Section 218(a) of the Nuclear Waste Policy Act of 1982, as amended (NWPA), requires that “[t]he Secretary [of the Department of Energy (DOE)] shall establish a demonstration program, in cooperation with the private sector, for the dry storage of spent nuclear fuel at civilian nuclear power reactor sites, with the objective of establishing one or more technologies that the [Nuclear Regulatory] Commission may, by rule, approve for use at the sites of civilian nuclear power reactors without, to the maximum extent practicable, the need for additional site-specific approvals by the Commission.” Section 133 of the NWPA states, in part, that “[t]he Commission shall, by rule, establish procedures for the licensing of any technology approved by the Commission under Section 218(a) for use at the site of any civilian nuclear power reactor.”

To implement this mandate, the NRC approved dry storage of spent nuclear fuel in NRC-approved casks under a general license by publishing a final rule in 10 CFR part 72 entitled, “General License for Storage of Spent Fuel at Power Reactor Sites” (55 FR 29181; July 18, 1990). This rule also established a new Subpart L within 10 CFR part 72, entitled “Approval of Spent Fuel Storage Casks” containing procedures and criteria for obtaining NRC approval of spent fuel storage cask designs. The NRC subsequently issued a final rule on December 22, 1994 (59 FR 65920), that approved the Standardized NUHOMS® -24P and -52B cask design and added it to the list of NRC-approved cask designs in § 72.214 as Certificate of Compliance Number (CoC No.) 1004.

On July 15, 2000, and as supplemented on September 1, 2000, the certificate holder Transnuclear West, Inc. submitted an application to the NRC to amend CoC No. 1004 to permit a Part 72 licensee to use the -61BT dry storage canister (DSC) to store spent fuel. The -61BT is intended to both store and transport spent fuel. Second, conforming changes would be made to current Technical Specifications (TS) 1.2.1, 1.2.3, and 1.2.4, and would add new TS 1.2.3a, 1.2.4a, and 1.2.17 to accommodate the -61BT DSC and the fuel types it will contain. Additionally, the NRC, on its own initiative, is removing CoC Conditions Nos. 9, 10, and 11. Conditions Nos. 9 and 11 have been superseded by a change to 10 CFR 72.48 (64 FR 53582; October 4, 1999) that permits certificate holders to make certain changes to a cask design without prior NRC approval. Condition No. 10 has been superseded by the new 10 CFR 72.248 (64 FR 53617; October 4, 1999) that requires a certificate holder to periodically update the final safety analysis report (FSAR) associated with the cask design. This update must include any changes to the cask design made under the provisions of 10 CFR 72.48. The change to 10 CFR 72.48 became effective on April 5, 2001, and the addition of 10 CFR 72.248 became effective on February 1, 2000. Removal of Conditions Nos. 9, 10, and 11 will remove confusion for users of the Standardized NUHOMS® Storage System between compliance with the CoC and Part 72 regulations. Finally, existing Condition No. 12 is redesignated as Condition No. 6. The NRC notes that current Condition Nos. 6, 7, and 8 are unused. Additionally, a minor editorial change would be made to Condition No. 3.b. The NRC staff performed a detailed safety evaluation of the proposed CoC amendment request and found that adding the -61BT DSC to store spent fuel in and making conforming changes to the TS to add additional fuel parameters associated with the use of the -61BT DSC does not reduce the safety margin. In addition, the NRC staff has determined that these changes do not pose an increased risk to public health and safety.

However, the NRC is disapproving a portion of the applicant's request pertaining to storage of failed fuel. The NRC staff concluded that the applicant's request did not provide acceptable assurance of retrievability of the failed fuel, absent the use of a separate failed-fuel can to store the failed fuel in the Standardized NUHOMS® cask design.

This direct final rule revises the Standardized NUHOMS® Storage System cask design listing in § 72.214 by adding Amendment No. 3 to CoC No. 1004. The particular TS that are changed are identified in the NRC Staff's Safety Evaluation Report for Amendment No. 3.

The amended Standardized NUHOMS® Storage System, when used in accordance with the conditions specified in the CoC, the TS, and NRC regulations will meet the requirements of Part 72; thus, adequate protection of public health and safety will continue to be ensured.

CoC No. 1004, the revised Technical Specifications, the underlying Safety Evaluation Report for Amendment No. 3, and the Environmental Assessment are available for inspection at the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD. Single copies of these documents may be obtained from Gordon Gundersen, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-6195, email GEG1@nrc.gov.

Certificate No. 1004 is revised by adding the effective date of Amendment Number 3 and adding Model Number NUHOMS® -61BT.

This rule is limited to the changes contained in Amendment 3 to CoC No. 1004 and does not include other aspects of the Standardized NUHOMS® Storage System cask system design. The NRC is using the “direct final rule procedure” to promulgate this amendment because it represents a limited and routine change to an existing CoC that is expected to be noncontroversial. Adequate protection of public health and safety continues to be ensured. This amendment is not considered to be a significant amendment by the NRC staff. The amendment to the rule will become effective on September 12, 2001. However, if the NRC receives significant adverse comments by July 30, 2001, then the NRC will publish that document that withdraws this action and will address the comments received in response to the proposed amendments published elsewhere in this issue of the Federal Register . A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. These comments will be addressed in a subsequent final rule. The NRC will not initiate a second comment period on this action.

The National Technology Transfer Act of 1995 (Pub. L. 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this direct final rule, the NRC would revise the Standardized NUHOMS® Storage System cask system design listed in § 72.214 (List of NRC-approved spent fuel storage cask designs). This action does not constitute the establishment of a standard that establishes generally applicable requirements.

Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs” approved by the Commission on June 30, 1997, and published in the Federal Register on September 3, 1997 (62 FR 46517), this rule is classified as compatibility Category “NRC.” Compatibility is not required for Category “NRC” regulations. The NRC program elements in this category are those that relate directly to areas of regulation reserved to the NRC by the Atomic Energy Act of 1954, as amended (AEA) or the provisions of the Title 10 of the Code of Federal Regulations. Although an Agreement State may not adopt program elements reserved to NRC, it may wish to inform its licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws, but does not confer regulatory authority on the State.

The Presidential Memorandum dated June 1, 1998, entitled, “Plain Language in Government Writing” directed that the Government's writing be in plain language. The NRC requests comments on this direct final rule specifically with respect to the clarity and effectiveness of the language used. Comments should be sent to the address listed under the heading ADDRESSES above.

Finding of No Significant Environmental Impact: Availability

Under the National Environmental Policy Act of 1969, as amended, and the NRC regulations in Subpart A of 10 CFR Part 51, the NRC has determined that this rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. The rule would amend the CoC for the Standardized NUHOMS® Storage System cask system within the list of approved spent fuel storage casks that power reactor licensees can use to store spent fuel at reactor sites under a general license. The amendment will modify the present cask system design by adding the -61BT DSC to store spent fuel in and making conforming changes to TS to add additional fuel parameters to support use of the -61BT DSC. Additional administrative changes are made to the conditions of the CoC. The environmental assessment and finding of no significant impact on which this determination is based are available for inspection at the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD. Single copies of the environmental assessment and finding of no significant impact are available from Gordon Gundersen, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone (301) 415-6195, email GEG1@nrc.gov.

This direct final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). Existing requirements were approved by the Office of Management and Budget, Approval Number 3150-0132.

If a means used to impose an information collection does not display a currently valid OMB control number, the NRC may not conduct or sponsor, and a person is not required to respond to, the information collection.

On July 18, 1990 (55 FR 29181), the NRC issued an amendment to 10 CFR part 72 to provide for the storage of spent nuclear fuel under a general license in cask designs approved by the NRC. Any nuclear power reactor licensee can use NRC-approved cask designs to store spent nuclear fuel if it notifies the NRC in advance, spent fuel is stored under the conditions specified in the cask's CoC, and the conditions of the general license are met. A list of NRC-approved cask designs is contained in § 72.214. On December 22, 1994 (59 FR 65920), the NRC issued an amendment to part 72 that approved the Standardized NUHOMS® Storage System cask design by adding it to the list of NRC-approved cask designs in § 72.214. On July 15, 2000, and as supplemented on September 1, 2000, the certificate holder, Transnuclear West, submitted an application to the NRC to amend CoC No. 1004 to permit a part 72 licensee to use the -61BT DSC to store spent fuel in and to make conforming changes to TS to support the use of the -61BT DSC.

This rule will permit general licensees to use the -61BT DSC to store spent fuel. The rule will remove CoC Conditions Nos. 9, 10, and 11; will redesignate Condition No. 12 as No. 6; and make an editorial change to Condition No. 3.b. The alternative to this action is to withhold approval of this amended cask system design and issue an exemption to each general license. This alternative would cost both the NRC and the utilities more time and money because each utility would have to pursue an exemption.

Approval of the direct final rule will eliminate the above described problem and is consistent with previous NRC actions. Further, the direct final rule will have no adverse effect on public health and safety. This direct final rule has no significant identifiable impact or benefit on other Government agencies. Based on the above discussion of the benefits and impacts of the alternatives, the NRC concludes that the requirements of the direct final rule are commensurate with the NRC's responsibilities for public health and safety and the common defense and security. No other available alternative is believed to be as satisfactory, and thus, this action is recommended.

In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the NRC certifies that this rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. This direct final rule affects only the licensing and operation of nuclear power plants, independent spent fuel storage facilities, and Transnuclear West. The companies that own these plants do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the Small Business Size Standards set out in regulations issued by the Small Business Administration at 13 CFR part 121.

