On July 27, 1999, OPM published interim regulations with a request for comment on the government's career transition assistance programs in 5 CFR part 330. These regulations extended the Career Transition Assistance Plan (CTAP) and the Interagency Career Transition Assistance Plan (ICTAP) until September 30, 2001. The regulations also made some technical changes and clarifications.

Four agencies and one union commented on the interim regulations. All supported OPM's extension of these programs in light of their successful placement rates.

One agency stated its desire to move employees from one component to another, or to jobs in the same component located in a different commuting area, without checking for CTAP eligibles. We understand the concerns agencies have with this requirement. However, this was not part of the interim regulation as published—it would constitute a major change in the program, and the interim regulations included only minor technical changes and clarifications. Reassignments within a component and commuting area continue to be exempt from the CTAP requirements.

One agency asked for clarification on how the ICTAP exception in § 330.705(c)(19) relates to § 330.708(b) on selection. The exception in § 330.705(c)(19) allows an agency to select an ICTAP eligible at any time with or without announcing the vacancy. However, if the vacancy is announced and more than one well-qualified ICTAP eligible applies, then the agency is free to select any of them. Another agency commented that the term “reassignment” should be deleted from this paragraph. Since these eligibles would only be appointed through a transfer or reinstatement action, we agree that the word “reassignment” is unnecessary and have deleted it.

One agency recommended that we eliminate the requirement for a second review when an ICTAP eligible fails to meet the well-qualified requirement. The agency preferred to conduct this review only when the ICTAP eligible requested it. This provision was part of the final regulations published June 9, 1997, and no change to this provision was proposed in the July 27, 1999, interim regulation. Therefore, this provision remains unchanged.

Another agency suggested that we further define the type of documentation described in § 330.607(b) that the agency could use when they have no CTAP eligibles in a given location. We have considered this suggestion but feel that agencies should have the flexibility to use the type of documentation that best suits their needs.

Finally, we discovered a typographical error in the interim regulation which we are correcting here. In the process of adding a clarifying sentence in § 330.607(b), another sentence was accidentally deleted. We are restoring that dropped sentence here.

I certify that this regulation will not have a significant economic impact on a substantial number of small entities because it affects only certain Government employees.

This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.

U.S. Office of Personnel Management

Section 208(a) of title 18 of the United States Code prohibits Government employees from participating in an official capacity in particular Government matters in which, to their knowledge, they, or, inter alia, any organization in which they are serving as an employee, have a financial interest, if the particular matter would have a direct and predictable effect on that interest. Section 208(b)(2) of title 18 permits the Office of Government Ethics to promulgate branchwide regulations describing financial interests that are too remote or inconsequential to warrant disqualification pursuant to section 208(a).

On March 29, 2000, the Office of Government Ethics (OGE) published an interim rule with a 30-day request for comments to provide for an additional exemption under 5 CFR 2640.203 from the prohibition in the conflict of interest statute at 18 U.S.C. 208(a). See 65 FR 16511-16513 (March 29, 2000).

The new exemption, to be codified at 5 CFR 2640.203(l), permits employees who work for State, local, or tribal governments to work temporarily as enumerators, crew leaders, and field operations supervisors in a Local Census Office or an Accuracy and Coverage Evaluation function at the Department of Commerce Bureau of the Census (the Bureau). These employees have been hired under authority of 18 U.S.C. 23 to perform duties in connection with the decennial census, notwithstanding these employees' disqualifying interest under 18 U.S.C. 208(a) arising from the interests of their non-Federal employers. However, the exemption does not cover employees who work for State, local, or tribal governments whose positions are filled through public election.

The interim rule was published after obtaining the concurrence of the Department of Justice pursuant to section 201 of Executive Order 12674. Also, as provided in section 402 of the Ethics in Government Act of 1978, as amended, 5 U.S.C. appendix, section 402, OGE has consulted with both the Department of Justice (as additionally required under 18 U.S.C. 208(d)(2)) and the Office of Personnel Management on the interim rule. No further consultation with the Department of Justice or the Office of Personnel Management is required because the interim rule is being adopted without change.

As noted, the interim rule provided for a 30-day comment period. Comments were received from two sources, one from the Department of Commerce and one from a private citizen. After carefully considering these comments, the Office of Government Ethics is adopting the interim rule as final without change.

The Department of Commerce recommended a change to the exemption to provide for a newly created position of “crew leader assistant” and to cover any future positions that the Department might create within the occupations of enumerator, crew leader, or field operations supervisor. These newly created positions would have similar duties and responsibilities as those occupations covered by the exemption, but would be performed at different activity levels, such as crew leader assistant. In OGE's view, it would not be necessary to amend the regulation to cover such newly created positions since all activity levels within those designated occupations in a Local Census Office or an Accuracy and Coverage Evaluation function would automatically be covered by the exemption.

The second commenter, an elected member of a city council, raised two concerns. The commenter believes that the distinction between elected and nonelected officials is arbitrary and both too broad and, at the same time, too narrow in that some elected officials ( e.g., coroners) would have no interest in the outcome of the census while some nonelected officials ( e.g., city managers) serve in policy-making positions and would have an interest in the outcome of the census. The commenter recommends that the line be drawn to exclude those employees who serve in policy-making positions.

As indicated in the preamble to the interim rule, the distinction between elected and nonelected officials was a general attempt to eliminate concerns about appearances arising from the greater interest that elected officials might have regarding the impact of the census count on their employers. The distinction represents the best line that could be drawn to include the greatest number of individuals who might be perceived as having an interest in the outcome of the census. It also serves the Department of Commerce's need to quickly and easily identify those individuals whose non-Federal employment might present a conflict of interest or appearance thereof. It may be that, in drawing such a broad distinction, some individuals might be included who need not have been and that some few individuals might not have been excluded who perhaps could have been. However, the distinction represents OGE's best view of how the line should be drawn under the specified circumstances here.

Drawing the distinction on the basis of whether an individual holds a policy-making position would be both cumbersome and unworkable. The exemption must set forth a bright-line distinction because both the Department of Commerce and the employees it hires need to know who is clearly covered by the exemption and who is not. Any incorrect decisions about who is covered by the exemption could potentially subject the employee to criminal penalties should 18 U.S.C. 208(a) be violated. In addition, attempting to define who does and does not serve in a policy-making position would seriously hamper and unnecessarily complicate and impede a truncated hiring process.

The commenter also believes that the exemption would prevent the Department of Commerce from issuing individual waivers which would permit some elected officials to perform work on the decennial census. However, the exemption does not prevent the Department of Commerce from issuing waivers in individual cases in accordance with 18 U.S.C. 208(b)(1) and the requirements set forth in OGE regulations at 5 CFR 2640.301. An agency may issue such waivers in individual cases where it determines that a disqualifying financial interest in a particular matter is not so substantial as to be deemed likely to affect the integrity of the employee's services to the Government.

Finally, the commenter believes that the exemption may not be necessary due to the nature of the work to be performed, the inability of the temporary employees to affect the census count to any significant degree, and the remoteness of the financial interests of their non-Federal government employers due to the number of various steps in the census process. However, on balance and in an abundance of caution, OGE believes that an exemption is in the best interest of the Department of Commerce which initiated the request for an exemption and in the best interest of individuals who will be employed by Commerce to work on the decennial census.

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

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

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

The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply because this final regulation does not contain information collection requirements that require the approval of the Office of Management and Budget.

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

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the Food and Nutrition Service generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the Food and Nutrition Service to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective or least burdensome alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector of $100 million or more in any one year. Thus, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

The program addressed in this action is listed in the Catalog of Federal Domestic Assistance under No. 10.567, and for the reasons set forth in the final rule of 7 CFR part 3015, subpart V, and related Notice (48 FR 29115), is included in the scope of Executive Order 12372, which requires intergovernmental consultation with State and local officials.

This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). The Administrator of the Food and Nutrition Service has certified that this action will not have a significant impact on a substantial number of small entities. While program participants and Indian Tribal Organizations and State agencies that administer the Food Distribution Program on Indian Reservations will be affected by this rulemaking, the economic effect will not be significant.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. The rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full implementation. This rule is not intended to have retroactive effect. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this rule or the applications of its provisions.

The information collection requirements included in 7 CFR 253.7(a)(6)(i) have been approved by the Office of Management and Budget under OMB. No. 0584-0293.

On January 14, 2000, the Food and Nutrition Service (FNS) published a rule in the Federal Register (65 FR 2358) proposing amendments to the regulations at 7 CFR part 253 for the Food Distribution Program on Indian Reservations (FDPIR). We indicated that the proposed changes would improve program service by allowing households two additional income deductions when proper verification is provided. The first income deduction would be given to households that pay legally required child support for a nonhousehold member. The second income deduction would be provided to households that pay the premium for their Medicare Part B medical insurance. The Department also proposed making certain technical amendments, such as changing outdated terminology, and revising or removing provisions that are obsolete or have changed.

Comments were solicited through March 14, 2000, on the provisions of the proposed rulemaking. FNS received two comments from the public on the proposed regulatory changes, and no comments on the proposed information collection burden changes. Both commenters wrote in support of the proposed changes. Consequently, we are adopting the proposed rule as final, with one minor change, which is discussed below. For a full understanding of the provisions of this final rule, the reader should refer to the preamble of the proposed rule.

One of the commenters requested clarification in regard to the verification requirements associated with this rulemaking. By this action, the regulations at 7 CFR 253.7(a)(6)(i)(B) and (C) require the verification of Medicare Part B premium withholdings or payments, and child support payments, before the income deductions can be granted to a household. The commenter asked whether the Medicare Part B premium must be verified if it is not included in the Social Security check received by the household member. The State agency is required to verify the payment of the Medicare Part B premium whenever this cost is incurred by a household member. When conducting an eligibility interview, the State agency should first determine whether any household members are Medicare beneficiaries. If none of the household members are Medicare beneficiaries, the income deduction cannot be granted. If the household contains a Medicare beneficiary, the State agency should determine whether the Medicare Part B premium is withheld from a Social Security, Railroad Retirement Board, or Civil Service Retirement payment, or if it is paid directly by the household member to Medicare. If the premium is withheld from one of the above retirement/disability payments, documentation of this expense could include a copy of the Social Security benefit statement (SSA-4926-SM) for the current calendar year, or a similar statement provided to Railroad Retirement Board and Civil Service Retirement beneficiaries. The proposed rule at 7 CFR 253.7(a)(6)(i)(C)( 1 ) identified only the Social Security benefit statement as a source of documentation for premium withholdings. We have revised this provision to include Railroad Retirement Board and Civil Service Retirement benefit statements as additional sources of documentation. If the benefit statement does not reflect that the Medicare Part B premium is being withheld from the monthly retirement payment, the income deduction cannot be granted.

Some individuals make direct payments to Medicare because they do not receive a Federal retirement or disability payment from which the Medicare premium can be withheld. This may include persons under 65-years of age who have chronic kidney disease or other disabilities. Documentation for these individuals could include money order receipts, canceled checks, or other receipts showing payment for the current calendar year. Direct payments to Medicare are usually made on a quarterly basis; therefore, the premium payment in these cases must be averaged over the 3-month payment period to determine a monthly amount for certification purposes. If the household cannot provide adequate documentation of this expense, the income deduction cannot be granted.

Similarly, the State agency must verify the household's payment of child support to or for a non-household member. Specifically, the State agency must verify the household's legal obligation to pay child support, the amount of the obligation, and the monthly amount of child support the household actually pays. A court order, or similar documentation, is necessary to verify the household member's legal obligation to pay the child support, but it cannot be used to verify the household's actual monthly child support payments. Some non-custodial parents fail to fully meet their court-ordered obligation and owe hundreds of dollars in child support. Verification of actual payments will ensure that these non-custodial parents receive an income deduction for the amount of child support they pay—not the amount they are required, but fail, to pay each month.

During the eligibility interview, the State agency should determine the actual monthly amount of child support that has been paid by the household member, and obtain documentation of payment (for example, money order receipts or canceled checks). In many cases, the amount paid each month may fluctuate. In such instances, we recommend that the State agency average the amounts paid each month to determine the amount to be used for certification purposes. For example, Mr. Smith is legally obligated to pay $300 in child support each month. In December, he paid $300; in January, he only paid $200; in February, he paid $350, and in March he paid $350. The eligibility worker averages the total amount of child support paid over the four months ($1200 ÷ 4 months) and determines that Mr. Smith is entitled to receive an income deduction of $300.

This rule has been determined to be exempt for the purpose of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB).

Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the collections of information in this rule have been approved by OMB under control number 0563-0053 through April 30, 2001.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

The policies contained in this rule do not have any substantial direct effect on states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with the states is not required.

This regulation will not have a significant economic impact on a substantial number of small entities. Additionally, the regulation does not require any greater action on the part of small entities than is required on the part of large entities. The amount of work required of the insurance companies will not increase because the information must already be collected under the present policy. No additional work is required as a result of this action on the part of either the insured or the insurance companies. Therefore, this action is determined to be exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605), and no Regulatory Flexibility Analysis was prepared.

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983.

This rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. The administrative appeal provisions published at 7 CFR part 11 must be exhausted before any action for judicial review of any determination made by FCIC may be brought.

This action is not expected to have a significant economic impact on the quality of the human environment, health, and safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

On February 8, 2000, FCIC published a notice of proposed rulemaking in the Federal Register at 65 FR 6033-6040 to revise 7 CFR 457.110 Fig Crop Insurance Provisions, section 457.111 Pear Crop Insurance Provisions, section 457.122 Walnut Crop Insurance Provisions, section 457.123 Almond Crop Insurance Provisions, section 457.133 Prune Crop Insurance Provisions, section 457.149 Table Grape Crop Insurance Provisions, section 457.153 Peach Crop Insurance Provisions, section 457.157 Plum Crop Insurance Provisions, section 457.158 Apple Crop Insurance Provisions, and section 457.159 Stonefruit Crop Insurance Provisions, effective for the 2001 and succeeding crop years.

Following publication of the proposed rule the public was afforded 30 days to submit written comments and opinions. A total of 10 comments were received from 2 reinsured companies and a trade association. The comments received and FCIC's responses are as follows:

Comment. A reinsured company questioned if the wording “could or would reduce the yield” in section 2 or 3 of the applicable crop provisions (Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities), is subject to interpretation. The commenter questioned: (1) If all of the acreage of the crop will need to be inspected if the producer requests a higher level of coverage or an increased price election; (2) if FCIC will determine that coverage cannot be increased in a specified area and publish this information in a bulletin, or if the company will be allowed to make the determination; and (3) when the determination must be made.

Response. The provisions require the insurance provider to determine whether a cause of loss occurred that “could or would reduce the yield.” The producer is not allowed to increase the coverage level or price election if it is evident that a cause of loss had occurred prior to the producer's request for such increase. There is no requirement to inspect any acreage to determine if a loss occurred. The insurance provider must simply determine whether a cause of loss has occurred prior to accepting the application for increased coverage. Therefore, no change has been made.

Comment. A reinsured company recommended changing the word “unshelled” to “in-shell” in the definition of “meat pounds” in section 1 of the Almond Crop Insurance Provisions because this is the common term used by the almond industry.

Response. FCIC has incorporated the change.

Comment. A reinsured company recommended that there should be one specific calendar date for the end of the insurance period for all of the crops listed in this final rule. The commenter stated there are so many dates represented by different varieties, crops, etc., that administrative problems are caused.

Response. Changing the end of insurance period to one specific date for all of the crops listed in this final rule is not feasible. The insurance period is set to provide insurance during the time when the crop is at risk from normal causes of loss. This period is not the same for all crops. There needs to be variance in the beginning and ending of insurance periods to reflect differences in the crops being insured and the areas where they are grown. The calendar date for the end of insurance period must reflect the normal harvest date for each crop. Therefore, no change has been made.

Comment. A reinsured company recommended that claim examples for almonds and walnuts listed in this final rule should not be included in the Settlement of Claim section. The commenter stated the examples are too simple and do not provide any explanation of “Quality Adjustment or Stage.”

Response. FCIC does not agree with the comment. Claim examples were added to the Settlement of Claim section to provide a general explanation of how the indemnity payment would be calculated. There is no quality adjustment on almonds. Quality Adjustment for walnuts is provided only for mold damage and is rarely used. The claim examples for almonds and walnuts are consistent with other crop policies. Therefore, no change has been made.

Comment. A reinsured company recommended that almond rejects be counted as production to count and should remain part of the Almond Crop Insurance Provisions.

Response. FCIC disagrees with the idea that all rejects should be counted as production to count. Rejects that are due to an insured cause of loss which is beyond the control of the producer should not be counted as production to count. However, FCIC does agree that rejects due to uninsured causes of loss should be counted as production to count. Therefore, FCIC has revised section 11(c)(2) to include meat pounds damaged due to uninsured causes of loss as production to count.

Comment. A reinsured company recommended revising section 14 of the Apple Crop Insurance Provisions which allows optional units and price elections by varietal group. The commenter stated that apple trees may be planted in a block that consists of only a few trees in a row being the same variety or a few rows of trees being the same variety, or even a single tree of a variety that was planted as a replacement. To allow units by variety would create problems for determining production and acreage.

Response. A block of apples may include different varieties. However, producers harvest and market apples by variety. The provisions in this final rule provide producers with optional units and price elections based on varietal groups. These varietal groups, which currently consist of two groups, are listed in the Special Provisions. Producers have the responsibility of identifying the acreage of each varietal group and separately maintaining production records. FCIC has revised the option to specify that producers are not eligible if they do not have separate production records for each varietal group or cannot identify the acreage upon which each varietal group is produced.

Comment. A reinsured company questioned if the provisions under section 14 of the Apple Crop Insurance Provisions that provide prices and units by varietal group will be available under the Fresh Fruit Option B.

Response. Prices and units by varietal group under section 14 are available under Fresh Fruit Option B provided that both Option B and C are elected.

Comment. A reinsured company stated the requirement to give notice of loss 15 days prior to harvest of walnuts when there is mold damage will be very difficult. Walnuts will not show mold damage prior to removal from the tree, so the grower generally will not know there will be mold before harvest.

Response. FCIC has changed the policy to give notice when knowledge is obtained or 15 days prior to harvest. The 15 day requirement allows the insurance provider adequate time to inspect the damaged production. Therefore, no change will be made.

In addition to the changes described above, FCIC has made the following changes:

1. Section 457.110 Fig crop insurance provisions.

a. Added a definition of “Interplanted” to standardize the term interplanted between other perennial crop provisions and the Fig Crop Insurance Provisions.

b. Added a section 3(c) that requires the insured to report damage, removal of trees, change in practices or any other circumstance that may reduce yields. The insured must report, for the first year of insurance for acreage interplanted with another perennial crop and anytime the planting pattern of such acreage is changed, the age and type, if applicable, of any interplanted crop, the planting pattern, and any other information needed to establish the approved yield. If the insured fails to report these changes, the acreage or yield used to establish the production guarantee, or both, may be adjusted when the insurance provider becomes aware of the situation.

c. Redesignated sections 8 through 11 as sections 9 through 12 respectively and added a new section 8 to allow interplanting as an insurable farming practice if the fig crop is interplanted with another perennial crop. This change makes insurance available on more acreage and reduces reliance on the noninsured crop disaster assistance program (NAP) for protection for crop losses.

d. Removed language in previous designated sections 8(a), (c), (d), (e), as this language is in the Basic Provisions. Previous designated sections 8(b) and (d) have been added to new section 9(a)(2) of these provisions.

e. Added language to redesignated section 9(a) to clarify the date on which coverage begins for the year the application is first signed.

2. Section 457.111 Pear crop insurance provisions.

Section 8(c)—Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of the provisions contained in section 8(c) to clarify that the dates insurance attaches contained in section 8(a)(1) do not apply to subsequent crop years. The dates contained in section 8(a)(1) apply only to the initial crop year. This change clarifies when year round coverage begins for each crop year.

3. Section 457.122 Walnut crop insurance provisions.

a. Section 4—Revised to state that October 31 is the contract change date for California only and added the contract change date of August 31 for all other states. This change will promote the walnut crop insurance program in states outside California.

b. Section 5—Revised to state that January 31 is the cancellation and termination dates for California only and added the cancellation and termination dates of November 20 for all other states. This change will promote the walnut crop insurance program in states outside of California.

c. Section 8(a)(1), (2) and (3)—Revised (a)(1) to state that February 1 is the date when insurance attaches in California and added November 21 when insurance attaches in all other states. This change will promote the walnut crop insurance program in states outside of California. Added to (a)(2) the words, “(Exceptions, if any, for specific counties, or varieties or varietal group are contained in the Special Provisions.)” Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of proposed section 8(a)(3) to clarify that the dates insurance attach under paragraph (a)(1) do not apply to subsequent crop years. The dates contained in paragraph (a)(1) apply only to the initial crop year. These changes provide insurance periods similar to other perennial crops and clarify when year round coverage begins.

4. Section 457.123 Almond crop insurance provisions.

Section 8(a)(3)—Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of proposed section 8(a)(3) to clarify that the dates insurance attach contained in paragraph (a)(1) do not apply to subsequent crop years. The dates contained in paragraph (a)(1) apply only to the initial crop year. This paragraph as changed clarifies when year round coverage begins.

5. Section 457.133 Prune crop insurance provisions.

Section 8(c)—Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of proposed section 8(c) to clarify that the dates insurance attach contained in paragraph (a)(1) do not apply to subsequent crop years. The dates contained in paragraph (a)(1) apply only to the initial crop year. This paragraph as changed clarifies when year round coverage begins.

6. Section 457.149 Table grape crop insurance provisions.

Section 9(c)—Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of proposed section 9(c) to clarify that the dates insurance attach contained in paragraph (a)(1) do not apply to subsequent crop years. The dates contained in paragraph (a)(1) apply only to the initial crop year. This paragraph as changed clarifies when year round coverage begins.

7. Section 457.153 Peach crop insurance provisions.

Section 7(c)—Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of proposed section 7(c) to clarify that the dates insurance attach contained in paragraph (a)(1) do not apply to subsequent crop years. The dates contained in paragraph (a)(1) apply only to the initial crop year. This paragraph as changed clarifies when year round coverage begins.

8. Section 457.157 Plum crop insurance provisions.

Section 8(c)—Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of proposed section 8(c) to clarify that the dates insurance attach contained in paragraph (a)(1) do not apply to subsequent crop years. The dates contained in paragraph (a)(1) apply only to the initial crop year. This paragraph as changed clarifies when year round coverage begins.

9. Section 457.158 Apple crop insurance provision.

a. Section 8(c)—Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of proposed section 8(c) to clarify that the dates insurance attach contained in paragraph (a)(1) do not apply to subsequent crop years. The dates contained in paragraph (a)(1) apply only to the initial crop year. This paragraph as changed clarifies when year round coverage begins.

b. Section 11(c)(1)(iii)—Revised to read “unharvested marketable production;” This change provides clarification that quality standards for appraisals of unharvested production are based on the definition of “marketable.”

10. Section 457.159 Stonefruit crop insurance provisions.

a. Section 1—Revised the definition of “grading standards” to refer to the Special Provisions. This change provides recognition of all other states grading standards. The current regulation contains only grading standards for the state of California.

b. Section 4—Revised to state that October 31 is the contract change date for California only and added the contract change date of August 31 for all other states. This change will promote the stonefruit crop insurance program in states outside of California and provide a contract change date similar to that for other perennial crops.

c. Section 5—Revised to state that January 31 is the cancellation and termination dates for California only and added the cancellation and termination dates of November 20 for all other states. This change provides cancellation and termination dates similar to other perennial crops.

d. Section 6(e)—Revised to provide for the recognized grading standards for all states, not just California. This change provides for the recognition of other states' grading standards. The current regulation contains only grading standards for the state of California.

e. Section 8(a)(1), (a)(2)(iii) and (c)—Revised (a)(1) to state that February 1 is the date when insurance attaches in California only and added November 21 for when insurance attaches for all other states. Added (a)(2)(iii) with regard to the end of insurance period to read “As otherwise provided for specific counties or types in the Special Provisions.” These changes will promote the stonefruit crop insurance program in states outside California. Added the phrase “Notwithstanding paragraph (a)(1) of this section” to the beginning of proposed section 8(c) to clarify that the dates insurance attach contained in paragraph (a)(1) do not apply to subsequent crop years. The dates contained in paragraph (a)(1) apply only to the initial crop year. This change provides insurance periods similar to other perennial crops and clarify when year round coverage begins.

Good cause is shown to make this rule effective upon publication in the Office of the Federal Register. This rule must be effective prior to the August 31, 2000, contract change date for Almond and Walnut, to be effective for the 2001 crop year. Therefore, public interest requires that FCIC act immediately to make these provisions available.

The FAA has determined that good cause exists for making these special conditions effective upon issuance; however, interested persons are invited to submit such written data, views, or arguments, as they may desire. Communications should identify the regulatory docket or notice number and be submitted in duplicate to the address specified above. All communications received on or before the closing date for comments will be considered by the Administrator. These special conditions may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must include a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. NM173.” The postcard will be date stamped and returned to the commenter.

On August 25, 1997, Boeing Airplane Services, Wichita Division, P.O. Box 7730, Wichita, KS 67277-7730, applied for a Supplemental Type Certificate (STC) for the Boeing Model 747-2G4B series airplanes. The Boeing Model 747-2G4B is a Model 747-200 series airplane with four CF6-80C2B1 engines. The Model 747-200 series airplanes are an extended range passenger version of the Model 747-100 airplanes with changes to increase its strength and fuel capacity. The Model 747-2G4B will incorporate an Electronic Flight Instrument System (EFIS), which displays attitude and heading information and is manufactured by Astronautics. The modified airplanes are scheduled for certification in November 2000.

The Astronautics EFIS is a critical function that displays attitude and heading information. The EFIS must be designed and installed to ensure that their operations are not adversely affected by high intensity radiated fields (HIRF). These functions can be susceptible to disruption of both command and response signals as a result of electrical and magnetic interference caused by HIRF external to the airplane. This disruption of signals could result in loss of critical flight displays and annunciations, or could present misleading information to the pilot.

Under the provisions of 14 CFR 21.101, Boeing Airplane Services must show that the Boeing Model 747-2G4B series airplanes, as changed, continue to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. A20WE or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations included in the certification basis for the Boeing Model 747-2G4B series airplanes include Title 14, Code of Federal Regulations (14 CFR) part 25, as amended by Amendments 25-1 through 25-8, plus additional requirements in Type Certificate Data Sheet (TCDS) A20WE.

If the Administrator finds that the applicable airworthiness regulations ( i.e. , part 25, as amended) do not contain adequate or appropriate safety standards for the Boeing Model 747-2G4B series airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the Boeing Model 747-2G4B series airplanes must comply with the fuel vent and exhaust emission requirement of 14 CFR part 34 and the noise certification requirement of 14 CFR part 36.

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

Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design features, these special conditions would also apply to the other model under the provisions of § 21.101(a)(1).

The Boeing Model 747-2G4B series airplanes will incorporate the Astronautics EFIS system, which performs critical functions. The EFIS system contains electronic equipment for which the current airworthiness standards (14 CFR part 25) do not contain adequate or appropriate safety standards that address protecting this equipment from the adverse effects of HIRF. This system may be vulnerable to HIRF external to the airplane. Accordingly, this system is considered to be a novel or unusual design feature.

There is no specific regulation that addresses the requirements for protection of electrical and electronic systems from HIRF. Increased power levels from ground-based radio transmitters and the growing use of sensitive electrical and electronic systems to command and control airplanes have made it necessary to provide adequate protection.

To ensure that a level of safety is achieved that is equivalent to that intended by the regulations incorporated by reference, special conditions are needed for the Boeing Model 747-2G4B airplanes modified to include the Astronautics EFIS system. These special conditions will require that this system, which performs critical functions, be designed and installed to preclude component damage and interruption of function due to both the direct and indirect effects of HIRF.

With the trend toward increased power levels from ground-based transmitters, plus the advent of space and satellite communications coupled with electronic command and control of the airplane, the immunity of critical digital avionics systems to HIRF must be established.

It is not possible to precisely define the HIRF to which the airplane will be exposed in service. There is also uncertainty concerning the effectiveness of airframe shielding for HIRF. Furthermore, coupling of electromagnetic energy to cockpit-installed equipment through the cockpit window apertures is undefined. Based on surveys and analysis of existing HIRF emitters, an adequate level of protection exists when compliance with the HIRF protection special condition is shown with either paragraph 1 OR 2 below:

1. A minimum threat of 100 volts rms per meter electric field strength from 10 KHz to 18 GHz.

a. The threat must be applied to the system elements and their associated wiring harnesses without the benefit of airframe shielding.

b. Demonstration of this level of protection is established through system tests and analysis.

2. A threat external to the airframe of the following field strengths for the frequency ranges indicated. Both peak and average field strength components from the Table are to be demonstrated.

As discussed above, these special conditions are applicable to the Boeing Model 747-2G4B series airplanes modified by Boeing to include the Astronautics EFIS system. Should Boeing Airplane Services apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate A20WE to incorporate the same novel or unusual design features, these special conditions would apply to that model as well under the provisions of § 21.101(a)(1).

This action affects only certain novel or unusual design features on the Boeing Model 747-2G4B series airplanes modified by Boeing Airplane Services. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplanes.

The substance of the special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. For this reason, and because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

On June 20, 2000, the FAA proposed to amend part 71 of the Federal Aviation Regulations (14 CFR part 71) by establishing Class D airspace at Kissimmee, FL (65 FR 38224). Designations for Class D airspace extending upward from the surface of the earth are published in FAA Order 7400.9G, dated September 1, 1999, and effective September 16, 1999, which is incorporated by reference in 14 CFR part 71.1. The Class D designations listed in this document will be published subsequently in the Order.

Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments objecting to the proposal were received.

This amendment to Part 71 of the Federal Aviation Regulations (14 CFR part 71) establishes Class D airspace at Kissimmee Municipal Airport.

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

On December 28, 1999, the Commission published proposed amendments to Regulation 1.59 (“proposing release”), 1 which generally requires SROs to adopt rules prohibiting employees, governing board members, and committee members from trading commodity interests on the basis of material, non-public information obtained in the course of their official duties (hereinafter referred to as “material, non-public information”). As proposed, the amendments would exclude governing board members, and any “functional equivalent” thereof, from the definition of “employee,” and would clarify the scope of the SRO employee trading prohibition. The Commission also sought comment on how Regulation 1.59 should treat consultants to SRO management and staff, in addition to non-paid advisors to SRO governing boards and committees. The Commission received 6 comment letters in response to the proposed amendments. 2

Historically, two categories of individuals have been subject to Commission Regulation 1.59: (1) SRO employees, including those employed by the SRO on a salaried or contract basis, and (2) SRO governing board and committee members. Regulation 1.59 prohibits these groups from trading under various circumstances.

Specifically, employees are absolutely prohibited from trading in any commodity interest traded on or cleared by their employing contract market or clearing organization, or from trading in any “related commodity interest,” as that term is defined by Regulation 1.59(a). 3 Additionally, employees with access to material, non-public information concerning a particular commodity interest are prohibited from trading in such commodity interest if it is traded on or cleared by contract markets or clearing organizations other than their employing SRO, or traded on or cleared by a linked exchange.

Governing board members and committee members, on the other hand, are prohibited only from using material, non-public information for any purpose other than the performance of their official duties. The possession of material, non-public information, therefore, does not absolutely bar these individuals from trading commodity interests. Rather, under Regulation 1.59(d), governing board and committee members are prohibited from trading for their own account, or for or on behalf of any other account, based on this material, non-public information.

The Commission proposed to exclude salaried governing board members from the definition of “employee” under Regulation 1.59(a) in order to ensure that salaried governing board members are not subject to two inconsistent trading restrictions—one for governing board members and another, more restrictive, prohibition for employees. At the time these clauses were adopted, members of governing boards generally were not salaried. Because the industry now typically gives stipends to governing board members, the Commission proposed to remove any confusion by excepting salaried governing board members from the definition of “employee.”

The Commission believes that inclusion of salaried governing board members in the definition of “employee” might create disincentives for competent individuals to serve in this capacity. If excluded from the definition of “employee,” governing board members would remain prohibited from using material, non-public information for purposes other than performance of their official duties, pursuant to Regulation 1.59(c). All but one commenter supported this amendment, 4 and the Commission has determined to adopt the proposal.

The Commission proposed to add a clause defining the term “governing board member” to include certain individuals who work closely with, but who are not technically members of, the governing board, like ex officio or emeritus governing board members. The proposed language would deem such individuals to be the “functional equivalent” of governing board members. Because of their experience, these members can provide valuable guidance to the governing board. However, including them in the definition of “employee” would subject them to broad restrictions on trading, potentially creating a disincentive to counsel the board on matters within their expertise.

Four commenters supported the proposal, and another expressed its support while noting that its board presently does not have any such individuals participating. 5 The Commission has determined to adopt the proposal.

