On January 21, 2000, the Department published an interim rule at 65 FR 3375 to implement three legislative requirements in the William F. Goodling Child Nutrition Reauthorization Act of 1998, Public Law 105-336, 112 Stat. 3143, enacted October 31, 1998, which affect the application and certification process. These provisions include, with limited exceptions, that WIC agencies require WIC applicants and participants to: (1) Provide proof or documentation of family income in cases where an individual is not determined adjunctively or automatically income eligible; (2) provide proof or documentation of an applicant's residency; and (3) physically present themselves at the WIC clinic at certification. Comments were requested by the Department on the interim rule. Comments received on the interim rule are discussed below.

Subsequently, legislation was enacted on June 20, 2000, the Agricultural Risk Protection Act of 2000, Public Law 106-224, 114 Stat. 224, which includes several nondiscretionary provisions that also affect the WIC application and certification process. One of these provisions was subsequently amended by the Grain Standards and Warehouse Improvement Act of 2000, Public Law 106-472, 114 Stat. 2058, enacted on November 9, 2000. The Agricultural Risk Protection Act of 2000 allows individuals residing in a remote Indian or Native village or served by an Indian tribal organization and residing on a reservation or pueblo, to provide their mailing address and name of the remote Indian or Native village as proof of residency. This legislation defines “remote Indian or Native village.” The Agricultural Risk Protection Act of 2000, subsequently amended by the Grain Standards and Warehouse Improvement Act of 2000, also provides State agencies, in determining an applicant's eligibility for WIC, the option to exclude from consideration as income any cost-of-living allowance provided to military personnel who are on duty outside the contiguous United States. These requirements, as set forth in this final rule, are reproduced verbatim from the legislation. Thus, they are considered nondiscretionary provisions.

Section 263 of the Agricultural Risk Protection Act of 2000 requires that FNS promulgate regulations to implement the provisions as soon as practicable after the date of enactment without regard to the Administrative Procedure Act's notice and comment provisions (5 U.S.C. 553); the State of Policy of the Secretary of Agriculture relating to notices of proposed rulemaking and public participation in rulemaking effective July 24, 1971 (36 FR 13804); and the Paperwork Reduction Act (44 U.S.C., chapter 35). In addition, section 172 of Public Law 106-224 requires us to promulgate regulations to carry out the Act and its amendments not later than 120 days after the date of enactment, June 20, 2000. For these reasons, and because we are obligated by law and have exercised no discretion in making the amendments set forth by Public Law 106-224, we are not taking public comment prior to promulgation of this final rule.

A total of 24 comment letters, faxes and emails were received on the interim rule published on January 21, 1999, at 65 FR 3375. Commenters were primarily WIC State and local agencies and staff. Other commenters represented industry, a professional health or nutrition-related group, and the general public. In general, some commenters supported the legislative measures to improve the integrity of the WIC Program. However, the majority of commenters opposed various aspects of the requirements in the interim rule, primarily the requirements mandated by law. In addition, some commenters recommended changes to WIC eligibility, and certification requirements that were not addressed in the interim rule such as what is counted as income for WIC eligibility purposes.

The Department has carefully considered all comments in the development of this final rule and would like to thank all agencies, organizations and individuals that responded to the request for comments on the interim rule. The Department does not have the authority to eliminate or revise legislative requirements, or change other WIC requirements not addressed in the interim rule without first issuing proposed regulations and affording the public the opportunity to comment on the proposal. There are, however, several issues that need clarification, given the comments received. The following is a discussion of each provision, clarifications needed as a result of comments received, an explanation of the three nondiscretionary certification provisions contained in Public Law 106-224, with one provision subsequently amended by Pub. L. 106-472, and an explanation of the provisions in this final rule.

In the interim rule, the Department added new definitions for “Applicants,” “Documentation” and “Individual with disabilities.” One commenter recommended that the definition of “documentation” include cases where the local agency assists in obtaining the documentation such as contacting the Medicaid Program to establish eligibility for WIC adjunct income eligibility purposes. It is the Department's intention that the definition of “documentation” include situations where the applicant may bring in written information to confirm verbal statements or include, where feasible, the WIC clinic assisting the client in obtaining the required written documents. For example, WIC staff could contact the Medicaid Program or access Medicaid eligibility information to confirm that the applicant is adjunctively or automatically income eligible for WIC. No comments were received on the definitions of “Applicants” and “Individual with disabilities.” As such, the three definitions included in the interim rule are not changed in this final rule.

Further, a new definition of “remote Indian or Native village” has been added as a result of the Agricultural Risk Protection Act of 2000, Public Law 106-224, 114 Stat. 224, Section 244(a). As noted below, this law adds an additional exception to the proof of residency requirement for individuals residing in a remote Indian or Native village. Therefore, as defined in the Act, “remote Indian or Native village” means an Indian or Native village that: (1) Is located in a rural area; (2) has a population of less than 5,000 inhabitants; and, (3) is not accessible year-around by means of a public road, as defined in section 101 of title 23 of the United States Code (U.S.C.). Section 101 of title 23 of the U.S.C. defines public road as “* * * any road or street under the jurisdiction of and maintained by a public authority and open to public travel.” Accordingly, § 246.2 adds a new definition of “remote Indian or Native village.”

The interim rule established, in accordance with legislation, that applicants, except those deemed adjunctively income eligible, must provide documentation of family income with limited exceptions. The limited exceptions include: (1) An individual for whom the necessary documentation is not available; or, (2) an individual, such as a homeless woman or child, for whom the agency determines the requirement would present an unreasonable barrier to participation. The Department also clarified in the interim rule that certain instream migrant farmworkers and their family members with expired Verification of Certification cards shall satisfy the State agency's income standard and income documentation requirements. The interim rule also addressed the Department's intent to continue to include a provision which affords State and local agencies the authority to verify an applicant's income, that is validating information provided by the applicant through an external source other than the applicant.

One commenter recommended the exceptions to the provision of documentation include individuals that have lost everything due to theft, fire, flood or other disaster. This example clearly falls within the parameters of one of the exceptions set forth in the legislation, that is an individual for whom the necessary documentation is not available.

One commenter recommended that all sources of family income be documented, not just income of one family member. It has been the Department's and State and local agencies' longstanding policy that all sources and amounts of family income are identified in determining WIC income eligibility.

Given the comments received and clarifications noted above, the interim requirements pertaining to the documentation of income are unchanged in this final rule.

Section 244(b) of Public Law 106-224 amended section 17(d)(2)(B) of the Child Nutrition Act (CNA) to make a technical correction. The technical correction is made to a provision which permits State agencies to exclude from income, in determining WIC eligibility, any basic allowance for quarters received by military personnel residing off military installations. First, Section 244(b) changes the reference from “basic allowance for quarters” to “basic allowance for housing.” This change is necessary and consistent with a revision in the terminology used in referring to this military allowance. Second, Section 244(b) of Public Law 106-224, subsequently amended by Section 307(b)(1) of Public Law 106-472, adds at the end of section 17(d)(2)(B) of the CNA a new provision. Under this provision, State agencies may choose to exclude, in determining WIC income eligibility, any cost-of-living allowance (COLA) provided under section 405 of title 37 of the United State Code, to a member of a uniformed service who is on duty outside the contiguous states of the United States. This allowance is referred to as the overseas continental United States (OCONUS) COLA.

The OCONUS COLA is provided to active duty uniformed service members in designated overseas high-cost areas including Hawaii, Alaska and Guam. Ultimately, the decision to choose whether to exclude the OCONUS COLA in determining WIC income eligibility affects all WIC State agencies. This is the case because some members of a military family may remain stateside and apply and/or participate in WIC while a family member on duty overseas receives the OCONUS COLA. In areas outside the contiguous U.S., such as Hawaii, Alaska and Guam, only one COLA is provided to active duty military personnel stationed in these locations, that is the OCONUS COLA. Therefore, each WIC State agency in which applying members of a military family reside within its borders must determine whether it will include or exclude the OCONUS COLA provided to the family member who is stationed in a designated overseas high-cost area in determining WIC income eligibility. The determination to include or exclude the OCONUS COLA needs to be addressed in each State agency's policy and procedures manual.

While State agencies may choose to exclude the OCONUS COLA in determining WIC income eligibility, the amendments made by Public Laws 106-224 and 106-472 do not authorize or permit State agencies to choose whether to exclude the COLA provided to military personnel in designated high-cost areas within the continental United States. This allowance is referred to as the Continental United States (CONUS) COLA. Therefore, in all cases where a military family receives the CONUS COLA, the amount must be counted as income in determining WIC eligibility.

In reviewing military pay stubs, while some variation may exist to reflect the COLA, generally, the military pay stubs will identify whether a COLA is provided to a military person, either as an OCONUS OCOLA or a CONUS COLA. All Marines' pay stubs, whether they receive or do not receive a CONUS COLA, will reflect in the remarks section of the pay stub that the Marine is entitled to CONUS COLA; computed amount is reflected as “O” or a specific dollar amount. As indicated above, if a military family member applies for WIC and a household member receives a CONUS COLA, the amount received must be counted in determining WIC income eligibility.

Accordingly, § 246.7(d)(2)(iv)(A) is revised to change the reference from “basic allowance for quarters” to “basic allowance for housing.” This section also adds the option that State agencies may choose to exclude any cost-of-living allowance provided to military personnel on duty outside the contiguous United States.

Public Law 105-336 addresses a renewed emphasis on State and local agencies' systems for detecting dual participation. Therefore, the interim rule, at § 246.7(l)(2), added a requirement, in addition to checking identity at certification, that State and local agencies must require each applicant at certification to present proof of residency, that is the location or address where the applicant routinely lives or spends the night. As noted, for an infant or child applicant, documentation of residency must be provided for the person with whom the infant or child resides. Further, the requirement to provide documentation of residency also applies to a person who transfers from another area or State and presents a valid Verification of Certification (VOC) card at a new WIC site. As indicated in the interim rule, a post office box does not constitute sufficient documentation of residency.

Some commenters opposed the requirement for various reasons. For example, WIC commenters indicated that WIC applicants may forget to bring in documentation or bills may not be in the name of the applicant. However, a greater, overriding factor is the need to detect and prevent dual participation. The collection of such information is an important data element in identifying dual participation and necessary to improve the integrity of the WIC Program. Further, sufficient flexibility exists for State agencies in developing procedures in this area. For example, we support a commenter's suggestion that “location” should also mean, for example, directions on a map where the applicant routinely lives or spends the night. Such procedures may be necessary, for example, in areas/towns where only post office boxes exist or in rural areas where there are no street names.

Some commenters expressed concern that some applicants may view and misinterpret the requirement as requiring proof of citizenship or alien status. We strongly encourage State and local agencies to ensure any program eligibility information to WIC applicants and participants reflects the true intent of this requirement. While for WIC regulatory and policy purposes, the Department refers to this requirement as proof of residency, WIC applicants need to understand they are being asked to provide documentation of where they routinely live or spend the night. Such clarification is extremely important to ensure misunderstanding or miscommunication of the requirement does not create a barrier to WIC participation.

The residency requirement, i.e., the location or address where the applicant routinely lives or spends the night, has no durational aspect. That is, there is no requirement on the length of time an applicant must reside at the location or address where he/she routinely lives or spends the night.

Accordingly, the general requirements pertaining to documentation of residency, as set forth in the interim rule, are retained in this final rule.

As specified in the preamble to the interim rule, current WIC regulations at section 246.7(c)(1) require all State agencies, except Indian State agencies to require applicants to reside within the jurisdiction of the State. WIC regulations authorize Indian/Native American State agencies to establish a requirement for applicants to reside within their area or legal jurisdiction.

Further, State agencies may also establish a local service area residency requirement. The residency requirement has no durational or formal legal aspect and need to represent a legal residence. Also, length of residency cannot be a prerequisite to receiving WIC benefits.

No comments were received on these current WIC residency requirements. Therefore, these requirements are retained in WIC regulations and policy.

As set forth in the interim rule in § 246.7(l)(2), State agencies are permitted, when no proof of residency or identity exists, to exempt an applicant from the residency and/or identity documentation requirements. In such cases, at a minimum, State or local agencies must require the applicant to confirm in writing his/her residency or identity. As noted in the interim rule, applicants to whom an exemption may apply include a victim of theft, loss, or disaster; a homeless individual; or, a migrant farm worker. No comments were received on this portion of the interim rule. Therefore, this final rule retains these requirements.

However, sections 244(a) and (c) of Public Law 106-224 have included an additional nondiscretionary exemption from the residency requirement. Section 244(c) of the law permits an individual residing in a remote Indian or Native village, or an individual served by an Indian tribal organization and residing on a reservation or pueblo, to establish proof of residency by providing to the State agency the mailing address of the individual and the name of the remote Indian or Native village. The Department has determined that no additional requirements or standards, as authorized by the Public Law 106-224, are necessary to implement this requirement. Accordingly, at the end of § 246.7(l)(2), a new sentence has been added to reflect this legislative provision.

Many commenters opposed the general requirement set forth in Public Law 105-335 that individuals seeking participation in the WIC Program must be physically present at the initial WIC certification and subsequent recertifications, except in certain limited circumstances. Some commenters recommended additional exemptions beyond those permitted by the legislation, such as permitting a non-WIC entity/individual such as any health professional, to confirm or verify an individual's physical presence. As indicated previously, the Department does not have the authority to change or expand legislative requirements. Further, the legislative mandate reinforces the Department's long-standing position that the physical presence of an individual at certification is basic to WIC Program effectiveness.

The Department wishes to emphasize, as set forth in the preamble to the interim rule, that although an applicant may be exempt from the physical presence requirement, State and local agencies must ensure that all necessary information and documentation, including income, residency, identity, and nutrition risk, are provided in order to make a WIC eligibility determination in the absence of the applicant. The applicant's parent, caretaker or proxy can bring in the documents necessary to determine eligibility for WIC.

Therefore, the general requirement that individuals must be physically present at the initial WIC certification and subsequent recertifications, except in certain limited circumstances as discussed below, has been retained in this final rule.

As set forth in Public Law 105-336 and the interim rule, State and local agencies are required to exempt from the physical presence requirement applicants who are qualified individuals with disabilities and are unable to be physically present at the WIC clinic because of their disabilities. The interim rule further clarified that this requirement also applies to applicants whose parents or caretakers are individuals with disabilities that meet this standard. The interim rule set forth examples of situations that would warrant an exception to the physical presence requirement due to a disability. Those examples included: (1) A medical condition that necessitates the use of medical equipment that is not easily transportable; (2) a medical condition that requires confinement to bed rest; and (3) a serious illness that may be exacerbated by coming in to the WIC clinic.

One commenter supported the exceptions for disability and indicated the exceptions were reasonable and represented current State agency practices. Another commenter recommended that the regulatory text be revised to include an example of a highly contagious illness that may be readily communicated to others. The interim rule and regulatory text set forth examples of situations that warranted an exception due to a disability. Therefore, some State agency flexibility exists to identify other potential conditions similar to those cited in the interim rule. Certainly, an individual with a highly contagious illness most likely would require confinement to bed rest and/or the condition may be exacerbated by coming in to the WIC clinic. Therefore, such a situation may fall under one or more of the examples set forth in the interim rule.

Further, another commenter recommended that if a person meets the conditions and is unable to be physically present, that the State or local agency should permit a caregiver or representative to present documentation of income, residency, and bloodwork data. This is the Department's intent with regard to implementation of this exception. While the applicant may be determined to be exempt from the physical presence requirement, State and local agencies would need to schedule an appointment for another family member, caregiver or representative to bring in all documents and information necessary to determine the applicant's eligibility for the WIC Program.

As indicated in the interim rulemaking, all persons with disabilities are not automatically exempt from the physical presence requirement. Only those disabilities that create a current barrier to the physical presence requirement may serve as a basis for an exception from the requirement.

Accordingly, as set forth in the interim rule, section 246.7(p)(2)(i) is retained in this final rule.

Public Law 105-336, and the interim rule, provide State agencies the option, if physical presence would present an unreasonable barrier to participation, to exempt certain infants or children from the physical presence requirement in the following situations:

An infant or child:

• Who was present at his/her initial WIC certification; and,

• Has documented ongoing health care from a provider other than the local agency; or

An infant or child:

• Who was present at his/her initial WIC certification; and

• Was present at a WIC certification or recertification determination within the 1-year period ending on the date of the most recent certification or recertification determination; and,

• Is under the care of one or more working parents or one or more primary working caretakers whose working status presents a barrier to bringing the infant or child in to the WIC clinic.

Several comments were received on the option to exempt an infant or child with ongoing health care. One commenter recommended this option be extended to children in foster or shelter care. Others opposed the provision because the provider of the health care must be an entity other than the WIC local agency. However, as indicated previously, the Department does not have the authority to expand the option or exclude one or more aspects of the requirement because they are specified in law. One commenter expressed concern that under this option, an infant could present soon after birth and never have to physically present again at a WIC certification. We support the concern raised by the commenter and would encourage WIC State agencies to consider this issue in the development of policy. A limit on the number of consecutive times this option could be used may be appropriate, as in the case identified by the commenter. This option, as set forth in the interim rule, is retained in this final rule.

Several commenters also opposed the option to exempt an infant or child of working parents. Reasons cited by commenters for opposing the provision include that it will confuse working parents, it will be difficult for parents to meet the initial physical presence requirement, and the option fails to address an essential requirement that the infant or child have ongoing health care. Because the option, as noted above, is reproduced in the regulations verbatim from the legislation, the Department does not have the authority to change or revise the option.

However, given comments received on this provision, several clarifications are necessary with regard to this option. First, as a commenter noted, the requirement that the infant or child must have been present within a 1-year period does mean that an infant or child must have been physically present at a WIC certification at least once in the previous 12 months. Second, the report language which accompanies Public Law 105-336 specifies that the exemption for working parents means that in families where there are two parents or caretakers, both individuals must be working in order for the option to apply. The exception for one working parent in the legislation and the interim rule refers to households where there is only one parent or caretaker.

As indicated above, commenters expressed concerns with both options for exempting an infant or child. However, the Department would emphasize that these are options that the State agency can determine whether or not to implement. State agencies are not required to implement these provisions. Therefore, for the reasons stated above, the option to exclude an infant or child in the case of working parents or caretakers is retained in this final rule, as set forth in the interim rule.

Section 246.7(i)(3)-(i)(5) of the interim rule specifies that the certification form, which may be either paper or electronic, must reflect the type of document(s) used to determine or confirm income eligibility, residency and identity or include a copy of the document(s) in the file. Further, in those cases where there is no proof of income, the file must include a copy of the written statement by the applicant indicating why he/she cannot provide documentation of income, and in applicable cases, specify if the applicant has no income. Further, this section also requires an indication of whether the applicant is physically present at certification. Such an indication may consist of simply checking off an appropriate annotated box on a paper or electronic form. If that applicant is not physically present, the form must indicate the reason why an exception was granted or a copy of a document(s) must be placed in the file that explains the reason for the exception.

Several commenters opposed the requirements for State and local agencies to reflect the types of documents used to confirm income and residency. However, the Department believes these requirements are necessary to ensure the integrity of the WIC certification process. State agencies have been encouraged to adopt procedures to meet this requirement in a manner that imposes the least administrative burden on WIC clinic staff.

This final 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.

