In FR Doc. E8-16354, appearing on page 40969 in the Federal Register of Thursday, July 17, 2008, there was an error regarding the impact of the final rule on small businesses. Specifically, language certifying that the final rule meets the requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612) was inadvertently omitted during document preparation. Accordingly, the following correction is made:

1. On page 40969, in the middle column, under section “VI. Analysis of Impacts,” in the second full paragraph, the third sentence is revised to read: “The agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.”

On April 11, 2008, the Department published a Notice of Proposed Rulemaking (NPRM) to add language clarifying how the criteria of Section 17(c) of the Export Administration Act of 1979 are implemented in accordance with the Arms Export Control Act by amending Category VIII *(b), (h), and the Note. Further background is provided with the NPRM at 73 FR 19778.

This rule reinstates the Section 17(c) reference in the ITAR to assist exporters in understanding the scope and application of the Section 17(c) criteria to parts and components for civil aircraft. It also clarifies that any part or component that (a) is standard equipment; (b) is covered by a civil aircraft type certificate (including amended type certificates and supplemental type certificates) issued by the Federal Aviation Administration for civil, non-military aircraft (this expressly excludes military aircraft certified as restricted and any type certification of Military Commercial Derivative Aircraft, defined by FAA Order 8110.101 effective date September 7, 2007 as “civil aircraft procured or acquired by the military”); and (c) is an integral part of such civil aircraft, is subject to the jurisdiction of the Export Administrative Regulations (EAR). Where such part or component is not Significant Military Equipment (“SME”), no Commodity Jurisdiction (CJ) determination is required to determine whether the item meets these criteria for exclusion under the United States Munitions List (USML), unless doubt exists as to whether these criteria have been met. However, where the part or component is SME, a CJ determination is always required, except where a SME part or component was integral to civil aircraft prior to the effective date of this rule.

Additionally, this proposed rule adds language in a new Note after Category VIII(h) to provide guidelines concerning the parts or components meeting these criteria. The change to Category VIII*(b) also identifies and designates certain sensitive military items, heretofore controlled under Category VIII(h), as SME. Previous and current authorizations concerning the manufacturer of these items will not require notification in accordance with § 124.11, and will not require a “Nontransfer and Use Certificate” DSP-83, unless they are amended, modified, or renewed.

This requirement for a CJ determination by the Department of State helps ensure the U.S. Government is made aware of, and can reach an informed decision regarding, any sensitive military item proposed for standardization in the commercial aircraft industry before the item or technology is actually applied to a commercial aircraft program, whether such item is integral to the aircraft, and, if so, whether the development, production, and use of the technology associated with the item should nevertheless be controlled on the USML. It will also ensure the Department of State fulfills the requirements of section 38(f) of the Arms Export Control Act.

This regulation is intended to clarify the control of aircraft parts and components, and does not remove any items from the USML, nor does it change any CJ determinations. Should there be an apparent conflict between this regulation and a CJ determination issued prior to this date, the holder of the determination should seek reconsideration, citing this Federal Register Notice and 22 CFR 121.1(c) Category VIII Note of this subchapter.

The Proposed Rule had a comment period ending May 12, 2008. Twenty (20) parties filed comments by May 12th recommending changes. Having thoroughly reviewed and evaluated the comments and the recommended changes, the Department has determined that it will, and hereby does, adopt the Proposed Rule, with minor edits, and promulgates it as a Final Rule. The Department's evaluation of the written comments and recommendations follows.

Ten (10) commenting parties criticized the Department for making “specifically designed military hot section components and digital engine controls ( e.g. , Full Authority Digital Engine Controls (FADEC) and Digital Electronic Engine Controls (DEEC))” significant military equipment in paragraph *(b) of Category VIII. The Department believes that the designation of these military hot section components and digital engine controls as significant military equipment is necessary to safeguard the national security of the United States, because these components and controls fulfill the definition of significant military equipment in 22 CFR 120.7 in that they have the “capacity for substantial military utility or capability.” In addition, the significant military equipment designation of these components and controls is consistent with the exclusion of hot section technology from 22 CFR 124.2(c) and 126.5. The Department will not, as a matter of process, require DSP-83 nontransfer and use certificates for the export of spare parts for hot sections and digital engine controls previously authorized for export. The “grand-father clause” added to sub-paragraph (b) for military hot section components and digital engine controls manufactured to engineering drawings dated on or before January 1, 1970 was also intended to address the concerns raised by the ten commenting parties.

Six (6) commenting parties recommended paragraph (h) of Category VIII(h) start with the phrase “Except as noted below.” That phrase does not conform with the regulatory language used in other sub-paragraphs of the United States Munitions List categories that have associated notes paragraphs.

One (1) commenting party recommended the commodity jurisdiction requirement for significant military equipment be removed from the explanatory note. The inclusion of the commodity jurisdiction requirement for significant military equipment is needed to ensure the government has an opportunity to review proposals to use military equipment in a civil application and to avoid the removal of items from the United States Munitions List through company self-determinations. Before placing a defense article considered significant military equipment on a civil aircraft, a written commodity jurisdiction determination must be obtained.

Seven (7) commenting parties recommended the first sentence of the explanatory note add the EAR term “or item.” The Department has chosen to use ITAR terms.

One (1) commenting party recommended the first sentence of the explanatory note use the phrase “component, part, accessory, and associated equipment” instead of “part or component.” That recommendation was adopted.

Eleven (11) commenting parties recommended the first sentence of the explanatory note delete “exclusively.” The suggestion was not adopted. The word is necessary, since the Department claims no jurisdiction over parts or components designed exclusively for civil, non-military aircraft. Such parts and components are subject to Department of Commerce jurisdiction.

Four (4) commenting parties recommended the “and” linking “civil, non-military aircraft” and “civil, non-military aircraft engines” in the first sentence of the explanatory note be changed to an “or.” There was a concern about coverage of a part or component of a civil, non-military aircraft engine. The sentence in the final rule was changed to clarify that a part or component designed exclusively for civil, non-military aircraft and a part or component designed exclusively for a civil, non-military aircraft engine are both controlled by the Department of Commerce.

Two (2) commenting parties recommended part (b) of the second sentence of the explanatory note add Parts Manufacturer Approval (PMA). As a PMA may be issued for an exclusively USML item, inclusion of PMA is not appropriate here.

Six (6) commenting parties recommended part (b) of the second sentence of the explanatory note be expanded to include foreign government civil aviation authorities. As Section 17(c) is limited to certifications issued by the Federal Aviation Administration, it is appropriate to limit the civil aircraft type certificate (including amended type certificates and supplemental type certificates) to those issued by the U.S. Federal Aviation Administration.

Six (6) commenting parties recommended part (b) of the second sentence of the explanatory note add “FAA Order 8110.10” after “Military Commercial Derivative Aircraft.” That reference has been included in the supplementary information above.

Six (6) commenting parties recommended part (c) of the second sentence of the explanatory note change “control of the EAR” to “jurisdiction of the EAR.” This change was adopted.

One (1) commenting party recommended explaining the Department of State's policy concerning its jurisdiction over an ITAR-controlled article that is incorporated into a civil item. With few exceptions specified in the ITAR (e.g. USML Category XIV(n)(4)(i)), a USML item does not change jurisdiction when it is incorporated into another item. As stated above, it is important for the government to review, via the Commodity Jurisdiction process, the proposed use of military items in commercial applications.

One (1) commenting party recommended the fourth sentence of the explanatory note change “part or component” to “components, parts, accessories, attachments, and associated equipment.” This change was not adopted. An “accessory,” an “attachment,” and “associated equipment” are not considered standard equipment integral to the civil aircraft.

Four (4) commenting parties recommended the fourth sentence of the explanatory note change “a part” to “such a part” and delete “designated as SME in this category.” The purpose of this sentence is to grandfather from obtaining a commodity jurisdiction determination a part or component designated as Significant Military Equipment (SME) in Category VIII that was standard equipment, integral to civil aircraft prior to the effective date of the final rule. The language of the proposed rule is clearer and has been retained.

Ten (10) commenting parties recommended the eighth sentence of the explanatory note add at the end of the sentence “of the item's form, fit, or function.” This change was adopted.

Four (4) commenting parties recommended the ninth sentence of the explanatory note delete “radomes” and “low observable blades” and add “rotodomes” and “bomb bay doors.” The Department accepted the substitution of rotodomes for radomes.

Fifteen (15) commenting parties recommended the tenth sentence of the explanatory note add “manufacturer's specification or standard” and add Technical Standard Order “TSO” in the parenthesis. As a TSO may be issued for an exclusively USML item, inclusion of TSOs is not appropriate here.

Eleven (11) commenting parties recommended the eleventh sentence of the explanatory note change “unpublished civil aviation industry specifications” to “unpublished (e.g., proprietary) manufacturer's specifications.” Also, it was recommended to add “bolts” to the e.g. list. The Department believes that many of the concerns raised with regard to sentences ten and eleven are alleviated when the two sentences are read together. Parts and components meeting published industry or government specifications or established but unpublished (e.g., proprietary) industry standards are considered standard equipment. Also, the recommendation to add bolts was not adopted.

Eleven (11) commenting parties recommended the twelfth sentence of the explanatory note be deleted, noting that aircraft parts are routinely tested beyond the applicable specification for a variety of reasons, including marketing purposes or warranty obligations. This recommendation was not adopted. If a part is required to exceed established standards, such requirements call into question whether it is a “standard part.”

Ten (10) commenting parties recommended the thirteenth sentence of the explanatory note delete “unless the item was designed or modified to meet that specification or standard.” That change was adopted.

Fourteen (14) commenting parties recommended the fourteenth sentence of the explanatory note clarify the jurisdiction of exporting spare parts when the part or component is not installed in the aircraft at the time of export. The Department believes it is clear that parts and components that meet the section 17(c) criteria, when exported separately are subject to EAR jurisdiction.

Five (5) commenting parties recommended the fifteenth sentence of the explanatory note add “APUs, seats, and flaps” to the e.g. parenthesis. This change was not adopted. We believe the examples provided are sufficient, and note that not all APUs, seats, and flaps are subject to Department of Commerce jurisdiction.

One (1) commenting party objected to disqualifying “unique application parts or components not integral to the aircraft” in the sixteenth sentence of the explanatory note. Section 17(c) applies to standard parts and components integral to the aircraft. Parts that are not standard or are not integral to the aircraft are clearly not included in Section 17(c), and are therefore not included here.

This amendment involves a foreign affairs function of the United States and, therefore, is not subject to the procedures contained in 5 U.S.C. 553 and 554.

Since this amendment involves a foreign affairs function of the United States, it does not require analysis under the Regulatory Flexibility Act.

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

This amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.

This amendment will not have substantial effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this amendment does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this amendment.

This amendment is exempt from the review under Executive Order 12866, but has been reviewed internally by the Department of State to ensure consistency with the purposes thereof.

This rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

The collection of information contained in these final regulations has been reviewed and approved by the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-2114.

The collection of information is required by § 1.1361-1(m)(2)(ii)(A) of these final regulations. This information is required to enable the IRS to verify whether the corporation is an eligible S 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.

Books or records relating to a collection of information must be retained as long as their contents might 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 the Income Tax Regulations (26 CFR part 1) concerning S corporations under sections 1361, 1362, and 1366 of the Internal Revenue Code (Code). These sections were amended by sections 231, 232, 233, 234, 235, 236, 237, 238, and 239 of the American Jobs Creation Act of 2004 (Pub. L. 108-357, 118 Stat. 1418) (the 2004 Act) and sections 403 and 413 of the Gulf Opportunity Zone Act of 2005 (Pub. L. 109-135) (the 2005 Act). This document does not address other amendments made by the 2004 Act or the 2005 Act. In addition, this document contains additional amendments to the regulations under Code section 1362 necessary to conform the regulations to the changes made by section 1305(a) of the Small Business Job Protection Act of 1996 (Pub. L. 104-188, 110 Stat. 1755) (the 1996 Act).

On September 28, 2007, a notice of proposed rulemaking and a notice of public hearing (REG-143326-05) were published in the Federal Register (72 FR 55132).