Regulation 1.59(b)(1)(i) requires SROs to maintain in effect rules which, at a minimum, prohibit employees from trading in the following four scenarios:

As discussed in the proposing release, the Commission believes the existing structure of this paragraph may create confusion as to which trading prohibitions the italicized clause modifies. In particular, because no punctuation precedes the clause “where the employee has access to material nonpublic information concerning such commodity interest” (hereinafter referred to as the “access clause”), this precondition for the application of the trading restriction would appear to apply to only one trading scenario—the trading scenario that immediately precedes it. However, an examination of this provision as it existed prior to the 1993 amendments to Regulation 1.59 (“1993 Amendments”), and of the Federal Register releases promulgating the 1993 Amendments, 6 confirms that the access clause should also apply to the prohibition on trading “in any commodity interest traded on or cleared by contract markets or clearing organizations other than the employing self-regulatory organization.”

The Commission has decided to amend Regulation 1.59(b)(1)(i) by subdividing each prohibition into a separate subparagraph, as proposed. This amendment to paragraph (b)(1)(i) will help differentiate between situations in which employees of SROs are absolutely prohibited from trading commodity interests from those in which they are prohibited from trading only if they have access to material, non-public information.

Toward that end, the Commission has also determined to edit the language of the third clause of the paragraph. In the proposing release, the Commission suggested adding the access clause back to the third prohibition, so that it would read as it was originally intended. No commenters disagreed with this proposal. However, it also has come to the attention of the Commission that merely inserting the access clause at the end of the third prohibition, without further editing, might still result in an unclear articulation of the nature of the prohibited conduct. The clause, as proposed, would have read:

Regulatory history clearly indicates that this clause was only meant to prohibit an SRO employee from trading a commodity interest on another, non-linked exchange if he or she has access to material, non-public information about that particular commodity interest. The Federal Register release promulgating Regulation 1.59 states unequivocally that exchanges may permit their employees to trade “unrelated” commodity interests on other exchanges, if they do not have access to material, non-public information. 7 The original rule proposal included an outright ban on employee trading at other exchanges, 8 but the Commission ultimately adopted less restrictive rules after receiving comments from the industry. 9

On its face, however, the third clause could be misconstrued to mean that employees are prohibited from trading all commodity interests on a non-employing exchange, even if they only have access to material, non-public information concerning a single commodity interest traded on that exchange. This potential confusion arises out of the meaning of the word “any,” which connotes a slightly different meaning in the two preceding clauses. A reader applying the meaning of “any” consistently throughout the paragraph, as it is used in the first two clauses, might be led to believe that the prohibition extends to all contracts at another exchange. The Commission has therefore determined to edit the language of this third prohibition to read as follows:

The Commission requested comment on whether “consultants” should be included in the definition of “employee” for purposes of Regulation 1.59, based upon its understanding that exchanges hire consultants for a variety of purposes, 11 often with respect to information technology issues. These consultants may or may not gain access to material, non-public information during the course of their duties, depending on the nature of the work they are performing. Although the current provisions do not explicitly include consultants within the definition of “employee,” the original promulgation of Regulation 1.59 in 1986 indicated the Commission's intention that consultants be included. 12 Furthermore, the definition of “employee” under Regulation 1.59(a) clearly states: “Employee means any person hired or otherwise employed on a salaried or contract basis by a self-regulatory organization.” (emphasis added) Although this language appears to indicate that consultants fall into the definition of “employee” under Regulation 1.59, it has recently come to the attention of the Commission that some exchanges retain consultants that they do not consider “employees.”  13

In 1992, the Commission adopted Rule 4.7 as part of the Commission's ongoing program for review of its rules. 2 Rule 4.7 provides an exemption from certain disclosure, reporting and recordkeeping requirements for registered CPOs in connection with their operation of commodity pools whose participants meet specified eligibility criteria. 3 The exemption provides relief from all of the specific disclosures required by Rules 4.21 and 4.24 through 4.26 and streamlines the reporting and recordkeeping requirements of Rules 4.22 and 4.23, respectively. 4 Rule 4.7 provides similar relief from the specific disclosure requirements of Rules 4.31 and 4.34 through 4.36 and recordkeeping requirements of Rule 4.33 to registered CTAs who direct or guide the commodity interest trading accounts of clients who meet specified eligibility criteria. 5

Subsequent to the adoption of Rule 4.7, and consistent with the purposes of the rule, Commission staff permitted various CPOs and CTAs to claim relief under the rule with respect to certain persons who did not meet the specified eligibility criteria of the rule. In addition, in 1996, Congress enacted the National Securities Markets Improvement Act of 1996 (“NSMIA”). 6 Among other things, NSMIA added Section 3(c)(7) to the ICA  7 thereby providing an additional exemption from the definition of the term “investment company” under the ICA with respect to funds comprised exclusively of qualified purchasers (“QPs”). NSMIA also directed the Securities and Exchange Commission (“SEC”) to promulgate rules that would permit ownership by knowledgeable employees of the securities of the issuer (or affiliate) without loss of the issuer's definitional exemption under Section 3(c)(1)  8 or 3(c)(7) of the ICA. In 1997, the SEC adopted Rule 3c-5 under the ICA, 9 which defines the term “knowledgeable employee.”  10

Based upon staff's experience in administering Rule 4.7 and taking into account these recent developments in the federal securities laws, on March 2, 2000 the Commission published for comment in the Federal Register proposed revisions to Rule 4.7 (the “Proposal”). 11 Certain of the proposed revisions were substantive in nature— i.e., they would expand the definitions employed in Rule 4.7, which would have the effect of permitting registered CPOs and CTAs to claim relief in additional circumstances under the rule. In proposing this action, the Commission noted that it had been guided by the purposes of Rule 4.7. With respect to CPOs, these purposes are to: (1) Reduce unnecessary regulatory burdens with respect to persons who appear not to need the full protections of the Part 4 framework; and (2) coordinate the Commission's rules with certain federal securities laws. 12 As for CTAs, the rationale for relief “is analogous to that for * * * CPOs, i.e., that [qualified eligible persons] are sophisticated investors who have the financial ability and experience necessary to understand the risks of futures trading and to obtain the information they require.”  13

The Commission received six comment letters on the Proposal: one from a firm registered as a futures commission merchant, CPO and CTA; one from a firm registered as a CPO; one from a designated self-regulatory organization; one from a bar association; one from a member of the commodities bar; and one from a trade association representing CPOs and CTAs. 14 All of the persons who commented on the proposed revisions to Rule 4.7 expressed strong support for the Proposal. Among the reasons commenters provided for their support were that the Proposal: (1) Would coordinate and harmonize the commodities and securities laws where they have a common purpose; (2) would relieve Commission staff from expending its resources on what have become routine and redundant Rule 4.7 letters; (3) would provide similar relief to the applicants for those letters; and (4) would make the rules more “user friendly.”

In light of the comments received, the Commission generally has adopted the revisions to Rule 4.7 that it proposed. 15 In addition, the Commission has further reorganized the rule and has included more persons in the qualified eligible person definition. Each of the changes from the Proposal is discussed below, and distribution and derivation tables are provided at Section IV below.

In the Federal Register release announcing the Proposal (“Proposing Release”), the Commission gave a detailed explanation of each revision it had proposed to make to Rule 4.7. 16 The scope of this Federal Register release generally is restricted to the comments received on the Proposal and changes to the Proposal that the Commission has made in response thereto. Accordingly, the Commission encourages interested persons to read the Proposing Release for a discussion of the purpose of each of the revisions the Commission proposed to make to the various provisions under Rule 4.7.

The Commission proposed to reorganize Rule 4.7 to assist CPOs and CTAs in determining the availability of the rule to them. This proposed reorganization would have put all of the definitions used in Rule 4.7 in one place, proposed paragraph (a) of the rule. 17 In particular, proposed paragraph (a)(1) would have contained the general definitions used throughout Rule 4.7. 18 One of those definitions was the term “Portfolio Requirement” in proposed paragraph (a)(1)(v). 19 One of the commenters questioned the need for two separate definitions of the term “Portfolio Requirement” (one for QEPs and one for QECs) because, as it noted, these definitions were virtually identical except for those references where the definition applicable to QEPs concerned “pool participants” and “exempt pool” and the definition applicable to QECs concerned “clients” and “exempt account.” Accordingly, the commenter recommended that the Commission should merge the two “Portfolio Requirement” definitions into one definition. The Commission believes this is a useful recommendation, and it has thus adopted in Rule 4.7(a)(1)(v) a single definition of “Portfolio Requirement” that equally applies to pool participants and exempt pools and to clients and exempt accounts.

In furtherance of this comment, the Commission additionally has streamlined other definitions used in Rule 4.7, such that now the rule solely refers to “qualified eligible persons.” Under both the former rule and the Proposal, persons for whom a CPO or CTA could claim relief under Rule 4.7 were termed QEPs and QECs, respectively, and the criteria each such person had to satisfy was separately set forth depending on whether the person had to meet the Portfolio Requirement. Thus, under proposed Rule 4.7(a)(2), two categories of persons were defined as QEPs (persons who were QEPs irrespective of the Portfolio Requirement and persons who were required to satisfy the Portfolio Requirement to be QEPs) and under proposed Rule 4.7(a)(3) two categories of persons were defined as QECs (persons who were QECs irrespective of the Portfolio Requirement and persons who were required to satisfy the Portfolio Requirement to be QECs). This made for a total of four eligibility categories under Rule 4.7. 20 By employing solely the term “qualified eligible person” in Rule 4.7, the Commission has reduced to two from four the categories of persons defined under the rule: Persons who do not need to satisfy the Portfolio Requirement to be qualified eligible persons (Rule 4.7(a)(2))  21 and persons who do need to satisfy the Portfolio Requirement to be qualified eligible persons (Rule 4.7(a)(3)). 22

The Commission additionally has streamlined Rule 4.7 by combining at one place, Rule 4.7(d), text applicable to the notice of claim for exemption that must be made to claim the relief available under Rule 4.7. Under both the former rule and the Proposal, text applicable to this notice was included at two places in Rule 4.7: After the relief that CPOs could claim and after the relief that CTAs could claim. Inasmuch as this text was virtually identical at both places, the Commission has combined it into one location, Rule 4.7(d).

Finally, to assist CPOs and CTAs in their reading and application of Rule 4.7, the Commission has adopted introductory text to the rule, which explains the organization of Rule 4.7 as follows: Paragraph (a) contains definitions for the purposes of Rule 4.7; paragraph (b) contains the relief available to CPOs under Rule 4.7; paragraph (c) contains the relief available to CTAs under Rule 4.7; paragraph (d) concerns the Notice of Claim for Exemption under Rule 4.7; and paragraph (e) concerns insignificant deviations from a term, condition or requirement of Rule 4.7.

Under the Proposal, the term “Non-United States person” would have been defined at proposed Rule 4.7(a)(1)(iv). 23 Similar to the definition of the term “Portfolio Requirement,” the Commission did not propose to change the definition but, rather, it proposed to change its placement within the rule and to replace with the term “Non-United States person” the former reference in the rule to “a person that is not a United States person.”

Under the Proposal, a Non-United States person would have been defined to include, among other persons:

One of the commenters stated that it was unclear as to how, if at all, persons who did not qualify as Non-United States persons but who otherwise were QEPs should be counted for purposes of the 10% limitation of this definition. This commenter contended that they should not be counted because they were, after all, QEPs in their own right.

The Commission agrees with this commenter, and has revised the rule accordingly. Thus, as adopted, the ownership limitation of Rule 4.7(a)(1)(iv)(D) provides that “units of participation in the entity held by persons who do not qualify as Non-United States persons or otherwise as qualified eligible persons represent in the aggregate less than 10% of the beneficial interest in the entity” (emphasis added).

Because of the organization of the former rule, CPOs and CTAs were required to have a “reasonable belief” that certain persons defined in Rule 4.7 as QEPs and QECs, respectively were, in fact, QEPs and QECs. Under the proposed reorganization of the rule, CPOs and CTAs would have been required to have a “reasonable belief” that all persons defined as QEPs and QECs, respectively, were, in fact, QEPs and QECs. While the Commission stated that it did not believe that this should impose any additional burdens on CPOs and CTAs, it nonetheless requested comment on the proposed revision. 24 The three persons who commented on this proposed revision stated that they had no objection to it. And, in response to one of those commenters, the Commission is clarifying that CPOs and CTAs have latitude in determining how to obtain a “reasonable belief”—e.g., whether by statements from the prospective participant or client, its agent, or other similar means. Of course, what will establish a “reasonable belief” will depend on the facts of each particular case.

Under the Proposal, the QEP definition would have been expanded in proposed Rule 4.7(a)(2)(i)(H) to include, in addition to the CPO or the CTA of the exempt pool, the following persons: the investment adviser of the exempt pool; an affiliate of the exempt pool, CPO, CTA or investment adviser; a principal of these persons; certain employees of these persons; and certain family members of these persons. 25 Similarly, the QEC definition would have been expanded in proposed Rule 4.7(a)(3)(i)(B) to include the following persons: an affiliate of the CTA of the exempt account; a principal of the CTA or the affiliate; certain employees of these persons; and certain family members of these persons. 26 For the purposes of the discussion below, all of the foregoing persons collectively are referred to as “Insiders.”

The Commission has adopted as proposed the provisions that would define each of the Insiders as a qualified eligible person. Further, in response to the comments received, the Commission has included certain other persons as qualified eligible persons and has expanded from the Proposal the availability of the qualified eligible person definition to certain family members of Insiders.

For example, one of the commenters on the proposed addition of Insiders to the QEP and QEC definitions suggested that the Commission include in Rule 4.7 a provision allowing transfers of interests in a Rule 4.7 exempt pool or exempt account from Insiders to other persons by gift or bequest. This commenter stated that support for including such a provision is found in rules under the ICA, 27 which permit transfers of interests in a Section 3(c)(1) or 3(c)(7) fund from a knowledgeable employee or QP to another person under specified situations. The Commission agrees with this suggestion and has adopted it in Rule 4.7(a)(2)(viii), which provides that a qualified eligible person includes the following: (1) Asny person who acquires a participation in the exempt pool or an interest in the exempt account by gift, bequest or pursuant to an agreement relating to a legal separation or divorce from an Insider; (2) the estate of an Insider; or (3) a company established by an Insider exclusively for the benefit of (or owned exclusively by) the Insider and any other permitted transferee. This language generally follows the provisions of Rule 3c-6(b) under the ICA, which applies to transfers of interests in Section 3(c)(1) and (3)(c)(7) funds.

Proposed Rule 4.7(a)(2)(i)(H)( 4 ) would have included within the QEP definition certain employees of the exempt pool, CPO, CTA, investment adviser of the exempt pool, or affiliate thereof, and proposed Rule 4.7(a)(3)(i)(B)( 4 ) would have included within the QEC definition certain employees of the CTA of the exempt account or of an affiliate of the CTA, provided that the employee: (1) Was an accredited investor as defined in Rule 501(a)(5) or (a)(6) under the Securities Act of 1933  28 (“Accredited Investor”); and (2) had been employed by any of the foregoing persons, or by another person engaged in providing commodity interest, securities or other financial services, for at least 24 months. As the Commission explained, the purpose of these rules was in furtherance of the intent of Rule 4.7: to reduce unnecessary regulatory prescriptions for CPOs and CTAs with respect to persons who do not appear to need the full protections offered by the Part 4 framework. 29 The Commission has adopted this proposed definition and, in response to a comment received, has additionally included certain agents as qualified eligible persons under this rule.

One of the commenters on the Proposal suggested that the Commission consider including as QEPs and QECs certain attorneys and other persons similarly engaged whose activities and degree of sophistication would merit their being treated as QEPs and QECs. The Commission agrees with this comment and has incorporated it in Rule 4.7. Specifically, Rule 4.7(a)(2)(viii)(A)( 4 ) defines a qualified eligible person with respect to an exempt pool as “any other employee of, or an agent engaged to perform legal, accounting, auditing or other financial services for,” the exempt pool or the CPO, CTA or investment adviser of the exempt pool, or for an affiliate of any of the foregoing, provided that the employee or agent: (1) Is an Accredited Investor; and (2) has been engaged by the exempt pool, CPO, CTA, investment adviser or affiliate, or by another person engaged in providing commodity interest, securities or other financial services, for at least 24 months. Similarly, Rule 4.7(a)(2)(viii)(B)( 4 ) defines a qualified eligible person with respect to an exempt account as “any other employee of, or an agent engaged to perform legal, accounting, auditing or other financial services for,” the CTA of the exempt account, or for an affiliate of the CTA, provided that the employee or agent: (1) Is an Accredited Investor; and (2) has been engaged by the CTA or the affiliate, or by another person engaged in providing commodity interest, securities or other financial services, for at least 24 months. Consistent with the treatment of employees under Rule 4.7, this definition excludes agents who perform solely clerical, secretarial or administrative functions.

Proposed Rule 4.7(a)(2)(i)(H)( 5 ) would have included in the QEP definition the spouse, child, sibling or parent of an Insider, provided that an investment in the exempt pool by any such family member was made with the knowledge and at the direction of the Insider. 30 Proposed Rule 4.7(a)(3)(i)(B)( 5 ) similarly would have included in the QEC definition the spouse, child, sibling or parent of an Insider, provided that the establishment of an exempt account by any such family member was made with the knowledge and at the direction of the trading advisor. 31 The Commission received no comments on these criteria and, accordingly, has adopted them as proposed in Rules 4.7(a)(2)(viii)(A)( 5 )( i ) with respect to exempt pools and 4.7(a)(2)(viii)(B)( 5 )( i ) with respect to exempt accounts.

The proposed rules also would have strictly limited the application of the QEP and QEC definitions, such that these family members would not have been QEPs or QECs for any other purposes of Rule 4.7— e.g., for the purpose of being a QEP settlor of a trust under proposed Rule 4.7(a)(2)(i)(I). The commenter on this proposed criterion stated that it was unnecessarily opaque, and urged the Commission to treat these family members as QEPs and QECs for all purposes of Rule 4.7. Upon further reflection, the Commission agrees that the proposed limitation may have been overly broad where the source of funds used for participating in an exempt pool or investing in an exempt account was one of the specified family members. Accordingly, Rules 4.7(a)(2)(viii)(A)( 5 )( ii ) with respect to exempt pools and (a)(2)(viii)(B)( 5 )( ii ) with respect to exempt accounts provide that these family members are qualified eligible persons except for the purposes of paragraph (a)(3)(xi) of the rule. That paragraph provides that certain collective investment vehicles, such as a pool, are qualified eligible persons if, among other things, they satisfy the Portfolio Requirement, have in excess of $5,000,000 in total assets and their “participation in the exempt pool or investment in the exempt account is directed by a qualified eligible person.” Because the source of funds in a collective investment vehicle such as a pool will always be either in addition to or other than from the family member, the Commission has provided that the family member is not a qualified eligible person for the purposes of Rule 4.7(a)(3)(xi).

Proposed Rule 4.7(a)(3)(i)(A)( 2 ) would have defined Non-United States persons as QECs, provided that the CTA who sought to direct or guide the commodity interest trading account of the Non-United States person: (1) Provided commodity interest trading advice exclusively to persons who were QECs (including persons who were Non-United States persons); and (2) had filed a notice of claim for exemption under Rule 4.7. In the Proposing Release, the Commission noted that a CTA who directs or guides the accounts of United States persons who are not QECs would be subject to the Disclosure Document requirements of Rules 4.31, 4.34, 4.35 and 4.36 and the recordkeeping requirements of Rule 4.33. Accordingly, the Commission reasoned that requiring the CTA to comply with requirements to which it already would be subject would not impose any additional burden on the CTA with respect to clients who are Non-United States persons. 32

Four persons commented on this proposed provision. While they generally expressed support for expanding the QEC definition to include Non-United States persons, they objected to the proposed limitation on permitting CTAs to claim relief under Rule 4.7 where the CTA has both United States and Non-United States persons as clients. Commenters disagreed with the Commission's argument that this framework would not impose any additional burdens on these CTAs because they would already be subject to disclosure and recordkeeping requirements with regard to their (other) Non-QEC clients. One of these commenters further stated that while this may be true where the trading programs and solicitation documents are substantially the same, this frequently will impose a significant burden on CTAs where the trading programs and solicitation documents are different—thereby requiring significant additional work for the CTA in what is likely to be a very different context. In support of permitting CTAs to treat Non-United States persons as QECs without limitation, commenters noted that a CTA soliciting Non-United States persons is subject to the requirements of applicable foreign law, including any mandatory disclosure requirements. On the whole, then, the commenters on this proposed provision saw no reason why the Commission should treat Non-United States persons differently for the purpose of participating in an exempt pool or opening an exempt account.

Based upon the comments received, and in light of the increasing globalization of the futures markets and competitiveness concerns, the Commission has decided not to adopt the proposed limitation. Thus, Rule 4.7(a)(2)(xi) defines a Non-United States person as a qualified eligible person, without regard to whether the Non-United States person is seeking to participate in an exempt pool or to open an exempt account. 33

By the Proposal the Commission proposed to add QPs and knowledgeable employees to the QEP and QEC definitions,  34 and by the Revision the Commission has included QPs and knowledgeable employees in the qualified eligible person definition. As the Commission stated in the Proposing Release:

In particular, the Commission noted that in April of 1999, staff of the SEC's Division of Investment Management responded to a series of inquiries from the Subcommittee on Private Investment Entities of the Federal Regulation of Securities Committee, Section of Business Law of the American Bar Association concerning the scope of both the qualified purchaser and knowledgeable employee definitions. 36 As stated in the SEC staff's letter:

The following distribution table indicates where the provisions of former Rule 4.7 can be found in revised Rule 4.7 and the derivation table indicates where the provisions of revised Rule 4.7 can be found in former Rule 4.7. The derivation table indicates by “—” any provision in the revised rule that is not derived from the former rule ( i.e., it is an entirely new provision). To avoid what otherwise would be a very lengthy presentation, as appropriate each table groups together certain paragraphs.

Part 30 of the Commission's rules governs the offer and sale of foreign futures and foreign options contracts to persons located in the United States. Rule 30.6 sets forth the disclosure requirements that apply to domestic and foreign persons who are registered or required to be registered under Part 30 or who have obtained an exemption from such registration under Rule 30.5. Specifically, Rule 30.6(b) sets forth those requirements with respect to CPOs and CTAs, differentiating between disclosures applicable in the context of participants and clients, respectively, who meet the requirements of Rule 4.7 (Rule 30.6(b)(1)) and those who do not (Rule 30.6(b)(2)).

As discussed above, under the Revision persons who formerly were termed “qualified eligible participants” or “qualified eligible clients” are now all termed “qualified eligible persons” and the provisions of Rule 4.7 have been reorganized. The Commission accordingly has conformed the nomenclature of Rule 30.6(b) to that of revised Rule 4.7.

Rule 140.99 governs requests for exemptive, no-action and interpretative letters. Among other things, it sets forth the procedures that an applicant must follow in making a request for a letter. Paragraph (i)(A) makes clear that Rule 140.99 does not affect the requirements of, or is otherwise applicable to, notice filings required to be made to claim relief from the Act or from a Commission rule— e.g., pursuant to Rule 4.7.

As stated above, all claims for relief under Rule 4.7 are now found in paragraph (d) of the rule. Accordingly, the Commission has revised Rule 140.99(i)(A) such that it similarly refers to Rule 4.7(d).

Part 180 of the Commission's rules governs arbitration or other dispute settlement procedures. Rule 180.3(b)(2) concerns the signing of a pre-dispute arbitration agreement and certain endorsement procedures that may be followed by certain persons. The Commission similarly has conformed the nomenclature of Rule 180.3(b)(2)(vi) so that it now refers to “A person who is a ‘qualified eligible person' under § 4.7(a) of this chapter.”  38

The Attorney General must establish fees to be taxed and collected for certain services rendered by the United States Marshals Service in connection with Federal court proceedings. 28 U.S.C. § 1921(b). These services include, but are not limited to, serving writs, subpoenas, or summonses, preparing notices or bills of sale, keeping attached property, and certain necessary travel. To the extent practicable, these fees shall reflect the actual and reasonable costs of the services provided. The Attorney General initially established the fee schedule in 1991 based on the actual costs, e.g., salaries, overhead, etc., of the services rendered and the hours expended at that time. See 56 FR 2436 (January 23, 1991). Due to an increase in the salaries and benefits of United States Marshals Service personnel over time, the current fee schedule is inadequate and no longer reflects the actual and reasonable costs of the services rendered.

When developing fees for services, the United States Marshals Service adheres to the principles contained in OMB Circular No. A-25, User Charges. OMB Circular A-25 states that, as a general policy, a “user charge * * * will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the general public.”

The guidance contained in OMB Circular A-25 is applicable to the extent that it is not inconsistent with any Federal statute. Specific legislative authority to charge fees for services takes precedence over OMB Circular A-25 when the statute “prohibits assessment of a user charge on a service or addresses an aspect of the user charge ( e.g., who pays the charge; how much is the charge; where collections are deposited).” When a statute does not address issues of how to calculate fees or what costs to include in the fee calculation, Federal agencies must follow the principles and guidance contained in OMB Circular A-25 to the fullest extent allowable. The guidance directs Federal agencies when calculating fees to charge the “full cost” of providing services that provide a specific benefit to recipients. OMB Circular A-25 defines full cost as including “all direct and indirect costs to any part of the Federal Government of providing a good, resource, or service. These costs include, but are not limited to, an appropriate share of”:

• Direct or indirect personnel costs, including salaries and fringe benefits such as medical insurance and retirement;

• Physical overhead, consulting, and other indirect costs including material and supply costs, utilities, insurance, travel, and rents or imputed rents on land, buildings, and equipment;

• The management and supervisory costs; and

• The costs of enforcement, collection, research, establishment of standards, and regulation.

As previously stated, the Attorney General initially established the fee schedule in 1991 based on the average salaries, benefits, and overhead of the Deputy U.S. Marshals who executed process on behalf of a requesting party. The 1991 rates are:

For each item served (or service attempted) in person:

(a) Within two hours, during published duty hours—a minimum charge of $40 per Deputy (or guard). If necessary, for each associated additional hour, or portion thereof—$20 per Deputy (or guard) per additional hour.

(b) Within two hours, after published duty hours—a minimum charge of $50 per Deputy (or guard). If necessary, for each associated additional hour, or portion thereof—$25 per Deputy (or guard) per additional hour.

In addition, the Attorney General established a flat fee of $3 for each item served by mail or forwarded for service in another judicial district.

In November 1995, the Department of Justice, Office of Inspector General, issued an audit report on the United States Marshals Service's Collection of Service Fees and Commissions (Audit Report 96-01). 1 In the report, the Office of Inspector General recommended that the United States Marshals Service determine whether the fee schedule reflects actual and reasonable costs of the services provided. As a result of the audit report, in 1998, the United States Marshals Service conducted an analysis to determine whether, in light of the increase in salaries and expenses of its workforce over time, the existing fee schedule accurately reflects the costs of serving process. The following cost module reflects the average hourly cost of serving process in person on behalf of a requesting party.

The hourly wage was determined by dividing the annual salary, including locality pay, of the average Deputy U.S. Marshal in 1998 who serves process into the total work hours in a year. The cost of Law Enforcement Availability Pay is also factored into the hourly wage of a Deputy U.S. Marshal. 2 The fringe benefits rate reflected 40 percent of wage costs. Finally, the indirect costs, which are reflective of the costs of administrative services, including management/supervisory compensation and benefits, depreciation, utilities, supplies, and equipment, are approximately 18 percent of the total wage and benefits costs. 3 As a result of the cost module, the United States Marshals Service has determined that the existing fee schedule no longer reflects the actual and reasonable costs of serving process.

The total personnel costs of serving process were rounded to the nearest whole dollar. Thus, in order to recover the actual and reasonable costs of serving process, the United States Marshals Service will be charging $45 per hour (or portion thereof) for each item served by one Deputy U.S. Marshal. In order to simplify the calculation of the fees, the United States Marshals Service is eliminating the minimum charge for serving process within two hours and, instead, will charge a fee based on a straight hourly rate for service.

The United States Marshals Service also conducted a survey of a representative sampling of its district offices to determine whether the $3 flat fee for mailing process reflected the actual costs of mailing. The results of the survey indicated that the average actual cost of mailing process (which in most cases, required certified mail, return receipt delivery) is approximately $7 per item. Thus, the United States Marshals Service has determined that the flat mailing fee of $3 per item no longer reflects the costs of mailing. The United States Marshals Service will be charging a flat fee of $8 per item as an accurate reflection of the costs of mailing or forwarding process. The $8 fee is based on the combination of the average actual cost of mailing or forwarding process and the indirect costs associated with mailing or forwarding process.

The United States Marshals Service makes three additional clarifications to the fee regulation. One of the revisions establishes a specific fee for the administrative preparation of a notice of sale, bill of sale, or U.S. Marshal deed on behalf of a requesting party. The other two revisions are housekeeping revisions, setting forth the definitions of “item” and “process.”

28 U.S.C. § 1921(a)(1)(D) authorizes the United States Marshals Service to collect a fee for the preparation of a notice of sale or bill of sale on behalf of a requesting party. When the Attorney General initially established the fee schedule in 1991, there was no specific provision made for a fee for the preparation of a notice of sale, bill of sale (in cases where personality is sold), or a U.S. Marshal deed (in cases where realty is sold).

The United States Marshals Service conducted an analysis to determine the administrative cost of preparing a notice of sale, bill of sale, or a U.S. Marshal deed. The following module reflects the average hourly administrative costs to complete this task.

The hourly wage was determined by dividing the average annual salary of an administrative employee who prepares the notice of sale, bill of sale, or U.S. Marshal deed into the total work hours in a year. The fringe benefits rate of 36 percent  4 of wage costs was also added to reflect the average hourly personnel cost of preparing these documents. Finally, as previously described, the indirect costs are approximately 18 percent of the total wage and benefits costs.

The analysis disclosed that the average administrative employee spent approximately 30-45 minutes conducting the task of preparing each of these documents. Thus, the typical cost for the preparation of these documents is between $17.24 and $25.86 for each item. Because the time to prepare notices of sale, bills of sale, or U.S. Marshal deeds does not vary widely, and in most cases takes less than one hour to accomplish, the United States Marshals Service will be charging a flat fee of $20 per item rather than calculating the fee based on a straight hourly rate per item.

The calculation of the fee charged under the current fee regulation is dependent upon the number of endeavors to serve a piece of process, also referred to in the regulation as an “item.” Although “item” is not defined in 28 U.S.C. § 1921 or the fee regulation, it has been defined by the United States Marshals Service in its internal guidance disseminated to its employees, as “all papers issued in one action which are served simultaneously on one person or organization.” The regulation includes this definition of “item.” Under this definition, a Deputy U.S. Marshal who serves one person with one or more pieces of process in one case at one time serves one item. When two different people or organizations, however, are served with one or more pieces of process from one case at one time, then the number of items served would be two. Although the United States Marshals Service has the discretion to determine the number of items upon which fees will be calculated, the United States Marshals Service will exercise reasonableness to avoid excessive charges.

Similarly, consistent with 28 U.S.C. 1921(a)(1)(A), the United States Marshals Service broadly defines “process” to include, but not be limited to, a summons and complaint, subpoena, writ, and the execution of court-ordered injunctions, and civil commitments on behalf of a requesting party. Process may also include the execution of ancillary court orders (other than subpoenas issued on behalf of indigent defendants and arrest warrants) in criminal cases. The regulation sets forth the United States Marshals Service's internal policy regarding this matter.

As previously stated, this rule revised the United States Marshals Service fees to reflect current costs to the United States Marshals Service for service of process in Federal court proceedings. A proposed rule with invitation to comment was published in the Federal Register on December 7, 1999, at 64 FR 68307. No comments were received within the 60-day comment period. Accordingly, the proposed rule is finalized without change.

The Attorney General, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this rule and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities. Under the current fee structure, the United States Marshals Service collected $1,341,921 in service of process fees in FY1998. 5 The implementation of this rule will provide the United States Marshals Service with an additional $1,000,000 in revenue over the revenue that would be collected under the current fee structure. This revenue increase is a recovery of costs based on an increase in salaries, expenses, and employee benefits.

The economic impact on individual entities that utilize the services of the United States Marshals Service is minimal. The service of process fees only affect entities that pursue litigation in Federal court and, in most instances, seek to have the United States Marshals Service levy upon or seize property. The service of process fees, currently set at essentially $20 per duty hour and $25 per non-duty hour, will be increased to $45 per hour. The fees are consonant with similar fees already paid by these entities in state court litigation.