This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). Pursuant to that review, Samuel Chambers, Jr., Administrator, Food and Nutrition Service, has certified that this rule would not have a significant impact on a substantial number of small entities. This rule would modify WIC certification procedures. Therefore, the effect of these changes would be primarily on State and local WIC agencies, some of which are small entities. However, the impact on small entities is not expected to be significant.

The WIC Program is listed in the Catalog of Federal Domestic Assistance Programs under 10.557. For the reasons set forth in the final rule in 7 CFR part 3015, Subpart V, and related Notice (48 FR 29115), this program is included in the scope of Executive Order 12372 which requires intergovernmental consultation with State and local officials.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This final 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 unless so specified in the EFFECTIVE DATE section of the preamble of this final rule. Prior to any judicial challenge to the application of the provisions of the final rule, all applicable administrative procedures must be exhausted.

Title II of the Unfunded Mandates Reform Act of 1995 ((UMRA) (2 U.S.C. 1531-38)) 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 (FNS) 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 the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 204 of the UMRA generally requires FNS to identify and consider a reasonable number of regulatory alternatives and adopt the most cost effective or least burdensome alternative that achieves the objectives of the rule.

This final 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, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.

This regulation contains information collection that is subject to review and approval by the Office of Management and Budget. The information collection contained in Section 246.7 (i)(3)—(i)(5) of this regulation is approved under OMB No. 0584-0043.

The Inflation Adjustment Act  1 requires the OCC, as well as other Federal agencies with CMP authority, to publish regulations to adjust each CMP authorized by a law that the agency has jurisdiction to administer. The purpose of these adjustments is to maintain the deterrent effect of CMPs and to promote compliance with the law. The Inflation Adjustment Act requires adjustments to be made at least once every four years following the initial adjustment. The OCC's prior adjustment to each CMP was published in the Federal Register on January 22, 1997,  2 and became effective that same day.

The Inflation Adjustment Act requires that the adjustment reflect the percentage increase in the Consumer Price Index between June of the calendar year preceding the adjustment and June of the calendar year in which the amount was last set or adjusted. The Inflation Adjustment Act defines the Consumer Price Index as the Consumer Price Index for all urban consumers published by the Department of Labor (“CPI-U”). 3 In addition, the Inflation Adjustment Act provides rules for rounding off increases, 4 and provides that any increase in a CMP applies only to violations that occur after the date of the adjustment.

This final rule adjusts the amount for each type of CMP that the OCC has jurisdiction to impose in accordance with these statutory requirements. It does so by revising the table contained in section 19.240 of our regulations. The table identifies the statutes that provide the OCC with CMP authority, describes the different tiers of penalties provided in each statute (as applicable), and sets out the inflation-adjusted maximum penalty that the OCC may impose pursuant to each statutory provision.

The inflation adjustment for the CMPs was calculated by comparing the CPI-U for June 1996 (156.7) with the CPI-U for June 1999 (166.2), 5 resulting in an inflation adjustment of 6.1 percent. 6 The amount of each CMP was multiplied by the appropriate percentage and the resulting dollar amount was rounded up or down according to the rounding requirements of the statute. In some cases, rounding resulted in no adjustment to the CMP. The table below shows both the present CMPs and inflation adjusted CMPs. The table as published in the rule includes only the CMPs as of the effective date of this rule.

On June 25, 1999, Flight Structures, Inc., 4407 172 Street NE, Arlington, Washington, 98223, applied for a supplemental type certificate to install an overhead crew rest compartment in Boeing Model 777-200 series airplanes. The Boeing Model 777-200 series airplane is a large twin-jet engine transport airplane with four pairs of Type A exits, a passenger capacity of 440, and a range of 5000 miles. The overhead crew rest compartment is a single compartment located above the main passenger compartment in the vicinity of door three. The crew rest compartment will contain eight private bunks and two seats, and is to be certified for a maximum of ten occupants. A stairwell entering from the door three aisle is the main entry. Two escape hatches are located on either side of the entryway door. These special conditions are written for an overhead crew rest compartment that will be occupied only in flight, not during taxi, takeoff, or landing.

Under the provisions of § 21.101, Flight Structures, Inc., must show that the Boeing Model 777-200 series airplane, as changed, continues to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. T00001SE 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 incorporated by reference in Type Certificate No. T00001SE for the Boeing Model 777-200 series airplanes include 14 CFR part 25, as amended by Amendments 25-1 through 25-82. The U.S. type certification basis for the Boeing Model 777-200 series airplanes is established in accordance with 14 CFR 21.29 and 21.17 and the type certification application date. The type certification basis is listed in Type Certificate Data Sheet No. T00001SE.

If the Administrator finds that the applicable airworthiness regulations ( i.e., part 25) do not contain adequate or appropriate safety standards for the Model 777-200 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, Boeing Model 777-200 series airplane must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

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

Special conditions are initially applicable to the model for which they are issued. Should the 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 feature, the special conditions would also apply to the other model under the provisions of § 21.101(a)(1).

While the installation of a crew rest compartment is not a new concept for large transport category airplanes, each compartment design has unique features by virtue of its design, location, and use on the airplane. Previously, crew rest compartments have been evaluated that are installed within the main passenger compartment area of the Boeing Model 777-200 and Model 777-300 series airplanes; other crew rest compartments have been installed below the passenger cabin area, within the cargo compartment. Similar overhead crew rest compartments have also been installed on the Boeing Model 747 airplane. The interfaces of the modification are evaluated within the interior and assessed in accordance with the certification basis of the airplane. However, part 25 does not provide the requirements for crew rest compartments within the overhead area of the passenger compartment for the Boeing Model 777-200 series airplanes.

This is a compartment that has never been used for this purpose in any previous Boeing Model 777-200 series airplanes. Due to the novel or unusual features associated with the installation of this crew rest compartment, special conditions are considered necessary to provide a level of safety equal to that established by the airworthiness regulations incorporated by reference in the type certificate.

Notice of proposed special conditions No. 25-00-02-SC for the Boeing Model 777-200 series airplanes modified with a Flight Structures, Inc., overhead crew rest compartment was published in the Federal Register on September 25, 2000 (65 FR 57564). Six commenters responded to the Notice.

Two comments address special condition no. 1(a)(2), concerning a placard near the crew rest compartment entrance stating that occupants must be trained in crew rest compartment evacuation procedures. One commenter proposes that the placarding include the reference to the training material document. The commenter states that this would be consistent with the 747 door 5 overhead crew rest compartment special conditions.

The 747 door 5 overhead crew rest special conditions, issued November 13, 1987, do not include a requirement to have a placard near the entrance of the crew rest compartment stating that occupants must be trained in crew rest compartment evacuation procedures.

The requirement that the occupants must be trained in the evacuation procedures for the Boeing Model 777-200 series airplane crew rest compartment is contained in special condition no. 2(d). After further consideration, the FAA agrees with the recommendation to modify the placarding requirement of special condition no. 1(a)(2) to include “that are trained in the evacuation procedures for the overhead crew rest compartment,” but not to include the reference to the training material document.

One comment raises the question that if lighted “No Smoking” signs are provided in addition to the “No Smoking” placarding in special condition no. 1(a)(4) then the signs and placarding could provide conflicting and confusing information. If the lighted signs are switchable then this would be confusing to the occupants of the crew rest compartment since the lighted signs when not illuminated would allow smoking and the placarding would prohibit smoking. The commenter recommends that if lighted signs are provided that they remain on at all times.

The FAA agrees that if lighted “No Smoking” signs are provided that they should remain on at all times.

One comment addresses special condition no. 2, concerning the requirement that the evacuation from the crew rest compartment must be rapid, which implies an undefined time restraint that is not well understood or required in other special conditions for similar designs of remote compartments. The commenter proposes removing the word “rapidly” from the special conditions.

The FAA does not agree with the comment that “rapidly” should be removed from the special conditions. The wording in the special conditions is consistent with the evacuation requirements for other remote compartments. The regulation for lower deck service compartments, 14 CFR 25.819, has the same requirement that is addressed in special condition no. 2, including the requirement for rapid evacuation from the compartment to the main deck. The crew rest compartment evacuation must be rapid to reduce the amount of time between the detection of smoke and initiation of fire fighting procedures. Also, rapid evacuation would reduce the amount of time that smoke from the crew rest compartment could enter the passenger cabin through the open evacuation route.

Two comments address special condition no. 2(a), concerning the requirement that the two evacuation routes be located on opposite sides of the crew rest compartment, with sufficient separation within the compartment to minimize the possibility of an event rendering both routes inoperative. They note the words “opposite sides of the crew rest” do not add to the level of safety for the occupants of the crew rest over that provided by the evacuation routes that have “sufficient separation within the compartment to minimize the possibility of an event rendering both routes inoperative.”

Previous special conditions for overhead crew rest compartments have given the option for evacuation routes to be located on opposite sides of the crew rest, or to have sufficient separation within the compartment to minimize the possibility of an event rendering both routes inoperative. The FAA agrees with the comment that the words “opposite sides of the crew rest” do not add to the level of safety for the occupants of the crew rest when the routes must have “sufficient separation within the compartment to minimize the possibility of an event rendering both routes inoperative.” Evacuation routes located on opposite sides of the crew rest compartment may be located in an area where both routes could be rendered inoperative. The final special conditions will be revised to remove the words “opposite sides of the crew rest.”

Five comments address special condition no. 2(b), concerning the location of crew rest compartment evacuation paths entering the main deck. One commenter proposes clarification to the times that must be considered for normal movement of passengers that would affect the evacuation from the crew rest compartment by adding the following words “during times in which occupancy is allowed” in the crew rest compartment. The commenter states that since the crew rest compartment is not occupied during taxi, takeoff and landing, egress from the compartment during an emergency evacuation of the airplane is not relevant.

The FAA agrees with the comment that passenger movement during in-flight conditions needs to be considered since the crew rest may only be occupied during flight. The special conditions will be revised to reflect this clarification, that normal movement by passengers when crew rest compartment occupancy is allowed must be considered.

A second commenter states that the limitations for the location of one of the two evacuation routes are too restrictive and proposes some changes. The commenter suggests that during flight the normal passenger movement would be greatest in the main aisle and galley complex areas and the movement in a cross aisle would be much less. The commenter proposes allowing the evacuation routes to open into cross aisles provided there were procedures that would require verification that area below the emergency hatch is clear of passengers before evacuating.

The FAA does not agree with the concern that requiring one evacuation route not to open into a cross aisle is overly restrictive. The special conditions require that one evacuation route be located such that normal passenger movement would not block the route, but allows the other route(s) to be located where they could be blocked by normal passenger movement. A compartment design that would allow both evacuation routes to be blocked by normal passenger movement does not provide an acceptable level of safety.

A third commenter notes that passenger movement is low enough when the crew rest compartment is occupied that the cabin crew could clear the area under or adjacent to an emergency escape route quickly, regardless of its location. The commenter proposes a change to the special conditions requiring procedures for clearing the area of the evacuation route in the event an evacuation is necessary and there is passenger movement in the evacuation route.

The FAA has considered the proposal to have the main deck cabin crew clear passengers out of the evacuation path prior to evacuation from the crew rest compartment. The reliance on the main deck cabin crew to take some action before the crew rest compartment can be evacuated is not acceptable. In cases when the main deck cabin crew is involved with an emergency, they may not be available to clear the passengers out of the area of the evacuation path. This includes evacuation paths into an aisle, cross aisle, galley complex, or over passenger seats.

A fourth commenter states that if the evacuation path is over an area where there are passenger seats, then several items need to be considered including: the number of passengers that would need to be displaced, the relocation of these displaced passengers, passenger displacement during turbulence, the possibility of the evacuees stepping on the passenger seats, and addressing the strength of these passengers seats. The fifth commenter provides some responses to the fourth commenter's concerns.

The FAA agrees that an evacuation path over an area where the passengers must be relocated is a concern. The FAA has considered this type of evacuation path and has determined that a maximum of one row of seats may be displaced.

The FAA agrees that if the evacuation procedure includes having the evacuee step on a seat, then it must be shown the seat will not be damaged to the extent that it is unsafe for the emergency landing conditions.

Three commenters address special condition no. 3 concerning the evacuation of an incapacitated person from the crew rest compartment. One commenter raises a concern that limiting the procedure to a single person assisting the evacuation of an incapacitated occupant was too restrictive. The commenter suggests that a procedure that requires more than one person assisting should be acceptable.

The FAA does not agree with the comment concerning the assistance of a single person to demonstrate that they can evacuate an incapacitated occupant from the crew rest compartment is too restrictive. In the event there are only two occupants of the crew rest compartment and one becomes incapacitated, the other occupant must be able to evacuate the incapacitated occupant to the main deck of the airplane.

The second commenter questions the need to have the evacuation demonstration conducted for each of the evacuation paths and proposes that the demonstration be limited to the most critical evacuation path.

The FAA does not agree with the comment that only the most critical evacuation path for the incapacitated occupant must be demonstrated, unless the paths are identical to each other including but not limited to size, assist means, access, and available room around the evacuation path. It is very difficult to evaluate which evacuation route would be the most critical path to demonstrate the evacuation of an incapacitated occupant. Therefore, the FAA will require that all routes be demonstrated.

The third commenter proposes that the evacuation procedures should be transmitted to the operator as part of the training evacuation procedure.

The FAA concurs with the comment that the procedures for the evacuation of an incapacitated occupant should be part of the training requirements for the occupants of the crew rest compartment.

One comment addresses special condition no. 4(a), concerning the requirement for at least one exit sign to be located near each exit. The commenter proposes that only the primary evacuation route be equipped with an exit sign meeting the requirements of § 25.812(b)(1)(i). The commenter believes that having exit signs at both primary and secondary exits may cause confusion during an evacuation.

The FAA disagrees with the comment to have an exit sign only at the primary exit path. The basic reason for the requirement to have an exit sign meeting the requirements of § 25.812(b)(1)(i) located near each exit is to identify the emergency exits. When there is an emergency that requires the evacuation of the crew rest compartment, the occupants must be provided the greatest opportunity to evacuate the compartment as quickly as possible. Identifying all of the evacuation routes with an exit sign provides the evacuees with visible signs that locate the available exits. With this knowledge they can assess the conditions and determine the best route for evacuation based on the conditions present in the compartment.

Three comments address special condition no. 4(d) concerning the illumination of the exit handles and instruction placards. Two of the commenters recommend that the special conditions be revised to clarify what instruction placards are being addressed by the special conditions.

The FAA agrees that special condition no. 4(d) should be revised to identify what instruction placards must be illuminated to at least 160 microlamberts under emergency lighting conditions. The intent is to have the instruction placards for the operation and use of the escape paths be addressed by the illumination requirements of these special conditions.

The third commenter proposes that special condition no. 4(d) be deleted and special condition no. 4(c) be revised to read as follows: “Placards and exit handles must be visible and readable from a distance of 30 inches under emergency lighting conditions.”

The FAA disagrees with the proposal to delete special condition no. 4(d) and revise the requirements of special condition no. 4(c) to address the visibility of the instruction placards under emergency lighting conditions. The FAA requires a specific measurable illumination level because it is the best way to eliminate judgement calls that would result from the proposal that requires the placard be readable from a distance of 30 inches under emergency lighting conditions.

Two comments address special condition no. 7 concerning the use of the public address and crew interphone as the means of alerting the occupants of the crew rest compartment of an emergency. The commenters state that the current public address and crew interphone designs do not differentiate between normal and emergency communications and that each airline has a protocol and procedures for emergency communications.

The FAA is concerned that during normal operation the public address system would not be active in the crew rest compartment. In an emergency, the system would need to be active in the crew rest compartment. Therefore, means need to be provided for differentiating between normal and emergency communications. The FAA also has a similar concern that the chime system on the crew interphone system does not provide an adequate means of differentiating between normal and emergency communications.

Two comments address special condition no. 9 concerning providing protective clothing for a person fighting a fire in the crew rest compartment. One commenter proposes that protective clothing be provided for the designated fire fighter. The other commenter argues against that type of requirement.

The FAA has determined that the minimum equipment required to fight a fire in the crew rest compartment is a fire extinguisher and protective breathing equipment.

One comment addresses special condition no. 10(c) concerning the smoke detection warning provided in the main passenger cabin. The commenter suggests that the special condition be changed from “A warning in the main passenger cabin * * *” to “A visual and/or aural warning in the main passenger cabin. * * *” It is the commenter's contention that both means would provide an acceptable warning.

The FAA agrees that either a visual or aural warning could be found acceptable, however, the current wording does allow both types of warnings or combinations of the warnings. Therefore, no change to the special conditions wording is required.

Five comments address special condition no. 11 concerning fire control in the overhead crew rest. One commenter disagrees with handling fire control without entering the overhead crew rest area. The commenter states that this does not provide an acceptable level of safety and that manual fire fighting does provide an acceptable level of safety. The commenter states that Halon stratification from a built-in system would settle in the vestibule area of the overhead crew rest and prevent proper concentration in the entire area that would be needed to control the fire.

The FAA disagrees with the comment that a built-in fire extinguishing system does not provide an acceptable level of safety. The FAA would require a test to show that for any built-in fire extinguishing system, the concentration during the initial introduction of Halon 1301 or equivalent is a minimum of five percent by volume and that it is sustained at a minimum level of three percent for the maximum diversion in still air (including an allowance for 15-minute holding and/or approach and land) for the airplane. The applicant's design must ensure that in the event the vestibule door is damaged, the extinguishing agent concentration of Halon 1301 is not compromised. The door would be placarded for crew access only and access will be limited by a mechanism to prevent “accidental opening.”

One comment mentions a concern about products of thermal decomposition of Halon when exposed to a fire, and the impact of this on passengers.

The FAA agrees that the built-in fire extinguishing system must not introduce a hazard to the occupants or airplane structure. Section 25.851(b) would apply to any built-in fire extinguishing system. The issue of toxicity of fire extinguishing agents has been previously explored as in Amendment 25-74, Airplane Cabin Fire Protection, adopted: April 4, 1991, effective May 16, 1991, as published in the Federal Register 56 FR 15450, April 16, 1991.

One comment expresses concern over the operation of the vent system used to evacuate smoke when smoke is present in the overhead crew rest. A system that evacuates smoke during a fire would also evacuate the fire suppression agents used to control the fire in the compartment.

The FAA agrees with the comment that a ventilation system within a compartment that has a fire suppression system can have a negative affect on the fire suppression system. The design of the ventilation system would need to ensure that the ventilation flow can be controlled in such a way during a fire that the fire suppression agent used remains in the compartment. There is no requirement to clear smoke from the crew rest area, however, there is a requirement to clear the smoke that has entered the main passenger compartment during the evacuation of the crew rest compartment and/or during the process of fighting the fire.

One commenter addresses concerns regarding the access provisions required for the crew rest compartment and timely access of the crew member with the fire fighting equipment and proposes changes to the special condition. The commenter believes that “unrestricted access” is too restrictive a requirement and the “sufficient access” provides an acceptable level of safety.

The FAA disagrees with the comment that the current language is inappropriate. The use of “unrestricted access” related to “crewmembers equipped for fire fighting”. The intent of this requirement is to ensure that the aircraft design will accommodate the entrance to enable “crewmembers equipped for fire fighting” to gain entrance to the crew rest area in a minimum amount of time.

One comment suggests that a built-in fire extinguishing system is not warranted.