No one requested to speak at the public hearing. Accordingly, the public hearing scheduled for January 16, 2008, was cancelled in a notice published in the Federal Register (73 FR 1131) on January 7, 2008. No one submitted written or electronic comments, which were due by December 27, 2007. Thus, the proposed regulations are adopted as revised by this Treasury decision, which make only administrative or ministerial changes to the proposed regulations.

The proposed regulations conformed references in the regulations to the specific numbers of S corporation shareholders permissible under section 1361. For purposes of determining the number of shareholders of an S corporation under Code section 1361(b)(1)(A), the proposed regulations provided rules relating to stock owned by family members.

Pursuant to section 1361(c)(2)(A)(vi), the proposed regulations provided rules regarding limited instances in which individual retirement accounts (including Roth IRAs), qualify as eligible shareholders of banks or depository institution holding companies.

The proposed regulations provided that a disposition of the S corporation stock by a QSST shall be treated as a disposition by the income beneficiary for purposes of applying sections 465 and 469 to the income beneficiary of a QSST.

The proposed regulations described information that is required to be included in the ESBT election statement if the trust includes a power of appointment or other power to make distributions to certain organizations. The proposed regulations provided rules under which a person that may receive a distribution under a power of appointment will not be treated as a PCB. Also, the proposed regulations provided rules under which a class of organizations described in section 1361(c)(6) will be treated as one PCB if the fiduciary has a power (other than a power of appointment) to make distributions to one or more members of the class. Also, the proposed regulations provided rules that any person who first met the definition of a PCB one year before the disposition by an ESBT of all of the stock of the S corporation will not be treated as a PCB or a shareholder of the S corporation.

The proposed regulations provided that the Commissioner may provide relief for inadvertent invalid elections to be an S corporation or QSub or for inadvertent terminations of valid elections to be an S corporation or QSub and described the requirements to obtain that relief.

Finally, with regard to a transfer of stock under Code section 1041(a), between spouses or incident to a divorce, the proposed regulations provided for the treatment of losses or deductions with respect to the transferred shares that are subject to the basis limitation under Code section 1366(d)(1).

No comments were received. All revisions are administrative or ministerial and substantively conform to the proposed regulations.

The following publication is obsoleted as of August 14, 2008 :

Notice 2005-91 (2005-2 CB 1164).

These regulations are effective on August 14, 2008 .

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. Further, it has been determined that these regulations are not subject to the Regulatory Flexibility Act (5 U.S.C. chapter 6) because the collection of information required by these regulations is imposed on electing small business trusts and such entities are not “small entities” for purposes of the Regulatory Flexibility Act (5 U.S.C. chapter 6). Additionally, the information collection burden imposed on the electing small business trusts is minimal. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rule making 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 these proposed regulations is Charles J. Langley, Jr. of the Office of Associate Chief Counsel (Passthroughs and Special Industries).

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because a delay in publication would be contrary to the public interest since immediate action is needed to protect the maritime public during the event. In order to ensure the safety of life on navigable waters during this event, the Coast Guard is establishing a special local regulation. The Coast Guard will issue a broadcast notice to mariners to advise mariners of the restriction and on scene Coast Guard and Coast Guard Auxiliary vessels will also provide additional notice to mariners.

On September 27, 2008, the Cape Fear Dragon Boat Club will sponsor the “Cape Fear River Dragon Boat Festival.” This festival will include four 45 foot long Dragon Boats racing a straight line course 250 meters in length. The races will take place on the Cape Fear River in front of the Wilmington River Walk, approximately 0.5 nautical miles north of the Cape Fear River Memorial Bridge. To provide for the safety of participants, spectators and other transiting vessels, the Coast Guard will temporarily restrict vessel traffic in the event area during the races.

The Coast Guard is establishing a special local regulation on specified waters of the Cape Fear River, Wilmington, North Carolina. The special local regulation includes all waters from shoreline to shoreline, bound by the following position latitude 34°14′24″ N, longitude 77°57′08″ W thence south along the east bank of the river to latitude 34°14′00″ N, longitude 77°56′58″ W, thence west to latitude 34°14′00″ N, longitude 77°57′05″ W, thence north along the west bank to latitude 34°14′24″ N, longitude 77°57′21″ W, thence east back to the point of origin. All coordinates reference Datum NAD 1983. The special local regulation will be in effect from 8 a.m. to 6 p.m. on September 27, 2008. The effect will be to restrict general navigation in the regulated area during the races. Except for persons or vessels authorized by the Coast Guard Patrol Commander, no person or vessel may enter or remain in the regulated area during the enforcement period. The Patrol Commander will notify the public of specific enforcement times by Marine Radio Safety Broadcast. These regulations are needed to control vessel traffic during the event to enhance the safety of participants, spectators and transiting vessels.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

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

We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation is unnecessary. Although this regulation prevents traffic from transiting a portion of the Cape Fear River during the event, the effect of this regulation will not be significant due to the limited duration that the regulated area will be in effect. Extensive advance notification will be made to the maritime community via marine information broadcasts, local radio stations and area newspapers so mariners can adjust their plans accordingly. Additionally, the regulated area has been narrowly tailored to impose the least impact on the maritime public yet provide the level of safety deemed necessary. Vessel traffic will be able to transit the regulated area between races, when the Coast Guard Patrol Commander deems it is safe to do so.

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

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

This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit this section of the Cape Fear River from 8 a.m. to 6 p.m. on September 27, 2008. This rule will not have a significant economic impact on a substantial number of small entities for the following reasons:

(i) Although the regulated area will apply to the section of the Cape Fear River approximately 0.5 nautical miles north of the Cape Fear Memorial Bridge, traffic may be allowed to pass through the regulated area with the permission of the Coast Guard Patrol Commander;

(ii) the Patrol Commander will allow non-participating vessels to transit the event area between races;

(iii) the minimal size of the zone; and

(iv) before the enforcement period, the Coast Guard will issue maritime advisories so mariners can adjust their plans accordingly.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 5100.1 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded under the Instruction that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(h), of the Instruction, from further environmental documentation.

Under figure 2-1, paragraph (34)(h), of the Instruction, an “Environmental Analysis Checklist” and a “Categorical Exclusion Determination” are available in the docket where indicated under ADDRESSES .

The Office is adjusting certain patent fee amounts in accordance with the applicable provisions of title 35, United States Code, as amended by the Consolidated Appropriations Act (Pub. L. 108-447, 118 Stat. 2809 (2004)). In addition, this final rule changes the addresses for maintenance fee payments and correspondence, and deposit account replenishments. The addresses are being changed to reflect the current addresses that should be used.

Statutory Provisions: Patent fees are set by or under the authority provided in 35 U.S.C. 41, 119, 120, 132(b), 156, 157(a), 255, 302, 311, 376, section 532(a)(2) of the Uruguay Round Agreements Act (URAA) (Pub. L. 103-465, § 532(a)(2), 108 Stat. 4809, 4985 (1994)), and section 4506 of the American Inventors Protection Act of 1999 (AIPA) (Pub. L. 106-113, 113 Stat. 1501, 1501A-565 (1999)). For fees paid under 35 U.S.C. 41(a) and (b) and 132(b), independent inventors, small business concerns, and nonprofit organizations who meet the requirements of 35 U.S.C. 41(h)(1) are entitled to a fifty-percent reduction.

Section 41(d) of title 35, United States Code, authorizes the Director to establish fees for all other processing, services, or materials related to patents to recover the average cost of providing these services or materials, except for the fees for recording a document affecting title, for each photocopy, for each black and white copy of a patent, and for standard library service.

Section 41(f) of title 35, United States Code, provides that fee amounts established under 35 U.S.C. 41(a) and (b) may be adjusted on October 1, 1992, and every year thereafter, to reflect fluctuations in the CPI over the previous twelve months.

Section 41(g) of title 35, United States Code, provides that new fee amounts established by the Director under 35 U.S.C. 41 may take effect thirty days after notice in the Federal Register and the Official Gazette of the United States Patent and Trademark Office.

The fiscal year 2005 Consolidated Appropriations Act (section 801 of Division B) provided that 35 U.S.C. 41(a), (b), and (d) shall be administered in a manner that revises patent application fees (35 U.S.C. 41(a)) and patent maintenance fees (35 U.S.C. 41(b)), and provides for a separate filing fee (35 U.S.C. 41(a)), search fee (35 U.S.C. 41(d)(1)), and examination fee (35 U.S.C. 41(a)(3)) during fiscal years 2005 and 2006. See Public Law 108-447, 118 Stat. 2809, 2924-30 (2004). The patent and trademark fee provisions of the fiscal year 2005 Consolidated Appropriations Act were extended through September 30, 2008, by subsequent legislation. See Public Law 110-161, 121 Stat. 1844 (2007), Public Law 110-149, 121 Stat. 1819 (2007), Public Law 110-137, 121 Stat. 1454 (2007), Public Law 110-116, 121 Stat. 1295 (2007), Public Law 110-92, 121 Stat. 989 (2007), Public Law 110-5, 121 Stat. 8 (2007), Public Law 109-383, 120 Stat. 2678 (2006), Public Law 109-369, 120 Stat. 2642 (2006), and Public Law 109-289, 120 Stat. 1257 (2006). Legislation is pending before Congress which, if enacted, would extend the patent and trademark fee provisions of the fiscal year 2005 Consolidated Appropriations Act through fiscal year 2009 (through September 30, 2009). See S. 3182, 110th Cong. (2008).

Fee Adjustment Level: The patent statutory fee amounts established by 35 U.S.C. 41(a) and (b) are adjusted to reflect fluctuations occurring during the twelve-month period from October 1, 2007, through September 30, 2008, correspondingly, in the Consumer Price Index for All Urban Consumers (CPI-U). The Office of Management and Budget has advised that in calculating these fluctuations, the Office should use CPI-U data as determined by the Secretary of Labor. In accordance with previous fee-setting methodology, the Office bases this fee adjustment on the Administration's CPI-U for the twelve-month period ending September 30, 2008.

The Office published a notice proposing to adjust the patent fees charged under 35 U.S.C. 41(a), (b), and (d)(1) for fiscal year 2009 to reflect fluctuations in the CPI. See Revision of Patent Fees for Fiscal Year 2009, 73 FR 31655 (June 3, 2008), 1331 Off. Gaz. Pat. Office 97 (June 24, 2008) (proposed rule). While the proposed rule specified fee amounts based upon a projected CPI-U of 4.0 percent, the proposed rule indicated that the fee amounts adopted in a final rule may be based upon the actual fluctuations in the CPI-U as determined by the Secretary of Labor. See Revision of Patent Fees for Fiscal Year 2009, 73 FR at 31656, 1331-4 Off. Gaz. Pat. Office at 98. After the date the proposed rule was published, the projected CPI-U for the twelve-month period prior to the enactment of the fee amount adjustments has increased from 4.0 percent to 5.0 percent. Thus, this final rule adjusts the patent fees charged under 35 U.S.C. 41(a), (b), and (d)(1) by 5.0 percent based upon the current projected fluctuation in the CPI-U.

The fee amounts were rounded by applying standard arithmetic rules so that the amounts rounded will be convenient to the user. Fees for other than a small entity of $100 or more were rounded to the nearest $10. Fees of less than $100 were rounded to an even number so that any comparable small entity fee will be a whole number.

General Procedures: Any fee amount that is paid on or after the effective date of the fee adjustment is subject to the new fees in effect. The amount of the fee to be paid will be determined by the time of filing. The time of filing will be determined either according to the date of receipt in the Office (37 CFR 1.6) or the date reflected on a proper Certificate of Mailing or Transmission, where such a certificate is authorized under 37 CFR 1.8. Use of a Certificate of Mailing or Transmission is not authorized for items that are specifically excluded from the provisions of 37 CFR 1.8. Items for which a Certificate of Mailing or Transmission under 37 CFR 1.8 is not authorized include, for example, filing of national and international applications for patents. See 37 CFR 1.8(a)(2).

Patent-related correspondence delivered by the “Express Mail Post Office to Addressee” service of the United States Postal Service (USPS) is considered filed or received in the Office on the date of deposit with the USPS. See 37 CFR 1.10(a)(1). The date of deposit with the USPS is shown by the “date-in” on the “Express Mail” mailing label or other official USPS notation.