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

This rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996. 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

This rule has been drafted and reviewed in accordance with Executive Order 12866 (Regulatory Planning and Review), section 1(b) (Principles of Regulation). The Department of Justice, United States Marshals Service, has determined that this rule is a “significant regulatory action” under Executive Order 12866, section 3(f), and, accordingly, this rule has been reviewed by the Office of Management and Budget.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, the Department of Justice, United States Marshals Service, has determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

This rule does not contain collection of information requirements and would not be subject to the Paperwork Reduction Act of 1980, as amended (44 U.S.C. 3501-20).

We try to write clearly. If you can suggest how to improve the clarity of these regulations, call or write Joe Lazar, Associate General Counsel, United States Marshals Service, 600 Army Navy Drive, CS-3, Arlington, Virginia 22202, telephone number (202) 307-9054.

Authority delegations (Government agencies), Government employees, Organization and functions (Government agencies), Whistleblowing.

On April 19, 2000 at 65 FR 20913, EPA published a direct final rulemaking action approving a rule from the Sacramento Metropolitan Air Quality Management District of the California State Implementation Plan (SIP). The direct final rulemaking contained amendments to 40 CFR part 52, subpart F. The amendment which incorporated material by reference into § 52.220, Identification of plan, paragraph (c)(263)(i)(C)( 2 ) is incorrect. The amendment is being corrected in this action. Paragraph (C) should have been identified as Sacramento Metropolitan Air Quality Management District and paragraph (1) should have listed Rule 464 instead of paragraph ( 2 ). The identification of these two paragraphs is being corrected in this action.

On May 7, 1996, at 61 FR 20454, EPA published a direct final rulemaking action approving Rule 359 for the Santa Barbara County Air Pollution Control District. The direct final rulemaking contained amendments to 40 CFR part 52, subpart F. The material incorporated by reference into § 52.220, Identification of plan, paragraph (c)(198)(i)(K)( 2 ) was identified in the Federal Register , however, the information was not transferred to the Code of Federal Regulations (CFR). Paragraph ( 2 ) should read: “Rule 359, adopted on June 28, 1994.” This omission is being corrected in this action.

Additional omissions in 40 CFR 52.220 are being corrected in this action. Paragraph (c)(184)(i)(D) should be identified as San Diego County Air Pollution Control District. Paragraph (c)(220)(i)(B) should be identified as Placer County Air Pollution Control District. Paragraph (c)(225)(i)(C) should be identified as El Dorado County Air Pollution Control District. The identification of these paragraphs is being corrected in this action.

On March 1, 1996, at 61 FR 7994, the deletion of Kern County Air Pollution Control District Rule 425 was incorrectly added as paragraph (c)(194)(i)(D)( 3 ). In today's action, the deletion of Rule 425 is being correctly added to paragraph (c)(132)(B) and paragraph (c)(194)(i)(D)( 3 ) is being removed.

Section 553 of the Administrative Procedure Act, 5 U.S.C. 553(b)(B), provides that, when an agency for good cause finds that notice and public procedures are impracticable, unnecessary or contrary to the public interest, the agency may issue a rule without providing notice and an opportunity for public comment. EPA has determined that there is good cause for making today's rule final without prior proposal and opportunity for comment because EPA is correcting omissions and amending the rules listed in the currently approved information. The affected regulations are codified at 40 CFR part 52, subpart F, § 52.220. These rules were previously subject to notice and comment prior to EPA approval. Thus, notice and public procedure are unnecessary. EPA finds that this constitutes good cause under 5 U.S.C. 553(b)(B).

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

This technical correction action does not involve technical standards; thus the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implication of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). EPA's compliance with these statutes and Executive Orders for the underlying rule is discussed in the June 8, 2000 Federal Register document.

The Congressional Review Act (5 U.S.C. 801 et seq. ), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement. 5 U.S.C. 808(2). As stated previously, EPA has made such a good cause finding, including the reasons therefor, and established an effective date of August 4, 2000. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Entities potentially affected by today's action are those discharging pollutants to waters of the United States in the Great Lakes System in the States of Michigan, Ohio, Indiana and Illinois. Potentially affected categories and entities include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected. This table lists the types of entities that EPA believes could be affected by this action. Other types of entities not listed in the table could also be affected. To determine whether your facility may be affected by these final actions, you should examine the definition of “Great Lakes System” in 40 CFR 132.2 and examine 40 CFR 132.2 which describes the Part 132 regulations. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

On March 23, 1995, EPA published the Guidance. See 60 FR 15366 (The term “Guidance” as used below refers to the regulation promulgated by EPA on March 23, 1995 and codified at 40 CFR Part 132). The Guidance establishes minimum water quality standards, antidegradation policies, and implementation procedures for the waters of the Great Lakes System in the States of Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania and Wisconsin. Specifically, the Guidance specifies numeric criteria for selected pollutants to protect aquatic life, wildlife and human health within the Great Lakes System and provides methodologies to derive numeric criteria for additional pollutants discharged to these waters. The Guidance also contains minimum implementation procedures and an antidegradation policy.

Soon after being published, the Guidance was challenged in the U.S. Court of Appeals for the District of Columbia Circuit. On June 6, 1997, the Court issued a decision upholding virtually all of the provisions contained in the 1995 Guidance. American Iron and Steel Institute, et al. v. EPA (AISI), 115 F.3d 979 (D.C. Cir. 1997). The Court vacated the human health criterion for polychlorinated biphenyls (PCBs) and the acute aquatic life criterion for selenium, and the provisions of the Guidance “insofar as it would eliminate mixing zones for [BCCs] and impose [WQBELs] upon internal facility waste streams.” 115 F.3d at 985. On October 9, 1997, EPA published a notice revoking the PCB human health criteria pursuant to the Court's decision. 62 FR 52922. On April 23, 1998, EPA published a second notice amending the 1995 Guidance to remove the BCC mixing zone provisions from 40 CFR Part 132 (found in Procedure 3.C. of Appendix F) and to remove language in the Pollutant Minimization Program provisions (Procedure 8.D. of Appendix F) that might imply that permitting authorities are required to impose WQBELs on internal waste streams or to specify control measures to meet WQBELs. 63 FR 20107. On June 2, 2000, EPA published a third notice withdrawing the acute criteria for selenium. 65 FR 35283.

40 CFR 132.4 requires the Great Lakes States to adopt water quality standards, antidegradation policies, and implementation procedures for waters within the Great Lakes System consistent with the Guidance or be subject to EPA promulgation. 40 CFR 132.5(d) provides that, where a State makes no submission to EPA, the Guidance shall apply to discharges to waters in that State upon EPA's publication of a final rule indicating the effective date of the Part 132 requirements in that jurisdiction.

On July 1, 1997, the National Wildlife Federation filed suit alleging that EPA had a non-discretionary duty to promulgate the Guidance for any State that failed to adopt standards, policies and procedures consistent with the Guidance. National Wildlife Federation v. Browner, Civ. No. 97-1504-HHK (D.D.C.). EPA negotiated a consent decree providing that the EPA Administrator must sign, by February 27, 1998, a Federal Register notice making Part 132 effective in any State in the Great Lakes Basin that failed to make a submission to EPA by that date under 40 CFR Part 132. However, all of the Great Lakes States made complete submissions to EPA on or before the February deadline. On March 2, April 14, April 20 and April 28, 1998, EPA published in the Federal Register notices of its receipt of each of the States' Great Lakes Guidance submissions and a solicitation of public comment on the National Pollutant Discharge Elimination System (NPDES) portions of those submissions. 63 FR 10221; 63 FR 18195; 63 FR 19490; 63 FR 23285.

40 CFR 132.5(f) provides that, once EPA completes its review of a State's submission, it must either publish notice of approval of the State's submission in the Federal Register or issue a letter notifying the State that EPA has determined that all or part of its submission is inconsistent with the CWA or the Guidance, and identify any changes needed to obtain EPA approval. If EPA issues a letter to the State making findings of inconsistencies, the State then has 90 days to make the necessary changes. If the State fails to make the necessary changes, EPA must publish a notice in the Federal Register identifying the approved and disapproved elements of the submission and a final rule identifying the provisions of the Guidance that will apply to discharges within the State.

On November 15, 1999, the National Wildlife Federation and the Lake Michigan Federation filed suit alleging that EPA had a non-discretionary duty to take action on the Great Lakes States' Guidance submissions. National Wildlife Federation v. Browner, Civ. No. 99-3025-HHK (D.D.C.). EPA negotiated a consent decree providing that EPA must sign Federal Register notices by July 31, 2000, taking the action required by 40 CFR 132.5 on the Guidance submissions of the States of Illinois, Indiana, Michigan, Minnesota, Ohio and Pennsylvania; and Federal Register notices by September 29, and October 31, 2000, taking the action required by 40 CFR 132.5 on the Guidance submissions of the States of New York and Wisconsin, respectively. Today's Federal Register notice fulfills EPA's obligations under that Consent Decree with respect to the States of Michigan, Ohio, Indiana and Illinois. EPA is separately taking final action with respect to the States of Minnesota, New York, Pennsylvania and Wisconsin. EPA notes that each of the States' Guidance submissions may contain provisions that revise its NPDES program or water quality standards in areas or with respect to regulated entities not covered by the Guidance. EPA is not taking action at this time to either approve or disapprove any such provisions.

EPA has conducted its review of the States' submissions in accordance with the requirements of Section 118(c)(2) of the CWA and 40 CFR Part 132. Section 118 requires that States adopt policies, standards and procedures that are “consistent with” the Guidance. EPA has interpreted the statutory term “consistent with” to mean “as protective as” the corresponding requirements of the Guidance. Thus, the Guidance gives States the flexibility to adopt requirements that are not the same as the Guidance, provided that the State's provisions afford at least as stringent a level of environmental protection as that provided by the corresponding provision of the Guidance. In making its evaluation, EPA has considered the language of each State's standards, policies and procedures, as well as any additional information provided by the State clarifying how it interprets or will implement its provisions.

Where EPA has promulgated a final rule that identifies a provision of the Guidance that shall apply in a State, EPA explains below its reasons for concluding that the State failed to adopt requirements that are consistent with the Guidance. Additional explanation of EPA's conclusions are contained in EPA's correspondence with each State (identified in relevant sections below) where EPA initially identified inconsistencies in the States's submission. Notice of the availability of each of these letters was published in the Federal Register and EPA has considered all public comments received regarding any conclusions as to whether a State had adopted provisions consistent with the Guidance.

In this proceeding, EPA has reviewed the States' submissions to determine their consistency with 40 CFR Part 132. EPA has not reopened Part 132 in any respect, and today's action does not affect, alter or amend in any way the substantive provisions of Part 132. To the extent any members of the public commented during this proceeding that any provision of Part 132 is unjustified as a matter of law, science or policy, those comments are outside the scope of this proceeding.

With regard to those elements of the State submissions being approved by EPA, EPA is approving those provisions as amendments to each State's NPDES permitting program under Section 402 of the CWA and as revisions to each State's water quality standards under Section 303 of the CWA. Today's notice identifies those approved elements. Additional explanations of EPA's review of and conclusions regarding the States' submissions, including the specific State provisions that EPA is approving, are contained in the administrative record for today's actions in documents prepared for each State entitled “[particular State] Provisions Being Approved as Being Consistent With the Guidance,” “Analysis of Whether [the particular State] Has Adopted Requirements Consistent With the Guidance” and “Analysis of Steps Taken By [the particular State] in Response to EPA's 90-Day Letter.”

On June 30 and August 16, 1999, EPA issued letters notifying the Michigan Department of Environmental Quality (MDEQ) that, while the State of Michigan had generally adopted requirements consistent with the Guidance, EPA concluded that portions of the rules adopted by the State were not consistent with corresponding provisions of the Guidance. On September 14, 1999, EPA published in the Federal Register a notice of and solicitation of public comment on its June 30 and August 16, 1999, letters. 64 FR 49803. EPA has completed its review of the State of Michigan's response to, and all public comments on, the June 30 and August 16, 1999, letters, and has determined that, with one exception described below, Michigan has adopted requirements consistent with all aspects of the Guidance. Specifically, Michigan has adopted requirements consistent with, and EPA is therefore approving those elements of the State's submissions which correspond to: the definitions in 40 CFR 132.2; the water quality criteria for the protection of aquatic life, human health and wildlife in tables 1-4 of Part 132; the methodologies for development of aquatic life criteria and values, bioaccumulation factors, human health criteria and values and wildlife criteria in Appendices B-D; the antidegradation policy in Appendix E; and, with one exception, the implementation procedures in Appendix F. As explained more fully below, Michigan has not adopted requirements consistent with the provisions for determining reasonable potential and establishing water quality based effluent limitations for whole effluent toxicity set forth in Paragraph 1 of Section C, and Section D, of Procedure 6 in Appendix F.

EPA's June 30, 1999, letter concluded that some of the provisions that EPA is now approving authorized the State to act consistent with the Guidance, but provided inadequate assurance that the State would exercise its discretion consistent with the Guidance. Subsequent to that letter, MDEQ provided additional materials, including an Addendum to its Memorandum of Agreement with EPA regarding the State's approved NPDES program in which MDEQ commits to always exercise its discretion under those provisions in a manner consistent with the Guidance. Pursuant to 40 CFR 123.44(c)(3) and 123.63(a)(4), the State is required to comply with commitments made in its Memorandum of Agreement (MOA) or risk EPA objection to permits and even program withdrawal. These materials have demonstrated to EPA that the State will implement its program (with one exception identified below) consistent with the Guidance. The specific provisions that EPA is approving, and EPA's full rationale for approving these provisions, are set forth in the documents entitled “Michigan Provisions Approved as Being Consistent With the Guidance,” “Analysis of Whether Michigan Has Adopted Requirements Consistent With the Guidance” and “Analysis of Steps Taken By Michigan in Response to EPA's 90-Day Letter” included in the record for this action.

EPA has determined that Michigan's provisions at R 323.1219(4) for determining reasonable potential for a discharge to cause or contribute to an exceedance of Michigan's whole effluent toxicity requirements are inconsistent with Section D of Procedure 6 in Appendix F to 40 CFR Part 132. The Guidance procedure for evaluating reasonable potential for whole effluent toxicity (WET) is based on comparing a projected 95th percentile WET value at a 95 percent confidence level with the acute and chronic WET criteria after accounting for any available dilution. This conservative approach is designed to ensure that WQBELs are imposed when there is a reasonable potential for toxicity, taking into account the effluent variability and the size of the data set, even if no toxicity has actually been observed.

In evaluating State reasonable potential procedures for WET, EPA looked for an equivalent level of protection to that provided by the Guidance procedure. In the case of a procedure to determine when a WQBEL is needed, one important consideration is whether the alternative procedure would indicate the need for a WQBEL in similar situations to those that would trigger a WQBEL under Section D of Procedure 6.

In most cases where there is quantifiable effluent data, EPA's procedure will project an effluent value greater than the maximum observed value to characterize the reasonable worst case effluent. Michigan's procedures for determining WET reasonable potential are based on comparisons of preliminary effluent limits to average effluent toxicity values (with further possible adjustment based on the frequency of failures), rather than comparisons of preliminary effluent limits to maximum effluent toxicity values multiplied by factors to account for effluent variability and size of the data set as required by Paragraph D of Procedure 6 of the Guidance. Michigan's use of the average effluent toxicity value will, except in highly unusual circumstances, be lower than the maximum toxicity value multiplied by the factors to account for effluent variability set forth in the Guidance. Indeed, in certain circumstances, Michigan's procedure would not require a reasonable potential finding even where testing has shown actual, observed toxicity. This is clearly inconsistent with Section D of Procedure 6.

EPA notes that Paragraph 1 of Section C of Procedure 6 requires that WQBELs be imposed whenever the WET reasonable potential procedures in Section D of Procedure 6 show that there is reasonable potential that a discharge will cause or contribute to causing an excursion above a State's numeric WET criterion or narrative criterion. Michigan's R. 323.1219(2) also provides that WQBELs shall be imposed whenever the WET reasonable potential procedures in Michigan's R. 323.1219(4) show reasonable potential. As discussed above, however, Michigan's WET reasonable potential rules are not consistent with the Guidance. Because R.323.1219(2) links establishment of WQBELs for WET to a finding of reasonable potential under procedures that EPA has determined are not consistent with Section D of Procedure 6 (i.e., the procedures in R. 323.1219(4)), R.323.1219(2) is not consistent with Paragraph 1 of Section C of Procedure 6.

EPA, therefore, disapproves of R. 323.1219 (2) and (4), and has determined that Paragraph 1 of Section C, and Section D, of Procedure 6 in Appendix F to 40 CFR Part 132 shall apply for discharges into the Great Lakes System in the State of Michigan.

EPA understands that MDEQ intends to initiate rulemaking to revise its regulations to insure that the State's WET reasonable potential provisions are consistent with the Guidance. EPA will work closely with MDEQ to insure that its revised regulations will be consistent with the Guidance. MDEQ will then submit its revised regulations to EPA for approval pursuant to 40 CFR 123.62 as a revision to its NPDES program and, upon EPA approval of those revisions, EPA will revise its regulations so that Paragraph 1 of Section C, and Section D, of Procedure 6 in Appendix F to 40 CFR Part 132 will no longer apply to discharges into the Great Lakes System in the State of Michigan. EPA also notes that, based upon Michigan's adoption of criteria consistent with the Guidance, EPA intends, in a separate action in the future, to remove Michigan from the list of States specified at 40 CFR 131.36 for which EPA has promulgated specific criteria under Section 304(a) of the Clean Water Act.

On June 30 and August 16, 1999, EPA issued letters notifying the Ohio Environmental Protection Agency (OEPA) that, while the State of Ohio had generally adopted requirements consistent with the Guidance, EPA concluded that portions of the rules adopted by the State were not consistent with corresponding provisions of the Guidance. On September 14, 1999, EPA published in the Federal Register a notice of and solicitation of public comment on its June 30 and August 16, 1999, letters. 64 FR 49803. EPA has completed its review of the State of Ohio's response to, and all public comments on, the June 30 and August 16, 1999, letters, and has determined that, with only one exception described below, Ohio has adopted requirements consistent with all aspects of the Guidance. Specifically, Ohio has adopted requirements consistent with and EPA is therefore approving those elements of the State's submissions which correspond to, the definitions in 40 CFR 132.2; the water quality criteria for the protection of aquatic life, human health and wildlife in tables 1-4 of Part 132; the methodologies for development of aquatic life criteria and values, bioaccumulation factors, human health criteria and values and wildlife criteria in Appendices B-D; the antidegradation policy in Appendix E; and, with one exception, the implementation procedures in Appendix F. As explained more fully below, Ohio has not adopted requirements consistent with the provisions for determining reasonable potential and establishing water quality based effluent limitations for whole effluent toxicity set forth in Paragraph 1 of Section C, and Section D, of Procedure 6 in Appendix F.

EPA's June 30, 1999, letter concluded that some of the provisions that EPA is now approving authorized the State to act consistent with the Guidance, but provided inadequate assurance that the State would exercise its discretion consistent with the Guidance. Subsequent to that letter, OEPA provided additional materials, including an Addendum to its Memorandum of Agreement with EPA regarding the State's approved NPDES program in which OEPA commits to always exercise its discretion under those provisions in a manner consistent with the Guidance. Pursuant to 40 CFR 123.44(c)(3) and 123.63(a)(4), the State is required to comply with commitments made in its MOA or risk EPA objection to permits and even program withdrawal. These materials have demonstrated to EPA that the State will implement its program (with one exception identified below) consistent with the Guidance. The specific provisions that EPA is approving, and EPA's full rationale for approving these provisions, are set forth in the documents entitled “Ohio Provisions Approved as Being Consistent With the Guidance,” “Analysis of Whether Ohio Has Adopted Requirements Consistent With the Guidance” and “Analysis of Steps Taken By Ohio in Response to EPA's 90-Day Letter.”

EPA has determined that Ohio's procedure at OAC 3745-33-07(B) for determining reasonable potential for a discharge to cause or contribute to an exceedance of Ohio's whole effluent toxicity requirements are inconsistent with Section D of Procedure 6 in Appendix F to 40 CFR Part 132. Ohio's procedure is based on consideration of a wide range of available data, including the number of tests performed, the magnitude and frequency of toxicity exhibited by the effluent and available biological data. Ohio's procedure is not consistent with the Guidance because rather than provide safety factors to be applied to observed WET data as does Procedure 6, they apply factors that devalue observed WET test results and would not require a WQBEL even where WET test results show observed levels of unacceptable toxicity.

Specifically, where biological data are unavailable to corroborate effluent toxicity data, Ohio's procedures generally do not require establishment of a WQBEL unless the maximum observed toxicity value is at least three times greater than the expected toxicity limit, the average toxicity exceeds one-third the expected effluent limit, and more than 30 percent of the test results exceed a projected wasteload allocation. Where biological data are present to corroborate effluent data that a toxicity problem exists, Ohio's procedure would allow a permit writer to consider WET data at full value ( i.e., compare the maximum observed WET result to the expected toxicity limit), but it also requires the permit writer, in determining whether a WQBEL is needed, to weigh factors related to a minimum frequency of actual exceedances and a comparison of the average of WET test results to a percentage of the expected toxicity limit similar to those that must be considered when only WET data are available. Because these procedures devalue toxicity results and fail to require a limit even in cases of observed toxicity, Ohio's procedure would not require a reasonable potential finding even where testing has showed actual, observed toxicity. This is clearly inconsistent with Section D of Procedure 6.

As discussed above with respect to Michigan, Paragraph 1 of Section C of Procedure 6 requires that WQBELs be imposed whenever the WET reasonable potential procedures in Section D of Procedure 6 show that there is reasonable potential that a discharge will cause or contribute to causing an excursion above a State's numeric WET criterion or narrative criterion. Ohio's rules at OAC 3745-33-07(B)(2) provide that WQBELs shall be imposed whenever the WET reasonable potential procedures in Ohio's rules at OAC 3745-33-07(B) show reasonable potential. Because OAC 3745-33-07(B)(2) links establishment of WQBELs for WET to a finding of reasonable potential under procedures that EPA has determined are not consistent with Section D of Procedure 6 ( i.e., the procedures in OAC 3745-33-07(B)), OAC 3745-33-07(B)(2) is not consistent with Paragraph 1 of Section C of Procedure 6.

EPA, therefore, disapproves of OAC 3745-33-07(B), and has determined that Paragraph 1 of Section C, and Section D, of Procedure 6 in Appendix F to 40 CFR Part 132 shall apply for discharges into the Great Lakes System in the State of Ohio.

On August 16, 1999, EPA issued a letter notifying the Indiana Department of Environmental Management (IDEM) that, while the State of Indiana had generally adopted requirements consistent with the Guidance, EPA concluded that portions of the rules adopted by the State were not consistent with corresponding provisions of the Guidance. On September 14, 1999, EPA published in the Federal Register a notice of and solicitation of public comment on its August 16, 1999, letter. 64 FR 49803. EPA has completed its review of the State of Indiana's response to, and all public comments on, the August 16, 1999, letter, and has determined that, with the exceptions described below, Indiana has adopted requirements consistent with all aspects of the Guidance. Specifically, Indiana has adopted requirements consistent with, and EPA is therefore approving those elements of the State's submissions which correspond to, the definitions in 40 CFR 132.2; the water quality criteria for the protection of aquatic life, human health and wildlife in tables 1-4 of Part 132; the methodologies for development of aquatic life criteria and values, bioaccumulation factors, human health criteria and values and wildlife criteria in Appendices B-D; the antidegradation policy in Appendix E; and, with the exceptions described below, the implementation procedures in Appendix F. As explained more fully below, Indiana has not adopted requirements consistent with the criteria for granting variances set forth in Paragraph 1 of Section C of Procedure 2 in Appendix F, requirements for including WQBELs in permits set forth in Paragraph 2 of Section F of Procedure 5 in Appendix F, and the provisions for determining reasonable potential and establishing water quality based effluent limitations for whole effluent toxicity set forth in Paragraph 1 of Section C, and Section D, of Procedure 6 in Appendix F.

EPA's August 16, 1999, letter concluded that some of the provisions that EPA is now approving were inconsistent with the Guidance because authorized the State to act consistent with the Guidance, but provided inadequate assurance that the State would exercise its discretion consistent with the Guidance. Subsequent to that letter, IDEM provided additional materials, including an Addendum to its Memorandum of Agreement with EPA regarding the State's approved NPDES program in which IDEM commits to always exercise its discretion under those provisions in a manner consistent with the Guidance. Pursuant to 40 CFR 123.44(c)(3) and 123.63(a)(4), the State is required to comply with commitments made in its MOA or risk EPA objection to permits and even program withdrawal. These materials have demonstrated to EPA that the State will implement its program (with exceptions identified below) consistent with the Guidance. The specific provisions that EPA is approving, and EPA's full rationale for approving these provisions, are set forth in the documents entitled “Indiana Provisions Approved as Being Consistent With the Guidance,” “Analysis of Whether Indiana Has Adopted Requirements Consistent With the Guidance” and “Analysis of Steps Taken By Indiana in Response to EPA's 90-Day Letter.”

EPA has determined that Indiana's provisions at 327 IAC 2-1.5-17(b), which allow IDEM to grant a variance from water quality standards if the permit applicant demonstrates that failure to grant the variance “will cause an undue hardship or burden upon the applicant,” are inconsistent with the criteria for granting variances set forth at Paragraph 1 of Section C of Procedure 2 in Appendix F to 40 CFR Part 132. Specifically, the Guidance only allows variances based upon economic considerations if the failure to grant the variance “would result in substantial and widespread economic and social impact.” EPA believes, and Indiana agrees, that it is possible that a failure to grant a variance could result in “an undue hardship or burden upon [a particular discharger]” without also causing “substantial and widespread economic and social impact.” Consequently, Indiana's provisions allow variances to be issued that relax water quality standards, and consequently permit conditions to meet standards, in instances where such a loosening of applicable requirements would not be permitted by the Guidance. Therefore, these provisions of Indiana's submission are not consistent with the Guidance.

EPA, therefore, disapproves of 327 IAC 2-1.5-17(b), and has determined that Paragraph 1 of Section C of Procedure 2 in Appendix F to 40 CFR Part 132 shall apply for discharges into the Great Lakes System in the State of Indiana. EPA notes that Indiana's “undue hardship or burden upon the applicant” criterion for granting a variance, as applied to municipal dischargers, may often be consistent with the “substantial and widespread social and economic impact” criterion in Paragraph 1.f of Section C of Procedure 2 in Appendix F to 40 CFR Part 132. This is because an undue hardship on the discharger ( i.e. , the community served by the municipal discharger) may also constitute widespread social and economic impact. Consequently, EPA believes that specifying that Paragraph 1 of Section C of Procedure 2 in Appendix F to 40 CFR Part 132 applies to discharges into the Great Lakes System in the State of Indiana may, as a practical matter, not have a significant effect on the granting of variances for municipalities in Indiana. In any case, under today's rule, Indiana may only grant variances that meet the criteria specified in Procedure 2 in Appendix F to 40 CFR Part 132.

EPA has further determined that Indiana's provisions at 327 IAC 5-3-4.1(b)(1), which prevent Indiana from including necessary WQBELs in permits simply because a variance application has been submitted, is inconsistent with Paragraph 2 of Section F of Procedure 5 in Appendix F to 40 CFR Part 132 and with 40 CFR 122.44(d). Under those federal provisions, WQBELs must be included in NPDES permits whenever there is reasonable potential that a discharge will cause or contribute to causing nonattainment of an existing water quality standard. The mere filing of a variance application does not change a water quality standard. Consequently, 327 IAC 5-3-4.1(b)(1), which prevents Indiana from including WQBELs when there is reasonable potential for a discharge to cause or contribute to causing nonattainment of an existing water quality standard where a permittee has applied for a variance from that standard, is not consistent with the Guidance and 40 CFR 122.44(d).

EPA, therefore, disapproves of 327 IAC 5-3-4.1(b)(1), and has determined that Paragraph 2 of Section F of Procedure 5 in Appendix F to 40 CFR Part 132 shall apply for discharges into the Great Lakes System in the State of Indiana.

EPA also has determined that Indiana's provisions at 327 IAC 5-2-11.5(c)(1) for determining reasonable potential for a discharge to cause or contribute to an exceedance of Indiana's WET requirements are inconsistent with Section D of Procedure 6 in Appendix F to 40 CFR Part 132.

As described above with respect to Michigan, EPA's procedure, in most cases, will project an effluent value greater than the maximum observed value to characterize the reasonable worst case effluent. Indiana's procedure, on the other hand, uses the mean value of effluent data, further “discounted” by the fraction of tests exceeding the wasteload allocation. This both lessens the impact of observed toxicity on the calculation and fails to account for the reasonable possibility that effluent toxicity may exceed the level observed in the tests because sampling did not coincide with periods of maximum toxicity. An analysis of Indiana's procedure shows that those procedures often do not require a limit on WET where one would be required under the procedures in the Guidance. In fact, in some cases, Indiana's procedure would not require imposition of a WQBEL even where testing has showed actual, observed toxicity. This is clearly inconsistent with Section D of Procedure 6.

As discussed above with respect to Michigan and Ohio, Paragraph 1 of Section C of Procedure 6 requires that WQBELs be imposed whenever the WET reasonable potential procedures in Section D of Procedure 6 show that there is reasonable potential that a discharge will cause or contribute to causing an excursion above a State's numeric WET criterion or narrative criterion. Indiana's rules at 327 IAC 5- 2-11.5(c), which specify when the permitting authority must include a WQBEL for WET, limits the permitting authority to using the WET reasonable potential procedures in Indiana's rules at 327 IAC 5-2-11.5(c)(1). Because 327 IAC 5-2-11.5(c) links establishment of WQBELs for WET to the Indiana WET reasonable potential procedures that EPA has determined are not consistent with Section D of Procedure 6 (i.e., the procedures in 327 IAC 5-2-11.5(c)(1)), 327 IAC 5-2-11.5(c) is not consistent with Paragraph 1 of Section C of Procedure 6.

EPA, therefore, disapproves of 327 IAC 5-2-11.5(c), and has determined that Paragraph 1 of Section C, and Section D, of Procedure 6 in Appendix F to 40 CFR Part 132 shall apply for discharges into the Great Lakes System in the State of Indiana.

On November 12, 1999, EPA issued a letter notifying the Illinois Environmental Protection Agency (IEPA) that, while the State of Illinois had generally adopted requirements consistent with the Guidance, EPA concluded that portions of the State's rules were not consistent with corresponding provisions of the Guidance. On December 9, 1999, EPA published in the Federal Register a notice of and solicitation of public comment on its November 12, 1999, letter. 64 FR 69019. EPA has completed its review of the State of Illinois' response to, and all public comments on, the November 12, 1999, letter, and has determined that, with one exception, Illinois has adopted requirements consistent with all aspects of the Guidance. Specifically, Illinois has adopted requirements consistent with, and EPA is therefore approving those elements of the State's submissions which correspond to, the definitions in 40 CFR 132.2; the water quality criteria for the protection of aquatic life, human health and wildlife in tables 1-4 of Part 132; the methodologies for development of aquatic life criteria and values, bioaccumulation factors, human health criteria and values and wildlife criteria in Appendices B—D; the antidegradation policy in Appendix E; and, with one exception described below, the implementation procedures in Appendix F. As explained more fully below, Illinois has not adopted requirements consistent with the requirements governing total maximum daily loads in Procedure 3 in Appendix F.

EPA's November 12, 1999, letter, had concluded that some of the provisions that EPA is now approving were inconsistent with the Guidance because they authorized the State to act consistent with the Guidance, but provided inadequate assurance that the State would exercise its discretion consistent with the Guidance. Subsequent to that letter, Illinois provided additional materials, including an Addendum to its Memorandum of Agreement with EPA regarding the State's approved NPDES program in which IEPA commits to always exercise its discretion under those provisions in a manner consistent with the Guidance. Pursuant to 40 CFR 123.44(c)(3) and 123.63(a)(4), the State is required to comply with commitments made in its MOA or risk EPA objection to permits and even program withdrawal. These materials have demonstrated to EPA that the State will implement its program (with one exception identified below) consistent with the Guidance. The specific provisions that EPA is approving, and EPA's full rationale for approving these provisions, are set forth in the documents entitled “Illinois Provisions Approved as Being Consistent With the Guidance,” “Analysis of Whether Illinois Has Adopted Requirements Consistent With the Guidance” and “Analysis of Steps Taken By Illinois in Response to EPA's 90-Day Letter.”

