On March 12, 1997, OGE published an interim rule amending subpart G of 5 CFR part 2638, “Executive Agency Ethics Training Programs” (Training Regulation). See 62 FR 11307-11314. Minor corrections to the rule were issued on March 19, 1997, 62 FR 13213, and March 27, 1997, 62 FR 14737. Most provisions of the rule became effective on June 10, 1997. Interested persons were asked to submit comments by April 11, 1997.

The most significant revisions that the 1997 interim rule amendments made to the Training Regulation were in the area of annual ethics training to be provided to certain covered employees. The prior version of the Training Regulation required agencies to provide annual verbal ethics training to all covered employees. However, the interim rule amendments permitted agencies to fulfill this requirement for most covered employees by means of written training, provided that the employees receive verbal training at least once every three calendar years. The interim rule did require agencies to continue to provide annual verbal training to employees who file public financial disclosure forms (“public filers”). On January 1, 1998, agencies became subject to a further requirement that a qualified instructor be present during and immediately following the annual ethics training provided to public filers.

As stated in the preamble to the 1997 interim rule amendments, the changes made by the amendments were not intended to enable agencies to diminish the resources that they devote to ethics training. The interim rule was structured to minimize the impact of OGE-mandated training, focusing more intensive training on those employees in sensitive positions (public filers) while ensuring that all executive branch employees receive sufficient training to enable them to understand the ethical responsibilities concomitant with their Government positions. By lessening the level of OGE-mandated verbal ethics training, agencies are able to reallocate their ethics training resources for use in other parts of their ethics training programs.

Executive Order 12866 and the President's Memorandum of June 1, 1998 require Federal agencies to write all new rules in plain language. In keeping with the spirit of the President's Memorandum, we have attempted to rewrite this new interim rule in plain language by: organizing the material more logically; using shorter sentences; eliminating unnecessary technical language; stating the rule's requirements clearly; and using tables to summarize information. We invite your comments as to whether this interim rule is easier to understand and how we could further improve its clarity. This plain language version of the previous interim rule makes only nonsubstantive changes to the rule. The following discussion summarizes some of the more significant changes that the plain language revision has made.

This interim rule is organized differently than the previous rule. We have avoided numbering subordinate paragraphs past the second level (except for the rows of the helpful tables at new § 2638.706(c)). Thus, this rule has a § 2638.703(a)(1) but not a § 2638.703(a)(1)(i) or a § 2638.703(a)(1) (i)(A) . We believe this change makes it easier to follow the rule. We have, however, added two sections to the rule. One new section (§ 2638.702) provides definitions of terms used throughout this subpart. The other new section is a result of our dividing the annual training requirement into two sections: one for public filers (§ 2638.704) and one for all other covered employees (§ 2638.705). Because the training requirements are different for these two groups of employees, we believe this format clarifies the different requirements for each.

While the previous interim rule referred to verbal and written ethics “briefings,” this rule uses the term ethics “training.” This substitution was made because briefing is a more technical, legal term and training is a more commonly used and understood term.

We have deleted the discussion in existing § 2638.701 of the particular provisions of law that are to be covered by ethics training. We believe that this information is redundant as it is also stated in new § 2638.704(b) which addresses the content of ethics training. Section 2638.704(b)(5) (and § 2638.703(b)) requires that the agency provide covered employees with the office addresses and telephone numbers of the Designated Agency Ethics Official (DAEO) and other agency ethics officials. Although not required, the E-mail addresses of such persons may also be given to covered employees.

This interim rule does not contain the discussion of the responsibilities of the DAEO found in previous § 2638.702(a) and (b). The DAEO's responsibilities are clearly delineated earlier in part 2638 at § 2638.203. Section 2638.203(a)(3) states that the DAEO must initiate and maintain an ethics education and training program. We believe this section requires the DAEO to be responsible for all aspects of the agency's ethics training program. Aside from the discussion of the DAEO's duties, we are moving the remaining material (concerning the agency's written training plan) from the existing § 2638.702(c) to the new rule's § 2638.706. While the requirements for the agency's written training plan are identical in this rule, we have provided tables in § 2638.706(c)(2)-(c)(4) to assist agencies in determining the number of employees they plan to train in each upcoming calendar year.

We are eliminating the statement in existing § 2638.702(c) that, in preparing its written training plan, an agency must “coordinate with OGE where necessary.” We believe that wording is unnecessary because agencies are always welcome to consult with OGE on any ethics-related matter, regardless of a published regulation.

We have renamed the person who is authorized to conduct ethics training. The previous interim rule referred to that person as a “qualified individual.” This rule refers to that person as a “qualified instructor” in order to make it clearer that the person must be qualified to teach, or prepare the material for, ethics training courses. In addition, this interim rule requires that the qualified instructor be “available” during and after the training provided to public filers. See § 2638.704(d). The previous interim rule required the instructor's “presence,” which caused confusion as to whether the instructor must be physically present at the training site. Use of the term “available” clarifies that the instructor's physical presence is not required. As explained in the examples following § 2638.704(d), an instructor is “available” if he or she is connected to the training site through a video or telephone link.

The following distribution table shows where the material from the previous interim rule can be found in this new interim rule. It also indicates the sections from the previous rule that have been removed, as discussed above.

The Office of Government Ethics received 15 comments in response to the 1997 interim rule amendments. Of these 15 comments, 13 were from Federal executive branch agencies, one was from an individual executive branch employee, and one was from an interagency group of ethics officials. Generally, the comments received by OGE were in favor of the changes made by the interim rule amendments. In particular, the comments supported the provision permitting agencies to fulfill the annual ethics training requirement for most covered employees through the use of written ethics training in two of any three calendar years. The Office of Government Ethics also received several positive responses to the deletion of “procurement officials” (no longer a defined category in light of changes to the procurement integrity law) from the categories of covered employees. After careful consideration of the comments received, OGE has decided to retain the interim rule amendments with minor changes. We do, however, invite further suggestions as to improvements in the ethics training program. This new interim rule will give agencies an additional opportunity to make such suggestions, as well as to comment on the new plain language format of the rule.

An analysis of the comments received follows.

In the preamble to the interim rule amendments, OGE specifically invited comment as to whether it is appropriate to have stricter training requirements for public filers than for other covered employees. One agency indicated that it felt the distinction was unnecessary because, generally, public filers better understand and are more sensitive to their ethical responsibilities than other employees. However, two other agencies and the interagency group of ethics officials endorsed the annual verbal training requirement for public filers. After considering these views, and for the reasons originally stated in the preamble to the interim rule amendments at 62 FR 11308, we have decided to retain the requirement that public filers receive verbal training every year.

The provision of the 1997 interim rule amendments that generated the greatest amount of comment was the requirement that agencies, effective January 1, 1998, have a qualified instructor “present” during and immediately following the annual training provided to public filers. Nine of the commenters addressed this section, with comments ranging from supportive to sharply critical. For the reasons given below, OGE has decided to retain the “presence” requirement. Notably, this interim rule substitutes the term “available” for the previous rule's term “present.” See new § 2638.704(d).

New § 2638.704(d), which states that a qualified instructor must be available during and immediately after verbal training, does not require the instructor's physical presence at the training session. As noted, OGE has replaced the word “present” with “available” to clarify that the instructor need not be physically present at the training site. It is sufficient if some mode of telecommunications enables the instructor to answer employees' questions during and after the training. As in the existing regulation, the examples that follow new § 2638.704(d) illustrate the flexibility of this provision. Examples 1 and 2 show that a qualified instructor is available when the public filer receiving the ethics training has access to the instructor through a video conference link or telephone line. These examples demonstrate how agencies may take advantage of existing and new communication technologies that provide greater access and can substitute for actual physical presence.

Two commenters indicated that providing employees with a set time to contact a qualified instructor should satisfy the requirement that a qualified instructor be available. After careful consideration, OGE has not adopted this proposal. The delay in time between the receipt of the training and the answer to the employee's question could easily result in a lost educational opportunity. Also, the use of a separate set time for contacting a qualified instructor may discourage employees from contacting agency ethics officials at other times. The primary purpose of the Training Regulation is not necessarily to provide agency employees with a comprehensive knowledge of all of the conduct-related laws and regulations that govern them. Rather, the rule is intended to create an awareness of those laws and to introduce the point of contact where employees can obtain further ethics advice. Agency employees are, therefore, given the names and telephone numbers of their ethics officials at the start of their employment. See new § 2638.703(b). Covered employees must receive annual updates of this information as part of their annual ethics training. See new § § 2638.704(b)(5); 2638.705(b).

One agency, and one individual from that agency, stated that the previous interim rule amendments undermine the agency's use of computers for annual training. The agency felt that the advantage of computer-based training, such as the computer game that it had developed, lies in its flexibility. The agency pointed out that its game makes ethics training available at the employee's convenience, including off-duty hours and weekends, and can easily be distributed worldwide. Having developed the game with OGE's assistance, the agency felt that the usefulness of the game was undercut by the interim rule amendments because the planned implementation of the game would not meet the requirements of the regulation. The agency therefore urged that the presence requirement be deleted or, at a minimum, changed to once every three to five years. The individual submitting comments, while acknowledging that an agency can waive the requirement of a qualified instructor in certain situations, stated that the main problem with the requirement would be the loss of flexibility in having to complete the training at a set time, rather than at the employee's convenience.

The points articulated by these two commenters concern the verbal training that agencies must provide to public filers. In the case of a covered employee other than a public filer, the computer game developed by the agency should meet the requirements of new § 2638.705(c)(1) which does not require that a qualified instructor be available. Computer-based methods of training are specifically mentioned as fulfilling the requirement for verbal training in new § 2638.705(c)(1). Thus, the game (and similar computer-based training) remains an excellent tool to fulfill the verbal ethics training requirement for the approximately 93% of covered employees who are not public filers. Similarly, the use of computer-based training is also an appropriate way for agencies to provide verbal training to the approximately 7% of covered employees who are public filers, provided that a qualified instructor is available to answer questions. New § 2638.704(c)(2) specifically lists computer presentation as a means for fulfilling the verbal training requirement for public filers. The two commenters, however, felt that making a qualified instructor available to public filers undermines the primary benefit of the computer game: its flexibility. For the following reasons, we disagree.

First, as stated above, ethics training is most effective when employees are provided with spontaneous answers to their questions. A delay in time between question and answer could result in an employee forgetting to ask the question and could discourage the employee from taking the initiative to contact the instructor. In keeping with this philosophy, an agency could use a computer game to provide public filers with training through their workstation computers. Employees could be given a specific time reserved for accessing the computer game when a qualified instructor is standing by to respond to any questions concerning the game or other ethics issues. This specific scheduled time would not prevent the public filer from accessing the computer game at any other time but would ensure that the public filer receives the required one hour of official duty time for the training. The official duty time requirement is a long-standing one, having been in existence from the inception of the Training Regulation. Since the 1992 promulgation of the original Training Regulation final rule, OGE program reviews have not indicated that agencies find it difficult to fulfill this requirement.

One commenter urged OGE to defer to an agency's determination as to which circumstances make it impractical to provide verbal training with a qualified instructor available. This interim rule retains, at § 2638.704(e)(1) (for public filers) and § 2638.705(d)(1) (for other covered employees), the Training Regulation's long-standing exceptions providing the DAEO at each agency with the authority to use verbal training without a qualified instructor or to use only written training. Under these exceptions, where the DAEO or his or her designee makes a written determination that circumstances make it impractical to meet the verbal training requirement for a covered employee, a qualified instructor need not be available (for public filers) and written training can be provided for any covered employees (including public filers) in any year. The Office of Government Ethics realizes that each agency knows best the practical issues that it faces in providing training and, thus, OGE does give due deference to an agency's written determination that verbal training is impractical.

The exception at § 2638.704(e)(1) pertains to the comments from two agencies which have widely dispersed groups of public filers. One of these agencies expressed concern that some public filers may be unable to attend training at a group session and that makeup sessions would require significant resources because the entire ethics staff is centrally located. The other agency stated that it would be very difficult for them to establish even a scheduled telephone link. Where distance or difference in time zones makes such scheduling impractical, as in these cases, the agency has sufficient grounds to make a written determination waiving the requirement that a qualified instructor be available.

Another commenter felt that OGE should provide a specific exception in the regulation for training that takes place outside of core duty hours or outside of the continental United States, thus saving DAEOs the necessity of making individual written determinations in these situations. No similar comment was received and no other agency has expressed this concern during OGE's reviews of agency ethics programs. We note that the exceptions in §§ 2638.704(e) and 2638.705(d) do give DAEOs a fair amount of flexibility because DAEOs are permitted to make a single written determination for multiple employees. For these reasons, OGE did not adopt this recommendation.

For covered employees who are not public filers, these interim rule amendments continue to enable agencies to meet the annual training requirement through verbal training once every three calendar years (the “one in three” rule). Unlike the rule for public filers, there is no requirement that a qualified instructor be available. For those calendar years where eligible covered employees do not receive verbal training, written training is required. Five commenters commended these changes for providing agencies with greater freedom to devote resources to desired ethics training goals. On the other hand, one commenter felt that the 1997 interim rule amendments went too far in liberalizing the ethics training requirements. This commenter stated that annual verbal training demonstrates the importance of the ethics program to employees and the one in three rule would diminish the importance of the ethics program (and possibly its resources) for the covered employees receiving written training.

The Office of Government Ethics has retained this provision in this new interim rule. As noted earlier, the intent of the prior interim rule was not to diminish the emphasis or resources of agency ethics training programs. The intent was instead to reduce the level of OGE-mandated verbal ethics training to better allow each agency to tailor its training program to its specific needs. Because the requirements are minimum standards, agencies are encouraged to go beyond them where they believe it is beneficial to their programs. In such cases, agencies can provide verbal training for all covered employees each year. As stated in the preamble to the interim rule amendments, OGE will reconsider the one in three rule if it finds that the result is a diminution of resources devoted to the ethics training program.

One commenter stated that agencies would be unable to keep track of which covered employees had received verbal training within the past three years. In reviewing this comment, OGE considered its reviews of agency ethics programs performed since the effective date of the 1997 interim rule amendments. These program reviews have not shown that agencies have had difficulty tracking their employees' training. An agency experiencing such tracking problems could simply provide verbal training to all covered employees every third year and provide written training to employees (other than public filers) in the other two calendar years. For these reasons, OGE has decided to retain this requirement in this new interim rule.

Two commenters requested that OGE allow the written ethics training that they gave employees, other than public filers, before June 10, 1997 (the effective date of the 1997 interim rule amendments) to satisfy the verbal training requirement for calendar year 1997. We note that it is generally unwise for an agency to change operating policies or procedures based upon a rule that is not yet effective. Indeed, OGE purposely delayed the effective date of the 1997 interim rule amendments for 90 days so that we could evaluate comments received from agencies prior to the effective date and determine whether it would be necessary to amend or cancel the interim rule amendments. The issue raised by these commenters is moot, however, since any opportunity to correct a problem in its 1997 annual ethics training expired on January 1, 1998.

On a similar point, OGE notes that verbal training provided under the former Training Regulation does count for the purposes of the one in three rule at new § 2638.705(c)(1). Thus, agencies who gave all covered employees verbal training in 1997 would not have to provide verbal training again for covered employees (other than public filers) until 2000.