To ensure clarity in the implementation of the new fee amounts and change of addresses, a discussion of specific sections is set forth below.

37 CFR 1.1 Addresses for non-trademark correspondence with the United States Patent and Trademark Office. Section 1.1, paragraph (d), is revised to change the maintenance fee payment and correspondence address.

37 CFR 1.16 National application filing, search, and examination fees: Section 1.16, paragraphs (a) through (e), (h) through (k), and (m) through (s), is revised to adjust fees established therein to reflect fluctuations in the CPI.

37 CFR 1.17 Patent application and reexamination processing fees: Section 1.17, paragraphs (a), (l), and (m), is revised to adjust fees established therein to reflect fluctuations in the CPI.

37 CFR 1.18 Patent post allowance (including issue) fees: Section 1.18, paragraphs (a) through (c), is revised to adjust fees established therein to reflect fluctuations in the CPI.

37 CFR 1.20 Post issuance fees: Section 1.20, paragraphs (c)(3), (c)(4), and (d) through (g), is revised to adjust fees established therein to reflect fluctuations in the CPI.

37 CFR 1.25 Deposit accounts: Section 1.25, paragraph (c)(3), is revised to change the deposit account replenishment address. In addition, paragraph (c)(4) is removed.

37 CFR 1.492 National stage fees: Section 1.492, paragraphs (a), (b)(3), (b)(4), (c)(2), (d) through (f), and (j), is revised to adjust fees established therein to reflect fluctuations in the CPI.

37 CFR 41.20 Fees: Section 41.20, paragraphs (b)(1) through (b)(3), is revised to adjust fees established therein to reflect fluctuations in the CPI.

Alternative Fee Amounts if Legislation Extending the Patent and Trademark Fee Provisions of the Fiscal Year 2005 Consolidated Appropriations Act Is Not Enacted: If legislation that would extend the patent and trademark fee provisions of the fiscal year 2005 Consolidated Appropriations Act into fiscal year 2009 is not enacted, patent fees under 35 U.S.C. 41(a), (b), and (d) will become the patent fees in effect in the absence of the fiscal year 2005 Consolidated Appropriations Act. In that event, the Office will publish a final rule adjusting the patent fees under 35 U.S.C. 41(a), (b), and (d) in effect in the absence of the fiscal year 2005 Consolidated Appropriations Act to reflect fluctuations in the Consumer Price Index (CPI-U). The following table (Table 1) sets out the fee amounts that would be published in a final rule in the event that legislation extending the patent and trademark fee provisions of the fiscal year 2005 Consolidated Appropriations Act into fiscal year 2009 is not enacted.

Response to Comments: As discussed previously, the Office published a notice proposing to adjust the patent fees charged under 35 U.S.C. 41(a), (b), and (d)(1) for fiscal year 2009 to reflect fluctuations in the CPI. See Revision of Patent Fees for Fiscal Year 2009, 73 FR 31655 et seq. , 1331-4 Off. Gaz. Pat. Office 97 et seq. The Office received one comment (from an individual) in response to this notice. The comment stated that small entity fees should not be increased, but rather should be reduced.

The small entity reduction amounts are provided by 35 U.S.C. 41(h)(1) (“fees charged under [35 U.S.C. 41](a), (b) and (d)(1) shall be reduced by 50 percent with respect to their application to any small business concern as defined under section 3 of the Small Business Act, and to any independent inventor or nonprofit organization as defined in regulations issued by the Director”) and 41(h)(3) (“[t]he fee charged under [35 U.S.C. 41](a)(l)(A) shall be reduced by 75 percent with respect to its application to any entity to which [35 U.S.C. 41(h)(1)] applies, if the application is filed by electronic means as prescribed by the Director”). The Office has no authority to change (increase or reduce) the percentage by which the patent fees charged under 35 U.S.C. 41(a), (b), and (d)(1) are reduced for small entities. The Office also has no authority to adjust the patent fee amounts specified in [35 U.S.C. 41](a), (b) and (d)(1) to reflect fluctuations in the CPI (which is necessary to recover the higher costs associated with doing business) only with respect to non-small entities.

1. Description of the reasons that action by the Office is being considered: The Office is adjusting the patent fees set under 35 U.S.C. 41(a) and (b) to ensure proper funding for effective Office operations. The patent fee CPI adjustment is a routine adjustment that has generally occurred on an annual basis to recover the higher costs of the Office's operations that occur due to the increase in the price of products and services. The lack of proper funding for effective Office operations would result in a significant increase in patent pendency levels.

2. Succinct statement of the objectives of, and legal basis for, the final rule: The objective of the change is to adjust patent fees set under 35 U.S.C. 41(a) and (b) to recover the higher costs of Office operations. Patent fees are set by or under the authority provided in 35 U.S.C. 41, 119, 120, 132(b), 156, 157(a), 255, 302, 311, 376, section 532(a)(2) of the URAA, and 4506 of the AIPA. 35 U.S.C. 41(f) provides that fees established under 35 U.S.C. 41(a) and (b) may be adjusted every year to reflect fluctuations in the CPI over the previous twelve months.

3. Description and estimate of the number of affected small entities: The Small Business Administration (SBA) small business size standards applicable to most analyses conducted to comply with the Regulatory Flexibility Act are set forth in 13 CFR 121.201. These regulations generally define small businesses as those with fewer than a maximum number of employees or less than a specified level of annual receipts for the entity's industrial sector or North American Industry Classification System (NAICS) code. The Office, however, has formally adopted an alternate size standard as the size standard for the purpose of conducting an analysis or making a certification under the Regulatory Flexibility Act for patent-related regulations. See Business Size Standard for Purposes of United States Patent and Trademark Office Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR 67109 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). This alternate small business size standard is the previously established size standard that identifies the criteria entities must meet to be entitled to pay reduced patent fees. See 13 CFR 121.802. If patent applicants identify themselves on the patent application as qualifying for reduced patent fees, the Office captures this data in the Patent Application Location and Monitoring (PALM) database system, which tracks information on each patent application submitted to the Office.

Unlike the SBA small business size standards set forth in 13 CFR 121.201, this size standard is not industry-specific. Specifically, the Office's definition of small business concern for Regulatory Flexibility Act purposes is a business or other concern that: (1) Meets the SBA's definition of a “business concern or concern” set forth in 13 CFR 121.105; and (2) meets the size standards set forth in 13 CFR 121.802 for the purpose of paying reduced patent fees, namely an entity: (a) Whose number of employees, including affiliates, does not exceed 500 persons; and (b) which has not assigned, granted, conveyed, or licensed (and is under no obligation to do so) any rights in the invention to any person who made it and could not be classified as an independent inventor, or to any concern which would not qualify as a non-profit organization or a small business concern under this definition. See Business Size Standard for Purposes of United States Patent and Trademark Office Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR at 67112, 1313 Off. Gaz. Pat. Office at 63.

The changes in this final rule will apply to any small entity that files a patent application, or has a pending patent application or unexpired patent. The changes in this rule specifically apply when an applicant or patentee pays an application filing or national stage entry fee, search fee, examination fee, excess or multiple dependent claim fee, application size fee, extension of time fee, notice of appeal fee, appeal brief fee, request for an oral hearing fee, disclaimer fee, petition to revive fee, issue fee, or patent maintenance fee. The following table (Table 2) indicates the applicable fee, the number of small entity payments of the fee received by the Office in fiscal year 2007 (number of small entities who paid the applicable fee in fiscal year 2007), the current small entity fee amount, the new small entity fee amount, and the net amount of the small entity fee adjustment.

The Office has also been advised that a number of small entity applicants and patentees do not claim small entity status for various reasons. See Business Size Standard for Purposes of United States Patent and Trademark Office Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR at 67110, 1313 Off. Gaz. Pat. Office at 61. Therefore, the Office has also considered all other entities paying patent fees as well. The following table (Table 3) indicates the applicable fee, the number of non-small entity payments of the fee received by the Office in fiscal year 2007 (number of non-small entities who paid the applicable fee in fiscal year 2007), the current non-small entity fee amount, the revised non-small entity fee amount, and the net amount of the non-small entity fee adjustment.

4. Description of the reporting, recordkeeping and other compliance requirements of the final rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record: This rule does not require any reporting or recordkeeping or incorporate other compliance requirements. This rule only adjusts patent fees (as discussed previously) to reflect changes in the CPI.

5. Description of any significant alternatives to the final rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the rule on small entities: The alternative of not adjusting patent fees would have a lesser economic impact on small entities, but would not accomplish the stated objectives of applicable statutes. The Office is adjusting the patent fee amounts to ensure proper funding for effective Office operations. The patent fee CPI adjustment is a routine adjustment that has generally occurred on an annual basis to recover the higher costs of the Office's operations that occur due to the increase in the price of products and services. The lack of proper funding for effective Office operations would result in a significant increase in patent pendency levels.

6. Identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap or conflict with the final rules: The Office is the sole agency of the United States Government responsible for administering the provisions of title 35, United States Code, pertaining to examination and granting patents. Therefore, no other federal, state, or local entity shares jurisdiction over the examination and granting patents.

Other countries, however, have their own patent laws, and an entity desiring a patent in a particular country must make an application for patent in that country, in accordance with the applicable law. Although the potential for overlap exists internationally, this cannot be avoided except by treaty (such as the Paris Convention for the Protection of Industrial Property, or the Patent Cooperation Treaty (PCT)).

Nevertheless, the Office believes that there are no other duplicative or overlapping rules.

This final rulemaking does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

This rulemaking has been determined to be significant for purposes of Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order 13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).

This rulemaking will not: (1) Have substantial direct effects on one or more Indian tribes; (2) impose substantial direct compliance costs on Indian tribal governments; or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under Executive Order 13175 (Nov. 6, 2000).

This rulemaking is not a significant energy action under Executive Order 13211 because this rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001).

This rulemaking meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996).

This rulemaking does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (Apr. 21, 1997).

This rulemaking will not effect a taking of private property or otherwise have taking implications under Executive Order 12630 (Mar. 15, 1988).

Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq. ), the United States Patent and Trademark Office has submitted a report containing the final rule and other required information to the United States Senate, the United States House of Representatives and the Comptroller General of the Government Accountability Office. The changes in this final rule will not result in an annual effect on the economy of 100 million dollars or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this final rule is not a “major rule” as defined in 5 U.S.C. 804(2).

The changes in this final rule do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of 100 million dollars (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of 100 million dollars (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.

This rulemaking will not have any effect on the quality of environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.

The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are inapplicable because this rule making does not contain provisions which involve the use of technical standards.

This rule involves information collection requirements which are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). The collections of information involved in this rule have been reviewed and approved by OMB under OMB control numbers 0651-0016, 0651-0021, 0651-0031, 0651-0032, and 0651-0033. The Office is not resubmitting information collection packages to OMB for its review and approval at this time but will update the fee amounts for existing information collection requirements associated with the information collections under OMB control numbers 0651-0016, 0651-0021, 0651-0031, 0651-0032, and 0651-0033. The Office will submit fee revision changes for OMB control numbers 0651-0016, 0651-0021, 0651-0031, 0651-0032, and 0651-0033 at the time these collections are resubmitted to OMB for renewal.

Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.

Throughout this document, “we,” “us” and “our” refer to EPA.

On June 8, 2007, EPA proposed to re-approve the BACM and MSM demonstrations in Arizona's serious area PM-10 plan for the Maricopa County area. EPA also proposed to confirm that it appropriately granted Arizona's request for an extension of the area's attainment deadline from December 31, 2001 to December 31, 2006. 72 FR 31778. EPA originally approved the BACM and MSM demonstrations and granted the attainment date extension in 2002. 1 EPA's 2002 action was subsequently challenged in the U.S. Court of Appeals for the Ninth Circuit. On May 10, 2004, the Court issued its opinion which upheld EPA's final approval in part but remanded to EPA the issue of whether CARB diesel must be included in the serious area plan as a BACM and a MSM. See Vigil v. Leavitt , 366 F.3d 1025, amended at 381 F.3d 826 (9th Cir. 2004).

