On January 15, 1999, the Secretary of Agriculture established the USDA Hazardous Materials Policy Council (Council) to direct the USDA Hazardous Materials Management and Federal Facilities Compliance Program (Program). By Memorandum dated April 14, 1999, the Secretary decided to strengthen the Program within the Department by assigning to the Counsel lead responsibility for hazardous materials management and Federal facilities compliance. Also, the Secretary directed that the executive director of the Council serve as the Director of the Hazardous Materials Management Group, the group that acts as technical and program staff to the Council. The decision was based upon the fact that the Department had a decentralized arrangement for the implementation of the program and needed to improve coordination among the agencies of the Department. This final rule delegates responsibilities to the director of the Hazardous Materials Management Group.

This rule relates to internal agency management. Therefore, pursuant to 5 U.S.C. 553, notice of proposed rule making and opportunity for comment are not required.

Further, because this rule relates to internal agency management, it is exempt from the provisions of Executive Order No. 12866 and No. 12988. In addition, this action is not a rule as defined by the Regulatory Flexibility Act (5 U.S.C. 601, et seq. ), and thus is exempt from provisions of that act. Finally, this action is not a rule as defined in 5 U.S.C. 804, and thus does not require review by Congress.

CCC published a final rule implementing the LIP-CG on June 8, 2000 at 65 FR 36550, as provided by the Omnibus Consolidated Appropriations Act, 2000 (Pub. L. 106-113), which added funding to the emergency livestock assistance provided by section 802 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2000 (Pub. L. 106-78) and authorized its use for emergency assistance to contract growers during 1999. Section 824 of Public Law 106-78 required that the regulations necessary to implement the livestock assistance provisions be issued as soon as practicable and without regard to the notice and comment provisions of 5 U.S.C. 553 or the Statement of Policy of the Secretary of Agriculture (the Secretary) effective July 24, 1971 (36 FR 13804) relating to notices of proposed rulemaking and public participation in rulemaking. The 2001 Act amended Public Law 106-113 to extend the time frame for losses compensable under LIP-CG, and thus supercedes the existing regulations. Because this rule merely amends the regulations previously published as a final rule exempt from notice and comment, Congress intended for the statutory amendment to the program and the necessary regulatory amendments to be similarly exempt. These provisions are thus issued as final.

This rule is issued in conformance with Executive Order 12866 and has been determined to be significant and has been reviewed by the Office of Management and Budget.

It has been determined that the Regulatory Flexibility Act is not applicable to this rule because USDA is not required by 5 U.S.C. 553 or any other provision of law to publish a notice of proposed rulemaking with respect to the subject matter of this rule.

It has been determined by an environmental evaluation that this action will have no significant impact on the quality of the human environment. Therefore, neither an environmental assessment nor an Environmental Impact Statement is needed.

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

This rule has been reviewed in accordance with Executive Order 12988. The provisions of this rule preempt State laws to the extent such laws are inconsistent with the provisions of this rule. Before any judicial action may be brought concerning the provisions of this rule, the administrative remedies must be exhausted.

The provisions of Title II of the Unfunded Mandates Reform Act of 1995 are not applicable to this rule because USDA is not required by 5 U.S.C. 553 or any other provision of law to publish a notice of proposed rulemaking with respect to the subject matter of this rule. Further, in any case, these provisions do not impose any mandates on state, local or tribal governments, or the private sector.

As discussed in the earlier section on Notice and Comment, section 824 of Public Law 106-78 required that the regulations necessary to implement the emergency livestock assistance provisions be issued as soon as practicable and without regard to the notice and comment provisions of 5 U.S.C. 553 or the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 FR 13804) relating to notices of proposed rulemaking and public participation in rulemaking. Section 824 also required that the Secretary use the provisions of section 808 of the Small Business Regulatory Enforcement Fairness Act (SBREFA) (5 U.S.C. 808), which provides that a rule may take effect at such time as the agency may determine if the agency finds for good cause that public notice is impracticable, unnecessary, or contrary to the public purpose, and thus does not have to meet SBREFA's normal requirement for a 60-day delay for Congressional review of a major rule before it can go into effect. The 2001 Act amended the LIP-CG provisions of Public Law 106-113, which authorized the program under the general emergency livestock assistance provisions of Public Law 106-78, and therefore this rule merely amends regulations previously published as a final rule for which the Secretary was required to use the “good cause” provision provided in § 801 of SBREFA. Congress intended for the “good cause” provision to be used for the statutory amendment to the program and the necessary regulations as well. Additionally, this rule is not considered a major rule under SBREFA. Accordingly, because the rule affects the incomes of agricultural producers who have been hit hard by natural disasters, it would be contrary to the public interest to delay this rule and they are issued as final and are effective immediately.

Section 824 of Public Law 106-78 required that the regulations necessary to implement livestock assistance be promulgated without regard to 44 U.S.C. chapter 35 (the Paperwork Reduction Act (PRA)). This means that the normal 60-day public comment period and OMB approval of the information collections required by this rule are not required before the regulations may be made effective. The 2001 Act amended the LIP-CG provisions of Public Law 106-113, which authorized the program under the general emergency livestock assistance provisions of Public Law 106-78, and therefore this rule merely amends regulations previously published as a final rule that were exempt from the PRA. Congress intended for these regulations to be exempt as well. However, the 60-day public comment period and OMB approval under the provisions of the PRA are still required after the rule is published.

Section 805 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2000 (Pub. L. 106-78) gave the Secretary the authority to spend $325 million of CCC funds to compensate livestock producers for losses incurred during 1999. Subsequently, the Omnibus Consolidated Appropriations Act, 2000 (Pub. L. 106-113) gave the Secretary the authority to spend an additional $10 million of CCC funds to compensate “persons who raise livestock owned by other persons for income losses sustained with respect to livestock during 1999. * * *” CCC thus published a final rule implementing the LIP-CG on June 8, 2000 at 65 FR 36550. Subsequently, because the entire $10 million authorized by Public Law 106-113 was not spent, and because there were additional losses that occurred in January of 2000, the 2001 Act amended Public Law 106-113 by striking “during 1999” and inserting “from January 1, 1999, to February 7, 2000.” This final rule announces and carries out that statutory amendment.

For losses that occurred during 1999 the prior rule required producers to apply for benefits before May 1, 2000, and this amended rule does not affect the deadline that existed for losses that occurred during 1999. However, this rule announces a new sign-up period for the producers who suffered losses that occurred during the period of January 1, 2000, through February 7, 2000. Producers so affected will have to apply at their local USDA Service Center prior to January 26, 2001. All other program requirements remain unchanged. Accordingly, this rule announces the new loss period and the application period for those producers. This final rule also corrects the statutory authority for Part 1439.

The regulations in 9 CFR part 94 (referred to below as the regulations) govern the importation of certain animals and animal products into the United States in order to prevent the introduction of various animal diseases, including rinderpest, foot-and-mouth disease (FMD), African swine fever, hog cholera, and swine vesicular disease. These are dangerous and destructive diseases of ruminants and swine. Section 94.1 of the regulations lists regions of the world that are declared free of rinderpest or free of both rinderpest and FMD. Rinderpest or FMD exists in all regions of the world not listed. Argentina is not listed in § 94.1; however, § 94.1(a)(1) references § 94.21, which provides for the importation of fresh (chilled or frozen) beef from Argentina under certain conditions. Section 94.4 provides for the importation of cured or cooked meat from regions where rinderpest or FMD exists, except for cured or cooked beef from Argentina that meets the requirements for the importation of fresh (chilled or frozen) beef as provided in § 94.21.

Prior to the effective date of this interim rule, § 94.21 allowed the importation of fresh (chilled or frozen) beef from Argentina if, among other things, FMD had not been diagnosed in Argentina within the previous 12 months. In addition, beef from Argentina that was cured or cooked other than in accordance with the provisions of § 94.4 was allowed importation into the United States if the beef met the import conditions for fresh (chilled or frozen) beef as provided in § 94.21. However, on or about July 22, 2000, cattle from a neighboring country were illegally imported into Argentina, and on August 16, 2000, Argentina confirmed that one of the imported animals was infected with FMD.

Before August 2000, the last reported case of FMD in Argentina was in April 1994. Argentina stopped vaccinating cattle for FMD in April 1999.

In response to the confirmation of the FMD diagnosis in August 2000, Argentina issued a voluntary ban on beef exports and initiated other measures to control the spread of the disease. Additionally, the United States Department of Agriculture issued a temporary hold on the importation of all beef from Argentina that had been authorized to be imported under § 94.21. During late September and early October 2000, a tripartite delegation consisting of representatives from the United States, Canada, and Mexico visited Argentina to assess the FMD situation. After extensive inspection and evaluation, the tripartite delegation concluded that Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA) had acted promptly and effectively to eliminate the FMD infection. A copy of the site visit report is available for review in our reading room (see ADDRESSES for location and hours of operation) and at http://www.aphis.usda.gov/vs/reg-request.html.

Further, Veterinary Services staff members of the Animal and Plant Health Inspection Service (APHIS) produced a risk analysis document to explore the potential FMD risks associated with importing beef from Argentina under the limitations set in § 94.21. This report concluded that the August 2000 outbreak of FMD, which resulted from the illegal movement of animals into Argentina from a bordering country, had been quickly detected and contained. This report also noted that there is no evidence that Argentina is not in compliance with any of the requirements listed at § 94.21 and that Argentina is developing additional safeguards against the risks associated with the illegal movement of animals into Argentina from bordering countries. A copy of the risk analysis is available for review in our reading room (see ADDRESSES for location and hours of operation) and at http://www.aphis.usda.gov/vs/reg-request.html.

In consideration of SENASA's prompt action and the conclusions of the risk analysis, we plan to allow beef imports to resume from Argentina under § 94.21, with the following additional provisions contained in this interim rule. This interim rule requires an authorized veterinary official of the Government of Argentina to certify that the beef being exported to the United States is not from an animal that has ever been in specified areas along Argentina's borders with Paraguay, Brazil, Bolivia, and Uruguay. These areas are described in a new paragraph (n) of § 94.21, and maps showing the border areas may be viewed at http://www.aphis.usda.gov/vs/reg-request.html. We believe this additional measure will ensure that beef imported from Argentina under § 94.21 continues to present a negligible risk of being contaminated with the FMD virus.

This interim rule also revises current § 94.21(l) to clarify that an authorized veterinary official must certify on the meat inspection certificate accompanying the meat that all provisions of § 94.21 have been met. Currently, § 94.21(l) specifies only “an authorized official.” However, we believe it is necessary for a veterinarian to certify the provisions of § 94.21 have been met.

Although we are adding a requirement that an authorized veterinary official of the Government of Argentina certify that fresh (chilled or frozen) beef exported to the United States is not from areas designated in § 94.21(n), we recognize that SENASA responded immediately to the detection of the disease by imposing restrictions on the movement of animals from the affected areas and by initiating other measures to eradicate the disease. At the time of publication of this interim rule, it appears that the outbreak is well controlled. Because of SENASA's efforts to ensure that FMD does not spread beyond the previously affected areas, we intend to reassess the situation in accordance with the standards of the Office International des Epizooties (OIE). As part of that reassessment process, we will consider all comments received on this interim rule. This future reassessment will determine whether it is necessary to revise the areas designated in § 94.21(n), and, additionally, whether it is necessary to continue requiring an authorized veterinary official of the Government of Argentina to certify that fresh (chilled or frozen) beef exported to the United States is not from areas designated in § 94.21(n), or whether we can remove this additional certification requirement.

This rulemaking is necessary on an emergency basis to prevent the introduction of FMD into the United States. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the Federal Register . We are making this action effective retroactively to July 15, 2000, because we believe that an effective date that is 1 week prior to the reported illegal importation of cattle will ensure that fresh (chilled or frozen) beef imported into the United States from Argentina is not from animals that were exposed to FMD. The effective date is necessary to prevent the introduction of FMD into the United States.

We will consider comments that are received within 60 days of publication of this rule in the Federal Register . After the comment period closes, we will publish another document in the Federal Register . This document will include a discussion of any comments we receive and any amendments we are making to the rule as a result of the comments.

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review process required by Executive Order 12866.

We are amending the regulations governing the importation of fresh (chilled or frozen) beef from Argentina by adding a requirement that Argentina certify that the beef does not come from animals that have ever been in specified areas along Argentina's borders with Paraguay, Brazil, and Bolivia. We are taking this action as an emergency measure to protect the livestock of the United States from foot-and-mouth disease.

This emergency situation makes timely compliance with section 604 of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) impracticable. We are currently assessing the potential economic effects of this action on small entities. Based on that assessment, we will either certify that the rule will not have a significant economic impact on a substantial number of small entities or publish a regulatory flexibility analysis.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has retroactive effect to July 15, 2000; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

This interim rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) by superseding AD 99-03-10, Amendment 39-11080 (64 FR 13502), which is applicable to Agusta Model A109E helicopters, was published in the Federal Register on September 22, 2000 (65 FR 57298). That action proposed to require modifying the engine exhaust ejectors, P/N 109-0601-51, by installing a kit, P/N 109-0822-94.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on 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.

The FAA estimates that 13 helicopters of U.S. registry will be affected by this AD, that it will take approximately 12 work hours per helicopter to accomplish the required actions, and that the average labor rate is $60 per work hour. The manufacturer has stated that 12 work hours labor costs at $40 per hour and the kit will be provided under warranty if requested prior to December 31, 2000. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $3,120, assuming that all operators take full advantage of the warranty coverage stated by the manufacturer.

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 .

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 Boeing Model 737, 747, 757, and 767 series airplanes was published in the Federal Register on August 10, 2000 (65 FR 48947). That action proposed to require rework of certain duct assemblies of the environmental control system (ECS) or replacement of the duct assemblies with new or reworked duct assemblies.

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

Two commenters support the proposed rule.

Several commenters request an extension of the proposed compliance time. Generally, the commenters claim that the proposed five-year compliance time will result in a need to accomplish the proposed requirements on some airplanes before the next scheduled heavy maintenance visit, which would cause significant airplane down time, and would impose a substantial cost penalty. Individual comments are presented below.

One of the commenters suggests that an extension of the compliance time to six years for all aircraft types would not compromise safety any further. Another commenter requests that the compliance time be stated as follows: “* * * within five years after the effective date of the AD, or at the next scheduled heavy maintenance visit, whichever occurs later, not to exceed eight years after the effective date.” This commenter performs segmented “C” checks approximately every two years, and it takes four such checks to reach all areas of the airplane. Therefore, under that commenter's maintenance program, access to the specific areas affected may not occur for eight years.

The Air Transport Association (ATA) of America, on behalf of its members, states that the compliance time should be stated as follows: “* * * within five years after the effective date of this AD, or at the next scheduled heavy maintenance visit, whichever occurs later, not to exceed six years after the effective date.” The ATA contends that this compliance time “would preclude the press associated with significant, unscheduled maintenance visits”; in practical terms, this would affect the installation time of less than 20 percent of the applicable airplanes. The ATA believes that its suggested compliance time would achieve a level of safety equivalent to that intended by the proposed AD.

Another commenter states that it participated in a Boeing-hosted meeting on the subject ECS ducting flammability concerns and asked Boeing to recommend to the FAA that the actions be required during a heavy maintenance visit. The commenter notes that Boeing did indeed make this recommendation to the FAA in the referenced FAA-approved service bulletins. The commenter says that six years would facilitate making use of the first heavy maintenance visit under current maintenance programs. The commenter adds that compliance periods that intend to make use of scheduled down time per an approved maintenance program should reflect an interval taking into account such approved maintenance programs.

Another commenter states that a moderate escalation of the compliance time to 6 years would avoid burdening the operators with excessive costs, and would allow accomplishment of the modification at a heavy maintenance visit. Retaining the proposed 5-year compliance time for Model 757 series airplanes would require that approximately 17 percent of the fleet (15 airplanes) undergo the modifications at a light or special maintenance visit, which would impose an undue financial burden on some operators.

The commenter adds that a comparison between the compliance time specified in this proposed rule to that given in two previously issued AD's that address similar unsafe conditions cannot be used as a basis for the choice of a compliance time for this proposed rule. [The AD's referenced by the commenter are AD 2000-11-01, amendment 39-11749 (65 FR 34322, May 26, 2000), and AD 2000-11-02, amendment 39-11750 (65 FR 34341, May 26, 2000). Those AD's require replacement of metallized Mylar insulation blankets with new blankets made of more flame-resistant material on certain McDonnell Douglas airplanes.] Based on information about various heavy maintenance intervals provided by the commenter, the operators of airplanes affected by AD 2000-11-01 and AD 2000-11-02 would not be subjected to excessive modification costs since all of the affected airplanes could be modified during a heavy maintenance visit within the 5-year compliance time specified in those two AD's.

The FAA concurs that the compliance time can be extended somewhat. The FAA has closely reviewed the rationale presented by the commenters. In addition, the FAA has examined related comments to AD 2000-11-01 and AD 2000-11-02. In those AD's, the compliance time was extended from four to five years in the final rules.

The FAA acknowledges that a compliance time of six years will more closely align with heavy maintenance visits. Paragraph (a) of the final rule has been revised accordingly. For any operator that performs segmented “C” checks every two years, the revised compliance time should allow enough time to schedule the ducting rework or replacement during one of the next three such checks. The extension of the compliance time also will minimize the amount of unscheduled work and associated down time. The FAA considers that this extension of the compliance time will not adversely affect safety.

One commenter requests that a sampling program be incorporated for all fleet types affected to determine if BAC 5010, Type 97 adhesive was used on specific airplanes and to establish the requirements for replacing the ECS ducts. The commenter states that neither Boeing nor the FAA has provided concrete evidence that BAC 5010, Type 97 adhesive was used in the assembly of all the ECS ducts. The commenter adds that the applicable service bulletins and proposed rule are based purely on conjecture. The commenter suggests that negative findings in such a sampling program would offer terminating action for the proposed rule.

The FAA does not concur. The FAA finds that there is a significant amount of evidence pointing to widespread use of unsafe adhesives (that is, material and adhesive combinations that are easily ignited and consequently able to propagate a small fire) on Model 737, 747, 757, and 767 series airplanes. Determining which ECS ducts are affected has already been accomplished to a great extent through the efforts of Boeing. The scope of the parts and airplanes affected by the final rule has been significantly reduced through Boeing's efforts in surveying its duct suppliers. Only airplanes having parts that were made by suppliers that used unsafe adhesives in their manufacturing processes have been included in the applicability of this final rule. Although it is possible that some parts may have been manufactured using compliant adhesives, the FAA expects that almost all were manufactured using the BAC 5010, Type 97 adhesive because it is much easier to apply than other types of adhesives. Therefore, the FAA has determined that an option for a sampling program would not provide sufficient value and has not included such an option in this final rule.

However, an operator may request approval of an alternative method of compliance in accordance with the provisions of paragraph (b) of this final rule, provided that evidence is submitted to show that no unsafe adhesive was used in the construction of the ECS ducting on the airplanes in its fleet.

One commenter requests that certain portions of the Discussion section of the proposed rule be rewritten. The commenter specifically asks that this section include the FAA's actual safety concerns, which are that the material is too easy to ignite and is not self-extinguishing. The commenter also asks that the section include a statement indicating that a small electrical arc would be sufficient to ignite the fiberglass insulation material, if this is indeed the case.

Although the Discussion section of the proposed rule is not restated in the final rule, the FAA acknowledges that the commenter's statements are correct. The purpose for issuing this AD is to prevent ignition of insulation material by a small arc, which would then not self-extinguish, but would instead propagate a fire.

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

There are approximately 1,162 airplanes of the affected design in the worldwide fleet. The FAA estimates that 403 airplanes of U.S. registry will be affected by this AD. The following table shows the estimated cost impact of the required actions for airplanes affected by this AD. The average labor rate is $60 per work hour. The estimated total cost for all airplanes affected by this AD is $2,552,996.

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 Boeing Model 747, 757, 767 and 777 series airplanes was published in the Federal Register on August 10, 2000 (65 FR 48950). That action proposed to require modification of certain drip shields located on the flight deck, and follow-on actions.

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

One commenter supports the proposed rule.

Several commenters request an extension of the proposed compliance time. Generally, the commenters claim that the proposed five-year compliance time will result in a need to accomplish the proposed requirements on some airplanes before the next scheduled heavy maintenance visit, which would cause significant airplane down time, and would impose a substantial cost penalty. Individual comments are presented below.

One of the commenters suggests a compliance time of six years for Model 747, 757, and 767 series airplanes, and seven years for Model 777 series airplanes. The commenter states that such an extension will not compromise safety. Another commenter requests that the compliance time be stated as follows: “* * * within five years after the effective date of the AD, or at the next scheduled heavy maintenance visit, whichever occurs later, not to exceed eight years after the effective date.” This commenter performs segmented “C” checks approximately every two years, and it takes four such checks to reach all areas of the airplane. Therefore, under that commenter's maintenance program, access to the specific areas affected may not occur for eight years.

The Air Transport Association (ATA) of America, on behalf of its members, states that the compliance time should be stated as follows: “* * * within five years after the effective date of this AD, or at the next scheduled heavy maintenance visit, whichever occurs later, not to exceed six years after the effective date.” The ATA contends that its suggested compliance time “would preclude the press associated with significant, unscheduled maintenance visits”; in practical terms, this would affect the installation time of less than 20 percent of the applicable airplanes. The ATA believes that its suggested compliance time would achieve a level of safety equivalent to that intended by the proposed AD.

Another commenter states that it participated in a Boeing-hosted meeting on the subject drip shield flammability concerns and asked Boeing to recommend to the FAA that the actions be required during a heavy maintenance visit. The commenter notes that Boeing did indeed make this recommendation to the FAA in the referenced FAA-approved service bulletins. The commenter says that six years would facilitate making use of the first heavy maintenance visit under current maintenance programs. The commenter adds that compliance periods that intend to make use of scheduled down time per an approved maintenance program should reflect an interval taking into account such approved maintenance programs.

The FAA concurs that the compliance time can be extended somewhat. The FAA has closely reviewed the rationale presented by the commenters. In addition, the FAA has examined related comments to two AD's that require replacement of metallized Mylar insulation blankets with new blankets made of more flame-resistant material on certain McDonnell Douglas airplanes [AD 2000-11-01, amendment 39-11749 (65 FR 34321, May 26, 2000), and AD 2000-11-02, amendment 39-11750 (65 FR 34341, May 26, 2000)]. In those AD's, the compliance time was extended from four to five years in the final rules.

The FAA acknowledges that a compliance time of six years will more closely align with heavy maintenance visits. Paragraph (a) of the final rule has been revised accordingly. For any operator that performs segmented “C” checks every two years, the revised compliance time should allow enough time to schedule the drip shield rework during one of the next three such checks. The extension of the compliance time also will minimize the amount of unscheduled work and associated down time. The FAA considers that this extension of the compliance time will not adversely affect safety.

One commenter requests that a sampling program be incorporated for all fleet types affected to establish the requirements to replace the drip shields. (The proposed rule allows sampling of Model 747 and 767 fleets to establish if individual airplanes have unsafe adhesives.) The commenter states that neither Boeing nor the FAA has provided concrete evidence that BAC 5010, Type 97 adhesive was used in the assembly of all the drip shields. The commenter adds that the applicable service bulletins and proposed rule are based purely on conjecture. The commenter suggests that a sampling program would offer terminating action for the proposed rule.

The FAA does not concur. The FAA finds that there is a significant amount of evidence pointing to widespread use of unsafe adhesives (that is, material and adhesive combinations that are easily ignited and consequently able to propagate a small fire) on Model 747, 757, 767, and 777 series airplanes. This evidence is supported by the fact that unsafe adhesives were stocked in the manufacturing facilities where the drip shields were constructed. The FAA concludes that there is a high probability that unsafe adhesives were used in the construction of all drip shields on Model 757 and 777 series airplanes, as well as in the construction of the drip shields on certain Model 747 and 767 series airplanes. These conclusions are based on information provided by Boeing, interviews conducted with manufacturing personnel, and the materials ( i.e., adhesives) that were and were not available in the manufacturing facilities.

The FAA did not propose sampling for Model 757 and 777 series airplanes because all Model 757 and 777 series airplanes are subject to the unsafe condition. In contrast, not all Model 747 and 767 series airplanes are subject to the unsafe condition because the unsafe adhesives were not always available in the manufacturing facilities that constructed the drip shields used on those airplanes.

No change to the final rule is necessary in this regard. However, an operator may request approval of an alternative method of compliance in accordance with the provisions of paragraph (d) of this final rule, provided that evidence is submitted to show that no unsafe adhesive was used in the construction of the drip shields on the airplanes in its fleet.

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

There are approximately 3,137 airplanes of the affected design in the worldwide fleet. The FAA estimates that 999 airplanes of U.S. registry will be affected by this AD. The following table shows the estimated cost impact for airplanes affected by this AD. The average labor rate is $60 per work hour. The estimated maximum cost impact of the AD on U.S. operators of all airplanes affected by this AD is $3,695,460. Table 1 is as follows:

For Model 747 and 767 series airplanes listed in Group 1 in the applicable service bulletin, in lieu of accomplishment of the modification of the drip shields, this AD provides an option to take samples of the drip shields to determine if the modification is necessary. Therefore, the cost impact of this AD as presented above may be reduced if some airplanes do not need the modification. For airplanes that accomplish the sampling, it will take approximately 18 work hours, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the sampling on affected U.S. operators is estimated to be $1,080 per airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The 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 manufacturer has advised the FAA that warranty remedies may be available for parts and labor costs associated with accomplishing the actions that are required by this AD. Therefore, the future economic cost impact of this AD on U.S. operators may be less than the cost impact figures indicated above.

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 Ente Nazionale per l'Aviazione Civile (ENAC), the airworthiness authority for Italy, notified the FAA that an unsafe condition may exist on Agusta Model A109E helicopters. Investigation revealed that the blade failure was due to a change in the skin bonding manufacturing process for an identified production lot of blades.

Agusta issued Alert Bollettino Tecnico No. 109EP-13, dated August 3, 2000, which specifies, within 10 hours time-in-service (TIS) or with any abnormal increase in vibratory level, replacing blades, part number (P/N) 109-8132-01-109, serial number (S/N) A5-0130, A5-0131, A5-0224 to A5-0253, excluding A5-0247 and A5-0248, with blades, P/N 109-8132-01-109 or 109-8132-01-107, to ensure the continued airworthiness of these helicopters in Italy. ENAC classified this service bulletin as mandatory and issued AD 2000-393, dated August 8, 2000, to ensure the continued airworthiness of these helicopters in Italy.

This helicopter model is manufactured in Italy and is type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, ENAC has kept the FAA informed of the situation described above. The FAA has examined the findings of ENAC, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

Since we have identified an unsafe condition that is likely to exist or develop on other Agusta Model A109E helicopters of the same type design registered in the United States, this AD is being issued to prevent failure of a blade. This AD requires replacing certain blades. The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the controllability and structural integrity of the helicopter. Therefore, replacing each blade, P/N 109-8132-01-109, S/N A5-0130, A5-0131, A5-0224 through A5-0246, and A5-0249 through A5-0253, with a blade P/N 109-8132-01-109 or P/N 109-8132-01-107, is required within 10 hours time-in-service, and this AD must be issued immediately.

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

The FAA estimates that 20 helicopters will be affected by this AD, that it will take approximately 4 work hours to replace the blades, and that the average labor rate is $60 per work hour. Required parts will cost approximately $10,000 per helicopter. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $204,800 based on replacing both blades on all 20 helicopters.

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 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-58-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 Social Security and the SSI programs (titles II and XVI of the Social Security Act (the Act)) provide benefits to disabled and blind individuals. Disability is generally defined under both programs as, “* * * inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment * * *.” The Medicare and Medicaid programs (titles XVIII and XIX of the Act) provide related medical benefits to disabled and blind individuals.

We published a notice of proposed rulemaking (NPRM) in the Federal Register on August 11, 2000 (65 FR 49208). We are including all of the proposals contained in the NPRM in these final rules, which are discussed in detail below. We are including one additional change in response to several comments we received about the NPRM.

For a detailed discussion of how we calculate annual automatic adjustments that affect Social Security benefits, see our notice regarding cost-of-living increases and other determinations for the year 2001 that was published in the Federal Register for October 24, 2000 (65 FR 63663). We are required by statute to publish in the Federal Register every October an updated version of this notice. Future versions will include the annual adjustments provided under these final rules.

Under 20 CFR 404.1572 and 416.972, the term “substantial gainful activity” means work activity that involves significant physical or mental effort and that is done for pay or profit. Work activity is gainful if it is the kind of work usually performed for pay or profit, whether or not profit is realized. Sections 223(d)(4)(A) and 1614(a)(3)(E) of the Act require the Commissioner to prescribe by regulations the criteria for determining when earnings demonstrate ability to engage in substantial gainful activity for a person who has an impairment other than blindness.

In evaluating initial claims for disability, we make a determination whether an applicant for either Social Security benefits or SSI benefits is engaging in substantial gainful activity. We find applicants not to be disabled if they are working and performing substantial gainful activity, regardless of their medical condition. In addition, after an individual becomes entitled to title II Social Security benefits based on disability, we consider whether a person's earnings demonstrate the ability to engage in substantial gainful activity in determining ongoing entitlement to disability benefits. (We do not use substantial gainful activity as a measure for continuing eligibility for SSI benefits.) Since July 1999, if an individual's average monthly earnings were more than $700, we would ordinarily consider that the person engaged in substantial gainful activity. This earnings guideline level applies to all employees including those in sheltered workshops or comparable facilities and, in certain circumstances, to the self-employed.

We use earnings guidelines to evaluate a person's work activity to determine whether the work activity is substantial gainful activity and, therefore, whether that person may be considered disabled under the law. We are revising our rules to provide for annual indexing of this level after reassessing the current earnings guidelines as part of our effort to improve incentives to encourage individuals with disabilities to work. A consistent method of adjusting substantial gainful activity earnings guidelines will benefit applicants and beneficiaries in future years. The national average wage index is a measure of wage growth and, therefore, provides a logical basis for adjusting the earnings guidelines used to indicate ability to work. Indexing ensures that the substantial gainful activity amount is a uniformly representative indicator over time of an individual's ability to work.

Under the revised rules, we will adjust annually the substantial gainful activity amount for people with impairments other than blindness. Beginning January 2001, the guideline will be the larger of the previous year's amount or an increased amount based on the Social Security national average wage index (see section 209(k)(1) of the Act). The annual adjusted guideline will apply to earnings from work activity in months beginning with the month in which the adjusted guideline goes into effect. This means that the first increased amount will apply to earnings in months after December 2000.

Under this revised rule, the substantial gainful activity amount will never be lower than the previous year's amount. However, there may be years when no increase results from the calculation.

Under the calculation provided by this revised rule, we determine the ratio of the national average wage index for 1999 ($30,469.84) to that for 1998 ($28,861.44), which is 1.0557283, and multiply it by the calendar year 2000 monthly-earnings guideline amount of $700, yielding the amount of $739.01. This $739.01 amount is rounded to the nearest multiple of $10, which is $740. Because $740 is larger than the corresponding 2000 amount of $700, the new earnings guideline is $740. This amount is effective for months of work activity beginning January 2001. Beginning 2002, the guideline will be the larger of $740, or the $700 amount multiplied by the ratio of the national average wage index for 2000 to that for 1998 rounded to the nearest multiple of $10. Any new amount that goes into effect January 2002 will be used only to evaluate earnings from work activity in months beginning with January 2002.

Since January 1990, if an employee's earnings from work activities averaged less than $300 a month, we generally would have considered that that employee had not been engaging in substantial gainful activity. We referred to this $300 earnings guideline as the “secondary substantial gainful activity amount” to distinguish it from the “primary substantial gainful activity amount” discussed in the previous section.

We would not have further evaluated work activity below the secondary substantial gainful activity amount unless there was evidence to the contrary showing that the person might have been engaging in substantial gainful activity (e.g., an employee might be in a position to defer or suppress earnings). We would have examined further the work activity of employees who earned between these two levels (the primary and secondary substantial gainful activity levels) because the rules provided that such earnings were neither high nor low enough to determine if substantial gainful activity existed. Additional evidence would have been developed. (A different rule applied to individuals employed in sheltered workshops or comparable facilities. For these people, earnings not greater than the primary substantial gainful activity amount ordinarily would establish that the work was not substantial gainful activity.)

Because our experience suggests that the secondary substantial gainful activity amount has not been as useful a tool as we would have liked, we are discontinuing its use. With this rule change, we ordinarily will consider that an employee is not engaging in substantial gainful activity if his or her earnings are equal to or less than the primary substantial gainful activity amount ($740 for months beginning January 2001). We will perform additional development beyond looking at earnings only when circumstances indicate that such an employee may be engaging in substantial gainful activity or might be in a position to defer or suppress earnings. This change does not affect our evaluation guidelines for the self-employed.

Our experience suggests that few applicants and beneficiaries will be affected by this change because few employees have been found to have performed substantial gainful activity on the basis of these secondary rules unless they were also in a position to defer or suppress earnings. Discontinuing these complex secondary guidelines will help simplify our rules and facilitate public understanding of the Social Security disability program as well as improve our work efficiency.

The trial work period is a work incentive. During the trial work period, a title II beneficiary may test his or her ability to work and still be considered disabled. We do not consider services performed during the trial work period as showing that the disability has ended until services have been performed in at least 9 months (not necessarily consecutive) in a rolling 60-month period.

Section 222(c)(2) of the Act provides that, for purposes of the trial work period, “the term ‘services’ means activity (whether legal or illegal) which is performed for remuneration or gain or is determined by the Commissioner of Social Security to be of a type normally performed for remuneration or gain.” As established in regulations, § 404.1592(b), we have considered any month in which an employee earns more than $200 from his or her work to be a month of services for the trial work period.

We are increasing the monthly amount of earnings we consider to be “services” in a trial work period from $200 to $530 for earnings in months beginning January 2001. Beginning 2002, and for each year thereafter, we will adjust this amount to the higher of the previous year's amount or an increased amount based on the Social Security national average wage index. We are making these changes as part of our effort to improve incentives to encourage individuals with disabilities to work.

Although the dollar amount that ordinarily represents substantial gainful activity was increased from $500 to $700 in 1999, the $200 amount that represents a month of trial work period services has remained the same since 1990. Beneficiaries have been faced with exhausting months of a trial work period while earning as little as $200 a month, even on an intermittent basis. As a result, when beneficiaries were finally able to reach a higher earnings level, they may have already used up many or all of their 9 months of trial work. Increasing the trial work period services amount to $530 should allow more beneficiaries with disabilities to more realistically test their ability to work and will likely lead to work at levels closer to or at substantial gainful activity.

Automatic indexing will allow the trial work period services amount to be a uniformly representative indicator over time of a trial work attempt. We will calculate the adjustments in essentially the same manner as we will for increasing the substantial gainful activity amount. The trial work period amount will never be lower than the previous year's amount. However, there may be years when no increase results from the calculation.

The legislative history of the trial work period provision indicates that Congress did not intend to link the trial work period level to the amount that constitutes substantial gainful activity. Congress enacted the trial work period as part of the Social Security Amendments of 1960. The accompanying House Ways and Means Committee report states, “Your committee intends that any months in which a disabled person works for gain, or does work of a nature generally performed for gain, be counted as a month of trial work. Thus the services rendered in a month need not constitute substantial gainful activity in order for the month to be counted as part of the trial-work effort.” H.R. Rep. No. 86-1799, at 13 (1960). This change we are making maintains the distinction between the trial work period services amount and the substantial gainful activity amount intended by Congress while providing disabled beneficiaries with greater incentives to test their ability to work.

Several comments we received from the public about our proposed changes stated that we did not sufficiently address trial work period issues for the self-employed. We revisited that issue and, as a result of our analysis, in our final rules, we are increasing the number of hours of self-employed work in a business in a month that we will consider shows that the self-employed person performed services in that month. Since 1990, even if a self-employed person had earnings of $200 or less in a month, we would consider that services were performed in that month if the person worked more than 40 hours in the business. Under this revised rule, if a self-employed person has earnings that are equal to or less than the dollar threshold for services, we will consider that services were performed if the self-employed person works more than 80 hours in a month in his or her business. This change will encourage beneficiaries with disabilities to more realistically test their ability to work with respect to self-employment activities.

Section 1612 of the Social Security Act establishes the definition of “ income ” for purposes of the SSI program. This section also states what is excluded from income. Section 1612(b)(1) provides an exclusion from earned income, subject to the limitations (as to amount or otherwise) prescribed by the Commissioner, for a child who is a student regularly attending a school, college, or university, or a course of vocational or technical training designed to prepare him or her for gainful employment. With this section, Congress recognized that students with disabilities incur special expenses to go to school. Under our prior regulations, those SSI child beneficiaries who are students have been able to exclude up to $400 a month of earned income with an annual limit of $1,620. By being excluded, this earned income has no effect on eligibility or cash benefit amounts under the SSI program. These monthly and annual amounts have been in place since 1974 when the SSI program began.

In response to increases in school expenses since that time, we are revising these amounts as part of our effort to help SSI child beneficiaries who are students finance their school attendance and encourage them to work. We are increasing the earned income exclusion amount, beginning with earned income for January 2001, to $1,290 a month with an annual limit of $5,200. We also will make automatic adjustments to these amounts each year thereafter to the higher of the previous year's amounts or increased amounts based on the changes in cost-of-living.

The cost-of-living adjustments will ensure that the amounts account for price inflation. We will use a similar method to that currently used to calculate annual cost-of-living adjustments in the SSI program Federal benefit rates. The only differences are that this new calculation will use the calendar year 2001 amounts as the base amounts and any increases in these amounts will be rounded up to the nearest $10. These amounts will never be lower than the previous year's amounts. However, there may be years when no increases result from the calculation.

We received almost 600 comments in response to our proposals. Commenters included many advocates for people with disabilities, State and local government entities, attorneys, employees from SSA field offices, two members of Congress, and private citizens. The comments we received were overwhelmingly in support of the proposals. About 40% also included substantive assessments of the proposals or related suggestions. We have summarized these comments, grouped them by subject, and discuss them below.

Comment: Of the 600 comments received, only 13 expressed opinions not in favor of the proposals. Of those not in favor, three believed that the current SGA, TWP service months, and student earned income exclusion amounts were adequate to encourage someone who has a disability to work. One thought that the changes were too liberal and would have the effect of changing the various benefits paid by the Social Security Administration into another welfare system. Another thought that encouraging people who have a disability to work themselves off the rolls is not in their best interests. Rather than helping, this commenter stated that working would eventually cause these individuals to become destitute because, without their cash and medical benefits, these individuals would not be able to earn enough consistently to adequately provide for themselves. One other thought that liberalizing work incentives further would be useless. This commenter viewed work incentives as a failure because beneficiaries can control their earnings so as not to come off the rolls. Seven others thought the proposals would adversely affect the solvency of the Social Security trust funds or the U.S. treasury funds.

Response: We appreciate the fact that virtually all the commenters favored the proposal. The Office of the Chief Actuary for SSA estimates that the costs of these proposals are negligible. As such, these changes should not affect the trust funds or the government's expenditures, or promote a welfare system. Advocates for the disabled have long argued that people with disabilities want to work, but to do so they must be provided necessary accommodations and safeguards for their cash benefits and health coverage. The provisions of the Ticket to Work and Work Incentives Improvement Act of 1999, in conjunction with prior work incentives, should provide additional safeguards to prevent any dire consequences resulting from people with disabilities attempting to work. We believe these changes will provide another important step to ensuring these needs are met and thus will promote work efforts.

Comment: Almost all of the other comments that included substantive assessments or suggestions stated that the SGA amount should be indexed using a base amount higher than $700. Many stated that a figure of $900 or an amount equal to that used for statutorily blind individuals for SGA purposes, $1,170, should be used.

Response: The Act provides that the Commissioner is to prescribe by regulation the criteria for determining when earnings demonstrate the ability to engage in SGA for the non-blind. Thus, we designed the SGA guidelines as a way of measuring an individual's ability to work and not as a measure of an individual's need for income. The historical relationship between the SGA amount and average wage growth was roughly consistent between 1961 (when the SGA guideline was first issued by regulation) and 1980. In 1990, we raised the SGA amount to $500 from $300 to coincide to some degree with the growth of the average wage during the 1980s. The increase in the SGA amount in July 1999 to $700 approximately corresponded to the increase in the average wage since 1990. Indexing this SGA amount to average wage growth by regulation maintains the historical relationship.

Before 1977, section 223(d) of the Act authorized the Commissioner to prescribe the level of earnings that demonstrate SGA for all title II applicants and beneficiaries and all title XVI applicants. In 1977, Congress amended the Act to provide a different criterion for setting the SGA level for people who are blind. Congress consciously made this distinction between people who are blind and those with impairments other than blindness. The House and Senate conference report accompanying the Social Security amendments of 1977 clearly stated that a different SGA amount was being established for blind persons, and that the conferees did not intend that the amount be applied to people with impairments other than blindness.

Comment: Many commenters suggested that, since we proposed increasing the monthly earnings amount that we consider to be “services” during the trial work period, we consider making services for purposes of the trial work period (TWP) an amount equal to the SGA level, $700. Two commented that despite the proposed increase in the service amount to $530, it is still much too low for persons with blindness whose SGA amount is $1,170.

Response: As we noted earlier, the legislative history of the trial work period provision makes it clear that Congress did not intend to link the trial work period level to the amount that constitutes SGA. The change we proposed maintains the distinction between the trial work period services amount and the substantial gainful activity amount as Congress intended while still providing beneficiaries with disabilities a more realistic opportunity to test their ability to work. Although Congress provided a different criterion for determining the SGA for individuals who are blind, Congress did not provide different criteria for the blind for determining service months for the TWP.

Comment: A few commenters stated that we did not address TWP service months with respect to self-employed beneficiaries. One suggested increasing the number of hours from 40 to 60, while another suggested doubling the hours.

Response: As we stated earlier, we revisited the issue in response to these comments. As a result of our analysis, we are increasing the minimum number of self-employed hours that we consider shows a person has performed services from more than 40 to more than 80 hours a month.

Comment: Two commenters suggested that the TWP and SGA should vary according to type of impairment particularly those types of impairments, such as chronic fatigue and immune dysfunction syndrome and severe mental illness, that make sustained work efforts very difficult. Persons with these conditions fear losing benefits as the result of sporadic work. One suggested that we use net rather than gross wages for purposes of TWP and SGA.

Response: The issues addressed by these comments are outside the scope of these specific rules changes. We will consider these comments regarding possible future regulatory or legislative changes.

Comment: A number of commenters suggested that we stop using the TWP and SGA to evaluate the work activity of beneficiaries. Some recommended that we use an earnings offset formula to reduce cash benefits gradually as earnings rise (similar to the earned income exclusion currently under title XVI). Several others suggested that there should be no earnings limits for beneficiaries with disabilities similar to beneficiaries who have reached full retirement age, currently age 65. Another suggested that the TWP should be 9 consecutive months of work since sporadic work of a couple of months, now and then, in a 60-month period should not count against an indicator intended to measure the ability to sustain competitive work.

Response: These suggested changes would require new legislation and we cannot implement them by regulation alone. Sections 302 and 303 of the Ticket to Work and Work Incentives Improvement Act of 1999 provide for our conducting a demonstration project to test an earnings-offset formula for title II beneficiaries who try to work.

Comment: Several commenters suggested that we eliminate the age restriction for the SSI student earned income exclusion. A few other commenters urged us to consider changes to the SSI eligibility rules, such as increasing the resource limit ($2,000 for an individual or $3,000 for a couple).

Response: These suggested changes also would require new legislation and we cannot implement them by regulation alone.

Comment: Numerous commenters stated that our efforts have been poor with respect to tracking income and earnings. They believe that this deficiency will become more apparent as more people take advantage of these changes and the provisions of the Ticket to Work and Work Incentives Improvement Act of 1999, allowing more overpayments to occur which can derail the work efforts of our beneficiaries.

Response: A number of initiatives are underway to improve the accuracy and timely reporting of earnings. We are improving and extending our interfacing capabilities with federal, state and local databases to gather earnings information quickly and correctly. These efforts are being implemented incrementally, with careful attention to the privacy concerns of our beneficiaries. In addition, we are in the process of establishing a corps of specially trained staff who can facilitate the gathering of such information. We are currently testing this position, the employment support representative, in 32 sites around the country.

Comment: Many commenters stated that we should improve our collaboration with other federal agencies so that our programs and services complement other federal programs.

Response: While this suggestion addresses an area outside the scope of these specific rule changes, we have been working with other federal agencies, principally in joint committees and task forces, to better mesh our programs and services to theirs.

Comment: One commenter urged us to improve the process for homeless people to apply for disability benefits.

Response: This suggestion is outside the scope of these specific rule changes. Unrelated to these rule changes, however, we have undertaken recently several initiatives to improve our application processes.

Comment: One commenter stated that our proposals were difficult to understand and that examples are needed.

Response: We will be mindful of the need to provide more examples in future proposals.

We are revising §§ 404.1574(b)(2) and (4), and 416.974(b)(2) and (4) to adjust annually the earnings guidelines that we use to determine whether a non-blind employee is engaged in substantial gainful activity. Beginning January 2001, the guideline will be the higher of the previous year's amount or an increased amount based on the Social Security national average wage index. Under this revised rule, the monthly earnings guideline will increase from $700 to $740 for 2001. (This standard also applies to the self-employed in certain circumstances by cross-references that have been and continue to be present in §§ 404.1575 and 416.975.)

We also are revising §§ 404.1574(b)(3) and (6), and 416.974(b)(3) and (6) to provide, effective for months of work activity beginning January 2001, that we will ordinarily find that an employee whose average monthly earnings are equal to or less than the “primary substantial gainful activity amount” set forth in §§ 404.1574(b)(2) and 416.974(b)(2) has not engaged in substantial gainful activity without considering other information beyond the employee's earnings. We also are making conforming changes to §§ 404.1574(b)(4) and 416.974(b)(4).

We also are revising § 404.1592 to increase from $200 to $530 the minimum amount of monthly earnings above which we consider shows that a person is performing or has performed “services” for counting trial work period months, effective for months of earnings beginning January 2001. We will adjust the amount annually to the higher of the previous year's amount or an increased amount based on the Social Security national average wage index, beginning January 2002. Also, effective January 2001, for a self-employed person with earnings equal to or less than the dollar threshold for services, we are increasing the number of hours of self-employed work in a business each month that we will consider shows services are performed from more than 40 hours to more than 80 hours.

We also are revising § 416.1112(c)(3) to increase the maximum amount of the student earned income exclusion to $1,290 a month, not to exceed $5,200 per year, effective for earned income beginning January 2001. We also will adjust these amounts annually to the higher of the previous year's amounts or increased amounts calculated in essentially the same manner as the annual cost-of-living adjustments to the SSI Program federal benefit rates, beginning January 2002. This calculation will use the 2001 amounts as the base amounts and any increases in these amounts will be rounded to the nearest $10.

The electronic file of this document is available on the Internet at www.access.gpo.gov/nara. This document also is available on our Internet web site, Social Security Online, www.ssa.gov.

These regulations impose no new reporting/recordkeeping requirements necessitating clearance by the Office of Management and Budget (OMB).

Based on the costs associated with these final rules, the Social Security Administration has determined that they do not require an assessment of costs and benefits to society per Executive Order 12866 because they do not meet the definition of a “significant regulatory action.” These final rules also do not meet the definition of a “major rule” under 5 U.S.C. 801ff because the Social Security Administration's budget baseline assumes that substantial gainful activity amounts will keep pace with growth in average wages, and other provisions do not result in costs that exceed the threshold for what constitutes a “major rule.” In addition, the Social Security Administration has determined, as required under the aforementioned statute, that these regulations do not create any unfunded mandates for State or local entities under sections 202-205 of the Unfunded Mandates Act of 1995. OMB has reviewed these final rules.

We have also determined that these rules meet the plain language requirement of Executive Order 12866 and the President's memorandum of June 1, 1998.

We certify that these regulations will not have a significant economic impact on a substantial number of small entities because they primarily affect individuals who are applying for or receiving title II or title XVI benefits because of blindness or disability, and States which administer the Medicaid program and/or pay supplemental benefits to SSI eligible individuals.

Alpharma Inc., One Executive Dr., P.O. Box 1399, Fort Lee, NJ 07024, filed NADA 141-148 that provides for use of DECCOX® (27.2 gram per pound (g/lb) decoquinate) and Rumensin® (20, 30, 45, 60, 80, or 90.7 g/lb monensin activity as monensin sodium) Type A medicated articles to make two-way combination Type B and Type C medicated feeds. The Type C medicated feeds contain 13.6 to 27.2 g/ton decoquinate and 5 to 30 g/ton monensin, and are used for prevention of coccidiosis caused by Eimeria bovis and E. zuernii , and improved feed efficiency in cattle fed in confinement for slaughter. The NADA is approved as of November 16, 2000, and the regulations in 21 CFR 558.195 and 558.355 are amended to reflect the approval. The basis for approval is discussed in the freedom of information summary.

In accordance with the freedom of information provisions of 21 CFR part 20 and 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

The agency has determined under 21 CFR 25.33(a)(2) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

Internet users may access all comments received by the U.S. DOT Dockets, Room PL-401, by using the universal resource locator (URL): http:/ /dms.dot.gov. It is available 24 hours each day, 365 days each year. Please follow the instructions online for more information and help.

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

The FHWA issued a notice of proposed rulemaking (NPRM) June 17, 1996, at 61 FR 30553, and supplementary notices of proposed rulemaking (SNPRMs) June 18, 1997, at 62 FR 33047, and April 7, 1999, at 64 FR 16870.

This final rule establishes the following:

1. The criteria for participation with Federal highway funds (title 23, U.S. Code) in costs of mitigation of impacts to wetlands and natural habitats;

2. A preference in compensatory mitigation of wetlands and natural habitats impacts due to highway projects funded pursuant to title 23, U.S. Code, for mitigation banks, where the impacts are within the service area of the bank, and the bank has been properly permitted; and

3. The requirements for evaluation of wetlands impacts due to such projects and implementation of mitigation consistent with current technology and wetlands science.

This regulation does not establish a requirement to implement mitigation of impacts to resources regulated under the Clean Water Act (33 U.S.C. 1344), the Section 404 regulatory program, or to other resources regulated under other Federal, State, or local regulations, or to unregulated natural habitat resources. It establishes requirements for eligibility of such actions for Federal funding participation and the banking preference only.

Approximately 50 percent of our nation's wetlands have been lost in the last two hundred years. Section 404 of the Clean Water Act (CWA) established the regulatory program of the U.S. Army Corps of Engineers (33 CFR Parts 320-330) to permit discharges of dredged and fill material in wetlands and other waters of the United States, and helps to protect the nation's wetlands resources, functions, and values by requiring environmental review for the issuance of such permits. The permit review process requires a sequencing analysis of alternatives to avoid and minimize wetlands impacts as much as practicable in accordance with 40 CFR 230.10(a) (the Section 404 (b)(1) guidelines), and consideration of compensatory mitigation for unavoidable impacts.

Executive Order 11990, Protection of Wetlands, (42 FR 26961; 3 CFR, 1977 comp., p. 121) directs Federal agencies to avoid to the extent possible adverse impacts associated with the destruction or modification of wetlands, and to avoid direct or indirect support of new construction in wetlands wherever there is a practicable alternative. Other Federal programs designed to conserve and protect wetlands include the Emergency Wetlands Protection Resources Act of 1986 (16 U.S.C. 3921-3931), the North American Waterfowl Management Plan (16 U.S.C. 4401(a)(12)), and the Wetlands Reserve Program (16 U.S.C. 3837). Private organizations, such as Ducks Unlimited, have been established to help conserve, restore, and protect wetlands as waterfowl habitat. In addition, there are State and local wetlands protection programs and regulations that must be met when planning and building highway projects.

The FHWA implements the regulatory and national policy requirements stated above. The ISTEA (Pub. L. 102-240, 105 stat. 1914), and the TEA-21 (Public Law 105-178, 112 Stat. 107), both recognized changes in wetlands management regulations, procedures and processes, and included important new authorities for participation in costs of wetlands mitigation with Federal transportation funds. Accordingly, the FHWA decided to update and revise its regulation concerning mitigation of wetlands. At the same time, in accordance with new language in the TEA-21, eligibility for use of Federal transportation funds was established for mitigation of impacts to natural habitats.

In the NPRM published on June 17, 1996 (61 FR 30553), the FHWA proposed to amend 23 CFR Part 777, Mitigation of Impacts to Privately-owned Wetlands, in order to update the previous, obsolete regulation in light of changes brought about by the ISTEA. The ISTEA significantly altered the range and timing of alternatives eligible for Federal-aid participation for mitigation of wetland impacts due to Federal-aid highway projects. Accordingly, the June 17, 1996, NPRM revised the current regulation to conform to the ISTEA's requirements, providing more flexibility to State highway agencies in determining eligibility of alternatives for Federal participation. This proposal also broadened the scope of the current regulation to encompass all wetlands mitigation projects eligible for Federal participation, not just those involving privately-owned wetlands.

Subsequently, the FHWA determined that certain language in the regulation proposed in the NPRM, which was carried over from the original rulemaking published in 1980, could be interpreted in an unnecessarily restrictive manner. Part 777, as then written, stated that it applied to “the evaluation and mitigation of adverse environmental impacts to privately owned wetlands caused by new construction of Federal-aid highway projects.” (23 CFR 777.1). The NPRM retained this language, with the exception of the words “privately owned.” The FHWA believed this provision was unnecessarily restrictive, because under current law Federal-aid funds may be used to improve or restore wetlands affected by past Federal-aid highway projects, even when no current Federal-aid project is taking place in the vicinity.

Four provisions of title 23, U.S. Code, sanction such “historic wetlands” restoration projects. First, both the National Highway System and Surface Transportation Programs, created by the ISTEA, allow States to use Federal-aid funds for wetlands mitigation activities. 23 U.S.C. 103(b)(6)(m) and 133(b)(11). These provisions are identically worded, and allow the expenditure of Federal-aid highway funds towards efforts to conserve, restore, enhance, and create wetlands. Both provisions state that contributions to such mitigation efforts may take place concurrent with or in advance of project construction. The FHWA believes this phrase may be fairly interpreted as permissive, rather than restrictive and, therefore, States are permitted by these two provisions to use Federal-aid funds for the stated purposes concurrent with or in advance of project construction. Nothing in the language of sections 103(b)(6)(M) or 133(b)(11) forbids States from doing so after a project has been completed. No specific prohibition having been written into these provisions, the FHWA does not believe one is to be implied.

Two other provisions of title 23, U.S. Code, when read together, also provide a basis for funding so-called historic wetlands restoration projects. The first is 23 U.S.C. 133(b)(1), which permits Surface Transportation Program (STP) funds to be spent for “mitigation of damage to wildlife, habitat, and ecosystems caused by a transportation project funded under this title.” Under 23 U.S.C. 101, the term “project” means “an undertaking to construct a particular portion of a highway, or if the context so implies, the particular portion of a highway so constructed.” This definition is broad enough to encompass not just new or even recent projects, but any highway that has been constructed using title 23, U.S. Code, funds.

A final category of funding for which historic wetlands projects may be eligible is that available under the STP for transportation enhancement activities (TEAs) (23 U.S.C. 133(e)(5)). The definition of TEAs (23 U.S.C. 101) does not limit them to those related to particular “projects” (as defined in section 101), and does not specify any particular time frame in which they must take place. Historic wetlands projects could qualify for STP funds if legitimately tied to one of the categories of TEAs set forth in the definition, such as, scenic beautification, mitigation of water pollution due to highway runoff, or maintaining habitat connectivity while reducing wildlife mortality due to motor vehicles.

Accordingly, the FHWA issued an SNPRM, dated June 18, 1997 (62 FR 33047), which further amended Part 777 by revising § 777.1 to read: “To provide policy and procedures for evaluation and mitigation of adverse environmental impacts to wetlands resulting from projects funded pursuant to the provisions of title 23, United States Code.”

That SNPRM also made a technical amendment to the text of the June 17, 1996, NPRM, and revised the heading of the regulation to read, “Mitigation of Impacts to Wetlands.”

The TEA-21 established a preference for use of mitigation banks to provide compensatory mitigation for unavoidable wetlands impacts caused by federally funded highway projects, and for impacts to natural habitat. The TEA-21 provides that, for projects funded under title 23, U.S. Code, having a wetland impact within the service area of a mitigation bank, to the maximum extent practicable preference shall be given to the use of the mitigation bank, if the bank contains sufficient credits to offset the impact and is approved in accordance with the Federal Guidance for the Establishment, Use, and Operation of Mitigation Banks (60 FR 58605, November 28, 1995) (Federal Guidance). The Federal Guidance presents guidance for the use of ecological mitigation banks as compensatory mitigation in the Section 404 regulatory program for unavoidable impacts to wetlands and other aquatic resources.

The new regulation addresses the eligibility of mitigation activities for impacts to wetlands and natural habitats for funding under title 23, U.S. Code. The FHWA and State departments of transportation (DOTs), who are responsible for administering title 23, U.S. Code, funds and implementing highway projects, are the primary agencies affected by the new regulation. State departments of transportation will have increased flexibility in planning and implementing mitigation for impacts to wetlands and other waters of the United States, and to natural habitats caused by highway projects funded pursuant to title 23, U.S. Code. This increased flexibility will affect advance planning for wetlands conservation by other agencies as well through interagency coordination and cooperative projects. Providers of services to mitigate wetlands impacts, such as private wetlands mitigation banking companies, and wetland regulatory agencies, including the U.S. Army Corps of Engineers, U.S. Environmental Protection Agency, and State regulatory agencies, will also be affected by the regulation through the increased flexibility and the mitigation banking preference. The changes in the new regulation should reduce the permit review times for the Section 404 regulatory program by increasing the flexibility offered to State highway agencies in mitigating impacts to wetlands, facilitate project development, and result in greater efficiency in providing mitigation for unavoidable impacts.

The final rule establishes a preference for wetland mitigation banking in mitigating wetlands impacts caused by projects funded under title 23, U.S. Code, broadens the regulation to provide eligibility for use of title 23 Federal highway funds to mitigate for impacts to wetlands caused by current or past highway projects funded under title 23, U.S. Code, and to mitigate impacts to natural habitat. The NPRM did not address mitigation of impacts to natural habitat, however, this issue was discussed in the SNPRM April 7, 1999 at 64 FR 16870. The final rule also recognizes the eligibility of environmental restoration activities established in the TEA-21 on highway projects funded pursuant to title 23, U.S. Code.

Specific changes in the final rule from those published in the NPRM and the SNPRMs are the following:

In the definition of “compensatory mitigation,” the phrase “Activities such as” is deleted in order to limit the definition to the specific activities cited.

The definition of “ecologically desirable” is deleted in response to comments recommending its removal. The banking preference in the TEA-21 is not restricted to the most ecologically desirable mitigation alternative; therefore, the definition is not needed.

The definition of natural habitat is changed to add the word “currently” in the phrase “not currently subject to cultivation.” Also, a new sentence is added at the end of the definition. These changes were made to more clearly define the scope of the term.

The definition for “net gain of wetlands” is changed to make it more consistent with the Federal Guidance and Section 404(b)(1) guidelines. The phrase “at a ratio greater than 1:1” is added to clarify the definition.

A definition for “practicable” is added to make this regulation consistent with the regulatory program language found at 33 CFR Parts 320-330 and 40 CFR Part 240.

The definition for “wetland or habitat enhancement” is revised to make it consistent with the Federal Guidance and to broaden the definition with respect to control and management of pests necessary for enhancement.

The definition for “wetland or habitat establishment period” is changed in response to comments to clarify the distinction between establishment and maintenance of wetland mitigation sites. Maintenance activities are not eligible for participation with Federal-aid highway funds (23 U.S.C. 116(a)), whereas certain activities for wetland or habitat establishment for the purpose of project mitigation have been identified as eligible.

A definition for “wetland or habitat preservation” is added to make this regulation consistent with the Federal Guidance.

The definition for “wetland or habitat restoration” is changed in response to comments to make it consistent with the Federal Guidance.

The definition of “wetlands and habitat banking and related measures” is changed in response to a commenter's request to make it consistent with the Federal Guidance. The definition is now titled “mitigation bank.”

The definition of “wetlands or habitat mitigation credit” is changed in response to comments to make it consistent with the Federal Guidance.

This section is revised for clarity and to add regulatory references. Paragraph (b) is added to make the references to title 23, U.S. Code, formerly in paragraph (a), more clear. Paragraphs (c), (d), and (e) are added to provide reference to Federal regulations and guidance pertinent to wetlands and habitat mitigation activities, at the request of several commenters.

Paragraph (a) is revised to use appropriate regulatory language (“shall” rather than “should”) and to clarify the applicability of the regulation relative to participation with title 23, U.S. Code, funds. Paragraph (b) is revised to make it clearer. Paragraph (c) is revised to emphasize concurrent environmental analyses and processes, and to incorporate a reference to regulatory guidance relative to recognized wetlands functions and mitigation of impacts found at 33 CFR 320.4.

Paragraph (a) is revised to make it clearer that this section applies to mitigation activities eligible for participation with Federal-aid highway (title 23) funds and to remove requirements not found in the TEA-21, but stated elsewhere (at 40 CFR Part 230). Paragraph (b) is revised to remove a perceived bias against commercial wetlands banks in the proposed regulation. Paragraphs (c) and (d) are added to make the regulation more consistent with guidance on wetlands and natural habitat mitigation in the TEA-21 and to incorporate the FHWA's current legal interpretation on eligibility of mitigation activities for participation with title 23, U.S. Code, funds.

Paragraphs (b) and (c) are revised to make them consistent and clearer, and to include performance bonds as a sufficient assurance that a mitigation site would be properly maintained as a wetland or natural habitat. Paragraph (g) is changed to eliminate unnecessary language outside the authority of title 23, U.S. Code.

This rule was changed to implement new authority for participation with Federal highway funds in mitigation for wetlands and natural habitat impacts due to federally funded highway projects. It also recognizes new needs, requirements, and methods to successfully implement compensatory mitigation, and implements changes in interpretation of existing regulations to allow restoration or mitigation of such impacts due to already-completed projects which were not mitigated when the projects were built.

All comments received on the NPRM were carefully considered in the decision to publish a final rule. A total of 33 comments were received: 3 from Federal agencies, 22 from State agencies, 1 from a State legislature, 3 from non-governmental organizations, 3 from private wetland banking organizations or companies, and 1 from 3 U.S. Senators.

Comments in general supported the increased flexibility provided by changes in the regulation to conform with new authority established in the ISTEA and the TEA-21 for mitigating impacts to wetlands and natural habitat. However, concerns were expressed that this new authority: (1) Might become a requirement with respect to unregulated resources; (2) might lead to inappropriate use of permits and compensatory mitigation; (3) might de-emphasize the Section 404(b)(1) guidelines; and (4) might lead to lack of emphasis on the National Environmental Policy Act (NEPA) in the project development process.

As previously stated, this regulation does not establish any requirement to mitigate impacts to wetlands, waters of the United States, or natural habitats, or to carry out environmental restoration of historic or past impacts to such resources. It establishes requirements for participation with title 23, U.S. Code, Federal-aid highway funds in costs of mitigation activities (avoidance, minimization, rectification, reduction, compensation (40 CFR 1508.20)) or environmental restoration activities authorized under the TEA-21 associated with highway projects funded under title 23, U.S. Code, only. Part 771 of title 23, CFR, establishes the general project environmental process, impact review requirements, and mitigation policy under NEPA for federally funded highway projects. Specific mitigation requirements for wetlands and waters of the United States are established at 33 CFR Part 320, 40 CFR Part 230, and by other applicable State or local regulations. Federal requirements for conservation measures for habitat of federally listed species are found in 50 CFR Part 402—Interagency Cooperation—Endangered Species Act of 1973, as amended, and related guidance, and State regulations as applicable.

Part 771 is the FHWA regulation implementing NEPA; it addresses appropriate analysis of impacts to the natural and human environment, and use of title 23, U.S. Code, funds for mitigation of impacts in general. Other Federal guidance and regulations regarding mitigation for impacts to wetlands and aquatic resources include: the U.S. Fish and Wildlife Service (USFWS) draft regulations concerning compatible uses of Federal wildlife refuges, found at 64 FR 49055 (September 9, 1999); the USFWS policy on mitigation, found at 46 FR 7644 (January 23, 1981); the Federal Guidance; and the Regulations for Implementing the Procedural Provisions of the National Environmental Policy Act (40 CFR Part 1508).

Since the ISTEA was passed, the FHWA has implemented the additional flexibility that the ISTEA provided to participate in wetland mitigation that was not found in the old regulation through internal memoranda and technical guidance. The FHWA has encouraged progressive approaches to wetlands mitigation, including development of mitigation banking agreements and restoration of past impacts which were not mitigated when the highway projects were constructed. State DOTs have been allowed all possible flexibility in developing compensatory mitigation approaches for unavoidable wetlands impacts with Federal highway funds, and have been encouraged to seek out new methods and technology for mitigation. The FHWA has participated in wetland technical workshops, and published a technical manual on mitigation of wetlands, National Cooperative Highway Research Program (NCHRP) Report 379, “Guidelines for the Development of Wetland Replacement Areas,”  1 to improve the value and performance of compensatory mitigation.

This document contains amendments to the Income Tax Regulations (26 CFR Part 1) relating to the election of a taxable year other than the required taxable year under section 444. Section 444(d)(3) and § 1.444-2T generally prohibit an S corporation that is a member of a tiered structure from making an election under section 444 for taxable years beginning after December 31, 1986. An S corporation is considered to be a member of a tiered structure if the S corporation owns any portion of a deferral entity, or a deferral entity owns any portion of an S corporation. Section 1.444-2T(b)(2) defines deferral entity to include any entity that is a trust with the exception of certain grantor trusts (including qualified subchapter S trusts within the meaning of section 1361(d)(1)(A)).

Section 1302 of the Small Business Job Protection Act of 1996, Public Law 104-188 (110 Stat. 1755) (August 20, 1996), modified sections 641 and 1361 of the Internal Revenue Code (Code) to permit an electing small business trust (ESBT) to be an S corporation shareholder and also modified section 1361 to allow an organization (including a trust) that is described in section 401(a) or section 501(c)(3) and that is exempt from taxation under section 501(a) to be a shareholder of an S corporation. The temporary regulations under section 444 are also being issued as proposed regulations published elsewhere in this issue of the Federal Register .

The temporary regulations modify the temporary regulations under section 444 to provide that an ESBT and a trust that is described in section 401(a) or section 501(c)(3) that is exempt from taxation under section 501(a) is not a deferral entity for purposes of § 1.444-2T. Therefore, an S corporation with a section 444 election may have an ESBT or a trust that is described in section 401(a) or section 501(c)(3) that is exempt from taxation under section 501(a) as a shareholder. An ESBT is not a deferral entity within the meaning of § 1.444-2T because under section 641(c) the portion of the ESBT consisting of stock in one or more S corporations is taxed to the deemed owner under subpart E, part I, subchapter J of the Code or is subject to taxation at the trust level without a deduction for amounts distributed or required to be distributed from that portion of the trust. A trust described in section 401(a) (other than an employee stock ownership plan described in section 4975(e)(7)), or a trust described in section 501(c)(3) that is exempt from taxation under section 501(a) is not a deferral entity within the meaning of § 1.444-2T because with respect to such trust all items of income, loss, or deduction taken into account under section 1366(a) and any gain or loss on the disposition of the stock in the S corporation is treated as unrelated business taxable income of such trust under section 512(e)(1) and is subject to taxation under section 511. A trust described in section 401(a) that is an employee stock ownership plan described in section 4975(e)(7) is not a deferral entity within the meaning of § 1.444-2T because such trust does not defer taxation but rather is exempt from taxation under section 501(a) and is not treated as having unrelated business taxable income pursuant to section 512(e)(3).

The temporary regulations are effective as of December 29, 2000. However taxpayers may voluntarily apply these temporary regulations to taxable years of S corporations beginning after December 31, 1996, for S corporations that have ESBTs as shareholders, and for taxable years beginning after December 31, 1997, for S corporations that have trusts described in section 401(a) or section 501(c)(3) that are exempt from taxation under section 501(a) as shareholders.

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

The principal authors of these regulations are Bradford Poston and James A. Quinn of the Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development.

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

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

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

2. In person . The Agency has established an official record for this action under docket control number OPP-301093. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of August 26, 1998 (63 FR 45497) (FRL-6023-4), EPA issued a notice pursuant to section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a as amended by the Food Quality Protection Act of 1996 (FQPA) (Public Law 104-170) announcing the filing of a pesticide petition (PP) for tolerances for fludioxonil on grapes by Novartis Crop Protection, Inc, 410 Swing Road, Greensboro, NC 27419. This notice included a summary of the petition prepared by Novartis Crop Protection, Inc, the registrant. There were no comments received in response to the notice of filing.

The petition requested that 40 CFR 180.516 be amended by establishing tolerances for residues of the fungicide fludioxonil, 4-(2,2-difluoro-1,3-benzodioxol-4-yl)-1 H -pyrrole-3- carbonitrile, in or on grapes at 1.0 ppm.

In the Federal Register of March 29, 2000 (65 FR 45498) (FRL-6495-5), EPA issued a notice pursuant to section 408 of the FFDCA, 21 U.S.C. 346a as amended by the FQPA announcing the filing of a pesticide petition (PP) for tolerances for fludioxonil on strawberries, bulb vegetables, and stone fruit by the Interregional Research Project Number 4 (IR-4), New Jersey Agricultural Experiment Station, P.O. Box 231, Rutgers University, New Brunswick, NJ 08903. This notice included a summary of the petition prepared by the Interregional Research Project Number 4 (IR-4), the registrant. There were no comments received in response to the notice of filing.

The petition requested that 40 CFR 180.516 be amended by establishing tolerances for residues of the fungicide fludioxonil, 4-(2,2-difluoro-1,3-benzodioxol-4-yl)-1 H -pyrrole-3- carbonitrile, in or on strawberries at 2.0 ppm; dry bulb onion; great-headed garlic; shallot; and welsh onion at 0.2 ppm; green onion and leek at 7.0 ppm; and stone fruit group at 2.0 ppm.

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

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

Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2), for a tolerance for residues of fludioxonil on grapes at 1.0 ppm, strawberries at 2.0 ppm, dry bulb onions at 0.20 ppm, and green onions at 7.0 ppm. Tolerances are not being established for stone fruit at this time due to additional preliminary residue chemistry data (not yet available to the Agency for review) that indicate that a tolerance of 2.0 ppm may be too low for stone fruit. The Agency will not establish a stone fruit tolerance until the final set of residue chemistry data are submitted and reviewed. EPA's assessment of exposures and risks associated with establishing the tolerances follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by fludioxonil are discussed in the following Table 1 as well as the no observed adverse effect level (NOAEL) and the lowest observed adverse effect level (LOAEL) from the toxicity studies reviewed.

The dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. An UF of 100 is routinely used, 10X to account for interspecies differences and 10X for intra species differences.

For dietary risk assessment (other than cancer) the Agency uses the UF to calculate an acute or chronic reference dose (acute RfD or chronic RfD) where the RfD is equal to the NOAEL divided by the appropriate UF (RfD = NOAEL/UF). Where an additional safety factor is retained due to concerns unique to the FQPA, this additional factor is applied to the RfD by dividing the RfD by such additional factor. The acute or chronic Population Adjusted Dose (aPAD or cPAD) is a modification of the RfD to accommodate this type of FQPA Safety Factor.

For non-dietary risk assessments (other than cancer) the UF is used to determine the LOC. For example, when 100 is the appropriate UF (10X to account for interspecies differences and 10X for intraspecies differences) the LOC is 100. To estimate risk, a ratio of the NOAEL to exposures (margin of exposure (MOE) = NOAEL/exposure) is calculated and compared to the LOC.

The linear default risk methodology (Q * ) is the primary method currently used by the Agency to quantify carcinogenic risk. The Q * approach assumes that any amount of exposure will lead to some degree of cancer risk. A Q * is calculated and used to estimate risk which represents a probability of occurrence of additional cancer cases (e.g., risk is expressed as 1 × 10 - 6 or one in a million). Under certain specific circumstances, MOE calculations will be used for the carcinogenic risk assessment. In this non-linear approach, a “point of departure” is identified below which carcinogenic effects are not expected. The point of departure is typically a NOAEL based on an endpoint related to cancer effects though it may be a different value derived from the dose response curve. To estimate risk, a ratio of the point of departure to exposure (MOE cancer = point of departure/exposures) is calculated. A summary of the toxicological endpoints for fludioxonil used for human risk assessment is shown in the following Table 2:

1. Dietary exposure from food and feed uses . Tolerances have been established (40 CFR 180.516) for the residues of fludioxonil, in or on a variety of raw agricultural commodities. Fludioxonil is the active ingredient in registered products used as a seed treatment for many crops (with the exception of tree crops and berries). In addition, several Section 18 emergency exemptions for use as a foliar spray on strawberries, caneberries and as a post-harvest spray treatment on apricots, nectarines, peaches, and plums have been approved. Risk assessments were conducted by EPA to assess dietary exposures from fludioxonil in food as follows:

i. Acute exposure . Acute dietary risk assessments are performed for a food-use pesticide if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. The Dietary Exposure Evaluation Model (DEEM® analysis evaluated the individual food consumption as reported by respondents in the USDA 1989-1992 nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and accumulated exposure to the chemical for each commodity. The acute analysis was performed for the females 13-50 years old population subgroup using published and proposed tolerance levels, default concentration factors, and 100% CT assumptions for all commodities. The acute dietary exposure estimate at the 95th percentile of exposure for females 13-50 years old is 0.004512 mg/kg/day, representing 0.5% of the aPAD.

For acute dietary risk estimates, EPA's level of concern is > 100% aPAD. The results of the acute analysis indicate that at the 95th percentile of exposure, the acute dietary risk associated with the proposed uses of fludioxonil is below EPA's level of concern.

ii. Chronic exposure . The chronic DEEM® analysis evaluated the individual food consumption as reported by respondents in the USDA 1989-92 nationwide CSFII and accumulated exposure to the chemical for each commodity using published and proposed tolerance levels, default concentration factors, and 100% crop treated (CT) assumptions for all commodities. Chronic dietary exposure estimates ranged from 0.000609 mg/kg/day (2.0% of the cPAD) for males 13-19 years old, up to 0.003506 mg/kg/day (12% of the cPAD) for all infants ( < 1 year old). All other population subgroups fell in between these two figures, including the U.S. population (0.001107 mg/kg/day; 3.7% of the cPAD), children 1-6 years old (0.002934 mg/kg/day; 9.8% of the cPAD), children 7-12 years old (0.001522 mg/kg/day; 5.1% of the cPAD), females 13-50 years old (0.000823 mg/kg/day; 2.7% of the cPAD), males 20+ years old (0.000726 mg/kg/day; 2.4% of the cPAD), and seniors 55+ years old (0.000961 mg/kg/day; 3.2% of the cPAD).

Since the FQPA factor was reduced to 1x for all population subgroups, the Agency's level of concern is 100% cPAD = 100% cRfD. The results of this analysis indicate that the chronic dietary risk associated with the existing uses and the proposed uses of fludioxonil is below EPA's level of concern.

iii. Cancer . EPA has classified Fludioxonil as a Group D - not classifiable as to human carcinogenicity. The evidence is inadequate and cannot be interpreted as showing either the presence or absence of a carcinogenic effect. In one mouse study, there was a significant trend for malignant lymphomas in female mice up to 3,000 ppm. However, in a second study up to 7,000 ppm, the limit dose, there was no evidence of carcinogenicity for either sex. In rats, fludioxonil produced a significant trend and pair-wise increase in hepatocellular tumors, combined, in female rats at doses adequate to assess carcinogenicity. EPA determined that based on the increase in liver tumors in female rats that was statistically significant for combined adenoma/carcinoma only, the lack of tumorogenic response in male rats or in either sex of mice, and the need for additional mutagenicity studies, a Group D classification was appropriate.

Fludioxonil was not mutagenic in the tests for gene mutations. However, because of the powerful induction of polyploidy in the in vitro Chinese hamster ovary cell cytogenetic assay and the suggestive evidence of micronuclei induction in rat hepatocytes in vivo , additional mutagenicity testing was performed in an in vivo study specifically designed for aneuploidy analysis.

2. Dietary exposure from drinking water . The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for fludioxonil in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the physical characteristics of fludioxonil.

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

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

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

Based on the GENEEC and SCI-GROW models the estimated environmental concentrations (EECs) of fludioxonil for acute exposures are estimated to be 46 parts per billion (ppb) for surface water and 0.35 ppb for ground water. The EECs for chronic exposures are estimated to be 32 ppb for surface water and 0.35 ppb for ground water.

3. From non-dietary exposure . The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Fludioxonil is not currently registered for residential (outdoor, non-food) uses. The registrant is seeking registration for the use of fludioxonil by commercial applicators on residential lawns.

There is potential residential postapplication exposure to adults and children entering residential areas treated with fludioxonil. Since the Agency did not select a short-term endpoint for dermal exposure, only intermediate-term dermal exposures were considered. Based on the residential use pattern, no long-term post-application residential exposure is expected. Short-term non-dietary oral exposures for toddlers were not assessed since the acute dietary endpoint for fludioxonil is only relevant for females 13-50 years old. Intermediate-term, non-dietary ingestion exposure for toddlers is possible and was assessed using the intermediate-term dose and endpoint identified from the 13 week oral feeding study in rats. Intermediate-term exposure is not expected from the proposed ornamental uses of fludioxonil.

There are no chemical-specific data available to determine the potential risks from post-application activities associated with the proposed uses of fludioxonil. The exposure estimates are based on assumptions and generic data as specified by the newly proposed Residential SOPs. The MOEs for postapplication exposures from full lawn uses are 2,000 and 1,200 for adults and children, respectively. The dermal MOE for postapplication exposure for the hand to mouth scenario is 13,000. The aggregate intermediate MOE for postapplication residential exposure to toddlers is 1,100. These estimates indicate that the potential intermediate-term risks from residential uses of fludioxonil do not exceed the Agency's level of concern. The Agency's level of concern is for MOEs below 100.

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

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

Safety factor for infants and children —i. In general . FFDCA section 408 provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base on toxicity and exposure unless EPA determines that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a margin of exposure (MOE) analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans.

ii. Prenatal and postnatal sensitivity . The rat and rabbit developmental toxicity studies were tested at doses that produced maternal toxicity. There were no developmental findings in rabbits. The findings in the rat developmental toxicity studies were considered to be related to maternal toxicity, rather than an indication of increased susceptibility. In the reproductive study, maternal and reproductive/offspring toxicity occurred at the same dose indicating no evidence of susceptibility.

iii. Conclusion . There is a complete toxicity data base for fludioxonil and exposure data are complete or are estimated based on data that reasonably accounts for potential exposures. Accordingly, taking into account the data on pre- and post-natal toxicity, EPA determined that an additional tenfold safety factor was not necessary to protect infants and children.

To estimate total aggregate exposure to a pesticide from food, drinking water, and residential uses, the Agency calculates DWLOCs which are used as a point of comparison against the model estimates of a pesticide's concentration in water (EECs). DWLOC values are not regulatory standards for drinking water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food and residential uses. In calculating a DWLOC, the Agency determines how much of the acceptable exposure (i.e., the PAD) is available for exposure through drinking water e.g., allowable chronic water exposure (mg/kg/day) = cPAD - (average food + residential exposure). This allowable exposure through drinking water is used to calculate a DWLOC.

A DWLOC will vary depending on the toxic endpoint, drinking water consumption, and body weights. Default body weights and consumption values as used by the USEPA Office of Water are used to calculate DWLOCs: 2L/70 kg (adult male), 2L/60 kg (adult female), and 1L/10 kg (child). Default body weights and drinking water consumption values vary on an individual basis. This variation will be taken into account in more refined screening-level and quantitative drinking water exposure assessments. Different populations will have different DWLOCs. Generally, a DWLOC is calculated for each type of risk assessment used: acute, short-term, intermediate-term, chronic, and cancer.

When EECs for surface water and groundwater are less than the calculated DWLOCs, OPP concludes with reasonable certainty that exposures to the pesticide in drinking water (when considered along with other sources of exposure for which OPP has reliable data) would not result in unacceptable levels of aggregate human health risk at this time. Because OPP considers the aggregate risk resulting from multiple exposure pathways associated with a pesticide's uses, levels of comparison in drinking water may vary as those uses change. If new uses are added in the future, OPP will reassess the potential impacts of residues of the pesticide in drinking water as a part of the aggregate risk assessment process.

1. Acute risk . The acute dietary exposure estimate at the 95th percentile of exposure for females 13-50 years old is 0.004512 mg/kg/day, representing 0.5% of the aPAD. An acute dose and endpoint was not selected for the U. S. population (including infants and children) because there were no effects of concern observed in oral toxicology studies, including maternal toxicity in the developmental toxicity studies in rats and rabbits, that are attributable to a single exposure dose. In addition, there is potential for acute dietary exposure to fludioxonil in drinking water. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect the aggregate exposure to exceed 100% of the aPAD, as shown in the following Table 3:

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to fludioxonil from food will utilize 3.7% of the cPAD for the U.S. population, 12% of the cPAD for all infants ( < 1 year old) and 9.8% of the cPAD for children 1-6 years old. Based the use pattern, chronic residential exposure to residues of fludioxonil is not expected. In addition, there is potential for chronic dietary exposure to fludioxonil in drinking water. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect the aggregate exposure to exceed 100% of the cPAD, as shown in the following Table 4:

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

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

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

2. In person . The Agency has established an official record for this action under docket control number OPP-301098. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

EPA has previously issued a final rule for each chemical/commodity which were published in the Federal Register on the date listed in the summary for each chemical/commodity listed below. The initial issuance of these final rules announced that EPA, on its own initiative, under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, as amended by the Food Quality Protection Act of 1996 (FQPA) (Public Law 104-170) was establishing time-limited tolerances. EPA established the tolerances because section 408(l)(6) of the FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Such tolerances can be established without providing notice or time for public comment.

EPA received requests to extend the use of these chemicals for this year's growing season. After having reviewed these submissions, EPA concurs that emergency conditions exist. EPA assessed the potential risks presented by residues for each chemical/commodity. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and decided that the necessary tolerance under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. The data and other relevant material have been evaluated and discussed in the final rule originally published to support these uses. Based on that data and information considered, the Agency reaffirms that extension of these time-limited tolerances will continue to meet the requirements of section 408(l)(6). Therefore, the time-limited tolerances are extended until the date listed below. EPA will publish a document in the Federal Register to remove the revoked tolerances from the Code of Federal Regulations (CFR). Although these tolerances will expire and are revoked on the date listed, under FFDCA section 408(l)(5), residues of the pesticide not in excess of the amounts specified in the tolerance remaining in or on the commodity after that date will not be unlawful, provided the residue is present as a result of an application or use of a pesticide at a time and in a manner that was lawful under FIFRA, the tolerance was in place at the time of the application, and the residue does not exceed the level that was authorized by the tolerance. EPA will take action to revoke these tolerances earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.

Tolerances for the use of the following pesticide chemicals on specific commodities are being extended:

1. 2,4-D . EPA has authorized under FIFRA section 18 the use of 2,4-D on wild rice for control of common water plantain in Minnesota. This regulation extends a time-limited tolerance for residues of the herbicide 2,4-dichlorophenoxyacetic acid in or on wild rice at 0.1 ppm for an additional 2-year period. This tolerance will expire and is revoked on December 31, 2002. A time-limited tolerance was originally published in the Federal Register on September 5, 1997 (62 FR 46900) (FRL-5738-9).

2. Paraquat . EPA has authorized under FIFRA section 18 the use of paraquat on artichokes for control of weeds in California. This regulation extends a time-limited tolerance for residues of the herbicide paraquat in or on artichokes at 0.05 ppm for an additional 2-year period. This tolerance will expire and is revoked on December 31, 2002. A time-limited tolerance was originally published in the Federal Register on November 22, 1999 (64 FR 63714) FRL-6392-9).

3. Lambda-cyhalothrin . EPA has authorized under FIFRA section 18 the use of lambda-cyhalothrin on barley for control of Russian wheat aphid in Wyoming, Montana, Idaho, and Colorado and sugarcane for the control of the sugarcane borer in Louisiana. This regulation extends time-limited tolerances for combined residues of the insecticide lambda-cyhalothrin and its epimer in or on barley, bran at 0.2 ppm; barley, grain at 0.05 ppm; barley, hay at 2.0 ppm; barley, straw at 2.0 ppm, and sugarcane at 0.03 ppm for an additional 2-year period. These tolerances will expire and are revoked on December 31, 2002. Time-limited tolerances were originally published in the Federal Register on January 29, 1999 (64 FR 4584-4590) (FRL-6056-2).

4. Bifenthrin . EPA has authorized under FIFRA section 18 the use of bifenthrin on citrus for control of Diaprepes root weevil in Florida. This regulation extends time-limited tolerances for residues of the insecticide bifenthrin in or on citrus, whole fruit; citrus, oil; and, citrus, dried pulp at 0.05, 0.3, and 0.3 ppm, respectively, for an additional 2-year period. These tolerances will expire and are revoked on December 31, 2002. Time-limited tolerances were originally published in the Federal Register on December 16, 1998 (63 FR 69200) (FRL-6048-1).

5. Difenoconazole . EPA has authorized under FIFRA section 18 the use of difenoconazole on sweet corn grown for seed for control of fungal pathogens in Florida. This regulation extends time-limited tolerances for residues of the fungicide difenoconazole in or on Corn, sweet (kernel + corn with husk removed); Corn, sweet, forage; and Corn, sweet, stover at 0.1 ppm for an additional 2-year period. These tolerances will expire and are revoked on 12/31/02. Time-limited tolerances were originally published in the Federal Register on September 1, 1999 (64 FR 47680) (FRL-6094-3).

6. Fenbuconazole . EPA has authorized under FIFRA section 18 the use of fenbuconazole on blueberries for control of mummy berry disease in Georgia. This regulation extends a time-limited tolerance for combined residues of the fungicide fenbuconazole alpha-2-(4-chlorophenyl)-ethyl-alpha-phenyl-3-(1 H -1,2,4-triazole)-1-propanenitrile and its metabolites cis-5-(4-chlorophenyl)-dihydro-3-phenyl-3-(1 H -1,2,4-triazole-1-ylmethyl)-2-3 H -furanone and trans-5-(4-chlorophenyl)dihydro-3-phenyl-3-(1 H -1,2,4-triazole-1-ylmethyl-2-3H-furanone expressed as fenbuconazole in or on blueberries at 1.0 ppm for an additional 2-year period. This tolerance will expire and is revoked on December 31, 2002. A time-limited tolerance was originally published in the Federal Register on June 10, 1998 (63 FR 31633) (FRL-5791-5).

7. Sulfentrazone . EPA has authorized under FIFRA section 18 the use of sulfentrazone on cowpea and lima bean for control of hophornbeam copperleaf in Tennessee and on sunflower for control of weeds in North Dakota. This regulation extends a time-limited tolerance for residues of the herbicide sulfentrazone, N -[2,4-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1 H -1,2,4-triazol-1-y-l]phenyl] methanesulfonamide in or on bean, succulent seed without pod (lima beans and cowpeas) and sunflower at 0.1 ppm for an additional 2-year period. These tolerances will expire and are revoked on December 31, 2002. A time-limited tolerance was originally published in the Federal Register on September 21, 1999 (64 FR 51060) (FRL-6097-8).

8. Imazamox . EPA has authorized under FIFRA section 18 the use of imazamox on canola for control of wild mustard in Minnesota and North Dakota. This regulation extends a time-limited tolerance for residues of the herbicide imazamox, 2-4,5-dihydro-4-methyl-4-(1-methylethyl)-5-oxo-1 H -imidazol-2-yl-5-methoxymethyl-3-pyridine-carboxylic acid, applied as the free acid or ammonium salt in or on canola at 0.05 ppm for an additional 17-month period. This tolerance will expire and is revoked on December 31, 2003. A time-limited tolerance was originally published in the Federal Register on July 14, 1999 (64 FR 37855) (FRL-6086-5).

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

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-301098 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before February 27, 2001.

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

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

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

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

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

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit III.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket control number OPP-301098, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 file format or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

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

This final rule establishes time-limited tolerances under FFDCA section 408. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any prior consultation as specified by Executive Order 13084, entitled Consultation and Coordination with Indian Tribal Governments (63 FR 27655, May 19, 1998); special considerations as required by Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or require OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established under FFDCA section 408(l)(6) in response to an exemption under FIFRA section 18, such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4).

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

Copies: To order copies of the Federal Register containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 512-7800 (or toll free at 1-888-293-6498) or by faxing to (202) 512-2250. The cost for each copy is $8.00. As an alternative, you can view and photocopy the Federal Register document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register .

This Federal Register document is also available from the Federal Register online database through GPO Access, a service of the U.S. Government Printing Office. Free public access is available on a Wide Area Information Server (WAIS) through the Internet and via asynchronous dial-in. Internet users can access the database by using the World Wide Web; the Superintendent of Documents home page address is http://www.access.gpo.gov/su_docs/, by using local WAIS client software, or by telnet to swais.access.gpo.gov, then log in as guest (no password required). Dial-in users should use communications software and modem to call (202) 512-1661; type swais, then log in as guest (no password required).

On February 28, 1992, we published in the Federal Register (57 FR 7002) final regulations with an opportunity for public comment. These regulations set forth the requirements for laboratories that are subject to CLIA. These regulations established uniform requirements for all laboratories regardless of location, size, or type of testing performed. In developing the regulations, we included requirements that would ensure the quality of laboratory services and be in the best interest of the public health. We recognized that a rule of this scope required time for laboratories to understand and implement the new requirements. Therefore, certain requirements were phased-in and given prospective effective dates. We also planned to address the comments we received on the February 28, 1992 rule and make modifications, if necessary, in the subsequent final rule.

On December 6, 1994, May 12, 1997, and October 14, 1998, we published in the Federal Register (59 FR 62606, 62 FR 25855, and 63 FR 55031, respectively) final rules with opportunity for comment. These rules extended the phase-in of the quality control requirements applicable to moderate and high complexity tests and the date by which an individual with a doctoral degree must possess board certification to qualify as a director of a laboratory that performs high complexity testing. These changes were made due to the resource constraints that had prevented the Department of Health and Human Services from establishing a review process for manufacturers' test system quality control instructions for CLIA compliance and the inability of many laboratory directors to complete certification requirements within the time period originally specified.

The date extensions provided by the October 14, 1998 rule have proven to be inadequate for the reasons set forth below. In addition, based on our evaluation of comments submitted in response to the May 12, 1997 rule, advice from the Clinical Laboratory Improvement Advisory Committee (CLIAC) concerning the quality control requirements appropriate to ensure quality testing, and the qualification requirements for laboratory directors, we have found it necessary to make the following revisions to our regulations:

• We are extending from December 31, 2000, to December 31, 2002, the current phase-in quality control requirements for moderate and high complexity tests. The phase-in quality control requirements for unmodified, moderate complexity tests cleared by the Food and Drug Administration (FDA) (through 510(k) or premarket approval processes, unrelated to CLIA) are less stringent than the requirements applicable to high complexity and other moderate complexity tests.

• We are extending from December 31, 2000, to December 31, 2002, the date for laboratories to meet certain CLIA quality control requirements by following manufacturers' FDA CLIA-cleared test system instructions.

• We are extending from December 31, 2000, to December 31, 2002, the date by which individuals with doctoral degrees must obtain board certification to qualify as directors of laboratories that perform high complexity tests.

These revisions are discussed in more detail below.

42 CFR 493.1202 contains the quality control requirements applicable to moderate and high complexity tests and allows a laboratory that performs tests of moderate complexity, using test systems cleared by the FDA through the section 510(k) or premarket approval processes, until December 31, 2000, to comply with the quality control provisions of part 493, subpart K, by meeting less stringent quality control requirements, as long as the laboratory has not modified the instrument, kit, or test system's procedure.

Section 493.1203, effective beginning December 31, 2000, establishes a mechanism for laboratories using commercial, unmodified tests to fulfill certain quality control requirements by following manufacturers' test system instructions that have been reviewed and determined by the FDA to meet applicable CLIA quality control requirements. Implementation of this review process, however, depended upon the availability of sufficient additional resources necessary to meet the projected workload. These resources were not available due to financial and other constraints of the program.

Following the publication of some of the previous extensions, we received comments that the current quality control requirements are not appropriate for some test methodologies, and that a comprehensive quality control regulation should be developed to address current quality control needs. A final rule addressing quality control issues raised by these commenters is close to completion; however, it will not be published by December 31, 2000. Commenters also raised issues that stressed the need to ensure that the quality control requirements are practical and flexible enough to accommodate different testing sites and test systems that range from current methodologies to new and emerging technologies, in order to not impede access. We must also, as the commenters suggest, base the requirements on technical considerations as well as their impact on patient care.

To assist us in determining the types of quality control requirements necessary to monitor laboratory test performance, we also considered advice provided by the CLIAC, as well as information obtained from a public meeting held in September 1996 for manufacturers and others to make presentations on quality control.

Due to the complexity of the issues that must be addressed, we are extending the December 31, 2000 sunset date for quality control standards in § 493.1202 to December 31, 2002, and extending the effective date for § 493.1203 from December 31, 2000 to December 31, 2002, to allow laboratories to continue to meet current regulations until we make further determinations regarding quality control issues. We are extending the effective date for these sections to ensure that we have sufficient time to develop final rules concerning quality control that address new technology, including point-of-care testing, molecular methods and advances in testing in the specialties and subspecialties. Subsequent to the publication of the final regulations and prior to the actual implementation of the revised requirements, we must develop new surveyor guidelines, design new survey forms, reprogram the CLIA data system, conduct surveyor training, and inform and educate the laboratory community, State programs with CLIA-exempt laboratories and HCFA-approved accreditation organizations. Time must be allocated for HCFA-approved State licensure programs and HCFA-approved accreditation organizations to review their requirements and determine whether they must make changes to maintain their overall equivalency with the CLIA requirements. State programs with CLIA-exempt laboratories may need to make changes to their State laws and implementing regulations. Accreditation organizations may also need time to revise policies and requirements and have them approved by their organizations for adoption. An implementation period will provide States and accreditation organizations the time needed to make changes to their program requirements and for their subsequent review by CDC and HCFA. Failure to provide sufficient time for education and implementation could cause confusion and interfere with laboratories' continued compliance with CLIA requirements and jeopardize the continued equivalency of State programs with CLIA-exempt laboratories and accreditation organizations.

Section 493.1443(b)(3) provides that a director of a laboratory performing high complexity testing, who has an earned doctoral degree in a chemical, physical, biological, or clinical laboratory science from an accredited institution, must be certified by a board recognized by the Department as of December 31, 2000. The phase-in was designed to allow the Department adequate time to review requests for approval of certification programs and to ensure that a laboratory director with a doctoral degree had sufficient time to successfully complete the requirements for board certification.

As stated previously in the preamble to the December 1994 final rule, a number of comments to the February 1992 final rule suggested that board certification not be a mandatory requirement for currently employed individuals. In addition, CLIAC suggested the development of alternative provisions to qualify currently employed individuals with a doctoral degree on the basis of laboratory training or experience, in lieu of requiring board certification.

We are extending the date by which an individual with a doctoral degree must possess board certification to qualify as a director of a laboratory that performs high complexity testing to December 31, 2002. This extension will allow time for review of the qualifications required for laboratory director to determine whether modifications should be made for inclusion in the final rule being developed.

In summary, we are extending the phase-in period in § 493.1443(b)(3) from December 31, 2000, to December 31, 2002.

We ordinarily publish a notice of proposed rulemaking in the Federal Register and invite public comment on proposed rules. The notice of proposed rulemaking includes a reference to the legal authority under which the rule is proposed and the terms and substance of the proposed rule or a description of the subjects and issues involved. This procedure can be waived, however, if an agency finds good cause that a notice-and-comment procedure is impracticable, unnecessary, or contrary to the public interest and incorporates a statement of the finding and its reasons in the rule issued.

The revisions in this final rule are essential, because if the dates for quality control requirements are not extended, many laboratories performing moderate complexity testing will be faced unnecessarily with meeting more stringent and burdensome quality control requirements at a time when we are actively working to revise these same quality control requirements. While this activity is nearly complete, the issues we are addressing are many and complex, particularly in light of changing technologies. Since we will be revising the quality control requirements in the reasonably near future, to impose more stringent requirements now is unreasonable, unnecessary, and confusing. With respect to the personnel standards addressed in this rule, if the date is not extended, those individuals currently qualified as laboratory directors under the phase-in requirements based on their doctoral degree and laboratory training and work experience would no longer qualify to serve as directors of laboratories performing high complexity testing. Since we are contemplating revisions that would allow individuals with a doctoral degree to qualify under alternative provisions that would recognize their laboratory training and experience, we would not want to disenfranchise these currently employed directors at this time. Extending the dates governing laboratory director qualifications will provide the opportunity for individuals with a doctoral degree who have laboratory training and experience, but do not have board certification to continue to qualify as laboratory directors of high complexity testing while we consider appropriate revisions to the CLIA regulations.

Accordingly, we believe that it is impracticable, unnecessary, and not in the public interest to engage in proposed rulemaking and believe there is good cause for not doing so and are therefore issuing this final rule with a 60-day comment period. To do otherwise would create confusion among laboratories in understanding the requirements they must meet with respect to quality control and laboratory director qualifications. It could also impose unnecessary burdens on laboratories and hardships on persons affected by these requirements. Because current regulations will expire on December 31, 2000, additional urgency has been placed on the implementation of this rule. We, therefore, believe there is good cause to waive a delay in the effective date of this rule. To do otherwise would create unnecessary confusion among laboratories in understanding the requirements they must meet with respect to quality control and laboratory director qualifications. It could also impose unnecessary burdens on laboratories and hardships on individuals affected by these requirements.

Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 through 612), we prepare a regulatory flexibility analysis unless we certify that a rule will not have a significant economic impact on a substantial number of small entities. For purposes of the RFA, all laboratories are considered to be small entities. Individuals and States are not included in the definition of a small entity.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. That analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 50 beds.

Extending the phase-in periods will continue the quality control and personnel requirements in effect prior to December 31, 2000, allow adequate time for addressing all concerns with respect to revising quality control requirements, and not change costs, savings, burden, or opportunities to manufacturers, laboratories, individuals performing tests, or patients undergoing the tests.

For these reasons, we have determined, and the Secretary certifies, that this regulation does not result in a significant impact on a substantial number of small entities and does not have a significant effect on the operations of a substantial number of small rural hospitals. Therefore, we are not preparing analyses for either the RFA or section 1102(b) of the Act.

The Unfunded Mandates Reform Act of 1995 also requires (in section 202) that agencies prepare an assessment of anticipated costs and benefits for any rule that may result in annual expenditures by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million. The final rule has no consequential effect on State, local, or tribal governments. We believe the private sector costs of this rule fall below these thresholds, as well.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

Because of the large number of items of correspondence we normally receive on Federal Register documents published for comment, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, if we proceed with a subsequent document, we will respond to the major comments in the preamble to that document.

To effectively monitor landings of quota-managed species on a timely basis, NMFS issued a final rule (63 FR 52639, October 1, 1998) requiring federally-permitted dealers to submit a weekly summary of purchases of quota-managed species through the IVR system within 3 days of the end of the reporting week. To minimize the burden of dealer reporting requirements, the regulations implementing the use of an IVR system also include authorization (50 CFR 648.7(a)(ii)) for the RA to defer the IVR reporting requirements for any species if landings are not expected to reach levels that would cause the applicable target exploitation rate specified in the FMP for that species to be achieved, resulting in specific management changes. At that time the RA deferred IVR reporting requirements for Atlantic mackerel, butterfish and, regulated NE Multispecies, which included Atlantic cod and haddock.

In order to effectively monitor Atlantic cod and haddock landings relative to the trigger and TAC, NMFS is requiring any dealer issued a NE Multispecies permit to submit, through the IVR system, a weekly summary of Atlantic cod and haddock purchases beginning January 28, 2001. IVR reports must be submitted within 3 days of the end of the reporting week. If the RA determines that weekly IVR reports of Atlantic cod and haddock purchases are no longer necessary, notification of deferral will be published in the Federal Register .

Dealers must continue to report through the IVR system, their purchases of the species specified in 50 CFR 648.7(a) for which IVR reporting requirements have not been deferred. Currently, these species are summer flounder, scup, black sea bass, Illex squid and Loligo squid, spiny dogfish, and Atlantic bluefish. If no purchases of any quota-managed species are made during the reporting week, a negative report, so stating, must be submitted.

As specified in 50 CFR 648.7(a)(1), dealers must continue to report purchases of all species, including those species for which IVR reporting has been deferred, on the detailed written reports.

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

At 65 FR 33486, May 24, 2000, NMFS published final specifications for the 2000 summer flounder, scup, and black sea bass fisheries, which included preliminary 1999 landings and quota adjustments. At 65 FR 50463, August 18, 2000, and corrected at 65 FR 69886, November 21, 2000, NMFS announced adjustments to the 2000 summer flounder, scup, and black sea bass commercial quotas based on updated 1999 landings data. Additional adjustments are necessary through this notification due to the receipt of late 1999 summer flounder landings data from the Commonwealth of Massachusetts, and the States of New York, New Jersey, Maryland, and Delaware. In addition, some black sea bass landings reported by the State of Delaware in 1999 were double-counted, and landings from non-limited access black sea bass vessels that landed south of Cape Hatteras Light, North Carolina, were incorrectly counted, meaning that the final 1999 landings were lower than announced in the August 18, 2000, Federal Register .

The 1999 quota, preliminary 1999 landings, and the resulting 1999 overages for all states for summer flounder are given in Table 1. The following states recorded landings of summer flounder different from those reported in the August 18, 2000, and November 21, 2000, Federal Register : MA, +7,357 lb (3,337 kg); NY, +145 lb (66 kg); NJ, +241 lb (109 kg); DE, -376 lb (171 kg); and MD, +16 lb (7 kg).

The resulting adjusted 2000 commercial quota for each state is given in Table 2, taking into account both the 1999 quota overages published in the August 18, 2000, and November 21, 2000, Federal Register and the additional landings previously noted.

The 1999 quotas (by quarter), preliminary 1999 landings (by quarter) and resulting overages for black sea bass for all quarters are given in Table 5. Changes in landings from those reported in the August 18, 2000, Federal Register are as follows: Quarter 1, -3,792 lb (1,720 kg); Quarter 2, -26,088 lb (11,834 kg); Quarter 3, -18,104 lb (8,212 kg); and Quarter 4, -39,377 lb (17,861 kg).

In the document published at 65 FR 50643, August 18, 2000 [FR Doc. 00-21100] the following corrections are made.

On page 50464, Tables 1 and 2 are replaced in their entirety as follows.

This Federal Register document is also accessible via the internet at the website of the Office of the Federal Register: http://www.access.gpo.gov/su-docs/aces/aces 140.html .

The Council prepared Amendment 12 to provide a framework within the Pacific Coast Groundfish FMP to set guidelines and requirements for overfished species rebuilding plans. This framework integrates the rebuilding plan development process into the Council’s current stock assessment and annual specifications processes, to accommodate the complexities of the fishery and to ensure that rebuilding measures for overfished species may begin as soon as possible after the initial determination that a species is overfished. Amendment 12 also declares the West Coast groundfish resource to be fully utilized by domestic harvesting and processing entities.