The FAA does not concur with the comment. The special condition as written allows either a built-in system or crew entry and extinguishing of fire directly. This is left to the applicant to propose and demonstrate a suitable solution. The overhead crew rest area poses some challenges but a successful applicant should be able to design the crew rest area and associated ventilation system and smoke/detection and fire suppression system architecture to ensure that FAA requirements are met. Therefore, the FAA believes that the current language in the special condition is appropriate.

One commenter suggests the special condition should be revised to reflect the type of fire most likely to occur within the crew rest compartment and associated detection times.

The FAA disagrees that the special conditions should be revised to reflect the type of fires most likely to occur within the crew rest compartment. The special conditions must reflect all expected fire threat scenarios. It should be noted that the crew rest area will not be carrying flammable fluids, explosives, or other dangerous cargo. The requirements to enable crewmember(s) quick entry to the crew rest compartment and to locate a fire source inherently places limits on the amount of baggage that may be carried and the size of the crew rest area. The applicant must accommodate these requirements and the appropriate Aircraft Certification Office must require suitable means of compliance and may elect to limit an investigation to a “worse case fire threat” scenario.

One commenter suggests having a trained crewmember for manual fire fighting as the most effective means for controlling a fire in an overhead crew rest compartment. The commenter recommends that only the manual fire fighting be accepted for the crew rest compartment.

The special condition allows the applicant to select an appropriate means to meet the requirement. While the presence of a “trained crewmember” may be very effective, the FAA position is that a properly designed smoke detection and fire suppression system with sufficient quantity of smoke detectors, smoke detector placement, quantity and placement of fire extinguishing nozzles, control of ventilation, etc; can provide an effective means to control and suppress a fire threat in any crew rest area.

One commenter suggests that the critical design issue for effective manual fire fighting is unrestricted access to the compartment.

The FAA concurs that the time element is a critical issue for effective control and suppression of any fire threat for both a built-in smoke detection and fire suppression system and a manual fire fighting system.

One comment states that “the time for the compartment to become smoke-filled, * * *” is vague and open to numerous interpretations.

The FAA disagrees. Performance based wording is deliberately used to convey to the applicant a broad spectrum of requirements that the regulation intends. The FAA does agree that there needs to be a common understanding of the requirements and that they need to be consistently applied to each applicant that has a similar installation.

One comment states that it is not clear if a flight test is required for the crew intervention option in special condition no. 11. The commenter believes that it is possible this may be the more limiting test condition and should therefore be required.

The FAA concurs, and an aircraft certification office may require flight testing to demonstrate an acceptable means of compliance.

One comment states that there is no evaluation of the effectiveness of fire fighting procedures. The commenter questions whether it is sufficient to determine that the option of crew intervention provides an equivalent level of safety to the installation of a fire suppression system.

The FAA concurs that the special conditions as written focus on the requirement that a crewmember be able to quickly enter the crew rest compartment prepared to locate the smoke source. Inherent in the action of locating the smoke source is the action of suppression/extinguishment of the smoke source that should be no different than utilizing a fire extinguisher in the cabin. The key issue is the response time. As previously mentioned, the time required to gain access and determine the smoke source must be short enough to prevent the fire from propagating and threatening continued safe flight and landing. The applicant must evaluate the kinds of fires likely to occur and ensure that the appropriate fire extinguishers are provided per the requirements given in § 25.851. In addition, FAA has begun internal discussions to develop guidance on acceptable means of compliance. These discussions have included issues such as the required level of smoke concentration, the possible use of a low light level source to simulate a visual cue from a “smoldering source,” placement of the smoke source, and test conditions. The FAA will issue applicable guidance material when it becomes available or is required.

Five comments address special condition no. 14(a) concerning the manual release of the oxygen system in the crew rest compartment. Several of the comments state that the design in previous remote crew rest compartments has been an extension of the system provided in the passenger compartment. The oxygen system has an automatic and a manual release method. With the automatic release method, whenever the altitude in the cabin goes higher than a preset amount, the oxygen masks are automatically deployed. With the manual method, the flight crew can deploy the oxygen masks. The commenters question the need to have a method for the crew rest occupants to manually deploy the oxygen masks.

The FAA agrees with the commenters that the system should be similar to the main deck passenger oxygen system and there must be a means for the oxygen masks to be manually deployed from the flight deck.

One comment addresses special condition no. 14(c)(5) and (f)(7). The commenter interprets a section as a common area in the crew rest area that contains seats and/or bunks that can be closed off for privacy * * * and a smoke detection system in that section that ties into the entire crew rest smoke detection system. The commenter suggests changing the wording in the special conditions to read “Testing of the smoke detection system will demonstrate that a fire can be detected in each individual bunk.”

The FAA agrees with the interpretation but disagrees with the need to adopt the suggested language. The FAA interpretation of the requirements for built-in smoke detection and fire suppression/extinguishing systems inherently includes the need for detection and for suppression/extinguishment to encompass the entire area in question.

One comment recommends a general change to the special conditions concerning the approval of all normal, abnormal and emergency procedures and their training be approved by the Authority under which the airplane is operated. The commenter proposes that a statement to that effect be included in the special conditions.

The FAA agrees with the comment that the Authority under which the airplane is operated approves all normal, abnormal and emergency procedures and their training. However, the FAA disagrees that the special conditions must include that requirement. The modification to install the overhead crew rest area would be considered a major modification that would require the approval of the Authority under which the airplane is operated to return the airplane to service after the modification. This approval to return the airplane to service would include review and approval of all normal, abnormal and emergency procedures and their training changes made as a result of the modification.

In general, the requirements listed in these special conditions are similar to those previously approved in earlier certification programs, such as the Boeing Model 747 overhead crew rest compartment. These special conditions establish seating, communication, lighting, personal safety, and evacuation requirements for the overhead crew rest compartment. When applicable, the requirements parallel the existing requirements for a lower deck service compartment and provide an equivalent level of safety to that provided for main deck occupants.

Seats and berths must be certified to the maximum flight loads. Due to the location and configuration of the crew rest compartment, occupancy during taxi, takeoff, and landing would be prohibited, and occupancy limited to crewmembers during flight. Occupancy would be limited to either ten persons, or the combined total of approved seats and berths, whichever is less.

To preclude occupants from being trapped in the crew rest compartment in the event the main entryway is blocked, two evacuation routes, including the entryway, would be required. Each evacuation route must be designed to allow for removal of an incapacitated person from the crew rest compartment to the main deck.

In addition, passenger information signs, supplemental oxygen, and a seat or berth for each occupant of the crew rest compartment would be required. These items are necessary because of turbulence and/or decompression.

To prevent the occupants from being isolated in a dark area due to loss of the crew rest compartment lighting, either a second independent source of normal lighting or emergency lighting would be required. An emergency lighting system, which is activated under the same conditions as the main deck emergency lighting system, would also be required.

Two-way voice communications and public address speaker(s) would be required to alert the occupants to an inflight emergency. Also, a system to alert the occupants of the crew rest compartment in the event of decompression and to don oxygen masks would be required.

Special condition No. 8 requires a means, readily detectable by seated or standing occupants of the crew rest compartment, which indicates when seat belts should be fastened. The requirement for visibility of the sign by standing occupants may be met by a general area sign that is visible to occupants standing in the main floor area or corridor of the crew rest area. It will not be essential to be visible from every possible location in the crew rest area; however, the location should not be easily obscured or remotely located.

Since the overhead crew rest compartment is remotely located from the main passenger cabin and will not always be occupied, a smoke detection system and fire-fighting equipment will be required to minimize the hazards associated with a fire in the crew rest compartment. The smoke detection system must be capable of detecting a fire in each area of the compartment created by the installation of a curtain or partition. The materials in the crew rest compartment must meet the flammability requirements of § 25.853(a), and the mattresses must meet the fire blocking requirements of § 25.853(c).

The crew rest compartment must be designed such that fires within the compartment can be controlled without having to enter the compartment; or, the design of the access provisions must allow crew equipped for fire fighting to have unrestricted access to the compartment. The time for a crewmember on the main deck to react to the fire alarm, to don the fire fighting equipment, and to gain access must not exceed the time for the crew rest compartment to become smoke filled, making it difficult to locate the fire source. If the means of controlling the fire within the compartment is a Halon 1301 or equivalent fire suppression system, the system should be designed similar to a cargo compartment fire suppression system. Advisory Circular 120-42, titled “Extended Range Operation With Two-Engine Airplanes (ETOPS)” provides guidance on fire suppression systems in cargo compartments.

This special condition requirement concerning fires within the compartment was developed for, and applied to, Boeing Model 777-200 and Model 777-300 series airplanes lower lobe crew rest compartment; it was not applied to the overhead crew rest compartment in earlier certification programs such as the Boeing Model 747. The Model 747 special conditions were issued before the new flammability requirements were developed. This requirement originated from a concern that a fire in an unoccupied crew rest compartment could spread into the passenger compartment, or affect other vital systems, before it could be extinguished. The special condition would require either the installation of a manually activated fire containment system that is accessible from outside the crew rest compartment, or a demonstration that the crew could satisfactorily perform the function of extinguishing a fire under the prescribed conditions. The manually activated fire containment system would be required only if it could not be demonstrated that a crewmember responding to the alarm could not locate the fire source and successfully extinguish the fire.

These special conditions provide the regulatory requirements necessary for certification of this modification. Other special conditions may be developed, as needed, based on further FAA review and discussions with the applicant, manufacturer, and civil aviation authorities.

As discussed above, these special conditions are applicable to Boeing Model 777-200 series airplanes. Should Flight Structures, Inc., apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. T00001SE to incorporate the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101(a)(1).

This action affects only certain novel or unusual design features on Boeing Model 777-200 series airplanes. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

The authority citation for these special conditions is as follows:

(c) A warning in the main passenger cabin. This warning must be readily detectable by a flight attendant, taking into consideration the positioning of flight attendants throughout the main passenger compartment during various phases of flight.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Raytheon Model Hawker 800A (U-125A) and Hawker 800XP series airplanes was published in the Federal Register on August 8, 2000 (65 FR 48402). That action proposed to require inspecting the roller clearance in the nose landing gear drag stay and making any necessary adjustments.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were submitted in response to the proposal or the FAA's determination of the cost to the public.

The FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

There are approximately 85 airplanes of the affected design in the worldwide fleet. The FAA estimates that 50 airplanes of U.S. registry will be affected by this AD, that it will take approximately 7 work hours per airplane to accomplish the required inspection and any necessary adjustments, and that the average labor rate is $60 per work hour. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be $21,000, or $420 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

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

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

The Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, recently told the FAA that an unsafe condition may exist on certain S.N. CENTRAIR 101 series gliders. The DGAC reports that a failure analysis of the welded parts of airbrake arms revealed that cracks could occur in these parts.

This condition, if not corrected, could result in undetected cracks. Consequently, a crack in the airbrake control system could prevent the pilot from using the airbrake system.

We issued a proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to certain S.N. CENTRAIR 101 series gliders. This proposal was published in the Federal Register as a notice of proposed rulemaking (NPRM) on September 14, 2000 (65 FR 55466). The NPRM proposed to require you to inspect the airbrake control system for cracks and if cracks are detected, replace the airbrake control system.

Interested persons were afforded an opportunity to participate in the making of this amendment. No comments were received on the proposed rule or the FAA's determination of the cost to the public.

After careful review of all available information related to the subject presented above, we have determined that air safety and the public interest require the adoption of the rule as proposed except for minor editorial corrections. We determined that these minor corrections:

We estimate that this AD affects 41 gliders in the U.S. registry.

We estimate the following costs to accomplish the inspection:

The FAA issued Emergency AD 2000-08-53 (Docket No. 2000-SW-08-AD) on April 26, 2000, which superseded AD 89-17-03, Amendment 39-6251, Docket No. 88-ASW-33 (54 FR 31935, August 3, 1989), which established RIN counting procedures for the mast assemblies installed on H-1 series surplus military helicopters. AD 2000-08-53 also incorporated life-hour adjustments for mast hub spring and helicopter usage. Since issuing AD 2000-08-53, the FAA has issued AD 2000-15-21, Amendment 39-11854, Docket 2000-SW-01-AD (65 FR 48605, August 9, 2000) to require removing masts, part number (P/N) 204-011-450-001 and -005, from service. The FAA also issued Emergency AD 2000-15-52, Docket No. 2000-SW-28-AD, on July 25, 2000, for the BHTI Model 204B, 205A, 205A-1, 205B, and 212 helicopters, which was prompted by a report of another cracked mast, similar to the masts installed on H-1 series helicopters. Metallurgical inspection revealed that the mast cracked as a result of fatigue in snap ring groove radii that were smaller than the 0.020-inch minimum allowable dimension. Detailed takeoff and lift event data for the entire life of the mast confirm that the accumulated RIN count at the time the fatigue crack was detected was approximately 68,000 when calculated in accordance with the RIN counting procedures in effect at the time of the failure.

U.S. Army Safety of Flight Message UH-1-10, dated July 19, 2000, required inspecting masts for a minimum radius of 0.020 inch or for a burr around the circumference of the snap ring groove and removing defective masts from service. Based on that message and a review of fatigue data and previously issued AD's, the FAA has concluded that several corrections to the RIN counting procedures are required as follows:

• Recalculating the accumulated RIN and revised hours TIS to date for certain masts to correct the inadequate factors provided in AD 2000-08-53. New RIN and frequency of event per hour factors are required to calculate the accumulated RIN and revised hours TIS to properly reflect the actual level of torque (horsepower rating of helicopter) applied to the mast when it is installed on the different helicopter models affected by this AD.

• Using the new RIN factors for each takeoff and external load lift to continue the calculations for the accumulated RIN as installed on the different helicopter models affected by this AD and changing the definition for external load lift.

• Expanding the serial number (S/N) applicability for a one-time special inspection to detect inadequate radii and burrs in the snap ring grooves to include masts with S/N 00000 through 52720, 61433 through 61444, or 61457 through 61465, regardless of prefix. This action was required based on inadequate radius and burrs detected outside the S/N applicability of the previous AD.

• Reducing the compliance time to 100,000 accumulated RIN for any affected mast for a one-time special inspection to detect burrs in the snap ring grooves.

• Adding a one-time special inspection to detect inadequate radii and burrs in the snap ring grooves for any mast that has been previously installed with a hub spring.

Since the unsafe condition described is likely to exist or develop on other Model HH-1K, TH-1F, TH-1L, UH-1A, UH-1B, UH-1E, UH-1F, UH-1H, UH-1L, and UH-1P; and Southwest Florida Aviation SW204, SW204HP, SW205, and SW205A-1 helicopters manufactured by BHTI for the Armed Forces of the United States, the FAA issued Emergency AD 2000-22-51 to prevent failure of a mast or trunnion, separation of the main rotor system, and subsequent loss of control of the helicopter. The AD requires the following:

• Within 10 hours TIS, create a component history card or equivalent record.

• Within 10 hours TIS, determine and record the accumulated RIN and revised hours TIS.

• Establish a retirement life for any mast, P/N 204-011-450-007, -105, or -109, and replace any mast that has accumulated 265,000 RIN or 15,000 or more revised hours TIS and identify the removed mast as unairworthy.

• Within 25 hours TIS, remove any hub spring.

• Determine if the mast has ever been operated with a hub spring.

• Before reaching 100,000 RIN for a mast that has never been on a helicopter operated with a hub spring:

• Inspect the upper and lower snap ring groove in the damper clamp splined area for an inadequate radius and for a burr.

• Remove the mast before exceeding 100,000 RIN if any radius is inadequate or before exceeding 170,000 RIN if a burr is found, and identify such masts as unairworthy.

• Before reaching 100,000 RIN or 400 unfactored flight hours, whichever occurs first, on a mast that was installed on a helicopter with a hub spring or if the history of a hub spring installation is unknown:

• Inspect each snap ring groove for an inadequate radius or for a burr.

• Remove any mast before further flight if any groove radius is inadequate or if a burr is found, and identify such masts as unairworthy.

• After completing the inspections, send the requested information to the FAA. The requirements for retirement life hours for the trunnion remain the same as required in superseded AD 2000-08-53, Docket 2000-SW-08-AD. The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the structural integrity and controllability of the helicopter. Therefore, the actions listed previously are required at the specified time intervals, and this AD must be issued immediately.

Since it was found that immediate corrective action was required, notice and opportunity for prior public comment thereon were impracticable and contrary to the public interest, and good cause existed to make the AD effective immediately by individual letters issued on November 2, 2000, to all known U.S. owners and operators of Model HH-1K, TH-1F, TH-1L, UH-1A, UH-1B, UH-1E, UH-1F, UH-1H, UH-1L, and UH-1P; and Southwest Florida Aviation SW204, SW204HP, SW205, and SW205A-1 helicopters manufactured by BHTI for the Armed Forces of the United States. These conditions still exist, and the AD is hereby published in the Federal Register as an amendment to section 39.13 of the Federal Aviation Regulations (14 CFR 39.13) to make it effective to all persons.

The FAA estimates that 75 helicopters of U.S. registry will be affected by this AD. It will take approximately 10 work hours per helicopter to remove and replace the mast, if necessary; 6 work hours to remove any hub spring; and 10 work hours to inspect the mast for proper radius or a burr. The approximate time necessary for calculating the accumulated RIN and for providing the requested information to the FAA is 15 work hours per helicopter. The average labor rate is $60 per work hour. Required parts will cost approximately $9,538 to replace a mast, if necessary. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $899,850 ($11,998 per helicopter, assuming inspecting 1 mast, removing 1 hub spring, replacing 1 mast, determining the RIN calculations, and providing the requested information to the FAA).

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

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

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 2000-SW-42-AD.” The postcard will be date stamped and returned to the commenter.

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

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

The Navy Meridian NDB has been decommissioned. As a result the airspace legal description must be amended. This rule will become effective on the date specified in the EFFECTIVE DATE section. Since this action has no impact on users of the airspace in the vicinity of Meridian NAS-McCain Field, notice and public procedure under 5 U.S.C. 553(b) are unnecessary. Class E airspace designations for airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005 of FAA Order 7400.9H, dated September 1, 2000, and effective September 16, 2000, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

This amendment to Part 71 of the Federal Aviation Regulations (14 CFR Part 71) amends Class E5 airspace at Meridian, MS.

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.

In the September 21, 2000, Federal Register , volume 65, No. 184, 65 FR 57119-57121, BEA published a notice of proposed rulemaking setting forth revised reporting requirements for the BE-82, Annual Survey of Financial Services Transactions Between U.S. Financial Services Providers and Unaffiliated Foreign Persons. No comments on the proposed rules were received. Thus, these final rules are the same as the proposed rules.

These final rules amend 15 CFR part 801 to set forth revised reporting requirements for the BE-82, Annual Survey of Financial Services Transactions Between Financial Services Providers and Unaffiliated Foreign Persons. The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, will conduct the survey under the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108), hereinafter “the Act”, and under Section 5408 of the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 4908). Section 4(a) of the Act (22 U.S.C. 3103(a)) provides that the President shall, to the extent he deems necessary and feasible, conduct a regular data collection program to secure current information related to international investment and trade in services, and publish for the use of the general public and United States Government agencies periodic, regular, and comprehensive statistical information collected pursuant to this subsection. In Section 3 of Executive Order 11961, the President delegated authority granted under the Act as concerns international trade in services to the Secretary of Commerce, who has redelegated it to BEA.

