This rule is issued under Marketing Agreement and Order No. 989 (7 CFR part 989), both as amended, regulating the handling of raisins produced from grapes grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the order provisions now in effect, final free and reserve percentages may be established for raisins acquired by handlers during the crop year. This rule establishes final free and reserve percentages for Naturals and Zantes for the 1999-2000 crop year, which began August 1, 1999, and ends July 31, 2000. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

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

This rule establishes final volume regulation percentages for 1999-2000 crop Naturals and Zantes covered under the order. The volume regulation percentages are 85 percent free and 15 percent reserve for Naturals and 51 percent free and 49 percent reserve for Zantes. Free tonnage raisins may be sold by handlers to any market. Reserve raisins must be held in a pool for the account of the Committee and are disposed of through various programs authorized under the order. For example, reserve raisins may be sold by the Committee to handlers for free use or to replace part of the free tonnage raisins they exported; used in diversion programs; carried over as a hedge against a short crop the following year; or disposed of in other outlets not competitive with those for free tonnage raisins, such as government purchase, distilleries, or animal feed.

The volume regulation percentages are intended to help stabilize raisin supplies and prices, and strengthen market conditions. Final percentages for Zantes were recommended by the Committee on January 13, 2000, and for Naturals on February 11, 2000.

Section 989.54 of the order prescribes the procedures and time frames to be followed in establishing volume regulation. This includes methodology used to calculate percentages. Pursuant to § 989.54(a) of the order, the Committee met on August 12, 1999, to review shipment and inventory data, and other matters relating to the supplies of raisins of all varietal types. The Committee computed a trade demand for each varietal type for which a free tonnage percentage might be recommended. Trade demand is computed using a formula specified in the order and, for each varietal type, is equal to 90 percent of the prior year's shipments of free tonnage and reserve tonnage raisins sold for free use into all market outlets, adjusted by subtracting the carryin on August 1 of the current crop year and by adding the desirable carryout at the end of that crop year. As specified in § 989.154(a), the desirable carryout for each varietal type is equal to the shipments of free tonnage raisins of the prior crop year during the months of August, September, and one-half of October. In accordance with these provisions, the Committee computed and announced 1999-2000 trade demands for Naturals and Zantes at 254,475 and 1,855 tons, respectively, as shown below.

As required under § 989.54(b) of the order, the Committee met on October 1, 1999, and announced a preliminary crop estimate of 294,519 tons for Naturals. This estimate was almost 15 percent lower than the 10-year average of 346,325 tons. Naturals are the major varietal type of California raisins. Combining the carryin inventory of 101,946 tons with the 294,519-ton crop estimate resulted in a total available supply of 396,465 tons, which was much higher than the 254,475-ton trade demand. Thus, the Committee determined that volume regulation for Naturals was warranted. The Committee announced preliminary free and reserve percentages for Naturals which released 65 percent of the computed trade demand since the field price had not yet been established. The preliminary percentages were 56 percent free and 44 percent reserve. The Committee authorized its staff to modify the preliminary percentages to release 85 percent of the trade demand once the field price was established. The field price was established on October 22, 1999, and the preliminary percentages were thus modified to 73 percent free and 27 percent reserve.

Also at its October 1, 1999, meeting, the Committee announced a preliminary crop estimate for Zantes at 4,187 tons, which is comparable to the 10-year average of 4,463 tons. Combining the carryin inventory of 1,906 tons with the 4,187-ton crop estimate resulted in a total available supply of 6,093 tons, which is significantly greater the 1,855-ton trade demand. Thus, the Committee determined that volume regulation for Zantes was warranted. The Committee announced preliminary free and reserve percentages for Zantes which released 65 percent of the computed trade demand since field price had not yet been established. The preliminary percentages were 29 percent free and 71 percent reserve. Like Naturals, the Committee authorized its staff to modify the preliminary percentages to release 85 percent of the trade demand once the field price was established. The field price was established on October 12, 1999, and the preliminary percentages were thus modified to 38 percent free and 62 percent reserve. As in past seasons, the Committee submitted its marketing policy to the Department for review. In addition, the Committee determined that volume regulation was not warranted for the other varietal types of raisins covered under the order.

Pursuant to §§ 989.54(c) and (d) of the order, the Committee met on January 12, 2000, and announced interim percentages for Zantes at 50.75 percent free and 49.25 percent reserve. These interim percentages were based on a revised Zante crop estimate of 3,650 tons. At that meeting, the Committee also computed final percentages for Zantes which, when applied to the final 3,650-ton crop estimate, tend to release the full Zante trade demand. Final percentages compute to 51 percent free and 49 percent reserve.

The Committee met on February 11, 2000, and announced interim percentages for Naturals at 84.75 percent free and 15.25 percent reserve. These interim percentages were based on a revised crop estimate of 298,477 tons. The Committee also computed final percentages for Naturals which, when applied to the final 298,477-ton crop estimate, tend to release the full trade demand. Final percentages compute to 85 percent free and 15 percent reserve. The Committee's calculations to arrive at final percentages for Naturals and Zantes are shown in the table below.

In addition, the Department's “Guidelines for Fruit, Vegetable, and Speciality Crop Marketing Orders” (Guidelines) specify that 110 percent of recent years' sales should be made available to primary markets each season for marketing orders utilizing reserve pool authority. This goal will be met for Naturals and Zantes by the establishment of final percentages which release 100 percent of the trade demand and the offer of additional reserve raisins for sale to handlers under the “10 plus 10 offers.” As specified in § 989.54(g), the 10 plus 10 offers are two offers of reserve pool raisins which are made available to handlers during each season. For each such offer, a quantity of reserve raisins equal to 10 percent of the prior year's shipments is made available for free use. Handlers may sell their 10 plus 10 raisins to any market.

For Naturals, both 10 plus 10 offers will be held in June 2000 where a total of about 44,000 tons of raisins will be made available to handlers. This quantity is less than the amount specified in the order. As previously stated, the Committee utilized 1996-97 shipments of 314,013 tons as a base to compute trade demand because 1998-99 shipments were limited. Similarly, as specified in § 989.54(g), 1996-97 shipments were used as a base to compute the amount of tonnage to be made available in the 10 plus 10 offers. Thus, 31,402 tons should be made available in each of the 10 plus 10 offers (62,803 tons total). However, this amount is not available in the reserve. Thus, all of the reserve pool raisins will be made available to handlers for free use through the 10 plus 10 offers.

Adding the 44,000 tons of 10 plus 10 raisins to the 254,475-ton trade demand figure, plus 101,946 tons of 1998-99 carryin inventory equates to about 400,423 tons natural condition raisins, or 375,893 tons packed raisins, that will be made available for free use, or to the primary market. This is 136 percent of the quantity of Naturals shipped during the 1998-99 crop year (295,401 natural condition tons or 277,305 packed tons).

For Zantes, both Zante 10 plus 10 offers were made available simultaneously in early February 2000 and 708 tons of raisins were purchased by handlers. Adding the 708 tons of 10 plus 10 raisins to the 1,855 ton trade demand figure, plus 1,906 tons of 1998-99 carryin inventory equates to 4,469 tons natural condition raisins, or about 3,985 tons packed raisins, made available for free use, or to the primary market. This is 126 percent of the quantity of Zantes shipped during the 1998-99 crop year (3,542 natural condition tons or 3,158 packed tons).

In addition to the 10 plus 10 offers, § 989.67(j) of the order provides authority for sales of reserve raisins to handlers under certain conditions such as a national emergency, crop failure, change in economic or marketing conditions, or if free tonnage shipments in the current crop year exceed shipments of a comparable period of the prior crop year. Such reserve raisins may be sold by handlers to any market. When implemented, these additional offers of reserve raisins make even more raisins available to primary markets which is consistent with the Department's Guidelines.

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

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

There are approximately 20 handlers of California raisins who are subject to regulation under the order and approximately 4,500 raisin producers in the regulated area. Small agricultural service firms have been defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $500,000. Thirteen of the 20 handlers subject to regulation have annual sales estimated to be at least $5,000,000, and the remaining 7 handlers have sales less than $5,000,000, excluding receipts from any other sources. No more than 7 handlers, and a majority of producers, of California raisins may be classified as small entities.

Pursuant to § 989.54(d) of the order, this rule establishes final volume regulation percentages for 1999-2000 crop Natural and Zante raisins. The volume regulation percentages are 85 percent free and 15 percent reserve for Naturals and 51 percent free and 49 percent reserve for Zantes. Free tonnage raisins may be sold by handlers to any market. Reserve raisins must be held in a pool for the account of the Committee and are disposed of through certain programs authorized under the order.

Volume regulation is warranted this season for Naturals because the final crop estimate of 298,477 tons combined with the carryin inventory of 101,946 tons results in a total available supply of 400,423 tons, which is about 57 percent higher than the 254,475-ton trade demand. Volume regulation is warranted for Zantes this season because the crop estimate of 3,650 tons combined with the carryin inventory of 1,906 tons results in a total available supply of 5,556 tons which is about 200 percent higher than the 1,855-ton trade demand. The volume regulation percentages are intended to help stabilize raisin supplies and prices, and strengthen market conditions.

Many years of marketing experience led to the development of the current volume regulation procedures. These procedures have helped the industry address its marketing problems by keeping supplies in balance with domestic and export market needs, and strengthening market conditions. The current volume regulation procedures fully supply the domestic and export markets, provide for market expansion, and help prevent oversupplies in the domestic market.

Raisin-variety grapes can be marketed as fresh grapes, crushed for use in the production of wine or juice concentrate, or dried into raisins. Annual fluctuations in the fresh grape, wine, and concentrate markets, as well as weather-related factors, cause fluctuations in raisin supply. These supply fluctuations can cause producer price instability and disorderly market conditions. Volume regulation is helpful to the raisin industry because it lessens the impact of such fluctuations and contributes to orderly marketing. For example, excluding the 1997-98 season for which complete data is not yet available, producer prices for Naturals have remained fairly steady between the 1992-93 through the 1998-99 seasons, although production has varied. As shown in the table below, production has varied from a low of 240,469 tons in 1998-99 to a high of 387,007 tons in 1993-94, or 61 percent. According to Committee data, during years of Natural volume regulation, the total producer return per ton, which includes proceeds from both free tonnage plus reserve pool raisins, has varied from a low of $901 in 1992-93 to a high of $1,049 in 1996-97, or 16 percent.

Paratuberculosis, also known as Johne's disease, is a disease caused by Mycobacterium paratuberculosis. This disease primarily affects cattle, sheep, goats, and other domestic, exotic, and wild ruminants. Paratuberculosis is a chronic and contagious enteritis that results in progressive wasting and eventual death. Clinical signs are rarely evident until 2 or 3 years after the initial infection, which usually occurs soon after birth. The organism is shed in large numbers in the feces of infected animals, and infection can be acquired by ingestion of organisms from contaminated food and water sources. The organisms can also be present in colostrum and milk of infected cows. The disease is nearly always introduced into a clean herd by an infected animal that does not show symptoms of the disease. Our regulations are intended to control the interstate spread of the disease in the United States.

The regulations in subchapter C of chapter I, title 9, Code of Federal Regulations (CFR), govern the interstate movement of animals to prevent the dissemination of livestock and poultry diseases in the United States. Parts 71 and 80 (referred to below as the regulations) are included in subchapter C. Part 71 relates to the interstate transportation of animals, poultry, and animal products. Part 80 pertains to the interstate movement of domestic animals that are paratuberculosis reactors. A paratuberculosis reactor is a domestic animal that has reacted to a test recognized by the Secretary of Agriculture for paratuberculosis.

On March 22, 1999, we published in the Federal Register (64 FR 13726-13732, Docket No. 98-037-1) a proposal to amend the regulations regarding the interstate movement of domestic animals affected with Johne's disease. We proposed to replace references to “paratuberculosis” with references to “Johne's disease”, to identify an official test for Johne's disease, and to allow the interstate movement of domestic animals that are positive to the official Johne's disease test for slaughter purposes or the collection of germ plasm.

We solicited comments concerning our proposal for 60 days ending May 21, 1999. We received six comments by that date. They were from a national veterinary medical association, a State veterinary association, a beef association, two dairy associations, and a State advisory committee on Johne's disease. Two commenters supported the proposed rule. One commenter stated that he could not support the proposed rule. This commenter and the remaining commenters expressed concerns that are discussed below.

Several commenters raised concerns related to our proposed provisions to allow the interstate movement of positive animals for the collection of germ plasm (semen, embryos, and ova). We stated in our proposal that artificial insemination and embryo transfer were considered to present a low risk of transmitting Johne's disease, and that allowing interstate movement of positive animals for germ plasm collection would allow herd owners to salvage valuable genetics and continue an animal's lineage. One commenter took issue with our statement about low risk, maintaining that there is insufficient research to support our contention. One commenter mentioned that semen, embryos, and ova are not the only genetic materials that could be considered germ plasm. One commenter recommended that we allow interstate movement of positive animals only from herds that have achieved a certain status level under the United States Animal Health Association's (USAHA) Voluntary Johne's Disease Herd Status Program for Cattle, and that germ plasm be collected from other animals in a sanitized station on the premises. One commenter stated that many breeders enrolled in various voluntary Johne's disease programs are not interested in having an animal from a herd positive for Johne's disease on their property.

Based on these comments, and because germ plasm from positive animals may be collected without restriction on the premises of origin, this final rule will not allow the interstate movement of positive animals for germ plasm collection. Our proposed rule did not place any restrictions on the collection of germ plasm at the premises of origin, and we are not adding such provisions in this final rule.

In addition, because we are removing the proposed requirements for the interstate movement of positive animals for the collection of germ plasm, we have removed the definitions of accredited veterinarian, germ plasm, permit, and premises of origin from the proposed list of definitions in § 80.1. These terms were used and referenced in the aforementioned proposed requirements.

One commenter took exception to a portion of the discussion under the heading, “Executive Order 12866 and Regulatory Flexibility Act,” that stated, “However, for most producers, the impact may be insignificant.” The commenter stated that the impact of the proposed rule on a substantial number of seed stock producers will be very significant if overly vigorous administration of testing programs puts a significant number of seed stock producers out of business or reduces them to producing commercial milk products, which could have an international impact. This commenter further stated that the premature restriction of the movement of breeding animals could affect the rate of genetic gain in the United States, especially if the incidence of Johne's disease is as high as estimated. This commenter also stated that seed stock herds cannot be destroyed or locked up during the process of controlling Johne's disease.

Approximately 22 percent (25,670 herds) of U.S. dairy herds are affected with Johne's disease. In developing our proposal, we considered how breeding programs, and genetic gains, could be affected by restrictions on the interstate movement of animals that are positive to an official Johne's disease test. We proposed to limit the interstate movement of these animals, but we did not propose any quarantine or related measures, and we did not propose to require testing before interstate movement because mandatory testing programs are not currently supported by a majority of the cattle industry, partially due to the effect that testing might have on some seed stock producers. Industry sources indicated that when removing positive animals from a herd, most producers would choose to move the positive animals for slaughter purposes. Because we will allow the interstate movement of positive animals for slaughter purposes in this rule, and remove, among other things, requirements for permits and branding, seed stock producers will be able to implement more efficient and accelerated herd cleanup programs, if desired, and, thus, reduce the economic effect Johne's disease could have on their operations.

This rule will allow domestic animals that are positive to an official test for Johne's disease to be moved interstate only to a recognized slaughtering establishment or to an approved livestock facility for sale to such an establishment. However, there may be circumstances, including pilot projects, where other interstate movements may be appropriate. Therefore, this final rule provides that the Administrator may, upon request in specific cases, allow animals that are positive to an official Johne's disease test to be moved interstate to other locations and for other purposes under such conditions as the Administrator may prescribe in each case to prevent the spread of Johne's disease. The Administrator must notify the State animal health officials of the States involved of any such action.

One commenter stated that we should require serological tests for herd screening and allow the interstate movement of an animal from a herd only if the animal is negative when tested by an organism identification test.

As noted previously in this document, mandatory testing programs are not currently supported by a majority of the cattle industry. We believe that requiring serological testing of a herd prior to the interstate movement of an individual animal would be too restrictive and put too many constraints on herd owners. Therefore, at this time, we are only restricting the interstate movement of animals that are positive to an official Johne's disease test.

One commenter had concerns regarding the identification of specific officially recognized tests. One commenter stated that our use of the term “polymerase chain reaction (PCR)” was confusing, and noted that PCR is a process. The commenter who had concerns regarding the identification of specific officially recognized tests did not elaborate further.

We continue to believe that a standard test for Johne's disease is necessary and that a test that detects the presence of the M. paratuberculosis organisms in fecal samples is the most specific and reliable index of infection in live animals. As to the comment regarding PCR, we agree that PCR is a process. In our proposal, we stated, “Organism detection tests, such as fecal culture or polymerase chain reaction (PCR), detect the presence of the M. paratuberculosis organism in fecal samples.”

Two commenters stated that there were loopholes in the proposed regulations that could contribute to the spread of Johne's disease, and one of these commenters stated that the loopholes could affect various voluntary programs. One of these commenters had concerns regarding the structure of the proposed changes for interstate movement.

The commenters who stated that there were loopholes in the proposed regulations did not identify those areas of the proposed regulations that they thought might contribute to the spread of Johne's disease or affect voluntary programs. The commenter who had concerns regarding the structure of the proposed changes did not elaborate further. We assume that these commenters were referring to the proposed requirements that would have allowed sexually intact animals that are positive to an official Johne's disease test to be moved interstate for the collection of germ plasm. As stated previously in this document, this final rule will not allow the interstate movement of positive animals for germ plasm collection. This final rule will allow domestic animals that are positive to an official Johne's disease test to be moved interstate only to a recognized slaughtering establishment or to an approved livestock facility for sale to such an establishment, or elsewhere only with specific authorization from the Administrator.

One commenter stated that new regulations should not be finalized until States have standardized control and testing programs. This commenter further stated that it may be best to eliminate the current regulations, pending the development of an appropriate proposed rule, because they cannot be enforced. This commenter also stated that he was unable to endorse any particular animal movement control systems at this time. Another commenter expressed disapproval that this rulemaking exposed the public to the existing regulations, which he maintains are “obsolete and disregarded.”

The current regulations are outdated, and this rulemaking is intended to remove language that hinders State and industry voluntary programs that are attempting to reduce the national prevalence of Johne's disease. Prior to this final rule, the regulations provided that cattle and other domestic animals that had reacted to a test for Johne's disease could be moved interstate only to a recognized slaughtering establishment or to a specifically approved stockyard for sale to a recognized slaughter establishment. Prior to movement, cattle and other domestic animals had to be identified with an approved metal eartag that was attached to their left ear and bore a serial number and the inscription, “U.S. Reactor,” or a similar State reactor tag. Cattle also had to be: (1) Branded with the letter “J” on their left hip near the tailhead; or (2) accompanied directly to slaughter by an APHIS or State representative; or (3) moved in vehicles closed with official seals that were applied and removed by an APHIS representative, State representative, accredited veterinarian, or an individual authorized for this purpose by an APHIS representative.

Based on this final rule, domestic animals that are positive to an official Johne's disease test may be moved interstate to a recognized slaughtering establishment or to an approved livestock facility for sale to such an establishment if they bear an official eartag, are shipped with an owner-shipper statement, and are moved to the destination in one continuous movement without unloading. We believe that these changes will allow herd owners to remove infected animals from their premises sooner and decrease the possibility of these animals infecting other animals on the premises. We also believe that these changes, compared to the previous requirements, will allow APHIS to better enforce restrictions on interstate movement.