The NRC has determined that the backfit rule (10 CFR 50.109 or 10 CFR 72.62) does not apply to this direct final rule because this amendment does not involve any provisions that would impose backfits as defined. Therefore, a backfit analysis is not required.

In accordance with the Small Business Regulatory Enforcement Fairness Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs, Office of Management and Budget.

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 all Boeing Model 747-100, -200, -300, -400, and 747SR series airplanes was published in the Federal Register on April 24, 2000 (65 FR 21675). That action proposed to require repetitive inspections to detect cracks and corrosion around the lower bearing of the actuator attach fittings of the inboard and outboard flaps. That action also proposed to require repetitive overhauls for certain attach fittings or repetitive replacement of the attach fittings with new attach fittings, as applicable, which would constitute terminating action for certain repetitive 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.

One commenter, the airplane manufacturer, requests that the FAA limit the applicability of the proposed rule to airplanes having line numbers up to and including 1265. The commenter states that new, improved actuator attach fittings will be installed during production on airplanes starting at line number 1266. The commenter explains that the new, improved actuator attach fittings in certain positions (i.e., actuator attach fittings number 2 and 7) have an increased cross-sectional area that reduces stress levels and, consequently, the possibility of stress corrosion cracking. Attach fittings in all other locations will have increased bushing interference, and BMS 5-26 sealant will be applied to the new fittings to prevent general corrosion.

The FAA concurs with the intent of the commenter's request to limit the applicability of this AD. However, since they submitted their comment, the airplane manufacturer has advised the FAA that new fittings have been incorporated on airplanes starting with line number 1264. This coincides with the effectivity listing of a new service bulletin related to this AD, Boeing Service Bulletin 747-57A2310, Revision 2, dated February 22, 2001 (which is described in the next section of this final rule). Therefore, the FAA has revised and clarified the applicability of this AD to apply only to Model 747 series airplanes listed in Boeing Service Bulletin 747-57A2310, Revision 2. (Operators may note that, while the applicability of this AD has been reduced, the estimated number of affected airplanes has been increased in the “Cost Impact” section of the preamble. The new estimate includes airplanes delivered after the preparation of the proposed rule.)

One commenter notes that, in the preamble of the proposed AD, the FAA identifies the proposed AD as interim action, and states that, once a modification is developed, approved, and available, the FAA may consider additional rulemaking. The commenter states that it is very interested in this terminating modification. The commenter requests that, if release of the modification is imminent, the FAA delay release of this AD until the airplane manufacturer has developed the terminating modification. If the release is not imminent, the commenter requests that the FAA make the modification available as an alternative method of compliance (AMOC) to this AD or issue a superseding AD to include the terminating action as soon as possible.

The FAA partially concurs with the commenter's request. The FAA does not agree that issuance of the final rule should intentionally be delayed pending development of a terminating modification. The commenter provides no technical justification for such a delay.

However, since the issuance of the proposed AD, the FAA has reviewed and approved Boeing Service Bulletin 747-57A2310, Revision 2. (The proposed AD references Boeing Service Bulletin 747-57A2310, Revision 1, dated November 23, 1999, as an appropriate source of service information for certain proposed actions.) Among other actions, Revision 2 of the service bulletin includes procedures for a new terminating action. The new terminating action involves rework of the numbers 1, 3, 4, 5, 6, and 8 actuator attach fittings on both the inboard and outboard flaps, or replacement of the attach fittings with improved attach fittings; and replacement of the number 2 and 7 attach fittings of the trailing edge flap actuators with new, improved attach fittings (of a new design).

The FAA has determined that, if accomplished, this terminating action would adequately address the unsafe condition. Therefore, the FAA has added subparagraphs to paragraph (e) of this final rule, including paragraph (e)(2) which provides the terminating action specified in Revision 2 of the service bulletin as an option that ends the requirements of this AD. Additionally, the FAA finds that Revision 2 is also an acceptable source of service information for the inspections required by paragraph (c) of this AD. Thus, paragraph (c) of this final rule has also been revised to reference Revision 2 of the service bulletin, in addition to Revision 1, as an acceptable source of service information.

One commenter requests that the FAA revise paragraphs (a) and (b) of the proposed rule to state, “Accomplish the actions in paragraphs (c), (d), or (e) of this AD * * *” instead of referring to paragraph (c) only. The commenter provides no justification for its request.

The FAA concurs with the commenter's request because adding references to paragraphs (d) and (e) will clarify the complete range of actions available to operators. Paragraphs (a) and (b) of this final rule have been revised accordingly.

One commenter requests that the FAA provide for actuator attach fittings of the inboard flaps that have been overhauled in accordance with a revision of Boeing 747 Overhaul Manual (OHM) 57-52-35 that is dated prior to June 10, 1999. The commenter specifically requests that, for airplanes previously overhauled, the FAA revise the compliance times in paragraph (a) of the proposed AD to 8 years or 8,000 flight cycles after overhaul of the actuator attach fittings for the inboard flaps. The commenter notes that this compliance time would agree with the compliance time for the actuator attach fittings of the outboard flaps, which are more critical.

The FAA concurs with the commenters request, and has revised paragraph (a) of this final rule to apply to:

• Actuator attach fittings on the outboard flaps that have NOT been overhauled in accordance with revisions of OHM 57-52-55 dated prior to June 1, 1999, or replaced with a new fitting; and

• Actuator attach fittings on the inboard flaps that have NOT been overhauled in accordance with revisions of OHM 57-52-35, dated prior to June 10, 1999, or replaced with a new fitting.

Also, the FAA has revised paragraph (b) of this final rule to apply to:

• Actuator attach fittings on the outboard flaps that HAVE been overhauled in accordance with revisions of OHM 57-52-55 dated prior to June 1, 1999, or replaced with a new fitting; and

• Actuator attach fittings on the inboard flaps that HAVE been overhauled in accordance with revisions of OHM 57-52-35, dated prior to June 10, 1999, or replaced with a new fitting.

One commenter requests that the FAA revise paragraph (d) of the proposed rule to specify overhaul of the actuator attach fittings for the flaps in accordance with Boeing OHM 57-52-55, Temporary Revision 57-7, dated June 1, 1999, or Temporary Revision 57-9, dated May 14, 2000; and Boeing OHM 57-52-35, Temporary Revision 57-8, dated June 10, 1999, Temporary Revision 57-10, dated May 8, 2000, or Full Revision 57-10, dated July 1, 2000. The commenter also requests that the FAA refer to Boeing OHM 57-52-35, Temporary Revision 57-10, or Full Revision 57-10, in Note 4 of the proposed rule. The commenter states that these later revisions of the OHM chapters describe the same actions as those revisions referred to in the proposed rule but provide additional repair information.

Similarly, a second commenter requests that the FAA revise paragraph (d) of the proposed rule to specify overhaul of the actuator attach fittings in accordance with Boeing OHM 57-52-55, Temporary Revision 57-7, dated June 1, 1999, or later, and Boeing OHM 57-52-35, Temporary Revision 57-8, dated June 10, 1999, or later. The commenter states that this would allow use of the latest revision of the OHM when overhauling the fittings.

The FAA partially concurs with the commenters' requests. The FAA has reviewed the specific revisions referenced by the first commenter and finds them acceptable. The FAA has also reviewed Boeing OHM 57-52-55, Full Revision 57-9, dated July 1, 2000, and finds it acceptable. However, rather than revising paragraph (d) to cite all of these revisions, the FAA finds that paragraph (d) of this AD may be revised to refer to the accomplishment instructions of Boeing Service Bulletin 747-57A2310, Revision 1, dated November 23, 1999, or Revision 2, dated February 22, 2001, as acceptable sources of service information for the accomplishment of the overhaul required by that paragraph. The FAA finds that this change will clarify the requirements of paragraph (d) of this AD, and make it easier for operators to comply with that paragraph. The FAA has revised paragraph (d) accordingly. In addition, for the actuator attach fittings on the inboard flaps, the FAA has revised Note 4 of this AD to refer to specific OHM revisions referenced by the first commenter and reviewed and accepted by the FAA.

One commenter requests that the FAA revise the “Alternative Methods of Compliance” paragraph—paragraph (f) in the proposed rule—to allow repairs of corrosion or cracking that is outside the limits specified in the OHM in accordance with a method approved by a Boeing DER, in lieu of requiring replacement of the actuator attach fittings before further flight. The commenter states that this allowance is necessary to prevent unnecessary delays or grounding of airplanes if operators find conditions outside the rework limits in the OHM.

The FAA partially concurs with the commenter's request. The FAA does not concur with the commenter's request to revise the “Alternative Methods of Compliance” paragraph to allow the Boeing DER to approve repairs. However, the FAA finds that a new paragraph may be added to provide for repair of actuator attach fittings, in lieu of replacement. Therefore, the FAA has added paragraph (f) to this final rule (and reordered subsequent paragraphs accordingly), to allow for repair of the actuator attach fittings on the inboard and outboard flaps in accordance with a method approved by the FAA or data approved by a Boeing Company DER who has been authorized to make such findings.

One commenter requests that the FAA revise the estimate of the cost impact in the proposed rule. The commenter states that the estimate of 5 work hours per airplane for overhaul of the actuator attach fittings is extremely low. The commenter notes that the procedures for each actuator attach fitting include cleaning, removing sleeves, machining, performing non-destructive tests, and manufacturing and installing new sleeves. The commenter also submits estimates from several vendors as well as their own estimate of 192 work hours per airplane.