EPA has determined that Procedure 3 in Appendix F to 40 CFR Part 132 shall apply with regard to development of total maximum daily loads (TMDLs) for the Great Lakes System in the State of Illinois because Illinois decided not to adopt TMDL provisions for the Great Lakes System. Illinois did not adopt such provisions because EPA has indicated that it will be developing a TMDL for Lake Michigan and so Illinois does not believe that the State should be required to develop any TMDLs for the Great Lakes System. Today's action ensures that the provisions of Procedure 3 in Appendix F will apply in developing TMDLs in the Great Lakes System in the State of Illinois, regardless of who develops the TMDL. EPA notes that this promulgation has no effect on the reasonable potential procedures at 35 Ill. Adm. Code 309.141(h)(4), which EPA approves as being consistent with the reasonable potential procedures in Procedure 5 in Appendix F to 40 CFR Part 132, and which therefore apply in the Great Lakes System in the State of Illinois for purposes of developing preliminary effluent limitations in making reasonable potential determinations.

As noted above, EPA, in this notice, is not taking action to approve or disapprove portions of the States' Guidance submissions pertaining to NPDES permitting and water quality standards issues that are not addressed by the Guidance. While EPA is not taking action under Section 118 with regard to the following issue, EPA nevertheless wishes to describe its understanding with regard to one aspect of Illinois' submission that is not addressed by the Guidance. Specifically, Illinois' rules at 35 Ill. Adm. Code 352.700(a)(2) provide that, when a WQBEL is below the level of quantification, “[t]he analytical method adopted by the [Illinois Pollution Control] Board and specified in the permit shall be the method used for compliance assessment including enforcement actions.”

EPA is concerned about this language because EPA believes, as a matter of law, that any credible evidence (subject to generally applicable rules of evidence), not just evidence generated by use of an analytical method specified in a permit, can be used in an enforcement action to establish that a violation of an effluent limitation has occurred. IEPA has clarified that 35 Ill. Adm. Code 352.700(a)(2) is only a limitation on the types of evidence that IEPA may use in an enforcement action; it does not place limits on the types of evidence that the federal government or third parties can use in an enforcement action or citizen suit. IEPA also has clarified that it does not intend to include the language of 35 Ill. Adm. Code 352.700(a)(2) in NPDES permits. Finally, IEPA is considering revising its rules to address EPA's concerns. While EPA is not, at this time, taking action to either approve or disapprove 35 Ill. Adm. Code 352.700(a)(2) as a modification of Illinois NPDES program, EPA notes that revisions to State NPDES programs do not become effective until approved by EPA. 40 CFR 123.62(b)(4).

EPA received a large number of public comments in response to its Federal Register notices of its receipt of the States' Guidance submissions and of the availability of EPA's letters to the States of Michigan, Ohio, Indiana and Illinois regarding their Guidance submissions. EPA has responded to each of those comments in a document entitled “EPA Responses to Comments Regarding the Great Lakes Guidance Submissions of the States of Michigan, Ohio, Indiana and Illinois' that has been included as part of the record in this matter. The following is a summary of EPA's responses to the most significant of these comments.

Comment: A number of commenters asserted that EPA's regulatory determinations are being made without affected parties having any chance to review the Agency's reasoning or to raise issues as to the validity of that reasoning, in violation of the Administrative Procedure Act and EPA's public participation regulations at 40 CFR 25.

Response: The final rule being promulgated today makes certain provisions of 40 CFR Part 132 applicable to discharges in certain States within the Great Lakes System. Those provisions were adopted after publication of a proposed rule for public comment. See 58 FR 20802 (April 16, 1993). EPA is not modifying those provisions, but merely making them effective in accordance with 40 CFR 132.5(f)(2). Therefore, the public had a full opportunity to comment on the contents of today's rule. Moreover, public comment was also received regarding EPA's review of the State submissions. EPA provided public notice of the availability of, and solicited comment on, the NPDES portions of these States' Guidance submissions in Federal Register notices dated March 2, 1998 and April 28, 1998. 63 FR 10221; 63 FR 23285. In Federal Register notices dated September 14, 1999, and December 9, 1999, EPA subsequently provided notice of the availability of letters to the States of Michigan, Ohio, Indiana and Illinois in which EPA provided (a) detailed explanations of the bases for its findings that certain States had not adopted provisions consistent with certain provisions of the Great Lakes Guidance and (b) its preliminary conclusions that, with the exception of those findings, the States had adopted provisions consistent with the Guidance. 64 FR 49803, 64 FR 69019. EPA also solicited comment on all aspects of those letters, and has considered and responded to all comments received before taking today's final actions. Consequently, EPA has complied with all applicable public participation requirements.

Comment: A number of commenters raised questions regarding the basis for EPA's decisions to approve a State's provisions pertaining to a specific element of the Guidance where the State's provisions, on their face, do not plainly require the State's permitting or water quality standards authority to act in a manner consistent with the Guidance.

Response: EPA believes that these commenters' view is both unreasonable and contrary to EPA regulations governing the Agency's review of the State submissions. EPA regulations required each State to submit to EPA not only the criteria, methodologies, policies and procedures developed pursuant to the Guidance but also “general information which will aid EPA in determining whether the criteria, methodologies, policies and procedures are consistent with” the Act and the Guidance, and “information on general policies which may affect their application and administration.” 40 CFR 132.5(b)(1) and (4). Consistent with these regulations, EPA has not limited its review to solely the plain language of each State's criteria, methodologies, policies and procedures, but has considered the totality of the State's submission in determining whether it was consistent with the Guidance, including information regarding interpretation or implementation of a State's criteria, methodologies, policies and procedures.

As noted previously, the States were not required to adopt requirements that are identical to the Guidance. States' submissions can—and do—differ from the Guidance, and this difference is permissible provided the State's approach is consistent with (i.e., as protective as) the Guidance. Given the complexity of the States' submissions and EPA's review, it is not surprising that particular State provisions may be amenable to more than one interpretation or manner of application. Where a State's provision was either unclear or authorized the State to act consistent with the Guidance, but there was uncertainty as to whether the State would actually exercise its discretion consistent with the Guidance, EPA considered supplementary information to aid in determining the meaning and protectiveness of the State's provision vis-a-vis the Guidance. This information included, for example, States' legal interpretations of its criteria, methodologies, policies and procedures, or a State's position on how it would implement State law. For each of the States, clarification on the manner in which the State would exercise its discretion was provided on some issues in an addendum of the MOA with EPA governing its administration of the NPDES program. See 40 CFR 123.24. This MOA governs how each State will administer its NPDES program, and failure to comply with the terms of the MOA is grounds for EPA objection to a State permit and withdrawal of State's NPDES program. See 40 CFR 123.44(c)(3) and 123.63(a)(4).

Commenters suggest that EPA is required to ignore such supplementary information in its review and appear to believe that, simply because a State provision may be ambiguous or grants some flexibility to the State, EPA has no choice but to disapprove the provision as being inconsistent with the Guidance. Nothing in EPA's regulations or in the CWA compels such a cabined exercise of judgment by EPA. Where the totality of a State's submission demonstrates that the State will administer its program consistent with the Guidance, EPA believes that it is appropriate to approve the submission.

Comment: A commenter disagrees that Indiana's variance procedures, which allow Indiana to grant variances based upon a finding that compliance with the existing water quality standard would have an “undue hardship or burden upon the applicant,” is not consistent with the Guidance requirement that variances only be granted where compliance with the existing standard “would result in widespread economic and social impact.” According to the commenter, Indiana has the ability to obtain and consider information regarding societal impacts in deciding whether to grant a variance and so Indiana's provisions are consistent with the Guidance. The commenter also argues that, even if Indiana's provisions are not consistent with the Guidance, EPA can apply its “substantial and widespread” test in deciding whether to approve of any variance that Indiana decides to grant under its applicant-specific test.

Response: The fact that Indiana “has the ability to obtain and consider information regarding societal impacts in deciding whether to grant a variance” does not change the fact that Indiana law requires that variances be allowed in circumstances where the Guidance does not allow for variances to be granted: i.e., where the failure to grant the variance would have an “undue hardship or burden upon the applicant” but not cause “widespread social and economic impact.” Indiana's variance provisions, therefore, are not consistent with the Guidance.

With regard to the comment that EPA can apply the Guidance variance procedures in reviewing any variances that Indiana decides to grant, 40 CFR 132.4(a) requires that States “adopt requirements * * * that are consistent with * * * [t]he Implementation Procedures in Appendix F [to 40 CFR Part 132].” The affirmative obligation imposed on States by 40 CFR 132.4(a) to adopt such requirements would be rendered meaningless if EPA simply relied upon its approval/disapproval authorities as a basis to approve a State's provisions where the State does not interpret or implement a State provision in a manner that would be consistent with the Guidance.

Comment: One commenter believes that Indiana's provisions prohibiting it from imposing necessary WQBELs in NPDES permits simply because a variance application is pending are consistent with the Guidance. According to the commenter, “EPA has no authority, based on “protectiveness,” to demand that the State issue a limit that will later need to be withdrawn because a variance has been granted. Moreover, * * * [u]nder the EPA rule, the State would be fully authorized to issue a limit while a variance application is pending and, at the same time, issue a compliance schedule that applies to that limit, so that the limit would not take effect until after the variance application is either granted * * * or denied. That would achieve exactly the same end as the process that is currently contained in the Indiana rules.”

Response: Paragraph 2 of Section F of Procedure 5 in Appendix F to 40 CFR Part 132 and 40 CFR 122.44(d)(1) both require imposition of water quality based effluent limits whenever there is reasonable potential for a discharge to cause or contribute to causing nonattainment of existing water quality standards. Nothing in those provisions, or anywhere else in the Clean Water Act or in EPA's regulations, creates an exception to this requirement to account for the fact that existing water quality standards may eventually change. Consequently, to the extent that 327 IAC 5-3-4.1(b)(1) prohibits Indiana from including WQBELs where there is reasonable potential that a discharge will cause or contribute to an exceedance of a standard simply because someone has merely requested a change to Indiana's existing water quality standards (but the standard has not yet been modified by issuance of the variance), it is inconsistent with Paragraph F.2 of Procedure 5 and 40 CFR 122.44(d)(1).

The commenter is correct that Indiana might be able to accomplish the same result in certain situations by granting the permittee a compliance schedule. However, under the Guidance, any such compliance schedule would have to meet the requirements governing compliance schedules in Procedure 9 in Appendix F to 40 CFR Part 132 (Indiana's Great Lakes compliance schedule provisions, which EPA is approving as being consistent with Procedure 9, are at 327 IAC 5-2-12.1). 327 IAC 5-3-4.1(b)(1), which prohibits Indiana from including WQBELs when a variance application has been applied for, is not limited only to situations when the requirements governing compliance schedules in Procedure 9 and 327 IAC 5-2-12.1 are met. Thus, 327 IAC 5-3-4.1(b) is not consistent with the Guidance.

Comment: A number of commenters believe that EPA should disapprove Indiana's rule at 327 IAC 5-2-11.7, which the commenters assert allows Indiana to “downgrade” Indiana's historically held third tier, highest quality waters that were identified in the 1990 water quality standards approved by EPA as Outstanding State Resource Waters, which are Indiana's equivalent to Outstanding Natural Resource Waters (ONRW). These commenters also believe that EPA should disapprove Indiana's Guidance rules regarding mixing zones in Lake Michigan at 327 IAC 5-2-11.4(b)(2)(A) and (B), (b)4)(A)(iii) and (b)(4)(C), and (b)(5)-(7) because these sections allow a mixing zone in Lake Michigan contrary to the statewide ban on mixing zones in lakes at 327 IAC 2-1-4(c) of Indiana's EPA approved 1990 rules. The commenters believe that these changes constitute “downgrading” Indiana's standards for Lake Michigan.

Response: The term “downgrading” generally refers to a decision to modify a designated use where the current designated use cannot be attained for one of the reasons specified at 40 CFR 131.10(g). EPA's regulations at 40 CFR 131.10 place significant restrictions on a State's ability to engage in such “downgrading.”

EPA's regulations at 40 CFR 131.12 and Appendix E to 40 CFR Part 132 describe various levels of antidegradation protections that must be afforded to water bodies. These various levels of protection, which are known as “Tier I,” “Tier II” and “Tier III,” are not “use designations,” and so the restrictions placed on the States' ability to modify “designated uses” set forth at 40 CFR 131.10 do not apply to State decisions with regard to which “tier” of antidegradation protection should be afforded to particular water bodies. EPA further notes that EPA's regulations leave the question of whether a particular water body constitutes a “Tier III” water (or ONRW) to the States' discretion. Consequently, EPA does not agree that it should disapprove Indiana's antidegradation provisions.

With regard to the commenters' concerns regarding Indiana's mixing zone provisions, the availability of mixing zones does not represent a change or “downgrade” in use and thus is not subject to 40 CFR 131.10. Nevertheless, while States generally have discretion to change mixing zone requirements, the States' mixing zone requirements must still ensure attainment of designated uses and, in the case of requirements applicable to the Great Lakes System, must be consistent with the Guidance. EPA believes that Indiana's mixing zone requirements do insure attainment of designated uses and are consistent with the Guidance. Consequently, EPA is approving those provisions of Indiana's rules, notwithstanding the possibility that those provisions of Indiana's rules may have relaxed Indiana's previously adopted mixing zone provisions.

Comment: Citing a May 4, 1999, letter from EPA to Indiana, a number of commenters believe that EPA should disapprove certain exemptions in Indiana's antidegradation rule at 327 IAC 5-2-11.7(c).

Response: The Guidance specifies certain minimum requirements which all Great Lakes States must include in their antidegradation policies and implementation procedures that are specific to protecting the waters of the Great Lakes System. Specifically, the Guidance establishes minimum requirements for States' antidegradation policies which are largely identical to those of 40 CFR 131.12, and implementation requirements that are specific to BCCs. Indiana's policy and implementation procedures are consistent with the requirements identified in the Guidance. To the extent that Indiana's revised rules contain changes addressing other elements of the State's antidegradation policy not addressed by the Guidance (i.e., procedures addressing non-BCCs), those elements are outside the scope of this action and will be addressed in a separate proceeding.

Comment: EPA received numerous comments asserting that Section D of Procedure 6 in Appendix F, the WET reasonable potential procedure, was not valid because not all WET data sets appear to be lognormally distributed (as readily acknowledged by EPA). Based on this observation, the commenters conclude that Section D of Procedure 6 is scientifically indefensible and, therefore, EPA must accept the other procedures submitted by the States of Ohio, Michigan, and Indiana. These commenters further assert that EPA has no basis for disapproving these State procedures as not being consistent with the Guidance. (The same comments were made about the Illinois procedure even though it is based primarily on the Guidance procedure and is being approved by EPA. Accordingly, the discussion below does not relate to Illinois.) EPA believes that these commenters misunderstand the scope of the scientific defensibility provision of the Guidance. They also fail to refute EPA's conclusion that Ohio's, Michigan's and Indiana's procedures are not consistent with the Guidance.

The Guidance procedure for using effluent data to calculate a projected effluent quality (PEQ) for determining when a WET limit is needed Section D of Procedure 6 estimates an upper bound effluent value (95th percentile) by multiplying the maximum observed effluent value (expressed as toxic units) by a factor designed to take into account long-term effluent variability and the number of data available to make the projection. The size of the multiplying factor is determined by the number of data points in the data set, the variability of the effluent, the assumed distribution of the data, and the chosen confidence level for capturing the true 95th percentile (95 percent in the case of Table F6-1). Except in rare cases where there are large amounts of data, the projected 95th percentile will be greater than maximum observed effluent value.

Some commenters contended that Section D of Procedure 6—which uses multiplying factors that are based on the assumption that data are lognormally distributed—is scientifically indefensible within the meaning of 40 CFR 132.4(h), and that the States are therefore free to adopt other approaches. Section 132.4(h) allows States to adopt alternative methodologies or procedures different from those contained in the Guidance where a State demonstrates that a methodology or procedure is not scientifically defensible. EPA included this flexibility to address pollutants identified in the future for which some of the methodologies or procedures may not be technically appropriate. 58 Fed. Reg. 20843 (April 16, 1993). See also, Supplemental Information Document for the Water Quality Guidance for the Great Lakes System (March 23, 1995) (SID) at 58-59. No party contends that new pollutants pose unique technical attributes that render application of the existing WET methodologies or procedures invalid. Rather, these commenters simply contend that certain aspects of Procedure 6 promulgated by EPA are technically unsound and overly conservative. However, Section 132.4(h) is not a vehicle for parties to challenge anew the Guidance itself. The CWA requires the States to adopt policies, standards and procedures that are consistent with the Guidance promulgated by EPA. CWA § 118(c)(2)(C). EPA is reviewing State submissions to determine their consistency with the Guidance but has not reopened any provision of the Guidance in our review. The public had a full opportunity to provide its views on Procedure 6 during the rulemaking establishing the Guidance, and the time period for challenging the Guidance has passed. See CWA § 509(b). Therefore, none of the comments provide any basis for allowing the States to establish alternative methodologies and procedures pursuant to 40 CFR 132.4(h) to address whole effluent toxicity.

Even if Section 132.4(h) were relevant, none of the States has actually proposed an alternative approach of projecting effluent toxicity that attempts to meet even the basic parameters of the Guidance. While the States have flexibility to adopt approaches that make different assumptions about the distribution of WET data than is assumed in Procedure 6, no one has presented EPA with an analysis identifying a different distribution or statistical method that fits WET data better, either in general or in a particular case. More fundamentally, however, the procedures submitted by Ohio, Michigan and Indiana do not address in any manner the underlying premise of Procedure 6—that effluent quality is variable and, therefore, a method for assessing WET data must account for the likelihood that the maximum value in a particular data set is less than the true maximum that is likely to be experienced by the environment as a result of the discharge. In evaluating the potential for a discharge to cause or contribute to an exceedance of water quality standards, EPA believes it prudent to employ a procedure that minimizes the likelihood of misclassifying a discharge as not needing an effluent limitation, given the potential in such circumstances for unacceptable adverse impacts on the aquatic resource. Because the purpose of the PEQ reasonable potential procedure is to extrapolate from typically small data sets a reasonable worst case effluent quality that could be expected over the life of a permit, using a conservative assumption is in keeping with the purpose of the procedure. The reasonable potential determination is intended to allow the permitting authority to make a decision that will protect water quality with a high degree of confidence in the face of uncertainty and with a relatively small data set.

Rather than providing alternative methods of accounting for the uncertainty associated with small data sets by using an alternative mechanism that more precisely predicts likely maximum toxicity levels ( e.g. , alternative multipliers or “safety factors”), the Michigan and Indiana procedures make no attempt to extrapolate likely toxicity levels (i.e., they lack any safety factor whatsoever). Indeed, these States' procedures move in the opposite direction by averaging the observed effluent data in some fashion and applying either a mandatory or optional adjustment downward based on a “failure” rate. Ohio's procedure is more complex and less predictable, but it also provides for “discounting” observed WET data rather than applying a safety factor. Thus, not only do these procedures fail entirely to consider the potential of the discharge to cause or contribute to an exceedance taking into account long-term effluent variability and the fact that a small number of data sets may not capture the worst case effluent quality, they actually allow a finding of “no reasonable potential” where available data has indicated unacceptable toxicity. EPA does not consider these approaches to be either as protective as the Guidance, or in accordance with applicable national regulations (40 CFR 22.44(d)(1)).

EPA also received comments that EPA should find Ohio's weight-of-evidence approach for determining reasonable potential for WET as protective as the Guidance. These commenters support the Ohio approach as superior in considering all data regarding the toxicity of an effluent and note especially a feature of the Ohio procedure that they say would use biosurvey data as a substitute for the multiplier in Table F6-1 when considering WET data.

EPA does expect permitting authorities to consider all relevant information in determining whether reasonable potential exists. EPA believes that this is best accomplished by considering each line of evidence regarding the effect of an effluent on the environment separately and without differential weighting of data drawn from different sources. As discussed in the Technical Support Document for Water Quality-based Toxics Control (EPA/505/2-90-001, March 1991) (TSD) and reflected in paragraph 3 of Section F of Procedure 5 in Appendix F, the chemical-specific, bioassessment, and WET characterization approaches each have unique as well as overlapping attributes, sensitivities, and program applications, no single approach for detecting impact should be considered uniformly superior to any other approach (See Chapter 3.1.3, p. 49). Consistent with this principle, data showing an effect or potential for an effect is sufficient to require effluent limits and the results of one assessment technique should not be used to contradict or overrule the results of the other techniques that indicate the need for an effluent limit. This is especially appropriate when the task at hand is not only to identify existing problems but to predict the possibility of future adverse impacts and impose effluent limits to prevent those adverse impacts from occurring.

EPA recognizes some merit in the position that biological data can reduce the uncertainties about the effect of the discharge and thus could serve a similar purpose as the multipliers or “safety factors” used in the Guidance procedure. Taken as a whole, however, the Ohio procedure has the significant shortcoming discussed above of “discounting” WET data. Specifically, where biological data are unavailable to corroborate effluent toxicity data, Ohio's procedure would require that the maximum observed toxicity be at least three times greater than the expected toxicity limit, that the average toxicity exceed one-third the expected effluent limit, and that more than more than 30 percent of the test results exceed a projected wasteload allocation before it would be likely that a limit will be imposed. Where biological data are present to corroborate effluent data, it is not clear, as the commenter asserts, that a limit would be required if the maximum observed effluent value exceeded the projected effluent limit. In this situation, Ohio's procedure still could require that the maximum observed effluent value be greater than the projected wasteload allocation, that the average of the effluent test results exceed half the expected effluent limit for acute toxicity and two-thirds the expected effluent limit for chronic toxicity, and that more than 30 percent of the effluent values exceed the expected toxicity limit before a limit is imposed. Thus, Ohio's procedures will not necessarily require a limit even in situations where the effluent toxicity is observed in excess of the expected toxicity limit. As discussed above, such a procedure is inconsistent with the Guidance.

Another set of comments asserted that EPA must examine a State's whole approach to addressing WET and determine whether it reduces effluent toxicity to a similar extent as EPA's approach, rather than simply focusing on whether the State's procedures will result in imposition of effluent limits for WET in all situations where the Great Lakes Guidance would require imposition of such limits.

It is unclear how the commenter believes EPA's analysis is deficient and why a different analysis would show a different result. Certainly, the procedure that determines whether or not a permit includes a WQBEL for a particular pollutant or parameter (the reasonable potential procedure) is a critical element for determining the level of protection that will be achieved when implementing a water quality standard. Where a reasonable potential procedure is not as protective as the Guidance, a State's WET program cannot be considered to achieve the same level of protection as the Guidance.

EPA also notes that in addition to the requirements of the Procedure 6 of the Guidance itself, Section 301(b)(1)(C) of the Clean Water Act requires “limitation[s] * * * necessary to meet any applicable water quality standard.” Moreover, EPA's regulations implementing Section 301(b)(1)(C) at 40 CFR 122.44(d)(1)(iv) and (v) require that NPDES permits contain “effluent limits for whole effluent toxicity” or chemical-specific limits in lieu of WET limits, whenever there is reasonable potential that a discharge will cause or contribute to an in-stream excursion above a numeric criterion for WET or a narrative criterion of no toxics in toxic amounts. Therefore, the CWA and EPA's implementing regulations require permitting authorities to impose WQBELs for WET when there has been a reasonable potential finding, and EPA does not believe it would be consistent with the CWA and EPA regulations to approve an alternative approach that omits this fundamental requirement. EPA notes that, in appropriate cases, a permitting authority can include a compliance schedule for the WQBEL that would allow for additional monitoring and identification and reduction of toxicants, followed by a reassessment of the need for a limit or the identification of a specific toxicant that could be subject to a WQBEL rather than WET.

Some commenters contended that EPA's actions with respect to Indiana's, Michigan's and Ohio's WET reasonable potential procedures were not consistent with statements by EPA that permitting authorities retain the right to determine whether data is relevant and valid.

EPA agrees that permitting authorities have the right to exercise reasonable discretion to reject unrepresentative or invalid data in making reasonable potential determinations. EPA does not agree, and the commenter fails to explain why it believes, that EPA's actions with respect to Indiana's, Michigan's and Ohio's WET reasonable potential procedures conflict with that position. Section D of Procedure 6 is neutral with respect to the validity of particular pieces of WET data ( e.g. , were the quality assurance/quality control requirements of the method correctly followed) or whether that data is representative of the discharge ( e.g. , was the sample taken during normal operations of the facility). It is designed to work on the assumption that the permittee has submitted data the permitting authority agrees are valid and representative of the discharge. If the commenter is saying that States have the discretion to determine that valid, representative data that show effluent toxicity are irrelevant in determining whether a WET limit is needed, EPA disagrees.

PA is nonetheless aware that there has been considerable concern about the possibility that variability in WET test results could erroneously indicate toxicity. EPA recently addressed this issue in the document, “Understanding and Accounting for Method Variability in Whole Effluent Toxicity (WET) Applications Under the NPDES Program” (EPA 833-R-00-003, June 2000). This document clarifies several issues regarding WET variability and reaffirms EPA's earlier guidance and recommendations published in the Technical Support Document for Water Quality-Based Toxics Control (TSD, USEPA 1991). The document discusses analysis of WET data that shows WET test method precision is comparable to chemical-specific method precision. Significantly, the document recommends that, rather than adjusting the reasonable potential procedures, WET test method variability be minimized by adhering to the EPA test methods (especially the quality assurance/quality control procedures), representative sample collection, and other recommendations provided in the document related to evaluating the validity of specific WET test results. The Federal Register notice announcing the availability of this document and the document itself may be viewed or downloaded on the Internet at http://www.epa.gov/owm/npdes.htm.

As a result of today's action, the Guidance provisions specified in today's rule apply in the Great Lakes System in the States specified in the rule until such time as a State adopts requirements consistent with the specific Guidance provisions at issue, and EPA approves those State requirements and revises the rule so that the provisions no longer apply in that State.

Section 553 of the Administrative Procedure Act, 5 U.S.C. 553 (b)(3)(B), provides that, when an agency for good cause finds that notice and public procedure are impracticable, unnecessary or contrary to the public interest, the agency may issue a rule without publishing a notice of proposed rulemaking. EPA has determined that there is good cause for promulgating today's rule final without publishing a notice of proposed rulemaking because EPA finds it unnecessary and contrary to the public interest. Today's rule does not promulgate any new regulatory provisions. Rather, in accordance with the procedures in 40 CFR132.5(f), today's rule identifies the provisions of Part 132 promulgated previously by EPA that shall apply to discharges in certain States within the Great Lakes System. Those provisions have already been subject to a notice of proposed rulemaking, and publication of a new proposed rule is therefore unnecessary. See 58 FR 20802 (April 16, 1993). In addition, while EPA's approval/disapproval decisions described in this notice do not constitute rulemaking, EPA has nonetheless received substantial public comment on these decisions. See 63 FR 10221 (March 2, 1998) and 63 FR 23285 (April 28, 1998) (notices of receipt of State Guidance submissions and requests for comment); 64 FR 49803 (September 14, 1999), and 64 FR 69019 (December 9, 1999) (notices of letters identifying inconsistencies and requests for comment). EPA also believes the public interest is best served by fulfilling the CWA's requirements without further delay and publication of a notice of proposed rulemaking therefore would be contrary to the public interest. EPA finds that this constitutes good cause under 5 U.S.C. 553(b)(B).

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the Administrative Procedure Act or any other statute, as described in Section II, above, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), or to Sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In addition, because this action does not promulgate any new requirements, but only makes certain existing provisions of 40 CFR Part 132 effective in several States, it does not impose any new costs. The costs of Part 132 were considered by EPA when it promulgated that regulation. Therefore, today's rule does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in Sections 203 and 204 of UMRA, or significantly or uniquely affect the communities of Tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

This action does not involve technical standards; thus, the requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by Section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the Agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This rule is not a major rule as defined by 5 U.S.C. 804(2). This rule will be effective September 5, 2000.

You may be affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

1. Electronically . You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/.

2. In person . The Agency has established an official record for this action under docket control number OPP-301027. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

EPA issued a final rule, published in the Federal Register of October 29, 1997 (62 FR 56082) (FRL-5750-8), which announced that on its own initiative under section 408 of the FFDCA, 21 U.S.C. 346a, as amended by the Food Quality Protection Act of 1996 (FQPA) (Public Law 104-170) it established a time-limited tolerance for the combined residues of avermectin and its delta-8,9-isomer in or on basil at 0.05 ppm, with an expiration date of September 30, 1998. EPA extended the time-limited tolerance for avermectin on basil in the Federal Register of October 7, 1998 (63 FR 53835) (FRL-6033-7) with an expiration date of January 31, 2000. EPA established the tolerance because section 408(l)(6) of the FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under section 18 of FIFRA. Such tolerances can be established without providing notice or period for public comment.

EPA received a request to extend the use of avermectin on basil for this year's growing season due to continued pressure on basil crops from leafminers. Leafminers damage marketable basil in a variety of ways. After having reviewed the submission, EPA concurs that emergency conditions exist and has determined that it is appropriate to re-establish this time-limited tolerance. EPA has authorized under FIFRA section 18 the use of avermectin on basil for control of leafminers in basil.

EPA assessed the potential risks presented by residues of avermectin in or on basil. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and decided that the necessary tolerance under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. The data and other relevant material have been evaluated and discussed in the final rule of October 29, 1997 (62 FR 56082). Based on that data and information considered, the Agency reaffirms that extension of the time-limited tolerance will continue to meet the requirements of section 408(l)(6). Therefore, the time-limited tolerance is extended for an additional 19-month period. EPA will publish a document in the Federal Register to remove the revoked tolerance from the Code of Federal Regulations (CFR). Although this tolerance will expire and is revoked on July 31, 2001, under FFDCA section 408(l)(5), residues of the pesticide not in excess of the amounts specified in the tolerance remaining in or on basil after that date will not be unlawful, provided the pesticide is applied in a manner that was lawful under FIFRA and the application occurred prior to the revocation of the tolerance. EPA will take action to revoke this tolerance earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA of 1996, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d), as was provided in the old FFDCA sections 408 and 409. However, the period for filing objections is now 60 days, rather than 30 days.

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-301027 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before October 3, 2000.

1. Filing the request . Your objection must specify the specific provisions in the regulation that you object to, and the grounds for the objections (40 CFR 178.25). If a hearing is requested, the objections must include a statement of the factual issues(s) on which a hearing is requested, the requestor's contentions on such issues, and a summary of any evidence relied upon by the objector (40 CFR 178.27). Information submitted in connection with an objection or hearing request may be claimed confidential by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the information that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice.

Mail your written request to: Office of the Hearing Clerk (1900), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. You may also deliver your request to the Office of the Hearing Clerk in Rm. C400, Waterside Mall, 401 M St., SW., Washington, DC 20460. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (202) 260-4865.

2. Tolerance fee payment . If you file an objection or request a hearing, you must also pay the fee prescribed by 40 CFR 180.33(i) or request a waiver of that fee pursuant to 40 CFR 180.33(m). You must mail the fee to: EPA Headquarters Accounting Operations Branch, Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. Please identify the fee submission by labeling it “Tolerance Petition Fees.”

EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov , or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit III.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket control number OPP-301027, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov . Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 file format or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).

This final rule re-establishes a time-limited tolerance under FFDCA section 408. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any prior consultation as specified by Executive Order 13084, entitled Consultation and Coordination with Indian Tribal Governments (63 FR 27655, May 19, 1998); special considerations as required by Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or require OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a FIFRA section 18 petition under FFDCA section 408, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4).

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

You may be affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

1. Electronically . You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/.

2. In person . The Agency has established an official record for this action under docket control number OPP-301019. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2 (CM#2), 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of April 5, 2000 (65 FR 17872) (FRL-6550-7), EPA issued a notice pursuant to section 408 of the FFDCA, 21 U.S.C. 346a as amended by the FQPA (Public Law 104-170) announcing the filing of a pesticide petition (PP) for a tolerance by IR-4, 681 U.S. Highway #1 South, North Brunswick, NJ 08902-3390. This notice included a summary of the petition prepared by Uniroyal Chemical Company, the registrant.

The petition requested that 40 CFR 180.377 be amended by establishing a tolerance for combined residues of the insecticide diflubenzuron, (N-[[4-chlorophenyl)amino]carbonyl]-2,6-difluorobenzamide) and its metabolites, 4-chlorophenylurea (CPU) and 4-chloroaniline (PCA), in or on rangeland grass at 6.0 parts per million (ppm).

Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue....”

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997) (FRL-5754-7).

Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2), for a tolerance for combined residues of diflubenzuron and its metabolites on rangeland grass at 6.0 ppm. EPA's assessment of the dietary exposures and risks associated with establishing the tolerance follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by diflubenzuron are discussed in Unit II.A. of the Final Rule on Diflubenzuron Pesticide Tolerance published in the Federal Register of April 19, 1999 (64 FR 19050) (FRL-6075-4).

1. Acute toxicity . A toxicological endpoint for acute dietary exposure (1 day) was not established since 1 day single dose oral studies in rats and mice indicated only marginal effects on methemoglobin levels at a dose level of 10,000 milligrams/kilograms (mg/kg) of diflubenzuron.