One commenter stated that there needs to be an effective program to raise the level of awareness of Johne's disease among producers because only with an understanding of the disease and the mode of its transmission can broad-based support for control and eradication be gained. One commenter stated that control and eradication of Johne's disease requires producer and veterinary education, development of adequate diagnostic tests, design and implementation of herd testing and classification systems, and design of appropriate animal movement controls. One commenter stated that the regulations may need to be amended in the future to promote uniformity as States develop and implement Johne's disease control programs and to incorporate recommendations from future Johne's disease studies. Another commenter said that we should have included the voluntary herd status programs developed by USAHA's Johne's Disease Committee.

We agree that educating the beef and dairy industry and the public about Johne's disease is essential to control and eradication efforts. Some beef and dairy associations have taken steps to provide educational material regarding Johne's disease and other diseases of livestock to their members. APHIS has distributed educational material on Johne's disease as well as conducted training courses for our field veterinary medical officers. In addition, a classification system—the “voluntary herd status program” mentioned by the commenter above—has been developed by USAHA's Johne's Disease Committee. While APHIS supports the U.S. Voluntary Johne's Disease Herd Status Program for Cattle, we do not believe it is appropriate at this time to make it a federally-regulated activity and, therefore, have not made it part of this rulemaking.

In the future, the regulations may be further amended to include new technologies (including diagnostic tests) and standards from voluntary programs and to incorporate changes that may be necessary as States develop and implement their own Johne's disease control programs.

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

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

This rule will establish an official test for Johne's disease. It also will make it easier to move domestic animals that are positive to an official Johne's disease test interstate to slaughter.

However, we do not anticipate that these changes will have a significant economic effect on small entities. Under the regulations in effect before this final rule, animals moved interstate to slaughter had to bear an eartag with a serial number and the inscription “U.S. Reactor” and be transported with a certificate. In addition, cattle also had to be branded with the letter “J” on their left hip, accompanied directly to slaughter by an APHIS or State representative, or moved in vehicles closed with official seals. We are removing these requirements and will simply require positive animals moving interstate to slaughter to bear an official eartag and be shipped with an owner-shipper statement. There are no direct costs related to these requirements, so herd owners will not experience a savings from the removal of these requirements. However, this rule will expedite the movement of animals by 1 to 5 days because herd owners will not have to wait to obtain the services of an APHIS or State representative prior to the interstate movement of their animals to slaughter. This may result in some small savings to herd owners.

In a recent study, APHIS examined the cost of Johne's disease on U.S. dairy cattle producers. 1 The study found that infected herds with at least 10 percent of the culled cows showing clinical signs of Johne's disease had an average disease-related cost to producers of $227 for each cow in the herd per year. Therefore, the disease-related costs for a 100 cow dairy with at least 10 percent of culled cows showing clinical disease signs of Johne's disease would be approximately $22,700 per year. By amending the regulations, we may be able to strengthen detection and control of Johne's disease, which should reduce the producers' Johne's disease-related costs. However, the reduction in disease-related costs is not likely to be significant for the reasons provided in the next paragraph.

We anticipate that this rule will affect primarily U.S. dairy cattle producers. In 1997, there were 116,680 dairy herds or farms in the United States. We estimate that about 22 percent (25,670 herds) of the U.S. dairy herds are affected with Johne's disease. The Small Business Administration (SBA) considers a dairy farm a small entity if its annual receipts are $0.5 million or less. According to the 1992 Census of Agriculture, 95 percent of dairy producers are considered small entities under SBA guidelines. This rule should benefit dairy cattle producers, but for most producers, the economic effect of the rule may be insignificant. This is because on a per head basis only about 10 percent of the cattle will test positive, not all positive animals are likely to be moved interstate for slaughter, and, as noted earlier, there are no direct costs associated with the requirements we are removing.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are in conflict with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the information collection or recordkeeping requirements included in this final rule have been approved by the Office of Management and Budget (OMB). The assigned OMB control number is 0579-0148.

This action is part of the President's Regulatory Reform Initiative, which, among other things, directs agencies to remove obsolete and unnecessary regulations and to find less burdensome ways to achieve regulatory goals.

The FAA received several reports indicating that operators found loose nuts on the bolts that connect the lower input crank arm and the vernier adjustment input rod of the elevator power control unit (PCU). Apparently, maintenance had not been accomplished on the PCU's since delivery of the airplanes from the manufacturer. One of the loose PCU input rod nuts was found on a production airplane during a line check. The loose nuts reported had been finger tightened, but had not been properly torqued on the bolts.

Loose nuts on the bolts of the input rod of the elevator PCU could result in the loss of pivot bolts on the crank arms of the elevator PCU's, and consequent loss of control of the airplane during takeoff and landing.

The FAA has reviewed and approved Boeing Telegraphic Service Letter 737-SL-27-150, dated February 14, 2000, which describes procedures for a one-time visual inspection to determine if the nuts installed on the bolts at each end of the input rods connected to each elevator power control unit (PCU) are installed correctly, and tightening of any loose nut that is found.

Since an unsafe condition has been identified that is likely to exist or develop on other Boeing Model 737-600, -700, and -800 series airplanes of the same type design, this AD is being issued to prevent loss of control of the airplane during takeoff and landing due to loose nuts on the bolts of the input crank arms of the elevator PCU, and consequent loss of pivot bolts on the PCU. This AD requires a one-time general visual inspection to determine if the nuts installed on the bolts at each end of the input rods connected to each elevator PCU are installed correctly, and corrective action, if necessary. The actions are required to be accomplished in accordance with the telegraphic service letter described previously.

This AD also requires that operators report findings of loose nuts to the FAA.

Since a situation exists that requires the immediate adoption of this regulation, it is found that notice and opportunity for prior public comment hereon are impracticable, and that good cause exists for making this amendment effective in less than 30 days.

Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified under the caption ADDRESSES . All communications received on or before the closing date for comments will be considered, and this rule may be amended in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of the AD action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2000-NM-84-AD.” The postcard will be date stamped and returned to the commenter.

The regulations adopted herein will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and that it is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES .

The FAA has recently received reports indicating that several operators have found cracked fire extinguisher discharge tubes in the number 2 and number 3 struts on several Boeing Model 747-400 series airplanes that are equipped with General Electric (GE) CF6-80C2 series engines. Further investigation revealed similarly cracked fire extinguisher discharge tubes on Boeing Model 747-400 series airplanes equipped with Pratt & Whitney PW4000 series engines, which incorporate a similar tube installation. The cause of the cracking has been attributed to installation preload and flexing of the tube due to motion between the wing and the strut.

The subject fire extinguisher discharge tubes extend from the fire extinguisher bottles to the number 2 and number 3 engine struts, and are intended to deliver fire extinguishing agent to the engine in the event of an engine fire. Similar designs exist in Boeing Model 747-200B and -300 series airplanes equipped with GE CF6-80C2 series engines. A cracked tube could reduce the amount of fire extinguishing agent that can be delivered to the engine. In the worst case (a broken tube), no fire-extinguishing agent would be delivered to the engine. This condition, if not corrected, could result in a fire spreading from the engine to the wing of the airplane.

The FAA has reviewed and approved Boeing Alert Service Bulletin 747-26A2266, dated March 3, 2000. That alert service bulletin describes procedures for repetitive detailed visual inspections to detect cracking of fire extinguisher discharge tubes in the number 2 and number 3 engine struts. The alert service bulletin also describes procedures for replacement of any cracked tube with a new or serviceable tube.

The FAA also has reviewed and approved Boeing Service Bulletin 747-26-2233, dated May 11, 1995. That service bulletin applies to Model 747-400 series airplanes equipped with Pratt & Whitney PW4000 series engines and describes procedures for a modification of the fire extinguisher discharge tubes in the number 2 and number 3 engine struts, and a post-modification test of the fire extinguishing system to ensure that it functions properly. The modification is intended to prevent cracked fire extinguishing tubes by rerouting the fire extinguisher discharge tubes along the front spar and changing the orientation of two wire bundle clamps in the number 2 engine strut. Accomplishment of the modification eliminates the need for the repetitive inspections described previously on the subject airplanes.

Since an unsafe condition has been identified that is likely to exist or develop on other Boeing Model 747-200B, -300, -400, -400D, and -400F series airplanes of the same type design, this AD is being issued to detect and correct cracked fire extinguishing tubes in the engine struts. In the event of an engine fire, such cracked tubes could reduce the amount of fire extinguishing agent that can be delivered to the engine, and could result in a fire spreading from the engine to the wing of the airplane. This AD requires repetitive detailed visual inspections to detect cracking of fire extinguisher discharge tubes in certain engine struts, and replacement of any cracked tube with a new or serviceable tube. These actions are required to be accomplished in accordance with Boeing Alert Service Bulletin 747-26A2266. For Boeing Model 747-400 series airplanes equipped with Pratt & Whitney PW4000 series engines, this AD also provides for a modification of the fire extinguisher discharge tubes, which constitutes terminating action for the repetitive inspections. If accomplished, that modification is required to be accomplished in accordance with Boeing Service Bulletin 747-26-2233.

Though Boeing Alert Service Bulletin 747-26A2266 specifies that it applies to airplanes having line numbers 679 through 1062 inclusive, this AD applies to airplanes having line numbers 679 through 1061 inclusive. The alert service bulletin states that the intent of Boeing Service Bulletin 747-26-2233 was accomplished (by service bulletin validation) prior to delivery on the airplane having line number 1062. As stated previously, accomplishment of Boeing Service Bulletin 747-26-2233 constitutes terminating action for the requirements of this AD for Boeing Model 747-400 series airplanes equipped with Pratt & Whitney PW4000 series engines. Therefore, the airplane with line number 1062 is not included in the applicability statement of this AD.

Since a situation exists that requires the immediate adoption of this regulation, it is found that notice and opportunity for prior public comment hereon are impracticable, and that good cause exists for making this amendment effective in less than 30 days.

Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified under the caption ADDRESSES. All communications received on or before the closing date for comments will be considered, and this rule may be amended in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of the AD action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2000-NM-87-AD.” The postcard will be date stamped and returned to the commenter.

The regulations adopted herein will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and that it is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) by superseding AD 99-07-06, amendment 39-11091 (64 FR 14578, March 26, 1999), which is applicable to certain Boeing Model 767 series airplanes, was published in the Federal Register on June 23, 1999 (64 FR 33437). The action proposed to supersede AD 99-07-06 to continue to require repetitive inspections to detect cracking or damage of the forward and aft lugs of the diagonal brace of the nacelle strut, and follow-on actions, if necessary. That action also proposed to require accomplishment of the previously optional terminating action.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received.

Two commenters support the proposed rule.

One commenter requests that the compliance time for the repetitive inspection intervals specified in paragraph (b)(1) of the proposed AD be extended. The commenter suggests that the inspection intervals should coincide with its current heavy maintenance program, which specifies that inspections be performed between 1,200 and 1,300 flight cycles. The commenter further states that to carry out the inspection at intervals not to exceed 1,000 flight cycles would be considered punitive action as it is prior to the normally scheduled maintenance.

The FAA does not concur with the commenter's request to extend the compliance time for accomplishment of the repetitive inspection intervals to between 1,200 and 1,300 flight cycles after the initial inspection. In developing an appropriate compliance time for the repetitive inspections, the FAA considered not only the degree of urgency associated with addressing cracking or damage of the forward and aft lugs of the diagonal brace of the nacelle strut, but other factors as well. Those factors include the recommendations of the manufacturer, and the practical aspect of accomplishing the repetitive inspections within an interval of time coinciding with normally scheduled maintenance for the majority of affected operators. Considering those factors, the FAA has determined that the compliance time of 1,000 flight cycles after the accomplishment of the initial inspection represents the maximum interval in which the affected airlines can continue to operate without compromising safety. In view of those factors, and the amount of time that has already elapsed since issuance of the notice of proposed rulemaking, the FAA has determined that further delay of these inspections is, in general, not appropriate. The FAA may, however, approve a request for an adjustment of the compliance time under the provisions of paragraph (f) of this final rule if data are submitted to substantiate that such an adjustment would provide an equivalent level of safety. No change to the final rule is necessary in this regard.

Another commenter requests that the compliance times for the replacement of the diagonal brace specified in paragraphs (d) and (e) of the proposed rule be changed to reflect the flight cycle threshold formula specified in the structural inspection program service bulletin, 767-54-0081, Figure 1, which is to be released soon. The commenter also notes that the threshold formula could be placed in an appendix to the proposal.

The FAA does not concur with the commenter's request. Boeing Service Bulletin 767-54-0081 states that the threshold formula may be used in lieu of the calendar threshold specified in the identified service bulletins. The formula in service bulletin 767-54-0081 was FAA-approved based on the fact that certain airplanes ( e.g., those that have extended flights) would reach the 20-year calendar threshold long before they accumulated the flight cycle threshold of 37,500 total flight cycles specified in that service bulletin. The FAA notes that there is no comparable threshold in calendar time contained in this final rule for which the proposed threshold formula can be used as a substitute. The FAA considered many factors (as stated previously) before developing an appropriate compliance time for this AD, and the FAA has determined that the compliance time for the replacement required by paragraphs (d) and (e) of the final rule represents the maximum interval in which the affected airlines can continue to operate without compromising safety. Therefore, no change to the final rule is necessary.

Another commenter requests the compliance time in paragraph (b)(2) of the proposal be revised to read, “* * * diagonal brace has accumulated 24,000 flight cycles * * *” to agree with the alert service bulletin. The FAA does not concur. The alert service bulletin specifies that the initial inspection for Group 2 airplanes be performed prior to the accumulation of 24,000 flight cycles, or within 90 days after receipt of the service bulletin; and the repetitive inspections be performed at intervals not to exceed 3,000 flight cycles until the diagonal brace has accumulated 32,000 flight cycles. Therefore, the final rule agrees with the alert service bulletin and no change is necessary in this regard.

Three commenters request that the word “damage” be deleted from or clarified in paragraphs (a), (b), and (c) of the proposal.

The first commenter states that, if any damage is detected, even if it is minor and repairable, replacement of the diagonal brace is required, as specified in paragraph (c) of the proposal. The commenter further states that the alert service bulletin referenced in the proposal specifies an inspection to detect cracking of the diagonal brace lugs only, and does not specify inspecting for damage; therefore, the word “damage” should be deleted.

The second commenter states that if the words “or damage” are not removed, paragraphs (a), (b), and (c) of the proposal should specifically clarify what should be searched for (cracks, fracture) during the inspection. The same commenter requests the addition of a requirement in paragraph (c) of the proposal to specify that damage to the lug bores (including wear, cracks, or surface corrosion) be repaired in accordance with Part 2 of the Accomplishment Instructions of the alert service bulletin.

The third commenter states that the word “damage” is undefined in the proposed rule, and notes that the alert service bulletin specifies that cracks originated in the lug bore of the diagonal brace caused by bushing motion and subsequent fretting of the lug bore, indicating that the damage that caused the cracks was fretting of the lug bore. The commenter also notes that the detailed visual inspection required by paragraph (a) of the proposal does not inspect the lug bore; therefore, the fretting or “damage” will not be found. The commenter indicates that, without any damage limit guidelines, even very minor damage (tool marks, scratched paint) will make it necessary for operators to perform costly additional inspections. The commenter notes that the inspection should be limited to the unsafe condition that is caused by fretting of the lug bore, which can be found by crack indications.

The FAA does not concur with the commenters' requests concerning removal of the word “damage” as referenced in paragraphs (a), (b), and (c) of the final rule. The FAA has reviewed this issue and has determined that the inspection to detect cracks or damage as required by paragraphs (a) and (b) of the final rule, is necessary. Certain types of damage, if detected, specifically fretting and bushing motion, must be corrected in accordance with the Manager, Seattle Aircraft Certification Office. These types of damage are two links in a sequential chain of events that can ultimately result in a fractured lug, or other possible failure modes. Other types of damage (tool marks, scratched paint) are not related to the unsafe condition specified in this AD, and would be defined as superficial. The FAA has, however, added a “NOTE 2” to the final rule to define the word “damage.”

The FAA concurs with the second commenter's request to add another requirement to paragraph (c) of the final rule, which states that damage can be repaired in accordance with the applicable service bulletin. Paragraph (c) of the final rule has been revised to give the operator the option of either repair or replacement of the diagonal brace if any cracking or damage is detected, following accomplishment of any inspection required by paragraph (a) or (b) of the AD.

One commenter requests that the wording in paragraph (c) of the proposal be revised to read, “* * * and if one or more ligaments of the lugs are fractured perform additional inspections to detect damage of the strut secondary load paths * * *” The commenter notes that cracking, rather than fractures, will not increase the load in the secondary load path.

Another commenter requests clarification of the requirements in paragraph (c) of the proposal. The commenter questions which two lugs out of the four lugs (two lugs on the forward end and two lugs on the aft end) of the diagonal brace must be fractured before the extensive follow-on inspections of the secondary load path structure (Figure 8 of the service bulletin) are necessary. The commenter's interpretation is that the inspections specified in Figure 8 of the service bulletin are necessary only if both lugs on one of the ends of the diagonal brace are fractured, and if only one lug on each end of the diagonal brace is fractured, the inspections specified in Figure 7 of the service bulletin would be necessary.

The FAA agrees that clarification is necessary in order to better define the requirements in paragraph (c) of the AD. Paragraph (c) of the final rule has been revised to provide a detailed explanation of the inspection area and procedures.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule with the changes previously described. The FAA has determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 208 airplanes of the affected design in the worldwide fleet. The FAA estimates that 105 airplanes of U.S. registry will be affected by this AD.

The inspections that are currently required by AD 99-07-06, and retained in this AD, take approximately 1 work hour per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the currently required inspections on U.S. operators is estimated to be $6,300, or $60 per airplane, per inspection cycle.

The replacement that is required in this AD action takes approximately 8 work hours (4 work hours for each strut) per airplane to accomplish, at an average labor rate of $60 per work hour. Required parts will cost approximately $50,000 per airplane. Based on these figures, the cost impact of the required replacement required by this AD on U.S. operators is estimated to be $5,300,400, or $50,480 per airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted.

The regulations adopted herein will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

On February 15, 1994, the FAA published a final rule, Alcohol Misuse Prevention Program (59 FR 7380). On August 19, 1994, the FAA published a final rule, Antidrug Program for Personnel Engaged in Specified Aviation Activities (59 FR 42922). These final rules specified the requirements for drug and alcohol testing of air carrier employees. Since the publication of the final rules, the FAA has identified several FAA office addresses specified in the final rules that have changed. This technical amendment updates office addresses specified in 14 CFR Part 121, Appendices I and J. The changes will facilitate notification, reporting, and submission requirements.

Because this action is merely a technical amendment reflecting the change to office addresses, the FAA finds that notice and public procedure under 5 U.S.C. 553(b) are unnecessary. For the same reason, the FAA finds that good cause exists under 5 U.S.C. 5553(d) for making this amendment effective upon publication.

An electronic copy of this document may be downloaded using a modem and suitable communications software from the FAA regulations section of the Fedworld electronic bulletin board service (telephone: (703) 321-3339), or the Government Printing Office's (GPO) electronic bulletin board service (telephone: (202) 512-1661).