The FAA partially concurs with the commenter's request. The FAA does not concur that the commenter's estimate of 192 work hours is appropriate for use in this AD. The cost impact information in AD actions includes only the “direct” costs of the specific actions required by the AD. The FAA recognizes that, in accomplishing the requirements of any AD, operators may incur “incidental” costs in addition to the “direct” costs. The cost analysis in AD rulemaking actions, however, typically does not include incidental costs, such as the time required to gain access and close up; planning time; or time necessitated by other administrative actions. Because incidental costs may vary significantly from operator to operator, they are almost impossible to calculate.

However, the FAA does concur that the estimated number of work hours can be adjusted somewhat. The estimate of 5 work hours included only the time necessary specifically for the overhaul, based on the data included in the manufacturer's service bulletin. The FAA finds it appropriate to include the estimate of work hours needed for removal, inspection, and re-installation, as well as overhaul, of the subject parts. Based on the data provided in the airplane manufacturer's service bulletin, the FAA estimates the number of work hours for these actions to be 37 work hours per airplane. Similarly, the FAA finds that the cost estimate for replacement of the actuators should include time for the inspection that is included in the procedures for the replacement. Thus, the number of work hours for the replacement has been increased from 2 to 4 work hours per airplane. The FAA has revised the cost impact estimate in this final rule accordingly.

One commenter, an operator, requests that the FAA reduce the proposed initial compliance time for actions on the actuator attach fittings on the outboard flap that have been overhauled per OHM 57-52-55. The commenter requests a compliance time of 6 years or 6,000 flight cycles, whichever occurs first, after the attach fitting was overhauled, for the accomplishment of paragraph (c), (d), or (e) of this AD. The commenter states that the earlier of 6 years or 6,000 flight cycles is its “hard time” interval between overhauls.

The FAA does not concur. The compliance time of 8 years or 8,000 flight cycles, whichever occurs first, is based on when cracking of actuator attach fittings has been found, and the manufacturer's recommendation in the service bulletin. However, an operator may choose to accomplish the actions in this AD prior to the 8-year-or-8,000-flight-cycle threshold. No change to the final rule is necessary in this regard.

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 1,111 Model 747 series airplanes of the affected design in the worldwide fleet. The FAA estimates that 237 airplanes of U.S. registry will be affected by this AD.

It will take approximately 2 work hours per airplane to accomplish the required inspection, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of this inspection on U.S. operators is estimated to be $28,440, or $120 per airplane, per inspection cycle.

The overhaul of actuator attach fittings, which is offered as one alternative for compliance with this AD action, will take approximately 37 work hours per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of this overhaul is estimated to be $2,220 per airplane, per overhaul cycle.

In lieu of the overhaul, this AD provides for a replacement of actuator attach fittings, which would take approximately 4 work hours per airplane to accomplish, at an average labor rate of $60 per work hour. Required parts will cost approximately $6,623 (for the four attach fittings on the outboard flaps) and $7,566 (for the four attach fittings on the inboard flaps). Based on these figures, the cost impact of this replacement is estimated to be $14,429, per airplane, per replacement cycle.

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.

Should an operator elect to accomplish the optional replacement with improved attach fittings, which terminates the requirements of this AD, it would take approximately 16 work hours to accomplish, at an average labor rate of $60 per work hour. The cost of required parts would be approximately $15,322 per airplane. Based on these figures, the cost impact of the optional terminating action would be $16,282 per airplane.

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) by revising AD 2000-03-20, amendment 39-11580 (65 FR 8642, February 22, 2000), which is applicable to Airbus Model A300 B4-601, B4-603, B4-620, B4-605R, B4-622R, and F4-605R (collectively called A300-600) series airplanes, was published in the Federal Register on January 10, 2001 (66 FR 1919). The action proposed to continue to require repetitive ultrasonic inspections to detect cracks on the forward fittings in the radius of frame 40 adjacent to the tension bolts in the center section of the wings, and various follow-on actions. The action also proposed to remove Model A300 F4-622R from the applicability of the existing AD.

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

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

Since this AD merely deletes Model A300 F4-622R airplanes from the applicability of AD 2000-03-02, it adds no additional costs, and will require no additional work to be performed by affected operators. The current costs associated with this AD are reiterated in their entirety (as follows) for the convenience of affected operators:

The FAA estimates that 35 airplanes of U.S. registry will be affected by this AD, that it will take approximately 2 work hours per airplane (1 work hour per side) to accomplish the required ultrasonic inspection, and that the average labor rate is $60 per work hour. Based on these figures, the cost impact of the required inspection on U.S. operators is estimated to be $4,200, or $120 per airplane, per inspection cycle.

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

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

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

On April 16, 2001, the Federal Aviation Administration (FAA) issued Airworthiness Directive (AD) 2001-08-13, amendment 39-12191 (66 FR 20734, April 25, 2001), which applies to certain Gulfstream Model G-1159, G-1159A, G-1159B, G-IV, and G-V series airplanes. That AD requires inspection and modification of certain door control valves of the nose landing gear and the main landing gear. The actions required by that AD are intended to prevent loss of hydraulic system fluid due to failure of the door control valve of the landing gear, which could require the flight crew to use alternate gear extension procedures (landing gear blow down) for landing of all models.

Since the issuance of that AD, the FAA has received information that requires certain corrections and clarifications for that AD.

In indicating which Gulfstream alert customer bulletin to use in accomplishing the required actions for each of the five Gulfstream airplane models affected, the FAA inadvertently reversed the bulletins indicated for the G-1159, G-1159B, and G-1159A Gulfstream models. That information also was included in the applicability section in the table entitled “Gulfstream Airplane Models and Alert Customer Bulletins (ACB)” and in paragraph (b) of AD 2001-08-13. This document corrects the references to the appropriate alert customer bulletins, and will ensure that the appropriate Gulfstream bulletin is used to accomplish the actions required by this AD for each of the five Gulfstream models to which it applies.

Additionally, this document also corrects and clarifies the compliance time specified for the actions specified in paragraph (b) of the AD. The FAA inadvertently specified the compliance times for paragraphs (b)(1) and (b)(2) of the AD as “* * * after the effective date of this AD.” We intended that the requirements of paragraph (b) of that AD should read “* * * after the date of inspection accomplished per the requirements of paragraph (a) of this AD.” Correction of that wording permits a somewhat extended compliance time for the operators to accomplish the requirements of paragraph (b) of this AD. Therefore, this correction is a relieving requirement for operators and necessitates no additional work or cost burdens.

This document corrects an error, clarifies certain requirements, and correctly adds the AD as an amendment to section 39.13 of the Federal Aviation Regulations (14 CFR 39.13).

The AD is being reprinted in its entirety for the convenience of affected operators. The effective date of the AD remains May 10, 2001.

Since this action only clarifies a current requirement, it has no adverse economic impact and imposes no additional burden on any person. Therefore, notice and public procedures hereon are unnecessary.

In part, as a result of three large vessel groundings within an 18-day period in the fall of 1989 on the coral reef tract of the Florida Keys, Congress enacted the Florida Keys National Marine Sanctuary and Protection Act (FKNMSPA), designating the area surrounding the Florida Keys as the Florida Keys National Marine Sanctuary (FKNMS). The primary goal of this Act is to protect the health of the fragile ecosystem of the Florida Keys. Among other things, the FKNMSPA, established four ATBAs where tank vessels and vessels larger than 50 meters are prohibited from entering. Under the FKNMSPA, NOAA and the USCG have the authority to amend the ATBAs.

On April 21, 1998, pursuant to input from the shipping industry, the Florida Keys National Marine Sanctuary Advisory Council (SAC) recommended a revision to the boundary of the northernmost ATBA to eliminate a small portion of the boundary near “the Elbow” which juts out further than other portions of the ATBA. The revision to the boundary will permit ships in two opposing traffic patterns located just outside the boundary of the ATBA to increase the distance between them, thus increasing maritime safety in the area. The revised boundary will not result in bringing ship traffic any closer to the reef than the other parts of the ATBA and, by reducing the potential for collisions, the boundary revision is beneficial for the protection of the marine environment.

The north- and east-bound vessels utilize the Gulf Stream in this area while the south- and west-bound vessels try to take advantage of countercurrents from eddies off of the Gulf Stream. The existing configuration of the ATBA near the coral reef known as “the Elbow,” when examined in relation to the axis of the Gulf Stream, results in a potential convergence of northeasterly bound and southwesterly bound traffic. The potential risk of collision increases when the Gulf Stream meanders closer to “the Elbow.” The revision of the ATBA boundary will permit ships in these two opposing traffic patterns to increase the distance between them, thus increasing maritime safety in the area. A collision in this area could cause oil and other material to seep into the Florida Keys damaging marine sanctuary resources, the marine environment, and quite possibly, the recreational, tourism and fishing industries of the Florida Keys.

In March 2000, the USCG conducted a survey of mariners, who frequently travel through this area, to see whether they believed “the Elbow” of the ATBA to be a safety hazard for vessels traveling in that area. Close to half of the mariners surveyed felt that “the Elbow” created a “pinch point” for south- and west-bound vessels that attempt to stay out of both the ATBA and the lanes of traffic for the north- and east-bound vessels. The USCG subsequently recommended the revision of the ATBA boundary in order to increase maritime safety in the area.