In response to the Ninth Circuit's remand, EPA re-examined the feasibility of CARB diesel for both the on-road motor vehicle exhaust and nonroad engines and equipment exhaust significant source categories. On August 3, 2006, EPA again approved the BACM and MSM demonstrations in the MAG plan for these significant source categories without CARB diesel and granted the State's request to extend the attainment deadline from 2001 to 2006. 71 FR 43979. In this final action, EPA concluded that implementation of CARB diesel was not feasible for (1) on-road motor vehicle exhaust because Arizona would not be able to make a “necessity” showing for CARB diesel and thus, would not be able to obtain a waiver of federal preemption under CAA section 211(c)(4)(C)(i) in light of EPA's prior approval of the PM-10 attainment demonstration that did not rely on reductions associated with the use of CARB diesel, and (2) nonroad engines and equipment exhaust because of the uncertainties with fuel availability, storage and segregation and concerns about program effectiveness due to owners and operators fueling outside the Maricopa County area.

On June 6, 2007, EPA issued a finding that the Maricopa area failed to attain the 24-hour PM-10 NAAQS by December 31, 2006. 72 FR 31183. As a result, EPA can no longer rely on its August 3, 2006 conclusion that CARB diesel is not necessary for the attainment of the PM-10 NAAQS. Thus, EPA reassessed the BACM demonstration for the on-road motor vehicle exhaust source category in light of the new provisions in the Energy Policy Act of 2005 (EPAct) which we had mentioned but not addressed in the August 3, 2006 approval because, as noted earlier, we had concluded that we could not approve CARB diesel into the Arizona State implementation plan (SIP) under CAA section 211(c)(4)(C)(i). EPA concluded that it could not approve a CAA section 211(c)(4)(C)(i) waiver for Arizona for CARB diesel because the effect of such an approval would unlawfully increase the total number of fuels approved under section 211(c)(4)(C) as of September 1, 2004. Therefore, EPA again proposed to approve the BACM demonstration for the on-road motor vehicle exhaust source category in the MAG plan without CARB diesel.

Because our August 3, 2006 approval of the BACM demonstration for nonroad engines and equipment exhaust relied to some extent on our conclusion with respect to on-road motor vehicle exhaust, we also proposed again to find that CARB diesel is not required as a BACM for the nonroad category because of the uncertainties with fuel availability, storage and segregation and concerns about program effectiveness due to owners and operators fueling outside the Maricopa County area.

Finally, because the December 31, 2006 attainment deadline has passed since EPA granted the State's request for an attainment date extension in its August 3, 2006 action, the extension request is moot. However, if CARB diesel had been required as a MSM in order for EPA to grant the extension request, the State would now be required to implement it absent the requisite showing under CAA section 110(l). Therefore EPA again proposed to approve the MSM demonstration in the MAG plan without CARB diesel. We also proposed to confirm that we had appropriately granted the State's request for an attainment date extension in our 2002 and 2006 actions.

EPA received one comment letter, from Joy E. Herr-Cardillo, Senior Staff Attorney, Arizona Center for Law in the Public Interest (ACLPI), on behalf of Phoenix area residents Robin Silver, Sandra L. Bahr and David Matusow. EPA appreciates the time and effort expended by the commenter in reviewing the proposed rule and providing comments. We have summarized the comments and provided our responses below.

Comment 1: ACLPI asserts that EPA inappropriately relies upon an amendment to CAA section 211(c) by EPAct when re-evaluating a prior EPA approval on remand from the Court of Appeals. ACLPI notes that at the time Arizona submitted its BACM demonstration for approval, the section 211(c) waiver restrictions now relied upon did not exist and could not have served as a “reasoned justification” for rejecting CARB diesel.

Response: As authority for its conclusion that EPA's reliance on an amendment to section 211(c) by EPAct is inappropriate, ACLPI cites without elaboration only Disimone v. EPA , 121 F.3d 1262 (9th Cir. 1997). This case is inapt. The Disimone case involved a unique set of circumstances. Prior to Disimone , in 1990, the Ninth Circuit had ordered EPA to disapprove the Arizona SIP and to promulgate in its place a Federal implementation plan (FIP). Delaney v. EPA , 898 F.2d 687 (9th Cir. 1990), cert. denied 498 U.S. 998 (1990). Later in 1990 Congress amended the CAA and EPA requested that the Ninth Circuit recall its mandate in Delaney so that the Agency could take into account the 1990 Amendments in its action on remand. The Ninth Circuit denied EPA's request. EPA subsequently disapproved the Arizona SIP and promulgated a FIP as mandated by the Delaney court. EPA thereafter approved a SIP revision and rescinded its FIP. The Disimone court held that in so doing EPA acted contrary to a prior direct mandate of the Ninth Circuit and its action thus violated the law of the case. In addition the court held that EPA was collaterally estopped from claiming its action was required by the Act's statutory scheme, as amended in 1990, because the Delaney court had denied its motion to amend the judgment to conform to those amendments.

In contrast to Disimone , here there has been no prior judicial action with respect to the effect of the 2005 amendment that would have precluded EPA from proceeding with this regulatory action. Therefore the doctrines on which that court relied do not apply. We must comply with EPAct, the applicable current law, even though it did not exist at the time of EPA's original approval action.

Comment 2: ACLPI asserts that, regardless of the intervening EPAct restrictions, it does not agree that these restrictions prevent EPA from approving a waiver of preemption in order to allow CARB diesel fuel or other low emission diesel fuel as BACM. ACLPI argues that although CARB diesel fuel is not included on the Boutique Fuels List by virtue of its inclusion in the California SIP, the list does include “low emission diesel,” a fuel approved in the Texas SIP, and this fuel includes CARB diesel fuel as an approved low emission diesel fuel. ACLPI further states that because CARB diesel is already approved in California, it is also approved in the applicable Petroleum Administration for Defense District (PADD).

Response: As noted in our June 8, 2007 proposal, at 72 FR 31780, EPAct amended the CAA by requiring EPA, in consultation with the Department of Energy (DOE), to determine the total number of fuels approved into all SIPs under section 211(c)(4)(C), as of September 1, 2004, and to publish a list that identifies these fuels, the states and PADD in which they are used. CAA section 211(c)(4)(C)(v)(II). It also placed three additional restrictions on EPA's authority to waive preemption by approving a State fuel program into the SIP. These restrictions are as follows:

• First, EPA may not approve a state fuel program into the SIP if it would cause an increase in the total number of fuel types approved into SIPs as of September 1, 2004.

• Second, in cases where EPA approval of a fuel would increase the total number of fuel types on the list but not above the number approved as of September 1, 2004, because the total number of fuel types in SIPs is below the number of fuel types as of September 1, 2004, we are required to make a finding after consultation with DOE, that the new fuel will not cause supply or distribution interruptions or have a significant adverse impact on fuel producibility in the affected or contiguous areas.

• Third, with the exception of 7.0 psi RVP, EPA may not approve a state fuel into a SIP unless that fuel type is already approved in at least one SIP in the applicable PADD. CAA Section 211(c)(4)(C)(v)(I), (IV) and (V).

On December 28, 2006, EPA published a list of the total number of fuels approved into all SIPs, under section 211(c)(4)(C), as of September 1, 2004 , in the Federal Register . 71 FR 78192. The final list (known as the Boutique Fuels List) includes eight types of fuels approved into SIPs under section 211(c)(4)(C) as of September 1, 2004, but does not include CARB diesel fuel because it is not approved into California's SIP under section 211(c)(4)(C). 2

ACLPI is correct that Texas Low Emission Diesel fuel (also known as Texas LED fuel) is one of the eight types of fuels on the Boutique Fuels List. ACLPI is not correct, however, in asserting that because CARB diesel fuel is included as an approved low emission diesel fuel under the Texas LED rules, CARB diesel fuel is therefore already included among the fuels on the Boutique Fuels List. Texas LED fuel requirements allow CARB diesel fuel as a compliance option in lieu of meeting the regulatory standard for aromatic hydrocarbons and cetane number, but they also allow other compliance options that would not meet CARB diesel fuel requirements. 3

Specifically, Texas LED fuel requirements allow four compliance options in lieu of meeting the 10% (volume) maximum aromatic hydrocarbon limit and the minimum cetane number of 48: (1) Fuel meeting CARB diesel requirements (except those for small refiners) as of January 18, 2005, including the designated equivalent limits; (2) fuel meeting the requirements of a CARB certified alternative diesel formulation (except those for small refiners) approved before January 18, 2005 to meet CARB diesel regulations in effect as of October 1, 2003; (3) fuel meeting the Texas LED requirements for alternative diesel fuel formulations; and (4) fuel meeting the requirements of an alternative emission reduction plan approved as a substitute fuel strategy that will achieve equivalent oxides of nitrogen (NO X ) emission reductions. Based on quarterly reports submitted to the Texas Commission on Environmental Quality for 2007, more than half the volume of Texas LED fuel in 2007 consists of fuel meeting compliance options (3) and (4) noted above. 4 Compliance options (3) and (4) do not exist in CARB diesel fuel.

The Texas LED fuel program was modeled on the CARB diesel fuel program, but Texas has adapted the program to meet needs specific to the Texas ozone nonattainment areas, especially the Houston-Galveston ozone nonattainment area, for which the Texas LED fuel program is approved into the SIP. As a result, the two diesel fuel programs are similar but not equivalent, as we noted in our August 3, 2006 final rule, in response to ACLPI's comment that we had failed to account for availability of similar diesel fuel in Texas in assessing the feasibility of using CARB diesel for nonroad engines. See 71 FR at 43981-82. 5

ACLPI also asserts that, because CARB diesel is already approved in California, it is also approved in the applicable PADD. This is a reference to the PADD restriction, which is mentioned above and can be found in section 211(c)(4)(C)(v)(V). Under the PADD restriction, we are allowed to approve a fuel if it is “approved in at least one [SIP] in the applicable [PADD].” Arizona is in PADD 5, the same PADD as California, and Texas is in PADD 3. Our approval would, however, be subject to the other restrictions listed and discussed above. Thus, our approval must not cause an increase in the number of fuel types above those approved as of September 1, 2004, i.e., there must be “room” on the Boutique Fuels List, and we must consult with DOE on the effect of such a fuel on fuel supply and distribution in the affected or contiguous areas. As earlier mentioned, CARB diesel is approved into the California SIP. We would therefore, not be prohibited from approving CARB fuels for states within PADD 5, if there were room on the Boutique Fuels List. At this time, however, there is no room on the list, and therefore, we are prohibited from approving CARB diesel into Arizona's SIP since it would be a different fuel type that is not already on the list. Because CARB diesel fuel and Texas LED fuel are not equivalent, as noted above, the two are not interchangeable on the Boutique Fuels List, and thus the only type of low emission diesel fuel on the Boutique Fuels List is the Texas LED fuel program. This program is approved into a SIP in PADD 3, but is not approved into a SIP in the applicable PADD, which is PADD 5. Thus, EPA is further prohibited from approving a low emission diesel fuel program into the Arizona SIP because of the PADD restriction.

Comment 3: Since EPA relies upon its previous assessment in the August 3, 2006 final rule, ACLPI reasserts the objections raised in its comments submitted in response to that rulemaking in its letter dated August 1, 2005.

Response: As noted in the June 8, 2007 proposed rule, EPA is not changing its assessment in the August 3, 2006 final rule that requiring CARB diesel fuel for the control of nonroad engines and equipment exhaust is not currently feasible and is therefore not required as a BACM in the Maricopa County area. Except as specifically modified below, EPA is relying for this final rule on its discussion of Nonroad Engines and Equipment Exhaust in Section II.B(2) of the Agency's July 1, 2005 proposed rule, 70 FR at 38066-38067. We are also relying on our responses to public comments on this issue in Section II.B of our August 3, 2006 final rule, 71 FR at 43981-43983.

We note one further update to the information in footnote 7 of the August 3, 2006 final rule. There are currently thirteen, rather than six, approval letters on the Texas LED fuel program Web site  6 providing for the use of alternative diesel fuel formulations. The second sentence in footnote 7 should now read as follows: “Although Section 114.312(f) provides that alternative diesel fuel formulations must provide comparable or better reductions of NO X and PM, four of the thirteen alternative diesel fuel formulation approval letters to date have cited NO X reductions alone, or (in one case) reductions of NO X and hydrocarbons, but not PM, as the basis of approval.”