Internet users may reach the FAA's web page at http://www.faa.gov/avr/arm/nprm/nprm.thm or the Government Printing Office's webpage at http://www.access.gpo.gov/nara for access to recently published rulemaking documents.

Any person may obtain a copy of this rule by submitting a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue, SW, Washington, DC 20591, or by calling (202) 267-9680. Communications must identify the amendment number or docket number of this rule.

If you are a small entity and have a question, contact your local FAA official. If you do not know how to contact your local FAA official, you may contact Charlene Brown, Program Analysis Staff, Office of Rulemaking, ARM-27, Federal Aviation Administration, 800 Independence Avenue, SW, Washington, DC 20591, 1-888-551-1594. Internet users can find additional information on SBREFA in the “Quick Jump” section of the FAA's web page at http://www.faa.gov and may send electronic inquiries to the following Internet address: 9-AWA-SBREFA@faa.gov.

This is a routine matter that will affect only changes to office addresses for notification, reporting, and submission purposes. The regulations adopted herein 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. Therefore, in accordance with Executive Order 12612, it is determined that this final rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

The FAA has determined that this action does not warrant preparation of a regulatory evaluation since the anticipated impact is minimal. For the reasons discussed in the preamble, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Information collection requirements in the amendment to Part 121, Appendix I, Sections VI, VII, and IX and Appendix J, Sections V and VII have previously been approved by the Office of Management and Budget (OMB) under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. section 3507(d)), and have been assigned OMB Control Numbers 2120-0535 and 2120-0571, respectively.

An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number.

On December 8, 1998, the Securities and Exchange Commission (“Commission”) adopted new rules and rule amendments to allow alternative trading systems to choose whether to register as national securities exchanges, or to register as broker-dealers and comply with additional requirements under Regulation ATS, depending on their activities and trading volume. 1 The effective date for most of these new rules and rule amendments was April 21, 1999. The Commission stated in the adopting release that Rules 301(b)(5)(i)(D) and (E) and 301(b)(6)(i)(D) and (E) would become effective on April 1, 2000. These rules relate to certain requirements for alternative trading systems that trade investment grade and non-investment grade corporate debt securities. For alternative trading systems trading 20 percent or more of the average daily trading volume over at least four of the preceding six months in either investment grade or non-investment grade corporate debt securities, the fair access and systems capacity, security, and integrity requirements were to take effect on April 1, 2000.

In the Adopting Release, we noted that volume data for investment grade and non-investment grade corporate debt was not being compiled or published. Accordingly, market participants and regulators had no mechanism to determine what the aggregate daily trading volume is for either investment grade corporate bonds or non-investment grade corporate bonds. The Commission had anticipated that a comprehensive reporting system for corporate debt would be in place by April 1, 2000 that would have allowed market participants to access aggregate data with which to determine their own compliance with the rules. While efforts are ongoing to complete such a system, no such comprehensive reporting system is currently in place. The Commission currently believes that staying the effectiveness of Rules 301(b)(5)(i)(D) and (E) and 301(b)(6)(i)(D) and (E) until December 1, 2000 would provide sufficient time for a system to be developed and implemented that would compile and publish data for both market segments. 2

FDA has discovered that errors have been incorporated into the agency's codified regulations for 21 CFR parts 211 and 720. This document corrects those errors. Publication of this document constitutes final action under the Administrative Procedure Act (5 U.S.C. 553). FDA has determined that notice and public comment are unnecessary because this amendment is nonsubstantive.

On December 31, 1980, the Secretary of the Interior conditionally approved the New Mexico program. You can find background information on the New Mexico program, including the Secretary's findings, the disposition of comments, and conditions of approval in the December 31, 1980, Federal Register (45 FR 86459). You can also find later actions concerning New Mexico's program and program amendments at 30 CFR 931.11, 931.15, 931.16, and 931.30.

By letter dated March 11, 1996, New Mexico sent to us an amendment (SPATS No. NM-037-FOR, administrative record No. NM-773) to its program pursuant to SMCRA (30 U.S.C. 1201 et seq .). New Mexico submitted the proposed amendment to include changes made in response to the required amendment at 30 CFR 931.16(t) and at its own initiative.

We announced receipt of the amendment in the March 26, 1996 Federal Register (59 FR 13117), provided an opportunity for a public hearing or meeting on its substantive adequacy, and invited public comment on its adequacy (administrative record No. NM-802). Because no one requested a public hearing or meeting, none was held. The public comment period ended on April 25, 1996.

During our review of the amendment, we identified concerns and notified New Mexico of the concerns by letter dated May 15, 1996 (administrative record no. NM-785). New Mexico responded in a letter dated November 9, 1998, by submitting a revised amendment and additional explanatory information (administrative record no. NM-803).

We announced receipt of the proposed amendments in the December 3, 1998 Federal Register (63 FR 66774). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on the amendment's adequacy (administrative record No. NM-809). We did not hold a public hearing or meeting because no one requested one. The public comment period ended on December 18, 1998.

During our review of the revised amendment, we identified concerns and notified New Mexico of the concerns by letter dated December 21, 1998 (administrative record no. NM-814). New Mexico responded in a letter dated December 1, 1999, by sending us a revised amendment (administrative record no. NM-816).

Based upon New Mexico's revisions to its amendment, we reopened the public comment period in the December 22, 1999 Federal Register (64 FR 71698); administrative record no. NM-818). The public comment period ended on January 21, 2000.

Following are the findings we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are approving the amendment.

New Mexico proposed minor wording, editorial, punctuation, grammatical, and recodification changes to the following previously-approved rules.

Because these changes are minor, we find that they will not make New Mexico's rules less effective than the corresponding Federal regulations.

New Mexico proposed revisions to the following rules containing language that is the same as or similar to the corresponding sections of the Federal regulations.

Because these proposed rules contain language that is the same as or similar to the corresponding Federal regulations, we find that they are no less effective than the corresponding Federal regulations.

New Mexico proposed to revise 19 NMAC 8.2. 2054A(1), (2), and (3), concerning time requirements for backfilling and grading of contour mining, open pit mining, and strip mining, to add the allowance for the Director of the New Mexico program to approve additional distance, as well as additional time, for rough backfilling and grading if the permittee can demonstrate, on the basis of the materials submitted under 19 NMAC 8.2 906.B(3), that additional distance is necessary.

New Mexico also proposed to add at 19 NMAC 8.2 2054.A(5) the requirement that, at completion of mining, rough backfilling and grading shall occur in accordance with a time schedule approved by the Director of the New Mexico program based on materials submitted under 19 NMAC 8.2 906.B(3).

Existing 19 NMAC 8.2 906.B(3) requires that each permit application contain a reclamation plan including a plan for backfilling, soil stabilization, compacting, and grading, with contour maps or cross sections that show the anticipated final surface configuration of the proposed permit area.

On December 17, 1991, OSM promulgated new regulations, at 30 CFR 816.101, that provided national time and distance performance standards for rough backfilling and grading for surface mining operations. Those regulations were subsequently challenged in National Coal Association and American Mining Congress v. U.S. Department of the Interior, et al., Civ. No. 92-0408-CRR (1992). This case was dismissed without prejudice by the U.S. District Court for the District of Columbia as the result of a joint stipulation of the parties that included OSM's agreement to suspend the regulation at 30 CFR 816.101.

The December 17, 1991, Federal regulations at 30 CFR 816.101 concerning time and distance performance standards for rough backfilling and grading were suspended by OSM on July 31, 1992. Therefore, in absence of a specific Federal regulation providing specific time and distance performance standards for rough backfilling and grading, the Federal standards against which State time and distance performance standards for rough backfilling and grading must be judged are section 515(b)(16) of SMCRA and 30 CFR 816.100.

Section 515(b)(16) of SMCRA requires that surface coal mining and reclamation operations be conducted so as to insure that all reclamation efforts proceed as contemporaneously as practicable with the surface coal mining operations. The Federal regulation at 816.100 similarly provides that backfilling and grading shall occur as contemporaneously as practicable with mining operations. In common usage, the term “practicable” means “possible to perform” or “feasible”. Therefore, New Mexico's proposal to allow time and distance standards for backfilling and grading demonstrated as necessary by an applicant's reclamation plan, whether during active mining as proposed by New Mexico at 19 NMAC 8.2 2054.A (1), (2), and (3), or at the completion of mining, as proposed by New Mexico at 19 NMAC 8.2 2054.A(5), is equivalent in meaning to and consistent with section(b)(16) of SMCRA and the Federal regulation at 30 CFR 816.100. Accordingly, New Mexico's proposed rules at 19 NMAC 8.2 2054.A (1), (2), (3), and (5) are no less stringent than section 515(b)(16) of SMCRA and no less effective than the Federal regulations at 30 CFR 816.100 with respect to standards for rough backfilling and grading. The Director approves 19 NMAC 8.2 2054.A (1), (2), (3), and (5).

OSM required at 30 CFR 931.16(t) that New Mexico revise 19 NMAC 8.2 2076.B(9), concerning the requirement for all ancillary and primary roads to have (at a minimum) a static safety factor of 1.3 for all embankments, to reference 19 NMAC 8.2 2076.D instead of 19 NMAC 8.2 2076.C. (See finding No. 20(b), 58 FR 65907, 65923, December 17, 1993.)

New Mexico proposed to revise 19 NMAC 8.2 2076.B by deleting the general requirement at 19 NMAC 8.2 2076.B(9) that all roads have, at a minimum, a static factor of safety of 1.3 for all embankments, with the exception that the Director of the New Mexico program could determine a lesser static factor of safety on a site-specific basis with respect to an ancillary road. New Mexico also proposed to revise 19 NMAC 8.2 2077.A by adding the requirement at 19 NMAC 8.2 2077.A(5) that all primary roads have a static factor of safety of 1.3, at a minimum, for all embankments.

The Federal regulations at 30 CFR 816.150 and 817.150, concerning performance standards for all roads, do not specify a static safety factor for road embankments and the Federal regulations at 30 CFR 816.151(b) and 817.151(b), concerning performance standards for primary roads, require that each primary road embankment have a minimum static factor of 1.3.

Because New Mexico's proposed revisions cause its rules to be the same as the Federal regulations, the Director finds that New Mexico's proposed deletion at 19 NMAC 8.2 2076.B(9) and addition at 19 NMAC 8.2 2077.A(5) have resolved the required amendment and are no less effective than the Federal regulations at 30 CFR 816.150 and 151(b) and 817.150 and 151(b). The Director approves the proposed deletion of 19 NMAC 8.2 2076.B(9) and addition of 19 NMAC 8.2 2077.A(5) and is removing the required amendment at 30 CFR 931.16(t).

New Mexico proposed to revise 19 NMAC 8.2 813.K(1) through (3), concerning cross sections, maps, and plans required in a permit application, by (1) deleting specific slope measurement requirements paragraphs (1) through (3) so that proposed 19 NMAC 8.2 813.K requires that a map show the existing land surface configuration of the proposed permit area on contour maps of a maximum of 5 foot contour intervals.

The corresponding Federal regulation at 30 CFR 779.25(a) lists what is required to be shown by cross sections, maps, and plans required in a permit application. There is no counterpart to proposed 19 NMAC 8.2 813.K, pertaining to a map showing existing land surface configuration, in the corresponding Federal regulations at 30 CFR 779.25(a). However, the requirement at proposed 19 NMAC 8.2 813.K serves to aid the regulatory authority in a determination at phase I bond release concerning backfilling and grading to approximate original contours and is not inconsistent with the requirements of the Federal regulations at 30 CFR 779.25(a).

Therefore, the Director finds that proposed 19 NMAC 8.2 813.K is no less effective than the Federal regulations at 30 CFR 779.25(a). The Director approves proposed 19 NMAC 8.2 813.K.

New Mexico proposed to revise 19 NMAC 8.2 1412 by adding new 19 NMAC 8.2 1412.A(2) (i) through (vii), concerning minimum requirements for all bond release applications, and recodifying existing 19 NMAC 1412.A(2) as 19 NMAC 1412.A(3). New Mexico also proposed to revise 19 NMAC 1412.A(3) by deleting the requirement for bond release applications that the applicant submit copies of letters which he has sent to adjoining property owners, local governmental bodies, planning agencies, sewage and water treatment authorities, and water companies in the locality in which the surface coal mining and reclamation operation took place, notifying them of the intention to seek release from the bond. New Mexico deleted this requirement because it is proposed under the minimum requirements for a bond release application at 19 NMAC 1412.A(2)(v).

There are no specific counterparts setting forth minimum requirements for a bond release application in the corresponding Federal regulations at 30 CFR 800.40(a)(1). However, New Mexico's proposed minimum requirements at proposed 19 NMAC 1412.A(2)(i) through (vii) clarify what kinds of legal and technical information any bond release application must contain and are consistent with the Federal regulation at 30 CFR 800.40(a)(1). Recodified and revised 19 NMAC 1412.A(3), concerning the permittee's public notice of a bond release application, along with the requirement now codified at 19 NMAC 1412.A(2)(v) for copies of letters notifying specified individuals and governmental or private entities of the application for bond release, are substantively identical to the Federal regulation at 30 CFR 800.40(a)(2).

Therefore, the Director finds that proposed 19 NMAC 8.2 1412.A(2)(i) through (vii) and 1412.A(3) are no less effective than the Federal regulations at 30 CFR 800.40(a)(1) and (2). The Director approves proposed 19 NMAC 8.2 1412.A(2)(i) through (vii) and 1412.A(3).

We asked for public comments on the amendment (administrative record Nos. 776, 806, and 817).

The National Mining Association requested, by letter dated December 8, 1998 (administrative record No. NM-810), that OSM send copies of (1) the May 15, 1996, letter sent to New Mexico by OSM setting forth concerns with the proposed amendment and (2) the supplemental information OSM sent to New Mexico by letter dated February 26,1998. OSM sent the requested information by letter dated December 22, 1998 (administrative record No. NM-813).

The Navajo Nation commented, by letter dated January 21, 2000 (administrative record No. 821), that it was unclear from the two December 22, 1999, Federal Register notices (64 FR 71698 and 64 FR 71700), which published OSM's receipt of three New Mexico amendments (including the amendment that is the subject of this document), that there would be an opportunity for public comment prior to OSM's decision on the amendments. The text of December 22, 1999, Federal Register notices identified the changes proposed by New Mexico, notified the public of its right to comment and/or request a public hearing or meeting, and provided for a thirty day public comment period on the proposed New Mexico amendments. The public comment period for the New Mexico amendments closed on January 21, 2000. OSM explained to the Navajo Nation, in a letter dated February 7, 2000 (administrative record No. NM-823), the OSM's published Federal Register notices, as well as OSM's distribution of the proposed amendment to interested parties (which included the Navajo Nation) by letters dated April 1, 1996, November 23, 1998, and December 15, 1999, were the vehicles by which OSM provided for a public comment period and solicited public comments.

The Navajo Nation had two additional comments concerning New Mexico's March 11, 1996, amendment that is the subject of this notice. First, the Navajo Nation commented that the word “demonstrate” was missing from the text of 19 NMAC 8.2 2054.A(3), concerning the timing of backfilling and grading for strip mining. The amendment language at this rule as submitted by New Mexico to OSM on December 1, 1999, did not include the word demonstrate. However, this typographical error was corrected when New Mexico promulgated this rule and the word “demonstrate” is included in the published text of New Mexico's rules. Second, the Navajo Nation commented that New Mexico's proposed addition of 19 NMAC 2045.A(5), concerning the timing of backfilling and grading for the final pit at completion of mining, was less effective than SMCRA and the Federal regulations because it lacked a time factor. New Mexico's proposed rule at 19 NMAC 2045.A(5) requires that a permittee complete backfilling and grading of a final pit at the completion of mining in accordance with a time schedule approved by New Mexico based on materials submitted by the permittee in accordance with 19 NMAC 906.B(3). Although New Mexico did not specify in the rule a time factor such as 60 days, it does require that a specific time schedule be approved by New Mexico when mining is complete. And, as discussed in finding 3.A above, New Mexico's proposal to allow time (and distance) standards for backfilling and grading demonstrated as necessary by a permittee's reclamation plan, whether during active mining as proposed by New Mexico at 19 NMAC 8.2 2054.A(1), (2), and (3), or at the completion of mining, as proposed by New Mexico at 19 NMAC 8.2 2054.A(5), is equivalent in meaning to and consistent with section 515(b)(16) of SMCRA and the Federal regulation at 30 CFR 816.100. The Director is taking no further action in response to these comments in the Navajo Nation's January 21, 2000, letter.

Under 30 CFR 732.17(H)(11)(i), we requested comments on the amendment from various Federal agencies with an actual or potential interest in the New Mexico program (administrative record nos. 776, 806, and 817).

The U.S. Department of Agriculture, Natural Resources Conservation Service (NRCS), submitted the following comments by letter dated April 12, 1996 (administrative record No. NM-781).

New Mexico's recodified rule at 19 NMAC 8.2 1412.A(2)(v) requires that bond release application contain copies of letters which that have been sent to adjoining property owners, local governmental bodies, planning agencies, sewage and water treatment authorities, and water companies in the locality in which the surface coal mining and reclamation operation took place, notifying them of the intention to seek release from the bond. As discussed in finding No. 4.B above, 19 NMAC 8.2 1412.A(2)(v) is identical to the Federal regulation at 30 CFR 800.40(a)(3). NRCS questioned whether these groups will have sufficient opportunity to respond, whether they will have information on where to send their response, and will the responses be included as part of the bond release application. New Mexico's rules at 19 NMAC 8.2 1412.A(3) require that the applicant for bond release advertise its intention to seek bond release and that the advertisement include, among other things, the name and address of the Director of the New Mexico to which written comments, objections, or requests for public hearings and informal conferences may be submitted. New Mexico's rules at 19 NMAC 8.2 1412.F provide for a person's right to file written objections until 30 days after the last publication of the advertisement required by 19 NMAC 8.2 1412.A(3). These rules are identical to the counterpart Federal regulations. All comments pertaining to a bond release application received by New Mexico will become part of the public record.

NRCS commented that New Mexico's proposed rule at 19 NMAC 8.2 1510, concerning minimum requirements for coal mine operations exclusively under reclamation, should also contain information and analysis that will define expected land use, capability, and productivity after reclamation is complete. As announced by OSM in the December 3, 1998, Federal Register notice (which reopened the comment period on New Mexico's November 9, 1998, revisions proposed to its March 11, 1996, amendment), New Mexico withdrew all proposed rules at 19 NMAC 8.2 Part 15 (administrative record No. NM-809). These rules had no counterpart in the Federal program and were repealed by New Mexico so that they no longer exist in its program.

NRCS commented that the timing of backfilling and grading, as proposed by New Mexico at 19 NMAC 8.2 2054.A(1) and (3), should not rely only on distance, but should include a time factor as well. New Mexico subsequently revised its proposed rules at 19 NMAC 8.2 2054.A, as discussed in finding 3.A above, to require that the timing of backfilling and grading be determined by both time and distance standards.

Based on the discussion above, the Director is taking no further action in response to the NRCS comments.

The Bureau of Land Management (BLM) submitted the following comments by letter dated April 17, 1996 (administrative record No. NM-782).

