed this action for purposes of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4347) and has determined that this action will not have a significant effect on the human environment.

The energy impact of this action has been assessed in accordance with the Energy Policy and Conservation Act (EPCA) Public Law 94-163, as amended (42 U.S.C. 6362). We have determined that this rulemaking is not a major regulatory action under the provisions of the EPCA.

TSA is making the following changes to the prohibited items list:

1. Section I.G(1) through (5) is established.

2. Section I.B(3) (now section I.G(2)) is amended to read “Reserved.”

3. Section I.B(9) (now section I.G(4)) is amended to read “Reserved.”

4. Section I.B(10) is amended to read “Scissors, metal with pointed tips and a blade length greater than four inches as measured from the fulcrum.”

5. Section I.B(11) (now section I.G(6)) is amended to read “Reserved.”

6. Section I.C(6) (now section I.G(1)) is amended to read “Reserved.”

7. Section I.C(8) (now section I.G(3)) is amended to read “Reserved.”

8. Section I.C(15) (now sections I.G(5, 7-8)) is amended to read “Reserved.”

9. Section II.A(17) is amended to read “Scissors, plastic or metal with blunt tips, and metal with pointed tips and a blade four inches or less in length as measured from the fulcrum.”

10. Section II.C(1) is established.

11. Section III.E is deleted.

The following is the list of prohibited items and permitted items reprinted in its entirety, with the changes inserted.

I. Prohibited Items. For purposes of 49 U.S.C. 40101 et seq. and 49 CFR 1540.111, TSA interprets the terms “weapons, explosives, and incendiaries” to include the items listed below. Accordingly, passengers may not carry these items as accessible property or on their person through passenger screening checkpoints or into airport sterile areas and the cabins of a passenger aircraft.

(1) BB guns.

(2) Compressed air guns.

(3) Firearms.

(4) Flare pistols.

(5) Gun lighters.

(6) Parts of guns and firearms.

(7) Pellet guns.

(8) Realistic replicas of firearms.

(9) Spear guns.

(10) Starter pistols.

(11) Stun guns/cattle prods/shocking devices.

(1) Axes and hatchets.

(2) Bows and arrows.

(3) Reserved.

(4) Ice axes/Ice picks.

(5) Knives of any length, except rounded-blade butter and plastic cutlery.

(6) Meat cleavers.

(7) Razor-type blades, such as box cutters, utility knives, and razor blades not in a cartridge, but excluding safety razors.

(8) Sabers.

(9) Reserved.

(10) Scissors, metal with pointed tips and a blade length greater than four inches as measured from the fulcrum.

(11) Reserved.

(12) Swords.

(13) Throwing stars (martial arts).

(1) Baseball bats.

(2) Billy clubs.

(3) Blackjacks.

(4) Brass knuckles.

(5) Cricket bats.

(6) Reserved.

(7) Golf clubs.

(8) Reserved.

(9) Hockey sticks.

(10) Lacrosse sticks.

(11) Martial arts weapons, including nunchucks, and kubatons.

(12) Night sticks.

(13) Pool cues.

(14) Ski poles.

(15) Reserved.

(1) Ammunition.

(2) Blasting caps.

(3) Dynamite.

(4) Fireworks.

(5) Flares in any form.

(6) Gunpowder.

(7) Hand grenades.

(8) Plastic explosives.

(9) Realistic replicas of explosives.

(1) Aerosol, any, except for personal care or toiletries in limited quantities.

(2) Fuels, including cooking fuels and any flammable liquid fuel.

(3) Gasoline.

(4) Gas torches, including micro-torches and torch lighters.

(5) Lighter fluid.

(6) Strike-anywhere matches.

(7) Turpentine and paint thinner.

(8) Realistic replicas of incendiaries.

(9) All lighters.

(1) Chlorine for pools and spas.

(2) Compressed gas cylinders (including fire extinguishers).

(3) Liquid bleach.

(4) Mace.

(5) Pepper spray.

(6) Spillable batteries, except those in wheelchairs.

(7) Spray paint.

(8) Tear gas.

(1) Crowbars.

(2) Drills and drill bits, including cordless portable power drills.