The major purposes of the survey are to monitor trade in financial services, analyze its impact on the U.S. and foreign economies, compile and improve the U.S. economic accounts, support U.S. commercial policy on financial services, conduct trade promotion, and improve the ability of U.S. businesses to identify and evaluate market opportunities.

BEA will conduct the BE-82 survey in years in which a BE-80 benchmark survey, or census, is not conducted. The survey will update the data provided on the universe of financial services transactions between U.S. financial services providers and unaffiliated foreign persons. Reporting is required from U.S. financial services providers who have sales to or purchases from unaffiliated foreign persons in all covered financial services combined in excess of $10 million during the reporting year. Financial services providers meeting these criteria must supply data on the amount of their sales or purchases for each covered type of service, disaggregated by country. U.S. financial services providers that have covered transactions of less than $10 million during the reporting year are asked to provide voluntary estimates of their total sales or purchases of each type of financial service.

These final rules are not significant for purposes of E.O. 12866.

These final rules do not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under E.O. 13132.

The collection of information required in these final rules has been approved by the Office of Management and Budget under the Paperwork Reduction Act. Notwithstanding any other provisions of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection-of-information subject to the requirements of the Paperwork Reduction Act unless that collection displays a currently valid OMB Control Number; such a Control Number (0608-0063) has been displayed.

The survey is expected to result in the filing of reports, containing mandatory or voluntary data, from about 375 respondents. The average burden for completing the BE-82—both the mandatory and voluntary sections—is estimated to be 7 hours. Thus, the total respondent burden of the survey is estimated at 2,600 hours (375 respondents times 7 hours average burden). The actual burden will vary from reporter to reporter, depending upon the number and variety of their financial services transactions and the ease of assembling the data. Thus, it may range from 4 hours for a reporter that has a small number and variety of transactions and easily accessible data, or that reports only in the voluntary section of the form, to 150 hours for a very large reporter that engages in a large number and variety of financial services transactions and has difficulty in locating and assembling the required data. This estimate includes time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Comments regarding the burden estimate or any other aspect of this collection of information should be addressed to: Director, Bureau of Economic Analysis (BE-1), U.S. Department of Commerce, Washington, DC 20230, and to the Office of Management and Budget, O.I.R.A., Paperwork Reduction Project 0608-0063, Washington, DC 20503 (Attention PRA Desk Officer for BEA).

The Chief Counsel for Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, under provisions of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that these final rules will not have a significant economic impact on a substantial number of small entities. The information collection excludes most small businesses from mandatory reporting. Companies that engage in international financial services transactions tend to be quite large. In addition, the reporting threshold for this survey is set at a level that will exempt most small businesses from reporting. The BE-82 annual survey will be required only from U.S. persons with sales to, or purchases from, unaffiliated foreign persons in excess of $10 million during the reporting year, in all covered financial services transactions combined; the exemption level for the previous annual survey, covering 1998, was $5 million. Thus, the exemption level will exclude most small businesses from mandatory coverage. Of those smaller businesses that must report, most will tend to have specialized operations and activities, so they will likely report only one type of transaction; therefore, the burden on them should be small.

The Federal Energy Regulatory Commission (Commission) is amending § 284.12 of its regulations governing standards for conducting business practices and electronic communications with interstate natural gas pipelines. The Commission is incorporating by reference the most recent version of the consensus industry standards promulgated by the Gas Industry Standards Board (GISB), Version 1.4. Pipelines are required to implement these regulations on May 1, 2001. The Commission also is directing its staff to convene a technical conference to discuss whether to adopt the proposed regulation requiring pipelines to permit shippers to designate and rank the contracts under which gas will flow on a pipeline's system.

In Order Nos. 587, 587-B, 587-C, 587-G, 587-H, 587-I, and 587-K the Commission adopted regulations to standardize the business practices and communication methodologies of interstate pipelines in order to create a more integrated and efficient pipeline grid. 1 In those orders, the Commission incorporated by reference consensus standards developed by GISB, a private, consensus standards developer composed of members from all segments of the natural gas industry.

On February 23, 2000, GISB filed with the Commission a letter stating it had adopted a revised version of its business practice and communication standards, Version 1.4. The Version 1.4 standards include the standards for implementing pipeline interactive Internet web sites, which pipelines were required to implement by June 1, 2000, as well as standards for critical notices, and standards for multi-tiered allocations.

GISB also reported on certain issues on which the Commission had requested reports in Order No. 587-G. Of significance here, GISB reported that its Executive Committee was unable to reach consensus on standards for cross-contract ranking and that its confirmations and cross contract ranking subcommittee is considered inactive. In a letter dated June 15, 2000, GISB filed a follow-up report on cross contract ranking. GISB reports that its Executive Committee was unable to achieve consensus with respect to cross contract ranking due to disagreement on certain policy issues and that in the opinion of the Executive Committee no further progress can be made. GISB further reported that its Executive Committee approved standards for title transfer tracking, but that these standards are awaiting the development of the technical standards for information requirements and technical mapping.

On June 30, 2000, the Commission issued a Notice of Proposed Rulemaking (NOPR) proposing to adopt Version 1.4 of the GISB standards and to adopt a regulation requiring pipelines to permit shippers to designate and rank the transportation contracts under which gas will flow on the pipeline's system. 2 The Commission stated that cross-contract ranking would enable shippers to use their transportation contracts more efficiently by enabling them to allocate gas supplies across their transportation contracts so that the shipper can choose the contract which provides for the most economical transportation.

The Commission found that while the GISB record was not entirely clear on what prevented the adoption of cross-contract ranking standards, there appeared to be agreement on a method (entity-to-entity confirmation) by which such ranking could be achieved. The disputes apparently were over the amount of supplemental information pipelines should provide to shippers and over the method of confirmation with producers, independent of the cross-contract ranking issue. The Commission solicited comments on whether these issues were integral to the cross-contract ranking standard and whether these issues could be dealt with on an individual pipeline basis rather than through a generic rulemaking.

Twenty comments were filed. 3 Pipelines supported the use of entity-to-entity confirmation, but contended the Commission should not require the provision of supplemental information or working interest owner confirmations. Local Distribution Companies (LDCs) and endusers supported the provision of supplemental information, with endusers supporting a confirmation process based on gas package identifiers. Producers supported a confirmation process with producers or their agents.

The Commission is incorporating by reference into its regulations Version 1.4 of GISB's consensus standards. 4 Pipelines must implement these standards on May 1, 2001, by making compliance filings as discussed later in this order. 5

The adoption of Version 1.4 of the standards updates and improves the standards, particularly in the areas of communication of critical notices and multi-tiered allocations. 6 GISB approved the standards under its consensus procedures. 7 No comments objected to the incorporation of these standards. As the Commission found in Order No. 587, adoption of consensus standards is appropriate because the consensus process helps ensure the reasonableness of the standards by requiring that the standards draw support from a broad spectrum of all segments of the industry. Moreover, since the industry itself has to conduct business under these standards, the Commission's regulations should reflect those standards that have the widest possible support. In § 12(d) of the National Technology Transfer and Advancement Act (NTT&AA) of 1995, Congress affirmatively requires federal agencies to use technical standards developed by voluntary consensus standards organizations, like GISB, as means to carry out policy objectives or activities. 8

Dynegy requests clarification regarding the implementation of the standards providing for electronic notice of critical events affecting shippers. It asserts that the pipelines should provide a transition period for testing the new communication standards for critical notices before the pipelines rely solely upon Internet communication of such notices and discontinue their current communication methods. Dynegy contends that in Order No. 587-G, the Commission found that Internet communication could be sufficient notice to shippers of operational events, because the shipper could program its computers to trigger a telephone or pager. Dynegy is concerned that before shippers have to rely solely upon Internet communication, they be given the time to test whether their software can trigger a telephone or pager. Dynegy further requests that pipelines be required to continue their current method of communication until the customers software works satisfactorily.

The Commission agrees that pipelines should provide shippers with a reasonable opportunity to test the Internet communications before the pipelines dispense with existing methods of notifying shippers of critical events. Pipelines, however, will not be required to continue existing forms of communication to individual shippers until the individual shipper has been able to configure its software correctly. The shipper should have the responsibility, within a reasonable time period, to correct problems with its own software.

Altra asks that the Commission revise the implementation date for Version 1.4 of the standards so that the implementation of Version 1.4, cross-contract ranking, and title transfer tracking can occur simultaneously. Altra maintains that implementing such changes concurrently will be more economical for software providers as well as pipelines and their customers. The Commission understands that simultaneous implementation may be more efficient and generally attempts to adopt a complete version of the GISB standards at the same time. However, in this case, the Commission finds that the benefits from adopting Version 1.4 of the GISB standard should not be delayed until an indeterminate date when standards for cross-contract ranking and title transfer tracking are adopted.

Cross-contract ranking refers to the ability of shippers to allocate gas supplies across transportation contracts so that the shipper can choose the contract which provides for the most economical transportation. Shippers are doing business using a variety of contracts, including their own firm and interruptible contracts, and capacity release contracts with different terms and conditions. The ability to allocate gas supplies among these contracts will enhance shipper flexibility and better enable them to manage their gas supply and capacity portfolios. 9

In Order No. 587-G, the Commission deferred adoption of regulations regarding cross-contract ranking to give GISB an opportunity to develop standards governing this practice. GISB, however, was unable to reach consensus on appropriate standards due to policy disagreements among the industry segments, and states that it cannot proceed without further guidance from the Commission on the policy questions presented. 10 All the industry segments appear to agree that developing standards for cross-contract ranking and confirmation practices can be of benefit to the industry. Because the Commission cannot resolve these issues based solely on the comments, the Commission is directing the Commission staff to establish a technical conference at which the issues can be explored in greater detail.

While the record GISB submitted is not entirely clear, there did appear to be agreement that cross-contract ranking could be achieved through an entity-to-entity confirmation process. 11 (Appendix B reproduces the set of standards that were considered, but not approved, by GISB's Executive Committee). Disputes developed over whether along with entity-to-entity confirmation pipelines should be required to provide supplemental information to shippers and whether pipelines should confirm with working interest owners rather than exclusively with point operators. The two standards on which agreement could not be reached are standard 2 and standard 3 of proposal CXKR-2.

Standard 2 states:

Standard 3 states:

In the NOPR, the Commission proposed to require pipelines to permit shippers to designate and rank the transportation contracts under which gas will flow on each pipeline's system. The Commission generally proposed that such ranking would occur based on the entity-to-entity confirmation standards included in all the GISB proposals. The Commission, however, solicited comment on whether there is a need for a uniform generic standard setting forth additional, limited information pipelines should provide to local distribution companies or shippers and whether the need for additional information applies to all pipelines or is limited only to certain pipelines that currently provide such additional information to LDCs. With respect to the standard regarding production confirmation, the Commission asked for comment addressing the need for confirmations at the working interest level, the costs and benefits of adopting such a requirement for pipelines, shippers, and the overall efficiency of the pipeline grid, and whether a uniform requirement is necessary or whether pipelines should be permitted to choose the method of confirmation with producers that best fits their systems.

All commenters generally support the concept of cross-contract ranking. They differ again on the necessity of requiring supplemental information and on confirmation at receipt points. Dynegy and Altra are indifferent to whether any requirements for supplemental information or producer confirmation are adopted. Altra contends that some of the other issues, such as working interest owner confirmation, are unrelated to the cross-contract ranking issue.

The LDCs  13 that filed comments contend that provision of supplemental information concerning the type of contract, which establishes scheduling priority, is necessary for LDCs to plan their system usage, particularly in light of the requirements of retail unbundling. They contend, for instance, that LDCs need to know the priority of gas nominated to their systems so they can plan for the possibility of losing gas supplies during peak periods if interruptible or secondary firm nominations are limited. They further contend that this information on priority is needed to satisfy the requirements of some state unbundling programs that marketers have primary firm capacity for deliveries to LDC city-gates. Con Edison, for instance, raises the question of how entity-to-entity confirmation will permit LDCs to confirm gas deliveries in a situation when two behind-the-city-gate marketers both purchase gas from a third marketer at a downstream market center. It contends that without contract information, the LDC would not be able to match up the information from the marketer delivering the gas to the market center and the two behind-the-city-gate marketers. Distribution argues that the necessary information could be provided through a capacity-type indicator, which would not be burdensome for the pipelines to process. In reply comments, Distribution contends that based on the comments filed, the Commission should convene a technical conference to provide further explanation of why LDCs need supplemental contract information and why providing such information should not be burdensome for the pipelines.

The End User Group supports the concept of cross-contract ranking but claims that the NOPR proposal has two problems: it does not require pipelines to follow the rankings provided by shippers; and it does not provide shippers with the information necessary to determine what packages of gas actually flowed. Rather than aggregating information, as in the entity-to-entity confirmation method, the End Users contend that the confirmation process should be further disaggregated by confirming on a package identification basis. 14 They contend that frequently a customer will be receiving multiple natural gas packages from a single seller (pursuant to different contracts) and the buyer and the seller have diametrically opposed interests. The seller wants the most expensive gas to have the highest rank, while the buyer seeks to give it the lowest. The End Users contend that unless the confirmation process provides information as to which package actually flows, the shipper cannot accurately determine the package for which it must pay.

The producers (NGSA and IPAA) support a confirmation standard that would require pipelines to confirm with producers or their agents, rather than the standard discussed at GISB that would have required confirmation with all working interest owners. They contend that confirming with producers will enhance efficiency by eliminating the inefficiency of routing all adjustments through a point operator, as is done today. They also maintain that confirmation with producers will better safeguard commercially sensitive information, because producers will no longer have to route their sensitive nomination information through point operators that may have competing financial or business interests. NGSA maintains that confirmation with producers or their agents would be far less burdensome than confirmation with working interest owners.

While the pipelines generally support the cross-contract ranking standards proposed by the Commission, they contend the Commission should not require pipelines to provide the supplemental contractual information requested by the LDCs or new standards for producer confirmation. 15 They maintain that requiring supplemental information will unnecessarily complicate the confirmation process and the LDCs have not established the need for such information. Enron, for example, contends that the entity-to-entity confirmation standard will help to streamline the confirmation process, but that requiring the provision of supplemental information will defeat the very purpose of attempting to streamline the process. Williston Basin maintains that it understands only a few LDCs seek this supplemental information in order to appease state regulatory authorities and that none of the LDCs on its system require the provision of such information. The pipelines also contend that they are not all in position to confirm gas supplies with individual working interest owners.

All of the commenters find that development of standards for cross-contract ranking could benefit the industry by giving shippers more flexibility in using their capacity. It also appears from the comments that since the standards were debated at GISB, some industry members have clarified or revised their proposals or put forward new proposals. In addition, some of the comments appear to go beyond the limited issue of cross-ranking, but link the cross-contract ranking issue with other issues relating to standardization of the confirmation process.

Given the issues raised and the new proposals included in some of the comments, the Commission needs additional information to determine how best to proceed. It is, therefore, directing staff to convene a technical conference in which the industry and staff can discuss these issues to clarify what is in dispute and to determine if common ground can be found. The technical conference will be transcribed so that the Commission and those who cannot attend can be apprised of the discussion. Staff also will establish a schedule for further comments to be filed based on the discussion at the technical conference.

Among the issues that should be considered at the conference are:

• How confirmation takes place using entity-to-entity confirmation and contract confirmation.

• How package identification currently is used in nomination and confirmation processes.

• How the issues relating to cross-contract ranking differ depending on the nomination model used by the pipeline, i.e, pathed, non-pathed, or pathed non-threaded.

• Whether cross-contract ranking can be achieved efficiently without entity-to-entity confirmation.

• Whether verification of a shipper's contractual priority needs to occur on a daily basis through the confirmation process or whether priority can be verified in other ways, for example, by examining the shipper's contract or using the Index of Customers.

• Whether a uniform resolution of the need for supplemental information is needed or whether this issue can be resolved on a case-by-case basis, for example, by requiring those pipelines that previously provided contract information to continue that practice, while not imposing additional burdens on other pipelines.

• Whether, if confirmation of transportation priority is needed, a priority indicator, as Distribution suggests, would be a reasonably burden-free method of transmitting the information.

• Whether entity-to-entity confirmation has value in simplifying the confirmation process or whether further disaggregation to the gas package identification level is necessary.

• Whether gas package identification would protect customers against the possibility that the seller will allocate all gas supplies to the highest price contract or whether such protection can be better achieved through the contract between buyer and seller. For instance, even if confirmation was at the package identification level, the seller would still rank the most expensive package first.

• Whether the proposal to limit confirmations to producers, rather than working interest owners, meaningfully reduces the confirmation burden.

• Whether producers can use independent third-parties, as opposed to commercially interested point operators, to handle the confirmation process with respect to that information considered the most sensitive.

Office of Management and Budget Circular A-119 (§ 11) (February 10, 1998) provides that federal agencies should publish a request for comment in a Final Rule when the agency is seeking to issue or revise a regulation that contains a standard identifying whether a voluntary consensus standard or a government-unique standard is being proposed. In this final rule, the Commission is incorporating by reference Version 1.4 (August 31 and November 15, 1999 ) of the voluntary consensus standards developed by GISB.

OMB's regulations in 5 CFR 1320.11 require that it approve certain reporting and recordkeeping requirements (collections of information) imposed by an agency. Upon approval of a collection of information, OMB shall assign an OMB control number and an expiration date. Respondents subject to the filing requirements of this Rule shall not be penalized for failing to respond to these collections of information unless the collections of information display valid OMB control numbers.

The collections of information related to this Final Rule fall under the existing reporting requirements of: FERC-545, Gas Pipeline Rates: Rate Change (Non-Formal) (OMB Control No. 1902-0154) and FERC-549C, Standards for Business Practices of Interstate Natural Gas Pipelines (OMB Control No. 1902-0174). The following burden estimates are related only to this rule and include the costs of complying with GISB's version 1.4 standards. The burden estimates are primarily related to start-up for implementing the latest version of the standards and data sets and will not be on-going costs.

Public Reporting Burden: (Estimated Annual Burden)

In the Notice of Proposed Rulemaking (NOPR), the Commission proposed to adopt a regulation requiring pipelines to permit cross-contract ranking. However, this rule does not adopt that proposed regulation but instead directs staff to convene a technical conference to discuss whether to adopt the proposed regulation. For this reason, the burden estimates have been adjusted to remove the burden included in the NOPR for complying with the Commission's proposed regulation requiring pipelines to permit cross-contract ranking. The burden estimate for FERC-545 is unchanged because the exclusion of cross-contract ranking will not create a significant difference in the original burden estimate for tariff filings. However, the burden estimate for FERC-549C has been reduced to eliminate the burden estimate associated with the cross-contract ranking proposal in the NOPR.

The Commission regulations adopted in this rule are necessary to further the process begun in Order No. 587 of creating a more efficient and integrated pipeline grid by standardizing the business practices and electronic communications of interstate pipelines. Adoption of these regulations will update the Commission's regulations relating to business practices and communication protocols to conform to the latest version, Version 1.4, approved by GISB.

The Commission has assured itself, by means of its internal review, that there is specific, objective support for the burden estimates associated with the information requirements. The information required in this Final Rule will be reported directly to the industry users and later be subject to audit by the Commission. This information also will be retained for a three year period. The implementation of these data requirements will help the Commission carry out its responsibilities under the Natural Gas Act and conforms to the Commission's plan for efficient information collection, communication, and management within the natural gas industry.