Comment 4: ACLPI further asserts that, with respect to EPA's concerns that nonroad diesel fuel users will refuel outside the nonattainment area to avoid paying the higher cost of CARB diesel, the Texas LED rule provides guidance for Arizona since it applies to 102 counties even though only 8 of those counties are in the Houston nonattainment area. Citing EPA's November 14, 2001 final rule approving the Texas LED rule into the SIP, ACLPI asserts that the principal reason for extending the scope of the rule to so many counties was to prevent refueling outside the nonattainment area. 66 FR 57196, 57216. ACLPI states there is no reason that a similar approach could not be adopted in Arizona.

Response: In addition to the Texas LED fuel program, EPA has approved two other state fuel programs under CAA Section 211(c)(4)(C) in which the covered area included attainment areas outside the nonattainment area for which SIP approval was sought. See 66 FR 20927 (April 26, 2001) for the Gasoline Volatility Program in Eastern and Central Texas, and 67 FR 8200 (February 22, 2002) for the Gasoline Sulfur and Volatility Program in Atlanta, Georgia. In each of these three cases, EPA's approval of the state fuel program in attainment areas was based on the State's demonstration that emission reductions attributable to the state fuel program in the attainment areas was necessary to help achieve attainment in the nonattainment area for which SIP approval was sought.

Specifically, in the case of the Texas LED fuel program, EPA noted three reasons for Texas' conclusion that requiring LED fuel in the 110-county covered area benefits the 8-county Houston ozone nonattainment area. First, it will help ensure that LED fuel is used by intrastate and long-haul trucks that travel through the nonattainment area but purchase fuel in Texas outside the nonattainment area and within the covered area. Second, it will help reduce possible transport of ozone from the surrounding covered areas to the nonattainment area. Third, it will reduce the transport of NO X from the surrounding covered areas to the nonattainment area. See 66 FR at 57214 and 66 FR 36542, 36545.

ACLPI's reference to EPA's statement at 66 FR 57216 is misquoted; in this part of the November 14, 2001 final rule approving the Texas LED rule into the SIP, EPA stated that “a principal purpose of extending the coverage of the LED rule to the 102 counties outside the 8-county Houston nonattainment area is to ensure that intrastate and long-haul trucks traveling through the Houston area but re-fueling outside the Houston area are re-fueling with LED fuel.” (Emphasis added.) Thus preventing re-fueling with non-LED fuel outside the Houston area was one of three reasons for the expanded scope of the covered area, as described above, but it was not “the” principal reason, as ACLPI mistakenly asserts.

With respect to the potential use of CARB diesel fuel for nonroad engines and equipment, the preemption of state fuel controls in CAA section 211(c)(4)(A) does not extend to fuels used solely in nonroad engines and equipment and not for use in motor vehicles. See 70 FR 38064, 38066 (July 1, 2005), 69 FR 38958, 39072-73 (June 29, 2004). The choice of covered areas for a state diesel fuel program for nonroad engines and equipment might very well be affected, however, by the same kinds of reasons that would influence the design of the program if it were to include diesel fuel for on-road motor vehicles. We agree that the possible enlargement of the covered area beyond the nonattainment area is a factor Arizona could consider in evaluating the feasibility of a diesel fuel program for nonroad engines and equipment, but it is not the only factor Arizona would need to consider.

Such an enlarged program might help avoid the problem of re-fueling outside the Maricopa County area, but it would still face the same obstacles we have evaluated in our prior notices, i.e. , the uncertainty of fuel availability and the problem of fuel segregation and storage. Additionally, we note that the geographic considerations in assessing potential re-fueling avoidance are different in Arizona and Texas. Population in the Houston-Galveston ozone nonattainment area is about 22% of the statewide population but represents only 3% of the State's land area. By expanding the covered area to include the Dallas-Fort Worth and Beaumont-Port Arthur ozone nonattainment areas as well as 95 nearby counties, the Texas LED fuel program covers about 79% of statewide population and 35% of the State's land area. By contrast, population in the Phoenix nonattainment area is about 60% of statewide population but only 8% of the State's land area. If a fuel program were expanded to include Pima County, which includes the next largest metropolitan area in Arizona, the population in the covered area would be about 76% of statewide population but only 16% of the State's land area. (Statistics are based on 2000 Census Bureau data). 7

Comment 5: ACLPI states that, because EPA did not undertake a new analysis of CARB diesel as a MSM for purposes of the attainment date extension, ACLPI incorporates by reference comments it submitted ``in response to previous rulemakings, as well as the arguments and analysis set forth in the Opening and Reply briefs filed in Vigil * * * (specifically Opening Brief, pp. 21-27;  8 Reply Brief, pp. 9-18.)”

Response: The Vigil Court's remand of EPA's approval of the attainment date extension is limited. The Court concluded that ``[w]e also remand the question of Arizona's eligibility for the extension, insofar as that question depends on EPA's determination regarding MSM. ” (Emphasis added.) 381 F.3d at 487. Therefore to the extent that ACLPI intends to incorporate by reference its comments and arguments on aspects of the extension other than MSM, it is precluded from raising them in this rulemaking.

While ACLPI does not specify, we assume that by “previous rulemakings” it is referring to EPA's proposed approvals of the serious area PM-10 plan for the Maricopa County area at 65 FR 19964 (April 13, 2000) and 66 FR 50252 (October 2, 2001). ACLPI commented on these proposed actions in letters from Joy Herr-Cardillo to Frances Wicher, EPA Region 9, dated July 20, 2000 and November 1, 2001. EPA has previously addressed the arguments relating to MSM and the attainment date extension as it relates to MSM raised by ACLPI in its briefs and these letters. See 67 FR at 48722-48725 and EPA's Response Brief in Vigil at 10-12 and 30-34. Discussions also relevant to these issues can be found in EPA's proposed approvals of the serious area PM-10 plan for the Maricopa County area at 65 FR 19964 and 66 FR 50252.

EPA is again approving the BACM demonstration in the MAG plan for the source categories of on-road and nonroad vehicle exhaust without CARB diesel. EPA has concluded that it cannot approve a CAA section 211(c)(4)(C)(i) waiver for Arizona for CARB diesel because the effect of such an approval would unlawfully increase the total number of fuels approved into SIPs under section 211(c)(4)(C) as of September 1, 2004. Therefore, EPA is again approving the BACM demonstration in the MAG plan for the on-road source category without CARB diesel. Because EPA has found that CARB diesel is not feasible for nonroad engines and equipment because of the uncertainties with fuel availability, storage and segregation and concerns about program effectiveness due to owners and operators fueling outside the Maricopa County area, we are again approving BACM demonstration in the MAG plan for the nonroad source category without CARB diesel. For the reasons discussed above, EPA is also again approving the MSM demonstration in the MAG plan and is confirming that we appropriately granted in 2002 and 2006 the State's request for an extension of the attainment deadline for the area from December 31, 2001 to December 31, 2006. These actions are codified at 40 CFR 52.123(j)(2), (4) and (7) and remain in effect. See 67 FR at 48739.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Executive Order 12898 (59 FR 7629, February 16, 1994) establishes a Federal policy for incorporating environmental justice into Federal agency actions by directing agencies to identify and address, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority and low-income populations. Today's action will not have disproportionately high and adverse effects on any communities in the area, including minority and low-income communities.

This rule also is not subject to Executive Order 13045 ``Protection of Children from Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), because it is not economically significant.

The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 14, 2008. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Throughout this document, “we,” “us” and “our” refer to EPA.

Section 112(l) of the Clean Air Act, as amended in 1990 (CAA), authorizes EPA to delegate to state or local air pollution control agencies the authority to implement and enforce the standards set out in the Code of Federal Regulations, Title 40 (40 CFR), part 63, National Emission Standards for Hazardous Air Pollutants for Source Categories. On November 26, 1993, EPA promulgated regulations, codified at 40 CFR part 63, Subpart E (hereinafter referred to as “Subpart E”), establishing procedures for EPA's approval of state rules or programs under section 112(l) (see 58 FR 62262). Subpart E was later amended on September 14, 2000 (see 65 FR 55810).

Any request for approval under CAA section 112(l) must meet the approval criteria in 112(l)(5) and Subpart E. To streamline the approval process for future applications, a state or local agency may submit a one-time demonstration that it has adequate authorities and resources to implement and enforce any CAA section 112 standards. If such demonstration is approved, then the state or local agency would no longer need to resubmit a demonstration of these same authorities and resources for every subsequent request for delegation of CAA section 112 standards. However, EPA maintains the authority to withdraw its approval if the State does not adequately implement or enforce an approved rule or program.

On July 17, 1998, EPA published a direct final action delegating to the Arizona Department of Environmental Quality (ADEQ) several NESHAP and approving ADEQ's delegation mechanism for future standards (see 63 FR 38478). That action explained the procedure for EPA to grant delegations to ADEQ by letter, with periodic Federal Register listings of standards that have been delegated. On April 17, 2008, ADEQ requested delegation of the following NESHAP contained in 40 CFR part 63:

• Subpart DDDD—NESHAP: Plywood and Composite Wood Products

• Subpart DDDDD—NESHAP for Industrial, Commercial, and Institutional Boilers and Process Heaters

On June 4, 2008, EPA granted delegation to ADEQ for these NESHAP, along with any amendments to previously-delegated NESHAP, as of July 1, 2006. Today's action is serving to notify the public of the June 4, 2008, delegations and to codify these delegations into the Code of Federal Regulations.

On June 28, 1999, EPA published a direct final action delegating to the Pima County Department of Environmental Quality (PDEQ) several NESHAP and approving PDEQ's delegation mechanism for future standards (see 64 FR 34560). That action explained the procedure for EPA to grant delegations to PDEQ by letter, with periodic Federal Register listings of standards that have been delegated. On May 23, 2008, PDEQ requested delegation of the following NESHAP contained in 40 CFR part 63:

• Subpart J—NESHAP for Polyvinyl Chloride and Copolymers Production

• Subpart MM—NESHAP for Chemical Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-Alone Semichemical Pulp Mills

• Subpart XX—National Emission Standards for Ethylene Manufacturing Process Units: Heat Exchange Systems and Waste Operations

• Subpart DDDD—NESHAP: Plywood and Composite Wood Products

• Subpart WWWWW—National Emission Standards for Hospital Ethylene Oxide Sterilizers

• Subpart YYYYY—NESHAP for Area Sources: Electric Arc Furnace Steelmaking Facilities

• Subpart ZZZZZ—NESHAP for Iron and Steel Foundries Area Sources

• Subpart BBBBBB—NESHAP for Source Category: Gasoline Distribution Bulk Terminals, Bulk Plants, and Pipeline Facilities

• Subpart CCCCCC—NESHAP for Source Category: Gasoline Dispensing Facilities

• Subpart DDDDDD—NESHAP for Polyvinyl Chloride and Copolymers Production Area Sources

• Subpart EEEEEE—NESHAP for Primary Copper Smelting Area Sources

• Subpart FFFFFF—NESHAP for Secondary Copper Smelting Area Sources

• Subpart GGGGGG—NESHAP for Primary Nonferrous Metals Area Sources—Zinc, Cadmium, and Beryllium

• Subpart HHHHHH—NESHAP: Paint Stripping and Miscellaneous Surface Coating Operations at Area Sources

• Subpart LLLLLL—NESHAP for Acrylic and Modacrylic Fibers Production Area Sources

• Subpart MMMMMM—NESHAP for Carbon Black Production Area Sources

• Subpart NNNNNN—NESHAP for Chemical Manufacturing Area Sources: Chromium Compounds

• Subpart OOOOOO—NESHAP for Flexible Polyurethane Foam Production and Fabrication Area Sources

• Subpart PPPPPP—NESHAP for Lead Acid Battery Manufacturing Area Sources

• Subpart QQQQQQ—NESHAP for Wood Preserving Area Sources

• Subpart RRRRRR—NESHAP for Clay Ceramics Manufacturing Area Sources

• Subpart SSSSSS—NESHAP for Glass Manufacturing Area Sources

• Subpart TTTTTT—NESHAP for Secondary Nonferrous Metals Processing Area Sources

On June 16, 2008, EPA granted delegation to PDEQ for these NESHAP, along with any amendments to previously-delegated NESHAP, as of February 1, 2008. Today's action is serving to notify the public of the June 16, 2008, delegations and to codify these delegations into the Code of Federal Regulations.