Based on these recommendations, and its own draft environmental assessment of the recommendations, NOAA published a proposed rule to revise the boundary in the Federal Register on November 22, 2000 (65 FR 70324, Nov. 22, 2000). Two public hearings were subsequently held on December 12 and 13, 2000. While no formal requests to present oral testimony at either meeting were received, a total of six people spoke at the meetings regarding the revised boundary. At the first meeting two individuals spoke in favor of the revision. At the second meeting one person spoke in favor of the revision and three individuals requested further information as to how the revision could affect their tugboat operations in the Florida Keys. Once it was explained that the ATBA only affects boats larger than 50 meters in registered length, the individuals spoke in favor of the change as well. One written comment was received supporting the boundary revision.

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

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration when the rule was proposed that it will not have a significant economic impact on a substantial number of small entities. The basis for that certification has not changed. Accordingly, a Regulatory Flexibility Analysis was not prepared.

NOAA has concluded that this regulatory action does not constitute a major federal action significantly affecting the quality of the human environment. Therefore, an environmental impact statement is not required. A final environmental assessment has been prepared. Copies are available (see ADDRESSES ).

The President has directed all agencies to use plain language in their communications with the public, including regulations. To comply with this directive, we seek public comment on any ambiguity or unnecessary complexity arising from the language used in this rule (see ADDRESSES ).

This document contains amendments to 26 CFR part 1 under section 401(a)(4) of the Internal Revenue Code of 1986 (Code).

Section 401(a)(4) provides that a plan or trust forming part of a stock bonus, pension, or profit-sharing plan of an employer shall not constitute a qualified plan under section 401(a) of the Code unless the contributions or benefits provided under the plan do not discriminate in favor of highly compensated employees (HCEs) (within the meaning of section 414(q)). Whether a plan satisfies this requirement depends on the form of the plan and its effect in operation.

Section 415(b)(6)(A) provides that the computation of benefits under a defined contribution plan, for purposes of section 401(a)(4), shall not be made on a basis inconsistent with regulations prescribed by the Secretary. The legislative history of this provision explains that, in the case of target benefit and other defined contribution plans, “regulations may establish reasonable earnings assumptions and other factors for these plans to prevent discrimination.” Conf. Rep. No. 1280, 93d Cong., 2d Sess. 277 (1974).

Under the section 401(a)(4) regulations, a plan can demonstrate that either the contributions or the benefits provided under the plan are nondiscriminatory in amount. Defined contribution plans generally satisfy the regulations by demonstrating that contributions are nondiscriminatory in amount, through certain safe harbors provided for under the regulations or through general testing.

A defined contribution plan (other than an ESOP) may, however, satisfy the regulations on the basis of benefits by using cross-testing pursuant to rules provided in § 1.401(a)(4)-8 of the regulations. Under this cross-testing method, contributions are converted, using actuarial assumptions, to equivalent benefits payable at normal retirement age, and these equivalent benefits are tested in a manner similar to the testing of employer-provided benefits under a defined benefit plan.

In Notice 2000-14 (2000-10 I.R.B. 737), released February 24, 2000, the IRS and the Treasury Department initiated a review of issues related to use of the cross-testing method by so-called new comparability plans and requested public comments on this plan design from plan sponsors, participants and other interested parties. In general, new comparability plans are defined contribution plans that have built-in disparities between the allocation rates for classifications of participants consisting entirely or predominantly of HCEs and the allocation rates for other employees.

In a typical new comparability plan, HCEs receive high allocation rates, while nonhighly compensated employees (NHCEs), regardless of their age or years of service, receive comparatively low allocation rates. For example, HCEs in such a plan might receive allocations of 18 or 20% of compensation, while NHCEs might receive allocations of 3% of compensation. A similar plan design, sometimes known as a super-integrated plan, provides for an additional allocation rate that applies only to compensation in excess of a specified threshold, but the specified threshold (e.g., $100,000) or the additional allocation rate (e.g., 10%) is higher than the maximum threshold and rate allowed under the permitted disparity rules of section 401(l).

These new comparability and similar plans rely on the cross-testing method to demonstrate compliance with the nondiscrimination rules by comparing the actuarially projected value of the employer contributions for the younger NHCEs with the actuarial projections of the larger contributions (as a percentage of compensation) for the older HCEs. As a result, these plans are able generally to provide higher rates of employer contributions to HCEs, while NHCEs are not allowed to earn the higher allocation rates as they work additional years for the employer or grow older. Notwithstanding the analytical underpinnings of cross-testing, the IRS and Treasury Department became concerned that new comparability and similar plans were not consistent with the basic purpose of the nondiscrimination rules under section 401(a)(4).

After consideration of the comments received in response to Notice 2000-14, the IRS and Treasury issued proposed regulations on this subject (REG-114697-00), which were published in the Federal Register on October 6, 2000 (65 FR 59774). The proposed regulations preserved the cross-testing rules of the section 401(a)(4) regulations, but prescribed a gateway condition for new comparability and similar plans to meet in order to be eligible to use cross-testing to satisfy the nondiscrimination rules on the basis of benefits. However, defined contribution plans that provide broadly available allocation rates, as defined in the proposed regulations, did not have to satisfy the gateway. The definition of broadly available allocation rates under the proposed regulations covered plans that provide different allocation rates to different, nondiscriminatory groups of employees. Under the proposed regulations, the definition also covered plans that base allocations or allocation rates on age or years of service, that, in contrast to new comparability plans, provide an opportunity for participants to “grow into” higher allocation rates as they age or accumulate additional service.

The proposed regulations also addressed a new comparability-type plan design that aggregates a defined benefit plan that benefits primarily HCEs with a defined contribution plan that benefits primarily NHCEs. This design would permit an employer to circumvent the minimum allocation gateway by aggregating (for purposes of the nondiscrimination rules) a new comparability or similar defined contribution plan with a defined benefit plan that provides only minimal benefits to NHCEs or covers only a relatively small number of NHCEs. In addition, a defined benefit plan that benefits primarily HCEs, and that is aggregated with a defined contribution plan for nondiscrimination testing, could produce results similar to a new comparability plan but with a potential for substantially more valuable benefits for HCEs. The proposed regulations provided a gateway for testing the aggregated plans on the basis of benefits that must be satisfied unless the aggregated defined contribution and defined benefit plan (the DB/DC plan) is primarily defined benefit in character (as defined in the proposed regulations), or unless each of the defined contribution and defined benefit portions of the DB/DC plan is a broadly available separate plan (as defined in the proposed regulations).

Written comments responding to the notice of proposed rulemaking were received, and a public hearing was held on January 25, 2001, at the request of one commentator. After consideration of the comments, the proposed regulations are adopted as revised by this Treasury decision.

Like the proposed regulations, these final regulations permit defined contribution plans with either broadly available allocation rates or certain age-based allocation rates to test on a benefits basis (cross-test) in the same manner as under current law, and permit other defined contribution plans to cross-test once they pass a gateway that prescribes minimum allocation rates for NHCEs. Similarly, these final regulations retain the rule in the proposed regulations that permits a DB/DC plan to test on a benefits basis in the same manner as under current law if the DB/DC plan either is primarily defined benefit in character or consists of broadly available separate plans. Other DB/DC plans are permitted to test on a benefits basis once they pass a corresponding gateway prescribing minimum aggregate normal allocation rates for NHCEs.

These final regulations retain the rule in the proposed regulations that requires a defined contribution plan that does not provide broadly available allocation rates or certain age-based allocation rates (as these terms are defined in these final regulations) to satisfy a gateway in order to be eligible to use the cross-testing rules to meet the nondiscrimination requirements of section 401(a)(4). Under these final regulations, as under the proposed regulations, a plan satisfies this minimum allocation gateway if each NHCE in the plan has an allocation rate that is at least one third of the allocation rate of the HCE with the highest allocation rate, but a plan is deemed to satisfy the gateway if each NHCE receives an allocation of at least 5% of the NHCE's compensation (within the meaning of section 415(c)(3)).

Several commentators raised questions about the interaction of the requirements under the proposed regulations and other regulatory rules relating to testing for nondiscrimination. For example, some commentators asked what was intended by the gateway requirement that all NHCEs receive the minimum required allocation. Except as specifically provided, the regulatory definitions and rules that apply for purposes of section 401(a)(4) also apply for purposes of these regulations. For example, the term employee, as used in these regulations, is defined in § 1.401(a)(4)-12 as an employee (within the meaning of § 1.410(b)-9) who benefits as an employee under the plan for the plan year, and an NHCE is defined in § 1.401(a)(4)-12 as an employee who is not an HCE. Thus, an individual who does not otherwise benefit under the plan for the plan year is not an employee under these regulations, hence not an NHCE, and need not be given the minimum required allocation under the gateway. Similarly, the allocation rate referred to in the gateway is determined under § 1.401(a)(4)-2(c) as the allocations to an employee's account for a plan year, expressed either as a percentage of plan year compensation (which must be calculated using a definition of compensation that satisfies the requirements of section 414(s)) or as a dollar amount.

The general rules and regulatory definitions applicable under section 410(b) apply also for purposes of these regulations. For example, these regulations do not change the general rule prohibiting aggregation of a 401(k) plan or 401(m) plan with a plan providing nonelective contributions. Accordingly, matching contributions are not taken into account for purposes of the gateway. Similarly, pursuant to § 1.410(b)-6(b)(3), if a plan benefits employees who have not met the minimum age and service requirements of section 410(a)(1), the plan may be treated as two separate plans, one for those otherwise excludable employees and one for the other employees benefitting under the plan. Thus, if the plan is treated as two separate plans in this manner, cross-testing the portion of the plan benefitting the nonexcludable employees will not result in minimum required allocations under the gateway for the employees who have not met the section 410(a)(1) minimum age and service requirements.