Interested persons may obtain information on the reporting requirements by contacting the following: Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426 [Attention: Michael Miller, Office of the Chief Information Officer, phone (202)208-1415, fax (202)208-2425, E-mail mike.miller@ferc.fed.us]; or the Office of Management and Budget [Attention: Desk Officer for the Federal Energy Regulatory Commission, phone 202-395-3087, fax (202)395-7285].

The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment. 16 The Commission has categorically excluded certain actions from these requirements as not having a significant effect on the human environment. 17 The actions taken here fall within categorical exclusions in the Commission's regulations for rules that are clarifying, corrective, or procedural, for information gathering, analysis, and dissemination, and for sales, exchange, and transportation of natural gas that requires no construction of facilities. 18 Therefore, an environmental assessment is unnecessary and has not been prepared in this final rule.

The Regulatory Flexibility Act of 1980 (RFA) 19 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. The regulations adopted here impose requirements only on interstate pipelines, which are not small businesses, and, these requirements are, in fact, designed to reduce the difficulty of dealing with pipelines by all customers, including small businesses. Accordingly, pursuant to § 605(b) of the RFA, the Commission hereby certifies that the regulations proposed herein will not have a significant adverse impact on a substantial number of small entities.

In addition to publishing the full text of this document in the Federal Register , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through FERC's Home Page ( http://www.ferc.fed.us ) and in FERC's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, N.E., Room 2A, Washington, DC 20426.

From FERC's Home Page on the Internet, this information is available in both the Commission Issuance Posting System (CIPS) and the Records and Information Management System (RIMS).

User assistance is available for RIMS, CIPS, and the Website during normal business hours from our Help line at (202) 208-2222 (E-Mail to WebMaster@ferc.fed.us ) or the Public Reference Room at (202) 208-1371 (E-Mail to public.referenceroom@ferc.fed.us ).

During normal business hours, documents can also be viewed and/or printed in FERC's Public Reference Room, where RIMS, CIPS, and the FERC Website are available. User assistance is also available.

Pipelines must implement these regulations on May 1, 2001. Pipelines must file revised tariff sheets to incorporate Version 1.4 of the standards into their tariffs since their tariffs incorporated by reference an older version number. 20 To the extent pipelines have individual tariff provisions based on these standards, pipelines also will have to conform their tariffs to the new standards. 21 The tariff changes must be filed not less than 30 days prior to the date for implementing Version 1.4 of the standards.

These regulations are effective January 10, 2001. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” as defined in Section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996.

By the Commission.

We request that you notify us of your intention to make an oral presentation prior to the hearing date, but it is not required that you do so. The hearing will be conducted in an informal manner by a panel of MSHA officials. Although formal rules of evidence or cross examination will not apply, the presiding official may exercise discretion to ensure the orderly progress of the hearing and may exclude irrelevant or unduly repetitious material and questions.

The hearing will begin with an opening statement from MSHA, followed by an opportunity for members of the public to make oral presentations. The hearing panel may ask questions of speakers. At the discretion of the presiding official, the time allocated to speakers for their presentations may be limited. In the interest of conducting a productive hearing, MSHA will schedule speakers in a manner that allows all points of view to be heard as effectively as possible.

A verbatim transcript of the proceeding will be prepared and made part of the rulemaking record. A copy of the hearing transcript will be made available for public review.

MSHA will accept additional written comments and other appropriate data for the record from any interested party, including those not presenting oral statements. Written comments and data submitted to MSHA will be included in the rulemaking record. To allow for the submission of post-hearing comments, the comment period is extended and the record will remain open until December 19, 2000.

On March 16, 2000, the Copyright Office published a notice of proposed rulemaking (“NPRM”) seeking comment on whether the transmission of an AM/FM radio broadcast signal over the Internet by the broadcaster that originates the AM/FM signal is exempt from copyright liability under the exemption to the digital performance right in sound recordings set forth in section 114 of the Copyright Act, title 17 of the United States Code. 65 FR 14227 (March 16, 2000). The Office initiated this rulemaking proceeding in response to a petition from the Recording Industry Association of America (“RIAA”).

In its petition, RIAA asked the Office to adopt a rule “clarifying that a broadcaster's transmission of its AM or FM radio station over the Internet . . . is not exempt from copyright liability under section 114(d)(1)(A).” RIAA also believes that “until the Office rules, the parties will not agree on who qualifies for the Section 114 performance license.” Petition at 7.

The Office agreed with RIAA's observation and postponed the pending rate adjustment proceeding, the purpose of which is to set the rates and terms for the public performance of a sound recording by means of digital audio transmissions under the section 114 statutory license and to establish the rates and terms for the making of an ephemeral recording in accordance with the section 112 statutory license. See 63 FR 65555 (November 27, 1998); 64 FR 52107 (September 7, 1999). The Office took this action because it recognized that the outcome of the rulemaking would have the effect of deciding whether the rates and terms set in that proceeding would apply to broadcasters who stream their AM or FM radio stations over the Internet. 65 FR 14227 (March 16 , 2000).

A finding that the section 114(d)(1)(A) exemption covered a digital transmission of an AM or FM radio station made by an FCC-licensed broadcaster, including transmissions made by the broadcaster over the Internet, would likely mean that broadcasters, who are currently parties to the rate adjustment proceeding, would withdraw from the proceeding since the rates and terms to be decided would not apply to any transmission made by an FCC-licensed broadcaster. This, in turn, would narrow the scope of the issues and evidence presented to the CARP.

After the publication of the NPRM, the National Association of Broadcasters (“NAB”) filed an action in the U.S. District Court for the Southern District of New York on behalf of its members, asking for a declaratory judgment that nonsubscription simultaneous transmissions of radio broadcasts via the Internet by FCC-licensed broadcasters are exempt from the limited sound recording performance right. See National Ass'n of Broadcasters v. Recording Indus. Ass'n of Am. , No. 00 Civ. 2330 (S.D.N.Y., filed March 27, 2000). The NAB then moved to suspend the rulemaking proceeding, Docket No. RM 2000-3, until the Court had ruled in this case.

Before making a decision on the merits of the motion to suspend, the Office published a second notice in which it requested comments on whether to grant the motion to suspend the rulemaking proceeding and await the decision of the U.S. District Court for the Southern District of New York. 65 FR 17840 (April 5, 2000).

For the reasons set forth herein, the Copyright Office is denying the NAB's motion to suspend this rulemaking and is announcing a final rule to clarify that a transmission by an FCC-licensed broadcaster of its AM or FM radio broadcast over the Internet is not exempt from the limited public performance right for digital transmissions under section 114(d)(1)(A).

In response to the NPRM, the Office received comments from the following commenters: BroadcastAmerica.com, Inc. (“BroadcastAmerica”); jointly, American Society of Composers, Authors and Publishers, Broadcast Music, Inc., and SESAC, Inc. (collectively, the “Performing Rights Organizations”); Digital Media Association (“DiMA”); jointly, Balogh Broadcasting Company, Inc., Big Mack Broadcasting, Inc., Hall Communications, Inc., KSTP-AM, L.L.C., KSTP-FM, L.L.C., LBJS Broadcasting Company, L.P., Lyle Broadcasting Corporation, M&M Broadcasters, Ltd., Rice Capital Broadcasting Inc., Twin Lakes Communications, Inc., Zimmer Broadcasting Company, Inc., Zimmer Communications, Inc., Zimmer Radio of Mid-Missouri, Inc., and ZRG of Illinois, Inc. (collectively, “Broadcasters I”); jointly, AMFM, Inc., Bonneville International Corporation, CBS Corporation, Clear Channel Communications, Inc., Cox Radio, Inc., Emmis Communications Corporation, and National Association of Broadcasters (collectively, “Broadcasters II”); State Broadcasters Associations (“State Broadcasters”); Criswell Center For Biblical Studies (“Criswell”); and jointly, The Recording Industry Association of America, Inc., Association for Independent Music, American Federation of Musicians, and American Federation of Television and Radio Artists (collectively, “Copyright Owners”), including a separate memorandum, Copyright Liability of Broadcasters for Webcasting Their AM/FM Radio Signals, prepared by Robert Gorman (“Gorman”).

Reply comments were filed by Entercom Communications Corp., and five of the eight commenters: the Copyright Owners; Broadcasters I; DiMA; State Broadcasters; and Broadcasters II.

a. Authority to act. The Copyright Office stated in the NPRM that it initiated this proceeding under the rulemaking authority granted by 17 U.S.C. 702, to “interpret the statute in accordance with Congress” intentions and framework and, where Congress is silent, to provide reasonable and permissible interpretations of the statute.” 65 FR 14227, citing 57 FR 3284, 3292 (January 29, 1992). Our authority to act is supported by Satellite Broadcasting and Communications Ass'n of Am. v. Oman , 17 F.3d 344 (11th Cir. 1994) (“SBCA”), and Cablevision Sys. Dev. Co. v. Motion Picture Ass'n of Am., Inc. , 836 F.2d 599 (D.C. Cir.), cert. denied , 487 U.S. 1235 (1988) (“Cablevision”), where the Eleventh Circuit and the D.C. Circuit expressly acknowledged the Office's authority to provide reasonable interpretations of the cable statutory license. See , SBCA , 17 F.3d at 347 (“The Copyright Office is a federal agency with authority to promulgate rules concerning the meaning and application of section 111”); Cablevision , 836 F.2d at 608-09(same). See also, DeSylva v. Ballentine , 351 U.S. 570, 577-78 (1956)(recognizing that Copyright Office's interpretation of the Copyright Act should ordinarily receive deference).

Most of the commenters do not challenge the Office's rulemaking authority in this proceeding. However, the Broadcasters suggest that the Office may be without authority to interpret the extent of the section 114(d)(1)(A) exemption. They argue that the interpretation of section 114(d)(1)(A) sought by RIAA in this proceeding—whether copyright liability does or does not attach to transmissions of radio stations over the Internet—is very different from previous rulemaking proceedings of the Office interpreting provisions of other compulsory licenses.

Specifically, the Broadcasters submit that SBCA and Cablevision are poor precedent for supporting rulemaking authority in this case. In SBCA , the Office determined that satellite carriers were not eligible for the cable compulsory license for their retransmission of over-the-air broadcast signals, thereby subjecting these retransmissions to copyright owners' exclusive rights. In Cablevision , the Office interpreted the meaning of the term “gross receipts” as it appeared in the section 111 cable compulsory license. According to the Broadcasters, the copyright liability of satellite carriers and cable systems was already established, and the Office was merely sorting out the terms of a compulsory license. In this proceeding, however, the Office is being called upon to decide whether any copyright liability exists at all for broadcasters who stream their radio signals over the Internet. If, according to the Broadcasters, there is no copyright liability for such activity because it is exempted by section 114(d)(1)(A), then the Copyright Office has no jurisdiction over that activity because it does not implicate the copyright laws. The Broadcasters conclude that the Copyright Office does not have any authority to address the status of broadcaster transmissions of radio signals over the Internet until such time as a federal court decides the issue.

If the Broadcasters' position is accepted, the Copyright Office's ability to administer section 114 of the Copyright Act will be frustrated. Section 114 treats the public performance of sound recordings by digital audio transmissions in one of three ways: the performance is either exempt from copyright liability, subject to copyright owners' exclusive rights, or subject to statutory licensing. The Library of Congress and the Copyright Office are charged with conducting a copyright arbitration royalty panel (“CARP”) proceeding to set the rates and terms of the statutory license, and the Library has already begun the CARP process (and stayed its initiation pending the resolution of this rulemaking proceeding). Many broadcasters, and the NAB, have stayed out of the proceeding on the grounds that they qualify for the section 114(d)(1)(A) exemption. If these parties are not covered by the exemption (as the Office is determining today), they should be afforded the opportunity to participate in the CARP proceeding. 1 CARP proceedings are adversarial in nature, making it critical that the interests of all affected copyright owners and users are represented in the proceeding so that the CARP has a full and complete evidentiary record on which to render its determination. Without such information, the CARP cannot render a complete and accurate decision, thereby compromising the efficiency of the section 114 license.

Under the Broadcasters' approach, copyright users of sound recordings can effectively impede a CARP proceeding by claiming that their activities are not implicated by the proceeding until a federal court determines that they are. The Copyright Office would then be forced either to go forward with the CARP proceeding with an incomplete record, or to postpone the proceeding until after a ruling has been obtained from a federal court. If no ruling is obtained through private litigation, or conflicting decisions are handed down by the federal courts, the Library may not be able to have a CARP at all. The Copyright Office concludes that Congress intended no such result.

Broadcasters distinguish the SBCA case by observing that the issue therein was whether a satellite carrier was a “cable system” for purposes of Section 111 compulsory licensing. In contrast, according to Broadcasters, the issue here is whether their “particular conduct falls under the purview of the Copyright Act.” Broadcasters II Reply, at 9-11. They argue that because the activities of the satellite carriers in SBCA related to “particular conduct admittedly implicating copyright liability,” the Office had the power to determine whether that conduct was within the scope of the cable compulsory license. But they contend that where the activity is exempt under a specific statutory provision, the conduct may not be considered further by the Office under its authority to promulgate regulations to administer a compulsory license, the scope of which, but for the exemption, would otherwise include such activity.

The Office finds this distinction artificial and unpersuasive. Here, as in SBCA, the issue is whether a particular type of activity falls within the scope of a statutory compulsory license. The fact that Broadcasters claim to be exempt from the performance right for sound recordings does not deprive the Office of the ability to determine whether they are subject to the section 114 compulsory license. In order to determine whether broadcasters transmitting performances of their broadcast signals over the Internet are subject to the compulsory license, it is necessary to address their claim that they enjoy the exemption under section 114(d)(1)(A) when they engage in that activity. If they are exempt, then the inquiry proceeds no further. If they are not exempt, then there appears to be no dispute that their activity is subject to the section 114(f) compulsory license. Broadcasters cite absolutely no authority for the proposition that an agency may not determine whether conduct falls within a particular regulatory scheme administered by the agency when a claim of exemption is made by the party whose conduct is in question. 2

In sum, the Copyright Office concludes that it does possess the authority to conduct this rulemaking, based on our responsibility to conduct a CARP proceeding to establish rates and terms for the section 114 license, as provided in section 114 itself and chapter 8 of the Copyright Act, and the Office's general rulemaking authority granted by section 702 of the Act.

b. Advisability of acting. Most of the comments address the advisability of the Copyright Office's undertaking of this rulemaking proceeding. Not surprisingly, those commenters representing broadcasters favor postponement or cancellation of this proceeding, pending the outcome of the NAB action in the Southern District of New York. For the reasons described below, the Office believes that it is appropriate to exercise its authority and resolve this rulemaking proceeding now.

First, the Copyright Office disagrees with the assertion that a federal court is better suited at this point to determine whether broadcaster transmissions over the Internet are exempted by section 114(d)(1)(A) of the Copyright Act. We do not question the competence or expertise of the United States District Court for the Southern District of New York to interpret the copyright laws, and ultimately this issue may be resolved by the courts following the Office's ruling. But in the first instance, where the law is complex and requires clarification, the general policy is to allow the agency to complete its action, particularly “where the function of the agency and the particular decision sought to be reviewed involve exercise of discretionary powers granted the agency by Congress, or require application of special expertise.” Miss America Organization v. Mattel, Inc. , 945 F.2d 536, 540 (2nd Cir. 1991), citing McKart v. United States , 395 U.S. 185 (1969); see also , Cablevision , 836 F.2d at 608 (“The Copyright Office certainly has greater expertise in such matters than do the federal courts.”)

Moreover, the Office has a long and extensive history of administering and interpreting the Copyright Act, especially the statutory licensing provisions of the Copyright Act. See , e.g. , 49 FR 13029 (April 2, 1984)(definition of gross receipts under section 111 license); 57 FR 3284 (January 29, 1992)(definition of a cable system under section 111 license); 62 FR 18705 (April 17, 1997)(establishing filing regulations for SMATV systems under section 111). The Office also produced for Congress two studies on the advisability of adopting a performance right for sound recordings. Copyright Implications of Digital Audio Transmission Services: A Report of the Register of Copyrights (1991); Subcomm. on Courts, Civil Liberties, and the Administration of Justice of the Committee on the Judiciary House of Representatives, 95th Cong., Performance Right in Sound Recordings (Comm. Print 1978). And the Register of Copyrights testified before both the Senate and House of Representatives on the legislation that amended sections 106 and 114. See Digital Performance Right in Sound Recordings Act of 1995: Hearings on S. 227 Before the Senate Comm. On the Judiciary, 104th Cong., (March 9, 1995); Digital Performance Right in Sound Recordings Act of 1995: Hearings on H.R. 1506 Before the Subcomm. On Courts and Intellectual Property of the House Comm. On the Judiciary, 104th Cong. (June 28, 1995). Thus, we believe we are well-suited to interpret section 114, including the extent of the section 114(d)(1)(A) exemption.

Second, not only have the commenters to the NPRM not cited any authority that the Copyright Office must defer to a federal court action, but they have not cited any cases where a government agency has deferred action to a federal court a matter before the agency. Goya Foods, Inc. v. Tropicana Prods, Inc., 846 F.2d 848 (2d Cir. 1988), and Nader v. Allegheny Airlines, Inc., 426 U.S. 290 (1976) are cited by the Broadcasters for the proposition that the matter of the section 114(d)(1)(A) exemption “lies within the traditional realm of judicial competence.” Goya, 846 F.2d at 851. Neither of these cases, however, involved a government agency deferring judgment to a federal court on a matter clearly within the agency's jurisdiction. In fact, both cases involved just the opposite; a court's decision not to stay a judicial proceeding pending the resolution of an agency proceeding. There is not, therefore, any legal authority that compels or counsels the Office to stay this proceeding in deference to the court in New York.

Third, there is a need to resolve the status of broadcast transmissions over the Internet for purposes of the CARP proceeding to establish rates and terms for the section 114 statutory license as quickly as possible. As discussed above, the success of a CARP proceeding depends upon a full and complete record. This means that all parties who are potentially subject to the section 114 license must be identified and given the opportunity to participate in the CARP proceeding. The NAB/RIAA litigation in the Southern District of New York may not be resolved for several years, 3 which leaves the Copyright Office two undesirable choices: postpone the CARP until that litigation is resolved, or proceed with what we believe would be an insufficient record and receive an incomplete decision from the CARP. Neither of these choices is acceptable; therefore, the Office is now deciding whether the simultaneous transmission of an over-the-air radio broadcast transmission made by an FCC-licensed broadcaster over the Internet is exempt from the digital performance right.

Fourth, NAB has sought a declaratory judgment from the New York district court and is not currently being sued for copyright infringement. There is considerable question whether NAB has presented the district court with a live case and controversy, and the RIAA has sought dismissal of the case on jurisdictional grounds. If the suit is dismissed, there will be no opportunity for a court to interpret the meaning of the section 114(d)(1)(A) exemption, at least until such time as a copyright infringement action is brought against a broadcaster for transmitting over-the-air radio broadcasts on the Internet. The Office needs to act now to move the CARP proceeding forward.

Finally, even if the New York district court rules, and the case is appealed through the Second Circuit, that is still not the final word from the federal court system. Other suits may be brought in other federal circuits, creating the potential for conflicting determinations. Thus, we believe it makes far greater sense for the Copyright Office to address the status of broadcast transmissions over the Internet and the section 114(d)(1)(A) exemption, given that it is the expert agency entrusted with the authority to interpret the meaning of the provisions of the Copyright Act.