Today's document serves to notify the public of the delegation of NESHAP to ADEQ on June 4, 2008, and to PDEQ on June 16, 2008. Today's action will codify these delegations into the Code of Federal Regulations.

Under the Clean Air Act, the Administrator is required to approve a delegation request that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7412(l); 40 CFR 63.91(b). Thus, in reviewing state delegation submissions, our role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely updates the list of approved delegations in the Code of Federal Regulations and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the delegation submission is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 14, 2008. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

This is a summary of the Commission's CMAS Second Report and Order in PS Docket No. 07-287, adopted and released on July 8, 2008. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., in person at 445 12th Street, SW., Room CY-B402, Washington, DC 20554, via telephone at (202) 488-5300, via facsimile at (202) 488-5563, or via e-mail at FCC@BCPIWEB.COM. Alternative formats (computer diskette, large print, audio cassette, and Braille) are available to persons with disabilities by sending an e-mail to FCC504@fcc.gov or calling the Consumer and Governmental Affairs Bureau at (202) 418-0530, TTY (202) 418-0432. This document is also available on the Commission's Web site at http://www.fcc.gov.

1. Section 602(c) requires the Commission to require “licensees and permittees of noncommercial educational broadcast stations or public broadcast stations (as those terms are defined in section 397(6) of the Communications Act of 1934 (47 U.S.C. 397(6))) to install necessary equipment and technologies on, or as part of, any broadcast television digital signal transmitter * * * ” Section 397(6) of the Communications Act defines the terms “noncommercial educational broadcast station” and “public broadcast station” to mean a television or radio broadcast station which: (1) Under the rules and regulations of the Commission in effect on November 2, 1978, is eligible to be licensed by the Commission as a noncommercial educational radio or television broadcast station and which is owned and operated by a public agency or nonprofit private foundation, corporation, or association; or (2) is owned and operated by a municipality and which transmits only noncommercial programs for education purposes.

2. In the CMAS NPRM (73 FR 546, January 3, 2008) the Commission sought comment on the scope of section 602(c). The Commission noted that although the caption of section 602(c) refers to digital television transmissions, it mandates that the Commission impose any equipment requirements on licensees and permittees of NCE and public broadcast stations as those terms are defined under section 397(6) of the Communications Act. That provision references both radio and television broadcast stations. The Commission sought comment on this definition as it relates to section 602(c) of the WARN Act, and further asked whether it was a fair reading of the language to conclude that this section applies only to licensees and permittees of NCE and public broadcast television stations. The Association of Public Television Stations (APTS) noted in its comments that datacasting and the equipment required for it depends on the “unique capabilities of digital television,” and that accordingly, the section applies only to digital television transmission. DataFM asserted that section 602(c) requires installation of equipment at all NCE and public broadcast stations.

3. The Commission concluded that Congress intended the equipment requirements set forth in section 602(c) of the WARN Act to apply only to licensees and permittees of NCE and public broadcast television stations and not radio stations. Section 602(c) requires that the Commission complete a proceeding to require licensees and permittees of NCE or public broadcast stations to install necessary equipment and technologies “on, or as part of, any broadcast television digital signal transmitter” (emphasis added) to enable the distribution of geographically targeted alerts by CMS providers. This language clearly shows that Congress intended that these equipment requirements apply only to NCE and public broadcast television stations. The use of the term “any” indicates that if a station lacks a television transmitter—e.g., if the station is a radio broadcast station—there is no installation requirement. Additionally, APTS has indicated that its ability to perform the functions contemplated by section 602(c), enabling the distribution of geographically targeted alerts by participating CMS providers, is dependent on capabilities unique to digital television. For these reasons, the Commission disagreed with DataFM's conclusion that section 602(c) requires installation of equipment at all NCE and public broadcast stations.

4. In the CMAS NPRM the Commission sought comment regarding the equipment required by section 602(c) of the WARN Act. Specifically, the Commission asked how this digital television-based system would interface with the CMAS. The Commission also asked how the requirement regarding the geo-targeting of CMAS alerts would fit into a centrally administered CMAS as envisioned by the Commercial Mobile Service Alert Advisory Committee (CMSAAC). Further, the Commision sought comment regarding how the digital television-based system would implement the message formats defined by the “C” interface.

5. Apart from APTS, no commenters addressed the specific type of equipment that would need to be installed to satisfy section 602(c) of the WARN Act. In its comments and reply comments, APTS argued that by including section 602(c) in the WARN Act, Congress required that datacasting, and the equipment necessary for its implementation, be part of the CMAS. APTS further noted that datacasting equipment would not be inconsistent with the CMAS as recommended by the CMSAAC, but rather would be “one component of a comprehensive alert and warning system that includes necessary redundancies to ensure that the public receives essential information under any circumstances.” Such redundancies, argued APTS, would enhance the effectiveness and security of the CMAS.

6. APTS listed four types of equipment it says NCE/public broadcast television stations would need to install in order to transmit geo-targeted alerts to participating CMS providers. In listing this equipment, APTS contemplated that the Public Broadcasting System (PBS) would receive CMAS alerts directly from the Alert Gateway and transmit the CMAS alert data via national satellite feed to NCE/public broadcast television stations. NCE/public broadcast television stations would then transmit the geo-targeted CMAS alerts via their digital television transmitters to CMS Provider Gateways located in their television service areas, providing a redundant, alternate method of delivery of CMAS alerts to CMS Provider Gateways. APTS described the equipment needed as follows:

• “Geo-targeting Systems.” According to APTS, this equipment would have the capability to activate those NCE and public broadcast digital television transmitters necessary to transmit the CMAS alert to areas in which CMS Provider Gateways are located, while all other NCE and public broadcast digital television transmitters would ignore the CMAS alert transmission.

• “Groomers.” APTS stated that this equipment (also referred to as “dynamic bitrate capability”) would automatically adjust a selected program service's video bitrate to make room for CMAS alert data when those data are present. APTS stated that such a capability would allow the licensee to have full use of its transmission capability when CMAS alert data are not present. APTS argued that installation of this equipment is necessary for each licensee's master control (with redundancy) as well as at each licensee's remote transmitter sites (also with redundancy).

• “Data Receivers.” APTS asserted that this equipment is necessary for the stations to receive the CMAS data from PBS. APTS proposed that each master control and each remote transmitter have redundant receivers. APTS also proposed that small satellite receive antennas be installed for each remote transmitter should the licensee's data distribution via its studio-to-transmitter links be unavailable.

• PBS Equipment. Additionally, according to APTS, PBS will require equipment to route the CMAS data around its other functions. APTS reported that PBS will receive the CMAS data from appropriate origination point(s), process and bridge the data around the master control systems, and transmit the data via satellite to all licensees, remote transmitters, and other selected receive locations. APTS stated that PBS will install redundant systems at both its main Network Operations Center (NOC) and its Disaster Recover Site (DRS), as well as install both data security and physical security at both locations.

• Back-up Power Equipment. Finally, APTS recommended that licensees of NCE and public broadcast television stations be required to install back-up power equipment.

7. In order for NCE/public broadcast television station licensees/permittees to enable geo-targeting by participating CMS providers, they must be able to interface with the CMAS in a manner consistent with the rules adopted in the CMAS First Report and Order (73 FR 43099, July 24, 2008). According to the Commission, the most appropriate way for them to do this would be to install equipment that will allow them to receive CMAS alerts from the Alert Gateway over an interface and then to transmit such alerts to participating CMS providers. Under such an approach, licensees and permittees of NCE/public broadcast television stations would provide a redundant path by which participating CMS providers could receive geo-targeted alerts. Accordingly, the Commission required licensees and permittees of NCE/public broadcast television stations to install necessary equipment and technologies at, or as part of, their digital television transmitters that will provide them with the capability to receive CMAS alerts sent from the Alert Gateway over a secure interface and to transmit the alerts to the CMS Provider Gateways of participating CMS providers.

8. As noted above, APTS contemplated that licensees and permittees of NCE/public broadcast television stations will use datacasting technology to receive and deliver CMAS alerts to participating CMS providers. While the Commission believed that datacasting technology and the associated equipment described above is one way of meeting this requirement, it did not want to foreclose other DTV transmitter-based technologies that may exist in the future. Accordingly, in keeping with the technologically neutral policy articulated in the CMAS First Report and Order, the Commission's rules will allow, but not require, the use of datacasting to fulfill the requirements of section 602(c) and the Commission's rules, as long as NCE and public broadcast television station licensees and permittees do so in a manner consistent with the Commission's CMAS rules, including the CMAS architecture previously adopted in the CMAS First Report and Order. The Commission also recognized APTS's proposed use of datacasting assumes that PBS will provide a feed from the Alert Gateway to the NCE/public broadcast station digital television transmitters and associated receivers. For purposes of this Order, the Commission assumed that PBS or a similarly situated entity will provide the interface feed between the Alert Gateway and the NCE/public broadcast television stations. PBS or a similarly situated entity must work with the Alert Gateway Administrator to establish the necessary interface by which CMAS alerts will be sent to NCE and public broadcast television stations.

9. The Commission further noted that section 606(b) of the WARN Act provides that NCE and public broadcast station licensees and permittees shall be compensated by the Assistant Secretary of Commerce for Communications and Information for reasonable costs incurred in complying with the requirements imposed pursuant to section 602(c) of the WARN Act. The Commission noted that some, if not all, NCE and public broadcast television stations may need this funding to comply with the equipment requirements the Commission adopted in the CMAS Second Report and Order. Accordingly, the Commission required NCE and public broadcast television station licensees and permittees to install the required equipment no later than 18 months from the date of receipt of the funding permitted under section 606(b) of the WARN Act or 18 months from the effective date of these rules, whichever is later. The Commission concluded that this should give NCE and public broadcast television stations adequate time to obtain any necessary funding, determine the specific equipment needed and acquire and install that equipment.

10. According to the Commission, this approach satisfies section 602(c) and serves the public interest in that it requires NCE and public broadcast television station licensees and permittees to install necessary equipment on, or as part of, their digital television transmitters to enable geo-targeting by participating CMS providers. The Commission concluded that its approach also ensures that NCE and public broadcast television station licensees and permittees fulfill this requirement in a way that complements the CMAS architecture envisioned by the CMSAAC and rules the Commission adopted in the CMAS First Report and Order. In adopting these rules in this Second Report and Order, the Commission provides participating CMS providers with a redundant, alternate distribution path by which they may choose to receive geo-targeted CMAS alerts from the Alert Gateway. As such, this action will provide an increased level of redundancy to the CMAS architecture.

11. Section 602(f) of the WARN Act states that the Commission “shall require by regulation technical testing for commercial mobile service providers that elect to transmit emergency alerts and for the devices and equipment used by such providers for transmitting such alerts.” In the CMAS NPRM, the Commission sought comment on what type of testing regime the Commission should require. The Commission noted that the CMSAAC proposed that, in order to assure the reliability and performance of this new system, certain procedures for logging CMAS alerts at the Alert Gateway and for testing the system at the Alert Gateway and on an end-to-end basis should be implemented. The Commission sought comment on these proposed procedures, and asked whether they satisfied the requirements of section 602(f) of the WARN Act. The Commission also sought comment on whether there should be some form of testing of the CMAS that sends test messages to the mobile device and the subscriber. The Commission noted that it had a testing regime in place for the Emergency Alert System (EAS), and asked whether the EAS testing rules offered a model for CMAS testing. The Commission noted that in the EAS rules, internal system tests are combined with tests that are heard (or in some cases seen) by the public, and asked whether some similar form of test that alerts the public should be required for the CMAS. The Commission asked how subscribers should be made aware of such tests if testing were to involve subscribers.