One commentator suggested that the regulatory provision that permits a plan to satisfy the gateway requirement by providing an allocation of at least 5% of compensation within the meaning of section 415(c)(3) not require that the allocation be based on a full year's compensation in the case of an employee who participates in the plan for only a portion of the plan year. The final regulations modify this requirement as suggested. The final regulations allow a plan to satisfy the gateway by providing an allocation of at least 5% of compensation within the meaning of section 415(c)(3), limited to a period otherwise permissible under the timing rules applicable under the definition of plan year compensation, in the same manner as the general rules under the section 401(a)(4) regulations. The definition of plan year compensation permits use of amounts paid only during the period of participation within the plan year.

Some commentators questioned whether it was necessary to require the use of compensation within the meaning of section 415(c)(3) for purposes of the 5% of compensation component of the minimum allocation gateway. One of these commentators argued that using compensation within the meaning of section 414(s) would be more appropriate. Two other commentators argued that, for this purpose, plans should be able to use a definition of compensation that would be a reasonable definition of compensation for purposes of section 414(s) without regard to whether the definition of compensation meets the nondiscrimination standard under the section 414(s) regulations.

After consideration of these comments, the requirement that section 415(c)(3) compensation be used for purposes of the 5% of compensation component of the minimum allocation gateway has been retained. For purposes of the “one third” component of the gateway, a definition of compensation that satisfies section 414(s) is an appropriate measure because this component is based on the ratio of HCE allocation rates to NHCE allocation rates. By contrast, the 5% of compensation component of the gateway does not reflect a comparison of NHCE allocations to HCE allocations, but is based on a particular level of NHCE allocations. Without the comparison between HCE and NHCE allocations, a rule permitting the use of a definition of compensation that satisfies section 414(s), but is less inclusive than total compensation, could lead to NHCE allocations that are significantly smaller than the minimum that is contemplated by the regulations. Therefore, it is appropriate to require the use of total compensation, as defined in section 415(c)(3), for the 5% allocation component of the gateway. Furthermore, permitting the use of a potentially discriminatory definition of compensation would be inconsistent with the nondiscrimination requirements in general, including the minimum allocation gateway.

Like the proposed regulations, these final regulations provide that a plan that has broadly available allocation rates need not satisfy the minimum allocation gateway. In order to be broadly available, each allocation rate under the plan must be currently available to a group of employees that satisfies section 410(b) (without regard to the average benefit percentage test). Thus, if, within one plan, an employer provides different allocation rates for nondiscriminatory groups of employees at different locations or different profit centers, the plan would not need to satisfy the minimum allocation gateway in order to use cross-testing.

For purposes of determining whether an allocation rate that was available only to employees who satisfied an age or service condition was currently available to a section 410(b) group, the proposed regulations allowed such a condition to be disregarded if certain standards were met. The final regulations retain this exception from the application of the minimum allocation gateway. However, this exception has been relocated and is now part of an expanded provision for plans with age-based allocations (see Plans with Age-Based Allocations portion of this preamble).

In response to comments, the final regulations also liberalize the determination of whether a plan has broadly available allocation rates. First, the final regulations permit two allocation rates to be aggregated in a manner similar to the rule that permits aggregation of certain benefits, rights or features. This rule permits excess NHCEs with a higher allocation rate to be used to support a lower allocation rate. For example, under this rule, if under a plan there are two groups of participants, one group that receives an allocation rate of 10% and another that receives an allocation rate of 3%, and if the group of employees who receive the 10% allocation rate satisfies section 410(b) (without regard to the average benefit percentage test), then the 10% rate and the 3% rate can be aggregated and treated as a single allocation rate for purposes of determining whether the plan has broadly available allocation rates. In addition, the final regulations provide that, in determining whether a plan provides broadly available allocation rates, differences in allocation rates resulting from any method of permitted disparity provided for under the section 401(l) regulations are disregarded.

Several commentators raised the concern that a defined contribution plan may fail the broadly available test because of grandfathered allocation rates provided to employees who formerly participated in a defined benefit plan or provided to a group of employees in connection with a merger, acquisition, or other similar transaction. In response to these comments, the final regulations permit an employee's allocation to be disregarded, to the extent the employee's allocation is a transition allocation (as defined in the regulations) for the plan year. Transition allocations which can be disregarded can be defined benefit replacement allocations, pre-existing replacement allocations, or pre-existing merger and acquisition allocations (as defined in the regulations).

In each case, the transition allocations must be provided to a closed group of employees and must be established under plan provisions. Once the allocations are established under the plan, they cannot be modified, except to reduce allocations for HCEs, or because of de minimis changes (such as a change in the definition of compensation to include section 132(f) elective reductions). A plan also does not violate this requirement because of an amendment that either adds or removes a provision applicable to all employees in the group eligible for the allocations under which each employee who is eligible for a transition allocation receives the greater of the transition allocation or another allocation for which the employee would otherwise be eligible. If the plan provides that all employees who are eligible for the transition allocation receive the greater of the transition allocation or an otherwise available allocation, the otherwise available allocation is considered currently available to all such employees, including employees for whom the transition allocation is greater.

These final regulations set forth basic conditions for defined benefit replacement allocations. These conditions provide a framework that is designed to ensure that these allocations are provided in a manner consistent with the general principles underlying the provisions for broadly available allocation rates under these regulations. The regulations then delegate authority to the Commissioner to prescribe rules for defined benefit replacement allocations in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin. Rev. Rul. 2001-30 (2001-29 I.R.B.), dated July 16, 2001, published in conjunction with these final regulations, prescribes specific conditions for defined benefit replacement allocations that relate to the basic conditions set forth in the regulations. This division of the medium of guidance is designed to provide ongoing flexibility to the IRS and Treasury to respond to changing circumstances, or additional information relating to defined benefit replacement allocations.

The basic conditions that allocations must satisfy in order to be defined benefit replacement allocations are as follows: (1) The allocations are provided to a group of employees who formerly benefitted under an established nondiscriminatory defined benefit plan of the employer or of a prior employer that provided age-based equivalent allocation rates; (2) the allocations for each employee were reasonably calculated, in a consistent manner, to replace the retirement benefits that the employee would have been provided under the defined benefit plan if the employee had continued to benefit under the defined benefit plan; (3) no employee who receives the allocation receives any other allocations under the plan for the plan year (except as provided in these regulations); and (4) the composition of the group of employees who receive the allocations is nondiscriminatory.

Rev. Rul. 2001-30 fleshes out these basic conditions for determining whether an allocation is a defined benefit replacement allocation. Under the revenue ruling, the defined benefit plan's benefit formula applicable to the group of employees must be one that generated equivalent normal allocation rates (determined without regard to changes in accrual rates attributable to changes in an employee's years of service) that increased from year to year as employees attained higher ages. Further, if the defined benefit plan was sponsored by the employer, the defined benefit plan satisfied sections 410(b) and 401(a)(4), without regard to section 410(b)(6)(C) and without aggregating with any other plan, for the plan year which immediately precedes the first plan year for which the allocations are provided. Finally, the defined benefit plan must be one that has been established and maintained without substantial change for at least the 5 years ending on the date benefit accruals under the defined benefit plan cease (with one year substituted for 5 years in the case of a defined benefit plan of a former employer).

In order to be defined benefit replacement allocations for the plan year, the allocations for each employee in the group must be reasonably calculated, in a consistent manner, to replace the employee's retirement benefits under the defined benefit plan based on the terms of the defined benefit plan (including the section 415(b)(1)(A) limit) as in effect immediately prior to the date accruals under the defined benefit plan cease. In addition, the group of employees who receive the allocations in a plan year must satisfy section 410(b) (determined without regard to the average benefit percentage test of § 1.410(b)-5).

Although the regulations and Rev. Rul. 2001-30 prescribe conditions for the defined benefit replacement allocations, they still leave employers with flexibility in structuring these benefits. For example, there is more than one way in which the allocations may reasonably be calculated, such as a level percentage of pay for each year or an amount that increases as the employee ages.

The final regulations provide special rules applicable to allocations that are either pre-existing replacement allocations or pre-existing merger and acquisition allocations. Allocations are pre-existing replacement allocations if the allocations are provided pursuant to a plan provision adopted before June 29, 2001, are provided to employees who formerly benefitted under a defined benefit plan and are reasonably calculated, in a consistent manner, to replace some or all of the retirement benefits that the employee would have received under the defined benefit plan and any other plan or arrangement of the employer if the employee had continued to benefit under such defined benefit plan and such other plan or arrangement. Allocations are pre-existing merger and acquisition allocations if the allocations were established in connection with a stock or asset acquisition, merger, or other similar transaction occurring prior to August 28, 2001, for a group of employees who were employed by the acquired trade or business prior to a specified date, provided that the class of employees eligible for the allocations is closed no later than two years after the transaction (or January 1, 2002, if earlier), the allocations are provided pursuant to a plan amendment adopted by the date the class was closed, and the allocations for each employee in the group are reasonably calculated, in a consistent manner, to replace some or all of the retirement benefits that the employee would have received under any plan of the employer if the new employer had continued to provide the retirement benefits that the prior employer was providing for employees of the trade or business.

These final regulations provide a separate exception from the application of the minimum allocation gateway for certain plans with age-based allocation rates. This provision incorporates the exception under the proposed regulations for plans with gradual age or service schedules, and expands the exception to include plans that provide for allocation rates based on a uniform target benefit allocation.