In 1995, Congress enacted the Digital Performance Right in Sound Recordings Act (“DPRA”), Public Law 104-39, which created an exclusive right for copyright owners of sound recordings, subject to certain limitations, to perform sound recordings publicly by means of certain digital audio transmissions. Among the limitations on the performance right was the creation of a new compulsory license for nonexempt, noninteractive, digital subscription transmissions, 17 U.S.C. 114(f), and an exemption for certain nonsubscription transmissions. 17 U.S.C. 114 (d)(1)(A)(i)-(iii) (1995).

Congress passed the DPRA in response to the growth in the use of digital technology to provide recordings with superior sound quality (e.g., digital phonorecord deliveries) and the growth of digital transmission services that could offer a consumer a digital transmission of a particular sound recording on demand. Congress realized that these advancements offered new and better ways to distribute music to the consumer, but at the same time, it recognized that the current law was inadequate to protect the interests of the copyright owners whose livelihoods depend upon the revenues generated from the sales of their works. Thus, Congress created a limited performance right in sound recordings. S. Rep. No. 104-128, at 14 (1995) (hereinafter “1995 Senate Report”).

In drafting the DPRA, Congress tried to balance the interests of the music industry, 4 traditional users of sound recordings, 5 and those who wished to utilize the new technologies to make transmissions of sound recordings. The expressed intent of Congress in passing the Act was “to provide copyright holders of sound recordings with the ability to control the distribution of their product by digital transmissions, without hampering the arrival of new technologies, and without imposing new and unreasonable burdens on radio and television broadcasters, which often promote, and appear to pose no threat to, the distribution of sound recordings.” 1995 Senate Report at 15. This change, however, was not meant to alter or upset in any way the longstanding relationship between the record industry and broadcasters. Broadcasters II at 15, citing 1995 Senate Report, at 9; accord H.R. Rep. No. 104-274, at 6 (1995) (hereinafter “1995 House Report”).

To strike the proper balance between these parties, Congress created three exemptions for nonsubscription transmissions, including an express exemption for a nonsubscription broadcast transmission. 17 U.S.C. 114(d)(1)(A)(i)-(iii)(1995). It is the scope of this exemption, which has been debated since the passage of the DPRA, see Reply Comments of the National Association of Broadcasters at 9-12 (dated June 20, 1997), submitted in Docket No. RM 97-1, that is the subject of this proceeding.

Broadcasters take a broad view of the exemption. Their position is that any transmission made by an FCC-licensed broadcaster, whether made over-the-air or over the Internet, falls within the scope of the section 114(d)(1)(A) exemption. Not surprisingly, Copyright Owners and DiMA take a different view and interpret the scope of the exemption more narrowly. Their position is that a transmission of a radio signal over the Internet, generally referred to as a webcast, is subject to the copyright owner's public performance right, even when the transmission is made by an FCC-licensed broadcaster and is identical to an over-the-air transmission. See 17 U.S.C. 106(6). They further argue that Congress could not possibly have meant to exempt anything other than over-the-air broadcasts in the DPRA, because Congress had not even yet considered transmissions of sound recordings over the Internet and how they fit into the statutory scheme. This is a critical point, because the scope of the exemption did not change when Congress amended section 114 in 1998 with the passage of the DMCA.

To resolve this question, we examine the legislative history of the DPRA and the DMCA to discern what Congress intended to do and when it intended to do it. From this examination, it is clear that in 1995, Congress' focus was not on Internet transmissions of sound recordings, but rather on the emerging interactive services, e.g., the pay-per-listen, audio-on-demand, or “dial-up” services for a particular recording or artist, and the existing noninteractive subscription services that offered nearly continuous play of music through cable and satellite services. See 1995 Senate Report at 22.

Consideration of Internet services came later once it became clear that the DPRA did not adequately address their operations. The House Manager's Report for the DMCA makes this point clearly:

Staff of the House of Representatives Comm. on the Judiciary, 105th Cong., 2d Sess., Section-by-Section Analysis of H.R. 2281 as Passed by the United States House of Representatives on August 4, 1998 at 51 (Comm. Print, Serial No. 6, 1998) (hereinafter “House Manager's Report”).

It was during the DMCA debate in 1998 that Congress focused on the need to clarify how the law applied to the transmission of a sound recording by a noninteractive, nonsubscription service streaming music over the Internet. These services, now known in the industry as webcasters, had argued that they, like the broadcasters, were non-infringing users because noninteractive, nonsubscription transmissions were exempt under section 114(d)(1)(A)(i) (1995). The record industry did not agree, arguing that the transmissions were subject to the newly created digital performance right. DiMA at 4.

Congress revisited the issue and, ultimately, amended sections 114 and 112 to clarify “that the digital sound recording performance right applies to nonsubscription digital audio services such as webcasting, addresses unique programming and other issues raised by Internet transmissions, and creates statutory licensing to ease the administrative and legal burdens of constructing efficient licensing systems.” House Manager's Report at 50.

These changes were part of the Digital Millennium Copyright Act of 1998 (“DMCA”), Public Law 105-304, which among other things, amended section 114 by creating a new statutory license for nonexempt eligible nonsubscription transmissions ( e.g., webcasting) and nonexempt transmissions by preexisting satellite digital audio radio services to perform sound recordings publicly in accordance with the terms and rates of the statutory license. 17 U.S.C. 114(f)(1998). The DMCA also amended section 114(d)(1)(A) to “delete two exemptions that were either the cause of confusion as to the application of the DPRA to certain nonsubscription services (especially webcasters) or which overlapped with other exemptions (such as the exemption in subsection (A)(iii) for nonsubscription broadcast transmissions). The deletion of these two exemptions [was] not intended to affect the exemption for nonsubscription broadcast transmissions.” 1998 House Report at 80.

The question, however, is what constitutes a nonsubscription broadcast transmission for purposes of the DPRA, since its meaning remained unchanged when Congress amended section 114 in 1998. Both Copyright Owners and DiMA maintain that a “nonsubscription broadcast transmission” is nothing more than a traditional over-the-air broadcast made by an FCC-licensed broadcaster. Broadcasters disagree and argue that the definition of a “broadcast transmission” for purposes of the section 114 license is not so limited, but includes all transmissions of an AM or FM radio signal, even those over the Internet, if made by the FCC-licensed broadcaster.

In answering this question, Broadcasters and Copyright Owners each argue that the statutory language and licensing scheme, the legislative histories of the DPRA and the DMCA, and public policy considerations support its respective position.

a. Statutory definitions. The DPRA established three exemptions from the digital performance right for certain nonsubscription transmissions, including an express exemption for a “nonsubscription broadcast transmission.” It read, in relevant part, as follows:

Broadcasters assert that the statutory language is clear and unambiguous on its face and that where this is so, one need not resort to the legislative history to discern the meaning of the statutory terms. Broadcasters I at 7; Broadcasters II at 18. Broadcasters II also rely on the well-established proposition that where a term is defined by the statute, an agency and the courts are constrained to adhere to this definition when interpreting the provisions of the act, citing Fox v. Standard Oil , 294 U.S. 87, 95-96 (1935).

Using these principles, the Broadcasters analyze the statutory definitions of the relevant terms set forth in section 114(j) to determine whether a webcast of an AM/FM radio station's programming is exempt. These terms were defined in the DPRA as follows:

Global Express Guaranteed is the U.S. Postal Service's premium international mail service. GXG is an expedited delivery service that is the product of a business alliance between the U.S. Postal Service and DHL Worldwide Express, Inc. It provides time-definite service from designated U.S. ZIP Code areas to locations in over 200 destination countries and territories. Global Express Guaranteed consists of two mail classifications: Global Express Guaranteed Document Service and Global Express Guaranteed Non-Document Service. Regulations for Global Express Guaranteed service are currently set forth in section 215 of the International Mail Manual (IMM). These regulations were moved to IMM 210 pursuant to the notice published in the Federal Register on September 26, 2000. Numerous and successive expansions and changes to the service have been listed in previous Federal Register notices and are summarized in the final rule, which will be published in early December.

The Postal Service is changing the rates for Global Express Guaranteed service and is announcing the inclusion of this service in the current collection pickup service. The revised set of rates, set forth below, is based on experience gained with providing the service and more accurately reflects the actual costs of providing this service across the various rate groups. Additionally, the rate lanes for the Global Express Guaranteed Non-Document service are changed to an alpha character designation for clarity between the Document and Non-Document services.

Although the Postal Service is exempted by 39 U.S.C. 410(a) from the advance notice requirements of the Administrative Procedure Act regarding proposed rulemaking (5 U.S.C. 553), the Postal Service invites public comment on the interim rule at the above address.

The Postal Service is implementing the following rates and amending the International Mail Manual, which is incorporated by reference in the Code of Federal Regulations. See 39 CFR 20.1.

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

On August 9, 2000 (65 FR 48652), EPA proposed a limited approval and limited disapproval of the following rule that was submitted for incorporation into the California SIP.

We proposed a limited approval because we determined that this rule improves the SIP and is largely consistent with the relevant CAA requirements. We simultaneously proposed a limited disapproval because some rule provisions conflict with section 110 and part D of the Act. These provisions are described below.

• Rule 74.6 contains two director's discretion clauses in Sections C and C2a which are unapprovable because they allow the APCO to change SIP requirements without going through the rulemaking process.

• Section C1f contains a reference to Rule 74.32, Electronic Manufacturing Operations, which has never been submitted for approval into the SIP. The reference creates confusion over the rule's applicability.

• Section D requires that records of a solvent's intended uses, content, mix ratio be recorded. Although the types of records that must be maintained are specified, the frequency with which records should be kept is not specified.

EPA's proposed action provided a 30-day public comment period. During this period, we did not receive any comments.

Because no comments were submitted, our assessment of the rule as described in our proposed action is not changed. Therefore, as authorized in sections 110(k)(3) and 301(a) of the Act, EPA is finalizing a limited approval of the submitted rule. This action incorporates the submitted rule into the California SIP, including those provisions identified as deficient. As authorized under section 110(k)(3), EPA is simultaneously finalizing a limited disapproval of the rule. As a result, sanctions will be imposed unless EPA approves subsequent SIP revisions that correct the rule deficiencies within 18 months of the effective date of this action. These sanctions will be imposed under section 179 of the Act according to 40 CFR 52.31. In addition, EPA must promulgate a federal implementation plan (FIP) under section 110(c) unless we approve subsequent SIP revisions that correct the rule deficiencies within 24 months. Note that the submitted rules have been adopted by the VCAPCD, and EPA's final limited disapproval does not prevent the local agency from enforcing them.

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 9, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

The terms “we,” “us,” and “our” in this notice signify EPA. This notice is organized as follows:

On July 10, 2000, EPA published rulemaking proposing to approve a maintenance plan and redesignation of Cuyahoga and Jefferson Counties, Ohio, to attainment for particulate matter, specifically for particles known as PM 10 . (See 65 FR 43212.) This proposal was based on a request from the State of Ohio submitted in preliminary form on May 22, 2000. This action pertains to the PM 10 standards promulgated in 1987 at 40 CFR 50.6, for which designations are published at 40 CFR 81. This action does not pertain to the PM 10 standards promulgated in 1997 at 40 CFR 50.7, which have been vacated by the District of Columbia Circuit Court of Appeals and for which no designations have been published.

Ohio's maintenance plan relies predominantly on the emissions limits already included in its State Implementation Plan (SIP) that have been shown to limit emissions from the significant sources in these areas sufficiently to assure attainment. The attainment plan addresses maximum allowable emissions, so the plan provides for continued attainment even if source production rates grow to maximum capacity. Ohio's maintenance plan supplements this with evidence of declining impacts from other, unregulated sources, which contribute to the background concentration included in the attainment demonstration. Specifically, Ohio cited population declines in the two counties, which will lead to reduced emissions from consumer activities, and federal regulations requiring reduced emissions from diesel engines. Ohio further cited emission regulations which will reduce emissions below attainment levels at the coke batteries found in the two areas. EPA proposed to conclude on the basis of these plan elements that these counties can be expected to continue attaining the applicable PM 10 standards for the requisite 10 years.

EPA reviewed Ohio's redesignation request on the basis of five criteria given in section 107(d)(3)(E) of the Clean Air Act. The first criterion is attainment of the air quality standards. All monitors have annual average concentrations below the annual standard. The 24-hour standard is met if the expected frequency of values above 150 μg/m 3 is 1.0 day per year or less. All the monitors in the Steubenville area and most of the monitors in Cuyahoga County have recorded no recent exceedances of this air quality standard. These monitors clearly indicate attainment of these standards. Two monitors in Cleveland have recorded values above 150 μg/m 3 , requiring analysis of expected exceedances at these locations consistent with the provisions of Appendix K of 40 CFR 50. EPA found a sufficiently low expected frequency of exceedances to propose to conclude that these locations, like the rest of Cuyahoga County, are attaining the standards.

The second criterion is that EPA has fully approved the necessary air quality control plans. EPA has previously concluded that relevant requirements were met, as stated in rulemakings published on May 27, 1994, at 59 FR 27464, and June 12, 1996, at 61 FR 29662, supplementing earlier rulemakings. In acting on redesignation requests, EPA has consistently interpreted section 107(d)(3) as permitting the Agency to rely on prior approvals of SIP provisions when reviewing redesignation requests. See Memorandum from John Calcagni, Director of the Air Quality Management Division dated September 4, 1992. For a recent discussion of redesignation requirements see 65 FR 37879 (June 19, 2000) (redesignation to attainment for ozone of the Cincinnati-Hamilton moderate ozone nonattainment area).

The third criterion for redesignation is that attainment be attributable to permanent and enforceable emission reductions. EPA found that permanent and enforceable emission limits have yielded permanent emission reductions that satisfied this criterion at numerous facilities in the two counties. The fourth criterion is that EPA has approved a maintenance plan that assures continued attainment. As discussed above, EPA proposed to approve Ohio's maintenance plan. Final approval of this plan, which is part of today's action, completes the satisfaction of this criterion. The fifth criterion is that the State be found to have met applicable requirements of section 110 and Part D of the Clean Air Act. Based on various rulemakings, starting with rulemaking of April 15, 1974 (39 FR 13539) up to and including EPA's rulemaking of June 12, 1996 (61 FR 29662), EPA finds that the State met these requirements. In summary, EPA proposed to find that Ohio had met all five criteria for redesignation for PM  10 in Cuyahoga and Jefferson Counties, and so EPA proposed to redesignate these counties to attainment.

EPA received comments from one commenter, the Earthjustice Legal Defense Fund, representing the Ohio Chapter of the Sierra Club. These comments are organized according to the five criteria for redesignation listed above. The following comment summaries and EPA responses are organized accordingly.

Comment: The commenter cites EPA's Air Information Retrieval System (AIRS) database as showing that one of the monitoring sites, at East 14th Street and Orange Avenue in Cleveland, “had 6 expected exceedances of the 24 hour PM  10 standard in 1999. Moreover, AIRS data shows that the same monitor has recorded 6 expected exceedances so far in the year 2000.” The commenter states that the total of 12 expected exceedances at this site means that the area has not attained the standard.

The commenter further states that “EPA seeks to discount the 6 expected exceedances in 1999 at [the above site] by citing data from other monitors that did not exceed the standard that year.” The commenter states that disregarding violations based on data at other sites is not authorized in Appendix K, and EPA may not use guidance documents to amend Appendix K to grant itself this authority.

Response: The commenter summarizes air quality at the East 14th Street site by reporting a statistic from a summary of air quality data that EPA provides on the internet. By its nature, this summary statistic is derived by an oversimplified approach, and thus inaccurately reflects what the data show. This statistic in this context is derived by automated, default procedures that cannot make the case-by-case judgments involved in assessing attainment status for regulatory purposes. For example, the statistic that the commenter cites does not reflect judgments that must be made by EPA, such as whether to exempt the site from expected exceedance adjustments pursuant to Appendix K section 3.1(f) and 40 CFR 58.13. A more appropriate evaluation of the 1999 data at this site is presented in the notice of proposed rulemaking. This evaluation indicates that only approximately one exceedance is expected at that location. A similar evaluation of the 2000 data at this site, as described further below, also indicates approximately one exceedance is expected. Based on these data, EPA is determining that the 3-year average number of expected exceedances at this site is less than the 1.0 level, and thus the site is in attainment consistent with section 2.1 of Appendix K.

It is also apparent that the commenter may have misunderstood the discussion in the proposal relating to the historically worst-case site that adjoins the East 14th Street site. Contrary to the assertion in the comment, EPA is not using data from other monitors to discount a violation at the East 14th Street site. Instead, EPA is assessing whether a violation in fact occurred at the East 14th Street site.

The East 14th Street site has two instruments—a high volume sampler, taking samples once every six days, and an instrument that takes continuous concentration readings. The high volume sampler recorded an exceedance of the 24-hour PM 10 standard at this site in 1999 (as well as an exceedance in 2000). EPA's evaluation of these high volume sampler data appropriately considers data from the collocated continuous instrument as well as data from another nearby location. Specifically, EPA is using the additional data to evaluate the likelihood of exceedances on the other five out of six days on which the high volume sampler did not take measurements.

One element of EPA's evaluation is based on Appendix K section 3.1(f), for which EPA must consider whether everyday sampling has been conducted in accordance with 40 CFR 58.13. In 40 CFR 58.13, as it applies to sampling for this PM 10 standard, EPA calls for everyday sampling at the area of maximum concentration. Accordingly, the notice of proposed rulemaking describes an assessment in which the application of Appendix K section 3.1(f) to the East 14th Street site is contingent on daily sampling at a nearby, maximum concentration site. As discussed in the notice of proposed rulemaking, application of Appendix K section 3.1(f) contingent on daily sampling at the East 14th Street site yields the same result. Both methods lead to treating the measured exceedance as one expected exceedance, which leads to a finding that the standard is being attained.

When EPA promulgated Appendix K, it was concerned, in part, about how to appropriately interpret data from monitors taking measurements one day out of six days when they measure just one exceedance. EPA recognized that the occasional measurement of one exceedance by such monitors often does not signify that five other exceedances would be expected to occur on the unmonitored days. Therefore, section 3.1(f) of Appendix K provides that an adjustment, that entails treating one exceedance as reflecting six (or more) expected exceedances (which is otherwise required to account for missing or incomplete data), need not be done if complete daily, representative sampling is performed and related conditions are met. If complete daily, representative sampling then shows few or no exceedances, this would validate the view that the exceedance measured during one-in-six-day sampling is better interpreted as reflecting one rather than six (or more) expected exceedances. (Conversely, if daily sampling indicates frequent exceedances, EPA would have a more solid basis for concluding that the site is not attaining.)

The monitoring at the East 14th Street site poses unique circumstances not directly addressed in Appendix K. Appendix K does not specify how to interpret data from two instruments which measure air quality at the same location. EPA has issued guidance explaining how to assess expected exceedances for both instruments in such cases. However, neither Appendix K nor EPA's guidance specifies how to conduct this assessment in cases where the sampling frequencies of the two instruments differ.