12. Commenters generally supported the testing regime recommended by the CMSAAC. They did not object to testing during development and internal testing, and assumed that some sort of logging of results will be part of the ultimate testing process. For example, the California Public Utilities Commission (CAPUC) supported the recommendations of the CMSAAC and endorsed thorough testing before deployment. Similarly, the National Emergency Numbering Association (NENA) endorsed testing and noted that there needs to be ample time devoted to testing the CMAS before its deployment. According to the Wireless RERC, there is a need to develop a thorough testing regime to ensure that the CMAS will be accessible and inclusive of all people, including those with disabilities and those who do not speak English.

13. Although all parties that commented on the testing issue agree that a thorough testing regime is essential for an effective CMAS, the parties differ regarding the timing of tests, or whether testing should affect end-users. For example, T-Mobile, Nokia, and Alltel all supported testing, but recommended that the Commission follow the CMSAAC recommendations that end-to-end testing be defined as testing between the Alert initiator and the Alert Gateway, and that there be no testing that involves the end-user. According to Nokia, end-user testing would cause unnecessary network use and would result in customer confusion. AT&T agreed that any CMAS testing regime should follow the CMSAAC recommendations and asserted that “the EAS testing rules do not provide an effective model for testing the CMAS.” In its reply comments, Interstate Wireless supported testing to end-user “test units.” Similarly, by supporting the EAS testing regime as a model for testing the CMAS, CAPUC inherently supported testing to end-users. CellCast recommended a separate rulemaking for testing, and believes that testing to the end-user is appropriate. In its reply comments, CellCast also recommended that the Commission adopt a monthly end-to-end testing requirement.

14. In ex parte comments submitted on May 23, 2008, CTIA submitted a proposal for testing requirements that were developed together with Alltel, AT&T, Sprint Nextel, T-Mobile and Verizon Wireless. Under CTIA's proposal, participating CMS providers would participate in monthly testing of the CMAS system. The monthly test would be initiated by the federally-administered Alert Gateway at a set day and time and would be distributed through the commercial mobile service provider infrastructure and by participating CMS providers over their networks. Upon receipt of the test message, participating CMS providers would have a 24-hour window to distribute the test message in their CMAS coverage areas in a manner that avoids congestion or other adverse effects on their networks. Under CTIA's proposal, mobile devices supporting CMAS would not be required to support reception of the required monthly test and participating CMS providers would not be required to deliver required monthly tests to subscriber handsets, but a participating CMS provider may provide mobile devices with the capability for receiving these tests. CTIA's testing proposal also featured regular testing from the “C” interface to ensure the ability of the Federal Alert Gateway to communicate with the CMS Provider Gateway.

15. The Commission agreed with the CMSAAC and most commenters that periodic testing of all components of the CMAS, including the CMS provider's components would serve the public interest and is consistent with the WARN Act. Accordingly, as recommended by CTIA and several CMS providers, the Commission will require each participating CMS provider to participate in monthly testing of CMAS message delivery to the CMS Provider Gateway and within the CMS providers' infrastructure. CMS providers must receive these required monthly test messages and must also distribute those test messages to their coverage area within 24 hours of receipt by the CMS Provider Gateway. CMS providers may determine how this delivery will be accomplished and may stagger the delivery of the required monthly test message over time and over geographic subsets of their coverage area to manage the traffic loads and accommodate maintenance windows. Participating CMS providers must keep an automated log of required monthly test messages received by the CMS Provider Gateway from the Federal Alert Gateway.

16. CMAS required monthly tests will be initiated only by the Federal Alert Gateway Administrator using a defined test message; real event codes and alert messages may not be used for test messages. A participating CMS provider may forego these monthly tests if pre-empted by actual alert traffic or in the event of unforeseen conditions in the CMS provider's infrastructure, but shall indicate this condition by a response code to the Federal Alert Gateway. The Commission will not require that CMS providers make available mobile devices that support reception of the required monthly test. The Commission will, however, allow CMS providers to choose to do so. CMS providers that choose not to make the required monthly test available to subscribers must find alternate methods of ensuring that subscriber handsets will be able to receive CMAS alert messages.

17. The Commision also adopted CTIA's recommendation that, in addition to the required monthly test, there should be periodic testing of the interface between the Federal Alert Gateway and each CMS Provider Gateway to ensure the availability and viability of both gateway functions. Additional periodic testing to ensure that the Federal Alert Gateway is able to deliver CMAS alerts to the CMS Provider Gateway will further strengthen the reliability of the CMAS. CMS Provider Gateways must send an acknowledgement upon receipt of these interface test messages. CMS providers must comply with these testing requirements no later than the date of deployment of the CMAS, which is the date that CMAS development is complete and the CMAS is functional and capable of providing alerts to the public. All of these testing requirements are consistent with the testing procedures advocated by CTIA. The Commission declined to adopt some of the specific testing requirements that CTIA suggested, such as designating a specific day and time for the required monthly test and defining the exact parameters and content of the required monthly test, the expiration time for the required monthly test, and specific details of the periodic tests of the interface between the Federal Alert Gateway and participating CMS Provider Gateways. Because the CMAS must still undergo significant development and the Federal Alert Aggregator and Gateway have just recently been identified, the Commission believed it would be premature to adopt such specific testing requirements at this time.

18. This Second Report and Order adopts a new or revised information collection requirement subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. This requirement will be submitted to the Office of Management and Budget (OMB) for review under section 3507 of the PRA. The Commission also will publish a separate notice in the Federal Register inviting comment on the new or revised information collection requirements adopted in this proceeding. The requirement will not go into effect until OMB has approved it and the Commission has published a notice announcing the effective date of the information collection requirement. In addition, the Commission noted that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), it will seek specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

19. The Commission will send a copy of the CMAS Second Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

20. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking in PSHSB Docket 07-287 (CMAS NPRM). The Commission sought written public comments on the proposals in the CMAS NPRM, including comment on the IRFA. Comments on the IRFA were to have been explicitly identified as being in response to the IRFA and were required to be filed by the same deadlines as that established in section IV of the CMAS NPRM for other comments to the CMAS NPRM. The Commission sent a copy of the CMAS NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the CMAS NPRM and IRFA were published in the Federal Register . This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

21. Need for, and Objectives of, the Order. Section 602(c) of the WARN Act requires the Commission to, “[w]ithin 90 days after the date on which the Commission adopts relevant technical standards based on recommendations of the Commercial Mobile Service Alert Advisory Committee . . . complete a proceeding to require licensees and permittees of noncommercial educational broadcast stations or public broadcast stations (as those terms are defined in section 397(6) of the Communications Act of 1934 (47 U.S.C. 397(6))) to install necessary equipment and technologies on, or as part of, any broadcast television digital signal transmitter to enable the distribution of geographically targeted alerts by commercial mobile service providers that have elected to transmit emergency alerts under this section.” Although the CMAS NPRM solicited comment on issues related to section 602(a) (CMAS Technical requirements) and 602(b) (CMS provider election to the CMAS), this Second Report and Order only addresses issues raised by sections 602(c) and 602(f) of the WARN Act. Accordingly, this FRFA only addressees the manner in which any commenters to the IRFA addressed the Commission's adoption of rules regarding NCE and public television licensee's installation of digital television transmission towers retransmission equipment, as required by section 602(c) of the WARN Act, and the Commission's adoption of rules for testing the CMAS as required by section 602(f) of the WARN Act.

22. This Second Report and Order adopts further rules necessary to enable CMS alerting capability for CMS providers who elect to transmit emergency alerts to their subscribers. Specifically, the Order adopts rules that require NCE and public television stations to install on, or as part of, any broadcast television digital signal transmitter equipment to enable the distribution of geographically targeted alerts by commercial mobile service providers that have elected to transmit CMAS alerts. This equipment will interface with the CMAS Alert Gateway and enable the transmission of the national CMAS alert feed from the CMAS Alert Gateway to all covered broadcast television digital towers. As the Commission discussed in greater detail below, it is necessary that NCE and public broadcast television stations install this equipment to further enable the distribution of geographically targeted alerts by CMS providers that participate in the CMAS. The installation and operation of this equipment is consistent with the technologically neutral requirements adopted in the CMAS First Report and Order.

23-24. Summary of Significant Issues Raised by Public Comments in Response to the IRFA. There were no comments filed that specifically addressed the IRFA. The only commenter that explicitly identified itself as a small business was Interstate Wireless, Inc., whose comments addressed only the technical requirements and protocols relevant to section 602(a) of the WARN Act. Interstate Wireless Inc.'s comments were addressed in the CMAS First Report and Order.

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

26. Wireless Telecommunications Carriers (except Satellite). Since 2007, the SBA has recognized wireless firms within this new, broad, economic census category. Prior to that time, the SBA had developed a small business size standard for wireless firms within the now-superseded census categories of “Paging” and “Cellular and Other Wireless Telecommunications.” Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees. Because Census Bureau data are not yet available for the new category, the Commission will estimate small business prevalence using the prior categories and associated data. For the first category of Paging, data for 2002 show that there were 807 firms that operated for the entire year. Of this total, 804 firms had employment of 999 or fewer employees, and three firms had employment of 1,000 employees or more. For the second category of Cellular and Other Wireless Telecommunications, data for 2002 show that there were 1,397 firms that operated for the entire year. Of this total, 1,378 firms had employment of 999 or fewer employees, and 19 firms had employment of 1,000 employees or more. Thus, using the prior categories and the available data, the Commission estimates that the majority of wireless firms can be considered small.

27. Cellular Radiotelephone Service. As noted, the SBA has developed a small business size standard for small businesses in the category “Wireless Telecommunications Carriers (except satellite).” Under that SBA category, a business is small if it has 1,500 or fewer employees. Since 2007, the SBA has recognized wireless firms within this new, broad, economic census category. Prior to that time, the SBA had developed a small business size standard for wireless firms within the now-superseded census categories of “Paging” and “Cellular and Other Wireless Telecommunications.” Accordingly, the pertinent data for this category is contained within the prior Wireless Telecommunications Carriers (except Satellite) category. For the category of Cellular and Other Wireless Telecommunications, data for 2002 show that there were 1,397 firms that operated for the entire year. Of this total, 1,378 firms had employment of 999 or fewer employees, and 19 firms had employment of 1,000 employees or more. Thus, using the prior category and the available data, the Commission estimated that the majority of wireless firms can be considered small.

28. Auctions. Initially, the Commission notes that, as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Also, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated.

29. Broadband Personal Communications Service . The broadband Personal Communications Service (PCS) spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission has created a small business size standard for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years. For Block F, an additional small business size standard for “very small business” was added and is defined as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. These small business size standards, in the context of broadband PCS auctions, have been approved by the SBA. No small businesses within the SBA-approved small business size standards bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the C Block auctions. A total of 93 “small” and “very small” business bidders won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F. On March 23, 1999, the Commission reauctioned 155 C, D, E, and F Block licenses; there were 113 small business winning bidders. On January 26, 2001, the Commission completed the auction of 422 C and F PCS licenses in Auction 35. Of the 35 winning bidders in this auction, 29 qualified as “small” or “very small” businesses. Subsequent events concerning Auction 35, including judicial and agency determinations, resulted in a total of 163 C and F Block licenses being available for grant.

30. Narrowband Personal Communications Service . The Commission held an auction for narrowband Personal Communications Service (PCS) licenses that commenced on July 25, 1994, and closed on July 29, 1994. A second commenced on October 26, 1994 and closed on November 8, 1994. For purposes of the first two narrowband PCS auctions, “small businesses” were entities with average gross revenues for the prior three calendar years of $40 million or less. Through these auctions, the Commission awarded a total of forty-one licenses, 11 of which were obtained by four small businesses. To ensure meaningful participation by small business entities in future auctions, the Commission adopted a two-tiered small business size standard in the Narrowband PCS Second Report and Order. A “small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $40 million. A “very small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $15 million. The SBA has approved these small business size standards. A third auction commenced on October 3, 2001 and closed on October 16, 2001. Here, five bidders won 317 (MTA and nationwide) licenses. Three of these claimed status as a small or very small entity and won 311 licenses.

31. Wireless Communications Service . This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses in the 2305-2320 MHz and 2345-2360 MHz bands. The Commission defined “small business” for the wireless communications service (WCS) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these definitions. The Commission auctioned geographic area licenses in the WCS service. In the auction, which commenced on April 15, 1997 and closed on April 25, 1997, there were seven bidders that won 31 licenses that qualified as very small business entities, and one bidder that won one license that qualified as a small business entity.