A plan has a gradual age or service schedule if the schedule of allocation rates under the plan's formula is available to all employees in the plan and provides for allocation rates that increase smoothly at regular intervals. The rules applicable to the schedule of allocation rates are designed to be sufficiently flexible to accommodate a wide variety of age- or service-based plans (including age-weighted profit-sharing plans that provide for allocations resulting in the same equivalent accrual rate for all employees). The final regulations clarify that a plan projecting future age or service may not use imputed disparity in determining whether the allocation rates under the schedule increase smoothly at regular intervals. In response to comments, the final regulations also accommodate smoothly increasing schedules of allocation rates that are based on the sum of age and years of service. In addition, to conform with the rules for computation of service under § 1.401(a)(4)-12, references to service have been changed to years of service.

The requirement that the allocation rates under a schedule increase smoothly at regular intervals provides important protection for employees, because this requirement limits the exception from the minimum allocation gateway to plans in which NHCEs actually receive the benefit of higher rates as they attain higher ages or complete additional years of service. Some commentators expressed concern that employers could be forced to reduce allocations to younger or shorter-service NHCEs in order to satisfy the conditions for allocation rates that increase smoothly at regular intervals. In response to these comments, the final regulations provide that a plan's schedule of allocation rates does not fail to increase smoothly at regular intervals merely because a specified minimum uniform allocation rate is provided for all employees or because the minimum benefit described in section 416(c)(2) is provided for all non-key employees (either because the plan is top heavy or without regard to whether the plan is top heavy) if one of two alternative conditions is satisfied. These two alternative conditions are intended to limit the potential use of a minimum allocation to provide a schedule of rates that delivers allocations similar to those under a new comparability plan (i.e., a flat allocation rate applicable for all employees below a certain age, followed by a sharply increasing schedule of rates that effectively benefits only HCEs) without satisfying the minimum allocation gateway.

A plan satisfies the first alternative condition if the allocation rates under the plan that exceed the specified minimum rate could form part of a schedule of allocation rates that increase smoothly at regular intervals (as defined in these regulations) in which the lowest allocation rate is at least 1% of plan year compensation. The second alternative condition, available for a plan using an age-based schedule, allows the use of a minimum allocation rate if, for each age band above the minimum allocation rate, the allocation rate applicable for that band is less than or equal to the allocation rate that would yield an equivalent accrual rate at the highest age in the band that is the same as the equivalent accrual rate determined for the oldest hypothetical employee who would receive just the minimum allocation rate. Thus, under this condition, the allocation rates above the minimum allocation rate do not rise more steeply than expected under an age-weighted profit-sharing plan generally intended to provide the same accrual rate at all ages.

The exception to the minimum allocation gateway for plans with age-based allocation rates also applies to certain uniform target benefit plans that do not comply with the safe-harbor testing method provided in § 1.401(a)(4)-8(b)(3). 1 A plan has allocation rates based on a uniform target benefit allocation if it would comply with the requirements for a safe harbor target benefit plan in § 1.401(a)(4)-8(b)(3) except that the interest rate for determining the actuarial present value of the stated plan benefit and the theoretical reserve is lower than a standard interest rate, the stated benefit is calculated assuming compensation increases, or the plan computes the current year contribution using the actual account balance instead of the theoretical reserve.

These regulations prescribe rules for testing defined contribution plans that are aggregated with defined benefit plans for purposes of sections 401(a)(4) and 410(b). These rules apply in situations in which the employer aggregates the plans because one of the plans does not satisfy sections 401(a)(4) and 410(b) standing alone. These rules do not apply to safe harbor floor-offset arrangements described in § 1.401(a)(4)-8(d), or to the situation in which plans are aggregated solely for purposes of satisfying the average benefit percentage test of § 1.410(b)-5.

These regulations retain the rule of the proposed regulations that the combination of a defined contribution plan and a defined benefit plan may demonstrate nondiscrimination on the basis of benefits if the combined plan (the DB/DC plan) is primarily defined benefit in character, consists of broadly available separate plans (as these terms are defined in the regulations), or satisfies a minimum aggregate allocation gateway requirement that is generally similar to the minimum allocation gateway for defined contribution plans that are not combined with a defined benefit plan.

In order to apply this minimum aggregate allocation gateway, the employee's aggregate normal allocation rate is determined by adding the employee's allocation rate under the defined contribution plan to the employee's equivalent allocation rate under the defined benefit plan. This aggregation allows an employer that provides NHCEs with both a defined contribution and a defined benefit plan to take both plans into account in determining whether the minimum aggregate allocation gateway is met.

Under the gateway, if the aggregate normal allocation rate of the HCE with the highest aggregate normal allocation rate under the plan (HCE rate) is less than 15%, the aggregate normal allocation rate for all NHCEs must be at least one-third of the HCE rate. If the HCE rate is between 15% and 25%, the aggregate normal allocation rate for all NHCEs must be at least 5%. If the HCE rate exceeds 25%, then the aggregate normal allocation rate for each NHCE must be at least 5% plus one percentage point for each 5-percentage-point increment (or portion thereof) by which the HCE rate exceeds 25% ( e.g., the NHCE minimum is 6% for an HCE rate that exceeds 25% but not 30%, and 7% for an HCE rate that exceeds 30% but not 35%).

Several commentators expressed a concern that the minimum aggregate allocation gateway in the proposed regulations could require contributions for NHCEs that would make DB/DC plans too expensive for employers in certain circumstances. This could occur in cases where one HCE had a very high equivalent allocation rate on account of age or some other factor, and could prompt such an employer to redesign its plans in ways that could disadvantage NHCEs. In response to these comments, these final regulations provide that a plan is deemed to satisfy this minimum aggregate allocation gateway if the aggregate normal allocation rate for each NHCE is at least 7 1/2 % of compensation within the meaning of section 415(c)(3), determined over a period otherwise permissible under the timing rules applicable under the definition of plan year compensation.

These regulations retain the rule that, in determining the equivalent allocation rate for an NHCE under a defined benefit plan, a plan is permitted to treat each NHCE who benefits under the defined benefit plan as having an equivalent allocation rate equal to the average of the equivalent allocation rates under the defined benefit plan for all NHCEs benefitting under that plan. This averaging rule recognizes the grow-in feature inherent in traditional defined benefit plans ( i.e., the defined benefit plan provides higher equivalent allocation rates at higher ages).

Like the proposed regulations, these final regulations provide that a DB/DC plan that is primarily defined benefit in character is not subject to the gateway requirement and may continue to be tested for nondiscrimination on the basis of benefits as under former law. A DB/DC plan is primarily defined benefit in character if, for more than 50% of the NHCEs benefitting under the plan, the normal accrual rate attributable to benefits provided under defined benefit plans for the NHCE exceeds the equivalent accrual rate attributable to contributions under defined contribution plans for the NHCE. For example, a DB/DC plan is primarily defined benefit in character where the defined contribution plan covers only salaried employees, the defined benefit plan covers only hourly employees, and more than half of the NHCEs participating in the DB/DC plan are hourly employees participating only in the defined benefit plan.

Some comments suggested a loosening of the standard as to when a DB/DC plan is primarily defined benefit in character, but no changes have been made. The Treasury and IRS believe that the determination of whether a DB/DC plan is primarily defined benefit in character should be based on the relative size of the defined benefit accruals and the defined contribution allocations for individual employees, as reflected in the actual benefits testing that is being done under section 401(a)(4). In particular, the actuarial assumptions used to determine whether a DB/DC plan is primarily defined benefit in character must be the same assumptions that are used to apply the cross-testing rules.

Like the proposed regulations, these final regulations provide that a DB/DC plan that consists of broadly available separate plans may continue to be tested for nondiscrimination on the basis of benefits as under current law, even if it does not satisfy the gateway requirement. A DB/DC plan consists of broadly available separate plans if the defined contribution plan and the defined benefit plan, tested separately, would each satisfy the requirements of section 410(b) and the nondiscrimination in amount requirement of § 1.401(a)(4)-1(b)(2), assuming satisfaction of the average benefit percentage test of § 1.410(b)-5. Thus, the defined contribution plan must separately satisfy the nondiscrimination requirements (taking into account these regulations as applicable), but for this purpose assuming satisfaction of the average benefit percentage test. Similarly, the defined benefit plan must separately satisfy the nondiscrimination requirements, assuming for this purpose satisfaction of the average benefit percentage test. In conducting the required separate testing, all plans of a single type (defined contribution or defined benefit) within the DB/DC plan are aggregated, but those plans are tested without regard to plans of the other type.

This alternative is useful, for example, where an employer maintains a defined contribution plan that provides a uniform allocation rate for all covered employees at one business unit and a safe harbor defined benefit plan for all covered employees at another unit, and where the group of employees covered by each of those plans is a group that satisfies the nondiscriminatory classification requirement of section 410(b). Because the employer provides broadly available separate plans, it may continue to aggregate the plans and test for nondiscrimination on the basis of benefits, as an alternative to using the qualified separate line of business rules or demonstrating satisfaction of the average benefit percentage test.

As under the proposed regulations, the rules set forth in these final regulations cannot be satisfied using component plans under the restructuring rules. Although some commentators requested that restructuring be permitted for this purpose, the IRS and Treasury have determined that such use of component plans would be inconsistent with the purpose of these regulations.

These regulations apply for plan years beginning on or after January 1, 2002.