2. Short- and intermediate-term toxicity . The toxicological endpoint for short-term occupational or residential exposure (1 to 7 days) is sulfhemoglobinemia observed in the 14-day subchronic oral study in mice dosed with technical grade diflubenzuron. The no observed adverse effect level (NOAEL) in this study was 40 mg/kg/day and the lowest observed adverse effect level (LOAEL) was 200 mg/kg/day.

The toxicological endpoint for intermediate-term occupational or residential exposure (1 week to several months) is methemoglobinemia observed in the 13-week subchronic feeding study in dogs. For the purpose of risk assessments, the NOAEL of 1.64 mg/kg/day in this study was considered to be 2 mg/kg/day so as to be consistent with the NOAEL of 2 mg/kg/day in the chronic study used to calculate the Reference Dose (RfD). The LOAEL in this study was 6.24 mg/kg/day.

Since an oral NOAEL was selected for a dermal endpoint, a dermal absorption factor of 0.5% was used for this risk assessment when converting dermal exposure to oral equivalents. Therefore, the dermal equivalent dose producing a NOAEL by the oral route is 400.0 mg/kg/day (i.e., 2.0 mg/kg/day divided by 0.005 = 400.0 mg/kg/day).

3. Chronic toxicity . EPA has established the RfD for diflubenzuron at 0.02 mg/kg/day. This RfD is based on the NOAEL of 2.0 mg/kg/day in the 52-week chronic oral study in dogs. An uncertainty factor of 100 (10X for interspecies extrapolation and 10X for intraspecies variation) was used to determine the chronic Reference Dose (cRfD) of 0.02 mg/kg/day. The chronic Population Adjusted Dose (cPAD) is equal to the cRfD divided by the FQPA Safety Factor. Since the FQPA Safety Factor was reduced to 1X, the cPAD is equal to the cRfD.

4. Carcinogenicity . Based on the available evidence, which included adequate carcinogenicity studies in rats and mice and a battery of negative mutagenicity studies, diflubenzuron per se has been classified as Group E (evidence of non-carcinogenicity for humans). However, p-chloroaniline (PCA), a metabolite of diflubenzuron, is classified as a Group B2 carcinogen (probable human carcinogen). See Unit II. B. in the Final Rule on Diflubenzuron Pesticide Tolerance published in the Federal Register of April 19, 1999 (64 FR 19050).

For the purpose of calculating dietary risk assessments from exposure through food to these metabolites of diflubenzuron, the following procedure was used:

i. P-chlorophenylurea (CPU) and p-chloroacetanilide (PCAA), additional metabolites of diflubenzuron that are closely related to PCA and for which there are no adequate carcinogenicity data available, was considered to be potentially carcinogenic and to have the same carcinogenic potency (Q 1 *) as PCA.

ii. The sum of PCA, CPU, and PCAA residues in ingested food was used to estimate the dietary exposure of humans to the carcinogenic metabolites of diflubenzuron in food.

iii. In addition to ingested residues of these three metabolites, amounts of PCA, CPU, and/or PCAA formed in vivo following ingestion of diflubenzuron was also included when estimating the total exposure of humans to the carcinogenic metabolites of diflubenzuron. The in vivo conversion of ingested diflubenzuron to PCA and/or CPU was estimated to be 2.0%, based on data in the rat metabolism study.

The Q 1 * (estimated unit risk) for PCA, based upon spleen sarcoma rates in male rats, was calculated to be 6.38 x 10 −2 (mg/kg/day) in human equivalents. It has been determined that PCAA does not occur in animal or plant tissues in significant amounts.

1. From food and feed uses . Tolerances have been established (40 CFR 180.377) for the combined residues of diflubenzuron and its metabolites, in or on rice grain, rice straw, citrus, artichokes, walnuts, mushrooms, cottonseed, soybeans, and associated livestock. For the dietary risk assessment, anticipated residue levels were calculated for livestock, citrus and mushroom commodities. Anticipated residue estimates for diflubenzuron were not calculated for other raw agricultural commodities. Percent crop treated (PCT) data were utilized where available.

Risk assessments were conducted by EPA to assess dietary exposures in food from diflubenzuron and its metabolites as follows:

Section 408(b)(2)(E) authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide chemicals that have been measured in food. If EPA relies on such information, EPA must require that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. Following the initial data submission, EPA is authorized to require similar data on a time frame it deems appropriate. As required by section 408(b)(2)(E), EPA will issue a Data Call-In for information relating to anticipated residues to be submitted no later than 5 years from the date of issuance of this tolerance.

Section 408(b)(2)(F) states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if the Agency can make the following findings: Condition 1, that the data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain such pesticide residue; Condition 2, that the exposure estimate does not underestimate exposure for any significant subpopulation group; and Condition 3, if data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area. In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by section 408(b)(2)(F), EPA may require registrants to submit data on PCT.

The Agency used PCT information to conduct a routine chronic dietary exposure analysis for diflubenzuron based on likely maximum PCT as follows: 1% rangeland grass, 3% cottonseed, 8% grapefruit, 3.1% mushrooms, 2% oranges, 4% tangerines, 1% soybean, and 5% cattle bolus. Other commodities were assumed to be 100% treated.

The Agency believes that the three conditions listed above have been met. With respect to Condition 1, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. EPA uses a weighted average PCT for chronic dietary exposure estimates. This weighted average PCT figure is derived by averaging State-level data for a period of up to 10 years, and weighting for the more robust and recent data. A weighted average of the PCT reasonably represents a person's dietary exposure over a lifetime, and is unlikely to underestimate exposure to an individual because of the fact that pesticide use patterns (both regionally and nationally) tend to change continuously over time, such that an individual is unlikely to be exposed to more than the average PCT over a lifetime. The Agency is reasonably certain that the percentage of the food treated is not likely to be underestimated. As to Conditions 2 and 3, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available information on the regional consumption of food to which diflubenzuron and its metabolites may be applied in a particular area.

i. Acute exposure . A risk assessment for acute dietary exposure (1 day) was not conducted. One day single dose oral studies in rats and mice indicated only marginal effects on methemoglobin levels at a dose level of 10,000 mg/kg of diflubenzuron.

ii. Chronic exposure . The RfD used for the chronic dietary analysis for diflubenzuron is 0.02 mg/kg bwt/day. The chronic Dietary Exposure Evaluation Model (DEEM) analysis used mean estimates of consumption (3-day average). Anticipated residues and PCT information for select commodities were used. Since EPA determined to reduce the 10X FQPA Safety factor to 1X, the cPAD and the cRfD are the same. The results of the analyses indicate that the chronic dietary risks from food associated with the existing and proposed uses of diflubenzuron and its metabolites do not exceed EPA's level of concern for the U.S. population or any population subgroup.

Cancer risk from consumption of PCA and related metabolites. The Agency has determined that there are three possible sources for dietary exposure to PCA and related compounds (CPU and PCAA) from food: residues in plants/fungi (mushrooms), residues in animal commodities (milk and liver) and in vivo conversion of diflubenzuron.

2. From drinking water . The Agency uses the Generic Estimated Environmental Concentration (GENEEC) or the Pesticide Root Zone/Exposure Analysis Modeling System (PRZM/EXAMS) to estimate pesticide concentrations in surface water and SCI-GROW, which predicts pesticide concentrations in ground water. In general, EPA will use GENEEC (a tier 1 model) before using PRZM/EXAMS (a tier 2 model) for a screening-level assessment for surface water. The GENEEC model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. GENEEC incorporates a farm pond scenario, while PRZM/EXAMS incorporate an index reservoir environment in place of the previous pond scenario. The PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.

None of these models include consideration of the impact processing (mixing, dilution, or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a coarse screen for sorting out pesticides for which it is highly unlikely that drinking water concentrations would ever exceed human health levels of concern.

Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or %PAD. Instead drinking water levels of comparison (DWLOC) are calculated and used as a point of comparison against the model estimates of a pesticide's concentration in water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food and from residential uses.

To calculate the DWLOC for chronic (non-cancer) exposure relative to a chronic toxicity endpoint, the chronic dietary food exposure (from DEEM) was subtracted from the RfD to obtain the acceptable chronic (non-cancer) exposure to diflubenzuron in drinking water. To calculate the DWLOC for chronic exposures relative to a carcinogenic toxicity endpoint, the chronic (cancer) dietary food exposure was subtracted from the ratio of the negligible cancer risk to the Q* to obtain the maximum allowable chronic exposure to diflubenzuron in drinking water. DWLOCs were then calculated using default body weights and drinking water consumption figures.

EPA has calculated DWLOCs for chronic (non-cancer) dietary exposure to diflubenzuron in surface and ground water for the U.S. population and children (1-6 yrs). They are 700 and 200 parts per billion (ppb), respectively. For chronic (cancer) exposure to CPU in surface and ground water, the DWLOC is 0.30 ppb for the U.S. population.

Tier II PRZM-EXAM modeling using the index reservoir (IR) scenario and the percent crop area adjustment factor for the use of diflubenzuron on cotton and citrus was modeled. The concentration of diflubenzuron in drinking water in a Mississippi cotton index reservoir scenario adjusted for a percent crop area factor of 0.49 is not expected to exceed 1.66 μg/L for the 1 in 10-year annual peak (acute) concentration, 0.12 μg/L for the 1 in 10-year annual mean (chronic) concentration, and 0.06 μg/L for the 36-year average concentration. The concentration of CPU in drinking water from the same application on cotton is not expected to exceed 0.23 μg/L for the 36-year average concentration.

Based on the PRZM-EXAMS and SCI-GROW models, the EECs of diflubenzuron for chronic exposure are estimated to be 0.06 ppb for surface water and 0.0023 ppb for ground water.

3. From non-dietary exposure . Diflubenzuron is a restricted use pesticide and therefore not available for use by homeowners. However, non-agricultural uses of diflubenzuron may expose people in residential locations. Based on the low dermal absorption rate (0.5%), and the extremely low dermal and inhalation toxicity, exposure through these uses is expected to be insignificant.

4. Cumulative exposure to substances with a common mechanism of toxicity . Section 408(b)(2)(D)(v) requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA does not have, at this time, available data to determine whether diflubenzuron has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, diflubenzuron does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that diflubenzuron has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the Final Rule for Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997).

1. Acute risk . There is no risk from acute dietary exposure (1 day) to diflubenzuron as there is no toxic endpoint identified.

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to diflubenzuron from food will utilize <1% of the cPAD for the U.S. population, for infants <1 year old, and children 1-6 years old. There are no residential uses for diflubenzuron that result in chronic residential exposure. In addition, despite the potential for chronic dietary exposure to diflubenzuron in drinking water, after calculating the DWLOCs and comparing them to conservative model EECs of diflubenzuron in surface water 0.06 ppb and ground water 0.0023 ppb. EPA does not expect the aggregate exposure to exceed 100% of the cPAD.

3. Aggregate cancer risk for U.S. population . For the U.S. population, cancer risk resulting from food exposure is 4.5 x 10 −7 . The estimated 36-year average concentration (0.23 ppb) of CPU in surface water does not exceed EPA's level of concern (DWLOC) for CPU in drinking water (0.30 ppb) as a contribution to chronic (cancer) aggregate exposure. EPA has calculated that the cancer risk resulting from 0.23 ppb of CPU in drinking water is 4.2 x 10 -7 . The aggregate cancer risk is thus 8.7 x 10 −7 (4.5 x 10 −7 for food + 4.2 x 10 −7 for water).

4. Determination of safety . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result from aggregate exposure to residues of diflubenzuron and its metabolites.

1. Safety factor for infants and children in general . In assessing the potential for additional sensitivity of infants and children to residues of diflubenzuron and its metabolites, EPA considered data from developmental toxicity studies in the rat and rabbit and a 2-generation reproduction study in the rat. The developmental toxicity studies are designed to evaluate adverse effects on the developing organism resulting from maternal pesticide exposure gestation. Reproduction studies provide information relating to effects from exposure to the pesticide on the reproductive capability of mating animals and data on systemic toxicity.

FFDCA section 408 provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base unless EPA determines that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a margin of exposure (MOE) analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans. EPA believes that reliable data support using the standard uncertainty factor (usually 100 for combined interspecies and intraspecies variability) and not the additional tenfold MOE/uncertainty factor when EPA has a complete data base under existing guidelines and when the severity of the effect in infants or children or the potency or unusual toxic properties of a compound do not raise concerns regarding the adequacy of the standard MOE/safety factor.

2. Developmental toxicity studies —i. Rats . In the developmental study in rats, the maternal (systemic) NOAEL was 1,000.0 mg/kg/day highest dose tested (HDT). The developmental (fetal) NOAEL was 1,000.0 mg/kg/day, (HDT).

ii. Rabbits . In the developmental toxicity study in rabbits, the maternal (systemic) NOAEL was 1,000.0 mg/kg/day, HDT. The developmental (pup) NOAEL was 1,000.0 mg/kg/day, HDT.

iii. Reproductive toxicity study . In the 2-generation reproductive toxicity study in rats, the maternal (systemic) NOAEL was < 36 and < 42 mg/kg/day male and female, respectively. Lowest dose tested (LDT) based on hematological effects at all dose levels tested. The reproductive (pup) NOAEL was 427.0 mg/kg/day, based on decreases in the F-1 pup weight at the LOAEL of 2,454.0 mg/kg/day HDT.

iv. Conclusion . The toxicological data base for evaluating prenatal and postnatal toxicity for diflubenzuron is complete with respect to current data requirements. Based on the developmental and reproductive toxicity studies discussed above, there does not appear to be increased sensitivity to diflubenzuron for prenatal or postnatal effects. Based on the above, EPA concludes that reliable data support use of a 100-fold margin of exposure/uncertainty factor, rather than the 1,000-fold margin/factor, to protect infants and children.

3. Acute risk . There is no risk from acute dietary exposure (1 day) to diflubenzuron as there is no toxicological endpoint identified which could be attributable to a single dietary exposure. Therefore, a risk assessment for this exposure scenario was not conducted.

4. Chronic risk . Using the exposure assumptions described in this unit, EPA has concluded that aggregate exposure to diflubenzuron from food will utilize < 1 % of the RfD for infants and children. EPA generally has no concern for exposures below 100% of the RfD because the RfD represents the level at or below which daily aggregate dietary exposure over a lifetime will not pose appreciable risks to human health. Despite the potential for exposure to diflubenzuron in drinking water and from non-dietary, non-occupational exposure, EPA does not expect the aggregate exposure to exceed 100% of the RfD.

5. Determination of safety . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to diflubenzuron residues.

Adequate methods are available for the analysis of diflubenzuron and its metabolites in rice grain (0.01 ppm), rice straw (0.01 ppm) and water (0.001 ppm). Three enforcement methods for diflubenzuron are published in PAM, Vol. II as Methods I, II, and III. Method II is a GC/ECD method that can separately determine residues of diflubenzuron, CPU, and PCA in eggs, milk, and animal tissues. All three methods have undergone successful Agency validations and are acceptable for enforcement purposes.

There are no Codex proposals, Canadian, or Mexican limits for residues of diflubenzuron on rangeland grass. A compatibility issue is not relevant to the tolerance.

Therefore, the tolerance is established for combined residues of diflubenzuron and its metabolites, in or on rangeland grass at 6.0 ppm.

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA of 1996, EPA will continue to use those procedures, with appropriate adjustments, until the necessary modifications can be made. The new section 408(g) provides essentially the same process for persons to “object” to a regulation for an exemption from the requirement of a tolerance issued by EPA under new section 408(d), as was provided in the old FFDCA sections 408 and 409. However, the period for filing objections is now 60 days, rather than 30 days.

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-301019 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before October 3, 2000.

1. Filing the request . Your objection must specify the specific provisions in the regulation that you object to, and the grounds for the objections (40 CFR 178.25). If a hearing is requested, the objections must include a statement of the factual issues(s) on which a hearing is requested, the requestor's contentions on such issues, and a summary of any evidence relied upon by the objector (40 CFR 178.27). Information submitted in connection with an objection or hearing request may be claimed confidential by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the information that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice.

Mail your written request to: Office of the Hearing Clerk (1900), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. You may also deliver your request to the Office of the Hearing Clerk in Rm. C400, Waterside Mall, 401 M St., SW., Washington, DC 20460. The Office of the Hearing Clerk is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Office of the Hearing Clerk is (202) 260-4865.

2. Tolerance fee payment . If you file an objection or request a hearing, you must also pay the fee prescribed by 40 CFR 180.33(i) or request a waiver of that fee pursuant to 40 CFR 180.33(m). You must mail the fee to: EPA Headquarters Accounting Operations Branch, Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. Please identify the fee submission by labeling it “Tolerance Petition Fees.”

EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at tompkins.jim@epa.gov, or by mailing a request for information to Mr. Tompkins at Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VI.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket control number OPP-301019, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 file format or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).

This final rule establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any prior consultation as specified by Executive Order 13084, entitled Consultation and Coordination with Indian Tribal Governments (63 FR 27655, May 19, 1998); special considerations as required by Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or require OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4).

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

This is a summary of the Commission's Twelfth Report and Order and Memorandum Opinion and Order in CC Docket No. 96-45 released on June 30, 2000. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC 20554.

1. In this Order, we adopt measures to: (1) Promote telecommunications subscribership and infrastructure deployment within American Indian and Alaska Native tribal communities; (2) establish a framework for the resolution of eligible telecommunications carrier designation requests under section 214(e)(6) of the Telecom Act; and (3) apply the framework to pending petitions for designation as eligible telecommunications carriers filed by Cellco Partnership d/b/a Bell Atlantic Mobile, Inc., Western Wireless Corporation, Smith Bagley, Inc., and the Cheyenne River Sioux Tribe Telephone Authority.

2. An important goal of the Telecommunications Act of 1996 is to preserve and advance universal service. The 1996 Act provides that “[c]onsumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high[-]cost areas, should have access to telecommunications and information services. * * *” In the Further Notice of Proposed Rulemaking ( FNPRM ), 64 FR 52738 (September 30, 1999), of this proceeding, we sought to identify the impediments to increased telecommunications deployment and subscribership in unserved and underserved regions of our Nation, including tribal lands and insular areas, and proposed particular changes to our universal service rules to overcome these impediments. Although approximately 94 percent of all households in the United States have telephone service today, penetration levels among particular areas and populations are significantly below the national average. For example, only 76.7 percent of rural households earning less than $5,000 have a telephone, and only 47 percent of Indian tribal households on reservations and other tribal lands have a telephone. These statistics demonstrate, most notably, that existing universal service support mechanisms are not adequate to sustain telephone subscribership on tribal lands.

3. Central to the issues addressed in the FNPRM , is the notion that basic telecommunications services are a fundamental necessity in modern society. As our society increasingly relies on telecommunications technology for employment and access to public services, such telecommunications services have become a practical necessity. The absence of telecommunications services within a home places its occupants at a disadvantage when seeking to contact, or be contacted by, employers and potential employers. The inability to contact police, fire departments, and medical service providers in an emergency situation may have, and in some areas routinely does have, life-threatening consequences. In geographically remote areas, access to telecommunications services can minimize health and safety risks associated with geographic isolation by providing people access to critical information and services they may need. Basic telecommunications services also may provide a source of access to more advanced services. For example, voice telephone is currently the most common means of household access to the Internet, and the same copper loop used to provide ordinary voice telephone service also may be used for broadband services. Thus, as use of advanced services among the general population increases, those without basic telecommunications services may find themselves falling further behind in a number of ways. In its Falling Through the Net report, the U.S. Department of Commerce's National Telecommunications and Information Administration (NTIA) found that, while “[o]verall * * * the number of Americans connected to the nation's information infrastructure is soaring,” the benefits of even basic telecommunications services have not reached certain segments of our population.

4. This Order represents the culmination of an ongoing examination of the issues involved in providing access to telephone service for Indians on reservations. This process began when the Commission convened two meetings in April and July of 1998, which brought Indian tribal leaders and senior representatives from other federal agencies to the Commission to meet with FCC Commissioners and Commission staff. The Commission then organized formal field hearings in January 1999 at the Indian Pueblo Cultural Center in Albuquerque, New Mexico, and in March 1999 at the Gila River Indian Community in Chandler, Arizona, at which Indian tribal leaders, telecommunications service providers, local public officials, and consumer advocates testified on numerous issues, including subscribership levels and the cost of delivering telecommunications services to Indians on tribal lands, as well as jurisdictional and sovereignty issues associated with the provision of telecommunications services on tribal lands. Based on information and analysis provided during these proceedings, the Commission initiated two rulemakings: one proposing changes to our universal service rules to promote deployment of telecommunications infrastructure and subscribership on tribal lands, and the other proposing changes to our wireless service rules to encourage the deployment of wireless service on tribal lands.

5. In this Order, we take the first in a series of steps to address the causes of low subscribership within certain segments of our population. The extent to which telephone penetration levels fall below the national average on tribal lands underscores the need for immediate Commission action to promote the deployment of telecommunications facilities in tribal areas and to provide the support necessary to increase subscribership in these areas. We adopt measures at this time to promote telecommunications deployment and subscribership for the benefit of those living on federally-recognized American Indian and Alaska Native tribal lands, based on the fact that American Indian and Alaska Native communities, on average, have the lowest reported telephone subscribership levels in the country. Toward this end, we adopt amendments to our universal service rules and provide additional, targeted support under the Commission's low-income programs to create financial incentives for eligible telecommunications carriers to serve, and deploy telecommunications facilities in, areas that previously may have been regarded as high risk and unprofitable. By enhancing tribal communities' access to telecommunications services, the measures we adopt are consistent with our obligations under the historic federal trust relationship between the federal government and federally-recognized Indian tribes to encourage tribal sovereignty and self-governance. Specifically, by enhancing tribal communities' access to telecommunications, including access to interexchange services, advanced telecommunications, and information services, we increase their access to education, commerce, government, and public services. Furthermore, by helping to bridge the physical distances between low-income consumers on tribal lands and the emergency, medical, employment, and other services that they may need, our actions ensure a standard of livability for tribal communities. To ensure their effectiveness in addressing the low subscribership levels on tribal lands, we intend to monitor the impact of the enhanced federal support measures and to adjust the measures as appropriate.

6. In response to the requests of Indian tribal leaders, we have adopted a statement of policy that recognizes the principles of tribal sovereignty and self-government inherent in the relationships between federally-recognized Indian tribes and the federal government. In conjunction with our efforts to adopt policies that further tribal sovereignty and tribal self-determination, we note the Commission's upcoming Indian Telecom Training Initiative, in which the Commission will bring together experts on telecommunications law and technologies to provide information to tribal leaders and other interested parties to promote telecommunications deployment and subscribership on tribal lands.

7. In this Order, we also offer guidance on those circumstances in which the Commission will exercise its authority to designate eligible telecommunications carriers under section 214(e)(6) of the Telecom Act. We conclude that, consistent with the Act and the legislative history of section 214(e) of the Telecom Act, state commissions have the primary responsibility for the designation of eligible telecommunications carriers under section 214(e)(2) of the Telecom Act. We direct carriers seeking designation as an eligible telecommunications carrier for service provided on non-tribal lands to first consult with the state commission, even if the carrier asserts that the state commission lacks jurisdiction. We will act on a section 214(e)(6) of the Telecom Act designation request from a carrier providing service on non-tribal lands only in those situations where the carrier can provide the Commission with an affirmative statement from the state commission or a court of competent jurisdiction that the carrier is not subject to the state commission's jurisdiction.

8. We recognize, however, that a determination as to whether a state commission lacks jurisdiction over carriers serving tribal lands involves a legally complex and fact-specific inquiry, informed by principles of tribal sovereignty, treaties, federal Indian law, and state law. Such jurisdictional ambiguities may unnecessarily delay the designation of carriers on tribal lands. In light of the unique federal trust relationship between the federal government and Indian tribes and the low subscribership levels on tribal lands, we establish a framework designed to streamline the eligibility designation of carriers providing service on tribal lands. Under this framework, carriers seeking a designation of eligibility for service provided on tribal lands may petition the Commission for designation under section 214(e)(6) of the Telecom Act. The Commission will proceed to a determination on the merits of such a petition if the Commission determines that the carrier is not subject to the jurisdiction of a state commission. We apply the framework adopted in this Order to several pending requests for eligible telecommunications carrier designation on tribal and non-tribal lands.

9. We also recognize that excessive delay in the designation of competing providers may hinder the development of competition and the availability of service in many high-cost areas. We therefore commit to resolve requests for designation for the provision of service on non-tribal lands that are properly before us pursuant to section 214(e)(6) of the Telecom Act within six months of the date of filing. Similarly, we commit to resolve the merits of a request for designation for the provision of service on tribal lands within six months of our determination that the carrier is not subject to the jurisdiction of a state commission. We encourage state commissions to act accordingly, and resolve designation requests filed pursuant to section 214(e)(2) of the Telecom Act within six months.

10. For purposes of this Order, we define the terms “Indian tribe,” “reservation,” and “near reservation” as those terms are defined in Subpart A of the regulations promulgated by the United States Department of the Interior's Bureau of Indian Affairs (BIA). In light of our decision to adopt rules to benefit low-income individuals living on Indian tribal lands, we use, for purposes of this Order, the definition of “Indian tribe” contained in section 20.1(p) of the BIA regulations. That definition includes “any Indian tribe, band, nation, rancheria, pueblo, colony, or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act (85 Stat. 688) which is federally recognized as eligible by the U.S. Government for the special programs and services provided by the Secretary [of the Interior] to Indians because of their status as Indians.” Although there are minor variations between this definition and the statutory definition of “Indian tribe” in section 479a(2) and cited in the FNPRM, the characteristic common to both definitions that is relevant for our purposes is that both refer to the list of entities compiled and published by the Secretary of the Interior.

11. For purposes of identifying the geographic areas within which the rule amendments set forth will apply, we define the term “tribal lands” to include the BIA definitions of “reservation” and “near reservation” contained in sections 20.1(v) and 20.1(r) of the BIA regulations, respectively. The term “reservation” means “any federally recognized Indian tribe's reservation, Pueblo, or Colony, including former reservations in Oklahoma, Alaska Native regions established pursuant to the Alaska Native Claims Settlement Act (85 Stat. 688), and Indian allotments.” “Near reservation” means those areas or communities adjacent or contiguous to reservations that are designated as such by the Department of Interior's Commissioner of Indian Affairs, and whose designations are published in the Federal Register .

12. We define the term “tribal lands” to include the BIA definitions of “reservation” and “near reservation” because these definitions appear to encompass the geographic areas in which the Commission may adopt, consistent with principles of Indian sovereignty and the special trust relationship, rule changes to benefit members of federally-recognized Indian tribes. In particular, we agree with commenters who argue that Alaska Native Statistical Areas and other lands conveyed pursuant to the Alaska Native Claims Settlement Act, although not Indian reservations, should be included within the definition of tribal lands insofar as these lands are federally-recognized lands that are inhabited by Alaska Native tribes. The BIA definition of “near reservation” includes lands adjacent or contiguous to reservations that generally have been considered tribal lands for purposes of other federal programs targeted to federally-recognized Indian tribes. Again, we conclude that such lands properly should be included within our definition insofar as they are Indian lands on which principles of Indian sovereignty and the special trust relationship apply. To exclude the “near reservation” lands designated by the Department of the Interior or lands on which tribal members in Alaska live, in our view, would unfairly penalize tribal members who live in tribal communities, but for historic or other reasons, do not live on an Indian reservation.

13. We believe that using the BIA regulations to define and identify the geographic areas to which our rule amendments will apply offers significant advantages in the ease of its administration. Specifically, the BIA definitions of “reservation” and “near reservation” provide a widely used and readily verifiable standard by which tribes may establish and carriers may verify the eligibility of individuals who qualify for the targeted assistance made available by this Order. We note that the classification “on or near a reservation” is used by BIA in administration of its financial assistance and social services programs for Indian tribes. If BIA or Congress should modify these definitions in the future, we intend such modifications to apply in equal measure to the classifications adopted in this Order without further action on our part. We believe that this action is consistent with our goal of using a widely used and readily verifiable standard for defining these terms.

14. Section 254(b) of the Telecom Act sets forth the principles that guide the Commission in establishing policies for the preservation and advancement of universal service. Included among these is the principle that “quality services should be available at just, reasonable, and affordable rates.” Our authority to take action to remedy the disproportionately lower levels of infrastructure deployment and subscribership prevalent among tribal communities derives from sections 1, 4(i), 201, 205, as well as 254 of the Telecom Act. As discussed, the record before us suggests that the disproportionately lower-than-average subscribership levels on tribal lands are largely due to the lack of access to and/or affordability of telecommunications services in these areas (as compared with cultural or individual preferences that cause individuals to choose not to subscribe). Along with depressed economic conditions and low per capita incomes, commenters have identified the following factors as the primary impediments to subscribership on tribal lands: (1) The cost of basic service in certain areas (as high as $38 per month in some areas); (2) the cost of intrastate toll service (limited local calling areas); (3) inadequate telecommunications infrastructure and the cost of line extensions and facilities deployment in remote, sparsely populated areas; and (4) the lack of competitive service providers offering alternative technologies. We note that no tribal representative in this proceeding has suggested that cultural or personal preference accounts for low subscribership levels within or among particular tribes. Based on the substantial Indian tribal participation in this proceeding and in the Commission's proceedings in WT Docket No. 99-266 and BO Docket No. 99-11, we do not have any evidence to conclude that cultural or personal factors generally explain low subscribership levels on tribal lands.

15. We conclude that the unavailability or unaffordability of telecommunications service on tribal lands is at odds with our statutory goal of ensuring access to such services to “[c]onsumers in all regions of the Nation, including low-income consumers.” In addition, the lack of access to affordable telecommunications services on tribal lands is inconsistent with our statutory directive “to make available, so far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient Nationwide * * * wire and radio communication service, with adequate facilities at reasonable charges.” In the Universal Service Order , 62 FR 32862 (June 17, 1997) the Commission stated that, where “necessary and appropriate,” the Commission, working with an affected state or U.S. territory or possession, will open an inquiry to address instances of low or declining subscribership levels and take such action as is necessary to fulfill the requirements of section 254 of the Telecom Act.

16. Our authority to alter our rules in ways targeted to benefit tribal communities also must be informed by the principles of federal Indian law that arise from the unique trust relationship between the federal government and Indian tribes. That relationship has been characterized as “unlike that of any other two people in existence,” and “marked by peculiar and cardinal distinctions which exist no where else.” The Supreme Court has repeatedly “recognized the distinctive obligation of trust incumbent upon the [Federal] Government” in its dealings with Indian tribes. Moreover, Congress and the courts have recognized the federal government's responsibility to promote self-government among tribal communities as an important facet of the federal trust relationship. In Morton v. Mancari , for example, the Supreme Court upheld a federal regulation establishing a hiring preference for members of Indian tribes as consistent with the goal of promoting Indian self-government. In that case, the Court noted that “literally every piece of legislation dealing with Indian tribes and reservations * * * singles out for special treatment a constituency of tribal Indians living on or near reservations.”

17. By enhancing tribal communities' access to telecommunications services, the measures we adopt today are consistent with our federal trust responsibility to encourage tribal sovereignty and self-governance. Specifically, by enhancing tribal communities' access to telecommunications, including access to interexchange services, advanced telecommunications, and information services, we increase tribal communities' access to education, commerce, government, and public services. Furthermore, by helping to bridge physical distances between low-income individuals living on tribal lands and the emergency, medical, employment, and other services that they may need, our actions further our federal trust responsibility to ensure a standard of livability for members of Indian tribes on tribal lands.

18. Section 254(i) of the Telecom Act requires that the Commission and the states ensure that universal service is available at rates that are just, reasonable, and affordable. In the Universal Service Order , the Commission adopted the finding of the Joint Board that subscribership levels provide relevant information regarding whether consumers have the means to subscribe to universal service and, thus, represent an important tool in evaluating the affordability of rates. The Commission found that subscribership levels alone, however, do not reveal whether consumers are spending a disproportionate amount of income on telecommunications services or whether paying the rates charged for services imposes a hardship for those who subscribe. The Commission concurred in the recommendation of the Joint Board that a determination of affordability take into consideration both rate levels and non-rate factors, such as consumer income levels, that can be used to assess the financial burden subscribing to universal service places on consumers. The Commission also adopted the Joint Board's finding that the scope of a local calling area “directly and significantly impacts affordability” of universal service.

19. Consistent with our statutory goal of preserving and advancing universal service and of ensuring that consumers in all regions of the Nation have access to the services supported by federal universal service support mechanisms, we modify our universal service rules, as set forth, to increase telecommunications infrastructure deployment and subscribership on tribal lands. We take action at this time primarily for the benefit of low-income individuals living on tribal lands, as that term is defined, because of the critically low telephone subscribership levels that are reported in these areas. Specifically, statistics demonstrate that, although approximately 94 percent of all Americans have a telephone, only 47 percent of Indians on reservations and other tribal lands have a telephone. Similarly, an analysis of 1990 Census data found that Indians represent 89 percent of the Nation's population in the one hundred zip codes with the lowest subscribership levels. More recent studies of subscribership levels for individual tribes suggest that subscribership levels for many tribes remain significantly below the national average.