The history of Appendix K helps clarify why it does not directly address the situation found at the East 14th Street site. Appendix K was promulgated in 1987, at a time when reliable continuous instruments for measuring particulate matter concentrations were not available. Since high volume sampling and filter collection and analysis on a daily basis is resource intensive, EPA encouraged States to conduct sampling once every six days at numerous sites, with only a small number of critical sites sampling on a daily basis. When it encouraged this approach, EPA did not intend that any sampler measuring once every six days that happened to record an exceedance would automatically be treated as showing nonattainment, which is the approach reflected in the commenter's interpretation of the air quality data summary posted on the internet. EPA intended instead that such sampling sites be identified as critical sites warranting the dedication of resources necessary to conduct daily sampling, in order to determine whether the exceedance recurs with a frequency of more than once per year.

In promulgating Appendix K, EPA did not anticipate the possibility that States might simultaneously operate one sampler on a once in six days basis and operate a second sampler at the same site on a daily basis. Even today, sites with instruments measuring air quality once every six days almost never have a collocated instrument simultaneously taking daily or continuous measurements. Therefore, the one-in-six-day data are ordinarily the only basis on which to estimate the likelihood that exceedances would have been observed on the other five days. In such cases, if the site does not meet the criteria in section 3.1(f) of Appendix K that qualifies it to be exempt from expected exceedance adjustment, then EPA would view the five unmonitored days as days with missing data. Under Appendix K, for such cases, EPA takes a protective approach by assuming that the likelihood of exceedances for those five out of six days equals the likelihood of exceedances for the one in six days with actual observations. (See section 3.1(a).)

In the case of the East 14th Street site, the continuous instrument provides extensive data with potential to help EPA evaluate the likelihood that the high volume sampler would have recorded exceedances on the five out of six days it was not sampling. EPA therefore examined whether the continuous instrument data would reliably indicate whether the high volume sampler would have recorded an exceedance.

EPA compared 24-hour averages from the two instruments for days in 1998 to 2000 when both instruments had valid data. Then EPA developed what is known as a “best fit” equation, which attempts to describe, as accurately as possible, the relationship between same-day readings of the two instruments. On average, the high volume sampler reading equaled 1.05 times the continuous instrument reading plus 0.2 micrograms per cubic meter (μg/m 3 ), with a variance (r 2 ) of 0.78. In no case did the high volume sampler record any value more than 27 μg/m 3 higher than the continuous instrument. Thus, from a sampling perspective, readings from the two instruments would be considered quite similar.

Consequently, EPA concluded that data from the continuous instrument is reliable for use in assessing expected exceedances for the high volume sampler. Specifically, given the excellent agreement between the measurements produced by the two instruments, EPA believes the days with continuous instrument measurements but no high volume sampler measurements should be treated as days with valid data indicating high volume sampler concentrations. That is, consistent with the provisions of Appendix K, the best assessment of expected exceedances under these circumstances would be to consider all days with data from either instrument as days with valid data, and to treat as days with missing data only those days in which neither the high volume sampler nor the continuous instrument was operating. For purposes of this assessment, a day with only continuous instrument data is considered by EPA as having a value below the standard only if the maximum difference in instrument readings added to the continuous instrument value indicates a high volume sampler value below the level of the standard.

EPA described its assessment of the 1999 data in its notice of proposed rulemaking. Briefly, the high volume sampler recorded an exceedance during the first quarter. This first quarter included 14 days with high volume sampler values and 74 additional days with only continuous instrument values. Two days had no value from either instrument and, under Appendix K, should be considered days with missing data. The 14 days with high volume sampler values included one day with a measured exceedance and 13 days with values below the standard. For the 74 additional days with only continuous instrument values, the highest such value was 75 μg/m 3 . This continuous instrument value leads to a best estimated peak value for the high volume sampler of 79 μg/m 3 (using the best fit equation), and leads to a worst case peak estimate of 102 μg/m 3 (applying the maximum difference in instrument values). Based on the explanation above, the data from all of these 74 days will be treated by EPA as valid data. In total, then, for the high volume sampler in the first quarter of 1999, one day had an exceedance, 87 days have concentrations that are well below the standard of 150 μg/m 3 , and two days are lacking data. According to Appendix K, the proposed rulemaking therefore calculated an estimate of expected exceedances to be 1 + (2 * 1/88) or 1.02. Since no exceedances were measured at the site in any other quarter of 1999 or in 1998 or 1997, the total expected exceedances for 1999 is 1.02, and the three-year average of expected exceedances is 0.3.

A second unique feature of the situation at the East 14th Street site is the occurrence of a second exceedance measured by the instrument sampling once in six days. In ordinary circumstances, i.e., in the absence of collocated daily sampling data, EPA assumes that the first measured exceedance often reflects only about one expected exceedance, but EPA would generally assume that a second exceedance measured by a one-in-six day sampler represents multiple expected exceedances. However, EPA does not need to rely on such assumptions at the East 14th Street site, since in this case EPA has a wealth of actual data with which to assess the likelihood of exceedances at the site.

EPA therefore estimated expected exceedances for 2000 according to the same method it used to evaluate the 1999 data. An exceedance was observed by the high volume sampler in the first quarter of 2000. The high volume sampler provided values for 15 of the 91 days. The continuous sampler provided valid data for an additional 73 days. The highest 24-hour average for these 73 days was 84 μg/m 3 , suggesting a best estimated peak high volume sampler value of 88 μg/m 3 and a worst case estimated high volume sampler value of 111 μg/m 3 . Three days have missing values. These data indicate that only 1 out of 88 days with valid data had an exceedance. Consequently, expected exceedances for the quarter are estimated at 1 + (3 * 1/88 ) or 1.03. The second quarter had no observed exceedances. Thus, the available data for 2000 at this site indicate 1.03 expected exceedances.

Appendix K does not provide for us to include a half year's worth of data results in calculating the three year average of expected exceedances. Thus, consideration of data for the first half of 2000 by necessity involves projecting likely air quality in the second half of 2000. EPA examined data at the East 14th Street site to judge the most plausible such projection. In the past, the East 14th Street site has not been prone to observe exceedances in the second half of the year. In the 7 1/2 year history at this site, all three days with recorded exceedances have been in March. Therefore, EPA has good reason to anticipate that no further exceedances will be measured at this site in 2000. Assuming no further exceedances for the remainder of 2000 is equivalent to using data from a previous July to December period, for example constructing an assessment for 1998 to 2000 by using data from the second half of 1997 as a surrogate for projected data for the second half of 2000. This suggests a total of 1.03 expected exceedances for 2000. This result, in combination with the 1.02 expected exceedances for 1999 and zero expected exceedances for 1998, indicates a 3-year average of 0.7 expected exceedances.

The above presents EPA's evaluation of the frequency with which the high volume sampler at the East 14th Street site would have recorded exceedances had it been operating every day. One may do a similar evaluation for the continuous instrument at this site. This continuous instrument recorded no exceedances from the day it began operating in April 1998 to the present. This instrument was not operating on March 31, 1999, when the high volume sampler recorded an exceedance, but the high volume sampler data for that date suggest treating that day as a day the continuous instrument would be expected to have had an exceedance. Considering missing data according to Appendix K, this suggests 1.02 expected exceedances for the first quarter of 1999. While data are not available for a proper 3-year average of expected exceedances, the data that are available clearly suggest an average of less than 1.0 expected exceedances for this instrument. Thus, both instruments at the East 14th Street site indicate that this site is attaining the standard.

The commenter provided no rationale for using the computer-generated statistic he cited rather than applying the judgments and procedures described in the notice of proposed rulemaking, even though the two methods clearly give different results. For reasons given here and in the notice of proposed rulemaking, EPA believes that the evaluation described here is more consistent with applicable PM  10 regulations and reflects more reasoned judgments about the air quality at the site in question. EPA is determining on the basis of this evaluation that this site, like the remainder of Cuyahoga County, is attaining the standard.

Comment: The second prerequisite for redesignation to attainment is that EPA has fully approved the applicable SIP for the area. The commenter states that this prerequisite has not been met because EPA has not fully approved either the state's new source review (NSR) programs or the motor vehicle emission budget for these areas. With respect to NSR, the commenter states that this program is “not an optional program that the state and EPA can simply waive based on claims that it is not ‘needed’ for attainment.” With respect to conformity, the commenter cites Section 176(c) of the Clean Air Act and states that the absence of a motor vehicle emissions budget and conformity procedures means that EPA has not met all SIP requirements applicable to the area.

Response: EPA continues to believe that it has fully approved the applicable SIP for Cuyahoga and Jefferson Counties. For the requirements added in the Clean Air Act Amendments of 1990, in Subpart 4 of Part D of the Clean Air Act, EPA approved Ohio's attainment demonstration and other related plan elements on June 12, 1996, at 61 FR 29662. EPA has published several earlier rulemakings approving Ohio's SIP as meeting the various requirements enacted earlier.

With respect to NSR, EPA believes that Cuyahoga and Jefferson Counties may be redesignated to attainment notwithstanding the lack of a fully-approved NSR program meeting the requirements of the 1990 Clean Air Act Amendments. This view has been set forth by EPA in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled “Part D New Source Review (part D NSR) Requirements for Areas Requesting Redesignation to Attainment.” Also, see Cincinnati-Hamilton redesignation (65 FR 37879, June 19, 2000) and Grand Rapids, Michigan redesignation (61 FR 31834-31837, June 21, 1996). This policy has also been applied in ozone redesignations of Youngstown-Warren, Columbus, Canton, Cleveland-Akron-Lorain, Dayton-Springfield, Toledo, Preble County, Columbiana County, and Clinton County, Ohio, as well as Detroit, Michigan.

EPA believes that its decision not to insist on a fully approved NSR program as a prerequisite to redesignation is justifiable as an exercise of the Agency's general authority to establish de minimis exceptions to statutory requirements. See Alabama Power Co. v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1979). Under Alabama Power Co. v. Costle, EPA has the authority to establish de minimis exceptions to statutory requirements where the application of the statutory requirements would be of trivial or no value environmentally. In this context, the issue presented is whether EPA has the authority to establish an exception to the requirements of section 107(d)(3)(E) that EPA must fully approve a SIP meeting all of the requirements applicable to an area under section 110 and part D of title I of the Clean Air Act before redesignating the area. Plainly, the NSR provisions of section 110 and part D are requirements that were applicable to Cuyahoga and Jefferson Counties at the time of the submission of the request for redesignation. Thus, on its face, section 107(d)(3)(E) would seem to require that the State submit and EPA fully approve a part D NSR program meeting the requirements of the Clean Air Act before an area could be redesignated to attainment. Under EPA's de minimis authority, however, the agency may establish an exception to an otherwise plain statutory requirement if its fulfillment would be of little or no environmental value. Therefore, it is necessary to determine what would be achieved by insisting that there be a fully-approved part D NSR program in place prior to the redesignation of Cuyahoga and Jefferson Counties.

EPA believes that requiring the adoption and full approval of a part D NSR program prior to redesignation would not be of significant environmental value in this case. When an area is redesignated to attainment, a new source must satisfy prevention of significant deterioration (PSD) requirements rather than nonattainment new source review. PSD requires that new sources demonstrate that their construction will not increase ambient concentrations significantly and will not result in concentrations above the air quality standard. This may be compared to requirements under nonattainment area new source review for new sources to secure emission reductions to offset their new emissions. EPA believes that there would be trivial if any environmental value of applying nonattainment new source requirements in Cuyahoga and Jefferson Counties rather than PSD requirements.

The other purpose that requiring the full approval of a part D NSR program might serve is to ensure that NSR would become a contingency provision in the maintenance plan required for these areas by section 107(d)(3)(E)(iv) and 175A(d). These provisions require that for an area to be redesignated to attainment, it must receive full approval of a maintenance plan containing “such contingency provisions as the Administrator deems necessary to assure that the State will promptly correct any violation of the standard which occurs after the redesignation of the area as an attainment area. Such provisions shall include a requirement that the State will implement all measures with respect to the control of the air pollutant concerned which were contained in the SIP for the area before redesignation of the area as an attainment area.” Based on this language, it is apparent that whether an approved NSR program must be included as a contingency provision depends on whether it is a “measure” for the control of the pertinent air pollutants.

The term “measure” is not defined in section 175A(d) and Congress utilized that term differently in different provisions of the Clean Air Act with respect to the PSD and NSR permitting programs. For example, in section 110(a)(2)(A), Congress requires that SIPs include “enforceable emission limitations and other control measures, means, or techniques * * * as may be necessary or appropriate to meet the applicable requirements of the Act.” In section 110(a)(2)(C), Congress requires that SIPs include “a program to provide for the enforcement of the measures described in subparagraph (A), and regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure that NAAQS are achieved, including a permit program as required in parts C and D.” If the term “measures” as used in section 110 (a)(2)(A) and (C) had been intended to include PSD and NSR there would have been no point to requiring that SIPs include both measures and preconstruction review under parts C and D (PSD or NSR). Unless “measures” referred to something other than preconstruction review under parts C and D, the reference to preconstruction review programs in section 110(a)(2)(C) would be rendered mere surplusage. Thus, in section 110(a)(2) (A) and (C), it is apparent that Congress distinguished “measures” from preconstruction review. On the other hand, in other provisions of the Clean Air Act, such as section 161, Congress appeared to include PSD within the scope of the term “measures.”

EPA believes that the fact that Congress used the undefined term “measure” differently in different sections of the Clean Air Act is germane. This indicates that the term is susceptible to more than one interpretation and that EPA has the discretion to interpret it in a reasonable manner in the context of section 175A. Inasmuch as Congress itself has used the term in a manner that excluded PSD and NSR from its scope, EPA believes it is reasonable to interpret “measure,” as used in section 175A(d), not to include NSR. That this is a reasonable interpretation is further supported by the fact that PSD, a program that is the corollary of part D NSR for attainment areas, goes into effect in lieu of part D NSR when an area is redesignated to attainment. This distinguishes NSR from other required programs under the Clean Air Act, such as inspection and maintenance programs, which have no corollary for attainment areas. Moreover, EPA believes that those other required programs are clearly within the scope of the term “measure.”

EPA is not suggesting that NSR and PSD are equivalent, but merely that they are the same type of program. The PSD program is a requirement in attainment areas and is designed to allow new source permitting, yet contains adequate provisions to protect the NAAQS. If any information, including preconstruction monitoring, indicates that an area is not continuing to meet the NAAQS after redesignation to attainment, the requirements of 40 CFR part 51, appendix S (Interpretive Offset Rule) or a 40 CFR 51.165(b) program would apply.

With respect to conformity, the requirements cited by the commenter do not apply to PM 10 in these areas. As stated in EPA's conformity regulations, at 40 CFR 93.102(b), the conformity requirements apply in “nonattainment and maintenance areas for transportation-related criteria pollutants” [emphasis added}. Within that section of the conformity regulations, 40 CFR 93.102(b)(2)(iii) specifies that conformity requirements apply “in PM 10 areas [only] if the EPA Regional Administrator or the director of the State air agency has made a finding that transportation-related precursor emissions within the nonattainment area are a significant contributor to the PM 10 nonattainment problem and has so notified the MPO and DOT, or if the applicable implementation plan (or implementation plan submission established a budget for such emissions as part of the reasonable further progress, attainment or maintenance strategy.”

Transportation-related emissions do not contribute significantly to PM 10 concentrations in Cuyahoga and Jefferson Counties. Stationary sources are the predominant contributors to high concentrations in these areas. The attainment demonstration that EPA approved for these areas on June 12, 1996, at 61 FR 29662, documents this finding, and documents that mobile sources contribute only a few micrograms per cubic meter to airborne concentrations, i.e. only a few percent of the air quality standards. EPA and the Ohio Environmental Protection Agency agreed during the 1994 conformity consultation process that transportation sources are insignificant contributors to the nonattainment problem in Cuyahoga County and the Steubenville area. As appropriate, the SIP does not establish a budget for these emissions. EPA approved conformity rules for Ohio on May 16, 1996 (61 FR 24702) and May 30, 2000 (65 FR 34395). In accordance with applicable EPA regulations, conformity requirements under the state's rules do not apply to PM 10 in Cuyahoga or Jefferson Counties. Rules establishing such requirements and approval of an emissions budget are not prerequisites for full SIP approval or redesignation.

Furthermore, EPA believes it is reasonable to interpret the conformity requirements as not applying for purposes of evaluating a redesignation request under section 107(d). The rationale for this interpretation has been set forth in a number of notices redesignating areas to attainment for ozone. See, for example, the Cincinnati-Hamilton redesignation at 65 FR 37879 (June 19, 2000), the Grand Rapids redesignation at 61 FR 31835-31836 (June 21, 1996), and the Cleveland-Akron-Lorain redesignation at 61 FR 20458 (May 7, 1996).

Comment: The commenter believes that Section 107(d)(3)(E)(iii) requires that EPA or the State conduct modeling to demonstrate that air quality improvements are attributable to permanent and enforceable emission reductions rather than weather patterns, reduction in production, or other factors.

Response: When Ohio developed its attainment plan, it began by modeling existing emissions, to identify where existing air quality was problematic. This modeling identified problems consistent with the nonattainment problems identified at that time by monitoring. Ohio then conducted numerous model runs to assess alternative control strategies. The final modeling analysis demonstrated that the permanent and enforceable emission reductions which were added as requirements in the attainment plan regulations were sufficient to bring PM 10 concentrations down to attainment levels. Since this modeling reflected emissions at allowable levels assuming full capacity plant operations, attainment is not dependent on reduced production or other transient factors. While EPA does not concede that modeling must be done to demonstrate that air quality improvements are due to permanent and enforceable reductions, in this case the type of modeling requested by the commenter was in fact done. This modeling demonstrated that the air quality improvement is due to permanent and enforceable reductions.

Due to the length and variety of comments on Ohio's maintenance plan, these comments are addressed in three parts.

Comment: The commenter states that Ohio has failed to submit a SIP revision that provides for maintenance. The commenter observes that Ohio “has merely submitted a letter asserting that the standard will be maintained. There is no SIP revision comprising the maintenance plan, and no commitment to implement or continue control strategies necessary for maintenance.” The commenter further believes that “neither the state nor EPA has demonstrated that the standard will in fact be maintained for [the necessary] ten years”.

The commenter acknowledges that “EPA presumes” that declining population, cleaner new vehicles, and recent regulations on coke oven emissions will maintain the standards by keeping emissions at or below levels found in the SIP to assure attainment. However, the commenter states that Cuyahoga County “violated the [air quality standards] in 1995, again in 1999, and again in 2000,” demonstrating that “holding emissions to those assumed in the attainment plan most certainly does not assure attainment.” The commenter believes that the above “indicators” have not been shown to be good indicators of regional emissions, and observes that “other factors— e.g., increased production, construction of new pollution sources, increased per capita vehicle ownership—[may] cause emissions to rise.” The commenter cites EPA rules as requiring modeling to demonstrate maintenance, “rather than the intuitive approach proposed here,” and states that without “such a modeling demonstration, [EPA] cannot approve maintenance demonstrations for these areas.”

Response: A maintenance plan must provide sufficient assurances that attainment of the air quality standard will continue for at least 10 years after the area is redesignated to attainment. A maintenance plan is not required to add to the set of enforceable emission limitations in the SIP. If the State can show that the air quality standard will be maintained without any additional measures beyond those that are already part of the SIP, then the maintenance plan need not add any additional measures. Also, if the maintenance plan relies in part on a previously submitted attainment demonstration, then the State need not resubmit that attainment demonstration.

Ohio's maintenance plan is in fact based on its previously submitted attainment demonstration, which EPA approved on June 12, 1996, at 61 FR 29662. This analysis assesses the sum of the impacts of significant industrial sources at their maximum allowable emissions plus other, background sources at actual emission levels. Ohio demonstrated that the sum of these impacts is concentrations below the standard.

Emissions from the significant sources will be maintained at or below maximum allowable levels. Therefore, Ohio can demonstrate maintenance simply by demonstrating that background impacts will remain at or below current levels.

Maintenance planning for PM 10 differs from maintenance planning for ozone in this respect. Attainment plans for PM 10 for areas like Cuyahoga and Jefferson Counties must demonstrate that attainment will occur even if sources emit their maximum allowable amount. As a result, attainment and maintenance do not depend on maintaining preexisting levels of production by facilities in the area. Since the modeled industrial sources in the area are the principal contributors to high PM 10 levels in these counties, the maintenance plan will consist principally of the limits on these industrial sources provided in the attainment plan. The only remaining question pertains to future background concentrations. If the State can demonstrate that background concentrations will decline over the next ten years, then the maintenance demonstration will consist of that demonstration in conjunction with the previously approved attainment demonstration, and the maintenance plan's control measures will consist of the control measures in the attainment plan.

Ozone maintenance plans are different because ozone attainment plans address actual production levels. This means first that ozone maintenance plans must project any increases or decreases in future production. Such projections must consider all significant source types, and cannot be restricted to addressing background contributors. Thus, maintenance plans for PM 10 for areas like Cuyahoga and Jefferson County are considerably less complicated and have much less potential to require additional controls than maintenance plans for ozone.

The commenter expressed concern that the “indicators” that Ohio cites are not indicative of regional PM 10 emissions. In fact, Ohio should not be seeking to indicate trends in regional emissions. Ohio is properly relying on existing SIP limits to address the most significant regional emissions, and focusing its additional trend analyses on sources affecting “background” concentrations. Ohio need not address increased production at important industrial facilities, because all increases up to maximum production are already accommodated in the attainment/maintenance demonstration. Ohio need not address construction of new pollution sources, because PSD regulations require any significant new source to demonstrate that its emissions will not cause violations of the standards. Ohio needs to address increased vehicle ownership, but only as part of an assessment of trends in background concentrations.

Despite the relative insignificance of motor vehicle emissions, EPA has examined detailed assessments pertinent to motor vehicle emissions in Cuyahoga County. Ohio submitted extensive detail on current and projected traffic volumes in the Cleveland area as part of its maintenance plan for this area for ozone. Between 1996 and 2010, traffic volumes are projected to increase by less than one percent per year. Most of this growth is occurring in the outer counties of the area; Cuyahoga County traffic is projected to grow by less than 1/3 percent per year. Meanwhile, emissions per vehicle are declining as a result of previous regulations plus the tighter fuel and emission standards of the Tier 2 rules discussed below. Between now and 2010, emissions per vehicle are expected to decline an average of 2.5 percent per year, not including the significant emission reductions that will result from the Tier 2 rules. The net projected effect is a significant decline in motor vehicle emissions in Cuyahoga County over the next ten years. Similar information indicates a less than one percent traffic growth rate in the Steubenville area as well, so this area too will likely witness declining motor vehicle emissions.

EPA believes that Ohio has addressed important elements of the background concentrations. EPA believes that the net reduction in motor vehicle emissions plus the reduction in other emissions associated with population will yield a net decline in background concentrations. According to the attainment demonstration that EPA has approved, these background concentrations in combination with maximum allowable impacts from significant sources add up to concentrations below the standard. Consequently, EPA believes that Ohio's maintenance plan provides for maintenance of the PM 10 standards.

Ohio does not explicitly address whether maintenance is assured for 10 years. However, Ohio's approved attainment demonstration shows that the standard will be maintained, principally due to permanent emission limits on significant sources, so long as background emissions remain at or below current levels. Ohio provided evidence that background emissions will remain at or below current levels throughout the next 10 years. Consequently, EPA is satisfied that Ohio has assured maintenance for the requisite 10 years.

Comment: The commenter cites results of an EPA analysis conducted in conjunction with adoption of Tier 2 motor vehicle emission standards, discussed in the Federal Register of February 10, 2000 (65 FR 6698 and 6719). The commenter states that “EPA identified Cuyahoga County as an area with a 'significant risk of failing to attain and maintain the PM10 [air quality standards] without further reductions in emissions.”' The commenter acknowledges future reductions from the Tier 2 standards but states that “EPA has not shown that these reductions will be sufficient or will occur soon enough to prevent NAAQS violations” throughout the next 10 years.

Response: In preparation for adopting its Tier 2 motor vehicle emission standards, EPA attempted a national analysis of prospective attainment with and without these standards. EPA identified eight areas as areas of “high risk of failing to attain or maintain the PM 10 NAAQS”. These areas had monitored violations in 1996 to 1998 and were projected to have continued violations in 2030 without the Tier 2 standards. These areas were all in California or neighboring States. EPA then identified five additional counties, including Cuyahoga County, as having a risk of future violations of the PM 10 NAAQS. These counties were defined as attaining the NAAQS based on 1996 to 1998 data but projected to violate the standards in 2030 in the absence of Tier 2 regulations. The rulemaking cited by the commenter states, “There is a substantial risk that at least some of [these latter five counties] would fail to maintain without further emission reductions. The emission reductions from the Tier 2/Gasoline Sulfur program will help to keep them in 40 attainment.” EPA in fact adopted the Tier 2 regulations, so projections of possible future nonattainment without these regulations are irrelevant. Contrary to the commenter's statements, EPA's analysis for the relevant scenario (with Tier 2 standards) shows continued maintenance. In addition, a projection that vehicle emissions without Tier 2 standards could reach levels sufficient to help cause violations by 2030 does not necessarily mean that violations would occur by 2010, the timeframe that is germane here. In any case, the Tier 2 rulemaking notes that “[a]fter reviewing public comments on our presentation of these modeling results, [EPA] concluded that [its analysis is] suitable for estimating PM concentration reductions for economic benefits estimation, [but] it is not a tool we can use with high confidence for predicting that individual areas that are now in attainment will become nonattainment in the future.” Thus the most relevant analysis is Ohio's attainment modeling and maintenance plan information, which considers local data on the significance of motor vehicle emissions and on the population (and thus the number of drivers). This information, like the Tier 2 analysis, supports EPA's conclusion that Cuyahoga County will maintain the PM 10 NAAQS over the next ten years.

Comment: The commenter objects that what EPA calls a maintenance plan “lacks enforcement programs and commitments of resources” as well as “legal authority.” In addition, the commenter states that PM 10 motor vehicle emissions budget is “required not only for purposes of the attainment plan, but also for a maintenance plan as well.” Finally, the commenter states that “the state lacks adequate contingency plans for maintenance” pursuant to Section 175A(d). The commenter acknowledges that Ohio has contingency measures “designed to produce limited annual progress toward attainment in the event of a shortfall,” but the commenter believes that these measures fail to meet a different requirement applicable to maintenance plans “to assure that the State will promptly correct any violation of the standard.”

Response: The requirements under Section 110(a)(2)(E) that the commenter cites were addressed in general by Ohio in its initial SIP, submitted on January 31, 1972, and ultimately approved on April 15, 1974 (39 FR 13539). EPA's conclusion in that rulemaking remains valid, that Ohio's enforcement program, commitment of resources, and legal authority are adequate and assure that measures in the SIP (including maintenance plan measures) will be implemented. See Calcagni Memorandum cited above and Southwestern Pennsylvania Growth Alliance v. Browner, 144 F.3d 984 (6th Cir. 1998). See also discussion in Cincinnati-Hamilton redesignation notice at 65 FR 37882. If EPA were to find that SIP measures were not being implemented, for lack of the above or for any other reason, the process leading to sanctions under Section 179(a)(4) would commence.

A response above clarifies that motor vehicle emission budgets are not required for PM 10 in areas where motor vehicles do not contribute significantly to PM 10 nonattainment. Thus, neither the attainment plans nor the maintenance plans for Cuyahoga and Jefferson Counties need to have a motor vehicle emissions budget.

The commenter acknowledges that the Ohio SIP includes contingency measures. These measures, approved on May 6, 1996 (61 FR 20142), are triggered on the basis of air quality monitoring data irrespective of attainment status. That is, these measures are valid maintenance plan contingency measures because they take effect if violations recur for any reason after redesignation of the areas to attainment. The question of interest here, then, is whether these contingency measures are adequate to satisfy Section 175A(d).

The commenter's quote from Section 175A(d) omits a key qualifier that invokes EPA's judgment in assessing contingency measure adequacy for maintenance plan purposes. The full sentence in Section 175A(d) reads: “Each plan revision submitted under this section shall contain such contingency provisions as the Administrator deems necessary [emphasis added] to assure that the State will promptly correct any violation of the standard which occurs after the redesignation of the area as an attainment area.” Section 175A(d) does not dictate that the maintenance plan contingency measures be sufficient by themselves to correct any violation of the standard. Instead, these measures need only be sufficient in EPA's judgment to help assure that the State will promptly correct any future violation.

A variety of sources emit PM 10 , so nonattainment can occur for a variety of reasons. EPA cannot reasonably expect maintenance plan contingency measures by themselves to address all possible future violations. Instead, EPA must judge the contingency measures in the context of the types of future violations that it views as most likely and in the context of other factors which help assure that the State will correct any future violations.

Additional factors that help assure prompt correction of any future PM 10 violation in Cuyahoga County or the Steubenville area include provisions in Ohio's regulations that allow the State to impose additional source controls if violations occur and provisions in the Clean Air Act Section 110(h) (provisions for SIP Calls). EPA is satisfied that the contingency measures that are included in Ohio's maintenance plan for Cuyahoga and Jefferson Counties, in combination with other factors, assure that Ohio will promptly correct any future violations in these areas.

EPA is redesignating Cuyahoga and Jefferson Counties in Ohio to attainment for PM 10 and is approving Ohio's PM 10 maintenance plan for these counties. The redesignation action reflects EPA's judgment of Ohio's request, focusing on the five criteria given in Clean Air Act Section 107(d)(3)(E) for redesignations from nonattainment to attainment.

The first criterion is that the areas are in fact attaining the standards. The standards in question are the PM 10 standards given in 40 CFR 50.6, promulgated in 1987. Although EPA promulgated new standards for PM 10 into 40 CFR 50.7, these new standards have been vacated by the District of Columbia Circuit Court of Appeals, no designations have been promulgated for these new standards, and this rule addresses only the older standards.

No concentrations exceeding the applicable standards have been recorded in Jefferson County or in most of Cuyahoga County. Exceedances occurred at two sites in Cleveland. One site was found to have 2 exceedances of the 24-hour standard over 3 years, which was found to translate to 0.7 expected exceedances per year. EPA proposed this finding, no commenter challenged this finding, and EPA now concludes that the standard is being attained at this site. A second site observed 1 exceedance of the 24-hour standard in 1997 to 1999, which was found to translate to 0.3 expected exceedances per year. A commenter challenged this view, noting that EPA's AIRS database indicates 6 expected exceedances in 1999 as well as 6 expected exceedances in 2000. As discussed above in response to comments, EPA finds that the more sophisticated methods of data interpretation described in the proposed rulemaking give a better assessment of expected exceedances at this site. These methods indicate that the site had approximately one expected exceedance for 1999. A similar assessment of the data so far in 2000 also indicate approximately one expected exceedance. While it is problematic to average in data for only half of 2000, these data support a conclusion that expected exceedances averaged over 3 years is less than 1.0. Consequently, EPA finds that these two sites, as well as the rest of Cuyahoga County, are attaining the applicable PM 10 standards.

As noted in the proposed rulemaking, Jefferson County is part of a two-state area that also includes a portion of Brooke County, West Virginia. Satisfaction of the attainment criterion requires that air quality throughout this two-state Steubenville area be attaining the standards. The West Virginia portion of this area has one monitor, which has shown no recent exceedances. Thus, this criterion is met because the entire Steubenville area is attaining the standards.

The second criterion is that EPA has fully approved the applicable implementation plan for the areas. The most recent approval, including approval of Ohio's attainment demonstrations, was published on June 12, 1996, at 61 FR 29662. Other applicable plan elements were approved on prior occasions. EPA does not require full approval of new source review rules or conformity as a prerequisite for redesignation, and, moreover, the conformity regulations do not apply to these areas for PM 10 . While approval of the SIP for the West Virginia portion of the Steubenville area was published separately, both SIPs have been approved on the basis of the same, jointly developed attainment strategy.

The third criterion is that the air quality improvement be due to permanent and enforceable reductions. EPA finds that air quality has significantly improved as a result of emission reductions that limits in the SIP make permanent and enforceable.

The fourth criterion is that EPA has fully approved a maintenance plan. This rule approves Ohio's maintenance plan for Cuyahoga and Jefferson Counties. Ohio held a public hearing on its maintenance plan and otherwise satisfied the procedural requirements for adopting and submitting this plan. The most important part of this plan is the continuation of SIP emission limits on major industrial sources which have been shown by modeling to assure attainment even if the sources operate at maximum capacity. Additional factors will assure that the remaining, background concentrations will remain at attainment levels, including ongoing plus forthcoming mobile source control requirements as well as population declines in the two areas. Although a commenter expressed numerous concerns about Ohio's maintenance plans, the review of those concerns discussed in the previous section lead EPA to conclude that the maintenance plans fully meet applicable requirements. With today's approval of Ohio's maintenance plans, the fourth criterion for redesignation of the two counties is satisfied.

The fifth criterion for redesignation is that the State has met all requirements under Section 110 and Part D of the Clean Air Act that apply to the areas. This criterion is similar to the second criterion, and EPA finds that Ohio has met all relevant requirements.

For the Steubenville area, EPA is taking action today only on the Ohio portion of this area. This approach is for administrative convenience and in no way signifies any splitting of the area into separate air quality planning areas. EPA's action today reflects a review of the air quality for the full Steubenville area as well as Ohio's fulfillment of its portion of an attainment plan that Ohio and West Virginia jointly developed. EPA has received no redesignation request for the West Virginia portion of the Steubenville area. EPA anticipates receiving and rulemaking on such a request in the near future. If in the future the standard is violated in either portion of the area, such that redesignation back to nonattainment is warranted, EPA will reinstate nonattainment status for the entire area.

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

Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This rule is not subject to Executive Order 13045 because it does not involve decisions intended to mitigate environmental health or safety risks that may have disproportionate effects on children.

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

Today's rule does not significantly or uniquely affect the communities of Indian tribal governments. This action does not involve or impose any requirements that affect Indian Tribes. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.

Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely affects the status of a geographical area, does not impose any new requirements on sources, or allows a state to avoid adopting or implementing other requirements, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

Executive Order 12898 (59 FR 7629, February 16, 1994) instructs EPA to address, as appropriate, disproportionately high and adverse health or environmental effects on minority and low-income populations. EPA has found that this rulemaking is consistent with Executive Order 12898 and does not impose any disproportionately high and adverse human health or environmental effects on minority and low-income populations.

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

This rule will not have a significant impact on a substantial number of small entities because SIP approvals under section 110 and subchapter I, part D of the Clean Air Act do not create any new requirements but simply approve requirements that the State is already imposing. In addition, redesignation of an area to attainment under section 107(d)(3)(E) of the Clean Air Act does not impose any new requirements on small entities. Redesignation is an action that affects the status of a geographical area and does not impose any new requlatory requirements on sources. Therefore, because the Federal SIP approval does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities. Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of flexibility analysis would constitute Federal inquiry into the economic reasonableness of state action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

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

EPA has determined that the approval action promulgated does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action approves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective January 10, 2001.

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

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, and in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Redesignation is an action that affects the status of a geographical area but does not impose any new requirements on sources. 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.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 9, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Nothing in this action should be construed as permitting or allowing or establishing a precedent for any future request for revision to any SIP. Each request for revision to any SIP shall be considered separately in light of specific technical, economic, and environmental factors and regulatory requirements.

This is a synopsis of the Commission's Memorandum Opinion and Order, MM Docket No. 94-29, adopted November 22, 2000 and released December 1, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Information Center (Room CY-A257), at its headquarters, 445 12th Street, S.W. Washington, D.C.

The complete text of this decision may also be purchased from the Commission's copy contractors, International Transcription Service, Inc., (202) 857-3800, 1231 20th Street, N.W. Washington, D.C. 20036.

This is a synopsis of the Commission's Report and Order, MM Docket No. 99-58, adopted November 22, 2000, and released December 1, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Information Center (Room CY-A257), 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractors, International Transcription Service, Inc., (202) 857-3800, 1231 20th Street, NW., Washington, DC 20036.

Additionally, Channel 291A can be allotted to Farmington Township in compliance with the Commission's minimum distance separation requirements with a site restriction of 15.1 kilometers (9.4 miles) to avoid a short-spacing to the construction permit site of Station WMKX(FM), Channel 388B1, Brookville, Pennsylvania, and the licensed and construction permit sites of Station WCTL(FM), Channel 292A Union City, Pennsylvania. The coordinates for Channel 291A at Farmington Township are 41-30-54 North Latitude and 79-18-13 West Longitude. Since Strattanville is located within 320 kilometers (200) miles of the U.S.-Canadian border, Canadian concurrence for the allotment of Channel 267A at Strattanville has been obtained. However, concurrence for the allotment of Channel 292A at Farmington Township has been requested, but not yet received. Therefore, if a construction permit is granted to Farmington Township prior to the receipt of formal concurrence in the allotment by the Canadian government, the construction permit will include the following condition: “Operation with the facilities specified herein is subject to modification, suspension or termination without right to a hearing, if found by the Commission to be necessary in order to conform to the USA-Canadian FM Broadcast Agreement.”

The Board's regulations in 49 CFR 1002.3 require the Board's user fee schedule to be updated annually. The Board's regulations in 49 CFR 1002.3(a) provide that the entire fee schedule or selected fees can be modified more than once a year, if necessary. The Board's fees are revised based on the cost study formula set forth at 49 CFR 1002.3(d). Also, in some previous years, selected fees were modified to reflect new cost study data or changes in Board or Interstate Commerce Commission fee policy.

Because Board employees received a salary increase of 4.94% in January 2000, we are updating our user fees to recover the increased personnel costs. We also are increasing the fees to take into account an approximate increase of 4.2% in our publication costs. With certain exceptions, all fees will be updated based on our cost formula contained in 49 CFR 1002.3(d).

The fee increases involved here result only from the mechanical application of the update formula in 49 CFR 1002.3(d), which was adopted through notice and comment procedures in Regulations Governing Fees for Services—1987 Update, 4 I.C.C.2d 137 (1987). In addition, no new fees are being proposed in this proceeding. Therefore, we believe notice and comment are unnecessary for this proceeding. See Regulations Governing Fees for Services—1990 Update, 7 I.C.C.2d 3 (1990); Regulations Governing Fees for Services—1991 Update , 8 I.C.C.2d 13 (1991); and Regulations Governing Fees for Services—1993 Update , 9 I.C.C.2d 855 (1993).

We conclude that the fee changes being adopted here will not have a significant economic impact on a substantial number of small entities because the Board's regulations provide for waiver of filing fees for those entities that can make the required showing of financial hardship.

Additional information is contained in the Board's decision. To obtain a copy of the full decision, write, call, or pick up in person from Da-to-Da Office Solutions, Suite 405, Surface Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. Telephone: (202) 466-5530. [Assistance for the hearing impaired is available through TDD services 1-800-877-8339.]