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 regulation does 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, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal authors of these regulations are John T. Ricotta and Linda S. F. Marshall of the Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and Treasury participated in their development.

In section 4(e) of Public Law 106-404, the Technology Transfer Commercialization Act of 2000, signed by the President on November 1, 2000, agencies are now required to give the public notice of at least 15 days before granting an exclusive or partially exclusive license on a federally owned invention. This is reflected in revisions to 37 CFR 404.7(a)(1)(i) and (b)(1)(i). One of the reasons for the minimum notice was a concern that the granting of exclusive licenses was being unnecessarily delayed by the 60 day notice period prescribed by the current regulations. Although agencies may now issue shorter notices, they are expected to balance the need for promptness against the statutory purpose of ensuring that Government inventions are used to benefit the public.

Public Law 106-404 makes other changes to 35 U.S.C. 209 which will be separately addressed in a proposed rule.

In addition, the rule now cites 35 U.S.C. 208, instead of 35 U.S.C. 206, as the correct authority for the Department of Commerce over the patent licensing regulation. The rule also cites section 3(d)(3) of DOO 10-18, instead of section 3(g), for the specific delegation to the Assistant Secretary of Commerce for Technology Policy. Under the authority of 35 U.S.C. 208 and the delegation by the Secretary of Commerce in section 3(d)(3) of DOO 10-18, the Assistant Secretary of Commerce for Technology Policy may issue revisions to 37 CFR Part 404.

Administrative Procedure Act: Pursuant to 5 U.S.C. 553(b)(B), the Assistant Secretary of Commerce for Technology Policy finds good cause to waive the requirement to provide prior notice and an opportunity for public comment as being unnecessary. This regulation incorporates the language of the statue, verbatim. The Technology Administration is exercising no discretion for which public comment would serve a useful purpose and has no authority to change the statutory requirement.

This rule has been determined not to be significant for purposes of Executive Order 12866 (58 FR 51735, October 4, 1993).

This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, this rule not subject to the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

This rule does not impose any collection of information requirements under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ). However, OMB approval was recently obtained for the application for a license and the utilization reports. The number is 0692-0006 an expires on June 30, 2003.

This action is directed to the public in general. This action may, however, be of interest to those persons who are concerned about OMB approval for information collections required by EPA regulations. Since other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, consult the technical person listed under FOR FURTHER INFORMATION CONTACT .

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/. A frequently updated electronic version of 40 CFR part 9 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr9_00.html, a beta site currently under development.

This document updates the OMB control numbers listed in 40 CFR part 9 for various actions published in the Federal Register since July 1, 2000, and issued under the Toxic Substances Control Act (TSCA) (15 U.S.C. 2601) and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (7 U.S.C. 136 et seq .). EPA will continue to present OMB control numbers in a consolidated table format in 40 CFR part 9 of the Agency's regulations. The table lists Code of Federal Regulations (CFR) citations with reporting, recordkeeping, or other information collection requirements that require OMB approval under the PRA (44 U.S.C. 3501 et seq .), and the current OMB control numbers. This listing of the OMB control numbers and their subsequent codification in the CFR satisfies the requirements of the PRA and OMB's implementing regulations at 5 CFR part 1320.

Under PRA, the information collection requirements included in this document were previously subject to public notice and comment prior to OMB approval, either as part of the OMB approval process or as part of a rulemaking. Therefore, EPA finds that publication of a proposed rule is unnecessary and would waste public tax dollars. This technical amendment is effective upon publication under the “good cause” clause found in section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)(3)(B)) which allows a regulatory action to become final without prior notice and comment.

Because this action is not economically significant as defined by section 3(f) of Executive Order 12866, this action is not subject to Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997).

This action will not result in environmental justice related issues and does not therefore, require special consideration under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994).

Since the Agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the APA or any other statute (see Unit II.B.), this action is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq .), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Similarly, this rule will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000).

This action does not involve any technical standards that require the Agency's 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).

This rule does not contain any information collection requirements that require review and approval by OMB pursuant to the PRA. The collection activities associated with the OMB control numbers contained in this document have already been approved by OMB.

In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988, entitled Civil Justice Reform (61 FR 4729, February 7, 1996).

As a technical amendment to the CFR, the requirements of Executive Order 12630, entitled Governmental Actions and Interference with Constitutionally Protected Property Rights (53 FR 8859, March 15, 1988), which requires an agency to examine the takings implications of a rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the Executive Order, does not apply to this action.

This rule is not subject to Executive Order 13211, entitled Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001), because this action is not a significant regulatory action under Executive Order 12866.

The Congressional Review Act (CRA), 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. CRA section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement (5 U.S.C. 808(2)). As stated previously, EPA has made such a good cause finding, including the reasons therefore, and established an effective date of June 29, 2001. 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 rule in the Federal Register . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

Regulated entities. Entities that will potentially be affected by these corrections are those that process, upgrade, or store hydrocarbon liquids; or process, upgrade, store, or transport natural gas and are major sources of HAP as defined in section 112 of the Clean Air Act (CAA). The regulated categories and entities include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that we are now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your facility, company, business, organization, etc., is regulated by this action, you should carefully examine the applicability criteria in §§ 63.760 and 63.1270 of the Oil and Gas NESHAP. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

World Wide Web (WWW). The text of today's document will also be available on the WWW through the Technology Transfer Network (TTN). Following signature, a copy of this action will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules.

http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. If more information regarding the TTN is needed, call the TTN HELP line at (919) 541-5384.

Today's action consists of editorial, cross-referencing and clarifying corrections to the Oil and Gas NESHAP that was promulgated on June 17, 1999 (64 FR 32610). These editorial, cross-referencing and clarifying corrections are minor in nature and are noncontroversial. As an example of the editorial corrections, we have replaced the phrase “storage tank” or “tank” with “storage vessel.” We have removed the definition of relief device since it is not used in the Oil and Gas NESHAP. We have corrected a reporting requirement by replacing “operating days” with “calendar days” as it applies to the submission of Periodic Reports. Cross-referencing errors were corrected as applicable.

Some of the corrections in today's action are being made to clarify our intent in the promulgated rule. The following paragraphs present these changes and our rationale for making the changes.

Applicability. As promulgated, subparts HH and HHH (§§ 63.760(a)(1) and 63.1270(a)) require facilities that operate at or near their design throughput to use a throughput that is higher than their design maximum to calculate potential-to-emit (PTE). This outcome was not intended and is not consistent with the General Provisions (40 CFR part 63, subpart A) in which PTE is defined to be “the maximum capacity of a stationary source to emit a pollutant under its physical and operational design.” Therefore, we have added text to §§ 63.760(a)(1) and 63.1270(a) clarifying that owners and operators still have the option of using design maximum natural gas or hydrocarbon liquid throughput to estimate maximum PTE.

Section 63.1270(a) states that a “compressor station that transports natural gas prior to the point of custody transfer, or to a natural gas processing plant (if present) is considered a part of the oil and natural gas production source category.” Our intent was to exclude a compressor station that transports natural gas prior to the point of custody transfer, or to a natural gas processing plant (if present) from the transmission and storage source category. Therefore, to clarify our intent, we have modified § 63.1270(a) to state that a “compressor station that transports natural gas prior to the point of custody transfer, or to a natural gas processing plant (if present) is not considered a part of the natural gas transmission and storage source category.”

Section 63.1270(a)(1) contains a set of five equations that an owner or operator could use in sequence to estimate maximum facility natural gas throughput. We have modified § 63.1270(a)(1) by replacing the five equations with one equation, yielding the same result.

Definitions. We have reworded the definition of custody transfer in § 63.1271 by removing the phrase “* * * from storage vessels or automatic transfer facilities, or other equipment, including product loading racks, to pipelines or any other forms of transportation.”

The definition of major source in subpart HH was confusing because it was unclear that facilities that are not production field facilities (i.e., facilities located after the point of custody transfer) are required to aggregate HAP emissions from all HAP emission units for the major source determination. This is consistent with our interpretation of the associated equipment terminology in section 112(n)(4) of the CAA (64 FR 32618). We have added a sentence to the definition of major source in § 63.761 to read: “For facilities that are not production field facilities, HAP emissions from all HAP emission units shall be aggregated for a major source determination.”

Startups, shutdowns, and malfunctions. Sections 63.762 and 63.1272 of the Oil and Gas NESHAP require owners and operators to prepare startup, shutdown and malfunction plans, but do not provide an exemption for facilities that were subject to the rule but had no requirements (e.g., a natural gas processing plant, that was a major source, that has a dehydration unit with a throughput less than 18.4 thousand standard cubic meters per day would be subject to the rule, but would have no control requirements). A startup, shutdown and malfunction plan would serve little purpose if there were no emission limit; therefore, today's action clarifies that facilities meeting the exemption criteria specified in §§ 63.764(e) and 63.1274(d) are not required to prepare a startup, shutdown and malfunction plan.

Test methods, compliance procedures, and compliance demonstrations. Sections 63.772(e)(1) and 63.1282(d)(1) provide exemptions from conducting performance tests under those sections for certain specified control devices, including flares. However, §§ 63.772(e)(2) and 63.1282(d)(2) require an owner or operator to comply with § 63.11(b), which contains testing requirements for flares. Flares are not exempt from the testing requirements in § 63.11(b), but are exempt from the performance test requirements in §§ 63.772(e) and 63.1282(d). Therefore, today's action clarifies that intent by modifying §§ 63.772(e)(1)(i) and 63.1282(d)(1)(i) to state that except as specified in paragraph (e)(2) (or paragraph (d)(2) for subpart HHH), a flare designed and operated in accordance with § 63.11(b) of the General Provisions is exempt from the performance testing requirements of the subpart(s).