20. Consistent with recent research that demonstrates that telephone penetration correlates directly with income, federal statistics reveal that tribal communities are among the poorest populations in the United States. For example, according to 1990 data published by the Bureau of the Census, the per capita income of Native Americans living on tribal lands was only $4,478, as compared with the $14,420 per capita income in the United States as a whole. At the time of the 1990 Census data collection, almost 51 percent of American Indians residing on reservations and trust lands had incomes below the poverty level, compared to 13 percent of United States residents nationwide with incomes below this level. Unemployment levels for a sample of 48 tribes averaged 42 percent as compared to the national unemployment figure of 4.5 percent. The record before us suggests that there is a correlation between low subscribership levels and low incomes on tribal lands. Indeed, the majority of commenters identify low incomes or impoverishment as the key reason for low subscribership levels on tribal lands.

21. Based on our review of these statistics and the record before us, and consistent with the unique trust relationship between the federal government and members of Indian tribes, we conclude that specific action is needed to address the impediments to subscribership on tribal lands and to ensure affordable access to telecommunications services in these areas. Specifically, the significantly lower-than-average incomes and subscribership levels of members of federally-recognized Indian tribes warrant our immediate action to increase subscribership and improve access to telecommunications on tribal lands.

22. We conclude that the potential benefits to tribal members will only increase by extending to non-Indians living on tribal lands, as well as Indians, the measures we adopt Of this Order. First, we believe that, by increasing the total number of individuals, both Indian and non-Indian, who are connected to the network within a tribal community the value of the network for tribal members in that community is greatly enhanced. Implicit in our decision to extend the availability of enhanced federal support to all low-income individuals living on tribal lands, is our recognition of the likelihood that non-Indian, low-income households on tribal lands may face the same or similar economic and geographic barriers as those faced by low-income Indian households.

23. Second, we believe that increasing the total number of individuals, both Indian and non-Indian, who are connected to the network within a tribal community will result in greater incentives for eligible telecommunications carriers to serve in those areas. We anticipate that the availability of enhanced federal support for all low-income individuals living on tribal lands will maximize the number of subscribers in such a community who can afford service and, therefore, make it a more attractive community for carrier investment and deployment of telecommunications infrastructure. As the number of potential subscribers grows in tribal communities, carriers may achieve greater economies of scale and scope when deploying facilities and providing service within a particular community.

24. Finally, we believe that, by extending the availability of enhanced federal support to all low-income individuals residing on tribal lands, carriers will avoid the administrative burden associated with distinguishing between low-income individuals who are members of federally-recognized tribes living on tribal lands and all other low-income individuals living on tribal lands. By reducing the possible administrative burdens associated with implementation of the enhanced federal support, we intend to eliminate a potential disincentive to providing service on tribal lands.

25. At this time, we do not adopt commenters' suggestions to apply the actions taken in this Order more generally to all high-cost areas and all insular areas. Although the record demonstrates that subscribership levels are below the national average in low-income, rural areas and in certain insular areas, the significant degree to which subscribership levels fall below the national average among tribal communities underscores the need for immediate Commission intervention for the benefit of this population. The record before us does not permit a determination that the factors causing low subscribership on tribal lands are the same factors causing low subscribership among other populations. Indeed, the presence of certain additional factors on tribal lands that may not be present in non-tribal areas, and which appear to create disincentives for carriers to provide service in these areas, suggests that the identical strategy adopted in this Order to boost subscribership levels on tribal lands may not be appropriate for increasing subscribership in other areas. Specifically, the following combination of factors may increase the cost of entry and reduce the profitability of providing service on tribal lands: (1) The lack of basic infrastructure in many tribal communities; (2) a high concentration of low-income individuals with few business subscribers; (3) cultural and language barriers where carriers serving a tribal community may lack familiarity with the Native language and customs of that community; (4) the process of obtaining access to rights-of-way on tribal lands where tribal authorities control such access; and (5) jurisdictional issues that may arise where there are questions concerning whether a state may assert jurisdiction over the provision of telecommunications services on tribal lands.

26. We are concerned that to devise a remedy addressing all low subscribership issues for all unserved or underserved populations simultaneously might unnecessarily delay action on behalf of those who are least served, i.e. , tribal communities. We do not believe that we should delay action to benefit those who, based on national statistics and the record before us, comprise the most underserved segment of our population. We will, however, continue to examine and address the causes of low subscribership in other areas and among other populations within the United States and, in conjunction with the release of the 2000 Census data, we will take action as appropriate at that time to address low subscribership among such other populations.

27. Several incumbent local exchange carriers serving tribal communities indicate that subscribership levels among tribal communities within their service territories are higher than the nationwide average penetration rate for Indians on reservations and other tribal lands. These comments do not lead us to alter our conclusion that Commission action is warranted to improve subscribership levels for low-income individuals on tribal lands. As an initial matter, we recognize that penetration levels for particular tribal communities may exceed the 47 percent national average for Indians on tribal lands, just as certain tribes may be below the national average of 47 percent. This fact, however, is not inconsistent with our decision to adopt measures to benefit tribal communities generally because we are targeting our actions to low-income individuals on tribal lands, who we anticipate will have the lowest subscribership levels in these areas. Specifically, because research indicates that there is a correlation between income and subscribership levels, we anticipate that our actions will benefit tribal communities whose subscribership levels, as a function of low average per capita incomes, are closer to, or less than, the 47 percent national average for Indians on reservations.

28. Although we recognize the achievements of rural carriers serving tribal lands in improving subscribership levels in these areas, the fact that carriers employ various methodologies when measuring subscribership levels within their service territories limits the utility of particular statistics beyond the specific service territories. For example, statistics that measure the number or percentage of homes passed within a carrier's total service territory on a reservation do not reveal the number or percentage of households that, notwithstanding the fact that facilities are present, do not subscribe because they cannot afford telephone service. Even where subscribership statistics measure the number or percentage of households within a carrier's territory that have telephone service, those statistics provide no measure of reservation households outside of the carrier's service territory that have access to facilities or take service. Therefore, we conclude that nationwide and regional statistics that measure actual subscribership throughout tribal areas provide a more complete picture than do statistics that measure only the number of homes passed within particular service territories.

29. In this Order, we create a fourth tier of federal Lifeline support available to eligible telecommunications carriers serving qualifying low-income individuals living on tribal lands. This fourth tier of federal Lifeline support will consist of up to an additional $25 per month, per primary residential connection for each qualifying low-income individual living on tribal lands. This amount, in conjunction with the first-tier baseline (ranging from $3.50 to $4.35 after July 1, 2000) and $1.75 second-tier “non-matching” federal support amounts, will entitle each qualifying low-income consumer on tribal lands to a reduction in its basic local service bill of up to $31.10 per month. In taking this action, we follow the example of states such as New York and require all qualifying low-income individuals on tribal lands to pay a minimum monthly Lifeline rate of $1. As explained further, this enhanced Lifeline support should substantially reduce the Lifeline rate ( i.e. , the monthly basic service rate) for all qualifying low-income consumers on tribal lands.

30. Consistent with the requirement of § 54.403(a) of our rules, we condition the receipt of this increased federal Lifeline support on carriers passing through the entire fourth-tier support amount to each qualifying low-income individual living on tribal lands by an equivalent reduction in the subscriber's monthly bill for local service. Specifically, we require each eligible telecommunications carrier to certify that it (1) will pass through the fourth-tier federal support amount to its qualifying low-income subscribers, and (2) has received the necessary approval of any non-federal regulatory authority authorized to regulate such carrier's rates that may be required to implement the required rate reduction. As discussed, an eligible telecommunications carrier seeking to receive reimbursement during the calendar year 2000 for enhanced Lifeline and Link Up services provided during the fourth quarter 2000 must make these certifications in a letter filed with the universal service fund Administrator, the Universal Service Administrative Company (USAC), by September 1, 2000. All carriers seeking reimbursement for enhanced Lifeline or Link Up services must make these certifications in the FCC Form 497 (as revised).

31. Our primary goal, in taking this action, is to reduce the monthly cost of telecommunications services for qualifying low-income individuals on tribal lands, so as to encourage those without service to initiate service and better enable those currently subscribed to maintain service. In view of (1) the extraordinarily low average per capita and household incomes in tribal areas, (2) the excessive toll charges that many subscribers incur as a result of limited local calling areas on tribal lands, (3) the disproportionately low subscribership levels in tribal areas, and (4) the apparent limited awareness of, and participation in, the existing Lifeline program, we conclude that a substantial additional amount of support is needed to have an impact on subscribership. Our conclusion to provide up to an additional $25 for all qualifying low-income individuals living on tribal lands is consistent with the actions of state commissions that have instituted substantial rate reductions for their low-income residents. In each of these cases, substantial additional state funds have been made available to promote subscribership among qualifying low-income consumers in those jurisdictions. Our determination is informed by the experience of these jurisdictions and the increased subscribership levels achieved following their implementation of substantial Lifeline rate reductions. For example, in the four years (1992-1996) immediately following the District of Columbia Public Service Commission's (D.C. Commission) adoption of a $1 Lifeline rate for low-income residents 65 years of age and older and a $3 Lifeline rate for low-income residents under 65 years of age, the District of Columbia's overall subscribership levels increased by more than 4 percent, as compared with a nationwide increase of only 0.1 percent for the same time period. Similarly, while only 8,850 low-income individuals previously lacking telephone service initiated service in New York in the three years preceding the New York Public State Service Commission's adoption of a $1 Lifeline rate, 171,536 low-income individuals initiated service in the three years following adoption of the $1 Lifeline rate, an increase in new Lifeline subscribers of almost 2000 percent.

32. In adopting its $1 Lifeline program for low-income citizens in the District of Columbia, the D.C. Commission determined that a substantial rate reduction, along with the removal of other regulatory restrictions, was needed to stimulate interest among the low-income population generally, given its history of low subscription and in light of the potential importance of phone service, particularly to elderly residents, as a “Lifeline.” Subscribership levels on tribal lands, the multitude of obstacles to increasing subscribership on tribal lands, and the critical health and safety function of a telephone to persons in extremely remote locations suggest that tribal populations represent a similarly “at risk” population. Just as the D.C. Commission determined that an aggressive regulatory approach was needed to raise the visibility of Lifeline and stimulate interest on the part of residents there, we believe that a similarly aggressive, multi-faceted approach is needed to address the problem of low subscribership on tribal lands.

33. In combination with the “non-matching” federal first-tier Lifeline support of up to $4.35 and second-tier support of $1.75 per month per Lifeline customer, the additional $25 in enhanced federal Lifeline support for qualifying low-income individuals living on tribal lands would reduce the cost of the most expensive basic service rates presented on the record ( e.g. , $38 per month in areas of Alaska and $35 per month on the Wind River Reservation), to less than $10 per month. The record before us indicates that basic local service rates for subscribers living on or near reservations range from $5 to $38 per month, with most subscribers receiving rates of less than $20 per month. Thus, with the enhanced Lifeline support, low-income individuals on tribal lands whose local service rates are $32.10 or less per month would pay a monthly local service rate of $1. The enhanced support also would apply to any monthly mileage or zonal charges imposed as a condition for receiving basic local service. The enhanced support would not apply to state or federal taxes, state or federal universal service fees, or surcharges for 911 service that may appear as line items on a subscriber's bill for local service. By substantially reducing the monthly service costs for all qualifying low-income individuals on tribal lands, we find that the additional targeted Lifeline support provided here should eliminate or diminish the effect of unaffordability for those low-income individuals for whom it may be difficult to maintain telephone service even where facilities are present.

34. By creating this enhanced Lifeline support, we have attempted to reduce to $1 per month the basic service rate for the majority of income-eligible individuals residing on tribal lands. There are, however, some isolated instances where local telephone rates are high enough that, even with the enhanced Lifeline support, monthly service rates will be greater than $1. In addition, there are a myriad of charges, which vary from state to state, that also affect customers' bills, such as taxes, surcharges, and mileage charges. So, while we have taken significant steps toward reducing the monthly local service rates for low-income individuals on tribal lands with this program, we cannot assure each eligible customer that his or her local service bill will be $1 per month.

35. We have ample evidence that customer confusion and lack of awareness of Lifeline discounts have contributed to low subscribership levels on tribal lands. We encourage states to consider ways in which local charges may be simplified, particularly for low-income customers eligible to receive this enhanced Lifeline support, so as to make the Lifeline discounts easier to promote and explain to qualifying customers. We encourage the Joint Board to consider this issue in its review of Lifeline service for all low-income consumers.

36. In determining the appropriate level of enhanced Lifeline support for qualifying low-income individuals on tribal lands, we recognize that low-income individuals on tribal lands may spend a significantly greater percentage of their household income on local and toll services than do most other Americans as a result of the substantial toll charges they incur to place calls within their communities of interest. Based on data compiled by the Bureau of Labor Statistics, we observe that expenditures for residential local and toll telephone services comprise approximately two percent of the average U.S. household's annual expenditures. Assuming average local service charges of approximately $20 per month and toll charges of as much as $126 per month, a tribal member may spend as much as $1,752 per year on local and long distance telephone service. Assuming an average household income of $12,459 per year, a tribal household could spend approximately 14 percent of its annual income on telephone service. Given that an annual household income of $12,459 is unlikely to result in any savings, we assume that all or most of this amount is dedicated to household expenditures.

37. Even if we were to use the lowest local service charge on the record of $5 per month and assume intrastate toll charges of only $42 per month (or one-third of the $126 toll charge figure cited), total telephone services, excluding taxes and other charges, would cost $47 per month, or $564 per year. A tribal household earning $12,459 per year would spend, in this example, approximately 5 percent of its annual income on telephone service. Thus, in comparison to the two percent of household expenditures dedicated to telecommunications services in the average U.S. household, it appears that tribal members on average commit a substantially greater percentage of household resources to pay for the same services.

38. Finally, we are mindful that a low-income individual currently receiving and paying for service without enhanced support will, upon adoption of these rules, receive a discounted rate for the same service, when that individual arguably could continue to pay the current rate without any enhancement. Nonetheless, we believe that our decision is consistent with our responsibility to ensure that our actions do not expand the federal universal service support mechanisms beyond that required to achieve our statutory mandate to preserve and advance universal service. As we noted in the Universal Service Order , however, the fact that an individual is connected to the network does not, in itself, reveal whether that individual is spending a disproportionate amount of income on telecommunications services. We have carefully examined the facts before us and structured the enhanced Lifeline support in a manner that is precisely targeted to provide qualifying low-income individuals with access to telecommunications services and to increase subscribership on tribal lands. Given that: (1) tribal members appear to spend a significantly higher proportion of their incomes on telecommunications services than do other Americans; (2) low-income tribal members' services may be more likely to be disconnected; (3) beneficiaries of enhanced support must be income eligible; and (4) qualifying individuals can use only as much support as is needed to cover the cost of the individuals' basic service rate less $1, we are persuaded that the level of support provided here does not exceed that required to preserve and advance universal service.

39. We also believe that our adoption of enhanced Lifeline support will encourage: (1) Eligible telecommunications carriers to construct telecommunications facilities on tribal lands that currently lack such facilities; (2) new entrants offering alternative technologies to seek eligible telecommunications carrier status to serve tribal lands; and (3) tribes, eligible telecommunications carriers, and states to address impediments to increased penetration that are caused by limited local calling areas. We discuss each of these in greater detail.

40. Infrastructure Development. By providing carriers with a predictable and secure revenue source, the enhanced Lifeline support just discussed, in conjunction with the expanded support that we provide under the Link Up program, is designed to create incentives for eligible telecommunications carriers to deploy telecommunications facilities in areas that previously may have been regarded as high risk and unprofitable. We note that, unlike in urban areas where there may be a greater concentration of both residential and business customers, carriers may need additional incentives to serve tribal lands that, due to their extreme geographic remoteness, are sparsely populated and have few businesses. In addition, given that the financial resources available to many tribal communities may be insufficient to support the development of telecommunications infrastructure, we anticipate that the enhanced Lifeline and expanded Link Up support will encourage such development by carriers. In particular, the additional support may enhance the ability of eligible telecommunications carriers to attract financing to support facilities construction in unserved tribal areas. Similarly, it may encourage the deployment of such infrastructure by helping carriers to achieve economies of scale by aggregating demand for, and use of, a common telecommunications infrastructure by qualifying low-income individuals living on tribal lands.

41. The enhanced Lifeline and Link Up support adopted here also may help to foster principles of tribal sovereignty and tribal self-determination in two respects. First, the availability of enhanced federal support may provide additional incentives for tribes that wish to establish tribally-owned carriers to do so by diminishing the financial risk associated with providing service to low-income customers on tribal lands. Second, to the extent that tribal leaders can aggregate service requests of large numbers of qualifying individuals eligible for enhanced support, they may have more control in choosing the carriers serving their communities and increased bargaining power in their negotiations with carriers seeking to provide universal service on tribal lands.

42. To the extent that the cost to extend facilities, due to the geographic remoteness of a location or other geographic characteristics, is extraordinarily high, we recognize that the level of support provided here, in combination with existing levels of universal service high-cost support, may not always be sufficient to attract the necessary facilities investment. Accordingly, although we anticipate that the measures adopted in this Order will address a significant number of the obstacles to subscribership on tribal lands identified on the record before us, we anticipate that additional regulatory steps may be necessary to encourage the deployment of facilities in areas where the cost of deployment is extraordinarily high. We will address these issues, in consultation with the Joint Board, when we consider reform of the rural high cost mechanism, and implementation of section 214(e)(3) of the Telecom Act. For this reason, we do not adopt additional measures at this time to address the problem of inadequate facilities deployment in the most geographically remote tribal areas.

43. Competitive Service Providers. By providing additional federal support targeted to low-income individuals on tribal lands, without regard to the specific technology used to provide the supported telecommunications services, we recognize that different technologies may offer solutions to address low subscribership levels on tribal lands. For example, commenters have suggested that wireless service may represent a cost-effective alternative to wireline service in sparsely populated, remote locations where the cost of line extensions is prohibitively expensive. Moreover, as we discuss further, a wireless eligible telecommunications carrier service offering that features an expanded local calling area along with a predetermined number of calls or minutes of calling within a tribal member's community of interest, may represent a solution to the problem of limited local calling areas and excessive toll charges in tribal areas. The enhanced Lifeline support adopted in this Order is competitively neutral because any carrier, including a wireless carrier, that receives designation as an eligible telecommunications carrier and is permitted by tribal authorities to serve on tribal lands may provide enhanced Lifeline service to qualifying low-income individuals on tribal lands.

44. Limited Local Calling Areas. As noted, because the boundaries of local calling areas for wireline carriers are established by the states, we recognize that we do not have the authority to address the problem of limited local calling areas directly. We find, however, that the enhanced Lifeline support may help to alleviate the financial burden of the excessive toll charges that low-income individuals on tribal lands incur when their local calling area does not encompass their community of interest. First, the availability of enhanced Lifeline support, by reducing local service rates by as much as $25 per month, effectively “frees up” money formerly dedicated to local service charges that a subscriber now may apply to the subscriber's toll charges. Second, the enhanced Lifeline support may spur competitive entry by non-wireline carriers whose calling plans offer an expanded local calling area. Finally, our decision to increase the level of Lifeline support to reduce basic local service rates for qualified, low-income individuals on tribal lands may encourage states to expand local calling areas for subscribers whose local calling area does not encompass their community of interest. Specifically, in instances where the entire federal Lifeline support amount (up to $31.10 where no state matching funds are provided) is not needed to offset a subscriber's local service rate because the rate is less than this amount, the additional remaining support may provide states with incentives to examine and, where appropriate, expand local calling areas on tribal lands. By reducing the financial burden associated with excessive toll charges and by reducing the number of calls subject to toll charges, we conclude that the actions we take today will help low-income individuals on tribal lands to maintain their access to telephone service.

45. We decline at this time to adopt other proposals included in the FNPRM for offsetting the cost of intrastate toll service, based on our expectation that the measures adopted in this Order, although not providing support directly for intrastate toll charges, nevertheless will help to alleviate some of the burden associated with high intrastate toll charges on tribal lands. Because we find that the provision of federal support to offset the cost of intrastate toll service would expand upon the definition of supported services in section 254(c) of the Telecom Act, and would raise issues of competitive neutrality to the extent that interexchange carriers would not be eligible to receive such enhanced Lifeline support, we do not adopt our proposal to support intrastate toll service. We ask the Joint Board, in connection with its upcoming review of the definition of supported services, to issue a recommendation as to whether the Commission should include intrastate or interstate toll services or expanded area service within the list of supported services on tribal lands or in other areas. Finally, in recognition of the states' traditional jurisdiction and expertise in determining the appropriate size and scope of local calling areas, we concur in the view expressed by NTIA and other parties that counsel against our direct involvement in this area.

46. In this Order, we provide up to $100 of federal support under the Link Up program to reduce the initial connection charges and line extension charges of qualifying low-income individuals on tribal lands. Thus, in addition to the currently available Link Up support amount, i.e. , half of the first $60 of a qualifying subscriber's initial connection charges up to a maximum of $30, we will provide up to an additional $70 of federal Link Up support to cover 100 percent of the remaining charges associated with initiating service between $60 and $130, for a total maximum support amount of $100 per qualifying low-income subscriber. Adoption of this measure will provide up to $100 in federal Link Up support to qualifying low-income individuals on tribal lands with initial connection or line extension costs of $130 or more. Based on information and comment on the record pertaining to the costs associated with initiating service in many tribal areas, we conclude that the existing $30 maximum level of Link Up support is, in many cases, far short of the support amount needed to offset such charges. A recent study of American Indian and Alaska Native tribal communities on tribal lands found that average household telephone installation charges for responding tribes was $78. We note that all parties who commented on the appropriate amount by which to increase the level of Link Up support recommend an increase in the maximum level of support to $100 and that no party opposes this amount or proposes an alternative amount.

47. As proposed in the FNPRM , we also expand the types of charges covered by the Link Up program to include any standard charges imposed on qualifying low-income individuals on tribal lands as a condition of initiating service, including both line extension and initial connection charges, up to the $100 maximum. Although the Link Up program traditionally has operated only to reduce qualifying consumers' initial connection or initial installation charges ( e.g. , switch activation fees), we conclude that the expanded Link Up support also should apply to reduce facilities-based charges associated with the extension of lines or construction of facilities needed to initiate service to a qualifying low-income individual on tribal lands. We take this action in recognition of the fact that many low-income individuals on tribal lands face as a result of their remote locations certain supplementary charges for the installation of new lines and the initiation of service, in addition to the typical switch activation fees. For example, on Pueblo Picuris, in New Mexico, qualifying low-income consumers are charged an initial connection charge of approximately $130 per consumer and other consumers are charged approximately $160 per consumer, $113 of which represents a zonal charge to cover the cost of expanding the capacity of existing facilities located near that community. To the extent that parties have identified line extension and construction costs as obstacles to subscribership on tribal lands, this measure is designed to increase subscribership among qualifying low-income individuals by minimizing certain of these up-front costs. In addition, we conclude that several of the justifications supporting our adoption of enhanced Lifeline support also support our adoption of expanded Link Up support. Specifically, by adopting the expanded Link Up support, we intend to create incentives for (1) eligible telecommunications carriers to construct telecommunications facilities on tribal lands that currently lack such facilities; and (2) new entrants offering alternative technologies to seek eligible telecommunications carrier status to serve tribal lands.

48. We note that the expanded Link Up support for qualifying low-income individuals living on tribal lands is competitively neutral in that it will apply to any eligible telecommunications carrier's standard charges for initiating service to qualifying consumers on tribal lands. For example, the expanded Link Up support may be used to offset the charge associated with “activating service” for an eligible telecommunications carrier that offers satellite telephone service. We further note, however, that the expanded Link Up support cannot be applied to customer premises equipment, i.e. , equipment that falls on the customer side of the network interface device boundary between customer and network facilities. We adopt this limitation in light of the fact that the federal universal service support mechanisms generally support only the cost of facilities falling on the network side of the demarcation point and because the Commission's definition of supported services does not include customer premises equipment or inside wiring. Expanded Link Up support would be available for qualifying consumers on tribal lands to offset charges for facilities that are necessary to enable a non-wireline eligible telecommunications carrier to provide service to the demarcation point. For example, if the provision of a fixed wireless or satellite service required the installation of a receiver on the roof of a subscriber's premises to bring service to a demarcation point, i.e. , a network interface device, expanded Link Up support could be used to offset the cost of installing such facilities. To the extent that a non-wireline carrier can isolate costs associated with the portion of a handset that receives wireless signals, we conclude that those costs would be covered as costs on the network side of the network interface device.

49. With respect to GTE's concern that the use of expanded Link Up support to cover line extension costs may not provide sufficient funding, we note that, as discussed, where the cost to extend facilities to a low-income individual's residence is extraordinarily high, additional regulatory action may be necessary to encourage the deployment of facilities in such areas. To the extent that extraordinarily high costs pose a barrier to service in certain tribal areas, we will examine those issues in a future order implementing section 214(e)(3) of the Telecom Act and in connection with our consideration of the Joint Board's recommendations regarding high-cost universal service reform for rural carriers. We likewise are not dissuaded by GTE's concern that the expanded Link Up support will encourage inefficient investment in telecommunications infrastructure. We do not anticipate that the expanded Link Up support will encourage inefficient investment in telecommunications infrastructure because: (1) Support for line extension or other construction costs is capped at $100 per qualifying low-income individual on tribal lands; (2) the line extension or other construction costs in many tribal areas will exceed the maximum amount covered under the expanded Link Up support; and (3) carriers therefore may have to absorb certain costs in excess of the maximum expanded Link Up support amount in order to induce low-income individuals to initiate service,. Moreover, to the extent that a competitive eligible telecommunications carrier offering an alternative to wireline technology can extend service to a remote tribal area at a substantially lower cost than a wireline carrier, we believe that it is a more economically efficient use of federal universal service funds to create incentives, in the first instance, for the lower-cost provider to provide the service.

50. Our decision to apply the expanded Link Up support exclusively to low-income individuals living on tribal lands at this time and further examine whether to extend this approach to other unserved populations, is consistent with Bell Atlantic's suggestion that we adopt a means-tested approach to funding line extensions and, before adopting such an approach, resolve whether it should be applied to other unserved areas. With respect to Bell Atlantic's further suggestion that we resolve, prior to taking action, how much of an increase in expanded Link Up support is needed to have a significant impact on penetration, we note that the actions we take are necessarily based on our best estimates of how much support is needed to impact subscribership levels. We intend that the measures we adopt in this Order and their impact on subscribership levels will be subject to ongoing examination and possible refinement as may be appropriate.

51. We anticipate that carriers may require additional time, beyond the effective date of this Order, to implement the tariff and billing system changes that may be necessary for eligible telecommunications carriers to offer the enhanced Lifeline and expanded Link Up services we adopt in this Order. Accordingly, we have determined to extend until October 1, 2000 the date by which eligible telecommunications carriers must comply with the new rule § 54.403(a)(4) and § 54.411(a)(3) adopted in this Order. An eligible telecommunications carrier serving tribal lands must make available, upon request by a qualifying low-income individual living on tribal lands, the enhanced Lifeline and Link Up services adopted in this Order by no later than October 1, 2000. Although we encourage eligible telecommunications carriers to implement the necessary changes and offer the expanded Lifeline and Link Up services prior to this date where possible, we believe that this date gives carriers sufficient time to comply with these rule amendments. Because we find significant public interest in not delaying the benefits of these rules beyond that required to enable carriers to comply with them without undue burden, we decline to extend the deadline for their implementation beyond October 1, 2000.

52. In order to receive reimbursement during the calendar year 2000 for enhanced Lifeline and expanded Link Up services provided during the fourth quarter 2000, an eligible telecommunications carrier must submit to USAC by no later than September 1, 2000, a letter from a corporate officer of the carrier containing the following information and certifications: (1) An estimate of (a) the number of eligible low-income subscribers in each of the carrier's study areas that the carrier projects will receive non-enhanced federal Lifeline or Link Up discounts in the fourth quarter of 2000 ( i.e. , number of eligible subscribers on non-tribal lands), and (b) the number of eligible low-income subscribers in each of the carrier's study areas that the carrier projects will receive enhanced Lifeline or expanded Link Up discounts in the fourth quarter of 2000 as a result of actions taken in this Order ( i.e. , number of eligible subscribers on tribal lands); (2) a statement of the corporate officer that the estimates provided are based on the good-faith estimate of the corporate officer; (3) the carrier's monthly undiscounted service rates for subscribers eligible to receive enhanced Lifeline support; (4) the monthly amount of additional support for each low-income subscriber who the carrier projects will be eligible for enhanced Lifeline support; (5) the number of low-income individuals on tribal lands for whom the carrier expects to initiate service in the fourth quarter of 2000 and the number of other low-income individuals for whom the carrier expects to initiate service in the fourth quarter of 2000; (6) the amount charged to initiate service for low-income subscribers on tribal lands and the amount charged to initiate service for other low-income subscribers; (7) an estimate of total federal Lifeline and Link Up support that the carrier anticipates it will require in the fourth quarter of 2000; (8) a certification that the carrier will pass through all federal Lifeline support amounts to its qualifying low-income subscribers; (9) a certification that the carrier has received the necessary approval of any non-federal regulatory authority ( e.g. , a state commission or tribal regulatory authority) that is authorized to regulate such carrier's rates that may be necessary to implement the required rate reduction; and (10) a certification that the carrier is publicizing the availability of Lifeline and Link Up services in a manner reasonably designed to reach those likely to qualify for these services.

53. We emphasize that all eligible telecommunications carriers, including those that do not submit to USAC by September 1, 2000 the letter described, are required to make available the Lifeline and Link Up discounts adopted in this Order to all qualifying low- income consumers not later than October 1, 2000. We also remind all eligible telecommunications carriers that, as a condition for receiving federal Lifeline or Link Up support payments from USAC, they must submit to USAC at regular intervals an FCC Form 497. We direct the Common Carrier Bureau and USAC to revise the FCC Form 497 Lifeline Worksheet as necessary to implement the decisions and rule changes adopted in this Order. We delegate to the Common Carrier Bureau the authority to modify the FCC Form 497, along with any other forms that may be required to implement the decisions in this Order.

54. We amend § 54.409(b) of our rules to enable qualifying low-income individuals living on tribal lands within a state that does not provide intrastate matching funds under the Lifeline program (either for the benefit of the state's population generally or tribal members specifically), to qualify for Lifeline and Linkup support by certifying their participation in certain alternative means-tested assistance programs. Specifically, we expand the federal default qualification criteria for eligibility for Lifeline and Link Up assistance, as set forth in § 54.409(b), to permit low-income individuals living on tribal lands to establish their income eligibility by certifying their participation in one of the following federal assistance programs: (1) BIA general assistance; (2) Temporary Assistance for Needy Families (TANF) tribally-administered block grant program; (3) Head Start Programs (under income qualifying eligibility provision only); or (4) National School Lunch Program (free meals program only). Given that the household income thresholds for these newly added programs range from 100-130 percent of the federal poverty level or incorporate state-determined poverty thresholds, we conclude these income thresholds are consistent with those associated with the programs included in our current federal default list.

55. We take this action based on evidence on the record before us that the existing federal qualification criteria governing eligibility under the Commission's Lifeline and Link Up programs, to the extent that these criteria do not include low-income programs specifically targeted to Indians, serve as a barrier to participation in the Lifeline and Link Up programs by low-income members of Indian tribes. A low-income tribal member effectively may be excluded from participation in Lifeline and Link Up in instances where that individual receives assistance or benefits under a program other than one of the programs listed in § 54.409(b) of our rules. For example, a low-income tribal member who receives cash assistance benefits under the BIA general assistance program, but receives no assistance or benefits under any of the means-tested programs listed in § 54.409(b) of the Commission's rules, would not be eligible today to receive Lifeline and Link Up support by virtue of the individual's non-participation in any of the low-income programs listed under § 54.409(b). Accordingly, we have expanded the list of programs contained in § 54.409 to include means-tested programs in which, according to commenters, low-income tribal members are more likely to participate and, therefore, represent more suitable income proxies for low-income tribal members.