Two commenters indicated their concerns with the requirement in § 2638.702(c) (new § 2638.706) that agencies develop a written training plan each year. Prior to the 1997 interim rule amendments, agencies were required to file these plans annually with OGE. The interim rule deleted this requirement and modified the information required in the plan, including the addition of a narrative description of the agency's annual ethics training. One agency indicated its opinion that OGE should move even farther to convert the annual training plan to a narrative-based document or, alternatively, that OGE should place no additional requirements on agencies but should allow them to develop their own plans in keeping with their internal needs. Although OGE may further modify the information required in the written plan based upon future experience, we have elected not to permit a mere narration. We believe that, to run an effective ethics training program, agencies need to plan ahead. The information required in the written training plan should serve as a useful tool to agencies as they prepare for each training cycle. The other comment regarding the written training plan argued that the plan served no purpose and should not be required. For the reasons given above, OGE does not agree with this comment. Furthermore, section 301(c) of Executive Order 12674, as modified by Executive Order 12731, requires agencies to develop written training plans.

Two commenters requested that OGE allow agencies to satisfy both the requirements for initial ethics orientation and annual ethics training with one training session. This comment endorsed language in the preamble to the 1997 interim rule amendments, at 62 FR 11308, stating that OGE would permit the time spent in annual verbal ethics training during the first 90 days of an employee's service to count against the one hour of official duty time required for the initial ethics orientation. As indicated in the 1997 interim rule amendments, this offset is not new. Both the original proposed and final Training Regulations, in 1990 and 1992 respectively, included a provision for agencies to partially or completely offset the official duty time requirement for the initial ethics orientation by the amount of official duty time spent in annual verbal ethics training. See 55 FR 38335, 38337 (September 18, 1990) and 57 FR 11886, 11888, 11890, 11891 (April 7, 1992). The Office of Government Ethics believes that agencies should have an incentive to provide verbal training to new employees even though such training is not required. Therefore, whether the verbal training is labeled an initial ethics orientation or annual ethics training, it will count as both if it meets the requirements of both. Similarly, if a written initial ethics orientation is modified slightly so that it meets the requirements for written annual training, it will count as both.

Finally, the previous interim rule amendments, at § 2638.704(d)(3)(iii)(B), retained the exception from the prior Training Regulation allowing written training alone for special Government employees (SGE) who work fewer than 60 days in a calendar year. This exception (now at new § 2638.705(d)(2)) permits agencies to meet the annual training requirement for these SGEs through written training only. This exception is included only in the section dealing with annual training for covered employees other than public filers since SGEs who work fewer than 60 days in a calendar year are not required to file public financial disclosure reports. See 5 CFR 2634.201(a) and 2634.204.

Because SGEs typically serve limited terms of employment and because the interim rule amendments permit agencies to meet the annual training requirement for all covered employees (other than public filers) through written training for two of any three years, OGE specifically requested in the 1997 interim rule amendments that agencies inform us if they have SGEs who served for three or more years. If there were no such long-term SGEs, we realized this exception would be unnecessary. Three agencies responded that they have SGEs who serve for terms of three or more years. Accordingly, OGE has retained the exception in this interim rule. One commenter indicated that the language in the exception should be changed to “60 or fewer days in a calendar year” to more precisely track the language in 5 CFR part 2634. OGE has adopted this recommendation in the interim rule. See new § 2638.705(d)(2).

The Office of Government Ethics recently completed an agency survey to determine: whether agencies are aware of the changes to the Training Regulation made by the 1997 interim rule (the one in three rule and the fact that a qualified instructor's physical presence is not required); whether agencies have implemented the flexibility that the one in three rule allows; and whether the rule is effective. The survey was conducted as part of the regularly scheduled ethics program reviews performed in 57 agencies from December 1997 through November 1998. Sixty-one percent of the ethics officials said they have taken, or would be taking, advantage of the flexibility offered by the interim amendments. Eighty-nine percent of the ethics officials surveyed were satisfied that the interim rule amendments allowed their agencies to allocate ethics training resources in a more flexible and efficient manner and seventy-seven percent were satisfied with the effects of the changes on their agency's ethics training program. These officials believed that using written training allowed more time for ethics counseling, reduced the workload of the ethics office, and increased the number of topics covered by the training materials.

The Office of Government Ethics invites further suggestions as to overall improvements in the ethics training program, as well as comments regarding the new plain language format of the Training Regulation.

Pursuant to sections 553(b) and (d) of title 5 of the United States Code, I find good cause for waiving the general notice of proposed rulemaking. Because the plain language changes made by these interim rule amendments to the Training Regulation simply clarify the existing regulation, there is no need to solicit comments in advance. Moreover, this rule provides for a 90-day comment period. All interested persons are invited to submit written comments to OGE on these interim rule amendments. The Office of Government Ethics will review all comments received and consider any modifications which appear warranted in adopting a final rule on this matter.

In promulgating this interim rule amending the executive branchwide Government ethics training regulation, the Office of Government Ethics has adhered to the regulatory philosophy and the applicable principles of regulation set forth in section 1 of Executive Order 12866, Regulatory Planning and Review. This interim rule has also been reviewed by the Office of Management and Budget under that Executive order.

As Director of the Office of Government Ethics. I have reviewed this interim amendatory regulation in light of section 3 of Executive Order 12988, Civil Justice Reform, and certify that it meets the applicable standards provided therein.

As Director of the Office of Government Ethics, I certify under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this interim rule will not have a significant economic impact on a substantial number of small entities because it affects only Federal executive branch agencies and their employees.

As Director of the Office of Government Ethics, I have determined that the Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply to this interim rule because it does not contain any information collection requirements that require the approval of the Office of Management and Budget.

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have a retroactive effect.

The Act states that the statute is intended to occupy the field of promotion and consumer education involving pork and pork products and of obtaining funds thereof from pork producers and that the regulation of such activity (other than a regulation or requirement relating to a matter of public health or the provision of State or local funds for such activity) that is in addition to or different from the Act may not be imposed by a State.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under § 1625 of the Act, a person subject to an Order may file a petition with the Secretary stating that such Order, a provision of such Order or an obligation imposed in connection with such Order is not in accordance with law; and requesting a modification of the Order or an exemption from the Order. Such person is afforded the opportunity for a hearing on the petition. After the Hearing, the Secretary would rule on the petition. The Act provides that the district court of the United States in the district in which the person resides or does business has jurisdiction to review the Secretary's determination, if a complaint is filed not later than 20 days after the date such person receives notice of such determination.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ). The Administrator of AMS has considered the economic effect of this action on small entities and has determined that this proposed rule will not have a significant economic impact on a substantial number of small business entities. The purpose of RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly burdened.

In the December 29, 1998, issue of “Hogs and Pigs,” USDA's National Agricultural Statistics Service estimates that in 1998 the number of operations with hogs in the United States totaled 114,380. The majority of these operations subject to the Order are considered small businesses under the criteria established by the Small Business Administration. The final rule imposes no new burden on the industry. The Act and Order have payment and collection provisions for assessments. This rule further specifies the responsibility for the collection and remittance of assessments on feeder pigs and market hogs in the regulations. This rule adds a section to the regulations to provide that the producer who sells the animal must remit to the Board the assessment due if the purchaser of a feeder pig or market hog fails to collect and remit the assessment.

In compliance with the Office of Management and Budget (OMB) regulations (5 CFR Part 1320) which implements the Paperwork Reduction Act [44 U.S.C. 3501 et seq. ], the information collection requirements contained in this part have been previously approved by OMB and were assigned OMB control number 0851-0093.

The Act (7 U.S.C. 4801-4819) approved December 23, 1985, authorized the establishment of a national pork promotion, research, and consumer information program. The program was funded by an initial assessment rate of 0.25 percent of the market value of all porcine animals marketed in the United States and an equivalent amount of assessment on imported porcine animals, pork, and pork products. However, that rate was increased to 0.35 percent in 1991 (56 FR 51635) and to 0.45 percent effective September 3, 1995 (60 FR 29963). The final Order establishing a pork promotion, research, and consumer information program was published in the September 5, 1986, issue of the Federal Register (51 FR 31898; as corrected, at 51 FR 36383, and amended at 53 FR 1909, 53 FR 30243, 56 FR 4, 56 FR 51635, 60 FR 29963, 61 FR 29002, and 62 FR 26205). Assessments began on November 1, 1986.

For purposes of paying, collecting, and remitting assessments under the Order, porcine animals are divided into three categories: (1) Feeder pigs, (2) market hogs, and (3) breeding stock. Section 1230.71(a) provides that producers producing in the United States a porcine animal raised as a feeder pig, market hog, or for breeding stock, that is sold are to pay an assessment on that animal unless the producer demonstrates to the Board by appropriate documentation that an assessment was previously paid on that animal in the same category. Section 1230.71(b)(1) provides that purchasers of feeder pigs and market hogs collect assessments on these animals from the producer. Under § 1230.71 producers selling their own breeding stock must remit assessments to the Board. The Order further provides that for the purpose of collecting and remitting assessments on feeder pigs and market hogs, persons engaged as a commission merchant, auction market, or livestock market in the business of receiving such porcine animals for sale on commission for or on behalf of a producer are deemed to be the purchaser. Commission merchants, auction markets, or livestock markets who sell breeding stock on behalf of producers are required to collect and remit assessments.

Collection and remittance of assessments from sales transactions involving market hogs and breeding stock have been highly successful since the assessment collections became effective in 1986. For example, according to the Board's records, assessments are being collected and remitted on 99 percent of all market hogs slaughtered commercially in the United States each year.

Assessment collection and remittance on market hogs has been efficient and successful primarily because of the limited number of purchasers, i.e. meat packers, who purchase hogs from all sizes of production units. This centralization of collection points and their limited number facilitates remittance of assessments to the Board and reduces or eliminates compliance problems. However, in the marketing of feeder pigs, there are significantly greater numbers of purchasers which tend to complicate the collection and remittance process and increase the potential for compliance problems.

The Order contemplates that the producer (seller) will pay the assessment on feeder pigs and the purchaser, who also may be a producer, will collect the assessment due and remit it to the Board. For market hogs, the Order contemplates that the producer (seller) will pay the assessment and the purchaser will collect the assessment due and remit it to the Board.

Due to production and marketing changes within the feeder pig industry, an increasing number of high volume feeder pig production units (producers) are selling feeder pigs to large numbers of producers. Pursuant to § 1230.71(b)(1) each of these producers must collect assessments from the seller and remit them to the Board. According to the Board, many feeder pig producers, regardless of the size of their operation, simplify payment by remitting the assessment on all feeder pigs they sell to facilitate the collection and remittance of assessments. However, the large number of purchasers involved in feeder pig sales complicates the collection and remittance process and makes compliance difficult.

The primary focus concerning collection and remittance problems on feeder pigs are transactions commonly referred to as farm-to-farm sales of feeder pigs. These sales transactions typically involve two producers. Frequently, producers who purchase feeder pigs may not consider themselves to be purchasers under the Act and Order and consequently neither the seller nor the purchaser collects and/or remits assessments due. This is particularly the case in farm-to-farm feeder pig sales where producer purchasers may not consider themselves as purchasers in such transactions and therefore do not believe they are required to collect and remit assessments to the Board.

To clarify the meaning of a purchaser for the purpose of collection and remittance of assessments for the sale of feeder pigs and also for market hogs and to specify that each producer who sells an animal for the first time as a feeder pig or market hog is obligated to pay the required assessment, this rule adds a new section § 1230.113 to the rules and regulations titled “Collection and Remittance of Assessments for the Sale of Feeder Pigs and Market Hogs.” That section provides that purchasers of feeder pigs or market hogs shall collect assessments from producers if an assessment is due and shall remit those assessments to the Board pursuant to the provisions of § 1230.71. Failure of the purchaser to collect such assessment from a producer shall not relieve the producer of the obligation to pay the assessment. If the purchaser fails to collect the assessment when an assessment is due pursuant to § 1230.71, the producer (seller) shall remit the total amount of assessments due to the Board as set forth in § 1230.111. This change will facilitate enforcement of assessment collection in the Pork Promotion, Research, and Consumer Information Program.

On July 28, 1999, AMS published in the Federal Register (64 FR 40783) a proposed rule which would add a section to the regulations which implement the Order to provide that the producer who sells feeder pigs and market hogs must remit to the National Pork Board the assessments due if the purchasers of the feeder pigs or market hogs fails to collect and remit the assessments. The proposal was published with request for comments by September 27, 1999. Several comments were received—one from the National Pork Board and six from State pork producer associations. All of the comments supported the amendment. They were of the view that the amendment was a positive change, one that would enhance the remittance of checkoff on farm-to-farm sales of feeder pigs and result in easier compliance.

Accordingly, the final rule adds a new section, § 1230.113 to the rules and regulations titled “Collection and Remittance of Assessments for the Sale of Feeder Pigs and Market Hogs” which will require producers who sell feeder pigs and market hogs to remit to the National Pork Board the assessments due if the purchaser of the feeder pigs and market hogs fails to collect and remit the assessments.

On May 14, 1998, Cessna Aircraft Company applied to amend the Model 525 Type Certificate to add a new Model 525A. The Model 525A is a derivative of the Model 525 currently approved under Type Certificate Data Sheet A1WI.

The Cessna Model 525A, a derivative of the Model 525, will be certified for operation to a maximum altitude of 45,000 feet. This will be the first of this series to be approved above 41,000 feet. The certification basis of the Model 525 was primarily 14 CFR part 23, as amended by Amendments 23-1 through 23-40, plus special conditions. This unusually high operating altitude constitutes a novel or unusual design feature for which the applicable airworthiness regulations do not contain adequate or appropriate safety standards. Therefore, it is necessary to prescribe special conditions that provide the level of safety to that established by the regulations.

The FAA has previously issued Special Conditions No. 23-ACE-87, to another small turbojet airplane model with requested approval for operation up to 49,000 feet.

The FAA policy is to apply special conditions to part 23 airplanes when the certified altitude exceeds the capability of the oxygen system (in this case, the passenger system). This was the situation for a part 23 turbojet airplane. Thus, the special conditions were deemed to be appropriate for the Cessna Model 525A and provide the basis for formulating the special conditions described below:

Damage tolerance methods are prescribed to assure pressure vessel integrity while operating at the higher altitudes. Crack growth data is used to prescribe an inspection program, which should detect cracks before an opening in the pressure vessel would allow rapid depressurization. Initial crack sizes for detection are determined under § 23.571 as amended by Amendment 23-48.

The cabin altitude after failure may not exceed the cabin altitude/time history curve limits shown in Figures 3 and 4.

Continuous flow passenger oxygen equipment is certified for use up to 40,000 feet; however, for rapid decompressions above 34,000 feet, reverse diffusion leads to low oxygen partial pressures in the lungs, to the extent that a small percentage of passengers may lose useful consciousness at 35,000 feet. The percentage increases to an estimated 60 percent at 40,000 feet, even with the use of the continuous flow system. To prevent permanent physiological damage, the cabin altitude must not exceed 25,000 feet for more than 2 minutes. The maximum peak cabin altitude of 40,000 feet is consistent with the standards established for previous certification programs. In addition, at these altitudes the other aspects of decompression sickness have a significant, detrimental effect on pilot performance (for example, a pilot can be incapacitated by internal expanding gases).

Decompression above the 37,000 foot limit of Figure 4 approaches the physiological limits of the average person; therefore, every effort must be made to provide the pilot with adequate oxygen equipment to withstand these severe decompressions. Reducing the time interval between pressurization failure and the time the pilot receives oxygen will provide a safety margin against being incapacitated and can be accomplished by the use of mask-mounted regulators. The special condition, therefore, requires pressure demand masks with mask-mounted regulators for the flightcrew. This combination of equipment will provide the best practical protection for the failures covered by the special conditions and for improbable failures not covered by the special conditions, provided the cabin altitude is limited.

Under the provisions of § 21.101, Cessna Aircraft Company must show that the Cessna Model 525A meets the applicable provisions of the regulations incorporated by reference in Type Certificate Data Sheet A1WI or the applicable regulations in effect on the date of application for the change to the Cessna Model 525A. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in Type Certificate Data Sheet A1WI are as follows:

(1) Part 23 of the Federal Aviation Regulations effective February 1, 1965, as amended by Amendments 23-1 through 23-40;

(a) In addition, if the regulations incorporated by reference do not provide adequate standards with respect to the change, the applicant must comply with certain regulations in effect on the date of application for the change. The FAA has determined that the Cessna Model 525A must also be shown to comply with the following sections of part 23:

(2) Federal Aviation Regulations part 36 effective December 1, 1969, as amended by Amendments 36-1 through the amendment in effect at the time of TC issuance.

(3) Federal Aviation Regulations part 34 effective September 10, 1990, as amended by Amendment 34-1, Fuel Venting and Exhaust Emission Requirements for Turbine Engine Powered Airplanes.

(4) Special Conditions as follows:

(a) 23-ACE-55, additional requirements for engine location, performance, characteristics, and protection of electronic systems from lightning and high intensity radiated electromagnetic fields (HIRF).

(b) Special conditions adopted by this rulemaking action.

(5) Exemption: Exemption number 5759 granted. Model 525A to use Federal Aviation Regulations § 25.181 in lieu of damping criteria of Federal Aviation Regulations § 23.181(b).

(6) Compliance with ice protection will be demonstrated in accordance with Federal Aviation Regulations § 23.1419.

Because the Administrator has found that the applicable airworthiness regulations ( i.e., part 23) do not contain adequate or appropriate safety standards for the Cessna Model 525A because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the Model 525A must comply with the part 23 fuel vent and exhaust emission requirements of 14 CFR part 34 and the part 23 noise certification requirements of 14 CFR part 36, and the FAA must issue a finding of regulatory adequacy pursuant to § 611 of Public Law 92-574, the “Noise Control Act of 1972.”

Special conditions, as appropriate, are issued in accordance with § 11.49 after public notice, as required by § § 11.28 and 11.29(b), and become part of the type certification basis in accordance with § 21.101(b)(2).

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of § 21.101(a)(1).

The Model 525A will incorporate the following novel or unusual design feature: The methods used to ensure pressure vessel integrity and to provide ventilation, air conditioning, and pressurization will be unique due to the operating altitude of this airplane.

A notice of proposed special conditions No. 23-99-01-SC for the Cessna Aircraft Company Model 525A airplanes was published in the Federal Register on September 13, 1999 (64 FR 49413). No comments were received.

As discussed above, these special conditions are applicable to the Cessna Model 525A. Should the Cessna Aircraft Company apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101(a)(1).

This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

The authority citation for these special conditions is as follows:

History

On November 15, 1999, the FAA proposed to amend Title 14, Code of Federal Regulations, part 71 (14 CFR part 71) by establishing the Jackson, WY, Class D surface area (64 FR 61804). This establishment of the Class D area is in support of a new ATCT under construction at the Jackson Hole Airport, Jackson, WY. The FAA establishes Class D airspace where necessary to contain aircraft transitioning between the terminal and en route environments. Interested parties were invited to participate in the rulemaking proceeding by submitting written comments on the proposal. No comments were received.

The coordinates for this airspace docket are based on North American Datum 83. Class D surface airspace areas are published in Paragraph 5000 of FAA Order 7400.9G, dated September 1, 1999, and effective September 16, 1999, which is incorporated by reference in 14 CFR 71.1. The Class D airspace designation listed in this document will be published subsequently in the Order.

This amendment to 14 CFR part 71 establishes a Class D surface area in the vicinity of Jackson, WY. The intended effect of this rule is designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under Instrument Flight Rules (IFR) and Visual Flight Rules (VFR) at Jackson Hole Airport and between the terminal and en route transition states.

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

Under current Postal Service standards, Periodicals publications cannot contain certain types and amounts of advertising. For example, items such as cosmetic or perfume samples cannot be mailed at Periodicals postage rates. Also excluded is anything that is not comprised of printed sheets of paper or paper-like material; for example, a swatch of fabric, a pacquette of hand cream, or a CD-ROM.

All advertising matter or other enclosures or attachments that do not meet the requirements for mailing at Periodicals rates can be attached to the publication or included as enclosures but are charged Standard Mail (A) postage rates. The rate is computed as if the matter is a stand-alone piece of Standard Mail (A), even though the Standard Mail (A) matter is processed and delivered along with the rest of the Periodicals publication.

These standards require the mailer to pay processing and delivery costs for two pieces (the Periodicals publication and the Standard Mail (A) material) even though the Postal Service incurs processing and delivery costs for only one piece. Periodicals mailers maintain that this extra postage discourages advertisers from including certain kinds of advertisements in their publications. Some publishers work around this problem by including the Standard Mail (A) matter only in the copies that are sold at newsstands, thereby avoiding completely the extra postage costs.

In December 1996, the Periodicals Advisory Group (PAG), an industry group comprised of publishers and printers, recommended that the Postal Service investigate the idea of a reduced rate of postage for Standard Mail (A) material that could be combined with all Periodicals subclasses. This recommendation was supported by the Magazine Publishers of America and the American Business Press.

Acting on this recommendation, on September 27, 1999, pursuant to 39 U.S.C. 3623, the Postal Service filed with the Postal Rate Commission a request for a decision recommending an experimental “Ride-Along” classification and rate for Periodicals mail. The request was designated as Docket No. MC2000-1 by the Commission. Based on a settlement agreement reached among the parties, the Commission recommended the experimental classification and rate on February 3, 2000. This recommendation was approved by the Governors of the Postal Service on February 8, 2000, and the Board of Governors set February 26, 2000, as the implementation date for the experiment, which will last two years.

The experiment will allow a single Standard Mail (A) Ride-Along piece in a Periodicals host publication. The Ride-Along piece will be charged a flat postage rate of $0.10 per copy. There are very specific physical requirements for the Ride-Along piece, which are summarized below and detailed in the amendments to the Domestic Mail Manual (DMM) that are included in this notice. The Ride-Along postage is added separately, so that the addition of a Ride-Along piece does not affect the weight, advertising percentage, or postage for the Periodicals host piece. This experiment does not affect or change current standards for Standard Mail (A) enclosures in Periodicals.

The duration of this experiment is two years. Revenue and costs for this experiment will be attributed to Periodicals mail. The classification changes resulting from the experiment are summarized below and are detailed in the additions to the DMM included with this notice.

Over the course of the experiment, the Postal Service will collect appropriate data to determine the feasibility of a permanent classification change. Mailers also will be required to submit a sample of the host and Ride-Along mailpiece and will be asked to complete a simple questionnaire regarding the mailpiece. During the experiment, these sample mailpieces will be available for public inspection via the Manager, Pricing, 475 L'Enfant Plaza, SW, Room 6670, Washington, DC 20260-2406.

Periodicals mailers will be required to use an alternate postage statement (PS Form 3541-RX, 3541-NX, or 3541-NCX, as appropriate) so that the Postal Service can collect data on Ride-Along attachments or enclosures. No foreign copies will be reported on the Ride-Along statements, as Ride-Along pieces are not permitted in foreign copy mailings. Foreign copies and other mailings of copies without a Ride-Along enclosure or attachment will be mailed as a separate edition on regular Forms 3541-R, 3541-N, and 3541-NC. Monthly postage statements may not be used to report Ride-Along mailings.

These experimental postage statements will be used only when publishers are claiming copies with the Ride-Along rate. All copies within the mailing must contain the same Ride-Along enclosure or attachment. Ride-Along enclosures of different weights or different contents must be reported on separate postage statements.

This classification change applies to all subclasses of Periodicals, including pieces mailed at Regular, In-County, Nonprofit, Classroom, and Science-of-Agriculture rates. The addition of a Ride-Along Standard Mail (A) piece cannot change the shape, processing category or affect the uniform thickness of the host piece. In addition, for pieces claiming automation discounts, the addition of the Ride-Along cannot change the host piece's processing method (automation letter, FSM 881 flat, or FSM 1000 flat) or automation compatibility ( e.g., turning ability and deflection, flexibility, rigidity). Publications that are automation compatible and claim automation discounts before the addition of the Ride-Along piece must remain within the constraints of the automation requirements of the host publication in order to use the Ride-Along rate and claim the automation discounts.

This classification change is applicable to Standard Mail (A) material (advertising or otherwise) attached to or enclosed with the Periodicals host copy. A flat rate of $0.10 per copy is charged for this attachment or enclosure. Under the experiment, only one Ride-Along piece can be attached to a single host copy. Mailers desiring to mail multiple Standard Mail (A) attachments or enclosures with their Periodicals copies can continue to use the current standards, which require paying postage at full Standard Mail (A) rates, or may choose to pay the Ride-Along rate for the first attachment or enclosure and Standard Mail (A) rates for subsequent attachments and enclosures. If mailers choose the latter, the Ride-Along requirements apply.

The Ride-Along piece cannot exceed 3.3 ounces, and the weight of the Ride-Along piece cannot exceed the separate weight of the Periodicals host publication. The Ride-Along enclosure or attachment can be letter-size or flat-size, as long as the Ride-Along does not change the shape or affect the uniform thickness of the host piece. All pieces within a Periodicals mailing must contain the same Ride-Along piece. Mailers are encouraged to use common sense in the selection and preparation of Ride-Along pieces to ensure the proper handling and delivery of the mail. The Postal Service will be examining the sample pieces provided by mailers and will be monitoring operations to determine compliance with the requirements and whether any unexpected increases in costs are being caused as a result of Ride-Along pieces. The Postal Service will notify the mailer of any noncompliance with the requirements and will not accept future mailings of the same type. The Postal Service will work with the mailer to remedy noncompliance. The Postal Service also may determine that a change in the requirements is necessary because of unexpected cost increases and therefore reserves the right to amend these standards during the course of the experiment.

For the reasons discussed above, the Postal Service hereby adopts the following amendments to Domestic Mail Manual G094, which are incorporated by reference in the Code of Federal Regulations (see 39 CFR part 111).

See the information provided in the direct final rule located in the Rules and Regulations section and the proposed rule located in the Proposed Rules section of the December 20, 1999, Federal Register .

Therefore the amendment to 40 CFR part 52, § 52.1620, published in the Federal Register December 20, 1999 (64 FR 71027), which was to become effective February 18, 2000, is withdrawn.

A companion proposal to this direct final rule is being published in the Federal Register . If relevant adverse comments are timely received by the date specified in this action, EPA will publish a document informing the public that this rule will not take effect and the comments will be addressed in a subsequent final rule based on the proposed rule. If no relevant adverse comments on this direct final rule are timely filed, then the direct final rule will become effective on March 30, 2000, and no further action will be taken on the companion proposal published today.

On August 29, 1994 (59 FR 44460) and August 31, 1995 (60 FR 45530), EPA proposed revisions to the part 70 operating permits regulations. Primarily, the proposals addressed changes to the system for revising permits. A number of other less detailed proposed changes were also included. Altogether, State and local permitting authorities will have a complicated package of program revisions to prepare in response to these changes once promulgated. The part 70 revisions are anticipated to take place in late 2001.

Contemporaneous with permitting authorities revising their programs to meet the revised part 70, many programs have been granted interim approval which will require permitting authorities to prepare program revisions to correct those deficiencies identified in the interim approval action. The preamble to the August 31, 1995, proposal noted the concern of many permitting authorities over having to revise their programs twice; once to correct interim approval deficiencies, and again to address the revisions to part 70. In the August 1995 preamble, the Agency proposed that States with interim approval “* * * should be allowed to delay the submittal of any program revisions to address program deficiencies previously listed in their notice of interim approval until the deadline to submit other changes required by the proposed revisions to part 70” (60 FR 45552). The Agency also proposed “* * * to exercise its discretion under proposed § 70.4(i)(1)(iv) to provide States 2 years to submit program revisions in response to the proposed part 70 revisions * * *” (60 FR 45551).

On October 31, 1996 (61 FR 56368), EPA amended § 70.4(d)(2) to allow the Administrator to grant extensions to interim approvals so permitting authorities could take advantage of the opportunity to combine program revisions as proposed August 31, 1995. The Agency does not believe, however, that the August 31, 1995 blanket proposal to extend all interim approval program revision submittal dates until up to 2 years after part 70 is revised is appropriate. Program deficiencies that caused granting of interim approval of permitting programs vary from a few problems that can be easily corrected to complex problems that will require regulatory changes and, in some cases, legislative action. Where an undue burden will be encountered by developing two program revisions, combining program revisions and thus granting a longer time period for submission of the program revision to correct interim approval deficiencies is warranted. Where no such burden will occur, the Agency encourages permitting authorities to proceed with correcting their interim approval program deficiencies and not wait for the revised part 70.

Due to several controversial issues, the revisions to part 70 have been delayed beyond the date contemplated by the August 31, 1995 proposal. For permitting authorities to be able to combine program revisions, an agency's program interim approval cannot expire. The Agency must therefore extend any interim approval that may expire before the part 70 revisions are promulgated.

In the original October 31, 1996, action addressing this subject, all interim approvals granted prior to the date of issuance of a memorandum announcing EPA's position on this issue (memorandum from Lydia N. Wegman to Regional Division Directors, “Extension of Interim Approvals of Operating Permits Programs,” June 13, 1996) were extended by 10 months. This action was to encourage permitting authorities to proceed with program revisions within their interim approval timeframes, rather than wait for the revised part 70. The June 1996 memorandum is in the docket for this action.

The reason for this automatic extension was that permitting authorities, upon reading the August 1995 proposed action, may have delayed their efforts to develop program revisions to address interim approval deficiencies because they believed the proposed policy to extend interim approvals until revised part 70 program revisions are due would be adopted for all programs. The EPA has been informed that this was the case in many States. Approximately 10 months passed since the August 1995 proposal until the June 1996 memorandum was issued. The additional 10-month extension to all interim approvals offset any time lost in permitting authority efforts to develop program revisions addressing interim approval deficiencies. This 10-month extension was not applicable to application submittal dates for the second group of sources covered by a source-category limited interim approval. 1

As noted in the June 1996 memorandum, where the permitting authority applies for it after part 70 is revised, EPA may grant a longer extension to an interim approval so that the program revision to correct interim approval program deficiencies may be combined with the program revision to meet the revised part 70. Such a request must be made within 30 days of promulgation of the part 70 revisions. This will make it possible for EPA to take a single rulemaking action to adopt new interim approval deadlines for all programs for which such an application has been made.

As required by § 70.4(f)(2), program revisions addressing interim approval deficiencies must be submitted to EPA no later than 6 months prior to the expiration of the interim approval. The dates for permitting authorities to submit their combined program revisions to address both the revised part 70 and the interim approval deficiencies will be 6 months prior to the interim approval expiration dates which will be set through a future rulemaking.

The longer extension allowing combining of program revisions to meet both the revised part 70 and interim approval deficiencies will be based on the promulgation date of the revisions to part 70. If only regulatory changes to a program are needed to meet the revised part 70, the extension may be for up to 18 months after the part 70 revisions. If legislative changes are needed to a program to meet the revised part 70, the extension may be for up to 2 years. As previously noted, the program revision submittal date will be 6 months prior to expiration of the extended interim approval.

The June 13, 1996, memorandum and the October 31, 1996, action anticipated promulgation of the part 70 revisions no later than early 1997. As a result of not being able to promulgate the revisions to part 70 by early 1997, on August 29, 1997, EPA extended interim approvals a second time (62 FR 45732). In that action, EPA anticipated the part 70 revisions would be promulgated by mid-summer 1998 and thus extended all interim approvals that would have expired before October 1, 1998, up until that date. This would have provided the necessary time for agencies to apply to combine their program revisions and EPA to take action on those requests.

In early 1998 it appeared that the delay in resolution of issues would prevent promulgation of the part 70 revisions until around December 1999. Accordingly, on July 27, 1998 (63 FR 40054), EPA published a direct final rulemaking extending interim approvals until June 1, 2000.

The EPA has resolved the issues associated with the upcoming part 70 revisions; however the Agency finds that several aspects of the program it intends to promulgate are not natural outgrowths of previous proposals. A proposal notice is now being prepared to cover those program aspects and is anticipated to be published in the Federal Register in the Spring of 2000. Promulgation of the entire package of part 70 revisions is now anticipated for late 2001.

The EPA believes that the action to extend interim approvals in this rulemaking is necessary because of further delays in promulgation of the part 70 revisions. Due to these delays, all interim approvals will expire before part 70 is revised, thus denying these agencies the opportunity to combine program revisions. The EPA is aware that many States have been expecting to be able to combine the program revision correcting their interim approval deficiencies with the program revision to address the revised part 70. The Agency estimates that it may take until June 1, 2002, to receive all State requests for combining program revisions and to take the necessary rulemaking action to grant the final extension to those interim approvals. This action, therefore, moves all interim approval expiration dates up to June 1, 2002.

The docket for this regulatory action is A-93-50. The docket is an organized and complete file of all the information submitted to, or otherwise considered by, EPA in the development of this rulemaking. The principal purposes of the docket are: (1) To allow interested parties a means to identify and locate documents so that the parties can effectively participate in the rulemaking process and (2) to serve as the record in case of judicial review (except for interagency review materials). The docket is available for public inspection at EPA's Air Docket, which is listed under the ADDRESSES section of this notice.

Under E.O. 12866 (58 FR 51735, October 4, 1993), the Agency must determine whether each regulatory action is “significant,” and therefore subject to the Office of Management and Budget (OMB) review and the requirements of the Order. The Order defines “significant” regulatory action as one that is likely to lead to a rule that may:

1. Have an annual effect on the economy of $100 million or more, adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

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

3. Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligation of recipients thereof.

4. Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in E.O. 12866.

Pursuant to the terms of E.O. 12866, it has been determined that this action is not a “significant” regulatory action because it does not substantially change the existing part 70 requirements for States or sources; requirements which have already undergone OMB review. Rather than impose any new requirements, this action only extends an existing mechanism. As such, this action is exempted from OMB review.

Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Administrator certifies that this action will not have a significant economic impact on a substantial number of small entities. In developing the original part 70 regulations, the Agency determined that they would not have a significant economic impact on a substantial number of small entities. Similarly, the same conclusion was reached in an initial regulatory flexibility analysis performed in support of the proposed part 70 revisions (a subset of which constitutes the action in this rulemaking). This action does not substantially alter the part 70 regulations as they pertain to small entities and accordingly will not have a significant economic impact on a substantial number of small entities.

The OMB has approved the information collection requirements contained in part 70 under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0243. The Information Collection Request (ICR) prepared for part 70 is not affected by the action in this rulemaking notice because the part 70 ICR determined burden on a nationwide basis, assuming all part 70 sources were included without regard to the approval status of individual programs. The action in this rulemaking notice, which simply provides for an extension of the interim approval of certain programs, does not alter the assumptions of the approved part 70 ICR used in determining the burden estimate. Furthermore, this action does not impose any additional requirements which would add to the information collection requirements for sources or permitting authorities.

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

The EPA has determined that the action in this rulemaking does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector, in any one year. Although the part 70 regulations governing State operating permit programs impose significant Federal mandates, this action does not amend the part 70 regulations in a way that significantly alters the expenditures resulting from these mandates. Therefore, the Agency concludes that it is not required by section 202 of the UMRA of 1995 to provide a written statement to accompany this regulatory action.

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. The 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 . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1977), applies to any rule that EPA determines

(1) is “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This final rule is not subject to E.O. 13045 because it is not an economically significant regulatory action as defined by Executive Order 12866, and it does not address an environmental health or safety risk that would have a disproportionate effect on children.

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

If EPA complies by consulting, Executive Order 13132 requires EPA to provide to OMB, in a separately identified section of the preamble to the rule, a federalism summary impact statement (FSIS). The FSIS must include a description of the extent of EPA's prior consultation with State and local officials, a summary of the nature of their concerns and the agency's position supporting the need to issue the regulation, and a statement of the extent to which the concerns of State and local officials have been met. Also, when EPA transmits a draft final rule with federalism implications to OMB for review pursuant to Executive Order 12866, EPA must include a certification from the agency's Federalism Official stating that EPA has met the requirements of Executive Order 13132 in a meaningful and timely manner.

This rule change will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This rule change will not create new requirements but will only extend an existing mechanism to allow permitting authorities to more efficiently revise their operating permits programs. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 13084 requires EPA to provide to OMB, in a separately identified section of the preamble to the rule, a description of the extent of EPA's prior consultation with representatives of affected tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected officials and other representatives of Indian tribal governments “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.”

This rule does not significantly or uniquely affect the communities of Indian tribal governments because it applies only to State and local permitting programs. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.

Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA), Public Law 104-113, Section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by one or more voluntary consensus standard bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This rule does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

On October 9, 1991, the Environmental Protection Agency (EPA) promulgated the “Solid Waste Disposal Facility Criteria: Final Rule” (56 FR 50978, Oct. 9, 1991). That rule established part 258 of Title 40 of the Code of Federal Regulations (CFR) (40 CFR part 258). The criteria set out in 40 CFR part 258 include location restrictions and standards for design, operation, groundwater monitoring, corrective action, financial assurance and closure and post-closure care for municipal solid waste landfills (MSWLFs). The 40 CFR part 258 criteria establish minimum Federal standards that take into account the practical capability of owners and operators of MSWLFs while ensuring that these facilities are designed and managed in a manner that is protective of human health and the environment.

Section 4005(c)(1)(B) of subtitle D of the Resource Conservation and Recovery Act (RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984, requires States to develop and implement permit programs to ensure that MSWLFs will comply with the 40 CFR part 258 criteria. RCRA section 4005(c)(1)(C) requires EPA to determine whether the permit programs that States develop and implement for these facilities are adequate.

To fulfill this requirement to determine whether State permit programs that implement the 40 CFR part 258 criteria are adequate, EPA promulgated the State Implementation Rule (SIR) (63 FR 57025, Oct. 23, 1998). The SIR, which established part 239 of Title 40 of the CFR (40 CFR part 239), has the following four purposes: (1) It spells out the requirements that State programs must satisfy to be determined adequate; (2) it confirms the process for EPA approval or partial approval of State permit programs for MSWLFs; (3) it provides the procedures for withdrawal of such approvals; and (4) it establishes a flexible framework for modifications of approved programs.

Only those owners and operators located in States with approved permit programs for MSWLFs can use the site-specific flexibility provided by 40 CFR part 258, to the extent the State permit program allows such flexibility. Every standard in the 40 CFR part 258 criteria is designed to be implemented by the owner or operator with or without oversight or participation by EPA or the State regulatory agency. States with approved programs may choose to require facilities to comply with the 40 CFR part 258 criteria exactly, or they may choose to allow owners and operators to use site-specific alternative approaches to meet the Federal criteria. The flexibility that an owner or operator may be allowed under an approved State program can provide a significant reduction in the burden associated with complying with the 40 CFR part 258 criteria. Regardless of the approval status of a State and the permit status of any facility, the 40 CFR part 258 criteria shall apply to all permitted and unpermitted MSWLFs.

To receive a determination of adequacy for a MSWLF permit program under the SIR, a State must have enforceable standards for new and existing MSWLFs. These State standards must be technically comparable to the 40 CFR part 258 criteria. In addition, the State must have the authority to issue a permit or other notice of prior approval and conditions to all new and existing MSWLFs in its jurisdiction. The State also must provide for public participation in permit issuance and enforcement, as required in RCRA section 7004(b). Finally, the State must demonstrate that it has sufficient compliance monitoring and enforcement authorities to take specific action against any owner or operator that fails to comply with an approved permit program. EPA expects States to meet all of these requirements for all elements of a permit program before it gives full approval to a State's program.

On March 18, 1994, Rhode Island submitted a complete application for a determination of adequacy of its MSWLF permit program to EPA. EPA reviewed the application and requested additional information about program implementation. Rhode Island provided this information. As a result of the review process, Rhode Island identified certain deficiencies in its MSWLF permit program regulations, and it proposed revisions to make the program consistent with the Federal minimum criteria under 40 CFR part 258. On March 23, 1995, EPA provided Rhode Island with its comments regarding the application and acknowledged that Rhode Island had proposed to revise the MSWLF permit program regulations. Rhode Island provided EPA with these proposed revisions, subject to public comment, on August 28, 1995. On September 25, 1995, EPA informed Rhode Island that it had: (1) Completed its review of the proposed revisions: and (2) determined that upon their adoption as written, EPA would publish a tentative full determination of adequacy for the State's MSWLF permit program in the Federal Register . Before publication of this notice, however, Rhode Island further amended its MSWLF permit program regulations. It made these amendments in order to satisfy certain State law requirements and conform the regulations to certain Rhode Island Department of Environmental Management (RIDEM) recycling requirements, and because of a RIDEM reorganization. The revised MSWLF permit program regulations became effective on January 30, 1997. EPA reviewed these regulations and requested additional information about program implementation, which Rhode Island provided.

Based on its review, EPA tentatively determined that all portions of Rhode Island's MSWLF permit program meet all the requirements necessary to qualify for full program approval and ensure compliance with the 40 CFR part 258 criteria. EPA published the tentative determination as a proposed rule in the Federal Register on October 5, 1999 (64 FR 53976).

By finding that Rhode Island's MSWLF permit program is adequate, EPA does not intend to affect the rights of Federally recognized Indian Tribes in Rhode Island, nor does it intend to limit the existing rights of the State of Rhode Island. In addition, nothing in this action should be construed as making any determinations or expressing any position with regard to Rhode Island's audit law (R.I. Gen. Laws sections 42-17.8-1 to 8-8). The action taken here does not express or imply any viewpoint on the question of whether there are legal deficiencies in this or any other Federally authorized, delegated, or approved program resulting from the effect of Rhode Island's audit law.

RCRA section 4005(a) provides that citizens may use the citizen suit provisions of RCRA section 7002 to enforce the 40 CFR part 258 criteria independent of any State enforcement program. EPA expects that any owner or operator complying with provisions in a State program approved by EPA should be considered to be in compliance with the 40 CFR part 258 criteria.

During the public comment period on EPA's tentative determination of adequacy for Rhode Island's MSWLF permit program, EPA received nine letters and no requests for a public hearing. All nine of the letters involved concerns about the Central Landfill in Johnston, Rhode Island. EPA is aware of these concerns and is participating on a committee with RIDEM, citizens, state legislators, state representatives, town counselors, the mayor of Johnston, and the landfill operator to address these issues. EPA is satisfied that progress is underway to address these issues. None of the commentors questioned the adequacy of Rhode Island's MSWLF permit program in regard to meeting all of the statutory and regulatory requirements established by RCRA.

After evaluating Rhode Island's MSWLF permit program, EPA, Region I concludes that the program meets all of the statutory and regulatory requirements established by RCRA. Accordingly, the State of Rhode Island is granted a determination of adequacy of all portions of its MSWLF permit program.

Under Executive Order 12866 (58 FR 51735, Oct. 4, 1993), EPA must determine whether any proposed or final regulatory action is “significant” and therefore subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order. The order defines “significant regulatory action” as one that is likely to result in a rule that may:

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

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

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

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

OMB has exempted today's action from Executive Order 12866 review.

Under Executive Order 12875, EPA may not issue a regulation that is not required by statute and that creates a mandate upon a State, local or tribal government, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by those governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 12875 requires EPA to provide to OMB a description of the extent of EPA's prior consultation with representatives of affected State, local and tribal governments, the nature of their concerns, any written communications from the governments, and a statement supporting the need to issue the regulation. In addition, Executive Order 12875 requires EPA to develop an effective process permitting elected officials and other representatives of State, local and tribal governments “to provide meaningful and timely input in the development of regulatory proposals containing significant unfunded mandates.”

Today's action implements requirements specifically set forth by the Congress in sections 4005 (c)(1)(B) and (c)(1)(C) of subtitle D of RCRA, as amended, without the exercise of any discretion by EPA. Accordingly, the requirements of section 1(a) of Executive Order 12875 do not apply to today's action.

Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, Apr. 23, 1997) applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866: and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, EPA must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by EPA. EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. Today's action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 12875 requires EPA to provide to OMB, in a separately identified section of the preamble to today's action, a description of the extent of EPA's prior consultation with representatives of affected tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected and other representatives of Indian tribal governments “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.”

Today's action implements requirements specifically set forth by Congress in sections 4005 (c)(1)(B) and (c)(1)(C) of subtitle D of RCRA, as amended, without the exercise of any discretion by EPA. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to today's action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” are defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

Under section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This final rule does not have federalism implications. It will not have a substantial direct effect on 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, because this rule affects only one State. This action simply determines that the State of Rhode Island's MSWLF permit program is adequate. Thus, the requirements of section 6 of the Executive Order do not apply.

EPA has determined that this determination of adequacy will not have a significant adverse economic impact on a substantial number of small entities. The MSWLF revised criteria in 40 CFR part 258 provide directors of States with approved programs the authority to exercise discretion and to modify various Federal requirements. Directors of approved States may modify certain of these Federal requirements to make them more flexible on either a site-specific or State-wide basis. In many cases, exercise of this flexibility results in a decrease in burden or economic impact upon owners or operators of MSWLFs. Thus, with EPA's determination that the Rhode Island MSWLF permitting program is adequate, the burden on MSWLF owners and operators in that State that are also small entities should be reduced. Moreover, because small entities that own or operate MSWLFs are already subject to the requirements in 40 CFR part 258 (although some small entities may already be exempted from certain of these requirements, such as the groundwater monitoring and design provisions (40 CFR 258.1(f)(1)), today's action does not impose any additional burdens on them.

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 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 . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

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

Today's action contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local or tribal governments or the private sector. It implements mandates specifically and explicitly set forth by the Congress in sections 4005(c)(1)(B) and (c)(1)(C) of subtitle D of RCRA, as amended, without the exercise of any policy discretion by EPA. In any event, EPA does not believe that this determination of the State program's adequacy will result in estimated costs of $100 million or more to State, local, and tribal governments in the aggregate, or to the private sector, in any one year. This is due to the additional flexibility that the State can generally exercise (which will reduce, not increase, compliance costs). Moreover, this determination will not significantly or uniquely affect small governments including Tribal small governments. As to the applicant, the State has received notice of the requirements of an approved program, has had meaningful and timely input into the development of the program requirements, and is fully informed as to compliance with the approved program. Thus, any applicable requirements of section 203 of the Act have been satisfied.

EPA is committed to addressing environmental justice concerns and is assuming a leadership role in environmental justice initiatives to enhance environmental quality for all residents of the United States. The Agency's goals are to ensure that no segment of the population, regardless of race, color, national origin, or income bears disproportionately high and adverse human health and environmental effects as a result of EPA's policies, programs, and activities, and all people live in clean and sustainable communities. EPA does not believe that today's final rule will have a disproportionately high and adverse environmental or economic impact on any minority or low-income group, or on any other type of affected community.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This proposed rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

In 1990, amendments to Federal hazardous materials transportation law, now codified at 49 U.S.C. 5101 et seq. (the law), required the Secretary of Transportation to establish a registration program for persons who transport or offer for transportation in commerce certain types and quantities of hazardous materials. The Secretary delegated this authority to RSPA's Administrator (49 CFR 1.53(b)(1)). The registration program enables RSPA to gather information about the transportation of hazardous materials and to fund a grants program to support hazardous materials emergency response planning and training activities by State and local governments.

Section 5108 of the law requires each person who transports or causes to be transported in commerce one or more of the following categories of hazardous materials to file a registration statement with RSPA and pay an annual registration fee:

(1) A highway-route controlled quantity of Class 7 (radioactive) materials;

(2) More than 25 kilograms (55 pounds) of a Division 1.1, 1.2, or 1.3 (explosive) material in a motor vehicle, rail car, or freight container;

(3) A package containing more than one liter (1.06 quarts) of a hazardous material the Secretary designates as extremely toxic by inhalation, which has been identified as a material meeting the criteria for a Zone A material that is toxic by inhalation;

(4) A hazardous material in a bulk packaging, container, or tank with a capacity equal to or greater than 13,248 liters (3,500 gallons) for liquids or gases or more than 13.24 cubic meters (468 cubic feet) for solids; or

(5) A shipment in other than a bulk packaging of 2,268 kilograms (5,000 pounds) or more gross weight of a class of hazardous materials for which placarding of a vehicle, rail car, or freight container is required.

Section 5108(a)(2) of the law permits RSPA to extend registration requirements to persons who:

In establishing the registration and fee assessment program in 1992, RSPA chose to require registration only by those persons under a statutory obligation to do so. All registrants currently pay the same registration fee regardless of their size, their income, or the extent to which they engage in hazardous materials transportation activities. RSPA imposed the minimum $250 fee on all registrants, plus an additional fee, currently set at $50, to pay for the costs of processing the registration statements, as authorized by 49 U.S.C. 5108(g). (See final rule 57 FR 30630 (July 9, 1992) and current regulations at 49 CFR part 107, subpart G.) The current regulations, in § 107.608(a), require an annual submission of a registration statement.

To ensure that all persons required to register know of and comply with the requirements of the registration program, RSPA has conducted extensive outreach efforts. Approximately 780,000 informational brochures have been distributed through direct mailing campaigns and during presentations to industry. RSPA has annually mailed registration brochures and forms to hazardous materials shippers and carriers newly entered into the Federal Highway Administration's (FHWA) Motor Carrier and Highway Safety census of highway carriers and shippers, and to newly identified shippers and carriers named on the hazardous materials incident reports, (DOT Form F 5800.1). In addition, the registration program has been publicized in trade magazines and industry newsletters, and seven notices of the registration requirements have been published in the Federal Register . The registration instructional brochure and form are also available on RSPA's Hazardous Materials Safety internet website: (http://hazmat.dot.gov).

Responsibility for enforcement of the registration requirement is shared by RSPA, the DOT operating administrations, and state and local agencies that have assumed this role as part of a cooperative Federal/state partnership. Inspections conducted by RSPA, FHWA, and the Federal Railroad Administration routinely have included a check for registration. We believe that the rate of compliance with the registration requirements is relatively high. Persons knowing of a violation of the registration requirements should notify an Office of Hazardous Materials Enforcement regional office, a DOT operating administration office, or state or local enforcement authority of the violation.

The HMEP grants program, as mandated by 49 U.S.C. 5116, provides Federal financial and technical assistance, national direction, and guidance to enhance State, local, and tribal hazardous materials emergency planning and training. The HMEP grants program builds on existing programs and supports the working relationships within the National Response System and the Emergency Planning and Community Right-To-Know Act of 1986 (Title III), 42 U.S.C. 11001 et seq. The grants are used to develop, improve, and implement emergency plans, to train public sector hazardous materials emergency response employees to respond to accidents and incidents involving hazardous materials, to determine flow patterns of hazardous materials within a State and between States, and to determine the need within a State for regional hazardous materials emergency response teams.

The HMEP grants program encourages the growth of hazardous materials planning and training programs of State, local, and tribal governments. To ensure this growth, §§ 5116(a)(2)(A) and 5116(b)(2)(A) of the law require a State or Native American tribe applying for a grant to certify that the amount it spends on hazardous materials planning and training, not counting Federal funds, will at least equal the average amount spent for these purposes during the last two fiscal years. The HMEP grants, therefore, represent additional funds that supplement the amount already being provided by the State or tribe. To further encourage growth in planning and training funds, § 5116(e) limits the Federal share to 80 percent of the costs of the additional activity for which the grants are made, thus requiring the State or tribe to provide 20 percent of these additional costs. By accepting an HMEP grant, the State or tribe commits itself not only to maintaining its previous level of support, but increasing that level by an amount representing 20 percent of the funds newly expended on grant-supported activities each year. For example, an HMEP grant of $100,000 requires an additional commitment of $25,000 in State or tribal funds over the average amount spent by the agency during the previous two years. These additional State or tribal funds may be provided in the form of direct fiscal support or through the provision of in-kind resources.

Since 1993, all States and territories and 35 Native American tribes have been awarded planning and training grants totaling $47.1 million. These grants, which supplement funds from States, tribes, and local agencies, helped to:

In addition, over the past six years, HMEP grants program funds have been used to support the following related activities in the total amounts indicated:

In each of the eight registration years since 1992, RSPA has received approximately 27,000 registration statements and an average of $6.8 million to support the HMEP grants program. This has provided an average of $6.4 million annually for planning and training grants, only 50% of the $12.8 million authorized by law for these purposes ($5 million for planning and $7.8 million for training). As discussed in RSPA's April 15, 1999, notice of proposed rulemaking (NPRM) (64 FR 18786), the HMEP grants program has accomplished much in a short time, but many needs are not being met. The HMEP training grants are essential for providing adequate training of persons throughout the nation who are responsible for responding to emergencies involving the release of hazardous materials, both through direct Federal financial assistance for such training and by encouraging the provision of additional state and local funds for this purpose.

In a recent review, RSPA estimated that 800,000 shipments of hazardous materials make their way through the national transportation system each day. These shipments range in size and type from single small parcels of consumer commodities, such as flammable adhesives and corrosive paint strippers, to bulk shipments of gasoline in cargo tank motor vehicles and flammable or toxic gases in railroad tank cars. Such shipments are transported in every State, every day of the year, and it is impossible to predict with any degree of certainty when and where an incident may occur. The potential threat requires the development of emergency plans and training of emergency responders on the broadest possible scale. Yet, RSPA also believes there are over 2 million emergency responders requiring initial training or periodic recertification training, including 250,000 paid firefighters, 800,000 volunteer firefighters, 725,000 law enforcement officers, and 500,000 emergency medical services (EMS) providers.

The continuing need for training for emergency response personnel, whether paid or volunteer, is partially the result of a relatively high rate of turnover caused by the extraordinary demands expected of response providers in terms of time, physical exertion, and emotional stress. Emergency response personnel must be available at any time and at a moment's notice to respond to situations that by their very nature are unpredictable and pose a threat not only to the public in general but to the responder in particular. This turnover means that each year there is a significant number of recently recruited responders who must be trained at the most basic level. In addition, training at more advanced levels is not simply desirable; it is essential if emergency response personnel capable of effectively and safely responding to serious releases of hazardous materials are to be provided. For this reason, RSPA advocates advanced training at the first responder operations, hazardous materials technician, hazardous materials specialist, and on-scene commander levels in every emergency response team in the country. An increase in the funds available to the HMEP Grants Program will encourage the State, tribal, and local agencies to provide this more advanced, and more expensive, training.

The unmet needs of States and Native American tribes for financial assistance in emergency preparedness planning and training for transportation-related incidents involving hazardous materials are great. RSPA is determined to narrow the current gap between the authorized grant levels and the available Federal funds by its careful targeting of the additional funds collected as a result of this rulemaking. RSPA believes that it is essential to increase the awards for emergency planning and training grants to the full $12.8 million authorized by the law and, at the same time, maintain current funding of the additional activities supported by the HMEP Grants Program described above.

In FY 2000, RSPA intends to provide from registration fees $14.3 million for:

To achieve its goal of funding the HMEP grants program activities at $14.3 million, RSPA published an NPRM on April 15, 1999 (64 FR 18786), in which it proposed to expand the definition of those persons required to register and to impose a fee schedule based on the size of a business. RSPA conducted public meetings on May 25, 1999, in Washington, DC, and on June 22, 1999, in Des Moines, Iowa. The closing date for the comment period was extended until July 2, 1999. (64 FR 28135)

In the NPRM, RSPA proposed to require registration by any person, other than a “farmer,” who offers for transport or transports a shipment of hazardous materials that requires placarding. RSPA proposed a two-tiered fee schedule ($300 and $2,000), with the lower fee to be imposed on a registrant that meets the Small Business Administration (SBA) criteria for a small business. The proposed exception for a “farmer,” as defined in § 171.8 of the Hazardous Materials Regulations (HMR), is limited to operations in direct support of the farmer's farming operations. RSPA also proposed reducing the processing fee from $50 to $25 in order to bring the aggregate amount collected closer to the amounts needed to process the registration statement and to issue the Certificate of Registration. Finally, RSPA proposed to permit registration for one, two, or three years on a single registration statement.

RSPA received approximately 400 written comments, and 31 persons made oral presentations at the two public meetings. The commenters included representatives of emergency response organizations and LEPCs; individuals engaged in all modes of transportation, agricultural retailing, petroleum distribution, farming, and convenience store operations; and industry associations representing a broad spectrum of businesses that transport or offer for transport hazardous materials.

Many commenters supported the intent of the proposal to fully fund the HMEP grants program. Grant recipients expressed strong support for the proposed changes. The National Association of SARA Title III Program Officials (NASTTPO) expressed strong support for fully funding the HMEP grants program through increased registration fees and stated the need for increased funding at all levels, especially in emergency planning and curriculum development. NASTTPO stated:

The Connecticut State Emergency Response Commission stated, “We support the proposed rule which would raise additional funds for the National Hazardous Materials Emergency Preparedness (HMEP) Grants Program. Funding from this grant program is extremely important to Connecticut's hazardous materials emergency planning and responder training efforts.”

Emergency responders also strongly supported the proposal. The International Association of Fire Fighters (IAFF) stated:

Mr. Bradley D. Robinson, Captain in Charge of Hazmat Operations for the Sioux City Fire Department's Regional HazMat Team and current President of the Iowa Hazardous Materials Task Force, offered strong support for the proposed expansion of the base of registrants and increase in the registration fee. He stated that the:

Mr. John Gardner, Fire Marshal of the Chandler, Arizona, Fire Department and a Maricopa County LEPC member, fully supported the proposed expansion of the base of registrants and increased registration fees. He stated, “Increased funding needs to be provided for increased curriculum development that will ensure the innovation of programs is consistent with the rapidly changing technological and electronic advancements [that] are being made.”

Several industry organizations and associations also expressed their support for fully funding the HMEP grants program. The Hazardous Materials Advisory Council (HMAC) stated, “We recognize that the current system does not generate the amount of funding that was anticipated when the program was established. Moreover, we support the goal of funding the HMEP Grants Program to the $12.8 million level.”

In 1995, an Industry Working Group (IWG) facilitated by HMAC provided recommendations on how the registration and fee collection requirements could be improved under Docket HM-208B. Among the IWG's recommendations was the expansion of the registration rule to apply to all shipments for which display of hazard warning placards is required. This IWG recommendation was joined by many industry associations and other persons who provided additional comments to the 1995 proposal. In the April 15, 1999, NPRM, RSPA proposed to expand the base of registrants to include any person who offers for transportation or transports a shipment of hazardous materials for which a hazard warning placard must be displayed on a bulk packaging, freight container, unit load device, transport vehicle or rail car. This proposal attracted both strong support and opposition in the public comments.

Commenters who support the current proposal to expand the base of registrants note that the proposal would simplify compliance and enforcement. For example, HMAC commented that, “extension of the requirement to register to such parties [that offer or transport any shipment that requires placarding] would greatly simplify the requirement to register; additionally, the requirement to placard is a generally accepted measure of the degree of hazard presented by any specific load.”

The Chemical Manufacturers Association (CMA) also supports RSPA's proposed expansion of the base of registrants to include shippers and carriers of all placarded loads, with the exception of farmers (as defined in 49 CFR 171.8). CMA stated, “Ease of compliance and simplicity of enforcement are critical components of a successful registration program and CMA believes the placarding requirement will satisfy these conditions.”

The Association of Waste Hazardous Materials Transporters (AWHMT) and the National Tank Truck Carriers (NTTC) support expansion of the base of registrants to include all placarded loads, but oppose the exception proposed for farmers.

A significant number of commenters oppose expansion of the base of registrants to all placarded loads. In particular, petroleum marketers and agricultural retailers and their associations assert that expanding the base to include all placarded loads and increasing the registration fee would place undue burdens on their industries. Over 250 commenters from the petroleum distribution industry, such as the Petroleum Marketers Association of America (PMAA) and its member companies, expressed opposition to the proposed expansion of the base of registrants and the two-tiered fee structure. Many of these commenters stated that it is not “fair” to “tax” them to fund the HMEP grants program because they already pay local taxes to fund local firefighters. These commenters stated that they already provide adequate training to their customers and local emergency responders.

The Petroleum Marketers and Convenience Store Association of Kansas also opposes expansion of the base of registrants and any fee increase. It stated that the proposed fee is excessive and favors the “nation's largest corporations at the expense of small businesses.” It stated, “to include small cargo tank operators into a program that should clearly be predicated on interstate commerce, and to require a small convenience store owner to pay the same fees assessed huge corporations is inequitable, at minimum.” Finally, it stated, “if DOT feels it must increase Hazmat funding by requiring that anyone hauling a placarded material be included in the program, then the agency should take steps to ensure that all classes of Hazmat transporters are subject to the provisions of the program and consequently required to pay the annual registration fee.”

The Independent Lubricant Manufacturers Association (ILMA) stated, “this proposed expansion would create paperwork and administrative burdens on independent lubricant manufacturers far out of proportion to the potential benefits of the proposal, particularly in instances where a company might have only a handful of placarded shipments during the course of the year.” ILMA stated that RSPA could meet its objectives by retaining the current structure of persons required to register and “a very modest across-the-board fee increase, would suffice to fully fund the HMEP grants program.” Finally, ILMA did not support the exemption provided to farmers.

The Fertilizer Institute (TFI) also opposes expansion of the registrant base to include placarded loads. TFI stated, “RSPA fails to demonstrate a need for more registrants and, in any event, including agricultural retailers and others transporting farm inputs as part of the registration program contravenes clear Congressional intent regarding the scope of the registration program.”

The Illinois Fertilizer and Chemical Association (IFCA) opposes lowering the threshold to any placarded load as an unjustified fee increase, stating, “there is no indication that seasonal shipments of smaller, placarded loads in rural communities pose a substantial hazmat risk to responders.” IFCA further stated, “Most [agricultural] retailers also offer or transport placarded loads of pesticides; therefore, exempting only anhydrous ammonia nurse tanks from the registration program would provide no relief whatsoever for 99% of the ag retailers in Illinois.” RSPA did not propose to except anhydrous ammonia nurse tanks except when operated by farmers in direct support of their farming operations.

Other parties favor even greater extension of the registration requirement. The Iowa Department of Transportation (IDOT) suggested requiring registration by anyone who offers to transport or transports a shipment that is required to be marked and/or placarded, including marine pollutants, class 9 materials and cryogenics, with the exception of farmers. IDOT contends that requiring these persons to register would produce sufficient revenues without implementing two fee levels. IDOT stated, “By lowering the registration threshold quantity, more offerors and carriers would be required to register. Keep it simple, if you offer or transport HM in quantities that require placarding, or the marine pollutant mark, or the display of identification numbers on placards, white square on point configurations or orange panels you must register.” Phillips Petroleum Company (Phillips) also proposed expansion of the registration base to include marine pollutants and bulk shipments requiring the hazardous material identification number marking.

Based on its review of comments received in response to the NPRM, and the public meetings, RSPA is adopting the proposal to expand the base of registrants to each person who offers for transport or transports a shipment of hazardous materials for which placarding of a bulk packaging, freight container, unit load device, transport vehicle, or rail car is required. Expansion of the base of persons required to register by including all persons offering or transporting placarded loads recognizes the greater risks posed to health and safety or property by the transportation of hazardous materials in quantities that require placarding. Thus, shippers and carriers involved in the shipment of a placarded load of hazardous materials will bear a fair share of the financial burden that falls on State and local government agencies to develop emergency plans and to train first-on-the-scene responders. Also, by requiring all offerors and transporters of placarded shipments of hazardous materials to register, RSPA will create the most current list of persons engaged in the transportation of appreciable shipments of hazardous materials, one of the primary intentions of the registration requirement.

RSPA has provided one exception to this rule for those activities of a “farmer”, as defined in § 171.8 of the HMR, that support the farmer's farming operations. However, this is not a blanket exception for all farmers from the registration rule. If a farmer offers for transportation or transports in commerce a hazardous material that is specifically identified in § 5108(a)(1) of the law, or offers for transportation or transports a placarded shipment that is not in direct support of the farmer's farming activities, that farmer must submit a registration statement and pay the required fee.

The proposals to expand the proposed definition of persons required to register to include not only all shipments requiring placarding but also those requiring marking, including marine pollutants, class 9 materials and cryogenics, would not appreciably increase the number of persons required to register. Further, such an approach would make what was intended to be a simplification of the registration requirements more complicated. RSPA has, therefore, chosen not to adopt the suggested expansion of the scope of the registration rule.

The application of generally well understood hazard communication criteria for placarding greatly simplifies the matter of whether a shipper, carrier, or other person is required to register. Simplification of the regulations similarly makes the rule much easier to enforce, thereby further assuring a high rate of compliance.

In the April 15, 1999 NPRM, RSPA proposed a two-tiered fee schedule under which a company meeting the small business criterion for its category established by the SBA at 13 CFR 121.201 would pay a smaller registration fee than a company that does not meet the SBA criterion. The proposal specified that a small business would pay an annual registration fee of $300, while a larger business would pay $2,000.

Many commenters oppose the two-tiered fee structure, advocating an increased registration fee for all registrants instead. For example, the International Warehouse Logistics Association suggested, “If an increase is necessary * * * for the sake of clarity and simplification, we would urge a minimal increase in the registration fee for all registrants rather than a two-tiered plan.” Similarly, AWHMT opposes the two-tiered fee structure as flawed and difficult to enforce, suggesting as a more equitable approach a minimal incremental increase in the fee across the board, regardless of the size of the business or its hazardous materials operations. IDOT stated that a tiered fee program may be more difficult to implement than expected and stated that “Basing it on gross revenue of a company's total operation is unfair to say the least. They may have a high gross revenue, but only a small percentage is derived from Hazardous Materials activities.”

The Conference on Safe Transportation of Hazardous Articles, Inc. stated that RSPA should simply, “Determine the total amount necessary to be collected and divide it by the number of current and prospective registrants under an expanded pool. A two-tiered system would be more difficult to enforce, and presumes that smaller companies have a lesser impact on transportation safety than larger ones.”

Other commenters criticized use of the SBA criteria for small businesses. Morganite Incorporated stated the Environmental Protection Agency categorizes it as a small quantity generator of hazardous waste. While its level of revenues and number of employees is not at all related to the shipment of hazardous materials, Morganite stated that it would be unfair for it to “be assessed $2000/year for the transportation of these occasional small quantities.” The Canadian Trucking Alliance (CTA) similarly argued that basing the registration fee “on a motor carrier's total revenue as opposed to its revenue earned transporting hazardous materials does not appear to be equitable, although it is clearly administratively simple.” CTA requested that RSPA allow Canadian carriers to use only the revenue earned in the United States to determine whether those motor carriers are classified as a small business under SBA criteria.

Several large entities stated that basing registration fee amounts on the SBA criteria will require them, in essence, to financially subsidize potentially higher-risk, smaller entities. Southwest Solvents & Chemicals stated, “Generally, larger companies are capable and devote more personnel, time and money to promoting safety and developing proficiency in their operations than do smaller companies.” It further stated, “Assuming an increase is justifiable, there is nothing equitable in imposing on larger businesses a 660% increase in fees without asking small businesses to share the load.”

Phillips commented that the proposed fee increase puts an unfair burden for funding the HMEP grants program on larger businesses. Phillips stated, “As it is currently proposed, the two-tier fee structure would increase the total amount that Phillips and its subsidiaries pay to register from $1,500 to $10,000 annually. * * * Here again, the large corporations are being unfairly burdened.”

Phillips also stated that small businesses are more likely to fail to comply fully with the HMR because they do not employ full-time regulatory compliance staffs. Phillips and other large entities with multiple subsidiaries proposed that a single registration fee should cover both a parent company and its subsidiaries. Alternatively, one commenter from a large business entity suggested that no more than $20,000 should be collected from a family of companies that enjoy common equity or ownership.

Some commenters suggested a third level of registration fees for larger entities that offer relatively smaller amounts of hazardous materials, or who would be near the dividing line between small and larger businesses under SBA criteria. The Utility Solid Waste Activities Group suggested adding a mid-level third tier for entities who cannot satisfy the SBA criteria for a small business but offer or transport “low volume/low risk hazardous materials.”

A number of commenters expressed the view that RSPA should not base the amount of the registration fee on SBA criteria because that does not consider risk appropriately, and it is not one of the factors explicitly set forth in the statute. Tower Group International stated:

The International Sanitary Supply Association (ISSA), which opposes expansion of the base of registrants, stated that RSPA's two-tier fee proposal fails “to properly consider the criteria that the [law] requires it to do. As such, the imposition of a substantially higher fee without a finding that these companies present greater hazards across the board is inherently inequitable and cannot be supported by the ISSA.” ISSA stated it would support a risk-based alternative such as charging a higher fee for Table 1 placarded materials than for Table 2 placarded materials, and within each category a higher fee assessed for greater quantities.

Air Products and Chemicals Inc. stated that the lack of standardization in using SBA criteria for small and larger businesses would create confusion and difficulty in enforcement, because “companies will have difficulty understanding the Standard Industrial Code * * * to recognize whether they meet Small Business Administration criteria for a small business.” It went on to say, “We believe that the proposed two-tier fee schedule may cause misunderstanding with current and potential registrants. Also, we doubt whether the Department of Transportation has the time and resources to verify the size criteria for registrants for enforcement.”

Some commenters expressed a preference for basing registration fees on the number or size of containers or vehicles used to transport hazardous materials. The Petroleum Transportation and Storage Association stated that it “believes that the most efficient and equitable method to structure a multi-tiered fee system based on risk is to assign the fee according to the number of bulk packagings in a HAZMAT shipper's fleet.” The Illinois Fertilizer and Chemical Association urged RSPA to “Apply a graduated fee based on size of hazardous material containers,” suggesting a three-tier level of fees triggered by vehicle gross weight, number of rail cars, or a combination of both.

Farmland Industries, Inc. suggested a three-tier fee as follows:

RSPA has carefully considered the comments submitted in response to the NPRM, and has weighed them against the objectives declared in the April 15, 1999, notice. These objectives required the resulting program to: (1) Be simple, straightforward, and easily implemented and enforced; (2) Employ an equity factor that reflects the differences between the risk imposed on the public by the business activities of large and small businesses; (3) Ensure the adequacy of funding for the HMEP grants program; and (4) Be consistent with the law. While some of the recommendations made in the comments might come closer to satisfying one of these objectives, RSPA remains convinced that its proposal will most adequately address all four of them.

RSPA does not agree with the commenters opposing the two-tiered fee structure. RSPA considers the proposal to enlarge the definition of those persons required to register and simultaneously to increase the required fee for the larger registrants to be a reasonable distribution of the costs of the program among the varying types and sizes of businesses that contribute to the need for trained emergency response personnel. The expansion of the definition to include all offerors and transporters of placarded shipments of hazardous materials will most directly affect relatively small businesses that use smaller bulk containers or offer to transport or transport placarded shipments of less than 5,000 pounds in non-bulk packages. Requiring these entities to register recognizes that their activities contribute to the need for enhanced emergency response programs. The imposition of a larger fee of $2,000 on persons that do not meet the criteria for a small business, most of whom have been required to register since 1992, places a greater, but not unduly burdensome, share of these costs on companies most likely to be offering to transport or transporting large volumes of hazardous materials.

RSPA spent considerable time and effort evaluating several methods of apportioning the fee among registrants according to various approximations of the risk imposed. We considered factors such as Table 1 and Table 2 materials, the type and size of containers (including vehicles), and the number of shipments offered or transported. We concluded that trying to reasonably distinguish between distinct levels of imposed risk would require the imposition of a complicated system that would necessarily involve significant recordkeeping burdens on the regulated public. Persons interested in a more detailed analysis of such a risk-based proposal may consult Docket HM-208B, RSPA's 1995 proposal to base a four-level fee structure on risk factors.

Further, we are convinced that even the simplest of the suggested alternative fee structures would impose significant cost burdens. For example, the creation of an intermediate fee level for registrants that do not meet the criteria for a small business but engage in limited hazardous materials activities could impose a greater expense on the registrant to maintain the necessary records to prove its level of activity than the cost of the $2,000 fee. Similarly, the suggestion from the Canadian Trucking Alliance that only revenue earned in the United States be used to determine a foreign company's business size (for those businesses for which the SBA size standard is the annual revenue) would involve foreign carriers in complicated and detailed record-keeping.

In response to the commenters who supported retention of a flat fee for all persons required to register, we note that, if the base of registrants is not expanded and the current number of annual registrants is maintained, a flat fee of approximately $555 (including a processing fee of $25) would be necessary to collect $14.3 million in grant monies. If the universe of registrants is expanded to approximately 45,000 persons, a flat fee of $345 (including a $25 processing fee) would be necessary to meet that collection amount. Given Federal directives to consider the needs of small businesses in establishing fees, we cannot justify an increase in the fee required of small businesses when clear alternatives are available.

RSPA also disagrees with commenters who stated that RSPA's proposed use of the SBA criteria: (1) favors big businesses over small businesses; (2) is not one of the determinants allowed by 49 U.S.C. 5108(g)(2)(A); and (3) would be difficult for potential registrants to understand and apply to their business operations. We believe that our goals are best met by establishing a two-tiered fee schedule under which a person not meeting the criterion established for it by the SBA at 13 CFR 121.201 pays a larger fee than that required for a small business. This regulatory approach provides fee levels that reflect a key factor contained in 49 U.S.C. 5108(g)(2)(A), specifically, the relative size of a business.

In addition, this approach generally addresses the different levels of risk posed by small businesses that make fewer and smaller shipments of hazardous materials as compared to larger businesses that annually manufacture, offer, or transport thousands of tons of hazardous materials. Five of the specific factors permitted by 49 U.S.C. 5108 (g)(2)(A) as fee determinants are indicators of the level of risk imposed by the registrants, and two are indicators of the size of the business. Use of the SBA standards for differentiating small businesses offers a simple and direct factor that is commonly used and established by Federal regulation. The use of alternate size criteria would impose additional burdensome, and significant recordkeeping requirements on most registrants.

In relation to the comments suggesting that a limit be placed on the number of registrations required from corporately connected subsidiary companies, RSPA points out that the law requires registration of each “person” that engages in certain activities, and that the definition of “person” is governed by Section 1 of Title 1 of the U.S. Code. A corporation that elects the option of forming itself into more than one person for whatever reason also assumes certain legal responsibilities for each of those persons, including the requirement to register.

Many commenters believe that use of the SBA size criteria would be confusing to registrants. However, most businesses are already aware of the Standard Industrial Classification (SIC) code applicable to them or can easily determine that code from the list published by the SBA on its Internet web site at the following address: “http://www.sbaonline.sba.gov/regulations/siccodes/”. This list also contains the size standard established for each SIC code. With few exceptions, the specified standard is either annual receipts (as defined in 13 CFR 121.104) or maximum number of employees (as defined in 13 CFR 121.106). A company that considers the size determinant for its industrial code to be improper can request SBA to reconsider the standard by writing to the Assistant Administrator for Size Standards, Small Business Administration, 409 3rd Street, S.W., Washington, D.C. 20416. The SBA web site also has a link (“http://www.osha.gov/oshstats/sicser.html”) to the Occupational Safety and Health Administration Standard Industrial Classification search engine for persons needing a fuller description of the definition of the businesses included within particular SIC codes.

For these reasons and based on our review of comments received in response to the NPRM and at the public meetings, we believe that the proposed two-tiered fee schedule based on SBA criteria is the most equitable, simple, and enforceable method for determining and collecting registration fees. Therefore, RSPA is adopting, as proposed, the two-tiered fee schedule based on SBA criteria for small businesses.

With regard to use of SIC codes, RSPA notes that SBA recently issued a notice of proposed rulemaking (64 FR 57188, October 22, 1999) to amend its size regulations in 13 CFR 121.201 by establishing small business size standards for industries defined under the North American Industry Classification System (NAICS). In addition, SBA proposed that the new size standards be effective for Fiscal Year 2001, which begins October 1, 2000. SBA estimates that relatively few firms would gain or lose small business status as a result of this rule. SBA intends that, in establishing a new table of size standards, firms that are now eligible for Federal small business programs will remain eligible to the maximum extent practicable.

A review of the proposed NAICS table of size standards compared to industries identified by SIC codes in RSPA's regulatory evaluation revealed few instances in which an entity may lose its status as a small business.

The two-tiered fee schedule distributes registration fees according to a well-established measurement of business size and ensures the collection of sufficient funds to support the HMEP grants program at an enhanced level. RSPA will achieve its goal of raising $14.3 million annually (exclusive of funds collected for administrative processing), by collecting a fee of $300 (which includes a $25 processing fee) from an estimated 43,500 registrants that are small businesses and a fee of $2,000 (which includes a $25 processing fee) from an estimated 1,500 registrants that do not meet the criteria for a small business. If the number of estimated new registrants is significantly larger than RSPA's current estimate, RSPA will consider adjusting the registration fees in subsequent years to avoid collecting an annual amount in excess of the $14.3 million required for more appropriate funding of the HMEP grants program.

Some commenters, such as PMAA, Petroleum Transportation and Storage Association (PTSA), AWHMT, and several public meeting speakers, requested that RSPA further clarify and define the terms “offeror” and “shipper.” These commenters are particularly concerned about a person's name appearing on the shipping paper and containing the information required by §§ 172.202, 172.203, and 172.204. The commenters' concern involves an interpretation [57 FR 48739-41 (October 28, 1992)] by RSPA on activities which the agency considers as indicia of an entity's direct role in causing hazardous materials to be transported in commerce. These commenters include convenience store operators whose names appear on shipping papers when they order bulk quantities of gasoline for resale at their convenience stores. The referenced interpretation (No. 92-1-RSPA) was issued by RSPA's Chief Counsel in response to a request from PMAA and QTI Service Corporation. This interpretation references two previous interpretations (Nos. 88-1-RSPA and 89-1-RSPA) issued by RSPA's Chief Counsel's Office in 1988 and 1989 in response to requests from the National Tank Truck Carriers, Inc., and published in the Federal Register on February 26, 1990 (55 FR 6760-62).

PMAA stated that RSPA's instructions and DOT Form F 5800.2 for registration year 1999-2000 contain a definition of “offeror” that is in conflict with RSPA's official interpretation. RSPA's instructions state, “ If your company's name appears on the shipping papers as the shipper or as one of the shippers, you have assumed responsibility as an offeror and must therefore register.” PMAA pointed out that “Under some state tax laws, the marketer [who orders a shipment of gasoline] is named as the shipper on the shipping papers, since the state requires the marketer's name to be listed since he is the owner of the product.” PMAA requested RSPA rewrite the registration instructions to clarify that the company's name appearing on the shipping paper as the “shipper” does not automatically require registration as an “offeror.”

PTSA also requested clarification of “offeror” and recommended:

The AWHMT disagrees with PMAA and PTSA and states, “In our view, if a person's name appears on a shipping paper, the person has engaged in a commercial hazmat transaction and the person is subject to the HMR and if, for purposes of this rulemaking, the shipping paper causes to be transported hazardous materials which are placarded, the person should be” required to pay a registration fee.

RSPA disagrees with PTSA's position that only those functions normally performed by an offeror that “relate to the physical control of hazardous materials shipments” are appropriate in determining whether a person is an offeror of hazardous materials. All of the functions enumerated in Interpretation No. 92-1-RSPA continue to be valid factors for determining whether a person is a “shipper” or “offeror.” These functions, also printed in the annual registration brochures, include, but are not limited to, selection of the packaging for a regulated hazardous material, physical transfer of hazardous materials to a carrier, determining hazard class, preparing shipping papers, reviewing shipping papers to verify compliance with the HMR or their international equivalents, signing hazardous materials certifications on shipping papers, placing hazardous materials markings or placards on vehicles or packages, and providing placards to a carrier.

RSPA has carefully considered PMAA's request to clarify the advice given in the registration brochure extending the term “offeror” to persons whose name appears as the shipper or one of the shippers on the shipping paper. The 1996-97 registration brochure added a statement to the discussion of the term “offeror” that if a company's name appears on the shipping papers as the shipper or as one of the shippers, that company has assumed responsibility as an offeror and is therefore required to register. This does not contradict the 1992 interpretation and was intended to clarify the circumstances in which RSPA considers a party to a transaction to be one of the offerors. In the 1992 interpretation and the two related 1988 and 1989 interpretations (published in the Federal Register in 1990), RSPA emphasized the principle that more than one person may perform one or more of the functions of an offeror in the course of a transaction. PMAA and other commenters now allege that certain persons who do not engage in any activity of an offeror nevertheless are listed as the shipper or one of the shippers on the shipping papers in compliance with state tax or other regulatory requirements.

RSPA agrees that the act of ordering hazardous materials is not included within the meaning of “causes to be transported” and, in and of itself, does not require registration. Beginning in Registration Year 2000-2001, RSPA, as a matter of policy, will no longer consider the presence of a person's name on the shipping paper as the shipper or one of the shippers as conclusive evidence of whether that person is required to register. The registration brochure will be revised to eliminate that statement. Therefore, a person who purchases a hazardous material, has his or her name on the shipping paper as the shipper, and performs no “offeror” functions will not be required to register. However, RSPA notes that, most commonly, a person who is named as a “shipper” on a shipping paper performs one or more of the functions of an offeror and is required to register.

Some commenters expressed concern about applicability of the requirement to register to persons who return “empty” tank cars to the original shipper or to any other location. Commenters indicated that this requirement may have a significant adverse impact on a number of persons, especially petroleum marketers. According to commenters, many petroleum marketers receive a significant part of their propane supplies by tank car. Commenters argued that payment of the registration fee constitutes a significant cost of doing business and could absorb all of the savings realized by transporting a large volume of propane by tank car.

RSPA has long held that performance of functions necessary to assure the safe return of a tank car or cargo tank motor vehicle containing residue is subject to the HMR and clearly within the meaning of “offering” a hazardous material for transportation in commerce. When a propane tank car is unloaded (but not cleaned and purged), the petroleum marketer meets RSPA's criteria for an “offeror” when it returns the “empty” tank car to a railroad for return to the original shipper or another party. It is not uncommon for an “empty” tank car to retain several hundred gallons of product, which in the case of propane is likely to be extremely volatile. RSPA considers this issue to be settled and no comment submitted to the docket concerning this matter causes the agency to reconsider its position.

The American Trucking Associations (ATA) asked RSPA to remove the requirement for a motor carrier to carry a copy of its current Certificate of Registration issued by RSPA or another document bearing the registration number identified as the “U.S. DOT Hazmat Reg. No.” on board each truck and truck tractor as specified in § 107.620 (b). ATA stated:

Roadside enforcement is a key element of enforcement of the registration rule. Keeping records only at the motor carriers's place of business instead of in the motor vehicle where they are readily accessible for inspection would adversely impact enforcement efforts by Federal motor carrier inspectors and their partners in the States. A single day of roadside inspections enables inspectors to efficiently verify the registration status of a large number of carriers. Therefore, RSPA is not changing the requirement that a copy of the Certificate of Registration or another document bearing the registration number identified as the “US DOT Hazmat Reg. No.” be on board each truck and truck tractor.

PMAA asserts that the registration fee is a “tax” and constitutionally deficient. It claims that the registration fee is unconstitutional because the “originations” clause in Article I § 7 of the Constitution provides that “[a]ll bills for raising revenue shall originate in the House of Representatives.” According to PMAA, the 1990 amendments (as enacted in the Hazardous Materials Transportation Uniform Safety Act of 1990 (HMTUSA), Pub. L. 101-615) “originated as a bill in the Senate.” Next, PMAA claims that, because Article I § 8 of the Constitution provides that “Congress shall have power to lay and collect taxes,” the authority to set and collect a registration fee has been improperly delegated to DOT. Third, PMAA contends that the registration fee violates the “equal protection component of the Fifth Amendment due process” because it is not “rationally related to a legitimate government objective” and it “unfairly discriminates against small transporters.”

The Supreme Court has made it clear that the “originations” clause in Article I § 7 applies only to “a statute that raises revenue to support Government generally.” United States v. Munoz-Flores, 495 U.S. 385, 398 (1990). The Court cited its prior decision that “revenue bills are those that levy taxes in the strict sense of the word, and are not bills for other purposes which may incidentally create revenue,” so that “a statute that creates a particular governmental program and that raises revenue to support that program” is not a “bill for raising revenue” within the meaning of the originations clause. 495 U.S. at 397, 398. HMTUSA created a specific governmental program, the HMEP grants program, and devised the registration fee to support that specific program. Under the Supreme Court's long-standing interpretation, the registration fee is not subject to the originations clause, and it is unnecessary to undertake the sometimes difficult task of determining the body of Congress in which a particular statutory provision originated. Moreover, cases such as United States v. Sperry Corp., 493 U.S. 52, 66 (1989), and United States v. Munoz-Flores, 863 F.2d 654, 660-61 (9th Cir. 1988), rev'd on other grounds, 495 U.S. 385 (1990), discredit PMAA's theory that the number of the bill enacted into law determines the house in which the specific provision in the bill originated. In these cases, the court analyzed where the specific fee provision actually originated. According to AWHMT, the registration fee was first proposed in a House bill, which the Senate then substituted “for the Senate bill and returned the bill to the House with a Senate number.”

The Supreme Court has also clarified that a single, straightforward principle governs Congress's power to delegate to an administrative agency the authority to set a fee, regardless of whether the “fee” is found to be “a form of taxation because some of the administrative costs paid by the regulated parties inure to the benefit of the public rather than directly to the benefit of those parties.” Skinner v. Mid-America Pipeline Co., 490 U.S. 212, 223 (1989). Under that principle, delegation is permitted “so long as Congress provides an administrative agency with standards guiding its actions such that a court could ascertain whether the will of Congress has been obeyed.” 490 U.S. at 218 (internal quotation marks omitted). Section 5108 contains clear standards, which RSPA has followed in developing this rule, with respect to both the amount of the registration fee and the persons that may be required to register and pay the fee. RSPA notes that § 5108(g)(2) provides that the Secretary may set the amount of the registration fee based on the amount needed to carry out the HMEP grants program. That is exactly the basis on which RSPA has determined the total amount to be raised in registration fees. With the total amount set in this fashion, and the permissible $250-$5,000 range of the registration fee specified, there are sufficient standards in the law against which to measure RSPA's actions.

As explained in the NPRM, RSPA also believes that the registration fee should be “fair” in terms of having “an equity factor that reflects the differences between the risk imposed on the public by the business activities of large and small businesses,” and also being “simple, straightforward, and easily implemented and enforced.” 64 FR at 18790. RSPA does not read § 5108(g)(2) as requiring a single fee for all registrants nor, however, does it believe that it must provide perfect equity among all persons that are required to register. The Supreme Court has commented that the due process and equal protection clauses do not guarantee perfection in treatment, but rather protect against governmental actions “that are downright irrational.” Hudson v. United States, _U.S._,118 S.Ct. 488, 495 (1997). The use of registration fees to fund training and planning for emergency response to a hazardous material incident in transportation is clearly a rational governmental action. Congress perceived a nationwide need and fashioned a nationwide program to address that need. The fact that all businesses, including both small and “large, national transporters,” pay local taxes that may (or may not) be used by their local communities to train and plan for emergency response to transportation incidents involving hazardous materials is not a constitutional infirmity in a program that uses a national registration fee program to benefit all communities that respond to hazardous materials incidents in transportation. RSPA sees no discrimination against small businesses that pay the minimum fee (under the current program) or (under the program applicable after July 1, 2000) a significantly lower registration fee than a company that is not a small business. As discussed elsewhere (see Section III.C), the dividing line between a small business that will pay a $300 fee and a larger one that will pay a $2,000 fee is based on the size determinations of the Small Business Administration, which, even if not perfect, are appropriate bases for apportioning the costs of funding the HMEP grants program.

PMAA and others argued that RSPA's proposal departs from the statutory language and intent. PMAA stated that Congress meant to apply the registration fee only to “large, national hazmat offerors and transporters” who are directly involved in interstate commerce, and not to an offeror or carrier of “any placarded load,” because that criterion is not set forth in § 5108(a)(1). It also contended that the proposed exception for farmers is a political “call” which is not authorized in the statute and violates Article I § 8 of the Constitution. The Agricultural Retailers Association (ARA) acknowledged that the statute allows RSPA the discretion to require “any hazmat carrier” to register, but it “believes Congress contemplated this to operate on a carrier-by-carrier basis, and not to operate in an across-the-board fashion.” ARA urged RSPA to explain Congress's intent in setting the mandatory registration criteria in § 5108(a)(1) and the authority in § 5108(a)(2) for RSPA to require additional persons to register. Senator Conrad Burns (R-MT) expressed concern that the proposed rule contravenes the 1992 technical correction that added the words “except in a bulk package” to the mandatory registration provision now codified at § 5108(a)(1)(E), because it will require persons other than farmers who offer or transport nurse tanks with a capacity less than 3,500 gallons to register. PMAA also agreed with other commenters who stated that RSPA should not base the amount of the registration fee on business size instead of the “eight specific factors” listed in § 5108(g)(2)(A), and it urged RSPA to wait until congressional reauthorization of the appropriations language in § 5127 before increasing the registration fee.

RSPA believes that § 5108(a)(2) clearly reflects Congress's intent to allow the Secretary to require any person “transporting or causing to be transported hazardous material in commerce” to pay the registration fee. As reported by the House Committee on Energy and Commerce in April 1990, H.R. 3520 would have required all offerors and transporters of hazardous materials (among others) to register and allowed the Secretary to “exempt any class or category of persons from the requirement of this paragraph.” H.R. Rep. No. 101-444, Part 1, at 80 (Apr. 3, 1990). In contrast, the Senate bill reported in August 1990 contained a provision requiring the Secretary to “initiate a rulemaking proceeding concerning the need to establish annual or other registration requirements for persons or any class or category of persons who transport, ship, or cause to be transported or shipped in commerce hazardous materials * * *” S. Rep. No. 101-449 (Aug. 30, 1990), at 1990 U.S.C.C.A.N. 4595, 4623. These two approaches evolved into the provisions in HMTUSA specifying five categories for which registration is mandatory plus the authority for the Secretary to require other persons to register. Congress clearly left to the Secretary's discretion the determination of which additional categories of persons would be required to register and pay a registration fee, including the creation of exceptions from these categories. This conclusion is fully consistent with the direction in § 5103(b)(1) for the Secretary to “prescribe regulations for the safe transportation of hazardous materials “in intrastate * * * commerce” and the broad definition of “commerce” in § 5102(l). Accordingly, RSPA has applied the registration requirement to purely intrastate carriers since 1992. See 57 FR 30620, 30622, 30630 (July 9, 1992).

RSPA does not believe that Congress somehow intended the agency to require additional persons to register under § 5108(a)(2) “on a carrier-by-carrier basis,” as ARA suggests. Nor does RSPA agree that an exception for farmers from the additional categories of persons to be required to register is irrational, improper, or inconsistent with the will of Congress as expressed in the 1992 technical correction that added the words “except in bulk packagings” to current § 5108(a)(1)(E). The technical correction enacted in Public Law 102-508 removed a contradiction between two categories for which registration was mandatory in HMTUSA. As enacted in 1990, one provision of HMTUSA required a person to register if it offers or transports hazardous materials in a bulk packaging, container, or tank that has a capacity of 3,500 gallons or more. However, another provision of HMTUSA required registration by a shipper or carrier of any shipment of at least 5,000 pounds of a class of hazardous materials for which placarding of a vehicle, rail car, or freight container is required under RSPA's regulations. This meant that a shipper or carrier of hazardous materials (such as anhydrous ammonia) in a nurse tank or other bulk packaging with a 1,000-gallon capacity was covered by the latter provision (because the shipment weighed more than 5,000 pounds) but left out of the former provision. To eliminate this inconsistency, the law was clarified by adding the phrase “except in a bulk packaging” to the latter criterion. The 1992 technical change modified the language related to statutorily-mandated registrations and was not related to additional registrations that the Secretary could require by regulation. Nothing in P.L. 102-508 or its legislative history restricts the Secretary's discretion to require additional persons to register under § 5108(a)(2).

In summary, this regulation is consistent with the Secretary's § 5108(a)(2) authority to require additional persons to register and with the Secretary's § 5108(g)(2) authority to impose an annual fee based on at least one of several criteria. These criteria include several that support this regulation: (1) The type of hazardous material transported or caused to be transported; (2) the amount of such hazardous material; (3) the threat to property, individuals, and the environment from an accident or incident involving such hazardous materials; and (4) other factors the Secretary considers appropriate.

In the NPRM, RSPA noted that the Administration's Fiscal Year 2000 Budget and Hazardous Materials Transportation Reauthorization proposals to Congress include legislative authority to fund RSPA's entire Hazardous Materials Safety Program from the registration fee program, beginning with the fourth quarter of fiscal year 2000.

Several commenters expressed opposition to RSPA funding the entire Hazardous Materials Safety Program from the registration fee program. The Chemical Manufacturers Association (CMA) stated, “CMA believes that the Hazardous Materials Safety Program (excluding the registration program) should continue to be funded through general purpose funds; user fees should not be assessed for a program that benefits the general public. CMA also questions whether user fees of that scope could be assessed in a fair and equitable manner. CMA's willingness to support RSPA's proposals in this NPRM does not extend to funding the entire Hazardous Materials Safety Program through the fees collected from the registration program.”

The American Petroleum Institute (API) is also opposed to this proposal to Congress. API stated: “API does not believe that user fees are the appropriate method to fund the hazardous materials transportation program as its reason for existing is by design, to protect the public against risks to life and property that may result from the transportation of hazardous materials.”

The Association of American Railroads (AAR) expressed its opposition to funding RSPA's Hazardous Materials Safety Program through registration fees, and stated, “AAR has consistently opposed requiring the regulated community to fund the hazardous materials program. That position extends to using registration fees to pay for RSPA's hazardous materials program.”

The Sulfur Institute expressed its concern about possibly funding RSPA's hazardous materials program from registration fees and believed the proposal needed more clarification to reduce potential confusion.

The proposal to fund RSPA's entire hazardous materials safety program from the registration fee program is unrelated to this rulemaking. The reauthorization proposal is currently pending in Congress, but the FY 2000 budget does not include fourth quarter funding of the entire program through registration fees. If Congress takes action on the reauthorization proposal, RSPA will take appropriate action.

This final rule is considered a significant regulatory action under section 3(f) of Executive Order 12866 and, therefore, was reviewed by the Office of Management and Budget. This final rule is considered significant under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034). A regulatory evaluation is available for review in the public docket. This final rule is intended to collect annual registration fees in the amount of $14.3 million to support the HMEP grants program. Because Federal hazardous materials transportation law mandates the establishment and collection of fees, the discretionary aspects of this rulemaking are limited to setting the amount of the fees within the statutory range for each person subject to the registration program, and to extending the registration requirements to persons who transport or cause the transportation of hazardous materials but who are not specifically required to register by law. The increased fees are not related to the operational cost of RSPA's hazardous materials safety program. The fees to be paid by shippers and carriers of certain hazardous materials in transportation are related to the benefits received by these persons from the sale and transportation of hazardous materials and from emergency preparedness and response services provided by public sector resources. The fees are also related to expenses incurred by State, Native American tribal, and local governments in carrying out hazardous materials emergency preparedness and response activities.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This final rule does not adopt any regulation that:

(1) Has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government;

(2) Imposes substantial direct compliance costs on State and local governments; or

(3) Preempts state law.

Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13084 (“Consultation and Coordination with Indian Tribal Governments”). Because this final rule does not significantly or uniquely affect the communities of the Indian tribal governments and does not impose substantial direct compliance costs, the funding and consultation requirements of Executive Order 13084 do not apply.

The Regulatory Flexibility Act (5 U.S.C. 601-611) requires each agency to analyze proposed regulations and assess their impact on small businesses and other small entities to determine whether the proposed rule is expected to have a significant impact on a substantial number of small entities. Based on our assessment in the accompanying regulatory evaluation, and the absence of contradictory information submitted to the docket during the public comment period, I certify that the requirements adopted in this final rule are applicable to a substantial number of small businesses, but that the economic impact on these small businesses will not be significant.

The goal of this rulemaking is to increase annual funding for the national Hazardous Materials Emergency Preparedness (HMEP) grants program from the current level of approximately $6.8 million to $14.3 million. Federal hazardous materials transportation law (49 U.S.C. 5108) directs the Secretary of Transportation to prescribe regulations for the filing of a registration statement, and payment of an annual fee, by each person transporting or causing to be transported in commerce: (1) A highway-route controlled quantity of Class 7 (radioactive) materials; (2) More than 55 pounds of a Division 1.1, 1.2, or 1.3 (explosive) material in a motor vehicle, rail car, or freight container; (3) A package containing more than one liter of a hazardous material designated as extremely toxic by inhalation (Zone A); (4) A hazardous material in a bulk packaging, container, or tank with a capacity equal to or greater than 3,500 gallons for liquids or gases, or more than 468 cubic feet for solids; or (5) A shipment in other than a bulk packaging of 5,000 pounds or more gross weight of a class of hazardous materials for which placarding of a vehicle, rail car, or freight container is required. In addition, § 5108 permits the Secretary to extend registration requirements to persons who: (1) Transport or cause to be transported hazardous materials in commerce but do not engage in the activities listed above; or (2) Manufacture, fabricate, mark, maintain, recondition, repair, or test packagings that the persons represents, marks, certifies, or sells for use in transporting in commerce hazardous materials. Section 5108 directs the Secretary to impose and collect an annual fee of between $250 and $5,000 from each person required to prepare and file a registration statement. Since 1992, RSPA has chosen to require registration only by those persons under a statutory obligation to do so, and to assess the minimum registration fee of $250 (plus $50 for processing).

Under the current regulations, the approximately 27,000 persons that register and pay the fee of $250 generate annually funds in the amount of $6.8 million. As indicated elsewhere in this preamble, that $6.8 million is inadequate to meet funding levels necessary to carry out critical elements ($7.8 million for training grants, and $5 million for planning grants) of § 5116 of the law at the levels intended by Congress. The means adopted in this final rule for collecting sufficient monies to adequately fund the HMEP grants program is determined to be the best of all evaluated alternatives. This is particularly the case with regard to the potential impact on small businesses.

Unless alternative definitions have been established by the agency in consultation with the Small Business Administration (SBA), the definition of “small business” has the same meaning as under the Small Business Act. Since RSPA has established no such special definition, we employ the thresholds established by SBA and codified at 13 CFR 121.201.

Expanded Scope of Registration Rule. As noted in the preamble to this rule and the associated regulatory evaluation, RSPA anticipates an additional 15,000 to 18,000 persons will be required to register each year, with all but 500 of those persons being small businesses. Of this expanded base of registrants, RSPA estimates that potentially as many as 7,000 dealers of refined petroleum products (residential fuel oil, diesel fuel, propane, gasoline, etc.) comprise the single greatest segment of industry engaged in the transportation of hazardous materials that will now be required to prepare and file a registration statement and pay the required fee. Essentially all of these newly affected entities (a substantial number) are thought to meet the applicable SBA criteria for a small business, thereby subjecting them to an annual fee of $300 (including a $25 processing fee).

Based on RSPA's assessment of generally available information, we believe the following is a reasonable generalization of the scope of operations for some of the smaller of small businesses engaged in the distribution of petroleum products. For liquid petroleum products, we considered a theoretical marketer operating three small cargo tank motor vehicles for an average annual delivery to residences of 2 million gallons of distillate number 2 (home heating oil). For liquefied gases, we considered a theoretical marketer operating three small cargo tank motor vehicles for an annual delivery to residences of 400,000 gallons of consumer grade propane.

For the smaller marketer of liquid petroleum products, RSPA notes that over the five-year period between 1994-1998, the national average price per gallon by all sellers of distillate number 2 to residences (excluding tax) ranged from $0.852 to $0.989. ( Source: Energy Information Administration, Annual Energy Review, All Sellers Sales Prices for Selected Petroleum Products, 1983-1998 ). With sales of 2 million gallons per year, the business would generate annual revenues of at least $1.7 million. Given this scenario, the $300 registration fee represents 0.000176% of sales, which is an amount that should not have a significant impact on the viability of the business. In fact, it is more reasonable to expect that rather than absorbing the $300 fee as overhead, the fuels dealer would pass this cost on to the ultimate consumer. Of 2 million gallons sold, the $300 fee represents an additional cost per gallon of $0.00015, or an increased cost to the consumer of $0.02 on a delivery of 150 gallons of distillate number 2. It is unlikely that a consumer would choose an alternate source of energy on the basis of such a price increase.

For the smaller marketer of liquefied gas products, RSPA notes that over the five-year period between 1994-1998, the national average price per gallon by all sellers of consumer grade propane (excluding tax) ranged from $0.766 to $0.886. (Source: Energy Information Administration, Annual Energy Review, All Sellers Sales Prices for Selected Petroleum Products, 1983-1998). With sales of 400,000 gallons per year, the business would generate annual revenues of at least $306,000. Given this scenario, the $300 registration fee represents 0.001% of sales, an amount that should not have a significant impact on the viability of the business. In fact, it is more reasonable to expect that rather than absorbing the $300 fee as overhead, the propane marketer would pass this cost on to the ultimate consumer. Of 400,000 gallons sold, the $300 fee represents an additional cost per gallon of $0.00075, or an increased cost to the consumer of $0.11 on a delivery of 150 gallons of propane. It is unlikely that a consumer would choose an alternate source of energy on the basis of such a price increase.

The Regulatory Flexibility Act suggests that it may be possible to establish exceptions and differing compliance standards for small business and still meet the objectives of the applicable regulatory statutes. RSPA believes it has met that goal through the adoption of a two-tier fee schedule in which a small business must pay an annual fee of $300 (including a $25 processing fee) while persons that do not meet SBA criteria for a small business must pay an annual fee of $2,000 (including a $25 processing fee).

For small businesses, the cost of compliance with the requirement adopted in this final rule is so little that RSPA is confident that it will not have a significant impact on their ability to continue to successfully conduct operations related to the transportation of placarded shipments of hazardous materials. Based on its analysis, RSPA determined that although the requirement adopted in this final rule applies to a substantial number of small businesses, its economic burden is not significant, even for the smaller of the universe of affected small businesses.

This final rule will not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It will not result in costs of $100 million or more, in the aggregate, to any of the following: State, local, or Native American tribal governments, or the private sector. This final rule is the least burdensome alternative that achieves the objectives of the rule.

Under 49 U.S.C. 5108(i), reporting and recordkeeping requirements pertaining to the registration rule are specifically excepted from the information management requirements of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ).

We do not want to impose new requirements that would mandate business process changes when the resources necessary to implement those requirements would otherwise be applied to “Y2K” or related computer problems. This final rule does not mandate business process changes or require modifications to computer systems. Because this rule does not affect organizations' ability to respond to those problems, we are not delaying the effectiveness of the requirements.

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number contained in the heading of this document may be used to cross-reference this action with the Unified Agenda.

Section 202 of SARA (Pub. L. 99-499) amended Section 306(a) of CERCLA (Pub. L. 96-510), 42 U.S.C. 9656(a), by requiring the Secretary of Transportation to list and regulate hazardous substances, listed or designated under Section 101(14) of CERCLA, 42 U.S.C. 9601(14), as hazardous materials under the Federal hazardous materials transportation law (49 U.S.C. 5101-5127). RSPA carries out the rulemaking responsibilities of the Secretary of Transportation under the Federal hazardous materials transportation law, 49 CFR 1.53(b). This final rule is necessary to comply with 42 U.S.C. 9656(a) as amended by section 202 of SARA.

In carrying out that statutory mandate, RSPA has no discretion to determine what is or is not a hazardous substance or the appropriate reportable quantity (RQ) for materials designated as hazardous substances. This authority is vested in EPA. Therefore, under the CERCLA scheme, EPA must issue final rules amending the list of CERCLA hazardous substances, including adjusting RQs, before RSPA can amend its list of hazardous substances. In the preamble to a final rule on this subject issued under Docket HM-145F (51 FR 42174; November 21, 1986), RSPA included the following statement:

This rulemaking adjusts the “List of Hazardous Substances and Reportable Quantities” that appears in Appendix A to § 172.101, based on the following final rules that were published by EPA in the Federal Register and added and removed entries to the EPA table in 40 CFR 302.4 List of Hazardous Substances and Reportable Quantities under CERCLA:

This rulemaking will enable shippers and carriers to identify CERCLA hazardous substances and thereby enable them to comply with all applicable HMR requirements and to make the required notifications if a discharge of a hazardous substance occurs. In addition to the reporting requirements of the HMR found in §§ 171.15 and 171.16, a discharge of a hazardous substance is subject to EPA reporting requirements at 40 CFR 302.6 and may be subject to the reporting requirements of the U.S. Coast Guard at 33 CFR 153.203.

This final rule is not considered a significant regulatory action under section 3(f) of Executive Order 12866 and, therefore, was not reviewed by the Office of Management and Budget. The rule is not considered significant under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034). Because of the minimal economic impact of this rule, preparation of a regulatory impact analysis or a regulatory evaluation is not warranted.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This final rule does preempt State, local, and Indian tribe requirements but does not adopt any regulation that has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

This final rule addresses designation of hazardous material and preempts state, local, or Indian tribe requirements not meeting the “substantively the same” standard. This rule is required by law. Federal hazardous materials transportation law provides at section 5125(b)(2) that if RSPA issues a regulation concerning any of the covered subjects, RSPA must determine and publish in the Federal Register the effective date of Federal preemption. The effective date may not be earlier than the 90th day following the date of issuance of the final rule and not later than two years after the date of issuance. The effective date of Federal preemption for these requirements is May 15, 2000.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13084 (“Consultation and Coordination with Indian Tribal Governments”). Because this final rule does not significantly or uniquely affect the communities of the Indian tribal governments and does not impose substantial direct compliance costs, the funding and consultation requirements of Executive Order 13084 do not apply.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires an agency to review most regulations to assess their impact on small entities unless the agency determines that a rule is not expected to have a significant impact on a substantial number of small entities. Because this rule was not preceded by an NPRM, however, the Regulatory Flexibility Act does not apply to it and no assessment is required. EPA addressed the Regulatory Flexibility Act when it made the hazardous substances designations and changes reflected in this rule.

This final rule does not impose any new information collection burdens.

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

This final rule imposes no mandates and thus does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995.

We do not want to impose new requirements that would mandate business process changes when the resources necessary to implement those requirements would otherwise be applied to “Y2K” or related computer problems. This final rule does not mandate business process changes or require modifications to computer systems. Because this rule does not affect organizations' ability to respond to those problems, we are not delaying the effectiveness of the requirements.