BLM recommended that New Mexico revise 19 NMAC 8.2 813.K, concerning a map showing the existing land surface configuration of the proposed permit area on contour maps of a maximum of 5 foot contour intervals, to require the map to show roads, rail lines, occupied dwellings, pipelines, power lines, and planned exploratory and development features on a scale of 1:24,000 or larger. As discussed at finding No. 4.A above, proposed 19 NMAC 8.2 813.K is not inconsistent with the requirements of the Federal regulations at 30 CFR 779.25(a). New Mexico's existing rules at 19 NMAC 8.2 812.D and E require a map showing the location of (1) all buildings on and within 1,000 feet of the proposed permit area, with identification of the current use of the buildings, and (2) surface and subsurface man-made features within, passing through, or passing over the proposed permit area, including, but not limited to major electric transmission lines, pipelines, and agricultural drainage tile fields. The counterpart Federal regulations, concerning map requirements at 30 CFR 779.24 and 779.25, do not otherwise include requirements similar to the ones recommended by BLM. OSM can only require that New Mexico's program contain rules that are no less effective than the Federal regulations.

BLM recommended New Mexico revise proposed 19 NMAC 8.2 2054.A to require that the permittee demonstrate that additional distance for backfilling and grading is necessary or conducive to greater recovery of coal. As discussed in finding No. 3.A above, New Mexico revised 19 NMAC 8.2 2054.A to provide for additional time and distance for the timing of backfilling and grading based on information submitted in the reclamation plan required at 19 NMAC 906.B(3). This information could include justification for additional distance based on the need to maximize coal recovery. OSM is approving proposed 19 NMAC 8.2 2054.A in part because OSM recognized that there may exist unique conditions at individual surface coal mining operations that require unique standards for the timing of backfilling and grading (see finding No. 3A above). However, the counterpart Federal regulations at 30 CFR 816.100 contain no requirement to the one recommended by BLM. OSM can only require that New Mexico's program contain rules that are no less effective than the Federal regulations.

BLM recommended New Mexico revise 19 NMAC 8.2 2076.B, concerning general road design requirements, to require that roads be maintained and reclaimed so as to be in compliance with any and all safety standards established or approved by the Director. As discussed at finding 3.B above, New Mexico's proposed revision of 19 NMAC 8.2 2076 and 2077 to require a 3.1 safety factor for primary road embankments, rather than for all road embankments, is identical to the requirements in the Federal regulations. New Mexico's existing rule at 19 NMAC 8.2 2076.C requires that the design and construction or reconstruction of roads shall incorporate appropriate limits for grade, width, surface materials, surface drainage control, culvert placement, culvert size, and any necessary design criteria established by the Director (emphasis added).

The counterpart Federal regulations, concerning general road design at 30 CFR 816.150, do not include a requirement similar to the one recommended by BLM. OSM can only require that New Mexico's program contain rules that are no less effective than the Federal regulations.

Based on the discussion above, the Director is taking no further action in response to BLM's comments.

The U.S. Department of Interior, Fish and Wildlife Service (FWS), submitted several comments, by letter dated April 30, 1996 (administrative record No. NM-784), pertaining to proposed 19 NMAC Part 15, concerning minimum requirements for coal mine operations exclusively under reclamation. As announced by OSM in the December 3, 1998, Federal Register notice (which reopened the comment period on New Mexico's November 9, 1998, revisions proposed to its March 11, 1996, amendment), New Mexico withdrew all proposed rules at 19 NMAC 8.2 Part 15 (administrative record No. NM-809). These rules had no counterpart in the Federal program and were repealed by New Mexico so that they no longer exist in its program. For this reason, the Director is taking no action in response to the FWS comments.

The U.S. Department of Agriculture, Forest Service, Southwestern Region, commented, by letter dated December 9, 1998 (administrative record No. NM-811), that it had no comments.

The U.S. Department of Army, Corps of Engineers, commented, by dated December 28, 1999 (administrative record No. NM-820), that it found the proposed changes to be satisfactory.

BLM also commented, by letter dated January 26, 2000 (administrative record No. NM-822) that New Mexico's proposed 19 NMAC 8.2 2054.A allows 60 days for rough backfilling and grading when contour mining, yet 180 days for strip mining. BLM commented that this difference indicates that 60 days is an insufficient time for such remediation and recommended either the 180 day, 1500 linear feet limit or limits determined by plans of operations. BLM further stated that it preferred tying time frames to plans because specific seams may lend themselves to different backfilling and grading schedules.

As discussed in finding No. 3.A above, New Mexico proposed and OSM is approving, revisions to 19 NMAC 8.2 2054.A(1), (2), and (3), concerning time requirements for backfilling and grading of contour mining, open pit mining, and strip mining. New Mexico proposed to add the allowance for the Director of the New Mexico program to approve additional distance, as well as additional time, for rough backfilling and grading of contour mining, open pit mining, and strip mining, if the permittee can demonstrate, on the basis of the materials submitted that additional time or distance is necessary. Because New Mexico proposed (and OSM is approving) what BLM recommended in it's comment letter, the Director is taking no further action in response to this comment.

Under 30 CFR 732.17(h)(11)(ii), we are required to get a written agreement from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq. ) or the Clean Air Act (42 U.S.C. 7401 et seq. ).

None of the revisions that New Mexico proposed to make in this amendment pertain to air or water quality standards. Under 30 CFR 732.17(h)(11)(i), OSM requested comments on the amendment from EPA (administrative records Nos. 776, 806, and 817). EPA did not respond to our request.

Under 30 CFR 732.17(h)(4), we are required to request comments from the SHPO and ACHP on amendments that may have an effect on historic properties. We requested comments on New Mexico's amendment from the SHPO and ACHP (administrative record Nos. 776, 806, and 817); the ACHP did not respond to our request.

By letter dated April 19, 1996, the SHPO commented that it was unclear whether the protection from adverse effect of reclamation operations proposed at 19 NMAC 8.2 1517 (protection of public parks and historic places) included cultural resources identified at 19 NMAC 8.2 1510 (general environmental resources), and recommended that 19 NMAC 8.2 1517 be clarified to clearly include the cultural resources listed at 19 NMAC 8.2 1510.

As announced by OSM in the December 3, 1998, Federal Register notice (which reopened the comment period on New Mexico's November 9, 1998, revisions proposed to its March 11, 1996, amendment), New Mexico withdrew all proposed rules at 19 NMAC 8.2 Part 15 (administrative record No. NM-809). These rules concerned minimum requirements for coal mine operations exclusively under reclamation and had no counterpart in the Federal program; they were repealed by New Mexico and no longer exist in its program. Therefore, the Director is taking no action in response to this comment.

Based on the above findings, we approved the March 11, 1996, amendment sent to us by New Mexico, as revised on November 9, 1998, and December 1, 1999.

We approved, as discussed in:

(1) Finding No. 1, 19 NMAC 8.2 813.L, 19 NMAC 8.2 2054.A(2), and 19 NMAC 8.2 2054.A(3), concerning minor wording, editorial, punctuation, grammatical, and/or recodification changes to previously-approved New Mexico rules;

(2) Finding No. 2, 19 NMAC 8.2 2055.C(1) and 19 NMAC 8.2 1106.C, revisions to New Mexico's rules that contain language that is the same as or similar to the corresponding sections of the Federal regulations concerning, respectively, backfilling and grading requirements for the construction of small depressions and permit approval or denial pertaining to the probable cumulative hydrological impacts;

(3) Finding No. 3.A, 19 NMAC 8.2 2054.A(1), (2), and (3), and 19 NMAC 8.2 2054.A(5), concerning time requirements for backfilling and grading of contour mining, open pit mining, and strip mining and the schedule for backfilling and grading at completion of mining;

(4) Finding No. 3.B, 19 NMAC 8.2 2076.B and 19 NMAC 8.2 2077.A, concerning the static factor of safety of 1.3 for road embankments;

(5) Finding No. 4.A, 19 NMAC 8.2 813.K(1) through (3), concerning cross sections, maps, and plans required in a permit application; and

(6) Finding No. 4.B, 19 NMAC 8.2 1412.A(2) (i) through (vii), concerning minimum requirements for all bond release applications.

To implement this decision, we are amending the Federal regulations at 30 CFR Part 931, which codify decisions concerning the New Mexico program. We are making this final rule effective immediately to expedite the State program amendment process and to encourage States to make their programs conform with the Federal standards. SMCRA requires consistency of State and Federal standards.

This rule is exempted from review by the Office of Management and Budget (OMB) under Executive Order 12866 (Regulatory Planning and Review).

The Department of the Interior has conducted the reviews required by section 3 of Executive Order 12988 (Civil Justice Reform) and has determined that this rule meets the applicable standards of subsections (a) and (b) of that section. However, these standards are not applicable to the actual language of State regulatory programs and program amendments since each such program is drafted and promulgated by a specific State, not by OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State regulatory programs and program amendments submitted by the States must be based solely on a determination of whether the submittal is consistent with SMCRA and its implementing Federal regulations and whether the other requirements of 30 CFR Parts 730, 731, and 732 have been met.

This rule does not require an environmental impact statement because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency decisions on proposed State regulatory program provisions do not constitute major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C)).

This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3507 et seq .).

The Department of the Interior has determined that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). The State submittal that is the subject of this rule is based upon counterpart Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. Accordingly, this rule will ensure that existing requirements previously promulgated by OSM will be implemented by the State. In making the determination as to whether this rule would have a significant economic impact, the Department relied upon the data and assumptions for the counterpart Federal regulations.

OSM has determined and certifies under the Unfunded Mandates Reform Act (2 U.S.C. 1502 et seq. ) that this rule will not impose a cost of $100 million or more in any given year on any local, State, or Tribal governments or private entities.

It has been determined that 32 CFR part 318 is not a significant regulatory action. The rule does not:

(1) Have an annual effect to the economy of $100 million or more; or adversely affect in a material way the economy; a section 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;

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

It has been certified that this rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities.

It has been certified that this part does not impose any reporting or record keeping requirements under the Paperwork Reduction Act of 1995.

The proposed rule was published on January 20, 2000 at 65 FR 3167. No comments were received, therefore, the Defense Logistics Agency is adopting the rule as final.

It has been determined that 32 CFR part 321 is not a significant regulatory action. The rule does not:

(1) Have an annual effect to the economy of $100 million or more; or adversely affect in a material way the economy; a section 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;

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

It has been certified that this rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities.

It has been certified that this part does not impose any reporting or record keeping requirements under the Paperwork Reduction Act of 1995.

The rules being approved into the California SIP include: Antelope Valley Air Pollution Control District (AVAPCD) Rule 1151, Motor Vehicle and Mobile Equipment Coatings Operations and Mojave Desert Air Quality Management District (MDAQMD) Rule 1116, Automotive Refinishing Operations. These rules were submitted by the California Air Resources Board to EPA on October 29, 1999 and July 23, 1999, respectively.

On March 3, 1978, EPA promulgated a list of ozone nonattainment areas under the provisions of the Clean Air Act, as amended in 1977 (1977 Act or pre-amended Act), that included the portions of the San Bernardino County Air Pollution Control District  1 within the Southeast Desert Modified Air Quality Maintenance Area and the Los Angeles-South Coast Air Basin Area. 43 FR 8964, 40 CFR 81.305. On May 26, 1988, EPA notified the Governor of California, pursuant to section 110(a)(2)(H) of the 1977 Act, that the above districts' portions of the California SIP were inadequate to attain and maintain the ozone standard and requested that deficiencies in the existing SIP be corrected (EPA's SIP-Call). On November 15, 1990, the Clean Air Act Amendments of 1990 were enacted. Public Law 101-549, 104 Stat. 2399, codified at 42 U.S.C. 7401-7671q. In amended section 182(a)(2)(A) of the CAA, Congress statutorily adopted the requirement that nonattainment areas fix their deficient reasonably available control technology (RACT) rules for ozone and established a deadline of May 15, 1991 for states to submit corrections of those deficiencies.

Section 182(a)(2)(A) applies to areas designated as nonattainment prior to enactment of the amendments and classified as marginal or above as of the date of enactment. It requires such areas to adopt and correct RACT rules pursuant to pre-amended section 172 (b) as interpreted in pre-amendment guidance. 2 EPA's SIP-Call used that guidance to indicate the necessary corrections for specific nonattainment areas.

The AVAPCD portion of the Southeast Desert Modified Air Quality Maintenance Area (SDMAQMA) is classified as Severe-17, therefore, this area was subject to the RACT fix-up requirement and the May 15, 1991 deadline.

The MDAQMD portion of the SDMAQMA is classified as severe;  3 therefore, this area was subject to the RACT fix-up requirements and the May 15, 1991 deadline.

The AVAPCD was created pursuant to California Health and Safety Code (CHSC) section 40106 and assumed all air pollution control responsibilities of the South Coast Air Quality Management District in the Antelope Valley region of Los Angeles County,  4 effective July 1, 1997. AVAPCD is the successor agency to SCAQMD in the Antelope Valley portion of the Southeast Desert Modified Air Quality Maintenance Area. The AVAPCD remains subject to the RACT requirements.

The State of California submitted many revised RACT rules for incorporation into its SIP on July 23, 1999 and October 29, 1999, including the rules being acted on in this document. This document addresses EPA's direct-final action for AVAPCD Rule 1151, Motor Vehicle and Mobile Equipment Coatings Operations and MDAQMD Rule 1116, Automotive Refinishing Operations. AVAPCD adopted Rule 1151 on July 20, 1999 and MDAQMD adopted Rule 1116 on February 22, 1995 and revised Rule 1116 on April 26, 1999. These submitted rules were found to be complete on December 16, 1999 and August 24, 1999, respectively, pursuant to EPA's completeness criteria that are set forth in 40 CFR part 51 Appendix V  5 and is being finalized for approval into the SIP.

AVAPCD Rule 1151 is a new rule for Antelope Valley. Rule 1151 limits emissions of volatile organic compounds (VOC) and stratospheric ozone-depleting and global warming compounds from coatings applied to Group I or Group II Vehicles and Mobile Equipment. The provisions of this rule apply to all commercial and non-commercial coating applications at facilities involved in the production, modification, or refinishing of motor vehicles and mobile equipment.

MDAQMD Rule 1116 limits emissions of VOC and stratospheric ozone-depleting and global warming compounds from coatings applied to Group I and Group II Vehicles and Mobile Equipment. VOCs contribute to the production of ground level ozone and smog. These rules were originally adopted as part of AVAPCD's and MDAQMD's efforts to achieve the National Ambient Air Quality Standard (NAAQS) for ozone and in response to EPA's SIP-Call and the section 182(a)(2)(A) CAA requirement. The following is EPA's evaluation and final action for these rules.

In determining the approvability of a VOC rule, EPA must evaluate the rule for consistency with the requirements of the CAA and EPA regulations, as found in section 110 and part D of the CAA and 40 CFR part 51 (Requirements for Preparation, Adoption, and Submittal of Implementation Plans). The EPA interpretation of these requirements, which forms the basis for today's action, appears in the various EPA policy guidance documents listed in footnote 2. Among those provisions is the requirement that a VOC rule must, at a minimum, provide for the implementation of RACT for stationary sources of VOC emissions. This requirement was carried forth from the pre-amended Act.

For the purpose of assisting state and local agencies in developing RACT rules, EPA prepared a series of Control Technique Guideline (CTG) documents. The CTGs are based on the underlying requirements of the Act and specify the presumptive norms for what is RACT for specific source categories. Under the CAA, Congress ratified EPA's use of these documents, as well as other Agency policy, for requiring States to “fix-up” their RACT rules. See section 182(a)(2)(A). EPA has not yet issued a Control Techniques Guideline (CTG) for this source category, but has on December 30, 1997 amended 40 CFR Part 59, “National Volatile Organic Emission Standards for Consumer and Commercial Products” by adding Subpart E, “National Volatile Organic Compound Emission Standards for Automobile Refinishing Coatings,” 62 FR 67784. This standard regulates the manufacture of automotive coatings and not the application of automobile refinishing coatings. Body shops nationwide are not directly affected by the regulation's requirements. EPA has used the proposed VOC standards for automotive coatings as guidance in evaluating the VOC limits of Rule 1151 and Rule 1116. Further interpretations of EPA policy are found in the Blue Book, referred to in footnote 2. In general, these guidance documents have been set forth to ensure that VOC rules are fully enforceable and strengthen or maintain the SIP.

There is currently no version of AVAPCD Rule 1151, Motor Vehicle and Mobile Equipment Coatings Operations in the SIP. The submitted rule includes the following provisions:

On June 13, 1995 (60 FR 31081), EPA approved into the SIP a version of MDAQMD Rule 1116, Automotive Refinishing Operations that had been adopted on February 22, 1995. Revisions to this rule were subsequently adopted on April 26, 1999. The submitted Rule 1116 includes the following significant changes from the current SIP:

EPA has evaluated the submitted rules and has determined that they are consistent with the CAA, EPA regulations, and EPA policy. Therefore, AVAPCD Rule 1151, Motor Vehicle and Mobile Equipment Coatings Operations and MDAQMD Rule 1116, Automotive Refinishing Operations are being approved under section 110(k)(3) of the CAA as meeting the requirements of section 110(a) and part D.

EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comments. However, in the proposed rules section of this Federal Register publication, EPA is publishing a separate document that will serve as the proposal to approve the SIP revision should adverse comments be filed. This rule will be effective June 9, 2000 without further notice unless the Agency receives adverse comments by May 10, 2000.

If the EPA receives such comments, then EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. All public comments received will then be addressed in a subsequent final rule based on the proposed rule. The EPA will not institute a second comment period. Any parties interested in commenting on this rule should do so at this time. If no such comments are received, the public is advised that this rule is effective on June 9, 2000 and no further action will be taken on the proposed rule.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). For the same reason, this rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 9, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements.

We are finalizing approval of the 1997 ozone plan for the South Coast, as revised by a 1999 amendment. 1 The South Coast Air Quality Management District (SCAQMD) adopted the 1997 plan on November 15, 1996, and the California Air Resources Board (CARB) submitted the plan to us on February 5, 1997. SCAQMD adopted the 1999 amendment on December 10, 1999, and CARB submitted the plan to us on February 4, 2000. EPA determined the submittal to be complete on March 15, 2000. 2 In this document, we refer to the 1997 plan and 1999 amendment as “the revised ozone plan,” which is intended to replace the 1994 ozone SIP except for that portion of the SIP that consists of State control measures and EPA's commitment relating to a Public Consultative Process on national mobile sources. 3

On February 8, 2000, we proposed approval of the revised ozone plan with respect to the revised emissions inventory, the modeled attainment demonstration, control measures, commitment to achieve specified emission reductions in future years, revised rate-of-progress (ROP) plan, and emissions budget. Please see that document (65 FR 6091-6102) for further details on our proposed action, applicable CAA requirements, and additional information on the affected area.

We received 3 public comments. SCAQMD supported the proposed action, but requested a minor correction. The proposal stated that the South Coast Air Basin recorded the largest number of ozone violations in the country in 1999 based on preliminary data from EPA's Aerometric Information Retrieval System (AIRS). 65 FR 6092. We agree with SCAQMD that updated AIRS data now show that the basin had the second highest number of violations in 1999. Over the past three years (1997-1999), however, the South Coast Air Basin did have the largest number of ozone violations in the country.

A representative of the National Paint and Coatings Association commented regarding the purported technological and economic infeasibility of SCAQMD's coatings control measures, and issues regarding public notice and hearing requirements relative to SCAQMD's revisions to Rule 1113.

As noted by the commenter, we are barred from considering claims of economic or technological infeasibility in determining whether to approve a submitted SIP.

Union Electric Co. v. U.S. EPA , 429 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

The comment regarding Rule 1113 is not germane to our proposed action on the revised ozone plan, which does not address any approval issues associated with revisions to Rule 1113. When we take action on the SIP revision to Rule 1113, we will determine whether or not SCAQMD met public notice and public hearing requirements when the rule was revised. If the commentor continues to believe that these requirements were not met, he must resubmit comments during the public comment period for our rulemaking on the revisions to SCAQMD Rule 1113.

A private citizen argued that the emissions inventory does not meet the CAA section 172(c)(3) requirements and should not be approved. The commenter stated that the control factors associated with California's enhanced motor vehicle inspection and maintenance (I/M) program are known to be bogus. The commenter referenced a CARB letter dated January 7, 2000, stating: “There have been a number of legislative and operational changes to the I/M program that have reduced its effectiveness and associated air quality benefits.”

We addressed this issue in our proposed approval of the plan, noting that the revised ozone plan represents more current and accurate information than was used in the 1994 ozone SIP and complies with acceptable methodologies for inventory preparation, but that the responsible agencies are in the process of updating and refining emissions reductions, including those associated with the I/M program. 65 FR 6094, 6100.

When improved information is available to refine the estimate of emissions reductions associated with the I/M program, CARB and SCAQMD will use this information in a comprehensive ozone plan revision, scheduled for adoption and submittal as a SIP revision in 2001. As discussed in our proposed approval, this future revision will include a revised control strategy if needed to provide for expeditious attainment.

We reaffirm our finding that the emissions inventory portion of the revised ozone plan not only improves on the accuracy of the 1994 ozone SIP but also meets CAA requirements that the inventory be comprehensive, accurate, and current. Therefore, we are finalizing approval of the revised ozone plan with respect to the requirements of CAA sections 172(c)(3) and 182(a)(1).

In this document, we are finalizing the following actions on the revised ozone plan. For each action, we indicate the page on which the element is discussed in our proposal.

(1) Approval of the revised baseline and projected emissions inventories under CAA sections 172(c)(3) and 182(a)(1)—6094;

(2) Approval of the SCAQMD commitment to implement those measures that had been adopted in regulatory form between November 1994 and September 1999, by the dates specified to achieve the identified emission reductions, under CAA section 110(k)(3)—6095 (Table 1);

(3) Approval of the SCAQMD commitment to adopt and implement the short- and intermediate-term control measures in the revised ozone plan by the dates specified to achieve the identified emission reductions, under CAA section 110(k)(3)—6095 (Table 2);

(4) Approval of the SCAQMD commitment to adopt and implement control measures to achieve the identified emission reduction commitments  4 for 1999 to 2008, as specified in Table 2-6 of the 1999 amendment, under CAA section 110(k)(3)—6097 (Table 3);

(5) Deletion of 1994 ozone SIP control measures identified in the 1999 Amendment—6097 (Table 4);

(6) Approval of the SCAQMD commitment to adopt and implement the long-term control measures in the revised ozone plan by the dates specified to achieve the identified emission reductions, under CAA section 110(k)(3) and 182(e)(5)—6098 (Table 5);

(7) Approval of the revised rate-of-progress plan for the milestone years 1999, 2002, 2005, 2008, and 2010, under CAA sections 182(c)(2)—6099 (Table 6);

(8) Approval of the revised attainment demonstration under CAA sections 182(c)(2) and (e)—6100;

(9) Approval of the revised motor vehicle emissions budgets for purposes of transportation conformity under CAA section 176(c)(2)(A). Approval of the revised ozone plan also establishes new emissions budgets for ROP milestone years for purposes of general conformity under CAA section 176(c)(1)—6100-1 (Table 8).

Upon the effective date of our approval of the revised ozone plan, this plan replaces and supersedes the 1994 ozone SIP for the South Coast Air Basin with the exception of the State control measures for mobile sources, consumer products, and pesticides, and EPA's commitment. The State measures remain unchanged from those approved as part of the 1994 ozone SIP until we, in separate action, approve revised measures.

As discussed in our proposed action, CARB and SCAQMD intend to adopt and submit a comprehensive revision to the ozone plan in 2001. 65 FR 6101. We intend to work with CARB and SCAQMD to ensure the timely completion of this new comprehensive revision to refine and enhance the technical foundations of the attainment demonstration and update the control measures, as necessary.

The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that 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 rule is not subject to Executive Order 13045 because it does not involve decisions intended to mitigate environmental health or safety risks.

Under Executive Order 13084, Consultation and Coordination with Indian Tribal Governments, EPA may not issue a regulation that is not required by statute, that significantly affects 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. If the mandate is unfunded, EPA must provide to the Office of Management and Budget, 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 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 rule does not significantly or uniquely affect the communities of Indian tribal governments. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.

Executive Order 13121, entitled Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612, Federalism and 12875, Enhancing the Intergovernmental Partnership. Executive Order 13132 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.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions.

This final rule will not have a significant impact on a substantial number of small entities because SIP approvals under section 110 and subchapter I, part D of the Clean Air Act do not create any new requirements but simply approve requirements that the State is already imposing. Therefore, because the Federal SIP approval does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities.

Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of flexibility analysis would constitute Federal inquiry into the economic reasonableness of state action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

Under section 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated annual costs to State, local, or tribal governments in the aggregate; or to private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that the approval action promulgated does not include a Federal mandate that may result in estimated annual costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action approves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this 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. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This rule is not a “major” rule as defined by 5 U.S.C. 804(2).

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 9, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Regulated Entities. The entities potentially affected by this action include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. While the landfills EG and NSPS (40 CFR part 60, subparts Cc and WWW) will primarily impact facilities in the Standard Industrial Classification (SIC) code 4953, not all facilities in this code will be affected by this action. To determine if your landfill is affected by the landfills EG or NSPS, see 40 CFR part 60, subparts Cc and WWW, or the technical amendments published on June 16, 1998 (63 FR 37243).

Worldwide Web (WWW). In addition to being available in the docket, an electronic copy of today's action will be available on the WWW through the Technology Transfer Network (TTN). Following signature, a copy of this action will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. If more information regarding the TTN is needed, call the TTN HELP line at (919) 541-5384.

On March 12, 1996, the EPA promulgated in the Federal Register (61 FR 9919) EG for existing municipal solid waste landfills and the NSPS for municipal solid waste landfills. These regulations and guidelines were promulgated as subparts Cc and WWW of 40 CFR part 60. This action corrects an error in the amendatory instructions, typographic and formatting errors, and it corrects three inconsistencies in the direct final action published on June 16, 1998.

Due to an error in the amendatory instructions for the direct final rule published in the Federal Register on June 16, 1998, § 60.752(b)(2)(ii) (A) and (B) and § 60.752(b)(2)(iii)(B) (1) and (2) were incorrectly removed. These technical corrections add those paragraphs back into the final rule.

An inconsistency exists between what constitutes a reportable exceedance for boilers and process heaters in § 60.758(c)(1)(i), and the monitoring (§ 60.756(b)(1)) and recordkeeping (§ 60.758(b)(2)) requirements for these devices. Boilers and process heaters with design heat input capacity less than or equal to 44 megawatts are required to monitor temperature and keep records. A reportable exceedance related to temperature can only occur for boilers and process heaters that are less than 44 megawatts. It was not our intent to require monitoring and recordkeeping for boilers and process heaters if their design heat input capacity is equal to or greater than 44 megawatts.

A typographical error appearing in the equation in §§ 60.754(a)(1) (i), (ii) and 60.759(a)(3)(ii) is being corrected. The term “CN NM MOC” is corrected to read “C NMOC ”, meaning the concentration of non-methane organic compounds.

A typographical error appearing in § 60.754(a)(1)(ii) is being corrected. The paragraph immediately following the list of terms to the equation in this section was incorrectly duplicated from the paragraph in § 60.754(a)(1)(i). The paragraph is amended to correctly reflect the method for subtracting nondegradable solid waste when actual year-to-year solid waste acceptance rates are known.

A formatting error in § 60.756(a), introductory text, is being corrected. A comma was left out between the words “thermometer” and “other.”

A typographical error appearing in § 60.757(c) is being corrected. Throughout the rule, various requirements are triggered by the emission rate cutoff of “equals or exceeds 50 megagrams per year.” The term “equals or” was inadvertently omitted. This omission is being corrected to be consistent with the remainder of the rule and with our intent.

A typographical error appearing in § 60.758(c)(1)(ii) is being corrected. This section incorrectly references § 60.758(b)(3)(i) which does not exist. The correct reference is § 60.758(b)(3).

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. Because the EPA has made a “good cause” finding that this action is not subject to notice and comment requirements under the Administrative Procedure Act or any other statute (see Summary), it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate as described in sections 203 and 204 of UMRA. This rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This rule does not have substantial direct effects on the States, on the relationship between the national government and the States, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

This technical correction action does not involve technical standards; thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, the EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). The EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings' issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). The EPA's compliance with these statutes and Executive Orders for the underlying rule is discussed in the June 16, 1998 amendments to the final NSPS/EG rule Federal Register document.

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. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the Congressional Review Act if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement (5 U.S.C. 808(2)). As stated previously, the EPA has made such a good cause finding, including the reasons therefor, and established an effective date of April 10, 2000. 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 action is not a “major rule” as defined by 5 U.S.C. 804(2).

We are approving the Alabama State Plan, as submitted on April 20, 1999, for the control of air emissions from HMIWIs, except for those HMIWIs located in Indian Country. When EPA developed our New Source Performance Standard (NSPS) for HMIWIs, we also developed EG to control air emissions from older HMIWIs. (See 62 FR 48348-48391, September 15, 1997, 40 CFR part 60, subpart Ce [Emission Guidelines and Compliance Times for HMIWIs] and subpart Ec [Standards of Performance for HMIWIs for Which Construction is Commenced After June 20, 1996]). The ADEM developed a State Plan, as required by sections 111(d) and 129 of the Clean Air Act (the Act), to adopt the EG into their body of regulations, and we are acting today to approve it.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in a separate document in this Federal Register publication, we are proposing to approve the revision should significant, material, and adverse comments be filed. This action is effective June 9, 2000, unless by May 10, 2000, adverse or critical comments are received. If we receive such comments, this action will be withdrawn before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will be addressed in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting on this action should do so at this time. If no such comments are received, this action is effective June 9, 2000.

A HMIWI State Plan is a plan to control air pollutant emissions from existing incinerators which burn hospital waste or medical/infectious waste. The plan also includes source and emission inventories of these incinerators in the State.

States are required under sections 111(d) and 129 of the Act to submit State Plans to control emissions from existing HMIWIs in the State. The State Plan requirement was triggered when EPA published the EG for HMIWIs under 40 CFR part 60, subpart Ce (see 62 FR 48348, September 15, 1997).

Under section 129, EPA is required to promulgate EG for several types of existing solid waste incinerators. These EG establish the Maximum Achievable Control Technology (MACT) standards that States must adopt to comply with the Act. The HMIWI EG also establishes requirements for monitoring, operator training, permits, and a waste management plan that must be included in State Plans.

The intent of the State Plan requirement is to reduce several types of air pollutants associated with waste incineration.

The State Plan establishes control requirements which reduce the following emissions from HMIWIs: particulate matter; sulfur dioxide; hydrogen chloride; nitrogen oxides; carbon monoxide; lead; cadmium; mercury; and dioxin/furans. These pollutants can cause adverse effects to the public health and the environment. Dioxin, lead, and mercury bioaccumulate through the food web. Serious developmental and adult effects in humans, primarily damage to the nervous system, have been associated with exposures to mercury. Exposure to dioxin and furans can cause skin disorders, cancer, and reproductive effects such as endometriosis. Dioxin and furans can also affect the immune system. Acid gases affect the respiratory tract, as well as contribute to the acid rain that damages lakes and harms forests and buildings. Exposure to particulate matter has been linked with adverse health effects, including aggravation of existing respiratory and cardiovascular disease and increased risk of premature death. Nitrogen oxide emissions contribute to the formation of ground level ozone, which is associated with a number of adverse health and environmental effects.

The criteria for approving a HMIWI State Plan include requirements from sections 111(d) and 129 of the Act and 40 CFR part 60, subpart B. Under the requirements of sections 111(d) and 129 of the Act, a State Plan must be at least as protective as the EG regarding applicability, emission limits, compliance schedules, performance testing, monitoring and inspections, operator training and certification, waste management plans, and recordkeeping and reporting. Under section 129(e), State Plans must ensure that affected HMIWI facilities submit Title V permit applications to the State by September 15, 2000. Under the requirements of 40 CFR part 60, subpart B, the criteria for an approvable section 111(d) plan include demonstration of legal authority, enforceable mechanisms, public participation documentation, source and emission inventories, and a State progress report commitment.

The ADEM adopted the Federal EG into the ADEM Administrative Code, Rule 335-3-3-.04 and the Federal NSPS into the ADEM Administrative Code, Rule 335-3-10-.02(c). The State rules were effective on April 13, 1999. The Alabama State Plan contains:

1. A demonstration of the State's legal authority to implement the section 111(d) State Plan;

2. State rules, Rule 335-3-3-.04 and Rule 335-3-10-.02(c), as the enforceable mechanism;

3. An inventory of approximately 56 known designated facilities, along with estimates of their potential air emissions;

4. Emission limits that are as protective as the EG;

5. A compliance date of one year from the effective date of this State Plan approval;

6. Testing, monitoring, reporting and recordkeeping requirements for the designated facilities;

7. Records from the public hearing on the State Plan; and,

8. Provisions for progress reports to EPA.

The EG for existing HMIWIs affect any HMIWI built on or before June 20, 1996. If your facility meets this criterion, you are subject to these regulations.

You must meet the requirements listed in the ADEM Administrative Code, Rule 335-3-3-.04, summarized as follows:

1. Determine the size of your incinerator by establishing its maximum design capacity.

2. Each size category of HMIWI has certain emission limits established which your incinerator must meet. See Table 1 of Rule 335-3-3-.04 to determine the specific emission limits which apply to you. The emission limits apply at all times, except during startup, shutdown, or malfunctions, provided that no waste has been charged during these events.

3. There are provisions to address small rural incinerators (if your unit is applicable).

4. You must meet a 10% opacity limit on your discharge, averaged over a six-minute block.

5. You must have a qualified HMIWI operator available to supervise the operation of your incinerator. This operator must be trained and qualified through a State-approved program, or a training program that meets the requirements listed under 40 CFR part 60.53c(c).

6. Your operator must be certified, as discussed in 5 above, no later than one year after EPA approval of this Alabama State Plan.

7. You must develop and submit to ADEM a waste management plan. This plan must be developed under guidance provided by the American Hospital Association publication, An Ounce of Prevention: Waste Reduction Strategies for Health Care Facilities, 1993, and must be submitted to ADEM no later than 60 days following the initial performance test for the affected unit.

8. You must conduct an initial performance test to determine your incinerator's compliance with these emission limits. This performance test must be completed as required under 40 CFR 60.8.

9. You must install and maintain devices to monitor the parameters listed under Table 4 of Rule 335-3-3-.04.

10. You must document and maintain information concerning pollutant concentrations, opacity measurements, charge rates, and other operational data. This information must be maintained for a period of five years.

11. You must submit an annual report to ADEM containing records of site-specific operating parameters, performance test results, and exceedance information, and for small HMIWI units records of annual equipment inspections, any required maintenance, and unscheduled repairs. This annual report must be signed by the facilities manager.

EPA compared the Alabama rules (ADEM Administrative Code, Rule 335-3-3-.04) against our HMIWI EG. EPA finds the Alabama rules to be at least as protective as the EG. The Alabama State Plan was reviewed for approval against the following criteria: 40 CFR 60.23 through 60.26, Subpart B—Adoption and Submittal of State Plans for Designated Facilities; and, 40 CFR 60, 60.30e through 60.39e, Subpart Ce—Emission Guidelines and Compliance Times for Hospital/Medical/Infectious Waste Incinerators. The Alabama State Plan satisfies the requirements for an approvable section 111(d) plan under subparts B and Ce of 40 CFR part 60. For these reasons, we are approving the Alabama HMIWI State Plan.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). For the same reason, this rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings' issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 9, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

The text of this rulemaking and certain supporting documents used to develop the rule also can be accessed and downloaded from the Internet at http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired date or use Search feature) OR http://www.epa.gov/OMSWWW/ (look in What's New or under the Conformity file area). Please note that there may be format changes in the documents on the web due to differences in software.

Entities potentially regulated by the conformity rule are those which adopt, approve, or fund transportation plans, programs, or projects under title 23 U.S.C. or title 49 U.S.C. Regulated categories and entities include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this rule. This table lists the types of entities that EPA is now aware could potentially be regulated by the conformity rule. Other types of entities not listed in the table could also be regulated. To determine whether your organization is regulated by this action, you should carefully examine the applicability requirements in § 93.102 of the conformity rule. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

The contents of this preamble are listed in the following outline:

The original conformity rule was finalized on November 24, 1993 (58 FR 62188). That rule has been subsequently amended on August 7, 1995 (60 FR 40098), November 14, 1995 (60 FR 57179), and August 15, 1997 (62 FR 43780).

In 1998, we entered into a settlement with Environmental Defense (ED) in response to litigation. In that settlement, we agreed to repeal the grace period which had been established by the November 14, 1995 amendments and was permitted under 40 CFR 93.102(d) of the conformity rule. This grace period was overturned by the United States Court of Appeals in 1997.

We also agreed to respond to four issues raised in a Petition for Reconsideration that was submitted by the ED, Natural Resources Defense Council, and Sierra Club. That petition was filed with us on May 26, 1994 and addressed various provisions of the original conformity rule (58 FR 62188).

The Notice of Proposed Rulemaking for today's rule was published on November 30, 1999 (64 FR 66832). The comment period for the proposal ended December 30, 1999.

We received four comments on our proposal. Most commenters addressed issues relating to the rule's effect in areas subject to conformity. However, one commenter focused exclusively on our discussion of the four issues raised in the 1994 petition. Copies of the comments in their entirety can be obtained from the docket for this rule (see ADDRESSES ).

This docket also includes a complete Response to Comments document for this rule. We summarize our response to comments below in parts III, IV and V of this preamble.

Conformity applies as soon as we formally designate an area nonattainment. In this final rule we are deleting § 93.102(d), which had provided a one-year grace period following nonattainment designation. On November 4, 1997, the U.S. Court of Appeals for the District of Columbia Circuit overturned § 93.102(d) of the conformity rule, and ruled that the Clean Air Act requires conformity to apply upon designation. Because the court overturned § 93.102(d), we must delete this provision from our rules.

Therefore, as soon as a nonattainment designation is effective for your area, you must have a conforming transportation plan and transportation improvement plan (TIP) in order to approve transportation projects. This plan and TIP must conform with respect to all pollutants for which the area is designated nonattainment. You may have to delay approving projects until this is done.

Under today's rule, new nonattainment areas must have a conforming plan and TIP in place as soon as their designations become effective. As a practical matter, this requirement has been in effect since November 14, 1997, when the court ruled to delete the one-hour grace period.

Two commenters expressed concern that transportation planning agencies will not have enough time to respond to a new nonattainment designation and ensure that their plans and TIPs conform. These commenters were concerned that without a grace period, virtually all transportation projects in new nonattainment areas could be stopped upon the effective date of a designation.

We believe that new nonattainment areas will have ample time to develop a conforming plan and TIP before nonattainment designations are final and effective. There are generally several opportunities for transportation agencies to become aware that we are preparing to designate an area nonattainment, and as a consequence to prepare for conformity as needed.

For example, on October 25, 1999, we published a proposal to reinstate the one-hour ozone standard in areas that had previously been designated nonattainment. In that proposal, we stated that designations would not become effective until 90 days after we publish the final rule reinstating our one-hour ozone standard. In these areas, state and local transportation agencies will have been notified more than six months in advance of our decision to reinstate the nonattainment designations.

In addition, we point out that we do pursue a public process before we formally designate an area as nonattainment for the first time. We seek recommendations from the state regarding nonattainment designations and boundaries. If we modify the state's recommendations, we notify the state at least 120 days before finalizing the designation.

State and local transportation agencies and air quality agencies also are working to coordinate their planning processes and avoid situations that would result in a conformity lapse. We and the U.S. Department of Transportation (DOT) will work with areas to process their conformity determinations expeditiously. Although we acknowledge the timing issues and other concerns expressed by commenters regarding the deletion of the grace period, we believe that all partners involved in the conformity process can share information and effectively find ways to avoid significant delays in transportation projects resulting from the court's interpretation of the Clean Air Act.

We also note some transportation projects can proceed in the absence of a conforming plan and TIP, including exempt projects (§§ 93.126 and 93.127) and transportation control measures in an approved state implementation plan. These projects would not be affected by a new nonattainment designation.

On May 26, 1994, Environmental Defense (ED), Natural Resources Defense Council, and Sierra Club Legal Defense Fund submitted to us a Petition for Reconsideration of the November 1993 conformity rule. We have responded to all issues raised in this petition through previous conformity amendments, with the exception of four issues addressed in this preamble. In a 1998 court settlement, EPA and ED agreed to address these four issues through today's rulemaking. A copy of the 1998 settlement and the full Petition for Reconsideration are included in the docket for this rulemaking see     ( ADDRESSES ). As proposed, we are not taking any regulatory action in today's rule in response to the four issues raised in the 1994 Petition. However, in the discussion below we do clarify certain existing EPA policies, where we feel such clarification is necessary to address concerns raised by commenters on our proposed response to the Petition for Reconsideration.

As discussed in the November proposal, in issue 6 of the Petition for Reconsideration, the petitioners requested that we adopt our own regulatory language requiring transportation plans and TIPs to be fiscally constrained, rather than referencing the Department of Transportation's (DOT's) metropolitan planning regulations. The existing conformity rule requires plans and TIPs to be fiscally constrained as required by DOT's metropolitan planning rule at 23 CFR part 450. These DOT regulations require that proposed projects in plans and TIPs be consistent with already available or projected sources of revenue.

In response to our proposal, one of the petitioners reiterates their position that by referencing DOT's planning regulations, we have unlawfully delegated our rulemaking authority to DOT. Another commenter on the issue concurs with our belief that it is not necessary for us to establish our own language regarding fiscal constraint.

As we discussed in the proposal, we believe it is appropriate to refer to DOT's regulations on fiscal constraint for several reasons. First, we believe DOT's definition of fiscal constraint substantively meets the goals of our conformity rule. We also maintain that by referencing DOT's definition, we have met our procedural obligation to provide criteria and procedures for determining conformity, as required under section 176(c)(4)(A) of the Clean Air Act. We disagree with the commenter's contention that the Clean Air Act directs us to issue regulations specifically regarding fiscal constraint.

Again, we note that we rely on many other DOT definitions and rules, including some that are even more fundamental to the implementation of conformity ( e.g., DOT definitions and requirements for plans and TIPs). We also note that the petitioner's comments agree with us that DOT's existing fiscal constraint definition is acceptable for the purposes of conformity.

The commenter's real concern seems to be that future changes to the definition may be unacceptable, and that the conformity rule will automatically incorporate any future changes without EPA action. To remedy this situation, the commenter suggests that we adopt by reference DOT's existing definition of fiscal constraint and specifically exclude any changes that may be made in future DOT rules.

Although we agree that we do not have a concurrence role on DOT's metropolitan planning rule, we point out that there are effective, non- statutory mechanisms in place to ensure federal coordination. We are fully utilizing these mechanisms and actively working with DOT on their new metropolitan planning regulations, including those provisions that address the definition of fiscal constraint. DOT is proposing to amend these regulations under the Transportation Equity Act for the 21st Century. Petitioners will have an opportunity to comment directly on any changes DOT may propose to their regulation on fiscal constraint through DOT's regulatory process.

As described in the proposal, we also believe that it is appropriate and efficient to rely on DOT's definition of fiscal constraint. It would be impractical to require plans and TIPs to satisfy two different definitions of fiscal constraint. If we refer only to the current definition of fiscal constraint, to ensure consistency we would have to amend the conformity rule whenever DOT's regulations change.

In summary, we believe that by referencing DOT's fiscal constraint definition we are meeting our statutory duty under the Clean Air Act. We also believe that it is reasonable to rely on the framework for federal coordination to ensure that DOT's regulations are appropriate in the conformity context. Lastly, we also believe that wherever it makes sense, we have a responsibility to provide state and local agencies involved in transportation conformity with clear and consistent rules. By referencing DOT's regulations in this case, and coordinating with DOT on any changes they may be contemplating, we believe the goals of conformity and the needs of the public will be effectively met.

As discussed in the proposal, issue 9B of the Petition for Reconsideration requested that we require hot-spot analyses to examine the 20-year timeframe of the transportation plan. The existing transportation conformity rule does not clearly specify the horizon for hot-spot analyses.

One of the petitioners explained that their intention was to request that EPA require hot-spot reviews of transportation projects to be consistent with plan and TIP time horizons, and with the time horizons for emissions analyses required by our general conformity rule. To ensure that projects do not cause or worsen hot-spots during the timeframe of the transportation plan, the petitioner suggests that we require an analysis to be conducted for the year during which peak emissions from the action are expected.

As discussed in the proposal to this rule, the conformity rule allows flexibility for areas to decide through the interagency consultation process how to demonstrate that hot-spots are not caused or worsened in any area. Although most areas conduct hot-spot analyses for the year of project completion, many areas also examine other analysis years in the future. For example, some areas do analyze the last year of a currently conforming transportation plan, or another year within the timeframe of that plan, whichever year emissions are highest.

In response to comments on the proposal, we acknowledge the need to clarify that the hot-spot analysis must demonstrate that no hot-spots will be caused or worsened during the timeframe of the transportation plan. Nonetheless, we continue to believe that the specific year examined in the hot-spot analysis to make this demonstration should be decided through interagency consultation, as appropriate to the individual area, on a case-by-case basis. This is allowed by our conformity rule. We also reiterate that it is not necessary in all cases to model the last year of the transportation plan in a hot-spot analysis. Rather, the hot-spot analysis should examine the year in which peak emissions are expected, which may not necessarily be the last year of the conforming plan.

We believe that it would be useful for § 93.116 of the conformity rule to specify that a demonstration that local violations will not be caused or worsened should cover the timeframe of the transportation plan. We agree that without this clarification, it is difficult for implementers to decide which years to examine in order to demonstrate that the conformity requirement is satisfied. For example, some could read the existing requirement to mean that the demonstration regarding local violations must consider only the year of project completion, or in contrast that it consider all future years.

Because we need to propose a regulatory clarification before finalizing it, we are not making any changes to § 93.116 or § 93.123 in this rule. However, we will propose clarifying regulatory text on this issue in an upcoming proposal to amend the conformity rule in response to the March 2, 1999 court decision ( Environmental Defense Fund v. EPA, et al., 167 F. 3d 641, D.C. Cir. 1999). That proposal would codify existing EPA guidance, issued in a May 14, 1999 memorandum from Gay MacGregor, Director of the Regional and State Programs Division in the Office of Transportation and Air Quality, to Regional Air Division Directors, “Conformity Guidance on Implementation of March 2, 1999 Conformity Court Decision.” Based on the court's decision that guidance outlines our approach for notifying and providing the public an opportunity to participate in the conformity process. It also provides criteria for transportation projects that may proceed during a conformity lapse.

In the interim, until this proposal is advanced, we believe our interpretation of § 93.116 and § 93.123 is consistent with our existing conformity rule, and that selection of the year of peak emissions should continue to be decided through the consultation process. We and DOT will implement the hot-spot requirements of the conformity rule as described in this preamble in all future conformity determinations.

In issue 12 of the Petition for Reconsideration, petitioners requested that we require metropolitan planning organizations (MPOs) to demonstrate that regional land use policies and proposed transportation plans achieve the same spatial distribution of motor vehicle emissions as was used in the state implementation plan (SIP) for demonstrating attainment. As discussed in the proposed rule, we had interpreted issue 12 of the Petition for Reconsideration to mean that the petitioners were in effect requesting that we should always require SIPs to establish subarea budgets that MPOs would have to conform to.

Our existing conformity rule does not require states to establish subarea budgets in their SIPs. However, the conformity rule does support the development and use subarea budgets where states choose to do so, and it requires conformity to such budgets if they are established.

One commenter supported our current requirement that subarea budgets be established only at the state's discretion. One of the petitioners commented that we had misconstrued this issue as presented in the Petition for Reconsideration.

The petitioner states that they did not mean to request that subarea budgets be established in all cases. Rather, the petitioner intended to request that we require MPOs to determine whether the emissions it projects for an area are going to be spatially distributed in the same way their distribution has been assumed in a SIP, whether or not there are subarea budgets. The petitioner also suggests that we develop screening criteria to help MPOs identify what is a significant magnitude of variance. In cases where the variance is significant, the petitioner believes we should require MPOs to perform an updated air quality analysis.

We do not believe that the Clean Air Act directs us to require analyses of spatial distribution or regional air quality analyses as a means for ensuring that transportation activities will not cause or contribute to new or increased violations, or delay timely attainment. The Clean Air Act simply requires a comparison with the SIP's estimates of emissions. We do not believe that the Clean Air Act ever intended MPOs to routinely perform regional air quality analyses, such as photochemical grid modeling, as part of a conformity determination. 1

As a practical matter, we also note the SIP's assumptions about spatial distribution of emissions would not necessarily be clear to an MPO unless subarea budgets had been established. This is because not all SIPs are required to specifically document their assumptions about spatial distribution, and these assumptions are not always developed or presented in a form that is useful for other agencies, such as MPOs. Spatial distributions of emissions in SIPs are generally developed strictly to serve as an input to the SIP's dispersion modeling, and these emissions distributions are not designed or required to be used for any other purpose.

Again, neither the Clean Air Act nor the conformity rule requires states to develop subarea budgets. We have always interpreted the Clean Air Act to allow for a single budget for a nonattainment area for a given criteria pollutant or precursor, although states have the option to disaggregate and establish subarea budgets at their discretion (see our General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990 at 57 FR 13448, April 16, 1992).

To conclude, we do not believe that the Clean Air Act directs us to require the analysis suggested in the petitioner's comments as a means to ensuring that conformity is properly implemented. We also believe that the analysis suggested by petitioners would in effect require states to establish subarea budgets. Although EPA recognizes that there may be some areas that would benefit by conducting emissions analyses that rely on subarea budgets, we believe these areas will be identified through the interagency consultation process and that it is not necessary for us to issue regulations imposing these kinds of requirements.

As described in issue 15 of the Petition for Reconsideration, the petitioners believe that where a transportation control measure (TCM) has been delayed beyond the scheduled implementation date(s) in the SIP, an area's conformity determination should not be allowed to take emissions reduction credit for the TCM until after the TCM has actually been brought into service.

Under the current conformity rule, emission reduction credit may be taken at “such time as implementation has been assured” (see § 93.122(a)(2)). Once implementation has been assured, emissions analyses can take credit for the TCM in the analysis years during which the TCM would actually be in service (under the revised schedule). In the preamble discussion of the November 30, 1999 proposed rule, we clarified that an assurance of implementation would require at least the following: (a) Past obstacles to implementation of the TCM have been overcome; (b) state and local agencies are giving maximum priority to approval or funding of TCMs over other projects within their control; (c) funding for the TCM is identified and reasonably expected to be available; and (d) the legal or regulatory authority necessary to implement the TCM has been secured or appropriate commitments are in place.

In response to our discussion on requirements for assuring the timely implementation of TCMs in the proposal, commenters seemed satisfied that EPA's existing requirements were appropriate. However, a petitioner suggested that we include the criteria listed in the November 1999 proposal as a regulatory definition for assurance of implementation.

EPA does not believe that it is necessary to amend the conformity rule to include such a regulatory definition. We believe that § 93.113 of the conformity rule as written is clear, and that this preamble is an appropriate place to elaborate on the rule. We note that a previous preamble discussion on the timely implementation of TCMs (58 FR 62197, November 24, 1993) has provided additional guidance on our implementation of the conformity rule to date. EPA and DOT have effectively used this 1993 preamble discussion to implement conformity, and we will continue to do so with the language in today's preamble.

Clean Air Act section 176(c)(4)(C) requires states to submit revisions to their SIPs in order to include the criteria and procedures for determining conformity.

If we approved your area's conformity SIP and it includes a provision for a one-year grace period (§ 93.102(d)), that provision cannot be implemented. This has been the case ever since the November 4, 1997, court decision, which found such provisions to be inconsistent with the Clean Air Act. Future conformity SIP submissions may not include § 93.102(d).

If your area has submitted a conformity SIP to us that contains this provision (and we have not yet approved the conformity SIP), we will not approve such a provision as part of the SIP.

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

(1) Have an annual effect on the economy of $100 million or more, or otherwise 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;

(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.

It has been determined that this rule is not a “significant regulatory action” under the terms of Executive Order 12866 and is therefore not subject to OMB review.

This rule does not impose any new information collection requirements from EPA which require approval by OMB under the Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq. An Agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.

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

The Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, requires the agency to conduct a regulatory flexibility analysis of any significant impact a rule will have on a substantial number of small entities. Small entities include small businesses, small not-for-profit organizations and small government jurisdictions. EPA has determined that today's regulations will not have a significant impact on a substantial number of small entities.

One commenter questioned our determination that the proposal to delete the grace period will not have a significant impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act (RFA). We found no such impact because the conformity rules only apply directly to Federal agencies and metropolitan planning organizations (MPOs), which by definition are designated only for metropolitan areas with population of at least 50,000 and thus do not meet the definition of small entities under the RFA. The commenter alleged that both the RFA, the courts, and our own implementing guidance require us to consider the indirect impacts of a proposed rule as well.

We do not agree with the commenter that the agency must consider the indirect impacts of a regulation under the RFA. EPA has consistently interpreted the RFA as requiring the agency only to assess the impacts of proposed rules on the small entities directly regulated by the proposed rule, and this position has been upheld by the courts. See Mid-Tex Electric Cooperative, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985) (agency's certification need only consider the rule's impact on entities subject to the requirements of the rule); American Trucking Associations, Inc., et al., v. EPA, et al., 175 F.3d 1027 (D.C. Cir. 1999) (court has consistently interpreted RFA to impose no obligation on agency to assess impacts on entities it does not regulate).

In addition, the commenter misreads EPA's guidance concerning consideration of indirect impacts. The sentence the commenter quotes from EPA's guidance directs agency staff to consider indirect impacts as part of any broader economic analysis conducted for the rule, such as a Regulatory Impact Analysis if one is conducted. However, the immediately preceding sentence of the guidance clarifies that if a rule is applicable only to large entities but indirectly impacts small entities, the agency can still certify no significant impact on small entities under the RFA. See Revised Interim Guidance for EPA Rulewriters: Regulatory Flexibility Act, March 29, 1999, p. 17. In any event, the document to which the commenter refers is only guidance; it does not establish any legally binding requirements.

It is also clear that the conformity rule applies directly only to federal agencies and MPOs and does not directly regulate small entities, such as the road builders represented by the commenter. These entities will only be adversely effected by the deletion of the grace period if DOT and the MPOs fail to develop a conforming transportation plan and program by the effective date of a nonattainment designation. In light of the advance warning areas will have of pending designations during the notice and comment period, and the delayed effective date EPA intends to provide for such designations, EPA believes that DOT and MPOs will be able to develop conforming plans and programs in a timely fashion.

Finally, the commenter's allegation is incorrect that the court which ordered EPA to delete the grace period determined that such a change would adversely effect small entities. The court in Sierra Club did find that the fact that an intervening governmental agency could alleviate any potential impact on private individuals was not sufficient to deprive such individuals of standing to challenge the grace period in court. However, the standard for showing harm sufficient to support legal standing to sue has no bearing on the impact necessary to mandate a finding of significant impacts under the RFA. The RFA only requires an agency to assess the impacts of a proposed rule on entities directly subject to the proposed rule. The analysis under the RFA need not cover any entities not directly subject to the proposed rule notwithstanding any indirect impacts that may result to other entities, regardless of whether any such impacts could support legal standing to challenge the rule.

EPA therefore concludes that it correctly interpreted the RFA and correctly found that the proposal to delete the grace period would not have a significant impact on a substantial number of small entities. Therefore, as required under section 605 of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. , I certify that this rule will not have a significant economic impact on a substantial number of small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures 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.

EPA has determined that this rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one year. Furthermore, this rule simply formalizes what the court has already decided as a legal matter, and which is already being implemented in practice.

This rule affects only those areas that are newly designated as nonattainment, and it simply applies conformity one year earlier than our previous rule had required. Therefore, this rule could require a limited number of areas to perform perhaps one additional transportation plan/TIP conformity determination each.

A 1992 DOT survey of metropolitan planning organizations (MPOs) found that most MPOs spend less than $50,000 per transportation plan/TIP conformity determination. The largest MPOs (serving a population over one million) spent up to $250,000. Thus, even if EPA were to designate 200 areas as nonattainment in one year and each one incurred the maximum costs, the expenditures would not exceed $100 million.

Thus, today's rule is not subject to the requirements of sections 202 and 205 of the UMRA.

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.

Executive Order 13045: “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that 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 rule is not subject to Executive Order 13045 because it is not economically significant within the meaning of Executive Order 12866.

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 the Office of Management and Budget, 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.”

The Clean Air Act requires conformity to apply in nonattainment and maintenance areas, and the U.S. Court of Appeals for the District of Columbia Circuit has determined that the Clean Air Act requires conformity to apply immediately upon nonattainment designation. As a result, this regulatory change is required by statute. Furthermore, today's rule would not significantly or uniquely affect the communities of Indian tribal governments. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.

Executive Order 13132, Federalism (64 FR 43255, August 10, 1999), revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 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 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 the Office of Management and Budget (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 final rule, which is required by statute, will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. The Clean Air Act requires conformity to apply in nonattainment and maintenance areas, and the U.S. Court of Appeals for the District of Columbia Circuit has determined that the Clean Air Act requires conformity to apply immediately upon nonattainment designation. As a result, this rule is codifying in regulation the statutory interpretation by the court that is currently in effect. Consequently, this rule is required by statute, and by itself will not have substantial impact on States. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

One commenter indicated that we failed to consider the disproportionate impact the deletion of the grace period would have on minority and low income groups as required by Executive Order 12898 on environmental justice. The commenter argued that we recently found that minorities and low income populations were disproportionately represented in nonattainment areas, and that we are required by the Executive Order to consider the economic impact on such populations of job loss resulting from deletion of the grace period.

We do not agree that Executive Order 12898 requires us to consider the economic impact of the grace period deletion on minorities and low income populations in this case. The Executive Order only requires agencies to assess adverse impacts on minorities and low income populations where the action the agency is taking will cause disproportionate human health or environmental impacts on such populations. In this case the regulatory action we are taking to delete the grace period from our conformity regulations will not have such impacts, since we are only formally correcting our regulations to reflect the action taken by the United States Court of Appeals in 1997. Any potential adverse impacts on minority and low income populations resulting from deletion of the grace period were caused by the court when it found the grace period to be illegal and overturned it. Since the court decision in 1997, the grace period has effectively been nullified and any areas newly redesignated to nonattainment have been subject to conformity requirements immediately upon the effective date of any redesignation. In addition, since this deletion is mandated by the court's ruling, we could not effectively address any potential adverse impacts from EPA action even if an environmental justice analysis disclosed any.

Under 5 U.S.C. 801(a)(1)(A), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, EPA submitted 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 the publication of the rule in today's Federal Register . This rule is not a “major rule” as defined by 5 U.S.C 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 9, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review, nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceeding to enforce its requirements. (See section 307(b)(2) of the Administrative Procedures Act.)

The information in this section is organized as follows:

The EPA is finalizing the decision to grant Rhodia's petition to have their Filter Cake Sludge excluded, or delisted, from the definition of a hazardous waste.

After evaluating the petition, EPA proposed, on December 10, 1999 to exclude Rhodia's waste from the lists of hazardous wastes under §§ 261.31 and 261.32 (see 64 FR 8278).

Rhodia petitioned to exclude the Filter Cake Sludge treatment residues because it does not believe that the petitioned waste meets the criteria for which it was listed.

Rhodia also believes that the waste does not contain any other constituents that would render it hazardous. Review of this petition included consideration of the original listing criteria, as well as the additional listing criteria and the additional factors required by the Hazardous and Solid Waste Amendments (HSWA) of 1984. See , section 222 of HSWA, 42 U.S.C. 6921(f), and 40 CFR 260.22(d)(2)-(4).

For reasons stated in both the proposal and this document, EPA believes that Rhodia' Filter Cake Sludge should be excluded from hazardous waste control. The EPA therefore is granting a final exclusion to Rhodia, located in Houston, Texas for its Filter Cake Sludge.

This exclusion applies to the waste described in the petition only if the requirements described in Table 1 of part 261 and the conditions contained herein are satisfied. The maximum annual volume of the Filter Cake Sludge is 1,200 cubic yards.

Rhodia currently disposes of the petitioned waste (filter-cake Sludge) generated at its facility in off-site, RCRA permitted Treatment Storage or Disposal facilities which are not owned/operated by Rhodia. If the waste is delisted it will be disposed of in a subtitle “D” landfill.

This rule is effective April 10, 2000. The Hazardous and Solid Waste Amendments of 1984 amended section 3010 of RCRA to allow rules to become effective in less than six months when the regulated community does not need the six-month period to come into compliance. That is the case here because this rule reduces, rather than increases, the existing requirements for persons generating hazardous wastes. These reasons also provide a basis for making this rule effective immediately, upon publication, under the Administrative Procedure Act, pursuant to 5 U.S.C. 553(d).

Because EPA is issuing today's exclusion under the Federal RCRA delisting program, only States subject to Federal RCRA delisting provisions would be affected. This would exclude two categories of States: States having a dual system that includes Federal RCRA requirements and their own requirements, and States who have received our authorization to make their own delisting decisions.

We allow states to impose their own non-RCRA regulatory requirements that are more stringent than EPA's, under section 3009 of RCRA. These more stringent requirements may include a provision that prohibits a Federally issued exclusion from taking effect in the State. Because a dual system (that is, both Federal (RCRA) and State (non-RCRA) programs) may regulate a petitioner's waste, we urge petitioners to contact the State regulatory authority to establish the status of their wastes under the State law.

The EPA has also authorized some States (for example, Louisiana, Georgia, Illinois) to administer a delisting program in place of the Federal program, that is, to make State delisting decisions. Therefore, this exclusion does not apply in those authorized States. If Rhodia transports the petitioned waste to or manages the waste in any State with delisting authorization, Rhodia must obtain delisting authorization from that State before they can manage the waste as nonhazardous in the State.

A delisting petition is a request from a generator to EPA or another agency with jurisdiction to exclude from the list of hazardous wastes, wastes the generator does not consider hazardous under RCRA.

Under 40 CFR 260.20 and 260.22, facilities may petition the EPA to remove their wastes from hazardous waste control by excluding them from the lists of hazardous wastes contained in §§ 261.31 and 261.32. Specifically, section 260.20 allows any person to petition the Administrator to modify or revoke any provision of parts 260 through 265 and 268 of Title 40 of the Code of Federal Regulations (CFR). Section 260.22 provides generators the opportunity to petition the Administrator to exclude a waste on a “generator-specific” basis from the hazardous waste lists.

Petitioners must provide sufficient information to EPA to allow the EPA to determine that the waste to be excluded does not meet any of the criteria under which the waste was listed as a hazardous waste. In addition, the Administrator must determine, where he/she has a reasonable basis to believe that factors (including additional constituents), other than those for which the waste was listed, could cause the waste to be a hazardous waste, that such factors do not warrant retaining the waste as a hazardous waste.

On November 4, 1997, Rhodia petitioned the EPA to exclude from the lists of hazardous waste contained in §§ 261.31 and 261.32, a waste by-product (Filter-Cake Sludge) which falls under the classification of listed waste because of the “derived from” rule in RCRA 40 CFR 260.3(c)(2)(i). Specifically, in its petition, Rhodia, Incorporated, located in Houston, Texas, requested that EPA grant an exclusion for 1,200 cubic yards per year of filter-cake sludge resulting from its treatment process which treats listed hazardous waste. The resulting waste is also listed, in accordance with § 261.3(c)(2)(i) ( i.e. , the “derived from” rule).

The waste codes of the constituents of concern are EPA Hazardous Waste Numbers D001-D043, F001-F012, F019, F024, F025, F032, F034, F037-F039, K002-004, K006-K011, K013-K052, K060-K062, K064-K066, K069, K071, K073, K083-K088, K090-K091, K093-K118, K123-K126, K131-K133, K136, K141-K145, K147-K151, K156-K161, P001-P024, P026-P031, P033-P034, P036-P051, P054, P056-P060, P062-P078, P081-P082, P084-P085, P087-P089, P092-P116, P118-P123, P127-P128, P185, P188-P192, P194, P196-P199, P201-P205, U001-U012, U014-U039, U041-U053, U055-U064, U066-U099, U101-U103, U105-U138, U140-U174, U176-U194, U196-U197, U200-U211, U213-U223, U225-U228, U234-U240, U243-U244, U246-U249, U271, U277-U280, U328, U353, U359, U364-U367, U372-U373, U375-U379, U381-U396, U400-U404, U407, U409-U411.

Specifically, in its petition, Rhodia requested that EPA grant a standard exclusion for 1,200 cubic yards of Filter Cake Sludge generated per calender year.

In support of its petition, which included the sampling and analysis plan, Rhodia analyzed the samples for the complete list of constituents included in 40 CFR part 264, appendix IX and the additional parameters for waste common to the petrochemical, oil and gas industries. The analyses was performed using EPA-approved methods. The analytical parameters and methods are provided in Table I.

No public comments were received.

Under Executive Order 12866, EPA must conduct an “assessment of the potential costs and benefits” for all “significant” regulatory actions.

The proposal to grant an exclusion is not significant, since its effect, if promulgated, would be to reduce the overall costs and economic impact of EPA's hazardous waste management regulations. This reduction would be achieved by excluding waste generated at a specific facility from EPA's lists of hazardous wastes, thus enabling a facility to manage its waste as nonhazardous.

Because there is no additional impact from today's proposed rule, this proposal would not be a significant regulation, and no cost/benefit assessment is required. The Office of Management and Budget (OMB) has also exempted this rule from the requirement for OMB review under section (6) of Executive Order 12866.

Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, whenever an agency is required to publish a general notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis which describes the impact of the rule on small entities (that is, small businesses, small organizations, and small governmental jurisdictions). No regulatory flexibility analysis is required, however, if the Administrator or delegated representative certifies that the rule will not have any impact on a small entities.

This rule, if promulgated, will not have an adverse economic impact on small entities since its effect would be to reduce the overall costs of EPA's hazardous waste regulations and would be limited to one facility. Accordingly, I hereby certify that this proposed regulation, if promulgated, will not have a significant economic impact on a substantial number of small entities. This regulation, therefore, does not require a regulatory flexibility analysis.

Information collection and recordkeeping requirements associated with this proposed rule have been approved by the Office of Management and Budget (OMB) under the provisions of the Paperwork Reduction Act of 1980 (Pub. L. 96-511, 44 U.S.C. 3501 et seq. ) and have been assigned OMB Control Number 2050-0053.

Under section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, which was signed into law on March 22, 1995, EPA generally must prepare a written statement for rules with Federal mandates that may result in estimated costs to State, local, and tribal governments in the aggregate, or to the private sector, of $100 million or more in any one year.

When such a statement is required for EPA rules, under section 205 of the UMRA EPA must identify and consider alternatives, including the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The EPA must select that alternative, unless the Administrator explains in the final rule why it was not selected or it is inconsistent with law.

Before EPA establishes regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must develop under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, giving them meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising them on compliance with the regulatory requirements.

The UMRA generally defines a Federal mandate for regulatory purposes as one that imposes an enforceable duty upon state, local, or tribal governments or the private sector.

The EPA finds that today's delisting decision is deregulatory in nature and does not impose any enforceable duty on any State, local, or tribal governments or the private sector. In addition, the proposed delisting decision does not establish any regulatory requirements for small governments and so does not require a small government agency plan under UMRA section 203.

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

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. If the mandate is unfunded, EPA must provide to the 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, copies of 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 rule does not create a mandate on state, local or tribal governments. The rule does not impose any enforceable duties on these entities. Accordingly, the requirements of section 1(a) of Executive Order 12875 do not apply to this rule.

The Executive Order 13045 is entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This order applies to any rule that EPA determines: (1) Is economically significant as defined under Executive Order 12866, and (2) the environmental health or safety risk addressed by the rule has 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 proposed rule is not subject to Executive Order 13045 because this is not an economically significant regulatory action as defined by Executive Order 12866.

Because this action does not involve any requirements that affect Indian Tribes, the requirements of section 3(b) of Executive Order 13084 do not apply.

Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly affects or uniquely affects that 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.

If the mandate is unfunded, EPA must provide to the 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 and other representatives of Indian tribal governments “to meaningful and timely input” in the development of regulatory policies on matters that significantly or uniquely affect their communities of Indian tribal governments. This action does not involve or impose any requirements that affect Indian Tribes. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.

Under section 12(d) if the National Technology Transfer and Advancement Act (NTTAA), the Agency is directed 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, business practices, etc.) developed or adopted by voluntary consensus standard bodies. Where available and potentially applicable voluntary consensus standards are not used by EPA, the NTTAA requires that Agency to provide Congress, through the OMB, an explanation of the reasons for not using such standards.

This rule does not establish any new technical standards and thus, the Agency has no need to consider the use of voluntary consensus standards in developing this final rule.

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 section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that impose 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. The 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 action does not have federalism implication. 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 it affects only one State.

The United States Environmental Protection Agency (EPA) Region II announces the deletion of the Upper Deerfield Township Sanitary Landfill Superfund Site (the “Site”), which is located in Upper Deerfield Township, Cumberland County, New Jersey, from the National Priorities List (NPL). The NPL constitutes Appendix B of the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), 40 CFR part 300. EPA identifies sites that appear to present a significant risk to public health or the environment and maintains the NPL as the list of these sites. Pursuant to 40 CFR 300.425(e)(3) of the NCP, any site or portions of a site deleted from the NPL remains eligible for Fund-financed remedial actions if future conditions at the site warrant such action.

EPA will accept comments concerning this document until May 10, 2000.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses the procedures that EPA is using for this action. Section IV discusses the Upper Deerfield Township Sanitary Landfill Superfund Site and explains how the Site meets the deletion criteria.

As described in § 300.425(e) of the NCP, sites may be deleted from the NPL where no further response is appropriate. In making a determination to delete a site from the NPL, EPA, in consultation with NJDEP, shall consider whether any of the following have been met:

(i) Responsible parties or other persons have implemented all appropriate response actions required; or,

(ii) All appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

(iii) The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, taking of remedial measures is not appropriate.

Deletion of a site from the NPL does not preclude eligibility for subsequent Fund-financed actions at the Site if future Site conditions warrant such actions. Section 300.425(e)(3) of the NCP provides that Fund-financed actions may be taken at sites that have been deleted from the NPL. Further, deletion of a site from the NPL does not affect the liability of responsible parties or impede Agency efforts to recover costs associated with response efforts.

The following procedures are being used for the intended deletion of this Site: (1) EPA Region II issued a Record of Decision (ROD) on September 30, 1991, which found that the release poses no significant threat to public health or the environment and therefore, taking remedial measures is not appropriate; (2) EPA Region II issued a Final Close-Out Report dated September 27, 1993; (3) NJDEP has concurred with the deletion decision in a letter dated March 4, 1998; (4) a five-year review was completed in September 1999, and determined that the remedy continues to be protective of public health and the environment; (5) a notice has been published in the local newspaper and has been distributed to appropriate federal, state and local officials and other interested parties announcing a 30-day dissenting public comment period on EPA's Direct Final Action to Delete; and (6) EPA Region II recommends deletion and has made all relevant documents available for public review in the regional office and local Site information repositories.

EPA is requesting public comments on the Direct Final Action to Delete. The NCP provides that EPA shall not delete a site from the NPL until the Public has been afforded an opportunity to comment on the proposed deletion.

Deletion of sites from the NPL does not itself create, alter, or revoke any individual's rights or obligations. The NPL is designed primarily for informational purposes and to assist Agency management of Superfund sites.

EPA Region II will accept and evaluate public comments before making a final decision to delete. If appropriate, the Agency will prepare a Responsiveness Summary to address any significant public comments received.

If EPA does not receive significant adverse or critical comments and/or any significant new data submitted during the comment period, the Site will be deleted from the NPL effective June 9, 2000.

The Upper Deerfield Sanitary Landfill Superfund Site is an inactive, 14-acre landfill located on a 22.72-acre tract of land in the rural farming community of Upper Deerfield Township, Cumberland County, New Jersey. The Site is located approximately two and one-half miles east-southeast of Seabrook, New Jersey and lies between Woodruff Husted Station Road (County Route 687) to the east and Centerton Road (County Route 553) to the west.

The 14-acre site was operated as a municipal landfill licensed to accept household waste until it closed in 1983. In response to complaints about water quality from residents using private ground water wells, ground water investigations were conducted in 1980. Volatile organic compounds (VOCs) and mercury were found in area wells. In 1983, NJDEP and the County advised residents to discontinue using their wells, and the Township began supplying the affected residents with bottled water. The Site was included on the NPL on September 1, 1983.

In 1986, utilizing funds provided by the State of New Jersey, the Township installed a public water supply well and distribution system to provide potable water to residents in the area. EPA conducted a remedial investigation at the Site from September 1987 through September 1990.

The results showed that the ground water and soil contamination associated with the Site no longer posed a health threat under current or likely future land use conditions. On September 30, 1991, EPA issued a ROD which called for no further action with a program to monitor the air and ground water.

In September 1994, EPA and Upper Deerfield Township signed an Administrative Order on Consent (ACO) which requires the Township to monitor the ground water for 30 years pursuant to the 1991 ROD. The ground water monitoring program began in December 1995. To date, ground water samples taken at the landfill, have not shown elevated levels of contaminants of concern. Air samples at the landfill and surrounding areas have not detected any airborne contaminants. Since airborne contaminants were not detected, the air monitoring program has been discontinued.

A five-year review was completed in September 1999, and found the remedy continues to be protective of public health and the environment. In accordance with § 300.430(f)(4)(ii) of the NCP, this site is subject to a review of the remedies selected under CERCLA every five years. The next five-year review will be conducted on or before September 2004.

All the completion requirements for this Site have been met as described in the Final Close-Out Report dated September 23, 1993. EPA and NJDEP have found that the release poses no significant threat to public health and the environment and, therefore, taking remedial measures is not appropriate. Documents supporting this action are available in the deletion docket.

EPA and the NJDEP have found that the release poses no significant threat to public health and the environment and, therefore, taking remedial measures is not appropriate. Therefore, EPA is deleting the Site from the NPL.

This action will be effective on June 9, 2000. However, if EPA receives significant adverse or critical comments by May 10, 2000, EPA will publish a document that withdraws this action.

This Report and Order in CC Docket No. 98-137, ASD File No. 98-81, adopted on December 17, 1999 and released on December 30, 1999, is available for inspection and copying during normal business hours in the FCC Reference Information Center (RIC), 445 12th Street, SW, TW-A325, Washington, D.C. 20554. The complete text may be purchased from the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, N.W., Washington, D.C. 20036 (202) 857-3800.

This Report and Order contains new or modified information collections subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new or modified information collections contained in this proceeding.

This R&O contains either a new or modified information collections. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public to comment on the information collection(s) contained in this R&O as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due June 9, 2000. Comments should address: (a) Whether the new or modified collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.

OMB Control Number: 3060-0168.

Title: Reports of Proposed Changes in Depreciation Rates—Section 43.43.

Form No.: N/A.

Type of Review: Revised Collection.

Respondents: Business or other for-profit.

Total Annual Burden: 60,030 Hours.

Cost to Respondents: $0.

Needs and Uses: The Commission streamlined its depreciation prescription process by permitting summary filings and eliminating the prescription of depreciation rates for certain incumbent LECs, expanding the prescribed range for the digital switching plant account, and eliminating the theoretical reserve study requirement for mid-sized incumbent LECs. The Commission also established a waiver process whereby price cap incumbent LECs can free themselves of depreciation regulation. Synopsis of Report and Order:

The Commission prescribes depreciation factors for price cap incumbent LECs whose revenues exceed an indexed revenue threshold, currently set at $112 million in annual revenue. These carriers currently have investments in telephone plant totaling $288 billion and an accumulated depreciation balance totaling $146 billion. Depreciation constitutes 28 percent of incumbent LECs' total operating expenses, and is their largest single expense.

Over the years, the Commission has taken steps to streamline the depreciation requirements to keep pace with changes in communications technology and legal requirements. When incumbent LECs were regulated under cost-of-service (or rate-of-return) regulation, regulation and oversight of the depreciation process was a critical function because prices for incumbent LEC services were set based on costs, including depreciation expenses. Under this regulatory scheme, each carrier seeking to change its depreciation rates was required to submit a depreciation rate study that was reviewed both by the Commission staff and the representatives of the state regulatory authorities. This depreciation prescription process required carriers to submit extensive data for each plant category to support the projection life, survivor curve, and future net salvage estimates underlying their proposed depreciation rates. These data requirements often necessitated voluminous submissions, with up to 25 pages of analysis for each of 34 plant categories for each jurisdiction.