32. 700 MHz Guard Bands Licenses . In the 700 MHz Guard Bands Order, the Commission adopted size standards for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A small business in this service is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. SBA approval of these definitions is not required. An auction of 52 Major Economic Area (MEA) licenses for each of two spectrum blocks commenced on September 6, 2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 96 licenses were sold to nine bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of remaining 700 MHz Guard Bands licenses commenced on February 13, 2001, and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses. Subsequently, in the 700 MHz Second Report and Order, the Commission reorganized the licenses pursuant to an agreement among most of the licensees, resulting in a spectral relocation of the first set of paired spectrum block licenses, and an elimination of the second set of paired spectrum block licenses (many of which were already vacant, reclaimed by the Commission from Nextel). A single licensee that did not participate in the agreement was grandfathered in the initial spectral location for its two licenses in the second set of paired spectrum blocks. Accordingly, at this time there are 54 licenses in the 700 MHz Guard Bands.

33. 700 MHz Band Commercial Licenses . There is 80 megahertz of non-Guard Band spectrum in the 700 MHz Band that is designated for commercial use: 698-757, 758-763, 776-787, and 788-793 MHz Bands. With one exception, the Commission adopted criteria for defining two groups of small businesses for purposes of determining their eligibility for bidding credits at auction. These two categories are: (1) “Small business,” which is defined as an entity that has attributed average annual gross revenues that do not exceed $15 million during the preceding three years; and (2) “very small business,” which is defined as an entity with attributed average annual gross revenues that do not exceed $40 million for the preceding three years. In Block C of the Lower 700 MHz Band (710-716 MHz and 740-746 MHz), which was licensed on the basis of 734 Cellular Market Areas, the Commission adopted a third criterion for determining eligibility for bidding credits: an “entrepreneur,” which is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. The SBA has approved these small size standards.

34. An auction of 740 licenses for Blocks C (710-716 MHz and 740-746 MHz) and D (716-722 MHz) of the Lower 700 MHz Band commenced on August 27, 2002, and closed on September 18, 2002. Of the 740 licenses available for auction, 484 licenses were sold to 102 winning bidders. Seventy-two of the winning bidders claimed small business, very small business, or entrepreneur status and won a total of 329 licenses. A second auction commenced on May 28, 2003, and closed on June 13, 2003, and included 256 licenses: five EAG licenses and 251 CMA licenses. Seventeen winning bidders claimed small or very small business status and won 60 licenses, and nine winning bidders claimed entrepreneur status and won 154 licenses.

35. The remaining 62 megahertz of commercial spectrum is currently scheduled for auction on January 24, 2008. As explained above, bidding credits for all of these licenses will be available to “small businesses” and “very small businesses.”

36. Advanced Wireless Services . In the AWS-1 Report and Order, the Commission adopted rules that affect applicants who wish to provide service in the 1710-1755 MHz and 2110-2155 MHz bands. The Commission did not know precisely the type of service that a licensee in these bands might seek to provide. Nonetheless, the Commission anticipated that the services that will be deployed in these bands may have capital requirements comparable to those in the broadband Personal Communications Service (PCS), and that the licensees in these bands will be presented with issues and costs similar to those presented to broadband PCS licensees. Further, at the time the broadband PCS service was established, it was similarly anticipated that it would facilitate the introduction of a new generation of service. Therefore, the AWS-1 Report and Order adopts the same small business size definition that the Commission adopted for the broadband PCS service and that the SBA approved. In particular, the AWS-1 Report and Order defines a “small business” as an entity with average annual gross revenues for the preceding three years not exceeding $40 million, and a “very small business” as an entity with average annual gross revenues for the preceding three years not exceeding $15 million. The AWS-1 Report and Order also provides small businesses with a bidding credit of 15 percent and very small businesses with a bidding credit of 25 percent.

37. Common Carrier Paging . As noted, the SBA has developed a small business size standard for wireless firms within the broad economic census category of “Wireless Telecommunications Carriers (except Satellite).” Under this category, the SBA deems a business to be small if it has 1,500 or fewer employees. Since 2007, the SBA has recognized wireless firms within this new, broad, economic census category. Prior to that time, the SBA had developed a small business size standard for wireless firms within the now-superseded census categories of “Paging” and “Cellular and Other Wireless Telecommunications.” Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees. Because Census Bureau data are not yet available for the new category, the Commission estimates small business prevalence using the prior categories and associated data. For the first category of Paging, data for 2002 show that there were 807 firms that operated for the entire year. Of this total, 804 firms had employment of 999 or fewer employees, and three firms had employment of 1,000 employees or more. For the second category of Cellular and Other Wireless Telecommunications, data for 2002 show that there were 1,397 firms that operated for the entire year. Of this total, 1,378 firms had employment of 999 or fewer employees, and 19 firms had employment of 1,000 employees or more. Thus, using the prior categories and the available data, the Commission estimates that the majority of wireless firms can be considered small. Thus, under this category, the majority of firms can be considered small.

38. In the Paging Third Report and Order, the Commission developed a small business size standard for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. The SBA has approved these small business size standards. An auction of Metropolitan Economic Area licenses commenced on February 24, 2000, and closed on March 2, 2000. Of the 985 licenses auctioned, 440 were sold. Fifty-seven companies claiming small business status won. Also, according to Commission data, 365 carriers reported that they were engaged in the provision of paging and messaging services. Of those, the Commission estimates that 360 are small, under the SBA-approved small business size standard.

39. Wireless Communications Service . This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission established small business size standards for the wireless communications service (WCS) auction. A “small business” is an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” is an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these small business size standards. The Commission auctioned geographic area licenses in the WCS service. In the auction, there were seven winning bidders that qualified as “very small business” entities, and one that qualified as a “small business” entity.

40. Wireless Communications Equipment Manufacturers . While these entities are merely indirectly affected by the Commission's action, the Commission described them to achieve a fuller record. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, which is: all such firms having 750 or fewer employees. According to Census Bureau data for 2002, there were a total of 1,041 establishments in this category that operated for the entire year. Of this total, 1,010 had employment of under 500, and an additional 13 had employment of 500 to 999. Thus, under this size standard, the majority of firms can be considered small.

41. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing . The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, which is: all such firms having 750 or fewer employees. According to Census Bureau data for 2002, there were a total of 1,041 establishments in this category that operated for the entire year. Of this total, 1,010 had employment of under 500, and an additional 13 had employment of 500 to 999. Thus, under this size standard, the majority of firms can be considered small.

42. Software Publishers . While these entities are merely indirectly affected by the Commission's action, it is describing them to achieve a fuller record. These companies may design, develop or publish software and may provide other support services to software purchasers, such as providing documentation or assisting in installation. The companies may also design software to meet the needs of specific users. The SBA has developed a small business size standard of $23 million or less in average annual receipts for the category of Software Publishers. For Software Publishers, Census Bureau data for 2002 indicate that there were 6,155 firms in the category that operated for the entire year. Of these, 7,633 had annual receipts of under $10 million, and an additional 403 firms had receipts of between $10 million and $24, 999,999. For providers of Custom Computer Programming Services, the Census Bureau data indicate that there were 32,269 firms that operated for the entire year. Of these, 31,416 had annual receipts of under $10 million, and an additional 565 firms had receipts of between $10 million and $24,999,999. Consequently, the Commission estimates that the majority of the firms in this category are small entities that may be affected by the Commission's action.

43. NCE and Public Broadcast Stations . The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in broadcasting images together with sound. These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public.” The SBA has created a small business size standard for Television Broadcasting entities, which is: such firms having $13 million or less in annual receipts. According to Commission staff review of the BIA Publications, Inc., Master Access Television Analyzer Database as of May 16, 2003, about 814 of the 1,220 commercial television stations in the United States had revenues of $12 (twelve) million or less. The Commission notes, however, that in assessing whether a business concern qualifies as small under the above definition, business (control) affiliations must be included. The Commission's estimate, therefore, likely overstates the number of small entities that might be affected by the Commission's action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies.

44. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. The Commission is unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimate of small businesses to which rules may apply do not exclude any television station from the definition of a small business on this basis and are therefore over-inclusive to that extent. Also as noted, an additional element of the definition of “small business” is that the entity must be independently owned and operated. The Commission notes that it is difficult at times to assess these criteria in the context of media entities and the Commission's estimates of small businesses to which they apply may be over-inclusive to this extent. There are also 2,117 low power television stations (LPTV). Given the nature of this service, the Commission will presume that all LPTV licensees qualify as small entities under the above SBA small business size standard.

45. The Commission has, under SBA regulations, estimated the number of licensed NCE television stations to be 380. The Commission notes, however, that, in assessing whether a business concern qualifies as small under the above definition, business (control) affiliations must be included. The Commission's estimate, therefore, likely overstates the number of small entities that might be affected by the Commission's action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. The Commission does not compile and otherwise does not have access to information on the revenue of NCE stations that would permit it to determine how many such stations would qualify as small entities.

46. This Report and Order may contain new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. If the Commission determines that the Report and Order contains collection subject to the PRA, it will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA at an appropriate time. At that time, OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.

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

48. As noted in paragraph 2 above, this Second Report and Order deals only with the WARN Act section 602 (c) requirement that the Commission complete a proceeding to require licensees and permittees of noncommercial educational broadcast stations or public broadcast stations to install necessary equipment and technologies on, or as part of, any broadcast television digital signal transmitter to enable the distribution of geographically targeted alerts by commercial mobile service providers that have elected to transmit emergency alerts under this section.” Many of the entities affected by this Second Report and Order are the member stations for the Association of Public Broadcasters (APTS), which was a member of the CMSAAC. Further, in its formation of the CMSAAC, the Commission made sure to include representatives of small businesses among the advisory committee members. The CMAS NPRM also sought comment on a number of alternatives to the recommendations of the CMSAAC, such as the Digital EAS. In its consideration of this and other alternatives the CMSAAC recommendations, the Commission has attempted to impose minimal regulation on small entities to the extent consistent with the goal of advancing its public safety mission by adopting technical requirements, standards and protocols for a CMAS that CMS providers would elect to provide alerts and warnings to their customers. The Commission's action in this Second Report and Order neither requires nor forecloses the exact outcome requested by the entities most affected, as represented by APTS.

49. None.

50. The Commission will send a copy of the CMAS Second Report and Order, including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Second Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Second Report and Order and FRFA is also hereby published in the Federal Register .

51. It is ordered , that pursuant to sections 1, 4(i) and (o), 201, 303(r), 403, and 706 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (o), 201, 303(r), 403, and 606, as well as by sections 602(a), (b), (c), (f), 603, 604 and 606 of the WARN Act, this Second Report and Order is hereby adopted . The rules adopted in this Second Report and Order shall become effective October 14, 2008, except that § 10.350 (a)(7) and (b) contain new or modified information collection requirements which will not become effective prior to OMB approval.

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

Federal regulations at 50 CFR part 679 implement the Fishery Management Plan (FMP) and govern the groundfish fisheries in the BSAI. The North Pacific Fishery Management Council (Council) prepared the FMP, and NMFS approved it under the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). General regulations governing U.S. fisheries also appear at 50 CFR part 600.

On July 30, 2008 (73 FR 44173) NMFS published a revised Table 4 that reallocated Atka mackerel from the 2008 incidental catch allowance to the B season allowance for the Amendment 80 cooperative in the Eastern Aleutian District and the Bering Sea subarea of the BSAI. However, NMFS inadvertently miscalculated the 2008 Amendment 80 Cooperatives total amount as 8,804 metric tons (mt) instead of 8,683 mt and A season amount as 3,812 mt instead of 3,691 mt. NMFS also inadvertently miscalculated the 2009 Amendment 80 sectors amounts in the Eastern Aleutian District and Bering Sea area and the Central Aleutian District. This document corrects the errors and republishes Table 4 in its entirety.

Accordingly, the revised Table 4 from the temporary rule (FR Doc. E8-17466) published on July 30, 2008, at 73 FR 44173, is corrected as follows:

On page 44174, Table 4, is corrected and republished in its entirety to read as follows: