The Commission is issuing final rules to establish the administrative fines program that Congress authorized in amendments to section 309(a)(4) of the FECA, 2 U.S.C. 437g(a)(4). These amendments were enacted as part of the Treasury and General Government Appropriations Act, 2000, Public Law 106-58, 106th Cong., Section 640, 113 Stat. 430, 476-77 (1999). Under 2 U.S.C. 434, treasurers of political committees are required to file reports periodically to the Commission by a certain deadline. Prior to enactment of the amendment to the FECA, the Commission handled failures to file the reports in a timely manner under the enforcement procedures in 11 CFR part 111. The purpose of the administrative fines program is to institute streamlined procedures, while preserving the respondents' due process rights, to process violations of the reporting requirements of 2 U.S.C. 434(a) and assess a civil money penalty based on the schedules of penalties for such violations. The final rules include new subpart B of 11 CFR part 111, and technical amendments to 11 CFR 104.5, 111.8, 111.20, and 111.24 to implement the administrative fines program.

Section 438(d) of Title 2, United States Code, requires that any rule or regulation prescribed by the Commission to carry out the provisions of Title 2 of the United States Code be transmitted to the Speaker of the House of Representatives and the President of the Senate 30 legislative days before they are finally promulgated. These regulations were transmitted to Congress on May 12, 2000.

The Commission initiated this rulemaking by issuing a Notice of Proposed Rulemaking (NPRM) on March 29, 2000, in which it sought comments to the proposed rule. 65 FR 16534 (March 29, 2000). The comment period ended on April 28, 2000. The Commission received one comment in response to the NPRM from Akin, Gump, Strauss, Hauer & Feld. The comment included a request for a public hearing. Because Congress intended for this new program to apply to violations that occur in 2000 and 2001, the final rules need to be issued in a timely manner so that the program will be applicable to the reports that are due in 2000. Holding a public hearing would postpone publication of the final rules and delay the effective date, possibly until February or March, 2001. This late effective date would allow the Commission to apply the administrative fines procedure to only one major reporting period—the 2001 Mid-Year Report. This would not give the Commission a sufficient basis to determine whether to recommend that Congress make the program permanent. Also, the Commission received only one request for a public hearing and that requester did submit extensive comments. Therefore, the Commission will not hold a public hearing on this final rule.

The commenter's overriding concern was that the proposed procedures do not afford adequate procedural due process and therefore, violate the Fifth Amendment's Due Process Clause of the U.S. Constitution. The commenter argued that the procedures do not meet the balancing test in Mathews v. Eldridge, 424 U.S. 319 (1976), by failing to recognize the respondents' private interests, by minimizing the potential risk of erroneous result, and by placing undue emphasis on administrative expediency. The commenter claimed that the potential risk of erroneous result is high because the civil money penalty calculation includes three factors that could be misapplied and because the advent of mandatory electronic filing could flood the Commission's computers and lead to a breakdown that would unfairly penalize the respondents.

The Commission disagrees with this assessment. The Commission does recognize that the respondents have a property interest at stake. Except for political committees with low levels of financial activity during the reporting period, the civil money penalty will not exceed fifteen percent of the level of activity in the report for respondents who have no previous violations. For committees whose financial activity is less than $25,000 and who do not have a previous violation, the civil money penalty will not exceed $1000 or the level of activity, whichever is less. Thus, the cost of additional procedures such as a hearing for the respondent as well as the Commission will exceed the benefit of having them. Also, the Mathews balancing test considers whether additional procedures will provide greater protection against deprivation of a property interest or error. Within the administrative fines program, additional procedures in most cases will not afford the respondents greater protection against either. As stated in the NPRM, the factual and legal issues involved in violations of the reporting requirements of 2 U.S.C. 434(a) are relatively straightforward. The Commission will carefully review the facts and its records before it will even proceed with a reason to believe finding. For the most part, the factual disputes surrounding this type of violation are whether the respondent filed the report and when the report was filed. If the respondent disagrees with the facts in the notification of the reason to believe finding, he or she can send proof of the filing and the date of the filing. The Commission expects that the reviewing officer will be able to resolve these types of factual disputes based on the written submissions.

The Commission also disagrees with the commenter's assertion that the procedures set forth in the NPRM pose a large potential risk of erroneous result. The civil money penalty calculation is a simple arithmetic formula whereby an error can be readily corrected by the Commission or the reviewing officer when it is brought to their attention. It is premature to predict the impact of mandatory electronic filing on administrative fines. It will have no real effect on the administrative fines program during the year 2000 because mandatory electronic filing is not scheduled to begin until January, 2001. Given that most committees will file only two reports during 2001 (2000 Year End and 2001 Mid-Year reports) before the administrative fines program sunsets on December 31, 2001, the impact is likely to be minimal, if any. The Commission's electronic filing system has been designed to accommodate filings by all committees that will be mandated to file electronically in 2001. As a result, there is no expectation that the system will have an adverse impact on the ability of committees to file their reports in a timely manner. In fact, committees may find that electronic filing is easier, faster, and more convenient than paper filing. Nevertheless, any failure of the Commission's system that prevents committees from filing their reports when due would be recognized by the Commission as a circumstance beyond the control of the filer and would be taken into account when considering reason to believe findings or the final determination.

The Commission recognizes that the need to avoid administrative burdens is one of the stated purposes for the amendment to the FECA. Congressman William Thomas, Chairman of the Committee of House Administration, stated the following on the floor of the House of Representatives on September 15, 1999:

The Commission, however, disagrees with the commenter that the proposed rule sacrifices the respondents' rights and procedural due process in the interest of administrative efficiency. The Commission applied the Mathews balancing test in developing the administrative fines procedures, taking into consideration the private interests involved and the nature of the violation. The Commission believes that the procedures in the final rules more than adequately meet the Mathews test in providing the respondents with procedural due process.

Paragraph (i) is being added to section 104.5 to encourage political committees to keep proof that they filed their reports and the dates on which the reports were filed. Retaining this evidence will allow a respondent to demonstrate timely filing if the respondent disagrees with the Commission on whether the report was filed and if so, the date of the filing. No substantive comments were made concerning this proposed section.

Paragraph (d) is being added to section 111.8 to permit the Commission to process complaint-generated matters that allege violations of the reporting requirements of 2 U.S.C. 434(a) under the administrative fines program. The Commission received no substantive comment on this section.

New paragraph (c) in section 111.20 is being added to provide for the public disclosure of the enforcement file once the matter is completely resolved. The Commission did not receive any substantive comments to this section.

Revised paragraph (a) of section 111.24 allows for the imposition of civil money penalties so as to make section 111.24 consistent with 11 CFR part 111, subpart B. The Commission did not receive any substantive comments on this section.

The amendment to FECA authorizes the administrative fines procedures for violations of the reporting requirements of 2 U.S.C. 434(a) that occur between January 1, 2000 and December 31, 2001. Therefore, this section provides that subpart B only applies to violations that occur during that time frame and subpart B sunsets as of January 1, 2002. The Commission did not receive any substantive comments on this section.

Under the amendment to FECA, the Commission has discretion to apply either the administrative fines procedures or the current enforcement procedures set forth in §§ 111.9 through 111.19 to violations of the reporting requirements of 2 U.S.C. 434(a). The amendment, however, still requires the Commission to find reason to believe that a violation has occurred prior to making a final determination. Thus, §§ 111.1 through 111.8, which include the Commission's reason to believe procedures, will apply to violations processed through the administrative fines procedures. Please note that under 2 U.S.C. 437g(b), the Commission will continue to publish the names of political committees that fail to file their reports when due in the calendar quarter preceding an election including pre-election reports if the committees do not respond within four business days of being notified by the Commission of their failure to file. Sections 111.20 through 111.24, which pertain to public disclosure, confidentiality, ex parte communications, representation by counsel, and civil penalties, will also apply to violations processed under subpart B. In addition, while the Commission anticipates that it will process most of these violations under the administrative fines procedures, § 111.31 makes clear that the Commission has the discretion to use the enforcement procedures in §§ 111.9 through 111.19 to handle these violations in circumstances the Commission deems appropriate.

Proposed § 111.31(b) is being modified to include complaint-generated matters that allege violations of the reporting requirements of 2 U.S.C. 434(a) along with violations of other provisions of the FECA in the administrative fines program. The alleged violations of the reporting requirements will be processed through subpart B while the other alleged violations will be handled through the enforcement process of subpart A. The Commission made this modification to maintain consistency in its prosecution of alleged violations of the reporting requirement of 2 U.S.C. 434(a). The Commission did not receive any substantive comments on this section.

The Commission will follow its current procedures in finding reason to believe and in notifying the respondents of its finding. If the Commission, by an affirmative vote of at least four of its members, finds reason to believe that a violation has occurred, the Chairman or the Vice-Chairman will notify the respondent of the finding. The notification will include the legal and factual basis for the finding as well as the proposed civil money penalty in accordance with the schedules of penalties and an explanation of the respondent's right to challenge the finding and/or the proposed civil money penalty.

As stated in the NPRM, the Commission will also continue to follow its current procedure of notifying the political committees of their duty to file their reports and the dates on which the reports are due prior to the filing deadline. Thus, political committees will continue to be on notice of their legal obligation to file their reports in a timely manner.

The commenter urged that the Commission include a regulation stating when a report filed electronically is considered “filed.” The Commission agrees that the regulations should include such a provision but has decided that this topic is better addressed in the Commission's rulemaking regarding mandatory electronic filing.

Upon receipt of the notification of the reason to believe finding and the proposed civil money penalty, the respondents will have two options. They may pay the civil money penalties pursuant to § 111.34. The Commission will process the payment and then close the matter. Respondents may also challenge the reason to believe finding and/or the proposed civil money penalty by following the procedures set forth in § 111.35. The Commission did not receive any substantive comments on this section.

A respondent who does not wish to challenge the reason to believe finding and the proposed civil money penalty must submit a check or money order equal to the amount of the proposed civil money penalty to the Commission within 40 days of the reason to believe determination. Once the Commission receives payment, it will send the respondent a final determination that the respondent has violated 2 U.S.C. 434(a) and acknowledgment of the respondent's payment of the civil money penalty. The matter would then be closed and the file would be placed on the public record pursuant to 11 CFR 111.20 and new 11 CFR 111.42. The Commission did not receive any substantive comments on this section.

Proposed § 111.35 in the NPRM set forth the requirements that respondents must meet to challenge a reason to believe finding and/or proposed civil money penalty. The requirements included filing a notice of intent to challenge within twenty days of the date of the Commission finding reason to believe and filing a written response with supporting documentation within forty days of that date. This proposed section also provided for circumstances the Commission will consider in determining whether to levy a civil money penalty and defenses that the Commission will not accept.

The commenter had several criticisms of this aspect of the administrative fines procedures. First, the commenter objected to the requirement of the notice of intent to challenge the reason to believe finding and/or proposed civil money penalty, stating that the requirement is “contrary to the plain language of the statute, which forbids the Commission from making an adverse determination ‘until the person has been given notice and an opportunity to be heard before the Commission’ ” (citation omitted). While the Commission disagrees with the commenter's legal analysis on this issue, the Commission agrees that a notice of intent to challenge is not necessary. Consequently, that step has been eliminated from the final rules.

The commenter also objected to the use of the date of the Commission's reason to believe determination to trigger the time that the respondent has to file a notice of intent and the written response. The commenter suggested that the time to file the notice of intent and the written response should not begin until receipt of the notification of the Commission's reason to believe finding.

In determining when the time to appeal begins to toll, some federal agencies chose the date on which the decision was made, not the date of receipt, often providing thirty days from the date of the initial decision. See e.g., Coast Guards Regulations on Suspension, Revocation, and Appeals, 33 CFR 158.190 (2000); Department of the Interior Regulations on Public Lands, 43 CFR 4.356 (2000). The Commission also notes that several agencies that begin to toll the time for appeal upon service of an initial adverse decision provide thirty days for a party to file the appeal. See Federal Retirement Thrift Investment Board Privacy Act Regulations, 5 CFR 1630.13 (2000); National Indian Gaming Commission Regulations on Appeals, 25 CFR parts 524 and 539 (2000); Postal Service Regulations on Suspension and Revocation of Appeal, 39 CFR 501.12 (2000). Seen in this context, the Commission believes that forty days is an ample and fair amount of time for respondents to file a written response. The Commission has extended the traditional thirty day appeal period an additional ten days to take into account the time it takes for Commission staff to prepare the mailing as well as for the Postal Service to deliver the notification, with a few additional days as a margin for error.

The commenter strongly disagrees with the list of defenses in proposed § 111.35 that the Commission will and will not consider, suggesting that the Commission has failed to balance the respondent's rights with “administrative expediency” for the Commission. The commenter recommends that the Commission eliminate proposed § 111.35(c)(1)(iii) and (c)(4) because the Commission has no rationale for limiting defenses to “48-hour extraordinary circumstance” and errors on the part of the Commission. In addition, the commenter believes that the Commission should allow “good faith” defenses.

The Commission has sound policy reasons for limiting the respondents' defenses beyond streamlining the administrative process. A key cornerstone of campaign finance law is the full and timely disclosure of the political committee's financial activity. Such disclosure is essential to providing the public with accurate and complete information regarding the financing of federal candidates and political campaigns. Thus, violations of the reporting requirements of 2 U.S.C. 434(a) are strict liability offenses. Political committees are aware or should be aware of their legal duty to file the required reports in a timely manner, and the Commission makes ongoing efforts to remind committees of their duty. Committees are given ample time from the end of the reporting period to the filing deadline to prepare and file their reports. Absent extraordinary circumstances beyond the committees' control, the Commission sees no reason why committees cannot file their reports by the deadline. The rationale behind the “48-hour extraordinary circumstances” exception is that the Commission recognizes there may be instances such as natural disasters where a committee's office is located in the disaster area and the committee cannot timely file a report because of lack of electricity or flooding or destruction of committee records. The Commission, however, expects the committee to file its report as soon as it can reasonably do so.

The commenter argues that under proposed § 111.35(c)(4)(iv) respondents may be held liable for the failure of the Commission's computers. Any failure of the Commission's system that prevents committees from filing their reports when due would be recognized as an extraordinary circumstance beyond the respondents' control. Therefore, § 111.35(c)(4)(iv) has been revised to exclude Commission computer failures from the list of circumstances that the Commission will not consider as extraordinary circumstances.

The commenter states that, under the Due Process Clause of the U.S. Constitution, the Commission bears the burden of proving the factual allegations, not the respondent. In its notification to the respondent of its reason to believe finding, the Commission does include the factual and legal basis for its finding based on the information available to it. Only the respondents can answer the Commission's allegations, devise their defenses, and provide the documents that would support their defenses. Supporting documentation will permit the reviewing officer to evaluate the respondents' factual allegations and defenses. Administrative procedures under other federal agencies also require respondents to provide the factual and legal basis for seeking relief or appealing a decision of the agency. See e.g. , 18 CFR 1312.12(d) (2000) (Tennessee Valley Authority's regulations requiring the petition for relief from an assessment of a civil penalty to “set forth in full the legal and factual basis for the requested relief.”); 25 CFR 577.3 (2000) (The National Indian Gaming Commission's hearing regulations state that “* * * the respondent shall file with the Commission a supplemental statement that states with particularity the relief desired and the grounds therefor and that includes, when available, supporting evidence in the form of affidavits.”). Therefore, requiring a respondent to include reasons for challenging the reason to believe finding and/or proposed civil money penalty and the factual basis for those reasons does not violate a respondent's rights under the Due Process Clause.

Proposed § 111.36 in the NPRM provided for an impartial reviewing officer to review the reason to believe finding, the proposed civil money penalty, the Commission's documentation, and the respondent's written response and to make a recommendation to the Commission. The reviewing officer may request that the respondent and/or the Commission staff submit supplemental information. Paragraph (b) is being revised to clarify the consequence of failure by the respondent to file the supplemental information. Such failure will entitle the reviewing officer to draw an adverse inference.

The commenter expressed concern that the procedures described in proposed § 111.36 fail to meet the statutory requirements of Administrative Procedure Act (APA), 5 U.S.C. 551, et. seq., and the Due Process Clause of the U.S. Constitution. The commenter states that the proposed rule does not include provisions that incorporate 5 U.S.C. 555(b) and (c), which entitle a party to appear in person, to be represented by counsel, and to have access to documents that are the basis of the reviewing officer's recommendation to the Commission. The commenter argues that oral hearings will fulfill the requirements of 5 U.S.C. 555(b) and the Mathews balancing test to determine whether an agency's procedures afford respondents adequate procedural due process. The commenter contends that oral hearings would give greater meaning to the respondents' right to an “opportunity to be heard”; would settle disputes without need for litigation, thereby conserving resources; and would develop a full administrative record for the purposes of judicial review. The Commission disagrees with some of these contentions and believes that these objectives can be achieved in all cases without need for an oral hearing.

With regard to the respondents' right to be represented by counsel, new § 111.31 explicitly incorporates § 111.23, which allows for respondents to be represented by counsel in any matter before the Commission. The commenter cited to 5 U.S.C. 555(c) as the basis for requiring the Commission to give respondents access to documents used by the reviewing officer in formulating his or her recommendation. The Commission disagrees with this reading of this section of the APA. Section 555(c) states that a “person compelled to submit data or evidence is entitled to retain or * * * procure a copy or transcript thereof.” Thus, respondents are entitled to keep a copy of their written submissions or ask the Commission to send them a copy of their written submissions. It does not grant the respondents the right to obtain or review other documents that the reviewing officer relied upon to make his or her recommendation. The Commission, however, recognizes that a respondent should be given copies of any additional documents that the reviewing officer examines after the respondent has filed a challenge to the reason to believe finding and/or proposed civil money penalty. For example, Commission staff might possibly provide additional materials regarding receipt of an electronically filed report. Therefore, paragraph (d) is being added to revised § 111.36 to provide for that procedure. Revised § 111.36 also adds new paragraph (f) to require the reviewing officer to send the respondent a copy of the recommendation to the Commission and allows the respondent to file with the Commission Secretary a written response to the recommendation within ten days of the transmittal of the recommendation. However, the respondent will not be able to make any new arguments, that is, the respondent may not make arguments that the respondent did not make in its original written response or that are not in direct response to the arguments made by the reviewing officer in his or her recommendation to the Commission.

The commenter interprets the second sentence of 5 U.S.C. 555(b) as creating an independent right to appear in person with counsel whenever there is an agency proceeding. The Commission disagrees with this interpretation. In reading 5 U.S.C. 555(b) as a whole, it is apparent that the entitlement described in the second sentence is triggered only if the person is compelled to appear in person in an agency proceeding. Thus, if a person is compelled to appear in person, the person may chose to appear by himself or herself, to appear with counsel, or send counsel or a duly qualified representative in his or her stead. The right to appear under 5 U.S.C. 555(b) “is not blindly absolute, without regard to the status or nature of the proceedings and concern for the orderly conduct of public business.” DeVyver v. Warden , 388 F.Supp. 1213, 1222 (M.D. Pa. 1974) (citing Easton Utilities Commission v. Atomic Energy Commission , 424 F.2d 847, 852 (D.C. Cir. 1970)).

Moreover, 5 U.S.C. 555(b) does not afford the respondents a right to a hearing. The Supreme Court has held that even where a statute requires an “opportunity for hearing,” it “cannot impute to Congress the design requiring, nor does due process demand, a hearing when it appears conclusively from the applicant's ‘pleadings’ that the applicant cannot succeed.” Weinberger v. Hynson, Westcott & Dunning, Inc. , 412 U.S. 609, 621 (1973) (involving the Federal Drug Administration's procedure for withdrawing approval of a new drug application). Similarly, lower courts have held that agencies may make a decision solely on the written submission, much like summary judgment, where there are no disputed issues of material fact that cannot be resolved by the written submissions. State of Pennsylvania v. Riley , 84 F.3d 125, 130 (3rd Cir. 1996) (citing Moreau v. F.E.R.C. , 982 F.2d 556, 568 (D.C. Cir.1993); Altenheim German Home v. Turnock , 902 F.2d 582, 584 (7th Cir. 1990); California v. Bennett , 843 F.2d, 333, 340 (9th Cir. 1988); Bell Telephone Co. of Pennsylvania v. FCC , 503 F.2d 1250, 1267-68 (3rd Cir. 1974); Puerto Rico Aqueduct & Sewer Auth. v. E.P.A. , 35 F.3d 600, 606 (1st Cir. 1994); Louisiana Ass'n of Indep. Producers and Royalty Owners v. FERC , 958 F.2d 1101, 1113-15 (D.C. Cir. 1992); City of St. Louis v. Department of Transp. , 936 F.2d 1528, 1534 n. 1 (8th Cir. 1991)).

The court in Puerto Rico Aqueduct & Sewer recognized the need for administrative summary judgment. It stated that:

The balancing of accuracy and fairness with the need for efficiency in an agency contains two of the three prongs of the Mathews test. Unlike other types of violations that may involve complex factual and legal issues requiring extensive fact finding and analysis and witness testimony, the legal and factual issues pertaining to violations of the reporting requirements of 2 U.S.C. 434(a), are elementary and readily ascertainable by review of written submissions. Because of this, a hearing will not significantly increase accuracy and fairness but will drain the Commission's resources and hinder its efficiency. Therefore, the Commission does not believe that a hearing is legally required especially in light of the additional procedures that are being added to the final rules. See supra.

Paragraph (c) is being added to revised § 111.36 to strongly encourage respondents to submit documents to the reviewing officer under §§ 111.35 and 111.36 that are sworn to in the form of affidavits or declarations. More weight and credibility are generally given to statements and documents that are given under oath or are subject to the penalty of perjury.

The commenter had several additional comments with regard to the reviewing officer. First, the commenter stated that the reviewing officer could not be viewed as impartial if he or she is within the Reports Analysis Division (RAD) or the Office of General Counsel (OGC) and suggested an independent position be created to ensure objectivity and to shield the reviewing officer from the supervision of the General Counsel or the Assistant Staff Director of RAD. The Commission agrees that “[i]mpartiality does not require total independence from the government agency or the presence of an administrative law judge * * * [but] only decisionmaker independence * * * from the individual action to be decided.” P. Verkuil, A Study of Informal Adjudication, 43 U. Chi. L. Rev. 739, 750 n.45 (1976) (citing Goldberg v. Kelly, 397 U.S. 254, 271 (1970)). The Commission recognizes the need to separate its prosecutorial functions from its role as the decider of facts. Consequently, at this time, the Commission anticipates that the reviewing officer most likely will not be an employee within OGC or RAD.

The commenter also suggested that the civil money penalties in the schedules of penalties in § 111.43 should be considered the maximum civil money penalty and that the reviewing officer should have the authority to reduce the civil money penalty after considering mitigating factors and the totality of the circumstances to create “more flexibility in applying the new rules.” The Commission disagrees. Allowing the reviewing officer to reduce the civil money penalty would vest in the reviewing officer the authority to make final decisions, contrary to the FECA and long standing practice. See 2 U.S.C. 437c(c). Final agency decisions must be made by an affirmative vote of four members of the Commission. Also, if the reviewing officer is granted the discretion to reduce the civil money penalties, different civil money penalty amounts may be levied against political committees that commit identical violations, resulting in lack of uniformity and certainty and giving rise to the perception of unfairness.

Finally with respect to the reviewing officer, the commenter advocated that this person should be subject to the Commission's ethics regulation. Further, the person “should not be a member of the enforcement staff who previously served as counsel in a matter where the current respondent was either a witness or a respondent” because it will create a conflict of interest and an appearance of impropriety. As an employee of the Commission and the federal government, the reviewing officer will be subject to the Commission's Standards of Conduct set forth at 11 CFR part 7, and the Standards of Ethical Conduct for Employees of the Executive Branch. The conflict of interest standard in 11 CFR 7.2(c) is designed to address instances where the employee's private interests are inconsistent with the efficient and impartial conduct of his or her official duties and responsibilities. Nothing in the rules bars an employee from serving in different capacities at different times such as employees in the Office of General Counsel subsequently filling positions in Commissioners' offices.

Section 111.37 What Will the Commission Do Once It Receives the Respondent's Written Response and the Reviewing Officer's Recommendation?

The Commission will make a final determination, by an affirmative vote of at least four of its members, as to whether the respondent has violated the reporting requirements of 2 U.S.C. 434(a) and the amount of the civil money penalty, if any. The Commission will then authorize the reviewing officer to notify the respondent of its decision. The Commission did not receive any substantive comments on this section.

This section follows the amendment to the FECA by specifying that respondents may appeal a final adverse determination by the Commission to a federal district court where the respondents reside or conduct business by filing a written petition within thirty days of receipt of the Commission's final determination. Respondents, however, may not raise any issue that they did not timely raise in the administrative proceeding. The Commission received no substantive comments on this section.

Unless the respondent appeals the Commission's final determination, the respondent must send a check or money order to the Commission within thirty days of receipt of the final determination. Once there is a final determination of the civil money penalty amount, the civil money penalty will be a debt owed to the United States. If the respondent does not submit full payment, the Commission may forward the debt to the U.S. Department of the Treasury for collection under the Debt Collection Improvement Act of 1996 within 180 days of the date after the final determination. 31 U.S.C. 3711(g); 31 U.S.C. 3716(c)(6). In the alternative, the Commission may initiate a civil suit pursuant to 2 U.S.C. 437g(a)(6)(A). The Commission did not receive any substantive comments on this section.

The Commission will make a final determination and assess a civil money penalty, if any. The respondents will be notified by letter of the final determination. The respondent must pay any assessed civil money penalty within thirty days of receipt of the final determination. Unpaid civil money penalties are debts owed to the United States and may be transferred to the U.S. Department of the Treasury for collection. 31 U.S.C. 3711(g); 31 U.S.C. 3716(c)(6). In the alternative, the Commission may initiate a civil suit pursuant to 2 U.S.C. 437g(a)(6)(A). There were no substantive comments on this section.

Respondents must pay the civil money penalties by check or money order and make the check or money order payable to the Federal Election Commission. The Commission did not receive any substantive comments on this section.

Once the enforcement matter is closed, the file will be made available to the public subject to the provisions of 11 CFR 4.4(a)(3). A matter is considered closed when neither the Commission nor the respondent files a civil action in federal court or when there is a final disposition of the civil action pursuant to 11 CFR 111.20(c). The Commission received no substantive comments on this section.

Proposed § 111.43 contained two schedules of penalties—one for election sensitive reports and one for all other reports. The Commission took into account the level of activity in the report, the number of days late, the election sensitivity of the reports, and the existence of previous violations in developing the schedules. Two of these factors—the level of activity and the existence of previous violations—are mandated by the FECA. The Commission included the number of days as a factor because fairness demands that a report that is only a few days late should not be treated in the same manner as one that is many days late or not filed. Similarly, several state agencies responsible for overseeing state campaign finance laws levy fines on a per day basis for violations of their reporting requirements. See e.g., Fla. Stat. Ann. § 106.04(8) (West 2000); Haw. Rev. Stat. § 11-193(a)(5) (1999); N.M. Stat. Ann. § 1-19-35A (Michie 1999). Because of the need to disseminate campaign finance information prior to an election for it to have a meaningful impact, the Commission concluded that it is especially important for reports due prior to an election to be filed in a timely manner and before the election. Thus, the Commission developed a different schedule of penalties for election sensitive reports that imposes a higher civil money penalty for these reports than other types of reports. In addition, the schedule of penalties for election sensitive reports uses an earlier cut-off date in considering a report not to be filed than the date used for reports that are not election sensitive.

The commenter made several comments and suggestions regarding the schedules of penalties. First, the commenter urged the Commission to calculate the level of activity based on contributions and expenditures less overhead and administrative costs, rather than receipts and disbursements, arguing that a calculation based on receipts and disbursements does not further the goals of FECA and discriminates against political action committees. This argument implicitly assumes that disclosure of some types of receipts and disbursements is of lesser importance than disclosure of other types. The Commission disagrees with this assumption. The amendment to the FECA clearly states that the Commission must take into account the “amount of the violation involved,” which is not limited to contributions and expenditures. Under section 434 of the Act, political committees are required to disclose all receipts and disbursements in their reports, not just contributions and expenditures. Moreover, Congress could have drafted the amendment to include just contributions and expenditures, as it did for mandatory electronic filing in Section 639 within the same amendment, but it did not. This difference in terms used in these two sections is strong evidence that Congress intended these two provisions to reach different types of financial activity. Thus, the Commission concludes that the “amount of the violation involved” is equal to receipts and disbursements.

The commenter suggested that the final rules should state that committees with no receipts or disbursements will not be subject to the administrative fines, and urged the Commission to allow committees to send an affidavit attesting to the fact that they did not have any receipts or disbursements in lieu of filing a report. The Commission cannot do so because it does not have the authority to waive reporting requirements in this situation. While the Commission theoretically could make a final determination that a committee with no receipts and disbursements is in violation of 2 U.S.C. 434(a), the Commission could not assess a civil money penalty against the committee because the schedules of penalties only provides for civil money penalties if the level of activity is $1.00 or more. However, committees with no financial activity should file their reports; otherwise, the Commission will calculate an estimated level of activity based on the average level of activity over the current or previous two-year election cycle. Unless the committees file their reports disclosing no financial activity, the Commission will assess civil money penalties based on these estimated levels of activity or $5500 if the Commission cannot calculate the estimated levels of activity.

The commenter advocates the creation of a “safe harbor” for committees that do not have any contributions or expenditures in the given reporting period because these committees have not engaged in any political activity in that period. As discussed above, one of the mandated factors in determining the civil money penalty is the amount of the violation, which is not limited to just contributions and expenditures. Committees are required to file reports even if the committees did not have any contributions or expenditures. To create such a “safe harbor” would be to implicitly allow committees to ignore their affirmative and legal duty to file the required reports.

The commenter characterized the schedules of penalties in the NPRM as lacking a rational basis and as discriminating against small committees. The commenter suggested that the Commission break down the level of activity by $5,000 increments. The basis for the schedules of penalties is discussed above. The Commission believes the breakdowns in the schedules of penalties using the levels of activity fairly and equitably assess civil money penalties that reflect the nature and scope of the violation. The Commission notes, however, that the commenter was correct in stating that small committees that fall within the first range, $1-$24,999.99, could potentially pay a civil money penalty that exceeds their total financial activity for a given reporting period. Therefore, the two schedules in § 111.43 are being amended to include a provision stating that respondents with no previous violations will not be assessed a civil money penalty that exceeds the levels of activity in the report.

The preamble to the NPRM included an alternative method for calculating the schedule of penalties for the election sensitive reports. Instead of a fifty percent increase in the base amounts, the NPRM sought comment on adding a flat amount of $1000 to the base amounts for all levels of activity. No comments directly addressing this issue were received. However, the commenter expressed concern that the schedules of penalties discriminated against committees with low levels of financial activity. The Commission has determined that a flat $1000 addition to the base amounts would impose on committees with low levels of financial activity a significantly higher civil money penalty relative to their level of activity than committees with higher levels of financial activity. Consequently, the Commission has decided to adopt a schedule of penalties that increases the base amounts by fifty percent for election sensitive reports instead of adding a flat $1000 to the base amounts.

The commenter suggested that the civil money penalties in the schedules of penalties may be too high in some instances. The Commission agrees that the civil money penalties it initially proposed for non-filers were too high. Therefore, the civil money penalties for non-filers are being reduced in the schedules of penalties in § 111.43 (a) and (b). With respect to both election sensitive reports and non-election sensitive reports, the resulting civil money penalties for non-filers are higher than the civil money penalties for reports filed 30 days late, but are not as high as the civil money penalties proposed in the NPRM.

Finally, paragraphs (d) and (e) are being revised to clarify that election sensitive reports include reports due before special elections.

Committees are required to report within 48 hours of receipt of those contributions of $1000 or more that are received after the 20th day but more than 48 hours before an election. 2 U.S.C. 434(a)(6). The Commission developed a different schedule of penalties for failure to file these notices on time because of the nature and timing of these notices and the need to have them filed on time. The schedule proposed in the NPRM did not distinguish between notices that are filed late and those that are not filed at all, and would have imposed a civil money penalty equal to fifteen percent of the amount of the contribution(s) not reported on time plus $100. In the final rules that follow, this schedule of penalties is also being reduced because the resulting civil money penalties may be too high. The amount in the final schedule of penalties is being reduced to 10% of the amount of the contribution(s) not timely reported plus $100.

The Commission may take any and all appropriate actions authorized and required by the Debt Collection Act of 1982, as amended by the Debt Collection Improvement Act of 1996 (31 U.S.C. 3701 et. seq. ). This section adopts the Federal Claims Collection Standards issued jointly by the Department of Justice and the General Accounting Office, 4 CFR parts 101-105, to provide procedures for the collection of the debt. This section also adopts by cross-reference the regulations issued by U.S. Department of the Treasury at 31 CFR 285.2, 285.4, and 285.7. Changes are being made to this section in the final rules for clarification purposes. The Commission did not receive any substantive comments on this section.

The attached final rule will not have a significant economic impact on a substantial number of small entities. The basis for this certification is that the final rule will impose penalties which are scaled to take into account the size of the financial activity of the political committees. Thus, committees with less financial activity will be subject to lower fines than committees with more financial activity. Also, the Commission anticipates that there will not be a large number of small committees that would be subject to the process in the proposed rules. Therefore, the final rules will not have a significant economic impact on a substantial number of small entities.

The FAA published this direct final rule with a request for comments in the Federal Register on March 24, 2000 (65 FR 16114). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on May 23, 2000. No adverse comments were received, and thus this notice confirms that this final rule will become effective on that date.

This amendment to part 97 of the Federal Aviation Regulations (14 CFR part 97) establishes, amends, suspends, or revokes Standard Instrument Approach Procedures (SIAPs). The complete regulatory description of each SIAP is contained in official FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of the Federal Aviatiion Regulations (FAR). The applicable FAA Forms are identified as FAA Forms 8260-3, 8260-4, and 8260-5. Materials incorporated by reference are available for examination or purchase as stated above.

The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. The provisions of this amendment state the affected CFR (and FAR) sections, with the types and effective dates of the SIAPs. This amendment also identifies the airport, its location, the procedure identification and the amendment number.

This amendment to part 97 is effective upon publication of each separate SIAP as contained in the transmittal. Some SIAP amendments may have been previously issued by the FAA in a National Flight Data Center (NFDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP amendments may require making them effective in less than 30 days. For the remaining SIAPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

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

We pay disability benefits under title II of the Social Security Act (the Act) to disabled individuals who are insured under the Act. We also pay child's insurance benefits based on disability and widow's and widower's insurance benefits for disabled widows, widowers, and surviving divorced spouses of insured individuals. In addition, we make Supplemental Security Income (SSI) payments under title XVI of the Act to persons who are disabled and who have limited income and resources. For adults under both the title II and title XVI programs, and for persons claiming child's insurance benefits based on disability under title II, “disability” means that an impairment(s) results in an inability to engage in any substantial gainful activity. Disability must be the result of any medically determinable physical or mental impairment(s) that can be expected to result in death or that has lasted or can be expected to last for a continuous period of at least 12 months.

Although the listings are contained only in part 404, we incorporate them by reference in the SSI program by § 416.925 of our regulations. The listings are divided into part A and part B. We apply the criteria in part A when we evaluate impairments in adults, that is, persons age 18 or over. The listings in part A describe, for each of several major body systems, impairments that are considered severe enough to prevent a person from doing any gainful activity.

As a result of medical advances in disability evaluation and treatment, and program experience, we are required to periodically review and update the listings. In the Notice of Proposed Rulemaking (NPRM) we published in the Federal Register (64 FR 55215) on October 12, 1999, we indicated that we would review these rules on July 2, 2001. However, based on our experience adjudicating claims filed by adults with non-mosaic Down syndrome, we believe that these rules will continue to be valid for our program purposes after that date. Therefore, these rules will be in effect for 8 years after the effective date, unless we extend them, or revise and issue them again.

Aside from the change in the date on which these rules will no longer be effective, which we discussed above, we have made no changes from the proposed rules. We are adding a new listing to evaluate claims filed by adults who have non-mosaic Down syndrome. Since 1990, we have evaluated claims filed on behalf of children who have non-mosaic Down syndrome under listing 110.06, but we have not had a Down syndrome listing for adults. Instead, we evaluate most of these claims under listing 12.05-Mental Retardation—which requires measurement of intellectual functioning. Almost all adults with Down syndrome also have moderate to severe musculoskeletal abnormalities, and many have other impairments, including cardiac, gastrointestinal, oral/facial and skeletal abnormalities. We also evaluate the physical impairments that such individuals may have under the appropriate body system listings.

For children, current listing 110.06 represents what we have known for some time: that when we obtain appropriate evidence, virtually all individuals who have non-mosaic Down syndrome will be found disabled under our rules. Therefore, listing 110.06 is met by showing that the individual has Down syndrome (excluding mosaic Down syndrome) that has been established by clinical findings, including the characteristic physical features, and laboratory evidence, including chromosomal analysis.

When listing 110.06 is met, disability is established from birth. In recognition of the fact that non-mosaic Down syndrome rarely, if ever, improves to the point that an individual would not meet our definition of disability, we are adding a corresponding listing in part A. We expect that this listing will simplify and expedite our adjudication of cases filed by adults with non-mosaic Down syndrome. We also expect that these rules will simplify and expedite the process of performing disability redeterminations at age 18 for individuals who are eligible for SSI as children on the basis of non-mosaic Down syndrome. Although it is the only listing in section 10.00, we are numbering the new listing as listing 10.06, to correspond to listing 110.06 in part B.

As in the childhood listing, final listing 10.06 provides that an individual age 18 or older who has non-mosaic Down syndrome established by clinical and laboratory findings, including chromosomal analysis, is considered disabled from birth. The new sections 10.00A and 10.00B in the preface to the listing provide rules for documenting non-mosaic Down syndrome. These rules are similar to those in the corresponding sections of the part B listing, 110.00A and 110.00B. Final 10.00A includes a provision similar to one in current 110.00A.2, which states that an individual with Down syndrome is considered disabled from birth. We included this provision in the final rules for adults to establish that the 12-month duration requirement has been met.

As we have done in part B of our listings, we are excluding mosaic Down syndrome from the listing. Mosaic Down syndrome is a rare form of the condition that is manifested in a wide range of impairment severity. The condition can be profound and disabling, but it can also be so slight as to go undetected. Therefore, it would not be appropriate to conclude that mosaic Down syndrome is always disabling. However, we will still find individuals with mosaic Down syndrome disabled if their impairments meet or are medically equivalent in severity to the requirements of other listings. An individual whose mosaic Down syndrome is “severe” but whose impairment(s) do not meet or medically equal the requirements of a listing may also be found disabled at the fifth step of the sequential evaluation process, based on an assessment of his or her residual functional capacity and consideration of his or her age, education, and work experience.

Finally, we are adding a new section 10.00C. This paragraph provides guidance for evaluating other chromosomal abnormalities.

Section 10.00 of part A of the listings was reserved for future use. We are now adding a new preface (10.00A, 10.00B, and 10.00C) and new listing 10.06 in this section. For this reason, and because Down syndrome often has physical as well as mental effects, we are adding the heading “Multiple body systems” for this section. We are also making minor editorial changes to the introductory text and table of contents to part A of appendix 1, to reflect the provisions of the final rules.

In the NPRM, we provided the public with a 60-day comment period. In response to the NPRM, we received comments from 20 commenters. Most of the comments came from individuals, many of whom have family members with Down syndrome. These commenters supported the proposed rules, without any suggested changes. Several comments came from interested organizations, including the National Down Syndrome Congress, the National Down Syndrome Society, the Arc of the United States, and the Joseph P. Kennedy, Jr., Foundation. Other comments came from the State agencies that make disability determinations for us.

All of the commenters supported the addition of an adult listing for evaluating non-mosaic Down syndrome. The summaries of the significant comments we received and our responses to them follow. We have tried to summarize the commenters' views accurately, and have responded to all of the significant issues raised that are within the scope of the proposed rules.

Comment: Commenters from a State agency that makes disability determinations for us agreed that including a separate listing for evaluating non-mosaic Down syndrome in adults was a good idea that would help simplify the adjudication of these cases. Two commenters from a State agency asked us to consider additional revisions to the listings to include other genetic disorders. One of these commenters specifically suggested we add a listing for evaluating Lowe's syndrome.

Response: We have not adopted the comment. Lowe's syndrome is a genetic disorder that primarily affects the eyes, brain, and kidneys. As with most genetic disorders, the physical stigmas and the degree of mental retardation associated with Lowe's syndrome vary widely. Therefore, we cannot conclude that the impairment is always of listing-level severity. Section 10.00C of these final rules provides that genetic disorders other than non-mosaic Down syndrome should be evaluated under the listings for the affected body system. We believe that this section will allow us to evaluate appropriately the effects of other genetic disorders, including Lowe's syndrome.

Comment: One commenter indicated that laboratory testing for Down syndrome is generally done at birth or soon thereafter. This commenter stated that, since the listing would apply to individuals who are at least 18 years old, the result of any laboratory testing might be difficult to obtain due to the passage of time. The commenter questioned what type of medical evidence could be used to establish the diagnosis under the provisions of section 10.00B of these final rules. The commenter also asked if SSA would pay for chromosomal analysis if needed.

Response: Section 10.00B of the final rules provides that, in lieu of a copy of the actual laboratory report, medical evidence that is persuasive that a positive diagnosis has been confirmed by an appropriate laboratory testing, at some time prior to evaluation, is acceptable documentation of the existence of non-mosaic Down syndrome. Under this provision, the file must contain an acceptable reference to the fact that testing was conducted and the results of that testing. The referenced results must be consistent with other evidence in file, e.g., the description of the usual abnormal physical findings, the individual's educational history, or the results of psychological testing, if performed. Generally, this information will give us sufficient evidence to establish the diagnosis. However, in the unusual case in which it becomes necessary, SSA can purchase the appropriate blood test.

Comment: Another commenter from a State agency that makes disability determinations for us agreed that this listing will assist in the adjudication of adult cases, age-18 redetermination cases, and continuing disability review (CDR) cases. This commenter asked whether we could revise the listing to indicate that medical improvement is not expected and that the cases adjudicated under listing 10.06 be diaried for 7 years.

Response: After we find that an individual is disabled, we must evaluate his or her continued eligibility for benefits from time to time. SSA issues guidelines on how to schedule these reviews through internal operating instructions in our Program Operations Manual System (POMS). We will consider the guidelines recommended by the commenter when we issue POMS instructions on how to schedule CDR diaries for adults found disabled based on non-mosaic Down syndrome.

Comment: One commenter representing an interested organization expressed support for adding a new listing to provide for the evaluation of Down syndrome for adults. This commenter urged SSA to provide training to all adjudicators when these rules become final.

Response: We agree with the commenter's recommendation. In accordance with our usual practice, we will conduct training for all adjudicators after the final rules are published.

For the reasons given in our responses to the comments on the proposed rules, we have not made further changes to the text of the proposed rules. Other than the one change discussed above, we are publishing the proposed regulations as final regulations.

We have consulted with the Office of Management and Budget (OMB) and determined that these final rules do not meet the criteria for a significant regulatory action under Executive Order 12866. Thus, the final rules were not subject to OMB review. We have also determined that these final rules meet the plain language requirement of Executive Order 12866 and the President's memorandum of June 1, 1998 (63 FR 31885).

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

These final rules impose no reporting/recordkeeping requirements necessitating clearance by OMB.

An electronic copy of this document may be downloaded by using a computer, modem and suitable communications software from the Government Printing Office's Electronic Bulletin Board Service at (202) 512-1661. Internet users may reach the Office of the Federal Register 's home page at http://www.nara.gov/fedreg and the Government Printing Office's web page at http://www.access.gpo.gov/nara.

The guidance memorandum reads as follows:

The purpose of this memorandum is to issue clarification to you in implementing Title VI of the 1964 Civil Rights Act (42 U.S.C. 2000d-1) and related regulations, The President's Executive Order on Environmental Justice, the U.S. DOT Order, and the FHWA Order.

Title VI states that “No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.” Title VI bars intentional discrimination as well as disparate impact discrimination ( i.e. , a neutral policy or practice that has a disparate impact on protected groups).

The Environmental Justice (EJ) Orders further amplify Title VI by providing that “each Federal agency shall make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations.”

Increasingly, concerns for compliance with provisions of Title VI and the EJ Orders have been raised by citizens and advocacy groups with regard to broad patterns of transportation investment and impact considered in metropolitan and statewide planning. While Title VI and EJ concerns have most often been raised during project development, it is important to recognize that the law also applies equally to the processes and products of planning. The appropriate time for FTA and FHWA to ensure compliance with Title VI in the planning process is during the planning certification reviews conducted for Transportation Management Areas (TMAs) and through the statewide planning finding rendered at approval of the Statewide Transportation Improvement Program (STIP).

This memorandum serves as clarification pending issuance of revised planning and environmental regulations.

We request that during certification reviews you raise questions that serve to substantiate metropolitan planning organization (MPO) self-certification of Title VI compliance. Suggested questions are attached. Also attached are a series of actions that could be taken to support Title VI compliance and EJ goals, improve planning performance, and minimize the potential for subsequent corrective action and complaint.

Statewide planning is also subject to the same Title VI legislative requirements as the metropolitan planning process. The FHWA division offices, jointly with FTA regional offices, should review and document Title VI compliance when making the TEA-21 required finding that STIP development and the overall planning process is consistent with the planning requirements.

In part, the purpose of asking the questions attached to this memorandum is to review the basis upon which the annual self-certification of compliance with Title VI is made. The metropolitan planning certification reviews in TMAs and STIP findings offer an opportunity to FHWA and FTA staff to verify the procedures and analytical foundation upon which the self-certification is made. If it becomes evident that the self-certification was not adequately supported, a corrective action is to be included in their certification report to rectify the deficiency.

The FHWA's and FTA's Division and Regional Administrators should involve their respective civil rights staffs in the EJ and Title VI portions of the metropolitan planning certification reviews in TMAs and statewide planning findings.

As you know, FHWA and FTA are preparing to revise the planning (23 CFR 450 and 49 CFR 619) and environmental (23 CFR 771 and 49 CFR 622) regulations. In these rulemakings and subsequent documents, we will propose clarifications and appropriate procedural and analytical approaches for more completely complying with the provisions of Title VI and the Executive Order on Environmental Justice. Specifically, the proposals will focus on public involvement strategies for minority and low-income groups and assessment of the distribution of benefits and adverse environmental impacts at both the plan and project level.

If you have questions on metropolitan applications of this memorandum, please contact Sheldon M. Edner, Team Leader, Metropolitan Planning and Policies, FHWA, (202) 366-4066; or Charlie Goodman, Division Chief, Metropolitan Planning, FTA (202) 366-1944. On statewide applications, please contact Dee Spann, Team Leader, Statewide Planning, FHWA; (202) 366-4086; or Paul Verchinski, Chief, Statewide Planning, FTA, (202) 366-1626.

Discussion of these important issues will be held as part of planning certification reviews, and the discussion will be held as part of statewide planning findings that are made as part of Statewide Transportation Improvement Program (STIP) approval. These questions are offered as an aid to reviewing and verifying compliance with Title VI requirements:

• What strategies and efforts has the planning process developed for ensuring, demonstrating, and substantiating compliance with Title VI? What measures have been used to verify that the multi-modal system access and mobility performance improvements included in the plan and Transportation Improvement Program (TIP) or STIP, and the underlying planning process, comply with Title VI?

• Has the planning process developed a demographic profile of the metropolitan planning area or State that includes identification of the locations of socio-economic groups, including low-income and minority populations as covered by the Executive Order on Environmental Justice and Title VI provisions?

• Does the planning process seek to identify the needs of low-income and minority populations? Does the planning process seek to utilize demographic information to examine the distributions across these groups of the benefits and burdens of the transportation investments included in the plan and TIP (or STIP)? What methods are used to identify imbalances?

• Does the planning process have an analytical process in place for assessing the regional benefits and burdens of transportation system investments for different socio-economic groups? Does it have a data collection process to support the analysis effort? Does this analytical process seek to assess the benefit and impact distributions of the investments included in the plan and TIP (or STIP)?

• How does the planning process respond to the analyses produced? Imbalances identified?

• Does the public involvement process have an identified strategy for engaging minority and low-income populations in transportation decisionmaking? What strategies, if any, have been implemented to reduce participation barriers for such populations? Has their effectiveness been evaluated?

• Has public involvement in the planning process been routinely evaluated as required by regulation? Have efforts been undertaken to improve performance, especially with regard to low-income and minority populations? Have organizations representing low-income and minority populations been consulted as part of this evaluation? Have their concerns been considered?

• What efforts have been made to engage low-income and minority populations in the certification review public outreach effort? Does the public outreach effort utilize media (such as print, television, radio, etc.) targeted to low-income or minority populations? What issues were raised, how are their concerns documented, and how do they reflect on the performance of the planning process in relation to Title VI requirements?

• What mechanisms are in place to ensure that issues and concerns raised by low-income and minority populations are appropriately considered in the decisionmaking process? Is there evidence that these concerns have been appropriately considered? Has the metropolitan planning organization (MPO) or State DOT made funds available to local organizations that represent low-income and minority populations to enable their participation in planning processes?

At a minimum, FHWA and FTA should review with States, MPOs, and transit operators how Title VI is addressed as part of their public involvement and plan development processes. Since there is likely to be the need for some upgrading of activity in this area, a work element to assess and develop improved strategies for reaching minority and low-income groups through public involvement efforts and to begin developing or enhancing analytical capability for assessing impact distributions should be considered in upcoming SPRs and UPWPs.

In many areas, room for improvement exists in public involvement processes regarding engagement of minority and low-income individuals. It is appropriate to review the extent to which MPOs and States have made proactive efforts to engage these groups through their public involvement programs. Further, FHWA and FTA should review the record of complaints or concerns raised regarding Title VI in the planning process under review. During the on-site element of the metropolitan certification review, the public involvement process, now required by statute, should make a special effort to engage and involve representatives of minority and low-income groups to hear their views regarding changes to and performance of the planning process.

(1) FHWA and FTA should seek to determine what, if any, processes are in place to assess the distribution of impacts on different socio-economic groups for the investments identified in the transportation plan and TIP. If the planning process has no such capability in place, there needs to be further investigation as to how the MPO is able to annually self-certify its compliance with the provisions of Title VI.

(2) If no documented process exists for assessing the distributional effects of the transportation investments in the region, the planning certification report should include a corrective action directing the development of a process for accomplishing this end. This will serve to put the process on notice regarding existing requirements and prepare it for future regulatory requirements. If a minimal effort is in place, FHWA and FTA should encourage the planning process participants to become familiar with the provisions of the Executive Order on Environmental Justice and identify needed improvements based on the Order.

(3) If no formal evaluation of the public involvement process has been conducted per the requirement for periodic assessment (see 23 CFR 450.316(b)), a corrective action to conduct an evaluation should be included in the certification report. The formal evaluation should, at a minimum, assess the effectiveness of efforts to engage minority and low-income populations through the local public involvement process. If the MPO or State has conducted a public involvement evaluation, FHWA and FTA should determine whether the involvement of minorities and low-income individuals has been addressed and what strengths and deficiencies were identified. Recommended improvements or corrective actions for the certification report or STIP findings can be tied to the results of the MPO's or State's public involvement evaluation.

On June 14, 1999, the IRS and Treasury issued a notice of proposed rulemaking in the Federal Register (64 FR 31770) setting forth rules relating to the solely for voting stock requirement in reorganizations under section 368(a)(1)(C). The proposed regulations provided that prior ownership of stock of a target corporation by an acquiring corporation will not by itself prevent the solely for voting stock requirement of a “C” reorganization from being satisfied. The regulations propose to reverse the IRS's previous position that the acquisition of assets of a partially controlled subsidiary does not qualify as a tax-free “C” reorganization. See Rev. Rul. 54-396 (1954-2 C.B. 147). This position subsequently was sustained in litigation in Bausch & Lomb Optical Co. v. Commissioner , 267 F.2d 75 (2d Cir.), cert. denied , 361 U.S. 835 (1959) (the Bausch & Lomb doctrine). A public hearing regarding these proposed regulations was held on October 5, 1999. Written comments to the notice were received. After consideration of all the comments, the proposed regulations are adopted as revised by this Treasury decision.

The proposed regulations apply to transactions occurring after the date that a Treasury decision adopting the regulations is published in the Federal Register , except that they do not apply to any transactions occurring pursuant to a written agreement which is (subject to customary conditions) binding on the date that the regulations are published as final regulations in the Federal Register , and at all times thereafter.

A commentator requested that taxpayers be allowed to apply the proposed regulations to transactions occurring before the proposed regulations are published as final regulations.

The IRS and Treasury Department determined that the increased flexibility that results from the proposed regulations should be available to taxpayers in structuring transactions before their publication as final regulations. Accordingly, the IRS and the Treasury Department issued Notice 2000-1 (2000-2 I.R.B. 288), which changes the proposed effective date of the proposed regulations to apply to any transactions occurring after December 31, 1999, unless the transaction occurs pursuant to a written agreement binding on that date. Notice 2000-1 further provides that the proposed regulations, when finalized, will adopt this effective date rule and that taxpayers may rely on Notice 2000-1 until final regulations are issued. Accordingly, the final regulations adopt this effective date rule.

Finally, Notice 2000-1 provides that taxpayers may request a private letter ruling permitting them to apply the final regulations to transactions occurring on or after June 11, 1999 (the date the proposed regulations were filed with the Federal Register ) to which the final regulations would not otherwise apply, and for which there was not a written agreement (subject to customary conditions) binding on June 11, 1999 and at all times thereafter. The Notice cautions, however, that a private letter ruling will not be issued unless the taxpayer establishes to the satisfaction of the IRS that there is not a significant risk of different parties to the transaction taking inconsistent positions, for U.S. tax purposes, with respect to the applicability of the final regulations to the transaction. Any such requests for a ruling will continue to be considered.

A comment was received requesting that the IRS reconsider its position in Rev. Rul. 69-294 (1969-1 C.B. 110), where the Bausch & Lomb doctrine was applied to disqualify a purported section 368(a)(1)(B) reorganization that followed a tax-free section 332 liquidation. In Rev. Rul. 69-294, X owned all of the stock of Y and Y owned 80 percent of the stock of Z. Y completely liquidated into X in a section 332 liquidation. As part of the plan, X (now owning 80 percent of the stock of Z) acquired the minority 20 percent stock interest in Z in exchange for X voting stock in a purported “B” reorganization. The ruling holds that the exchange with the 20 percent minority shareholders was not a “B” reorganization. The rationale is that although the acquisition from the minority shareholders was “solely for voting stock,” the liquidation of Y, as part of the same plan, resulted in X acquiring 80 percent of the Z stock in exchange for Y stock surrendered back to Y on the liquidation of Y and not solely in exchange for X voting stock.

The commentator's suggestion is beyond the scope of this regulations project, which relates to “C” reorganizations. In light of these regulations, however, the IRS and Treasury Department may reconsider Rev. Rul. 69-294.

The following publication is obsolete as of January 1, 2000: Rev. Rul. 54-396 (1954-2 C.B. 147).

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

Drafting Information: The principal author of these regulations is Marnie Rapaport of the Office of the Assistant Chief Counsel (Corporate), IRS. However, other personnel from the IRS and Treasury Department participated in their development.

Although this rule is being published as a temporary final rule without prior notice, an opportunity for public comment is nevertheless desirable to ensure the rule is both reasonable and workable. Accordingly, we encourage you to submit comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking (CGD05-00-013), indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b), the Coast Guard finds that good cause exists for not publishing an NPRM. We were not notified of these events until May 5, 2000. There was insufficient time to publish an NPRM, allow for comments, and publish a final rule in sufficient time to allow notice to the public for the fireworks displays taking place prior to July 4, 2000. In previous years, these and similar events have been held without incident and without comment from the public regarding the Coast Guard's establishment of limited safety zones around barges engaged in launching fireworks. An NPRM will be published for those Virginia Beach fireworks displays taking place after July 4, 2000 of which we have been notified.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Most of these events will take place within 30 days of the publication of this rule. Delaying the effective date of the regulation would be contrary to the public interest because immediate action is needed to protect the mariners and spectators from the hazards associated with the fireworks display.

The Coast Guard is establishing a temporary safety zone for the Virginia Beach fireworks displays north of the Virginia Beach Fishing Pier, in the Atlantic Ocean. The safety zone will restrict vessel traffic within a 2500-foot radius of a fireworks laden barge in approximate position 36°50.75′ north and 076°58.40′ west. The safety zone is necessary to protect mariners and spectators from the hazards associated with the fireworks display.

The safety zone will be enforced from 9 p.m. until 11 p.m. on May 20, 2000; May 27, 2000—rain date May 28, 2000; June 4, 2000—rain date June 10, 2000; June 11, 2000—rain date June 17, 2000; June 18, 2000—rain date June 24, 2000; June 25, 2000—rain date July 1, 2000; and July 4, 2000.

Additional public notifications will be made prior to the event via marine information broadcasts.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040; February 26, 1979). This temporary final rule only affects a limited area for two hours/event, alternative routes exist for maritime traffic, and advance notification via marine information broadcasts will enable mariners to plan their transit to avoid entering the restricted area. The Coast Guard expects the economic impact of this rule to be so minimal that a full regulatory evaluation under paragraph 10(e) of the regulatory policies and procedures of the DOT is unnecessary.

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

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

This rule will affect the following entities, some of which might be small entities: the owners or operators of vessels intending to operate or anchor in portions of the Atlantic Ocean off Virginia Beach, Virginia within a 2500-foot radius of a fireworks laden barge located in approximate position 36°50.75′ north and 076°58.40′ west.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: This temporary final rule only affects a limited area for two hours/event, alternative routes exist for maritime traffic, and advance notification via marine information broadcasts will enable mariners to plan their transit to avoid entering the restricted area.

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

We have analyzed this rule under Executive Order 13132 and have determined that this rule does not have implications for federalism under that order.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a state, local, or tribal government or the private sector to incur direct costs without the federal government's having first provided the funds to pay those unfunded mandate costs. This rule will not impose an unfunded mandate.

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

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

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

The Coast Guard considered the environmental impact of this rule and concluded that under figure 2-1, paragraph (34)(g), of Commandant Instruction M16475.lC, this rule is categorically excluded from further environmental documentation. This regulation will have no impact on the environment.

On January 4, 2000, the Postal Service published for public comment in the Federal Register a proposed rule (65 FR 264-270) to allow offshore mail to ride along on DBMC pallets (or in sacks of machinable parcels) drop shipped to destination BMCs.

In addition, the document also proposed requiring mailers to use Labeling List L605 for all Standard Mail (A) flats, letter trays, and sacks prepared on pallets, regardless of where the mail is deposited or the rates are claimed. L605 currently is used for BMC and Origin BMC (OBMC) Presort of nonmachinable Parcel Post discounts. L605 delineates the ASF service areas and also includes the ZIP Codes for the offshore destinations within their respective BMC service areas. With this final rule, the offshore mail will “ride along” with the mail that is eligible for DBMC rate but will not be eligible for the DBMC discount. The benefit is that offshore mail will bypass the origin BMC and should receive better service. The three BMCs that presently service offshore destinations (New Jersey, San Francisco, and Seattle) already are receiving BMC service area pallets and sacks that contain offshore mail prepared using Labeling List L601. Therefore, the addition of offshore mail to these DBMC containers should have no negative impact.

Requiring the use of Labeling List L605 for all Standard Mail (A) flats, letter trays, and sacks prepared on pallets regardless of whether DBMC rates are claimed also will ensure that the eight ASFs always are included in the presort logic hierarchy and that ASF pallets are prepared when the volume warrants.

Labeling List L601 will be retained and will continue to be applicable for Standard Mail (A) and Standard Mail (B) machinable parcels, except when DBMC rates are claimed for such mail deposited at ASFs.

Current Labeling List L602, which contains the ZIP Code ranges for DBMC rate eligibility, will be deleted from the DMM. This information will appear, instead, in DMM Module E. This Final Rule does change current standards for DBMC rate eligibility. However, DMM E651.5.0 has been revised to reorganize and clarify eligibility requirements for Standard Mail (A) DBMC discounts.

To ensure that the creation of an ASF pallet does not take away from BMC pallets, the Postal Service will allow protection of the BMC pallet through the optional use of package reallocation between a “child” ASF and the “parent” BMC pallet. Package reallocation for protecting a BMC pallet is similar to the option implemented on July 29, 1999, for protecting the SCF pallet. In protecting a BMC pallet, any amount of mail necessary to achieve the minimum BMC pallet weight could be reallocated from one ASF pallet and the ASF pallet could be eliminated if necessary. Mailers who choose to utilize package reallocation to protect the BMC pallet must use PAVE-certified presort software.

Rather than sorting to L601, palletized Bound Printed Matter (other than machinable parcels) will be required to be prepared using L605 for sortation of mail to both BMC and ASF pallets. L601 will continue to be used for sortation of Bound Printed Matter machinable parcels both in sacks and on pallets.

The elimination of Labeling List L602 affects Parcel Post (Parcel Select) claimed at DBMC rates. Rather than using L602 for both DBMC rate eligibility and mail preparation, Parcel Post (Parcel Select) mailers claiming DBMC rates must sort to and deposit mail at a BMC or ASF using L605. However, eligibility for the DBMC rates (which does not change) will be determined using new DMM Exhibit E652.1.3d. For Parcel Post (Parcel Select) machinable parcels, mailers claiming the DBMC rates may continue the current practice of opting to sort mail using L601 (BMC sortation only) under the condition that mail for 3-digit ZIP Codes served by an ASF in Exhibit E652.1.3d is not eligible for DBMC rates, nor is mail for 3-digit ZIP Codes that do not appear on Exhibit E652.1.3d.

L605 will continue to be used for BMC Presort and OBMC Presort mailings of nonmachinable Parcel Post. L601 will continue to be required for machinable parcels claiming BMC Presort and OBMC Presort rates.

The Postal Service received three pieces of correspondence commenting on the Proposed Rule. Respondents included one mailer and two direct marketing companies.

The specific points raised in the comments are presented below, organized by general comments and by specific comments on particular issues. In addition to receiving these comments from the mailing industry, the Postal Service has had extensive ongoing exchanges of viewpoints with representatives of the mailing industry and software vendors. This cooperative effort has led to the development of revised standards that the Postal Service believes strikes a better balance between the interests of the mailers and those of the Postal Service.

Two comments were received indicating that the elimination of L602 will create a positive effect in the data processing area by using one labeling list for packages of flats, letter trays, and sacks prepared on pallets. Commenters further explained that it is better to use one list for identifying where the mail is going independent of the drop shipment process. One mailer asked if the elimination of L602 was required to implement this rule. The elimination of L602 is necessary because mail for offshore destinations is not entitled to the DBMC rate, these ZIPS are not included in L602, and mail for offshore destinations currently cannot be placed on DBMC pallets. Furthermore, when a mailer is sorting a list for entry at DBMC rates using this list, the offshore mail will be entered at the origin BMC and must be processed at the origin BMC and transported through the postal network to the destinating BMC that serves the offshore ZIP Codes. In addition, the offshore mail is frequently placed in sacks because it cannot be placed on DBMC pallets.

One commenter indicated that the creation of the ASF pallet, when volume warrants regardless of whether or not the mail is prepared for entry at the DBMC rates, should have a positive effect on their manufacturing area. Currently, if mail is prepared for DBMC rates and drop shipment is not utilized, then the pallet label must be changed to the appropriate BMC destination. Under this final rule, this would not happen and labor costs could be saved.

Two comments were received from direct marketing companies proposing that the offshore destinations that “ride-along” with the DBMC mail be eligible for the DBMC discount. The commenters also indicated that their customers would be paying freight costs to move these pieces, and will be preparing mail to enter the postal system further into the process, but will not be compensated by receiving the DBMC discount. The Postal Service cannot extend the DBMC discount for offshore destinations. The Postal Service needs the rates to fully reflect the true processing costs when offering a discount. This mail is unusual in its origin-destination characteristics and does not necessarily comply with the existing destination entry discount structure. The Postal Service still incurs significant transportation costs while moving the mail to the offshore destinations. In addition, the Postal Service does not want to discourage mailers from taking advantage of the DSCF discounts that are available. Sectional center facility mail entered at these offshore destinations might revert to DBMC entry if the DBMC discount was offered.

One commenter was concerned that a discount does not exist for ASF mail on BMC pallets. If the discount requirements were more clearly documented, drop ship mailers could evaluate the costs and benefits of paying transportation costs for the ASF mail. The Postal Service would like to emphasize that the eligibility of ASF mail to qualify for the DBMC discount has not changed. ASF pallets are allowed and required only if the DBMC rate is claimed for mail deposited at the ASF. The significant change resulting from this final rule is that DMM E651 Exhibit 5.1 and DMM E652 Exhibit 1.3 will be used to determine eligibility, not Labeling List L602. If packages of flats on pallets are reallocated from an ASF pallet to a BMC pallet under M045.6.0, mail for the ASF ZIP Codes placed on the BMC pallet are not eligible for the DBMC rates.

One commenter stated that if L602 (which lists the ZIP Codes entitled to the DBMC discount) is moved from module L to module E, then the Postal Service must still provide a machine-readable list of these ZIP Codes. This commenter maintains if this list is not provided in machine-readable form, then the authors of computer presort and entry point analysis software, such as PAVE-certified software and Mail.dat application software, would each be required to key in updates by hand from a hard-copy printed list. Manual updates also could create an unacceptable amount of redundant work and would create an environment prone to numerous errors. This commenter also stated the Parent/Child BMC/ASF table should be made available in machine-readable form because the proposed changes for the protected BMC pallets will make this information increasingly important to authors of PAVE-certified and Mail.dat application software. The Postal Service has had extensive ongoing discussions with representatives from the USPS National Customer Support Service center and Distribution Networks at USPS headquarters. To address this concern the Postal Service will provide an electronic product to mailers of the Parent/Child table and the new Module E eligibility tables. The Postal Service believes that this effort strikes a better balance between the interests of the mailers and their concerns and the needs of the Postal Service to provide high quality service and optimize operational efficiency.

One commenter emphasized that the package reallocation options should be clearly stated. To clarify the package reallocation option, the Postal Service will review the DMM language for clarification purposes. In addition, a new Quick Service Guide will be designed to demonstrate the standards for package reallocation, protecting the SCF or BMC pallet level. Package reallocation will remain optional and if performed must be done for the complete mailing job using PAVE-certified software.

One commenter indicated that the lead time for software changes should be factored into the implementation schedule. For the required elements, the Postal Service met with the software vendors and mailers to discuss this concern. Based on the comments received the Postal Service has determined to place all the provisions of this final rule into effect on an optional basis on October 15, 2000. The required provisions of this final rule will be required on the same date that new rules are implemented for the R-00 Omnibus Rate Case (expected in January 2001). Mail presented on and after that effective date must be prepared in accordance with the required provisions of this Final Rule. Generally, requests for exceptions to these required preparation standards on or after the implementation date will not be honored if the reason for the request is that software was not available to mailers in time to prepare the mailings. It is expected that this phased implementation period will provide software vendors and mailers enough time to develop, test, and implement the required provisions so that the mailings entered on or after the effective date will be prepared under these new standards.

EPA Region III announces the deletion of releases at the Site from the NPL, which constitutes Appendix B of the NCP. The EPA identifies sites that appear to present a significant risk to public health, welfare or the environment, and maintains the NPL as the list of those sites. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). Pursuant to § 300.425(e)(3) of the NCP, any site deleted from the NPL remains eligible for Fund-financed remedial actions if the conditions at the Site warrant such action.

The EPA will accept comments on this notice for 30 days after publication of this notice in the Federal Register .

Section II of this notice explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the history of the Mid-Atlantic Wood Preservers, Inc. Site and explains how the Site meets the deletion criteria. Section V announces EPA's intention to delete the Site from the NPL unless dissenting comments are received during the comment period.

The NCP establishes the criteria that EPA uses to delete Sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making this determination, EPA will consider, in consultation with the State, whether any of the following criteria 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.

Sites may not be deleted from the NPL until the State in which the site is located has concurred on the proposed deletion.

Section 300.425(e)(4) of the NCP sets forth requirements for site deletions to ensure public involvement in the decision. The EPA is required to conduct the following activities:

(i) Publish a notice of intent to delete in the Federal Register and solicit comment through a public comment period of a minimum of 30 calendar days;

(ii) Publish a notice of availability of the notice of intent to delete in a major local newspaper of general circulation at or near the Site;

(iii) Place copies of information supporting the proposed deletion in the information repository at or near the site proposed for deletion; and,

(iv) Respond to each significant comment and any significant new data submitted during the comment period and include this response document in the final deletion package.

Upon completion of the public comment period, the EPA Regional Office will, if necessary, prepare a Responsiveness Summary to evaluate and address comments that were received. The public is welcome to contact the EPA Region III Office to obtain a copy of this Responsiveness Summary, if one is prepared.

If none of the comments received during the comment period are dissenting, the Site will be deleted from the NPL, effective July 18, 2000.

Deletion of sites from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Furthermore, deletion from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist Agency management.

The Mid-Atlantic Wood Preservers, Inc. Site occupies approximately 3.17 acres straddling Shipley Avenue in Harmans, Anne Arundel County, Maryland in a mixed industrial and residential area. Between 1974 and February 1993, the Site was occupied by a wood treatment facility operated under the name of Fort McHenry Lumber Company, d/b/a Mid-Atlantic Wood Preservers, Inc. (collectively MAWP). Until MAWP ceased operations, this facility utilized a chromated copper arsenate (CCA) water-borne wood treating process. This two-part process began by pressure treating dimensional lumber in a housed processing plant. The wood was then moved to a concrete drip pad and left to dry. The facility consisted of two parcels: a Treatment Yard to the east of Shipley Avenue and a Storage Yard to the west.

Stoney Run Creek flows north through a wetland area approximately six hundred feet west of the Site, extending approximately four miles before discharging to the Patapsco River near Elkridge, Maryland. Drainage from the Treatment Yard enters the storm water drain in Shipley Avenue, which ultimately discharges to Stoney Run Creek, approximately 1200 feet from the Site. Drainage from the Storage Yard flows west to Stoney Run Creek.

In 1978, water in a shallow residential well hydraulically downgradient of the MAWP facility was found to contain up to 19,500 μg/l chromium, far exceeding the Federal and State drinking water standard of 50 μg/l for chromium (this standard has since been increased to 100 μg/l). Subsequently, the Maryland Water Resources Administration (WRA) identified MAWP as a user of chromium and a potential source of ground water contamination.

In February 1979, the Maryland WRA determined that MAWP had discharged CCA into the soil and that the ground water beneath the facility had become contaminated with chromium and arsenic. The Maryland WRA issued an Administrative Order requiring MAWP to develop and implement a plan to remove contaminated soil and to remediate contaminated ground water in the vicinity of the facility. Mandated actions included removal of twenty-six cubic yards of contaminated soil at the facility, modification of the product storage system to prevent overflows, and installation of a concrete drainage pad to collect CCA drippings. On December 26, 1980, Maryland WRA issued a “Notice of Compliance.”

A Site Investigation was performed at the Site by EPA in January 1983. Analyses of ground water indicated that arsenic and chromium levels in the ground water still exceeded drinking water standards. The public water supply was extended to properties in the area by the local government. The Site was promulgated to the National Priorities List (NPL) in June 1986. In July 1986, MAWP entered into a Consent Order with EPA to perform a Remedial Investigation and Feasibility Study (RI/FS) at the Site.

The RI reaffirmed the presence of elevated levels of arsenic in the on-Site soil and slightly elevated levels of chromium in the ground water. The risk assessment concluded that arsenic and chromium were contaminants of concern and that the potential carcinogenic risk at the Site was dominated by incidental ingestion of on-Site surface soil by workers. On December 31, 1990, the EPA Regional Administrator signed the Record of Decision (ROD) identifying the remedial action to be taken to address the unacceptable risks to human health identified in the RI/FS process.

In December 1991, following unsuccessful efforts to negotiate a Consent Decree with MAWP, EPA issued a Unilateral Administrative Order (UAO) requiring MAWP to implement the selected remedy. The selected remedy, as described in the ROD and the UAO, consisted of the following:

Pre-design sampling performed in April and June 1992 indicated that no soil on- or off-site had concentrations of arsenic greater than 1,000 mg/kg and therefore, excavation, stabilization and off-site disposal was not necessary. Predesign sampling did, however, indicate that surface soils on a portion of the adjacent Number One Supply property had been contaminated by runoff from the MAWP property. The sampling results indicated that the western portion of the Number One Supply property nearest the paved parking lot was not contaminated (i.e., levels of arsenic were less than 10 mg/kg), but the center portion and the eastern portions of the property did contain arsenic at concentrations greater than 10 mg/kg.

On February 4, 1993, MAWP informed EPA that it was ceasing business operations and closing the facility. Because MAWP was ceasing its wood treating operations, there was no longer a need to expand the drip pad to prevent potential future releases from wood drying operations. The remedial objectives were satisfied by extending the asphalt cap to all areas of the Treatment Yard not currently paved or covered by existing buildings, including those areas previously planned to be covered by the expanded drip pad.

The Remedial Action Work Plan and Remedial Design were approved by EPA on May 14, 1993. The scaled-back remedy included excavation and consolidation of contaminated soils from the Number One Supply property, paving of the MAWP property, implementation of institutional controls, long-term monitoring, and maintenance of the asphalt cap.

Construction activities were implemented from June to August 1993. In September 1993, EPA negotiated a Prospective Purchaser Agreement (PPA) with Gunther's Leasing Transport, Inc. (Gunther), which became effective January 24, 1994. In accordance with the PPA, Gunther agreed to implement the necessary institutional controls and perform operation and maintenance (O&M) activities, including environmental monitoring, as required by the EPA-approved O&M Plan. On July 5, 1994, Gunther filed EPA-approved “Restrictions on Land Use” for the MAWP site with the Clerk of Circuit Court, Anne Arundel County, Maryland.

Long-term environmental monitoring has been performed in accordance with the Post-Remedy Sampling and Analysis Plan contained in the RA Work Plan (ERM, April 1993). Monitoring and maintenance of the asphalt cap has been conducted with reports submitted to EPA on a biannual basis. A Five-Year Review dated August 26, 1998, confirmed that measures taken at the site remain effective, as do the results from long-term environmental monitoring completed on February 12, 1999.

The remedial action selected for the Site has been implemented in accordance with the Record of Decision. As a result, human health threats and potential environmental impacts arising from releases at the Site have been eliminated. Continued protection of human health and the environment will be achieved by maintenance activities and performance of the Five-Year Reviews, as required by CERCLA.

The EPA, with concurrence from the State of Maryland, has determined that all appropriate response under CERCLA at the Site has been completed, and no further CERCLA response action is appropriate in order to provide protection of human health and environment. Therefore, EPA is deleting the Site from the NPL.

This action will be effective July 18, 2000. However, if EPA receives dissenting comments by June 19, 2000, EPA will publish a document that withdraws this action. If, after reviewing such comments, EPA decides to proceed with the deletion, EPA will publish a notice of deletion in the Federal Register and place copies of the final deletion package, including a Responsiveness Summary, in the Site repositories.

In rule document 99-31215 beginning on page 67670 in the issue of Thursday, December 2, 1999, make the following corrections:

The reef fish fishery in the Gulf of Mexico EEZ is managed under the FMP. The FMP was prepared by the Council and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

In accordance with the framework procedures of the FMP, the Council recommended, and NMFS published, a proposed rule (65 FR 4221, January 26, 2000) to increase the commercial and recreational minimum size limits for gag and black grouper; prohibit the commercial harvest and the sale or purchase of gag, black grouper, and red grouper harvested from the Gulf EEZ from February 15 to March 15 each year; and establish two areas in the eastern Gulf of Mexico (Madison and Swanson sites and Steamboat Lumps) that would be closed to all fishing, except fishing for highly migratory species (i.e., tunas, marlin, sailfish, swordfish, and oceanic sharks). The preamble to the proposed rule explained the need and rationale for these measures. Those descriptions are not repeated here.

After considering the comments received on the proposed rule, NMFS partially approved the regulatory amendment. The proposed additional increases in the recreational minimum size limit for gag and black grouper from 22 inches to 24 inches (55.9 cm to 61 cm), to be phased in over a 2-year period following implementation of this final rule, were disapproved (see Response to Comment 3 under “Comments and Responses” below).

Comment 1 : Two Council members stated in their minority report that the proposed measures are insufficient to prevent overfishing and protect male gag. Specifically, they stated that the commercial 1-month closed season is too short to be effective. Several environmental groups also suggested that additional measures, including additional marine reserves, are needed to protect gag.

Response : NMFS agrees that additional measures to reduce fishing mortality will probably be required to achieve levels consistent with the Council's management objective. The Council's intent in preparing this amendment was to reduce overfishing to a level consistent with the 20-percent spawning potential ratio (SPR) management target in effect at the time it adopted final measures for the regulatory amendment. On November 17, 1999, NMFS approved a maximum fishing mortality threshold of 30-percent SPR for gag and black grouper, as proposed by the Council under its Generic Sustainable Fisheries Act Amendment to the Fishery Management Plans of the Gulf of Mexico. Additional reductions in fishing mortality will probably be needed to prevent this threshold from being exceeded. To address this concern, and other problems in the grouper fishery, the Council is developing an FMP amendment. NMFS agrees that the effectiveness of the 1-month closure of the commercial fishery could be reduced if, in response to the closure, fishing effort increases immediately before or after the closure; however, the closure will provide some reduction in fishing mortality and provide some protection to spawning aggregations. NMFS believes that additional measures to protect spawning aggregations may be required in the future; however, the 1-month closure is an appropriate step at this time.

Comment 2 : A for-hire fishing organization and two Council members stated that the proposal to close two areas to all fishing exceeds the most restrictive alternative presented and discussed at public hearings and should be disapproved. A commercial fishing organization and a for-hire fishing organization questioned the need for closing the two areas to all fishing. Nine individuals and seven environmental organizations expressed strong support for the two closed areas and suggested the closure period should be extended beyond the 4-year period.

Response : This rule closes the two areas only to fisheries under the jurisdiction of the Council. The Council has requested that NMFS' Highly Migratory Species Division (HMS Division), Office of Sustainable Fisheries, issue a compatible rule prohibiting fishing for all Atlantic highly migratory species in these two areas. The HMS Division is currently considering this request and expects to take appropriate action soon. Any HMS Division's rulemaking action will involve proposed and final rules and will provide the opportunity for public comment on proposed measures. The Council recommended closure of the two areas to all fishing in order to reduce bycatch mortality of gag and black grouper and to improve enforcement of the closure to fishing.

The closure to all fishing under the Council's jurisdiction is a logical extension of the Council's earlier proposal that was the subject of public hearings and a workshop involving affected fishery participants and is based on public comments. This earlier proposal would have closed areas to all reef fish fishing and to the use of all bottom gear capable of catching reef fish. At the Council's March 1999 meeting, NMFS enforcement personnel stated that the areas should be closed to all fishing rather than just to fishing in one fishery to enhance enforcement significantly. At its July 1999 meeting and after receiving public comment on the selection of the two sites, the Council determined that a closure to all fishing was necessary to achieve the goals of the proposed measure.

NMFS has approved this measure along with its 4-year sunset provision as recommended by the Council. The Council may consider extending the duration of the closure, as appropriate, at some subsequent time.

Comment 3 : Two Council members stated in their minority report that the proposed measures place an unfair and greater burden on the recreational sector than on the commercial fishery. Eighteen individuals objected to the proposal to increase the recreational minimum size limit and stated that regulations should reduce the commercial harvest only. Several individuals stated that reductions in the recreational bag limit would be more effective than increases in the minimum size limit since some released fish die as a result of capture trauma. A total of 277 individuals favored the increase in the recreational minimum size limit. In a minority report, four other Council members objected to the delay in the increase in the recreational minimum size limit to 24 inches (61.0 cm) and argued that an immediate increase to 24 inches (61.0 cm) is needed to reduce overfishing. A total of 279 individuals supported the increase in the commercial minimum size limit, and 3 individuals opposed this increase. Three environmental groups expressed support for the increased size limit and one expressed opposition.

Response : NMFS believes that minimum size limits are an appropriate and effective method of protecting immature fish in many fisheries. NMFS recognizes that the effectiveness of minimum size limits can be reduced if release mortality rates are high. In the shallow-water grouper recreational fishery and the hand-line commercial fishery, release mortality rates appear to be relatively low and, therefore, consistent with effective minimum size limits.

NMFS disagrees that regulations should affect only the commercial sector. Restrictions in both the recreational and commercial sectors should be equitable. The increase in the recreational minimum size limit to 22 inches (55.9 cm) and the measures intended to reduce the commercial harvest should result in an equitable harvest by each sector. NMFS believes that the proposed increase in the recreational minimum size limit from 22 to 24 inches (55.9 cm to 61.0 cm) could disproportionately reduce the recreational harvest compared to the commercial harvest reduction. Such an inequitable reduction in the harvest between the two sectors is contrary to national standard 4 and section 303(a)(14) of the Magnuson-Stevens Act. The administrative record indicates that the proposed increase in the minimum size limit from 22 inches to 24 inches (55.9 cm to 61.0 cm) in the recreational fishery would result in a disproportionally large reduction in the recreational harvest compared to the commercial harvest reduction resulting from the combined measures for the commercial fishery. Consequently, NMFS has disapproved the Council's proposed increase in the recreational minimum size limit from 22 inches to 24 inches (55.9 cm to 61.0 cm). NMFS will consider further minimum size limit changes for the recreational fishery if the Council proposes measures that ensure equitable reductions in the harvest by each sector. NMFS believes that the Council can resolve this issue later this year as it develops a comprehensive FMP amendment to address problems in the shallow-water grouper fishery.

The Council considered, but did not recommend, establishing a separate bag limit for gag. The current bag limit of five fish is an aggregate bag limit for shallow-water grouper. The Council considered analyses indicating that harvest would not be reduced significantly by setting a gag bag limit of two fish per person per day because few individuals land more than two fish. The Council may choose to reconsider bag limit reductions as it develops an FMP amendment to address conservation and management issues in the grouper fishery.

Comment 4 : Four Council members, a commercial fishing organization, and a for-hire fishing organization stated that the proposed measures are not based upon the best available science. Specifically, a Council minority report questioned the need for the protection of male gag and the scientific information indicating a recent declining proportion of male gag in the Gulf of Mexico. The for-hire organization objected to the use of SPR as a valid reference point upon which to base management decisions. Conversely, two individuals and five environmental organizations argued that the measures are based on the best available science, which they believe particularly supports the need to protect male gag through closed areas.

Response : NMFS believes that the approved measures are based on the best available science and are consistent with the precautionary approach to fisheries management. Uncertainty regarding scientific information does not preclude precautionary management action. Sufficient scientific information suggests that the proportion of males in the Gulf gag stock has decreased as a result of heavy exploitation. NMFS is concerned that the loss of males and the fishing effort on spawning aggregations could disrupt spawning and ultimately reduce recruitment. It is uncertain to what extent males have been depleted and whether such depletion has affected spawning success. However, closure of two areas to allow further study of this issue is an appropriate precautionary management measure.

SPR is an appropriate proxy for fishing mortality and, thus, an appropriate reference point upon which to base management decisions that are intended to address overfishing. The intent of this final rule is to reduce and prevent overfishing; thus, the use of SPR in this context is appropriate.

Comment 5 : Four Council members stated in their minority report that the 1-month closure of the commercial fishery only is not fair and equitable to all fishermen and should be disapproved based on national standard 4. An organization representing the commercial fishing industry, one environmental group and 25 individuals also objected to the 1-month closure of the commercial fishery. Many of these individuals explicitly objected to the lack of prior notice regarding the closure during 2000 and stated that uncertainty regarding the closure in 2000 interfered with efficient fishing operations. An additional 273 individuals questioned the effectiveness of a 1-month closure. They stated that effort would be shifted to other months and that ex-vessel prices would decrease as a result of the closure. Seventeen individuals and three environmental groups expressed support for the 1-month closure, although many of these believed that the closure should be extended to encompass the entire spawning season (3-4 months). Some individuals also suggested that a seasonal closure of spawning areas should be established.

Response : NMFS believes that the approved measures will result in approximately equal percent reductions of the harvests in the recreational and commercial sectors and, thus, the approved measures are fair and equitable. NMFS agrees that effort shifting in the commercial fishery may reduce the effectiveness of the 1-month closure of the commercial fishery; however, NMFS believes that the closure will provide some reductions in fishing mortality of gag, black grouper, and red grouper and will provide some limited protection to spawning aggregations of these species. Additional measures to reduce fishing mortality and protect spawning aggregations may be required in the future. NMFS also recognizes that limited notification of fishery closures places a hardship on the participants in the commercial fishery. Because this final rule does not become effective until after March 15, 2000, the 1-month closure of the commercial fishery will not occur until 2001.

Comment 6 : Four Council members stated in their minority report that the regulatory amendment does not adequately consider the economic impact on fishing communities.

Response : For analyzing economic impacts, information is available at the county level and is not available disaggregated to show fishing communities. However, all affected entities are included in the RIR's aggregate economic analysis. Therefore, because fishing communities would be affected, the economic impact on them is included in the aggregate analysis. The Council and NMFS prepared a Regulatory Impact Review (RIR) and a Final Regulatory Flexibility Analysis (FRFA) that assess the socioeconomic effects of the preferred measures and alternatives considered by the Council and NMFS. The costs and benefits of the rule are assessed in the RIR and the economic impacts on small entities are assessed in the RIR/FRFA. The Council considered the economic implications of each alternative for achieving the management objective of reducing and preventing overfishing. The FRFA identifies the alternatives with less adverse economic impacts on small entities and sets forth the reasons why such alternatives were rejected. NMFS believes that the approved measures are based on the best available scientific information and will achieve the management objective in a fair and equitable manner, while minimizing the adverse economic impacts to the extent practicable.

Comment 7 : Four Council members stated in their minority report that the regulatory amendment fails to address bycatch in the recreational fishery as required by the Magnuson-Stevens Act. One environmental group opposed the size limit increase based on its belief that bycatch would be increased.

Response : NMFS believes that the approved increase in the minimum size limit will reduce fishing mortality on small, immature grouper in the shallow-water grouper fishery and that this reduction in fishing mortality outweighs any increase in the resulting regulatory discards. National standard 9 requires that bycatch and bycatch mortality be minimized to the extent practicable. NMFS believes that bycatch in the recreational gag/black grouper fishery has been reduced to the extent practicable. Most bycatch in the recreational grouper fishery results from regulatory discards, which are an inevitable result of measures such as bag limits, size limits, and closed seasons. The elimination of these measures, with the intent of reducing bycatch, would increase overall fishing mortality and increase the rate of exploitation of immature grouper. Thus, the elimination of these measures to reduce bycatch would contribute to overfishing and is not practicable.

Comment 8 : A total of 284 individuals commented that longlines were responsible for most of the problems in the shallow-water grouper fishery and suggested that longlines either be eliminated from the fishery or restricted to depths beyond 40-50 fathoms (73.2-91.4 m). One individual suggested that spear fishing for grouper be eliminated. Another individual suggested that fish traps be eliminated.

Response : The Council did not propose gear restrictions in the grouper fishery in this regulatory amendment. The Council is expected to consider additional gear restrictions in its FMP amendment for the grouper fishery currently under development.

Comment 9 : Two individuals and five environmental groups responded to concerns raised by the NMFS Southeast Fisheries Science Center regarding the closed areas (see the proposed rule preamble). Comments received stated that (1) baseline data exist with which to compare changes in the closed area after 4 years; (2) the 4-year duration of the closure is too short but can and should be extended by the Council and NMFS; (3) scientists can provide criteria with which to judge the “success” or “failure” of the closure after the closure is approved; and (4) the results of studies within the closed areas will provide useful information to management agencies.

Response : NMFS has approved the closure of the two areas and will work with the Council to develop an appropriate experimental design and review existing baseline data.

For the reasons discussed under the Response to Comment 3, NMFS has disapproved the measure that would have phased in additional increases in the recreational minimum size limit for gag and black grouper from 22 inches (55.9 cm) to 24 inches (61 cm). Those additional phased-in increases have been removed from § 622.37(d)(2)(iii)(B) of this final rule.

In § 622.45(c)(4), the wording of the seasonal restriction on sale or purchase of gag, black grouper, or red grouper harvested by a vessel with a Federal commercial permit for Gulf reef fish has been revised to clarify that the restriction applies throughout the Gulf rather than only in the Gulf EEZ. This is consistent with the wording of the corresponding seasonal closure of the commercial fishery for gag, black grouper, and red grouper.

This final rule has been determined to be not significant for purposes of E.O. 12866.

The regulatory amendment implemented by this final rule was prepared by the Council and submitted to NMFS for review, approval, and implementation under authority of the Magnuson-Stevens Act. The Council prepared an initial regulatory flexibility analysis (IRFA) for the four measures proposed in the regulatory amendment. NMFS prepared an FRFA for the final rule implementing the regulatory amendment. The FRFA was based on the IRFA, public comments, and subsequent analysis by NMFS. A summary of the FRFA follows:

The final rule implements four management actions: (1) An increase in the minimum size limits for gag and black grouper from 20 to 24 inches (50.8 cm to 61.0 cm) for commercial fishermen; (2) an increase in the minimum size limits for gag and black grouper from 20 inches to 22 inches (from 50.8 cm to 55.9 cm) for recreational fishermen; (3) a 1-month seasonal closure of the commercial fishery for gag, black and red grouper; and (4) a year-round prohibition of recreational and commercial fishing in two specific areas where gag spawning aggregations are known to occur. The Council also proposed that the recreational minimum size limit for gag and black grouper be increased from 22 inches to 24 inches (from 55.9 cm to 61.0 cm) over the 2-year period following implementation of this final rule; however, NMFS disapproved that provision. The approved measures will result in a significant economic impact on a substantial number of small business entities.

NMFS received over 600 comments on the proposed action. The comments pertaining to economic impacts of the actions are summarized as follows. Some comments stated that the proposal to close two areas to all fishing is too restrictive, while other comments gave strong support to the two closed areas. NMFS responds that the closure to all fishing under the Council's jurisdiction is a logical extension of the Council's earlier proposal to close areas to reef fish fishing and is based on public comment. However, this final rule closes the areas to fishing only for species under the Council's management.

Some comments stated that the size limit proposal unfairly limits the recreational catch while several individuals favored bag limit reductions instead. There were 227 comments in favor of the proposed recreational size limit. 279 comments favored the commercial size limit, and 3 were opposed. NMFS believes that size limits are an appropriate method of protecting immature fish but is concerned that the proposed increases in the recreational size limit to 24 inches (61.0 cm) could unfairly reduce the recreational harvest. NMFS, therefore, disapproved the increase in the recreational size limit beyond 22 inches (55.9 cm).

A total of 273 individuals questioned the effectiveness of a 1-month closure, with some noting that the closure should be extended to encompass the entire spawning season (3-4 months). NMFS agrees that a 1-month closure would be less effective than a longer closure, but notes that the closure will result in a reduction in fishing mortality and is, therefore, an appropriate step at this time, notwithstanding the possible need for future reductions in fishing mortality.

Some comments stated that the regulatory amendment does not adequately consider the economic impact on fishing communities. NMFS notes that an RIR, IRFA, and FRFA were prepared that assess the economic impacts of the Council's proposed measures and the alternatives it considered.

In summary, there were no changes to the proposed rule that were based solely on the public comments. However, NMFS disapproved the Council's proposal for a subsequent increase in the recreational size limit for gag and black grouper from 22 inches to 24 inches (55.9 cm to 61.0 cm) because this size increase for the recreational sector could cause disproportionately large harvest reductions compared to the commercial sector's harvest reductions, and would, thus, be in conflict with national standard 4. Numerous public comments were in support of this decision; they alleged that the further minimum-size increase for the recreational fishery was discriminatory because of the arguably unfair and inequitable potential effects on recreational harvests.

The Council determined that 242 commercial vessels historically fishing in the Gulf of Mexico EEZ would be negatively affected by the seasonal and year-round area closures. A relatively small proportion of the for-hire fleet is also expected to be impacted adversely by the two year-round area closures. The minimum size limits will affect 757 commercial vessels and an unknown number of for-hire vessels. All of these units are classified as small business entities under the RFA. Most of the commercial vessels use handline gear, have an average length of 38 ft (11.6 m), and generate average annual gross revenues of about $50,000. The for-hire businesses tend to use traditional charter fishing boats with offshore capability. No additional reporting, recordkeeping, or other compliance requirements by small entities are contained in the final rule.

Significant alternatives to the proposed actions were identified. The Council rejected four alternatives to change the size limits. The status quo of a 20-inch (50.8-cm) minimum size limit was rejected because increasing the size limits will help achieve the objective of preventing overfishing. The impacts of some of the other rejected alternatives were greater than for the proposed limits, and the proposed alternative would help meet the regulatory amendment objectives while minimizing the adverse economic impacts. NMFS' decision to disapprove the phased-in increase to a 24-inch (61.0-cm) recreational minimum size limit will tend to minimize adverse impacts on some for-hire small businesses.

There were three alternatives to the proposal to implement a 1-month seasonal commercial closure for gag, black and red grouper. The status quo was rejected because action was needed in order to attain the objectives of the regulatory amendment. The other two alternatives were rejected because they would have resulted in greater adverse impacts on fishermen.

The remaining action would prohibit fishing for 4 years in two specific areas. The Council considered and rejected four alternatives to the closed areas, including the status quo. The status quo was rejected because the area closures will provide essential protection for a portion of the gag population. Based on the sizes of the closed areas considered, impacts from the other alternatives would have lesser or greater impacts. The Council's recommendation falls in the middle and represents an attempt to achieve the objective of protecting gag stocks while minimizing negative economic impacts. The 4-year sunset provision for the closed areas also represents an attempt to minimize the negative economic impacts.

This rule is necessary because the gag stock is approaching an overfished condition, and the Magnuson-Stevens Act requires the Council to take action to prevent overfishing.

A copy of the FRFA is available from NMFS (see ADDRESSES ).

The SFA Amendment addresses fisheries under the FMPs for coral and coral reef resources, coastal migratory pelagics, red drum, reef fish, shrimp, spiny lobster, and stone crab. The FMPs were prepared by the Gulf of Mexico Fishery Management Council (Council), except for the FMPs for coastal migratory pelagics and spiny lobster that were prepared jointly by the South Atlantic and Gulf of Mexico Fishery Management Councils. All of these FMPs, except the spiny lobster and stone crab FMPs, are implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622. The Fishery Management Plan for the Spiny Lobster Fishery of the Gulf of Mexico and South Atlantic is implemented by regulations at 50 CFR part 640; the Fishery Management Plan for the Stone Crab Fishery of the Gulf of Mexico is implemented by regulations at 50 CFR part 654.

On August 18, 1999, NMFS announced the availability of the SFA Amendment and requested comments on it (64 FR 44884). On November 2, 1999, NMFS published a proposed rule to implement those provisions of the SFA Amendment that required rulemaking (i.e., the modifications of the framework procedures of the applicable FMPs and the changes to the stone crab trap construction requirements) and requested comments on the proposed rule (64 FR 59153). The background and rationale for the measures in the SFA Amendment and proposed rule are contained in the preamble to the proposed rule and are not repeated here.

On November 17, 1999, after considering the comments received, NMFS partially approved the SFA Amendment. NMFS approved the portions of the amendment dealing with descriptions of the fisheries and fishing communities, the spawning potential ratio (SPR) proxies submitted for the MFMTs (except for red snapper), the MSSTs for shrimp, and the proposed changes in the construction characteristics of stone crab traps. NMFS disapproved the portion of the amendment dealing with bycatch reporting, because the Council has not fulfilled the Magnuson-Stevens Act requirement to develop standardized reporting to assess the amount and type of bycatch. NMFS also disapproved the portion of the amendment dealing with bycatch reduction, except for the measure for the construction of stone crab traps. This disapproval was based on national standard 9, because the Council has not fulfilled the Magnuson-Stevens Act mandate to reduce bycatch to the extent practicable and has not adequately explained why additional measures to reduce bycatch are not practicable. NMFS disapproved the following actions regarding overfishing targets and thresholds. All of the SPRs submitted as proxies for MSY, OY, and the MSST were disapproved based on national standards 1 and 2 because they are not consistent with the best available scientific information and do not provide an adequate basis for achieving OY on a continuing basis. The targets and thresholds proposed for shrimp are biomass-based; however, the proxies for MSY and OY were disapproved and must be revised to reflect the yields associated with the various biomass proxies proposed. The MFMT (referred to as an “overfishing threshold”) for royal red shrimp was disapproved based on national standards 1 and 2 because no fishing mortality rate is explicitly specified; therefore, no objective basis was provided for determining whether overfishing is occurring. NMFS disapproved the rebuilding schedules for king mackerel and red snapper based on national standards 1 and 2. The rebuilding targets specified are fishing mortality based (static SPR) rather than biomass-based as required by the Magnuson-Stevens Act and the national standard guidelines. NMFS recently provided the information needed to develop new rebuilding plans to the Council. The static SPR targets would not allow an adequate determination of the management measures required to rebuild these stocks to a biomass capable of producing MSY because static SPR is not sensitive to population size and reflects only current levels of fishing mortality. The Council did not propose rebuilding schedules for red drum, Nassau grouper, or jewfish. Additional rationale for NMFS' approvals and disapprovals of the various components of the SFA Amendment are provided in the Comments and Responses Section.

Those measures that were disapproved were not contained in the proposed rule; therefore, no changes to the proposed rule resulted from the disapprovals. No comments were received on the proposed rule, and the proposed rule has been adopted as final without change. NMFS received 11 comments on the SFA Amendment. They are summarized below:

Comment 1 : Two environmental groups recommended that NMFS disapprove the environmental assessment (EA) included in the amendment. They commented that the EA failed to adequately analyze the direct, indirect, and cumulative environmental impacts of the proposed actions and reasonable alternatives that would minimize adverse impacts.

Response : NMFS disagrees. NMFS has determined that no significant impact on the human environment will result from the approved measures. The proposed action, in the context of the fishery as a whole, will not have an adverse impact on the environment. The description of the affected environment for the fisheries under the jurisdiction of the Gulf of Mexico Fisheries Management Council is discussed in the Generic Amendment for Addressing Essential Fish Habitat. The only specific regulatory action that would affect fish stocks or the environment is the adoption of the construction characteristics of stone crab traps set forth in Chapter 46-13.002(2)(a) of Florida law. This measure is intended to reduce bycatch in the stone crab fishery and is not expected to have any adverse effects on the environment. The remaining measures proposed in the SFA Amendment address bycatch, overfishing definitions, and rebuilding schedules; however, the amendment proposes no regulatory actions that directly affect allocations or would be expected to substantially alter existing fishing practices in a way that would be detrimental to the environment. In addition, section 13.0 of the EA incorporates by reference sections of the amendment containing a description of the expected environmental consequences of each of the proposed alternatives considered. Additional environmental analyses and determinations will be made as future regulatory measures are implemented to achieve the goals of the SFA Amendment.

Comment 2 : Five groups objected to the provisions of the amendment regarding reporting and minimization of bycatch. All commented that additional reporting requirements were needed to fully describe bycatch and that additional measures were required to reduce bycatch.

Response : NMFS agrees that additional bycatch reporting measures are required. NMFS has disapproved the portion of the amendment dealing with bycatch reporting. The Council has not fulfilled the Magnuson-Stevens Act requirement to develop standardized reporting to assess the amount and type of bycatch. The Council has taken steps to improve bycatch reporting, such as the cooperative state-Federal program under development by the Gulf States Marine Fisheries Commission, but this program is not yet fully implemented. Furthermore, NMFS is developing a bycatch reporting requirement in future and current logbooks that will be implemented on January 1, 2001. The Council proposed no new measures to improve bycatch reporting in its SFA Amendment; however, the Council is currently developing options to address bycatch problems in the shrimp fishery. These options include requiring bycatch reduction devices (BRDs) in the eastern Gulf, permits, logbooks, and observer programs.

NMFS agrees that the SFA amendment does not fulfill the Magnuson-Stevens Act mandate to reduce bycatch to the extent practicable. The Council has not adequately explained why additional measures to reduce bycatch are not practicable. NMFS has disapproved the portion of the amendment dealing with bycatch reduction except the modifications in the construction of stone crab traps. NMFS has requested that the Council take more aggressive action throughout the Gulf to reduce shrimp trawl bycatch. Such action could include extending the requirement for BRDs into Federal waters east of Cape San Blas, Florida, effort reduction in the fishery, closed areas, or seasonal closures. NMFS has approved the proposed changes in the construction characteristics of stone crab traps intended to reduce bycatch in that fishery.

Comment 3 : Three environmental groups recommended disapproval of the proposed rebuilding plans for overfished species on the basis that the plans were either incomplete or proposed no specific description of how stocks are to be rebuilt. Some recommended that interim goals were needed within the proposed rebuilding period to ensure that rebuilding was occurring on schedule.

Response : NMFS has disapproved the rebuilding schedules for king mackerel and red snapper based on national standards 1 and 2 because they specified fishing mortality-based rebuilding targets rather than biomass-based targets, and because the time to rebuild in the absence of fishing mortality was not estimated based on rebuilding to biomass at MSY, as required by the Magnuson-Stevens Act and the national standard guidelines. Therefore, they are not based on the best available scientific information and provide no adequate basis for preventing overfishing and rebuilding stocks. Furthermore, the 26-percent spawning potential ratio (SPR) level specified as a proxy for red snapper is unlikely to reflect the fishing mortality rate at MSY according to the 1999 report of the Reef Fish Stock Assessment Panel. The Council did not propose rebuilding schedules for red drum, Nassau grouper, or jewfish. NMFS has recently provided the Council with information needed to revise rebuilding plans and requested that the Council submit the revisions through framework procedures as soon as possible. NMFS agrees that interim goals within an extended rebuilding period would be a valuable and precautionary way to ensure that a stock is rebuilding as planned; however, such goals are not explicitly required by the guidelines.

Comment 4 : Four environmental groups commented on the fishery management targets and thresholds proposed and specifically on the lack of any specification of the minimum stock size threshold (MSST). Some groups suggested that an interim SPR proxy be established for the MSST until biomass-based estimates are available.

Response : NMFS has disapproved the SPRs submitted as proxies for MSY, OY, and MSST based on national standards 1 and 2. The Council must provide biomass-based estimates of MSY, OY, and MSST that are consistent with the Magnuson-Stevens Act and the national standard guidelines rather than proxies based on fishing mortality, which is not based on the best available scientific information and would not provide an adequate measure for determining whether OY can be achieved on a continuing basis. The SPR proxies submitted for MFMT were approved with the exception of red snapper, which was disapproved based on national standards 1 and 2 because the 26-percent SPR level specified is unlikely to reflect the fishing mortality rate at MSY, according to the 1999 report of the Reef Fish Stock Assessment Panel. The MFMT for royal red shrimp was also disapproved because no fishing mortality rate is explicitly specified. Static SPR is an acceptable proxy for the MFMT; however, SPR is not biomass-based and is not an acceptable proxy for MSST. Transitional SPR can be a useful measure of the extent to which past fishing mortality has distorted the age structure of a stock, but it is not sensitive to population size or biomass and, thus, is not an acceptable proxy for MSST.

Comment 5 : Two charter-boat groups commented on the need for increased bycatch reduction in the shrimp fishery. They stated that BRDs have not reduced bycatch sufficiently and that a bycatch quota is needed in the shrimp fishery.

Response : NMFS agrees that additional bycatch reduction is required in the Gulf shrimp fishery. NMFS has disapproved the portion of the amendment dealing with bycatch reduction. The Council has not fulfilled the Magnuson-Stevens Act mandate to reduce bycatch to the extent practicable and has not adequately explained why additional measures to reduce bycatch are not practicable. NMFS has encouraged the Council to take more aggressive action throughout the Gulf to reduce shrimp trawl bycatch. NMFS has also notified the Council that additional measures to monitor bycatch in the shrimp fishery are needed. The Council is currently developing options to address bycatch problems in the shrimp fishery. These options include BRDs in the eastern Gulf, permits, logbooks, and observer programs. The Council has not previously considered bycatch quotas in the shrimp fishery; however, this idea may merit future consideration.

Comment 6 : Three charter-boat groups commented that the overfishing thresholds for finfish were too conservative and should be disapproved. They specifically objected to the proposed thresholds for red snapper, jewfish, and Nassau grouper. They stated that MSY should be established on an individual basis.

Response : NMFS agrees that MSY thresholds should be established on an individual species basis. NMFS disagrees that the proposed overfishing thresholds are overly conservative. The proposed SPR levels are consistent with a large body of published scientific literature regarding appropriate threshold levels to prevent recruitment overfishing. NMFS has disapproved the SPRs submitted as proxies for MSY, OY, and MSST based on national standards 1 and 2, because they are based on fishing mortality and are not consistent with the best available scientific information and are not adequate criteria for determining whether OY can be achieved on a continuing basis. The Council must provide species-specific, biomass-based estimates of MSY, OY, and MSST that are consistent with the Magnuson-Stevens Act and the national standard guidelines.

Comment 7 : One environmental group commented that the MFMT level should be set lower than MSY.

Response : NMFS disagrees. Both MSY and MFMT are limit thresholds. MSY is a biomass-based yield and MFMT is a fishing mortality rate, and, therefore, the two thresholds are not strictly comparable. NMFS' technical guidance recommends that MFMT be specified as the fishing mortality rate associated with MSY (F MSY ). The SFA amendment specified fishing-mortality-rate proxies (i.e., SPR) for MSY for most species. Thus, the amendment specifies MSY equal to MFMT for most stocks. The use of an SPR proxy is appropriate for MFMT but not for MSY, and NMFS has disapproved the SPR proxies submitted for MSY. Static SPR is an acceptable proxy for the MFMT; however, SPR is not biomass-based and is not indicative of any particular stock size or yield. Transitional SPR can be a useful measure of the extent to which past fishing mortality has distorted the age structure of a stock, but it is not sensitive to population size or biomass and, thus, is not an acceptable proxy for MSY. The Council must provide species-specific, biomass-based estimates of MSY and MSST in addition to the fishing-mortality-based proxies provided.

Comment 8 : Two environmental groups commented that additional measures are required to reduce bycatch in the reef fish fishery. These groups specifically raised concerns regarding bycatch of Nassau grouper and jewfish and requested that NMFS evaluate the level of bycatch of these two species.

Response : The Marine Recreational Fisheries Statistics Survey monitored bycatch in the reef fish recreational fishery. NMFS agrees that additional measures to reduce bycatch and better bycatch reporting measures in the commercial fishery are required. NMFS has disapproved the portions of the amendment dealing with reducing bycatch and bycatch reporting. The Council has taken steps to improve bycatch reporting, such as the cooperative state-Federal program under development by the Gulf States Marine Fisheries Commission, but this program is not yet fully implemented. Furthermore, NMFS is developing a bycatch reporting requirement in future and current logbooks that will be implemented on January 1, 2001. NMFS intends to continue to evaluate the effect of bycatch on the recovery of overfished reef fish stocks and to encourage the Council to take additional steps to reduce bycatch and increase the survival rates of fish caught and released in the reef fish fishery as needed. Thus, the Council has made progress towards improved bycatch monitoring in the Gulf, but several of the measures are still in development. The Council is also considering the need for mandatory observers to monitor bycatch in Gulf fisheries.

NMFS intends to continue to evaluate the effect of bycatch on the recovery of overfished reef fish stocks and to encourage the Council to take additional steps to reduce bycatch and increase the survival rates of fish caught and released in the reef fish fishery as needed. NMFS recently published a NOAA Technical Report assessing the status of Nassau grouper and jewfish. NMFS is currently monitoring numbers of jewfish and Nassau grouper caught and released in the recreational fishery.

Comment 9 : One commercial industry group commented that the proposed red snapper overfishing targets and thresholds were far too conservative.

Response : NMFS disapproved the proposed red snapper overfishing targets and thresholds but disagrees with the assertion that the proposed thresholds are overly conservative. The proxies proposed for red snapper overfishing targets and thresholds are consistent with previous recommendations of the reef fish stock assessment panels that were available to the Council at the time the SFA amendment was prepared. NMFS disapproved the overfishing thresholds and the rebuilding period proposed for red snapper because (1) the rebuilding target specified is fishing-mortality-based (26-percent SPR) rather than biomass-based, (2) the 26-percent SPR level specified as a proxy for MSY is unlikely to reflect the fishing mortality rate at MSY, according to the 1999 report of the Reef Fish Stock Assessment Panel, and (3) the time to rebuild in the absence of fishing mortality was not estimated based on rebuilding to biomass at MSY, as required by the Magnuson-Stevens Act and the national standard guidelines. The Council must provide additional biomass-based estimates of MSY and MSST, in addition to the fishing-mortality-based proxies provided, that address the recommendations of the Stock Assessment Panel and are consistent with the Magnuson-Stevens Act and the national standard guidelines. Biomass-based targets and thresholds were included in the 1999 red snapper stock assessment and have been reviewed by the Reef Fish Stock Assessment Panel, but not yet by the Council.

Comment 10 : One commercial industry group commented that the Gulf shrimp fishery has already minimized bycatch to the extent practicable. They argued that BRDs do not reduce bycatch mortality effectively and should not be required.

Response : NMFS disagrees. Current estimates of the effectiveness of BRDs suggest that a reduction in red snapper mortality of approximately 40 percent has been achieved and that greater reductions in 2000 are likely to result from changes in the design of acceptable BRDs, and from improvements in industry's ability to use BRDs effectively as experience is gained. The 1999 Reef Fish Stock Assessment Panel also concluded that red snapper bycatch was reduced about 40 percent in 1999. BRD performance improved in 1999, in part, because NMFS no longer allows the BRD configuration in which the elephant ear flap obstructs the opening of the BRD.

The Council is currently developing options to address bycatch problems in the shrimp fishery. These options include BRDs in the eastern Gulf, permits, logbooks, and observer programs. NMFS believes that BRDs have significantly reduced shrimp trawl bycatch in the western Gulf but that additional reductions are needed. NMFS has disapproved the portion of the amendment dealing with bycatch reduction based on national standard 9, except that portion addressing the modifications in stone crab trap construction. The Council has made progress towards reducing bycatch in the Gulf shrimp fishery by requiring BRDs in the western Gulf, but the Council has not adequately explained why additional measures to reduce bycatch are not practicable. Thus, it is not clear that the Council has fulfilled the Magnuson-Stevens Act's mandate to reduce bycatch to the extent practicable. Bycatch in the shrimp fishery has a substantial effect on many finfish stocks, including red snapper. NMFS has encouraged the Council to take more aggressive action throughout the Gulf to reduce shrimp trawl bycatch. Such action could include extending the requirement for BRDs into Federal waters east of Cape San Blas, Florida, effort reduction in the fishery, closed areas, or seasonal closures. NMFS believes that these actions may be practicable and could reduce bycatch substantially. NMFS has also notified the Council that additional measures to monitor bycatch in the shrimp fishery are needed.

Comment 11 : Two environmental groups commented that more conservative fishery management targets and thresholds are needed for hermaphroditic species (species that change sex) such as groupers.

Response : NMFS agrees that a precautionary approach to the management of hermaphroditic species is appropriate. Hermaphroditic species may respond differently to fishing mortality than typical non-hermaphroditic species do, and, in some situations, hermaphrodites that change sex from female to male may be more sensitive to overfishing than non-hermaphrodites. The SFA amendment proposes more conservative targets and thresholds for grouper than those currently approved. NMFS has approved the SPR proxies proposed for MFMT for hermaphroditic groupers but has disapproved the SPR proxies proposed for MSY, OY, and MSST for hermaphroditic groupers based on national standards 1 and 2, because they are based on fishing mortality, are not consistent with the best available scientific information, and are not adequate criteria for determining whether OY can be achieved on a continuing basis. The Council must provide biomass-based estimates of MSY, OY, and MSST; the estimates must be consistent with the national standard guidelines in addition to the fishing-mortality-based proxies provided by the Council. The Reef Fish Stock Assessment Panel will review these biomass-based estimates and evaluate their appropriateness for promoting sustainable fisheries for hermaphroditic species.

The Regional Administrator, Southeast Region, NMFS, with the concurrence of the Assistant Administrator for Fisheries, NOAA, determined that the approved measures of the SFA Amendment are necessary for the conservation and management of the fisheries of the Gulf of Mexico and that, with the exception of the provisions that were disapproved, the SFA Amendment is consistent with the Magnuson-Stevens Act and other applicable law.

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

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that the proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not prepared.

To effectively monitor landings of quota-managed species on a timely basis, NMFS issued a final rule (63 FR 52639, October 1, 1998) requiring federally permitted dealers to submit a weekly summary of purchases of quota-managed species through the IVR system within 3 days of the end of the reporting week. To minimize the burden of dealer reporting requirements, the regulations implementing the use of an IVR system authorize (§ 648.7(a)(ii)) the Administrator, Northeast Region, NMFS (RA), to defer the IVR reporting requirements for any species if landings are not expected to reach levels that would cause the applicable target exploitation rate specified in the applicable Fishery Management Plan (FMP) for that species to be achieved, resulting in specific management changes. NMFS announced in the Federal Register (63 FR 57931, October 29, 1998) the deferral of IVR reporting requirements for Atlantic mackerel, butterfish, and regulated NE multispecies, which included Atlantic cod.

To address the overfishing of Gulf of Maine and Georges Bank cod, NMFS recently published a final rule implementing Framework Adjustment 33 to the NE Multispecies FMP (65 FR 21658, April 24, 2000). One of the management measures under Framework Adjustment 33 is the conditional 1-month closure of two areas, which would become effective if preliminary landings from May 1, 2000, through July 31, 2000, indicate that more than 1.67 million lb (759 mt) of GOM cod have been landed. As specified in § 648.81(o), if the RA determines that preliminary landings through July 31, 2000, indicate that more than 1.67 million lb (759 mt) has been landed as of, or before, July 31, 2000, NMFS shall implement the closures. The trigger (1.67 million lb (759 mt)) is established at a level that is 50 percent of the total allowable catch (TAC) level between the TACs associated with F 0.1 and F max .

In order to monitor effectively Atlantic cod landings relative to the trigger of 1.67 million lb (759 mt), NMFS is requiring any dealer issued a NE multispecies permit to submit, through the IVR system, a weekly summary of Atlantic cod purchases made from May 28, 2000, through July 31, 2000. IVR reports must be submitted within 3 days of the end of the reporting week. Purchases of Atlantic cod transacted July 30-31, 2000, must be reported via the IVR system by midnight, Eastern time, Tuesday, August 8, 2000. Following submission of IVR reports for Atlantic cod purchases occurring from May 28, 2000, through July 31, 2000, the IVR system reporting requirements for Atlantic cod will again be deferred until notification terminating the deferral is published in the Federal Register .

Dealers must continue to report through the IVR system, their purchases of the species specified in § 648.7(a) for which IVR reporting requirements have not been deferred. These species are summer flounder, scup, black sea bass, Illex squid and Loligo squid. If no purchases of any quota-managed species are made during the reporting week, a negative report, so stating, must be submitted.

As specified in § 648.7(a)(1), dealers must continue to report purchases of all species, including those species for which IVR reporting has been deferred, on the detailed written reports.

This action is authorized by 50 CFR part 648 and is exempt from review under E.O. 12866.