In 1980, the Commission departed from its previous practice of relying largely on historical experience to project equipment lives and began to rely on analysis of company plans, technological developments, and other future-oriented studies. In 1993, the Commission issued the Depreciation Simplification Order (See 58 FR 00530 January 6, 1993) that adopted a simplified depreciation prescription process for AT&T and incumbent LECs. With regard to incumbent LECs, that Order provided for the establishment of ranges for the life and salvage factors that carriers could use to compute their depreciation rates. Consequently, incumbent LECs that proposed life and salvage factors within the Commission-approved ranges no longer needed to file detailed cost support for those rates. In contrast, a carrier that chose to propose depreciation factors outside of the ranges would have to provide cost support to justify it. Today, incumbent LECs remain subject to the Commission's rules under §§ 32.2000(g) and 43.43 for purposes of establishing depreciation rates; however, the typical carrier's filing requirements have been reduced by 75 percent when its depreciation proposals are within the prescribed ranges.

The recent Depreciation Notice (63 FR 56900 September 23, 1998) sought comment on proposals that would further minimize the burden on incumbent LECs in the depreciation prescription process. We address the proposals set forth in the Depreciation Notice and take further steps to streamline the depreciation prescription process for incumbent LECs. In this action, we take the following actions to further simplify our depreciation prescription process. Filing Requirements in the Depreciation Notice, we sought comment on a proposal that would reduce price cap incumbent LECs' filing requirements to four summary exhibits, and the electronic data files used to generate them, provided carriers select depreciation factors from within the specified ranges for all accounts and certify that their selections are consistent with their operations. The four summary exhibits are a comparison of existing and proposed depreciation rates; a comparison of existing and proposed annual depreciation expenses; a book and theoretical reserve summary; and the underlying depreciation factors. We conclude that we must balance the carriers' needs for simplification with the needs of this Commission, ratepayers, state regulatory missions, and competitors for sufficient information to assess claims the incumbent LECs' may make for regulatory relief. As noted, depreciation expense constitutes a large portion of a carrier's expenses and is significant in determining cost recovery. While we believe we can reduce the amount of information a carrier must file, we find certain basic information is still needed to allow us to adequately monitor a carrier's depreciation practices and amounts associated with these practices. The information that carriers will be required to file in the four summary exhibits, along with the underlying data used to generate them, will provide the depreciation factors ( i.e., life, salvage, curve shape, depreciation reserve) required to verify the calculation of the carriers' depreciation rates, estimate the changes in annual depreciation expenses, and monitor the adequacy of the depreciation reserve. This information is critical because it provides the minimum amount of data needed to maintain oversight of carriers' depreciation expenses and rates. We conclude that the proposal in the Depreciation Notice strikes an appropriate balance. It will minimize the burden on the carriers, since carriers will not be required to prepare extensive supporting documents for public filing, while providing the minimum amount of data needed to maintain oversight of carriers' depreciation expenses and rates. Thus, we will permit carriers that select depreciation factors from within the specified ranges for all accounts, and certify that their selections are consistent with their operations, to file four summary exhibits along with electronic data files used to generate the summary exhibits as described.

In the Depreciation Notice we proposed that, if a carrier selects depreciation factors from within the ranges for all of its accounts, the carrier's new depreciation rates could go into effect without a prescription order. Based on our review of the record in this proceeding, we will permit carriers to submit streamlined exhibits if they request depreciation factors for all accounts that are within the prescribed ranges. Carriers that request depreciation factors outside the ranges prescribed by the Commission must continue to submit exhibits for each account. In either case, however, the information filed by the incumbent LEC would contain life, salvage, reserve, rate, and expense information, which will be maintained in public files. Also, much of this data will be maintained in the ARMIS database, and therefore, will be readily available to the public via the Internet. We conclude, therefore, that we can eliminate prescriptions in the case where carriers select depreciation factors from within the prescribed ranges for all of its accounts, thereby further reducing the burden on these carriers, and still maintaining an adequate public record that all interested parties will be able to review.

We proposed to expand the range of lives for digital switching equipment from a range of 16 to 18 years to 13 to 18 years. Based on our review of the record, we are persuaded that the lower limit of the life range for digital switching should be shortened from the current 16-year minimum to 12 years. We find that this reduction is justified by incumbent LEC accounting data that shows an upward trend in retirements of digital switching equipment in recent years. The increasing retirements are due, in part, to the modular nature of modern digital switches, which allows the incumbent LECs to retire portions of a switch on an interim basis as technology improves. Incumbent LECs also advocate shorter minimum lives for accounts other than digital switching and recommend lives projected by Technology Futures, Inc. (TFI). Based on our review, and given the significant uncertainty that even TFI acknowledges exists in forecasting plant replacement over the next fifteen years, we do not find that the carriers that advocate adoption of TFI's much shorter projection lives have met their burden. Depreciation reserves are at 51 percent, an all-time high, and have increased for each of the past five years. There is no evidence that the large wave of plant replacements forecast by TFI, which should result in increased retirements, has begun or is about to begin. If the carriers do begin to retire plant more rapidly, our depreciation prescription process is flexible enough to allow them shorter lives and faster depreciation. We conclude, therefore, that the TFI study fails to establish convincingly that current projection lives are inadequate.

In order to calculate net salvage, carriers must estimate both gross salvage and cost of removal. Given the speculative nature of these estimates and the burdens associated with their calculation, the Depreciation Notice tentatively concluded that the prescription of net salvage no longer serves a regulatory purpose and that eliminating that factor from the formula would significantly reduce the regulatory burden of the depreciation prescription process. Accordingly, we proposed to eliminate the future net salvage factor from the depreciation formula and to record net salvage as a current expense in the period incurred. Alternatively, we proposed making the elimination of net salvage from the depreciation formula optional, and allowing each incumbent LEC the option to treat net salvage as either a current expense or a component of depreciation. The Financial Accounting and Standards Board (FASB) is currently conducting a proceeding that could change how firms must account for net salvage on their financial books. In light of the pending action by the FASB, we conclude that it is appropriate to defer action on this issue.

In the Depreciation Notice , we proposed that mid-sized incumbent LECs no longer be required to file annual theoretical reserve studies. Because the Commission would continue to receive theoretical reserve studies from the largest incumbent LECs, which serve approximately 90 percent of all access lines, this proposal would relieve these mid-sized companies of this regulatory burden without seriously encumbering the Commission's ability to monitor and evaluate the adequacy of the industry's reserves. Although a carrier's theoretical reserve studies allow us to monitor and evaluate the adequacy of a carrier's depreciation reserve, we recognize the burden these studies impose on mid-sized incumbent LECs. On balance, we believe that the benefits of streamlining depreciation reporting for mid-sized LECs outweighs the risks. We note that, if necessary, we can request a mid-sized carrier to provide a theoretical reserve study. Further, we note that incumbent LECs with individual annual operating revenues below the indexed revenue threshold continue to be exempt from the Commission's depreciation prescription process.

The Commission's existing confidentiality procedures are contained in 47 CFR 0.457 and 0.459 of the Commission's rules. We sought comment on whether these rules are adequate or whether additional safeguards need to be adopted to protect information that carriers regard as confidential. We find no reason to alter the policies we have in place to protect the confidentiality of carrier information.

In the Depreciation Notice , we noted that even under price caps, depreciation had a potentially significant impact on a carrier's price cap indexes and its rates for some non-price cap services. We invited comment on ways that we might eliminate our need for depreciation prescription. In addition, the USTA forbearance petition raised issues concerning conditions under which the depreciation process might not be necessary. Based on our review, we believe that it would be appropriate to grant a waiver of our depreciation prescription process for certain price cap incumbent LECs in certain instances. Specifically, we find that such a waiver may be approved when an incumbent LEC, voluntarily, in conjunction with its request for waiver: (1) Adjusts the net book costs on its regulatory books to the level currently reflected in its financial books by a below-the-line write-off; (2) uses the same depreciation factors and rates for both regulatory and financial accounting purposes; (3) foregoes the opportunity to seek recovery of the write-off through a low-end adjustment, an exogenous adjustment, or an above-cap filing; and (4) agrees to submit information concerning its depreciation accounts, including forecast additions and retirements for major network accounts and replacement plans for digital central offices. Finally, the waiver request must comply with § 1.3 of the Commission's rules. We will consider alternative proposals by carriers seeking a waiver of our depreciation requirements. Such alternative proposals, however, must provide the same protections to guard against adverse impacts on consumers and competition as the conditions adopted in this Order provide.

The first and second conditions of the waiver process we establish in this Order require that carriers seeking a waiver of our depreciation prescription process adjust their regulatory net book costs to their financial net book costs and use the same depreciation factors and rates for both regulatory and financial accounting purposes. The first condition addresses the disparity that exists between the largest incumbent LECs' financial and regulatory books. In the early 1990's many of the largest incumbent LECs wrote off billions of dollars from their financial books through adjustments to their depreciation reserves. Because they did not make comparable write-offs on their regulatory books, there are significant differences in depreciation reserves between their financial and regulatory books. The first condition requires that the incumbent LEC eliminate this disparity by increasing the depreciation reserves on its regulatory books by a below-the-line write-off. The second condition then requires that carriers use the same depreciation factors and rates for both regulatory and financial purposes. Using the same factors and rates will ensure that established accounting procedures are being followed. These conditions are important because they provide assurance that carriers do not engage in a practice that would disadvantage consumers and competition by using high financial depreciation rates with high regulatory net book costs or by applying inappropriate depreciation rates to regulatory plant accounts.

The third condition requires that carriers obtaining a waiver forego the opportunity to recover any portion of the adjustment that results from conforming their regulatory net book costs to their financial net book costs ( i.e. , through a below-the-line write-off). As a precondition to obtaining a waiver of the depreciation prescription process, a carrier would have to voluntarily forego its opportunity to recover any portion of the one-time adjustment to its regulatory books through a low-end adjustment, an exogenous adjustment or an above-cap filing. These are all mechanisms through which a price cap incumbent LEC can increase its prices by passing costs through to ratepayers. This third condition assures that a waiver from the depreciation prescription rules would not lead to unjust and unreasonable rates that would result from the inappropriate use of recovery mechanisms. Foregoing recovery of any portion of the write-off is necessary because the depreciation prescription process is the primary way in which we evaluate such claims for recovery. If, as a condition of obtaining a waiver, an incumbent LEC voluntarily foregoes any opportunity to assert such claims in connection with this adjustment to its regulatory net book costs, then our concerns would be mitigated and we could conclude that a waiver of our rules is consistent with the public interest.

These first three conditions are imposed in order to guard against adverse impacts on consumers and competition. Without these conditions, the largest incumbent LECs could use their high financial depreciation rates with their high regulatory net book costs, thereby drastically increasing their annual depreciation expenses. Large increases in depreciation expenses on the carrier's regulatory books would significantly reduce carrier's earnings, which in the case of most all the largest incumbent LECs, would be of such magnitude as to lower rates of return below 10.25%. This in turn could trigger a low-end adjustment, or could lead to carriers seeking recovery through exogenous cost treatment or above-cap filings. These recovery mechanisms, if granted, could enable incumbent LECs to increase prices they charge for access services and in rates they charge for unbundled network elements (UNEs) and interconnection. Increases in access service prices, which could be substantial, would be imposed on purchasers of access and passed on to their customers. The harmful impact that increased charges could have on competition is also substantial. State regulatory commissions have set rates for interconnection and UNEs, and in many instances, have based the rates on Commission-prescribed depreciation factors. Incumbent LECs, acting as wholesale providers of critical facilities to their competitors, could independently establish depreciation rates that could result in unreasonably high interconnection and UNE rates, which competitors would be compelled to pay in order to provide competing local exchange service.

In addition, allowing the largest incumbent LECs to select their own financial depreciation rates for regulatory purposes could have serious consequences for the universal service process. All the largest price cap incumbent LECs are classified as non-rural for universal service purposes. Under the rules we adopted in the recent federal high-cost support mechanism proceedings, each of the non-rural carriers' high cost support is the larger of: (1) An amount determined under our previous USF calculation method, i.e., by basing the amount of support on the relationship of the carrier's average cost per loop and the nationwide average cost per loop or (2) an amount determined under the new synthesis model. Our current depreciation prescription process is critical in the calculation of high cost support amounts determined under method (1) because it ensures that the depreciation expense component of the carriers' average costs per loop are reasonable. If we were to allow incumbent LECs to choose their own depreciation factors without review, we could no longer ensure that the depreciation expense or the average cost per loop were reasonable. If these carriers were to use their financial depreciation factors for regulatory purposes, they would report major increases in their average costs per loop. This would increase substantially their high cost support under method (1). Under this method, however, because high cost support is subject to a cap, increases in the largest incumbent LECs' high cost support would not increase the fund. Instead, it would lead to substantial reductions in the high cost support for other, primarily rural, carriers, many of which rely to a great extent on high cost support to keep their local rates affordable.

In light of the significantly harmful impact that unrestricted changes in depreciation expenses could have on consumers and competition, we find the public interest is protected only if safeguards are in place that will negate such potential harm. We believe the first three conditions provide the appropriate safeguards and will ensure that carriers do not unreasonably increase depreciation expenses as a result of granting flexibility to establish their own depreciation rates.

The fourth condition requires that carriers who obtain a waiver of our depreciation process submit certain information about network retirement patterns and modernization plans related to their plant accounts so that we can maintain realistic ranges of depreciable life and salvage factors for each of the major plant accounts. This condition seeks to ensure that the Commission has the necessary data to periodically update depreciation factors ( i.e. , life, salvage, curve shape, depreciation reserve) and to address issues in areas where reliance on the carriers' financial depreciation rates may be inconsistent with other regulatory policy goals. Maintaining appropriate depreciation ranges for the major plant accounts will continue to be critical even though some carriers may be granted relief from the Commission's prescribed depreciation process. This is especially true given the Commission's reliance on the prescribed depreciation ranges in the use of its cost models for universal service high cost support and UNE/interconnection prices.

As discussed, calculation of high cost support under method (2) uses the synthesis model. In this model, the Commission determined that it would rely on the weighted average of the prescribed lives and salvage percentages. If we were to discontinue depreciation prescription for most carriers, these weighted average factors would become less representative of the industry as a whole. In such a circumstance, in order to have representative depreciation factors, we would likely have to rely on the Commission's prescribed depreciation ranges. In order to do this successfully, however, we would have to require that all the major carriers continue to provide the data necessary to keep the ranges up-to-date.

Further, in the Local Competition Proceeding , (61 FR 45476 August 29, 1996) the Commission required the use of “economic depreciation” in calculating rates for interconnection and UNEs, but did not elaborate on how economic depreciation should be calculated. Based on our review to date, twenty-four states commissions have required incumbent LECs to use FCC-prescribed projection lives and salvage factors, or similar state-prescribed factors, to calculate their rates for UNEs. We are concerned that forbearance from depreciation regulation by the Commission might deprive state regulatory commissions of valuable information that they may want or need in setting rates for interconnection and UNEs, and might enable incumbent LECs to raise arbitrarily the rates for essential inputs that competitors must purchase from the incumbent LECs. This could have an adverse impact on the development of local competition.

Thus, in order to prevent any inappropriate and undesirable fluctuations in high cost support or the rates for interconnection and UNEs due to changes in depreciation rates caused by carriers receiving a waiver, we will continue to maintain realistic ranges of depreciable life and salvage factors for each of the major plant accounts. These ranges can be relied upon by federal and state regulatory commissions for determining the appropriate depreciation factors to use in establishing high cost support and interconnection and UNE prices. The information that carriers will be required to submit include: forecast additions and retirements for major network accounts; replacement plans for digital central offices; and information concerning relative investments in fiber and copper cable. This condition will assure that any increase in depreciation expense will not have a harmful effect on consumers or competition in rates calculated using reported costs or forward-looking cost models.

The four conditions outlined are intended to mitigate our concerns about the adverse impacts that could occur when carriers are given the freedom to select their own depreciation lives and procedures. The depreciation prescription process is our primary method of assessing the validity of the incumbent LECs' claims for reserve deficiencies and it would not be in the public interest to waive our depreciation rules with the issue of billions of dollars in potential claims unresolved. By establishing conditions pursuant to which a waiver from the depreciation prescription process would be granted, we are giving carriers the freedom from depreciation regulation that they seek. In exchange for that freedom, however, they would need to relinquish portions of the regulatory safety net that has protected them in the past.

On September 21, 1998, USTA filed a petition for forbearance on behalf of the price cap incumbent LECs and requested that the Commission forbear from imposing §§ 32.2000(g) and 43.43 of the Commission's rules, and refrain from conducting depreciation prescription proceedings under section 220(b) of the Act. The USTA petition is filed under section 10 of the Act. We deny the USTA's petition. We find that USTA did not meet the requirements of Section 10 and that: Our depreciation prescription process is necessary to ensure just and reasonable charges; continuation of our depreciation prescription process is necessary for the protection of consumers; and that forbearance is not consistent with the public interest and the promotion of competition as it is likely to have an adverse effect on competition by raising the input prices that competitors must pay to provide local exchange service. We therefore find that none of the three prongs of the section 10 forbearance test is met. We thus deny USTA's petition for forbearance from the prescription of depreciation prescription.

Final Regulatory Flexibility Certification—Report and Order in CC Docket No. 98-81, RM-9341.

The Regulatory Flexibility Act (RFA), 5 USC 601 et seq. , amended by the Contract With America Advancement Act of 1996, Public Law 104-121, 110 Stat. 847 (1996) (CWAAA), requires that an agency prepare a regulatory flexibility analysis for notice-and-comment rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” 5 U.S.C. 605(b). In the NPRM , 1998 Biennial Regulatory Review—Review of Depreciation Requirements for Incumbent Local Exchange Carriers, CC Docket No. 98-137, Notice of Proposed Rulemaking (NPRM) , the Commission certified that the Regulatory Flexibility Act did not apply to this rulemaking because none of the proposed changes to our depreciation prescription process would have a significant economic impact on a substantial number of small entities. Pursuant to longstanding rules, the proposed changes would apply only to incumbent LECs with annual operating revenues exceeding the indexed revenue threshold. No comments were received concerning the proposed certification.

26. Final Paperwork Reduction Act Analysis.

This decision herein has been analyzed with respect to the Paperwork Reduction Act of 1995, Public Law 104-13, and has been approved in accordance with the provisions of that Act. The Office of Management and Budget (OMB) approved the proposed requirements under OMB control number 3060-0168, which expires December 31, 2001. The Report and Order contains new or modified information collections which are subject to the Paperwork Reduction Act of 1995.

Pursuant to Sections 1, 2, 4, 11, 201-205, and 218-220 of the Communications Act of 1934, as amended, 47 USC 151, 152, 154, 161, 201-205, and 218-220, part 43 of the Commission's rules, 47 CFR part 43, is Amended as shown. Pursuant to Sections 1-4, 201-205, 220 and 303(r) of the Communications Act of 1934, as amended, 47 USC 151-154, 201-205, 220 and 303(r) that the Report and Order is Adopted. These rules contain information collections that have not been approved by OMB. The Commission will publish a document announcing the effective date of this rule.

Pursuant to Sections 1, 4, 10, and 220 of the Communications Act of 1934, as amended, 47 USC 151, 154, 160, and 220 that the Petition for Forbearance from Depreciation Regulation of Price Cap Local Exchange Carriers filed by the United States Telephone Association is hereby denied. The Commission's Office of Public Affairs, Reference Operations Division, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.