(3) Hammers.

(4) Saws and saw blades, including cordless portable power saws.

(5) Other tools greater than seven inches in length, including pliers, screwdrivers, and wrenches.

II. Permitted Items. For purposes of 49 U.S.C. 40101 et seq. and 49 CFR 1540.111, TSA does not consider the items on the following lists as weapons, explosives, and incendiaries because of medical necessity or because they appear to pose little risk if, as is required, they have passed through screening. Therefore, passengers may carry these items as accessible property or on their person through passenger screening checkpoints and into airport sterile areas and the cabins of passenger aircraft.

(1) Braille note taker, slate and stylus, and augmentation devices.

(2) Cigar cutters.

(3) Corkscrews.

(4) Cuticle cutters.

(5) Diabetes-related supplies/equipment (once inspected to ensure prohibited items are not concealed), including: insulin and insulin loaded dispensing products; vials or box of individual vials; jet injectors; pens; infusers; and preloaded syringes; and an unlimited number of unused syringes, when accompanied by insulin; lancets; blood glucose meters; blood glucose meter test strips; insulin pumps; and insulin pump supplies. Insulin in any form or dispenser must be properly marked with a professionally printed label identifying the medication or manufacturer's name or pharmaceutical label.

(6) Eyeglass repair tools, including screwdrivers.

(7) Eyelash curlers.

(8) Knives, round-bladed butter or plastic.

(9) Reserved.

(10) Matches (maximum of four books, strike on cover, book type).

(11) Nail clippers.

(12) Nail files.

(13) Nitroglycerine pills or spray for medical use, if properly marked with a professionally printed label identifying the medication or manufacturer's name or pharmaceutical label.

(14) Personal care or toiletries with aerosols, in limited quantities.

(15) Prosthetic device tools and appliances (including drill, Allen wrenches, pullsleeves) used to put on or remove prosthetic devices, if carried by the individual with the prosthetic device or his or her companion.

(16) Safety razors (including disposable razors).

(17) Scissors, plastic or metal with blunt tips, and metal with pointed tips and a blade four inches or less in length as measured from the fulcrum.

(18) Tweezers.

(19) Umbrellas (once inspected to ensure prohibited items are not concealed).

(20) Walking canes (once inspected to ensure prohibited items are not concealed).

(1) Knitting and crochet needles.

(2) Toy Transformer® robots and the like.

(3) Toy weapons (if not realistic replicas).

(1) Pliers, screwdrivers, wrenches, and other tools seven inches or less in length, excluding crowbars, drills, hammers, and saws.

III. Items Prohibited in Sterile and Cabin Areas, but May Be Placed in Checked Baggage. Passengers may place prohibited items other than explosives, incendiaries, disabling chemicals, and other dangerous items (other than individual self-defense sprays as noted below), and loaded firearms in their checked baggage, subject to any limitations provided in DOT's hazardous materials regulation. 49 CFR part 175.

A. Pepper spray or mace. A passenger may place one container of self-defense spray in checked baggage, not exceeding 4 fluid ounces by volume, but only if it incorporates a positive means to prevent accidental discharge. See 49 CFR 175.10(a)(4)(ii).

B. Small arms ammunition. A passenger may place small arms ammunition for personal use in checked baggage, but only if securely packed in fiber, wood or metal boxes, or other packaging specifically designed to carry small amounts of ammunition. 49 CFR 175.10(a)(5).

C. Unloaded firearms. A passenger may place an unloaded firearm or starter pistol in checked baggage if the passenger declares to the airline operator, either orally or in writing, before checking the baggage, that (1) the passenger has a firearm in his or her bag and that it is unloaded, (2) the firearm is carried in a hard-sided container, and (3) the container is locked, and only the passenger has the key or combination. 49 CFR 1540.111(c).

D. Club-like Items. A passenger may transport club-like objects and sharp objects in checked baggage, as long as they do not contain explosives or incendiaries.

IV. Lists are not Exclusive. Neither the prohibited items list nor the permitted items list contains all possible items. A screener has discretion to prohibit an individual from carrying an item into a sterile area or onboard an aircraft if the screener determines that the item is a weapon, explosive, or incendiary, regardless of whether the item is on the prohibited items list or the permitted items list. For example, if a cigar cutter or other article on the permitted list appears unusually dangerous, the screener may refuse to allow it in sterile areas. Similarly, screeners may allow individuals to bring items into the sterile area that are not on the permitted items list. In addition, items may be prohibited from the cabin of an aircraft, or allowed in only limited quantities, by Department of Transportation regulations governing hazardous materials. Individuals with questions about the carriage of hazardous materials on passenger aircraft may call the Hazardous Materials Information Center at 1-800-467-4922 for more information.

Regulations governing the summer flounder fishery are found at 50 CFR part 648. The regulations require annual specification of a commercial quota that is apportioned among the coastal states from North Carolina through Maine. The process to set the annual commercial quota and the percent allocated to each state are described in § 648.100.

The final rule implementing Amendment 5 to the Summer Flounder, Scup, and Black Sea Bass Fishery Management Plan which was published on December 17, 1993 (58 FR 65936) provided a mechanism for summer flounder quota to be transferred from one state to another. Two or more states, under mutual agreement and with the concurrence of the Administrator, Northeast Region, NMFS (Regional Administrator), can transfer or combine summer flounder commercial quota under § 648.100(d). The Regional Administrator is required to consider the criteria set forth in § 648.100(d)(3) in the evaluation of requests for quota transfers or combinations.

North Carolina has agreed to transfer 4,975 lb (2,257 kg) of its 2005 commercial quota to Virginia to cover a landing of a North Carolina vessel disabled at sea and subsequently granted safe harbor in Virginia. The Regional Administrator has determined that the criteria set forth in § 648.100(d)(3) have been met. The revised summer flounder quotas for calendar year 2005, inclusive of all previous adjustments and transfers published on October 18, 2005 (70 FR 60449), are: North Carolina, 4,604,347 lb (2,088,532 kg), and Virginia, 4,018,881 lb (1,822,964 kg).

This action is taken under 50 CFR part 648 and is exempt from review under Executive Order 12866.

Regulations established under the Fishery Management Plan for the Northeast Multispecies Fishery (NE Multispecies FMP) prohibit vessels fishing for Atlantic herring (herring) from possessing or landing any groundfish species, including haddock. In July 2004, NOAA's Office of Law Enforcement (OLE) observed prohibited juvenile haddock in catches being landed by midwater trawl vessels fishing for herring on Georges Bank (GB). Representatives of the herring industry requested a series of meetings with staff from OLE and the Northeast Regional Office to report that they were encountering haddock unusually high in the water column, and were unable to avoid catching it, even with midwater trawl gear. The issue was raised to the attention of the Council, which voted on March 30, 2005, to request emergency action to authorize all Category I herring vessels to possess up to 1,000 lb (454 kg) of haddock incidentally caught when fishing for herring. NMFS received the Council's formal request for emergency action on April 6, 2005. A temporary rule implementing the emergency measures was published on June 13, 2005 (70 FR 34055), and is effective through December 10, 2005. Public comments were accepted through July 13, 2005.

While these measures are not intended to directly reduce potential interactions between herring vessels and haddock, as interim measures, they are intended to provide an allowance for the herring fishery to operate while the Council develops a long-term solution through Amendment 1 to the Fishery Management Plan for the Atlantic Herring Fishery (Herring FMP). Since Amendment 1 is not expected to be implemented until summer 2006, it is prudent to continue the measures implemented through the emergency rule for an additional 180 days as authorized under section 305(c)(3)(B) of the Magnuson-Stevens Fishery Conservation and Management Act.