56. We also make available the expanded eligibility criteria enumerated to all low-income individuals living on tribal lands. This action is consistent with our rationale discussed for extending the benefits of the enhanced Lifeline and expanded Link Up support to all qualifying low-income individuals on tribal lands, as opposed to limiting these benefits solely to qualifying low-income tribal members on tribal lands. We believe that, by increasing the total number of individuals, both Indian and non-Indian, who are connected to the network within a tribal community the value of the network for tribal members in that community is greatly enhanced. We also anticipate that reducing barriers to participation in the Commission's Lifeline and Link Up programs for all low-income individuals residing on tribal lands will help to increase the number of subscribers in a tribal community who can afford service and, thereby, provide greater incentive for carriers to invest and deploy telecommunications infrastructure on tribal lands. In addition, making the identical set of eligibility criteria available to all low-income individuals on tribal lands should make it administratively less burdensome for an eligible telecommunications carrier serving tribal lands to provide Lifeline and Link Up services in those areas. In particular, we believe that it will be less burdensome for a carrier to verify the income eligibility of all potential Lifeline and Link Up subscribers in a tribal area using the same set of eligibility criteria.

57. We decline to expand our federal default qualification criteria to include participation in services provided by the Indian Health Service of the U.S. Department of Health and Human Services given that such services are available to Indian tribal members generally, rather than exclusively to low-income tribal members, and therefore are inappropriate qualification criteria for our purposes. In addition to proposing the addition of certain of the means-tested programs that we adopt here, one commenter suggests that we include the Low Income Home Energy Assistance Program (LIHEAP), Aid to Families with Dependent Children (AFDC), and Tribal Work Experience Program (TWEP). We note that LIHEAP is included currently in the federal default qualification criteria listed in § 54.409(b) of our rules. In light of our understanding that TANF has superseded the AFDC program, we do not include the AFDC program, but we do include the tribally-administered TANF block grant program. In addition, we do not include TWEP insofar as it appears that participation in BIA general assistance is a prerequisite to participation in TWEP and, given that our expanded default qualification criteria now include participation in the BIA general assistance program, TWEP participants need only certify their participation in the BIA general assistance program.

58. At this time, we also do not adopt a qualification procedure by which low-income individuals on tribal lands could establish their income eligibility by self-certifying that their income is below a particular level, such as that set by the Federal Poverty Guidelines, as one commenter has suggested. Because we believe, however, that this approach may reach more low-income consumers, including low-income tribal members, than the current method of conditioning eligibility on participation in particular low-income assistance programs, we will further examine, in consultation with the Joint Board, possible revisions to § 54.409 of the Commission's rules to provide for self-certification based solely on income level.

59. For qualifying low-income individuals who live on tribal lands in states that do provide intrastate matching funds under the Lifeline program and therefore are subject to state-created eligibility criteria, we adopt the suggestion of the Wisconsin Public Service Commission and revise our eligibility guidelines under § 54.409(a). Specifically, in addition to establishing qualification criteria under § 54.409(a) that are based “solely on income or factors directly related to income,” we conclude that a state containing any tribal lands also must ensure that its qualification criteria are reasonably designed to apply to low-income tribal populations within that state. We conclude that this modification to § 54.409(a) is preferable to an alternative approach under which we would require states to adopt the identical expanded qualification criteria as those adopted for purposes of the federal default qualification criteria. Our decision today will give a state whose eligibility criteria inadvertently exclude low-income tribal populations impetus to take corrective action, while giving the state flexibility to adopt eligibility criteria best-suited to the tribal populations within that state. Consistent with the Joint Board's goal of increasing low-income subscribership and ensuring that the availability of Lifeline and Link Up is not limited to particular populations, we conclude that this approach will help to ensure that all qualifying residents on tribal lands will receive the intended benefits of the federal Lifeline and Link Up programs.

60. We will permit, however, a low-income individual who lives on tribal lands and who is excluded from participation in the Lifeline and Link Up programs because the individual is not enrolled in any of the programs listed in a state's qualification criteria to qualify for federal Lifeline and Link Up support by certifying his or her eligibility under one of the means-tested programs listed in § 54.409, as revised herein. We conclude that this action is necessary to hasten the process of bringing telecommunications services to unserved and underserved tribal lands and in recognition of the time needed for states to revise their qualification criteria where those criteria limit participation in Lifeline and Link Up to individuals who receive benefits under one or more low-income assistance programs in which low-income tribal members typically do not participate. For example, in a state where Lifeline and Link Up eligibility hinges on enrollment in the Medicaid program, a low-income tribal member who receives health services through the Indian Health Services and does not participate in Medicaid would not be eligible for Lifeline and Link Up support (state or federal) in that state by virtue of that state's qualification criteria. This measure recognizes the unique barriers facing low-income tribal members living on tribal lands who may have been excluded inadvertently from participation in Lifeline and Link Up as a result of a state's qualification criteria. This action is consistent with the Commission's statement in the Universal Service Order that, where a state provides matching funds under the Lifeline program, the state's qualification criteria should apply. Conversely, if a low-income individual living on tribal lands is excluded from participation in the Lifeline and Link Up programs because that individual participates in none of the programs used as income proxies in a state's qualification criteria and such individual agrees to forgo state matching funds, then we find that the justification for applying state qualification criteria in that circumstance no longer applies.

61. In codifying section 214(e)(1)(B) of the Telecom Act, Congress recognized that merely providing a service is not enough to ensure that the needed support is received. Rather, it imposed an obligation to advertise the availability of the supported services and the charges for those services. There is evidence in the record that the lack of information concerning the availability of Lifeline and Link Up services contributes to low penetration rates. We are concerned that eligible telecommunications carriers are not advertising the availability of Lifeline and Link Up services or, if they are, that such efforts are not reasonably designed to reach those likely to qualify for the service. Based on the apparent lack of awareness of the availability of Lifeline and Link Up services in many rural, low-income communities and to remove any confusion concerning eligible telecommunications carriers' obligation to publicize the availability of these services, we conclude that this obligation should be codified in our rules.

62. We recognize, as pointed out by United Utilities, Inc. (UUI), the limitations of traditional advertising media in promoting awareness of low-income support mechanisms within particular low-income populations. Specifically, UUI, a Native-owned eligible telecommunications carrier serving “predominantly Alaskan native villages,” describes how it achieved significant increases in both penetration rates and Lifeline subscribership through an intensive outreach effort in 26 native villages. As part of its outreach effort, UUI waived “service order and hook-up fees,” identified and contacted each household that did not have service, and often spoke in its customers' Native language to inform them of the Lifeline program and toll blocking. According to UUI, as a result of this effort, the household penetration level in these 26 villages increased by 4.9 percent, and Lifeline subscribership increased from 395 to 1,263 subscribers. In its comments, UUI states that:

63. We amend § 54.405 and § 54.411 of our rules to require eligible telecommunications carriers to publicize the availability of Lifeline and Link Up services in a manner reasonably designed to reach those likely to qualify for those services. We emphasize that these rule amendments shall apply to all eligible telecommunications carriers and not merely to those serving tribal lands. We take this action based on evidence in the record that the lack of awareness of the Lifeline and Link Up programs contributes to low penetration rates and to eliminate any confusion concerning eligible telecommunications carriers' obligation to publicize the availability of these services.

64. We recognize that a method that is reasonably designed to reach qualifying low-income subscribers in one location may not be effective in reaching qualifying low-income subscribers in another location. For that reason, we do not prescribe in this Order specific, uniform methods by which eligible telecommunications carriers must publicize the availability of Lifeline and Link Up support. We do, however, require an eligible telecommunications carrier to identify communities with the lowest subscribership levels within its service territory and make appropriate efforts to reach qualifying individuals within those communities. For example, we would expect a carrier to take into consideration the cultural and linguistic characteristics of low-income communities within its service territory as well as the efficacy of particular methods in reaching the greatest number of qualifying low-income individuals within those communities. In addition, we require an eligible telecommunications carrier to provide to qualifying low-income individuals, through whatever public awareness method it selects, consumer information on the availability of toll blocking and toll limitation services for the purpose of enabling the subscriber to control the amount of toll charges that he or she may incur.

65. If we determine that eligible telecommunications carriers are not adopting methods reasonably designed to reach qualifying low-income individuals, additional action may be needed to increase public awareness among such individuals. To that end, we may address in a Further Notice of Proposed Rulemaking more specific methods by which eligible telecommunications carriers must publicize the availability of Lifeline and Link Up services. Finally, we note that the Commission's upcoming Indian telecommunications training initiative will be devoted, in part, to familiarizing carriers and tribal representatives with the Lifeline and Link Up programs generally, and the changes made to those programs by this Order, in particular.

66. State Approval Requirement for Second-Tier Support. We modify § 54.403(a) of our rules to make second-tier federal Lifeline support available to an eligible telecommunications carrier that is not subject to state rate regulation on the condition that the carrier certifies that it: (1) Will pass through the second-tier $1.75 federal support amount to its qualifying low-income subscribers, and (2) has received the necessary approval of any non-federal regulatory authority that is authorized to regulate such carrier's rates that may be required to implement the required rate reduction ( e.g., a tribal regulatory authority). To the extent that an eligible telecommunications carrier is not subject to rate regulation by any non-federal regulatory authority, then the carrier need only certify for this purpose that it: (1) will pass through the second-tier $1.75 federal support amount to its qualifying low-income subscribers, and (2) is not subject to rate regulation by any non-federal regulatory authority. As discussed, an eligible telecommunications carrier seeking to receive reimbursement during the calendar year 2000 for enhanced Lifeline and Link Up services provided during the fourth quarter 2000 must make these certifications in a letter filed with USAC by September 1, 2000. All carriers seeking reimbursement for enhanced Lifeline or Link Up services must make these certifications in the FCC Form 497 (as revised).

67. By eliminating the need for eligible telecommunications carriers not subject to state rate regulation to obtain state action or seek a Commission waiver in order to receive second-tier federal Lifeline support, this revision to § 54.403(a) of our rules ensures that no category of carriers is subjected to more burdensome administrative requirements than are imposed on all other eligible telecommunications carriers seeking second-tier federal Lifeline support. We conclude that this amendment maintains appropriate deference to tribal regulatory authorities because second-tier support will not be disbursed where a tribal regulatory authority that regulates the rates of an eligible telecommunications carrier does not permit an equivalent reduction in consumers' bills. In addition, by requiring eligible telecommunications carriers to certify that they are not subject to state rate regulation before we make available second-tier federal Lifeline support, this result is consistent with our overall deference to the states in areas of traditional state ratemaking.

68. Third-Tier Lifeline Support. In light of our determination to provide enhanced federal Lifeline support of up to $25 for low-income individuals living on tribal lands through the creation of a fourth tier of the Lifeline program, we do not adopt our proposal in the FNPRM to provide the third tier of federal Lifeline support to carriers serving tribal lands where no intrastate matching funds are provided. In granting a temporary waiver of the matching requirement for third-tier federal Lifeline support in the Gila River Order, the Bureau was aware that, absent a waiver, a tribal carrier not subject to the jurisdiction of a state commission, such as Gila River Telecommunications, Inc., could receive only first-tier Lifeline support in the amount of $3.50 per qualifying low-income subscriber. Central to the Bureau's determination to grant a temporary waiver of the second-tier state approval requirement and the third-tier state matching requirement, was the recognition that, in light of the “low penetration and income levels on reservations,” providing tribal carriers with only $3.50 per qualifying low-income subscriber was inconsistent with the “Commission's policy of fostering access to the public telephone network for those most in need.”

69. We note that, because we modify the state approval requirement of § 54.403(a) for the provision of second-tier Lifeline support and adopt enhanced Lifeline support for qualifying low-income individuals, eligible telecommunications carriers will be entitled to receive nonmatching federal support of up to $31.10 per month, per qualifying low-income subscriber. We conclude that it is not necessary to waive the third-tier state matching requirement because we anticipate the enhanced Lifeline amount of $31.10 per month per qualifying low income subscriber will constitute a sufficient level of support, even on tribal lands where no intrastate support is generated. We further believe that the enhanced Lifeline will increase qualifying low-income individuals' access to the public telephone network more effectively than would our proposal in the FNPRM to waive the third-tier matching requirement, which would yield a maximum additional level of support of only $1.75 per qualifying subscriber. Given that all parties who commented on this issue supported our proposal to waive the third-tier state matching requirement in § 54.403(a) as a means to direct additional federal Lifeline support to low-income individuals on tribal lands, we conclude that our decision to accomplish this result through the creation of a fourth tier of the Lifeline program, in lieu of waiving the third-tier state matching requirement, is not inconsistent with the comments addressing this issue.

70. We revise § 54.403(a), however, to permit a carrier that is not subject to state rate regulation to satisfy the third-tier intrastate matching requirement of § 54.403(a) by generating its own matching funds, independently of the actions of the state in which it operates. Although we recognize that many tribes and tribal carriers may not have adequate resources to generate the matching funds necessary to receive third-tier federal support, we find that the level of nonmatching federal Lifeline support that will be available for qualifying low-income individuals on tribal lands provides an adequate level of support. If a tribe or a carrier, including a wireless carrier, that is not subject to state rate regulation nevertheless wishes to provide matching funds in order to receive third-tier federal Lifeline support and reduce local rates further, we do not want to preclude such a result. Accordingly, we modify § 54.403(a) of our rules to provide third-tier federal Lifeline support, up to a maximum of $1.75 per qualifying low-income customer as calculated in § 54.403(a), to an eligible telecommunications carrier that certifies that it: (1) Is not subject to state rate regulation, and (2) will pass through the total amount of third-tier support (intrastate and federal) to its qualifying low-income subscribers by an equivalent reduction in those subscribers' monthly bill for local telephone service. As discussed, an eligible telecommunications carrier seeking to receive reimbursement during the calendar year 2000 for enhanced Lifeline and Link Up services provided during the fourth quarter 2000 must make these certifications in a letter filed with USAC by September 1, 2000. All carriers seeking reimbursement for enhanced Lifeline or Link Up services must make these certifications in the FCC Form 497 (as revised).

71. By maintaining the matching requirement of § 54.403(a) as a condition for receiving third-tier federal Lifeline support, we leave undisturbed a primary goal underlying the Commission's adoption of third-tier support, namely, the creation of an incentive for states (or tribal authorities, tribal carriers, or wireless carriers, as the case may be) to reduce local rates even further. In the Universal Service Order, the Commission determined that $5.25 represented a sufficient level of baseline federal Lifeline support. The Commission established the additional third tier of federal Lifeline support, which entitles an eligible telecommunications carrier to receive up to $1.75 of federal Lifeline support per qualifying low-income consumer in a state that generates support from the intrastate jurisdiction, in order to preserve states' incentive to reduce local rates beyond that achieved under the first and second tiers of Lifeline support, as deemed appropriate by the state. Accordingly, a carrier that is not subject to state rate regulation, but that certifies that it will pass through to its qualifying low-income subscribers a rate reduction equivalent to both the intrastate and federal third-tier support amounts, will be entitled to receive third-tier federal Lifeline support. For the foregoing reasons, however, we maintain the matching requirement of § 54.403(a) as a condition for receiving third-tier federal Lifeline support.

72. Filing of Federal Lifeline Plan. Finally, we observe that § 54.401(d) of the Commission's rules currently does not apply to an eligible telecommunications carrier that is not subject to the rate regulatory authority of a state commission. That section directs a state commission to file, or requires a state commission to direct an eligible telecommunications carrier to file, with USAC information demonstrating that the carrier's Lifeline plan meets the requirements of Subpart E of the Commission's rules. We amend § 54.401(d) to require eligible telecommunications carriers not subject to the rate regulatory authority of a state commission to file with USAC information demonstrating that the carrier's Lifeline plan meets the requirements of Subpart E of the Commission's rules.

73. State Commission Designation of Eligible Telecommunications Carriers. In light of the statutory framework and legislative history, we conclude that Congress, in enacting section 214(e)(6) of the Telecom Act, did not intend to alter the basic framework of section 214(e) of the Telecom Act, which gives the state commissions the principal role in designating eligible telecommunications carriers under section 214(e)(2) of the Telecom Act. This interpretation of section 214(e) of the Telecom Act is consistent with the legislative history, which indicates that section 214(e)(6) of the Telecom Act is not intended to “restrict or expand the existing jurisdiction of State commissions over any common carrier,” but is intended to provide a means for the designation of a carrier over which a state commission lacks jurisdiction.

74. We conclude that section 214(e)(6) of the Telecom Act requires the Commission to conduct a designation proceeding in instances where the relevant state commission lacks, for whatever reason, the authority to perform the designation. We are guided by the statutory framework, legislative history, and the record before us, to conclude that the threshold question in determining whether the Commission may exercise its authority under section 214(e)(6) of the Telecom Act is whether the state commission lacks jurisdiction over the carrier, for any reason. We agree with commenters who suggest that the inquiry should include, but not be limited to, whether a state commission lacks jurisdiction over the particular service or geographic area. The determination as to whether a state commission lacks jurisdiction over a particular carrier is a fact-specific inquiry that may depend on interpretations of federal, state, and tribal law where appropriate.

75. Jurisdiction Over Carriers Serving Tribal Lands. We are not persuaded by claims that the exercise of our authority under section 214(e)(6) of the Telecom Act is limited to designations of eligibility sought by tribally-owned carriers serving tribal lands. We conclude that neither the language of section 214(e)(6) of the Telecom Act nor its legislative history provides any indication that it applies only to tribally-owned carriers serving tribal lands. Section 214(e)(6) of the Telecom Act applies to any carrier “not subject to the jurisdiction of a state commission.” Moreover, the legislative history supports this interpretation. In sum, we agree with those commenters who contend that the legislative history of section 214(e)(6) of the Telecom Act makes clear that, although the class of carriers to be covered by section 214(e)(6) of the Telecom Act was dominated by tribally-owned carriers, it was not restricted to them.

76. Nor do we find persuasive claims that the Commission generally has authority to make all eligible telecommunications carrier determinations over carriers providing telecommunications service on tribal lands. We do not believe that Congress intended the Commission to use section 214(e)(6) of the Telecom Act to usurp the role of a state commission that has jurisdiction over a carrier providing service on tribal lands. On the contrary, in adopting section 214(e)(6) of the Telecom Act, Congress recognized that some state commissions had asserted jurisdiction over tribal lands. Congress also acknowledged pending jurisdictional disputes between states and tribes and made clear that the adoption of section 214(e)(6) of the Telecom Act was not “intended to impact litigation regarding jurisdiction between State and federally-recognized tribal entities.”

77. As discussed, the Commission's authority under section 214(e)(6) of the Telecom Act applies only when a carrier is not subject to the jurisdiction of a state commission. The determination as to whether a carrier providing service on tribal lands is subject to the jurisdiction of a state commission is a complicated and intensely fact-specific legal inquiry informed by principles of tribal sovereignty and requiring the interpretation of treaties, and federal Indian law and state law. Such determinations usually consider whether state regulation is preempted by federal regulation, whether state regulation is consistent with tribal sovereignty and self-determination, and whether the tribe has consented to state jurisdiction, either in treaties or otherwise. The inquiry as to whether a state commission has authority to regulate the provision of telecommunications service on tribal lands is a particularized one, and thus specific to each state and the facts and circumstances surrounding the provision of the service. As the U.S. Supreme Court has stated, “there is no rigid rule by which to resolve the question whether a particular state law may be applied to an Indian reservation or to tribal members.”

78. Jurisdiction Over Particular Services. We further conclude that the technology used to provide the telecommunications service does not per se determine whether the state commission or this Commission has jurisdiction over the carrier for purposes of designating the carrier as eligible to receive federal universal service support. Specifically, we conclude that the provision of service by terrestrial wireless or satellite carrier does not per se place the carrier outside the parameters of the state commission designation authority under section 214(e)(2) of the Telecom Act. We believe that if Congress had intended to exempt particular services from the state commission designation process, it would have expressly done so in section 214(e) of the Telecom Act. We therefore agree with NTIA that there is nothing in the statute or the legislative history to support the notion that, by enacting section 214(e)(6) of the Telecom Act, Congress intended to remove from the state commissions the primary responsibility for designating wireless or satellite carriers as eligible telecommunications carriers.

79. We further conclude that state commission designation of a Commercial Mobile Radio Service (CMRS) provider pursuant to section 214(e)(2) of the Telecom Act does not constitute entry regulation in violation of section 332(c)(3) of the Telecom Act. Section 332(c)(3) of the Telecom Act bars state and local rate and entry regulation of CMRS providers, but allows the states to regulate “other terms and conditions of service.” Section 332(c)(3) of the Telecom Act prohibits direct state regulation of entry by CMRS providers ( e.g., a regulation that requires the CMRS provider to obtain a certificate of public convenience and necessity from the state prior to providing service), but a regulation does not necessarily run afoul of section 332(c)(3) of the Telecom Act solely because it may make it more difficult for some carriers to offer service. We conclude that the prohibition on “entry” regulation in section 332(c)(3) of the Telecom Act does not prohibit states from designating CMRS providers as eligible telecommunications carriers because such designation relates to a carrier's right to receive federal universal service support, rather than a carrier's legal right to do business in a state. We need not decide for present purposes whether, or under what conditions, a particular state's eligible telecommunications carrier designation process as applied to a CMRS provider might constitute impermissible entry regulation, rather than permissible regulation of terms and conditions of service. Moreover, this conclusion does not affect our ability to determine whether a state commission's designation process or denial of eligibility may constitute a barrier to entry under section 253 of the Telecom Act.

80. We note that several states have already issued orders addressing designation requests from wireless carriers. We encourage states to move forward expeditiously to resolve pending requests in a pro-competitive manner designed to preserve and advance universal service.

81. As discussed, the threshold question for determining whether the Commission may exercise its authority to designate a carrier as an eligible telecommunications carrier under section 214(e)(6) of the Telecom Act is whether the state commission lacks jurisdiction over the carrier, for any reason. Section 214(e) of the Telecom Act does not, however, define the circumstances under which a state commission may lack jurisdiction, nor does it address whether such jurisdictional determinations should be made by the state commission or this Commission. We conclude that carriers seeking designation from this Commission under section 214(e)(6) of the Telecom Act for service provided on non-tribal lands must first consult with the relevant state regulatory commission on the issue of whether the state commission has jurisdiction to designate the carrier, even if the carrier asserts that the state commission lacks jurisdiction over the carrier. In so doing, we note that jurisdictional challenges relating to the authority of the state commission to designate certain carriers or classes of carriers on non-tribal lands derive almost exclusively from interpretations of state law.

82. While a carrier may believe state law to preclude the state commission from exercising jurisdiction over the carrier for purposes of designation under section 214(e)(2) of the Telecom Act, we conclude, as a matter of federal-state comity, that the carrier should first consult with the state commission to give the state commission an opportunity to interpret state law. We conclude that state commissions should be allowed a specific opportunity to address and resolve issues involving a state commission's authority under state law to regulate certain carriers or classes of carriers. Only in those instances where a carrier provides the Commission with an affirmative statement from a court of competent jurisdiction or the state commission that it lacks jurisdiction to perform the designation will we consider section 214(e)(6) of the Telecom Act designation requests from carriers serving non-tribal lands. We conclude that an “affirmative statement” of the state commission may consist of any duly authorized letter, comment, or state commission order indicating that it lacks jurisdiction to perform designations over a particular carrier. Each carrier should consult with the state commission to receive such a notification, rather than relying on notifications that may have been provided to similarly situated carriers.

83. We are concerned, however, that excessive delay in the designation of competing providers may hinder the development of competition and the availability of service in many high-cost areas. We believe it is unreasonable to expect prospective entrants to enter a high-cost market and provide service in competition with an incumbent carrier that is receiving support, without knowing whether they are eligible to receive support. If new entrants do not have the same opportunity to receive universal service support as the incumbent, such carriers may be unable to provide service and compete with the incumbent in high-cost areas. As the Commission has previously concluded, competitively neutral access to such support is critical to ensuring that all Americans, including those that live in high-cost areas, have access to affordable telecommunications services. We are therefore concerned that indefinite delays in the designation process will thwart the intent of Congress, in section 254 of the Telecom Act, to promote competition and universal service to high-cost areas. Accordingly, we commit to resolve, within six months of the date filed at the Commission, all designation requests for non-tribal lands that are properly before us pursuant to section 214(e)(6) of the Telecom Act. We also strongly encourage state commissions to resolve designation requests filed under section 214(e)(2) of the Telecom Act in the same time frame.

84. In this section, we establish a framework designed to streamline the process for eligibility designation of carriers providing service on tribal lands. As discussed in greater detail, we conclude that carriers seeking eligibility designations for service provided on tribal lands may petition this Commission under section 214(e)(6) of the Telecom Act for a determination of whether the carrier is subject to the state commission's jurisdiction and, in instances where the state lacks jurisdiction, a decision on the merits of the designation request. Under this framework, a carrier seeking an eligibility designation for service provided on tribal lands will avoid any costs and delays associated with resolving the threshold jurisdictional determination in a state designation proceeding and possible court appeal of that state jurisdictional decision. Moreover, this framework will provide a safe harbor for carriers unwilling to have the jurisdictional question resolved by a state commission. This streamlined designation process for carriers serving tribal lands is intended to facilitate the expeditious resolution of such requests so as to increase the availability of affordable telecommunications services to tribal lands, while preserving the state commissions' jurisdiction consistent with federal, tribal, and state law. We believe that this process will balance carefully the principles of tribal sovereignty and the demonstrated need for access to affordable telecommunications services on tribal lands, against the appropriate exercise of state jurisdiction over carriers operating on such lands.

85. As discussed, we conclude that section 214(e)(6) of the Telecom Act directs the Commission to perform the eligibility designation in instances where the carrier is not subject to the jurisdiction of a state commission. Neither section 214(e)(2) of the Telecom Act nor section 214(e)(6) of the Telecom Act, however, address how such jurisdictional determinations should be made or by which commission. In the absence of specific guidance in the statute as to how such jurisdictional determinations should be made, we conclude that this Commission may resolve the threshold question of whether a carrier seeking eligibility designation for service provided on tribal lands is subject to the jurisdiction of the state commission. This conclusion is consistent with the execution of our duty to preserve and advance universal service under section 254 of the Telecom Act, principles of tribal sovereignty, and the unique federal trust relationship between Indians tribes and the federal government.

86. We recognize that a determination as to whether a state commission lacks jurisdiction over a carrier providing service on tribal lands is a legally complex inquiry extending beyond interpretations of state law to principles of tribal sovereignty, federal Indian law, and treaties. Evaluating the extent to which a state commission has jurisdiction over activities conducted on tribal lands, whether by members or non-members of a tribe, will involve questions of whether state regulation is preempted by federal regulation, whether state regulation is consistent with tribal sovereignty and self-determination, and whether a tribe has consented to state jurisdiction in treaties or otherwise. Thus, we find that such jurisdictional determinations, which will involve an analysis of principles of tribal sovereignty, federal Indian law, treaties, and state law, may be appropriately performed by this Commission.

87. The jurisdictional ambiguities associated with the question of whether a state may designate a carrier serving tribal lands may unnecessarily delay the provision of affordable services in high-cost areas. We intend this framework to facilitate the designation of carriers eligible to receive federal universal service support for service provided on tribal lands by permitting such carriers to seek resolution of the jurisdictional issue directly from this Commission. Absent this framework, the designation of such carriers as eligible to receive federal universal service support may be otherwise unnecessarily delayed pending resolution of the jurisdictional question, or potentially prevented entirely in those instances where the tribal authority will not support the carrier's submission to state commission jurisdiction.

88. Moreover, in establishing this framework for the designation of eligible telecommunications carriers serving tribal lands, we are guided by our recognition of, and respect for, principles of tribal sovereignty and self-determination. As described in the Commission's Indian Policy Statement , we acknowledge the principles of tribal sovereignty and self-government and the unique trust relationship between the Indian tribes and the federal government. We are mindful that the federal trust doctrine imposes on federal agencies a fiduciary duty to conduct their authority in matters affecting Indian tribes in a manner that protects the interest of the tribes. We are also mindful that federal rules and policies should therefore be interpreted in a manner that comports with tribal sovereignty and the federal policy of empowering tribal independence.

89. In light of our obligation to preserve and advance universal service under section 254 of the Telecom Act, principles of tribal sovereignty and self-determination, and our unique federal trust responsibility, we adopt the following framework for resolution of designation requests under section 214(e)(6) of the Telecom Act for carriers serving tribal lands. We conclude that a carrier seeking a designation of eligibility to receive federal universal service support for telecommunications service provided on tribal lands may petition the Commission for designation under section 214(e)(6) of the Telecom Act, without first seeking designation from the appropriate state commission. The petitioner must set forth in its petition the basis for its assertion that it is not subject to the state commission's jurisdiction, and bears the burden of proving that assertion. The petitioner must provide copies of its petition to the appropriate state commission at the time of filing with the Commission. The Commission will release, and publish in the Federal Register , a public notice establishing a pleading cycle for comments on the petition. The Commission will also send the public notice announcing the comment and reply dates to the affected state commission by overnight express mail to ensure that the state commission is notified of the notice and comment period.

90. Based on the evidence presented in the record, the Commission shall make a determination as to whether the carrier has sufficiently demonstrated that it is not subject to the state commission's jurisdiction. In the event the Commission determines that the state commission lacks jurisdiction to make the designation and the petition is properly before the Commission under section 214(e)(6) of the Telecom Act, the Commission will decide the merits of the request within six months of release of an order resolving the jurisdictional issue. If the carrier fails to meet its burden of proof that it is not subject to the state commission's jurisdiction, the Commission will dismiss the request and direct the carrier to seek designation from the appropriate state commission. In such cases, we urge state commissions to act within a similar time frame ( i.e. , six months) to resolve such requests as expeditiously as possible.

91. We emphasize that a carrier seeking a section 214(e)(6) of the Telecom Act designation for service provided on tribal lands must bear the burden of demonstrating that it is not subject to the state commission's jurisdiction. As discussed, we reject the contention that section 214(e)(6) of the Telecom Act provides the Commission with the blanket authority to make all eligible telecommunications carrier designations over carriers providing service on tribal lands. In so doing, we recognize that the issue of whether a state commission may exercise jurisdiction over a carrier providing service on tribal lands is a particularized inquiry guided by principles of tribal sovereignty, federal Indian law, and treaties, as well as state law. Therefore, carriers seeking an eligibility designation from this Commission for the provision of service on tribal lands should provide fact-specific support demonstrating that the carrier is not subject to the state commission's jurisdiction for the provision of service on tribal lands. Such support should include any relevant case law, statutes, and treaties. We emphasize that this is a strict burden and that generalized assertions regarding the state commission's lack of jurisdiction will not suffice to confer jurisdiction on this Commission under section 214(e)(6) of the Telecom Act. We would also find informative any statements and analyses the tribal authority might provide regarding the petitioner's request for designation and the state commission's exercise of jurisdiction. For example, carriers may include with their petitions a letter from the appropriate tribal authority addressing the jurisdictional question or the merits of the designation request.

92. We decline to place on the affected state commission the burden of proving that it has jurisdiction over a particular carrier. To do so would suggest that state commission bear the burden of overcoming a general presumption that states do not have jurisdiction over carriers providing service on tribal lands. Such a presumption is inconsistent with our determination that the issue of whether a state commission lacks jurisdiction over a carrier providing service on tribal lands is a particularized inquiry, and thus specific to each state and the facts and circumstances surrounding the provision of the service.

93. We strongly encourage the participation of the affected state commissions and tribal authorities in this process. The determination of whether a particular carrier is subject to the state commission's jurisdiction for service provided on tribal lands is one that will be greatly informed by the participation of the tribes and state commission or other state officials. Based on our experience to date with section 214(e)(6) of the Telecom Act, we believe that there will be some state commissions that will not object to the Commission's designation of carriers serving tribal lands as eligible to receive federal universal service support. We look forward to working with the state commissions, tribal authorities, and members of industry to resolve these jurisdictional questions, and ultimately the designation requests, in an expeditious manner. To that end, we seek comment in a Further Notice of Proposed Rulemaking on additional measures that may be implemented to further facilitate the designation process for the provision of service on tribal lands.

94. We emphasize, however, that this process is limited in several respects. First, a carrier may avail itself of this process only to seek a designation of eligibility to receive federal universal service support for service provided on tribal lands. Petitioners seeking an eligibility designation under section 214(e)(6) of the Telecom Act for service provided on tribal lands must accurately describe the specific geographic areas they wish to serve, and must demonstrate that such areas satisfy the definition of tribal lands we adopt in this Order. As discussed, the federal government has a unique trust responsibility with respect to members of federally-recognized tribes. In addition, the determination of jurisdiction over a carrier serving tribal lands is an inquiry that will extend beyond questions of state law, and will be informed by principles of tribal sovereignty, federal law, and treaties. Thus, it is appropriate and reasonable that the Commission, in executing its statutory obligation to preserve and advance universal service, should determine whether a carrier seeking an eligibility designation for services provided on tribal lands is subject to the state commission's jurisdiction.