The following provisions are continued through this temporary rule that extends the emergency action: (1) Suspension of the prohibition on the possession of haddock by vessels using purse seines or midwater trawls (including pair trawls), (2) establishment of a 1,000-lb (454-kg) haddock incidental possession limit for Category 1 herring vessels, (3) suspension of the haddock minimum fish size for Category 1 herring vessels, (4) prohibition on the purchase and sale of haddock landed by Category 1 herring vessels for human consumption, (5) establishment of a provision to require herring processors to cull landings made by Category I herring vessels and retain haddock for inspection by enforcement officials, (6) establishment of a requirement to provide advance notification prior to landing for all Category 1 herring vessels via the Vessel Monitoring System (VMS), and (7) establishment of an incidental catch TAC (bycatch cap) on the total amount of haddock that can be landed under the haddock incidental catch possession limit. NMFS will continue to monitor a 270,000-lb (122,470-kg) haddock bycatch cap based on actual landings reported by vessels and dealers/processors, as well as any other landings based on observer reports or enforcement actions. As of November 2005, only an estimated 11.32 percent of the total haddock bycatch cap have been reported landed from Category 1 herring vessels. If these actual reported or observed landings under the incidental possession limit reach the bycatch cap, the directed herring fishery in the GB haddock stock area will be closed, and a prohibition on the possession of haddock would be reinstated for all Category 1 herring vessels fishing in all other areas. The current absolute prohibition on the possession of haddock appears unrealistic, given the potential for haddock and herring interactions. The measures being extended through this rule reflect the intention of maintaining a haddock possession tolerance as close to zero as practicable, while allowing the herring industry to operate. According to all available data, Category 1 herring vessels have done well in avoiding haddock during the initial effective period of the emergency rule. However, as a precautionary measure it is prudent to continue the emergency action for up to an additional 180 days, or until Amendment 1 to the Herring FMP can be implemented, if approved.

This temporary rule maintains the current cap on the total amount of observed and reported haddock that can be landed by Category 1 herring vessels. The bycatch cap is a backstop on the total amount of haddock permitted to be landed in order to mitigate any unexpected haddock harvest levels. Thus, the herring fishery will not be allowed an unlimited harvest of haddock. NMFS will use landings reported by vessels and dealers/processors, as well as any other landings reported through observer reports or enforcement actions, to determine if observed and reported landings reach the bycatch cap level. If the bycatch cap is reached, the directed herring fishery in the GB haddock stock area will be closed, and the emergency measures that authorize Category 1 vessels to possess haddock will be terminated. If the fishery is closed due to attainment of the bycatch cap, the measures established by this action to require herring processors and dealers to retain haddock landed by Category 1 herring vessels would remain in effect, as would the requirement for Category 1 herring vessels to provide advance notification of landing, to ensure that the closure is enforceable.

Additional background and explanation of the management measures being extended by this temporary rule contained in the preamble of the June 13, 2005, emergency rule and are not repeated here.

Nine letters were received during the comment period for the initial temporary rule implementing the emergency action to address haddock bycatch in the herring fishery. These comments included two letters from non-governmental organizations, one letter from the Maine Department of Marine Resources, five letters from industry members, and one letter from the general public. NMFS has not responded to the comments that were not specific to the emergency management measures contained in the initial temporary rule. The comments are summarized and addressed in the proceeding paragraphs.

Comment 1: Four comments were received questioning the rationale for allowing Category 1 herring vessels to catch haddock when this species was previously prohibited. Commenters stated that Category 1 herring vessels should not be allowed to catch haddock, since they use a mesh size that is prohibited in the directed haddock fishery, and because herring vessels are not historical participants in the groundfish fishery and should, therefore, not be eligible to participate in any capacity now that the haddock resource is recovering.

Response: Some allowance to allow Category 1 herring vessels to land haddock is needed to allow the herring fishery to operate. Regulations prior to the emergency action prohibited any possession of haddock by Category 1 herring vessels. This temporary action allows a limited amount of haddock to be possessed if caught coincidental to the herring fishery. The 270,000-lb (122,470-kg) haddock bycatch cap, is roughly equivalent to 1 percent of the 2005 GB haddock bycatch cap and less than 1 percent of the Council-recommended 2006 GB haddock total allowable catch (TAC). The groundfish fleet only caught 16 percent of the 2004 Eastern U.S./Canada haddock TAC, and has only caught 7 percent of the 2005 haddock TAC as of November 2005. As a result, it is not expected that the bycatch cap will hinder harvesting efforts in the directed haddock fishery, nor will it undermine haddock conservation measures of the NE Multispecies FMP. It is also important to note that NMFS has prohibited Category 1 herring vessels from selling landed haddock for human consumption, which significantly reduces any incentive to catch haddock.

Comment 1: Three comments were received regarding the monitoring of the haddock bycatch cap. Commenters requested that reported haddock catch be extrapolated to the entire Category 1 herring vessel fishing trips, similar to bycatch monitoring programs in the groundfish fishery.

Response: This action does not include a measure to extrapolate the reported haddock bycatch to all Category 1 herring trips, as the haddock bycatch events of the summer of 2004 showed that haddock bycatch events were not consistent across the fishery, but rather rare events. This variability led NMFS to conclude that it could not meaningfully extrapolate landings of haddock to the entire herring fishery. Furthermore, the 2005 herring fishing year was the first fishing year in which NMFS at-sea observers used a newly developed sampling protocol for determining the percent composition of haddock in the herring catch.

Comment 2: Two comments were received requesting that NMFS specify the level of at-sea observer coverage and the dockside monitoring protocol in the temporary rule.

Response: NMFS has relied on its existing programs to monitor the fishery. It would not be appropriate for NMFS to arbitrarily commit resources that it can not guarantee would be available for the duration of the emergency, and that may not be necessary to get reliable information sufficient to monitor this fishery.

Comment 1: One comment was received requesting that NMFS clarify how the closure of the herring fishery in the GB stock area would be administered if the haddock bycatch cap is attained. The commenter noted that a new herring fishing year begins January 1, 2006, and a new groundfish fishing year begins May 1, 2006. The commenter asked when a closure, if required, would end.

Response: Although not explicit in the initial temporary rule it is the intention of NMFS that the GB haddock stock area would re-open to the harvest of herring upon the expiration of the emergency rule that authorized the closure, unless additional management measures are implemented that address the situation at that time. However, in the absence of these temporary emergency measures, the haddock bycatch possession limit would be zero.

Comment 1: One comment was received regarding the western boundary of the area that would be closed to Category 1 herring vessels if the bycatch cap is reached. The commenter suggests that the western boundary of the closure area includes areas where haddock are sparse, and thus would not serve any benefit in conserving the haddock resource. Furthermore, the commenter stated that this area is important to the herring fishery and should not be included in any closure.

Response: Including the entire GB stock area as part of the area that would be closed once the haddock bycatch cap is reached was a provision recommended by the Council's Bycatch Committee to ensure that no further incidental haddock catch occurs in the herring fishery. The stock that NMFS is trying to protect through this action is the GB haddock stock. Thus, it is prudent to close the GB haddock stock area, already defined in the regulations, if and when it is determined that the herring fishery has reached the bycatch cap in a given groundfish fishing year.

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

This action continues emergency measures implemented June 13, 2005, for 180 days beyond the current expiration date of December 10, 2005, because the conditions prompting the initial emergency action still remain. The public was provided with the opportunity to submit public comment on these measures, and those comments are responded to in this rule. Therefore, the Assistant Administrator for Fisheries, NOAA (AA) finds that it would be impracticable and contrary to the public interest to delay the extension of these measures by providing additional opportunities for public comment, and finds good cause to waive additional public comments under U.S.C. 553 (b)(B).

Because this rule continues to relieve a restriction by maintaining a haddock possession limit for Category 1 herring vessels, it is not subject to the 30-day delayed effectiveness provision of the Administrative Procedure Act pursuant to 5 U.S.C. 553(d)(1). The possession limit for haddock for vessels using purse seine or midwater trawl gear in the Gulf of Maine and Georges Bank Exemption Area, absent this temporary rule, is 0 lb (0 kg). This emergency action continuance will maintain the haddock possession limit at 1,000 lb (454 kg) for these vessels.

This emergency rule extends a collection-of-information requirement subject to the Paperwork Reduction Act (PRA). Category 1 herring vessels will remain required to notify OLE via VMS of the port in which they will land their catch. Notice is required prior to landing. The public's reporting burden for the collection-of-information requirements includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection-of-information requirements. These requirements have been approved by the Office of Management and Budget (OMB) under control number 0648-0521 (5 min/response).

Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.