95. Second, a carrier may only avail itself of this process when it has not initiated a designation proceeding before the affected state commission. In order to avoid the potential for “forum-shopping” and the costs and confusion caused by a duplication of efforts between this Commission and state commissions, we will not make a jurisdictional determination under section 214(e)(6) of the Telecom Act if the affected state commission has initiated a proceeding in response to a designation request under section 214(e)(2) of the Telecom Act. Nothing we adopt today affects the ability of a state commission to make an eligible telecommunications carrier designation for a carrier serving tribal lands, where jurisdiction may otherwise be in dispute among the parties.

96. Finally, any determination made by this Commission pursuant to section 214(e)(6) of the Telecom Act relates only to a carrier's eligibility to receive federal universal service support for the provision of service on tribal lands. We emphasize that the Commission's determination of whether a particular carrier is subject to the state commission's jurisdiction for service provided on tribal lands is limited to the state commission's ability to designate the carrier as eligible to receive federal universal service support.

97. Discussion. Consistent with the Maryland Commission's request and our conclusions concerning the role state commissions play in the designation of carriers under section 214(e) of the Telecom Act, we dismiss without prejudice Cellco's request for designation of eligible telecommunications carrier status for service provided in Maryland. Although we do not reach the merits of the Cellco request for designation in Delaware in this Order, we conclude that the Delaware Commission's comments in this proceeding provide a sufficient basis for the exercise of our jurisdiction to consider the merits of the request for designation under section 214(e)(6) of the Telecom Act. We will discuss each of the requests in greater detail.

98. Maryland Request. At the request of the Maryland Commission, we dismiss Cellco's request for designation as an eligible telecommunications carrier in Maryland. In a letter to the Commission on April 18, 2000, the Maryland Commission stated its intent to assert jurisdiction over CMRS providers, including Cellco, for purposes of making eligible telecommunications carrier designations in Maryland. We are not persuaded by Cellco's statement that it has “informally confirmed with the professional staffs of the Maryland and Delaware commissions that these statutory exclusions are complete exclusions from the commissions' jurisdiction.” We emphasize that carriers seeking a designation from this Commission for service provided on non-tribal lands must provide to us an affirmative statement from the state commission or a court of competent jurisdiction that the carrier is not subject to the state commission's jurisdiction for purposes of eligible carrier designation.

99. We decline Cellco's invitation that we should interpret the relevant state law to conclude that it is not subject to the state commission's jurisdiction. We note that, while Cellco has cited provisions of applicable state law in both Delaware and Maryland to support its contention that the state regulatory commission has no designation authority over wireless carriers, we believe that, as a matter of federal-state comity, such interpretations are better performed by the affected state commissions. As this case demonstrates, in the absence of explicit state guidance in the form of an affirmative statement from the state commission or a court of competent jurisdiction regarding the interpretation of its state law, premature intervention by the Commission may lead to confusion and duplication of efforts with the state commission, and an improper exercise of our jurisdiction under section 214(e)(6) of the Telecom Act.

100. Should Cellco challenge the Maryland Commission's exercise of authority under section 214(e)(2) of the Telecom Act, resolution of the jurisdictional issue may be obtained either through the state commission proceeding or in a judicial proceeding. Should the state commission or courts ultimately determine that Cellco is not subject to the state commission's jurisdiction for purposes of the eligibility designation, the Commission will assume the designation responsibility under section 214(e)(6) of the Telecom Act upon request. We reiterate our expectation that state commissions will act as expeditiously as possible on requests for designation. Should Cellco submit to the Maryland Commission a request for designation under section 214(e)(2) of the Telecom Act, we strongly encourage the Maryland Commission to resolve this request within six months of the filing date.

101. Delaware Request. With regard to Cellco's request for designation as an eligible telecommunications carrier for service provided in Delaware, we conclude that the statements contained in comments filed by the Delaware Commission are sufficient to warrant our assertion of jurisdiction under section 214(e)(6) of the Telecom Act. In its comments, the Delaware Commission confirms that the Delaware General Assembly has, for almost two decades, withheld from the Delaware Commission jurisdiction over cellular service or other mobile radio services. Specifically, the Delaware Commission cites to Delaware law stating that it “shall have no jurisdiction over the operation of telephone service provided by cellular technology or by domestic public land mobile radio service or over the rates to be charged for such service or over property, property rights, equipment or facilities employed in such service.” According to the Delaware Commission, it has consistently taken the position that it has not been granted regulatory jurisdiction over any aspect of telephone service provided by mobile, and now fixed, cellular wireless technology. The Delaware Commission states that it does not currently exercise any form of supervisory jurisdiction over wireless CMRS providers, including Cellco, and acknowledges that this Commission, not the Delaware Commission, “must be the entity to * * * supervise and enforce the proper application of such support by Cellco.”

102. Consistent with the framework adopted in this Order, we conclude that we have jurisdiction to consider Cellco's request for designation as an eligible telecommunications carrier for services provided in Delaware. As a result, we will address Cellco's Delaware request for designation as an eligible telecommunications carrier within six months from the release date of this Order.

103. Discussion. Consistent with the framework adopted in this Order, we conclude that we have the authority under section 214(e)(6) of the Telecom Act to consider this petition. We commend the Wyoming Commission for its resolution of the threshold jurisdictional question, and encourage other state commissions to resolve such issues as expeditiously as possible. As with the Cellco Delaware request, we will promptly decide the merits of Western Wireless' request for designation in Wyoming within six months from the release date of this Order.

104. Discussion. Consistent with the framework we adopt in this Order, we will resolve the threshold question of whether Western Wireless is subject to the jurisdiction of the Montana Commission for purposes of determining eligibility for federal support for services provided on the Crow Reservation. As discussed, we have concluded that section 214(e)(6) of the Telecom Act does not provide the Commission with the per se authority to designate carriers based solely on the provision of service on tribal lands. As noted, determinations as to whether a state commission lacks jurisdiction over carriers serving tribal lands involves a fact-specific inquiry informed by principles of tribal sovereignty, treaties, state law, and federal Indian law. Consistent with the discussion, we conclude that Western Wireless should bear the burden of demonstrating that it is not subject to the jurisdiction of the Montana Commission for purposes of an eligibility designation for services provided on the Crow Reservation.

105. Consistent with the framework we establish and to permit Western Wireless a full and fair opportunity to present a case consistent with the guidance we give in this Order, we will reopen the record in this proceeding to allow Western Wireless an opportunity to supplement its claim that the Montana Commission lacks jurisdiction to make the designation for service provided on the Crow Reservation. Western Wireless shall notify the Commission in writing within 15 days of release of this Order whether it wishes to supplement the record consistent with the determinations in this Order. If Western Wireless chooses to supplement the record, it shall do so within 30 days of the date it notifies the Commission of its intent to do so. It shall also provide copies of the supplemental filing to the Montana Commission at the time of its filing with the Commission. In any event, the Commission will release, and publish in the Federal Register , a public notice announcing that the Montana Commission, and any other interested party, shall have 30 days to respond to Western Wireless' original petition and/or supplemental filing. To ensure that the Montana Commission receives prompt notification of the 30-day period, the Commission shall also send to the Montana Commission, by overnight express mail, the public notice announcing the comment cycle deadline. Should the Commission determine, on the basis of the record developed, that the Montana Commission does not have authority to perform the eligibility designation for Western Wireless' service provided on the Crow Reservation, the Commission will exercise its authority under section 214(e)(6) of the Telecom Act to decide the merits of the request within six months after release of an order resolving the jurisdictional issue.

106. Discussion. Consistent with the framework we adopt in this Order for the designation of carriers serving tribal lands, we dismiss without prejudice Smith Bagley's section 214(e)(6) of the Telecom Act request for designation as an eligible telecommunications carrier for tribal lands in Arizona and New Mexico. Both the Arizona and New Mexico Commissions are currently considering section 214(e)(2) of the Telecom Act requests for designation filed by Smith Bagley prior to the date of their filing with this Commission. As we concluded, in order to avoid the possibility of forum-shopping and the costs and confusion caused by a duplication of efforts between this Commission and state commissions, we decline to address a designation request under section 214(e)(6) of the Telecom Act if a request for eligible telecommunications carrier designation is pending at the state commission.

107. Accordingly, we dismiss without prejudice Smith Bagley's request for designation under section 214(e)(6) of the Telecom Act to permit the Arizona and New Mexico Commissions to complete their proceedings on the merits of Smith Bagley's pending requests. We request, however, that both state commissions act expeditiously in consideration of Smith Bagley's designation requests. We note that those requests have now been pending for over one year. As we have discussed, we are concerned that unreasonable delays in acting upon designation requests will hinder the availability of affordable telecommunications services in high-cost areas. We therefore strongly encourage the Arizona and New Mexico Commissions to resolve Smith Bagley's pending requests for designation as soon as possible.

108. Discussion. In accordance with our conclusion that section 214(e)(6) of the Telecom Act requires the Commission to designate an eligible telecommunications carrier only when the state lacks jurisdiction under section 214(e)(2) of the Telecom Act, we dismiss Cheyenne Telephone Authority's petition without prejudice. We find no reason before us to disturb the South Dakota Commission's designation of the Cheyenne Telephone Authority as an eligible telecommunications carrier. In addition, we note that this conclusion is consistent with our prior statement that, “[a]ny carrier that is able to be or has already been designated as an eligible telecommunications carrier by a state commission is not required to receive such designation from the Commission.”

109. In reaching this conclusion we note that, as with the case of the Cheyenne Telephone Authority, many tribes may have ongoing jurisdictional disputes with state commissions. We are hopeful that our decision not to disturb the finding of the state commission in this instance will encourage state commissions and tribes to move forward with the designation process for determining eligibility for federal universal service support despite disagreements relating to the state's exercise of jurisdiction over carriers providing service on tribal lands. We believe that to disturb a state commission's prior determination that a particular carrier is eligible for federal universal service support would have the unintended effect of forcing the tribal authority to choose between delaying its designation request pending a lengthy resolution of disputed jurisdictional issues or conceding jurisdiction to the state commission for other purposes in order to be eligible for federal universal service support.

110. The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 (PRA) and found to impose new or modified reporting and/or recordkeeping requirements or burdens on the public. Implementation of these new or modified reporting and/or recordkeeping requirements will be subject to approval by the Office of Management and Budget (OMB) as prescribed by the PRA, and will go into effect upon announcement in the Federal Register of OMB approval.

111. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the FNPRM . The Commission sought written public comment on the proposals in the FNPRM , including comment on the IRFA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

112. The Commission issues this Twelfth Report and Order (Order) as a part of its implementation of the Act's mandate that “[c]onsumers in all regions of the Nation * * * have access to telecommunications and information services * * *.” This Order implements that mandate by enhancing Lifeline and LinkUp support for low-income individuals living on tribal lands, as defined herein. This Order also outlines the process the Commission will follow in designating telecommunications carriers as eligible telecommunications carriers under section 214(e) of the Telecom Act for the purposes of receiving universal service support under section 254(e) of the Telecom Act. Our objective is to fulfill section 254 of the Telecom Act's mandate that “all regions of the Nation * * * have access to telecommunications” with respect to tribal lands, which have the lowest reported subscribership levels for telecommunications in the Nation.

113. We received no comments directly in response to the IRFA in this proceeding. Some comments generally addressed small business issues, but these issues are not a part of this present Order.

114. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the new rules. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). A small organization is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of 1992, there were approximately 275,801 small organizations. And finally, “small governmental jurisdiction” generally means “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than 50,000.” As of 1992, there were approximately 85,006 such jurisdictions in the United States. This number includes 38,978 counties, cities, and towns; of these, 37,566, or 96 percent, have populations of fewer than 50,000. The Census Bureau estimates that this ratio is approximately accurate for all governmental entities. Thus, of the 85,006 governmental entities, we estimate that 81,600 (91 percent) are small entities. In this Order, the Commission stated that the new rules will affect all providers of interstate telecommunications and interstate telecommunications services. We further describe and estimate the number of small business concerns that may be affected by the rules adopted in this Order.

115. The SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except Radiotelephone) to be small entities when they have no more than 1,500 employees. We first discuss the number of small telephone companies falling within these SIC categories, then attempt to refine further those estimates to correspond with the categories of telecommunications companies that are commonly used under our rules.

116. The most reliable source of information regarding the total numbers of common carriers and related providers nationwide, including the numbers of commercial wireless entities, appears to be data the Commission publishes annually in its Carrier Locator report, derived from filings made in connection with the Telecommunications Relay Service (TRS). According to data in the most recent report, there are 4,144 interstate carriers. These carriers include, inter alia , incumbent local exchange carriers, competitive local exchange carriers, competitive access providers, interexchange carriers, other wireline carriers and service providers (including shared-tenant service providers and private carriers), operator service providers, pay telephone operators, providers of telephone toll service, wireless carriers and services providers, and resellers.

117. We have included small incumbent LECs in this present RFA analysis. As noted, a “small business” under the RFA is one that, inter alia , meets the pertinent small business size standard ( e.g. , a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. We have therefore included small incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts.

118. Total Number of Telephone Companies Affected. The United States Bureau of the Census (“the Census Bureau”) reports that, at the end of 1992, there were 3,497 firms engaged in providing telephone services, as defined therein, for at least one year. This number contains a variety of different categories of carriers, including local exchange carriers, interexchange carriers, competitive access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone operators, PCS providers, covered SMR providers, and resellers. It seems certain that some of those 3,497 telephone service firms may not qualify as small entities or small incumbent LECs because they are not “independently owned and operated.” For example, a PCS provider that is affiliated with an interexchange carrier having more than 1,500 employees would not meet the definition of a small business. It seems reasonable to conclude, therefore, that fewer than 3,497 telephone service firms are small entity telephone service firms or small incumbent LECs that may be affected by the decisions and rules in this Order.

119. Wireline Carriers and Service Providers. SBA has developed a definition of small entities for telephone communications companies other than radiotelephone companies. The Census Bureau reports that, there were 2,321 such telephone companies in operation for at least one year at the end of 1992. According to SBA's definition, a small business telephone company other than a radiotelephone company is one employing no more than 1,500 persons. All but 26 of the 2,321 non-radiotelephone companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 non-radiotelephone companies that might qualify as small entities or small incumbent LECs. Although it seems certain that some of these carriers are not independently owned and operated, we are unable at this time to estimate with greater precision the number of wireline carriers and service providers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 2,295 small entity telephone communications companies other than radiotelephone companies that may be affected by the decisions and rules in this Order.

120. Local Exchange Carriers, Interexchange Carriers, Competitive Access Providers, Operator Service Providers, and Resellers. Neither the Commission nor SBA has developed a definition particular to small local exchange carriers (LECs), interexchange carriers (IXCs), competitive access providers (CAPs), operator service providers (OSPs), or resellers. The closest applicable definition for these carrier-types under SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of these carriers nationwide of which we are aware appears to be the data that we collect annually in connection with the Telecommunications Relay Service (TRS). According to our most recent data, there are 1,348 incumbent LECs, 212 CAPs and competitive LECs, 171 IXCs, 24 OSPs, 388 toll resellers, and 54 local resellers. Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of these carriers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 1,348 incumbent LECs, 212 CAPs and competitive LECs, 171 IXCs, 24 OSPs, 388 toll resellers, and 54 local resellers that may be affected by the decisions and rule changes adopted in this Order.

121. Wireless (Radiotelephone) Carriers. SBA has developed a definition of small entities for radiotelephone (wireless) companies. The Census Bureau reports that there were 1,176 such companies in operation for at least one year at the end of 1992. According to SBA's definition, a small business radiotelephone company is one employing no more than 1,500 persons. The Census Bureau also reported that 1,164 of those radiotelephone companies had fewer than 1,000 employees. Thus, even if all of the remaining 12 companies had more than 1,500 employees, there would still be 1,164 radiotelephone companies that might qualify as small entities if they are independently owned and operated. Although it seems certain that some of these carriers are not independently owned and operated, we are unable at this time to estimate with greater precision the number of radiotelephone carriers and service providers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 1,164 small entity radiotelephone companies that may be affected by the decisions and rules in this Order.

122. Cellular, PCS, SMR and Other Mobile Service Providers. In an effort to further refine our calculation of the number of radiotelephone companies that may be affected by the rules adopted herein, we consider the data that we collect annually in connection with the TRS for the subcategories Wireless Telephony (which includes Cellular, PCS, and SMR) and Other Mobile Service Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to these broad subcategories, so we will utilize the closest applicable definition under SBA rules—which, for both categories, is for telephone companies other than radiotelephone (wireless) companies. To the extent that the Commission has adopted definitions for small entities providing PCS and SMR services, we discuss those definitions. According to our most recent TRS data, 808 companies reported that they are engaged in the provision of Wireless Telephony services and 23 companies reported that they are engaged in the provision of Other Mobile Services. Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of Wireless Telephony Providers and Other Mobile Service Providers, except as described, that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 808 small entity Wireless Telephony Providers and fewer than 23 small entity Other Mobile Service Providers that might be affected by the decisions and rules adopted in this Order.

123. Broadband PCS Licensees. The broadband PCS spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission defined “small entity” for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years. For Block F, an additional classification for “very small business” was added, and is defined as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. These regulations defining “small entity” in the context of broadband PCS auctions have been approved by SBA. No small businesses within the SBA-approved definition bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 small and very small business bidders won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F. However, licenses for Blocks C through F have not been awarded fully, therefore there are few, if any, small businesses currently providing PCS services. Based on this information, we estimate that the number of small broadband PCS licenses will include the 90 winning C Block bidders and the 93 qualifying bidders in the D, E, and F blocks, for a total of 183 small PCS providers as defined by SBA and the Commissioner's auction rules.

124. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission has defined “small entity” in auctions for geographic area 800 MHz and 900 MHz SMR licenses as a firm that had average annual gross revenues of less than $15 million in the three previous calendar years. The definition of a “small entity” in the context of 800 MHz SMR has been approved by the SBA, and approval for the 900 MHz SMR definition has been sought. The rules may apply to SMR providers in the 800 MHz and 900 MHz bands that either hold geographic area licenses or have obtained extended implementation authorizations. We do not know how many firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to extended implementation authorizations, nor how many of these providers have annual revenues of less than $15 million. Consequently, we estimate, for purposes of this IRFA, that all of the extended implementation authorizations may be held by small entities, some of which may be affected by the decisions and rules in this Order.

125. The Commission recently held auctions for geographic area licenses in the 900 MHz SMR band. There were 60 winning bidders who qualified as small entities in the 900 MHz auction. Based on this information, we estimate that the number of geographic area SMR licensees that may be affected by the decisions and rules in the order and order on reconsideration includes these 60 small entities. No auctions have been held for 800 MHz geographic area SMR licenses. Therefore, no small entities currently hold these licenses. A total of 525 licenses will be awarded for the upper 200 channels in the 800 MHz geographic area SMR auction. The Commission, however, has not yet determined how many licenses will be awarded for the lower 230 channels in the 800 MHz geographic area SMR auction. There is no basis, moreover, on which to estimate how many small entities will win these licenses. Given that nearly all radiotelephone companies have fewer than 1,000 employees and that no reliable estimate of the number of prospective 800 MHz licensees can be made, we estimate, for purposes of this IRFA, that all of the licenses may be awarded to small entities, some of which may be affected by the decisions and rules in this Order.

126. 220 MHz Radio Service—Phase I Licensees. The 220 MHz service has both Phase I and Phase II licenses. There are approximately 1,515 such non-nationwide licensees and four nationwide licensees currently authorized to operate in the 220 MHz band. The Commission has not developed a definition of small entities specifically applicable to such incumbent 220 MHz Phase I licensees. To estimate the number of such licensees that are small businesses, we apply the definition under the SBA rules applicable to Radiotelephone Communications companies. According to the Bureau of the Census, only 12 radiotelephone firms out of a total of 1,178 such firms which operated during 1992 had 1,000 or more employees. Therefore, if this general ratio continues to 1999 in the context of Phase I 220 MHz licensees, we estimate that nearly all such licensees are small businesses under the SBA's definition.

127. 220 MHz Radio Service—Phase II Licensees. The Phase II 220 MHz service is a new service, and is subject to spectrum auctions. In the 220 MHz Third Report and Order , 62 FR 1004 (April 3, 1997), we adopted criteria for defining small businesses and very small businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. We have defined a small business as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. Additionally, a very small business is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. An auction of Phase II licenses commenced on September 15, 1998, and closed on October 22, 1998. 908 licenses were auctioned in 3 different-sized geographic areas: three nationwide licenses, 30 Regional Economic Area Group Licenses, and 875 Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693 were sold. Companies claiming small business status won: one of the Nationwide licenses, 67 percent of the Regional licenses, and 54 percent of the EA licenses. As of January 22, 1999, the Commission announced that it was prepared to grant 654 of the Phase II licenses won at auction. A reauction of the remaining, unsold licenses was completed on June 30, 1999, with 16 bidders winning 222 of the Phase II licenses. As a result, we estimate that 16 or fewer of these final winning bidders are small or very small businesses.

128. Narrowband PCS. The Commission has auctioned nationwide and regional licenses for narrowband PCS. There are 11 nationwide and 30 regional licensees for narrowband PCS. The Commission does not have sufficient information to determine whether any of these licensees are small businesses within the SBA-approved definition for radiotelephone companies. At present, there have been no auctions held for the major trading area (MTA) and basic trading area (BTA) narrowband PCS licenses. The Commission anticipates a total of 561 MTA licenses and 2,958 BTA licenses will be awarded by auction. Such auctions have not yet been scheduled, however. Given that nearly all radiotelephone companies have no more than 1,500 employees and that no reliable estimate of the number of prospective MTA and BTA narrowband licensees can be made, we assume, for purposes of this FRFA, that all of the licenses will be awarded to small entities, as that term is defined by the SBA.

129. Rural Radiotelephone Service. The Commission has not adopted a definition of small entity specific to the Rural Radiotelephone Service. A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio Systems (BETRS). We will use the SBA's definition applicable to radiotelephone companies, i.e. , an entity employing no more than 1,500 persons. There are approximately 1,000 licensees in the Rural Radiotelephone Service, and we estimate that almost all of them qualify as small entities under the SBA's definition.

130. Air-Ground Radiotelephone Service. The Commission has not adopted a definition of small entity specific to the Air-Ground Radiotelephone Service. Accordingly, we will use the SBA's definition applicable to radiotelephone companies, i.e. , an entity employing no more than 1,500 persons. There are approximately 100 licensees in the Air-Ground Radiotelephone Service, and we estimate that almost all of them qualify as small entities under the SBA definition.

131. Fixed Microwave Services. Microwave services include common carrier, private-operational fixed, and broadcast auxiliary radio services. At present, there are approximately 22,015 common carrier fixed licensees in the microwave services. The Commission has not yet defined a small business with respect to microwave services. For purposes of this IRFA, we will utilize the SBA's definition applicable to radiotelephone companies— i.e. , an entity with no more than 1,500 persons. We estimate, for this purpose, that all of the Fixed Microwave licensees (excluding broadcast auxiliary licensees) would qualify as small entities under the SBA definition for radiotelephone companies.

132. Wireless Communications Services. This service can be used for fixed, mobile, radio location and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (WCS) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The Commission auctioned geographic area licenses in the WCS service. In the auction, there were seven winning bidders that qualified as very small business entities, and one that qualified as a small business entity. We conclude that the number of geographic area WCS licensees that may be affected by the decisions and rules in this Order includes these eight entities.

133. Multipoint Distribution Systems (MDS). The Commission has defined “small entity” for the auction of MDS as an entity that, together with its affiliates, has average gross annual revenues that are not more than $40 million for the preceding three calendar years. This definition of a small entity in the context of MDS auctions has been approved by the SBA. The Commission completed its MDS auction in March 1996 for authorizations in 493 basic trading areas (BTAs). Of 67 winning bidders, 61 qualified as small entities.

134. MDS is also heavily encumbered with licensees of stations authorized prior to the auction. The SBA has developed a definition of small entities for pay television services, which includes all such companies generating $11 million or less in annual receipts. This definition includes multipoint distribution systems, and thus applies to MDS licensees and wireless cable operators which did not participate in the MDS auction. Information available to us indicates that there are 832 of these licensees and operators that do not generate revenue in excess of $11 million annually. Therefore, for purposes of this FRFA, we find there are approximately 892 small MDS providers as defined by the SBA and the Commission's auction rules, some which may be affected by the decisions and rules in this Order.

135. In this Order, we adopt revisions to Part 54 that enhance universal service support for low-income individuals living on tribal lands, that remove certain administrative burdens that have prevented carriers not subject to state rate regulation, such as many tribal carriers, from providing certain tiers of Lifeline service to qualifying low-income consumers, and that clarify how the Commission will proceed under section 214(e) of the Telecom Act in the designation of eligible telecommunications carriers.

136. With respect to our rules enhancing Lifeline and Link-Up assistance on tribal lands, carriers will be required to ascertain applicant eligibility for these forms of low-income universal service support. Ascertainment of applicant eligibility will entail determining whether a particular applicant is (1) a low-income applicant, under the criteria for income eligibility set forth; and (2) living on or near a reservation. This Order also clarifies and elaborates on carrier obligations to publicize the availability of Lifeline and Link-Up assistance, although no new carrier obligations are imposed. Furthermore, this Order changes the requirements placed upon carriers for the provision of second-tier and third-tier Lifeline support. A carrier not subject to state rate regulation may now obtain second-tier Lifeline support provided it certifies to the Administrator that it will pass through the full amount of any second-tier support it receives to qualifying low income subscribers, and that it has received any non-federal regulatory approvals necessary to implement the required rate reduction. Such a carrier also may now obtain third-tier Lifeline support provided that the carrier or a tribe provides the local matching funds necessary to receive third-tier federal Lifeline support. Finally, because carriers are required to make low-income assistance available to qualifying customers, the rules and decisions in this Order expanding the level and types of support available to any carrier's customers will require that carrier to make such expanded support available to its qualifying customers.

137. Our clarification of how the Commission will proceed under section 214(e) of the Telecom Act in the designation of eligible telecommunications carriers will impose no additional reporting, recordkeeping, or other compliance requirements on carriers seeking eligible telecommunications carrier designation for the provision of service on tribal lands, but instead should diminish some carriers' legal costs by setting forth guidelines for carriers seeking such designation from the Commission. A state government, however, seeking to preserve a claim of its jurisdiction over any carrier seeking such designation from the Commission, will have to indicate to the Commission its jurisdictional claim in order for the Commission to refrain from entertaining such a designation proceeding until the state makes a final determination on its jurisdiction over that carrier.

138. With respect to our rules enhancing Lifeline and LinkUp assistance on tribal lands, we emphasize that most of the information carriers will be required to examine in order to determine applicant eligibility are already collected pursuant to other federal programs for Indians and for low-income individuals, and are readily available. For example, BIA maintains and regularly publishes in the Federal Register lists of those areas in the Nation which fall under BIA's definition of “reservation” or are considered “near reservation.” Moreover, carriers are already required to determine applicants' income eligibility under the existing Lifeline and LinkUp support mechanisms; this Order modifies those eligibility criteria merely by providing certain additional means-tested programs that low-income individuals living on tribal lands may use to establish their income eligibility. In order to apply these new eligibility criteria, carriers will not be required to make de novo evaluations of subscriber eligibility. Rather, carriers will only need to consult the decisions regarding particular applicants' low-income status already made by other government entities. Thus, the inquiry carriers will have to make to determine whether an applicant for the low-income support adopted in this Order meets the income eligibility requirement should not be substantially different from the inquiry carriers must already make for the Commission's existing low-income support mechanisms. Furthermore, our clarification of carrier obligations to publicize the availability of Lifeline and Link-Up assistance does not expand existing obligations or create additional ones; rather, this Order clarifies existing obligations under section 214(e) of the Telecom Act and our previous Orders. Additionally, the certifications required by our new rules for second and third tier Lifeline support impose at most a minimal burden on carriers seeking to obtain such support. Finally, to the extent the rules and decisions adopted in this Order require carriers to change their operations in order to deliver expanded support to qualifying customers, for example by changing their billing systems, we have some indication that the costs of making such modifications, if any, are minimal. Furthermore, to the extent the rules and decisions adopted in this Order entail any such costs, they also provide substantial financial benefits, by providing carriers with guaranteed revenue streams in place of billings subject to the risks of non-collection. We conclude that, in general, the compliance requirements entailed by the low-income support mechanisms adopted in this Order are not of a scope or magnitude substantially different from the compliance requirements entailed by our existing low-income support mechanisms.

139. With respect to our clarification of how the Commission will proceed under section 214(e) of the Telecom Act in the designation of eligible telecommunications carriers we conclude that the cost to a state government of filing with the Commission a statement asserting jurisdiction over any carrier seeking such designation for the provision of service to tribal lands, in order for the Commission to refrain from acting on the designation petition until the state makes a final determination regarding its jurisdiction over that carrier, will be minimal. Furthermore, because such filings would be made by the authorized state government body, rather than a local governing authority, it is doubtful that any government authority making such a filing with the Commission would be considered a small entity.

140. The Commission will send a copy of this Order, including this FRFA, in a report to be sent to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of the Order, including FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the Order and FRFA (or summaries thereof) will also be published in the Federal Register . See 5 U.S.C. 604(b).

141. Pursuant to 5 U.S.C. 553(d), the rules and rule changes adopted herein shall take effect thirty (30) days after their publication in the Federal Register .

142. Accordingly, it is ordered that, pursuant to the authority contained in sections 1-4, 201-205, 218-220, 254, 303(r), and 403 of the Communications Act of 1934, as amended, this Report and Order, Memorandum Opinion and Order is adopted. The collections of information contained within this Order are contingent upon approval by the Office of Management and Budget. The Commission will publish a notice announcing the effective date of the collections of information.

143. It is further ordered that part 54 of the Commission's rules, is amended, effective thirty (30) days after the publication of this Report and Order, Memorandum Opinion and Order in the Federal Register .

144. It is further ordered that Cellco's Petition for Designation as an Eligible Telecommunications Carrier is dismissed without prejudice to the extent that it seeks designation for service in Maryland.

145. It is further ordered that Smith Bagley's Petition for Designation as an Eligible Telecommunications Carrier is dismissed without prejudice.

146. It is further ordered that the record in Western Wireless' Petition for Designation as an Eligible Telecommunications Carrier on the Crow Reservation shall be reopened as discussed herein.

147. It is further ordered that Cheyenne River Sioux Tribe Telephone Authority's Petition for Designation as an Eligible Telecommunications Carrier is dismissed without prejudice.

148. It is further ordered that authority is delagated to the Chief of the Common Carrier Bureau pursuant to § 0.291 of the Commission rules, to modify, or require the filing of, any forms that are necessary to implement the decisions and rules adopted in this Order.

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

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and CFR part 679.

The 2000 TAC of arrowtooth flounder for the Western Regulatory Area was established as 5,000 metric tons (mt) in the Final 2000 Harvest Specifications of Groundfish for the GOA (65 FR 8298, February 18, 2000). See § 679.20(c)(3)(ii).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2000 TAC for arrowtooth flounder in the Western Regulatory Area will be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 4,900 mt, and is setting aside the remaining 100 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for arrowtooth flounder in the Western Regulatory Area of the GOA.

Maximum retainable bycatch amounts may be found in the regulations at § 679.20(e) and (f).

This action responds to the best available information recently obtained from the fishery. It must be implemented immediately to prevent overharvesting the 2000 TAC of arrowtooth flounder for the Western Regulatory Area of the GOA. A delay in the effective date is impracticable and contrary to the public interest. Further delay would only result in overharvest. NMFS finds for good cause that the implementation of this action should not be delayed for 30 days. Accordingly, under 5 U.S.C. 553(d), a delay in the effective date is hereby waived.

This action is required by § 679.20 and is exempt from review under E.O. 12866.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The amount of the 2000 TAC of Pacific cod in the Western Regulatory Area of the GOA was established as 20,625 metric tons by the Final 2000 Harvest Specifications of Groundfish for the GOA (65 FR 8298, February 18, 2000) and subsequent reserve release (65 FR 20919, April 19, 2000). See § 679.20(c)(3)(ii).

In accordance with § 679.20(d)(2), the Administrator, Alaska Region, NMFS, has determined that the amount of the 2000 TAC for Pacific cod in the Western Regulatory Area of the GOA has been achieved. Therefore, NMFS is requiring that further catches of Pacific cod in the Western Regulatory Area of the GOA be treated as prohibited species in accordance with § 679.21(b).

This action responds to the best available information recently obtained from the fishery. It must be implemented immediately to prevent overharvesting the amount of the 2000 TAC for Pacific cod by vessels catching Pacific cod in the Western Regulatory Area of the GOA. A delay in the effective date is impracticable and contrary to the public interest. The fleet has taken the amount of the 2000 TAC for Pacific cod in the Western Regulatory Area of the GOA. Further delay would only result in overharvest. NMFS finds for good cause that the implementation of this action cannot be delayed for 30 days. Accordingly, under 5 U.S.C. 553(d), a delay in the effective date is hereby waived.

This action is required by § 679.20 and is exempt from review under E.O. 12866.