Also, §§ 63.772(e)(3) and 63.1282(d)(3) state that the performance test must be subject to the schedule specified in § 63.7(a)(2), meaning that the performance test results would be due 240 days after the effective date of the rule, but §§ 63.775(d) and 63.1285(d) require the results to be submitted in the notification of compliance status report, 180 days after the effective date of the rule. To correct this inconsistency, today's action modifies §§ 63.772(e)(3) and 63.1282(d)(3) to clarify that the performance test results must be submitted with the notification of compliance status report, but does not require owners or operators to follow the schedule specified in § 63.7(a)(2) of the General Provisions.

Finally, the Oil and Gas NESHAP allow an owner or operator to use GRI-GLYCalc TM in conjunction with the Atmospheric Rich/Lean Method to determine condenser performance as an alternative to the performance test procedures (§§ 63.772(e)(5) and 63.1282(d)(5)). The results from the GRI-GLYCalc TM program (i.e., uncontrolled emissions) are the same, regardless of control device type. Therefore, today's action modifies §§ 63.772(e)(3)(iii)(B) and 63.1282(d)(3)(iii)(B) to allow owners or operators to use GRI-GLYCalc TM to determine uncontrolled emissions.

Inspection and monitoring requirements. Under §§ 63.775(d) and 63.1285(d), the owner or operator is required to submit a notification of compliance status report that contains information in § 63.775(d)(1) through (12) in addition to the information in § 63.9(h). Section 63.9(h)(2)(i)(B) of the General Provisions requires the owner or operator to submit “the results of any * * * monitoring procedures or other methods that were conducted * * *” to demonstrate compliance with the standards. Today's action modifies §§ 63.773(c)(2), 63.775(d), 63.1283(c)(2) and 63.1285(d) to clarify that the owner or operator must submit inspection results without having to refer to the General Provisions.

Similarly, §§ 63.775(e) and 63.1285(e) require the owner or operator to submit periodic inspection results in the Periodic reports. Today's action modifies §§ 63.773(c)(2) and 63.1283(c)(2) to refer the reader to the reporting requirements.

We made an error in § 63.773(d)(5) by stating that the owner or operator must comply with § 63.773(d)(5)(i) for all control devices “except for condensers.” Section § 63.773(d)(5)(i) applies to all control devices, and owners and operators that install condensers must also comply with § 63.773(d)(5)(ii). Therefore, today's action removes the phrase “* * * except for condensers* * *” from § 63.773(d)(5).

Flare monitoring devices cannot calculate a daily average or a minimum or maximum operating value because they merely indicate that the pilot flame is either on or off. Therefore, today's action adds language to §§ 63.773(d) and 63.1283(d) clarifying that flares are exempt from calculating daily averages and minimum or maximum operating values.

We were not clear in § 63.773(d)(6)(iv) in stating that data available for less than 75 percent of the operating hours constitutes an excursion. Since averaging periods for demonstrating condenser compliance with the 95 percent control requirement can be either on a daily basis or 365-day basis, not specifying the period over which the data sufficiency criteria are evaluated could cause confusion. Therefore, today's action modifies § 63.773(d)(6)(iv) to clarify that an excursion occurs when the data are available for less than 75 percent of the operating hours in a day.

Reporting requirements. Section 63.10(c)(8) of the General Provisions requires an owner or operator to report excess emissions and parameter monitoring exceedances as defined in the relevant standard. As promulgated, §§ 63.775(e)(2)(i) and 63.1285(e)(2)(i) state that excess emissions are excursions. Therefore, since times when the pilot flame is absent would be a parameter monitoring excursion, reporting of the periods when the pilot flame is absent is required under the General Provisions. Today's action lists that requirement in §§ 63.775(e)(x) and 63.1285(e)(ix).

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget (OMB). Because the EPA has made a “good cause” finding that this action is not subject to notice and comment requirements under the Administrative Procedure Act or any other statute, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of the UMRA. This action also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13175 (65 FR 67249, November 6, 2000). These technical corrections do not have substantial direct effects on the States, or on the relationship between the national government and the States, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). These technical corrections also are not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because they are not economically significant.

This technical correction action does not involve technical standards; thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) of 1995 (15 U.S.C. 272) do not apply. These technical corrections also do not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing these technical corrections, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). The EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of these rule amendments in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the Executive Order. This technical correction does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). The EPA's compliance with these statutes and Executive Orders for the underlying rule is discussed in the June 17, 1999 Federal Register notice containing the Oil and Natural Gas Production final rule and Natural Gas Transmission and Storage final rule.

The Congressional Review Act (CRA) (5 U.S.C. 801 et seq. ), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement (5 U.S.C. 808(2)). As stated previously, EPA has made such a good cause finding, including the reasons therefor, and established an effective date of June 29, 2001. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Non-transportation related facilities handling, storing, or transporting oil that are considered “significant and substantial harm,” as well as certain other facilities designated by the Regional Administrator, must submit Facility Response Plans (FRPs) to the Agency. The Agency included in the final rule a more detailed description of which facilities are potentially affected by this action. 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” 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 SPCC-9P. The official record consists of the documents specifically referenced in this action, any public comments received during an applicable comment period, 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 Superfund Docket, Suite 105, 1235 Jefferson Davis Highway, Crystal Gateway I, Arlington, VA 22202. You may inspect the docket between 9 a.m. and 4 p.m., Monday through Friday, excluding Federal holidays; and you may make an appointment to review the docket by calling 703-603-9232. You may copy a maximum of 266 pages from any regulatory docket at no cost. If the number of pages copied exceeds 266, however, you will be charged an administrative fee of $25 and a charge of $0.15 per page for each page after 266. The docket will mail materials to you if you are outside of the Washington, DC metropolitan area.

A final rule revising the facility response plan requirements for non-transportation related facilities handling, storing, or transporting animal fats or vegetable oils was published in the Federal Register of June 30, 2000 (65 FR 40776). This correction is being published to:

Correct minor typographical errors in §§ 112.20 and 112.21, and appendix E;

Correct the inadvertent reference to “petroleum oils” in section 8.2.1 of appendix E (this section is about animal fats and vegetable oils rather than petroleum oils, as shown in the title in section 8.0);

Remove inconsistent language and combine sections 9.2 and 9.2.1 of appendix E, which describe USCG planning levels corresponding to EPA's medium discharge;

Clarify that the first line of the table in section 10.5.2 of appendix E contains the factor by which you multiply the planning volume on water (a multiplication sign was inadvertently omitted);

Correct the inadvertent omission of the operating area “Great Lakes” in the column heading with Nearshore and Inland on Table 2 to appendix E;

Correct the USCG fax number in section 1.8.3 of appendix F.

EPA is publishing this action as a final rule without prior notice and opportunity to comment because the Agency believes that providing notice and an opportunity to comment is unnecessary and would be contrary to the public interest. As explained above, the correction contained in this action will simply correct § 112.20 and its appendices by correcting typographical errors, removing inconsistent rule language, and changing incorrect references in the rule. EPA therefore finds that there is “good cause” under section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 553) to make this amendment without prior notice and comment.

No. This final rule implements technical corrections to the Code of Federal Regulations (CFR), and does not impose any new requirements.

Under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993), the Office of Management and Budget (OMB) has determined that a technical correction is not a “significant regulatory action” subject to review by OMB.

Because this action is not economically significant as defined by section 3(f) of Executive Order 12866, this action is not subject to Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997).

This action will not result in environmental justice related issues and does not, therefore, require special consideration under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994).

Since the Agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the APA or any other statute (see Unit IV.), this action is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.”

This final rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. This is so because this final rule only corrects mistakes in a rule which EPA issued in June 2000. It imposes no new regulatory requirements; nor does the rule announce new policies. Thus, Executive Order 13175 does not apply to this rule.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999).

This action does not involve any technical standards that require the Agency's 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).

This rule does not contain any information collection requirements that require review and approval by OMB pursuant to the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.).

EPA's compliance with these statutes and Executive Orders for the underlying rule is discussed in section IV (Regulatory Analyses) of the final rule (65 FR 40776, June 30, 2000).

Yes. The Congressional Review Act (CRA) (5 U.S.C. 801 et seq. ), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement. 5 U.S.C. 808(2). As stated previously, EPA has made such a good cause finding, including the reasons therefore, and established an effective date of June 29, 2001. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

You may be potentially 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/. A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html, a beta site currently under development.

2. In person . The Agency has established an official record for this action under docket control number OPP-301143. 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, 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, on its own initiative, in accordance with sections 408(e) and 408 (l)(6) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, is establishing a tolerance for combined residues of the insecticide bifenazate, (hydrazine carboxylic acid, 2-(4-methoxy-[1,1'-biphenyl]-3-yl-, 1-methylethyl ester) and diazenecarboxylic acid, 2-(4-methoxy-[1,1'-biphenyl]-3-yl-, 1-methylethyl ester, in or on tomato at 0.70 part per million (ppm). This tolerance will expire and is revoked on June 30, 2003. EPA will publish a document in the Federal Register to remove the revoked tolerance from the Code of Federal Regulations.

Section 408(l)(6) of the FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under section 18 of FIFRA. Such tolerances can be established without providing notice or period for public comment. EPA does not intend for its actions on section 18 related tolerances to set binding precedents for the application of section 408 and the new safety standard to other tolerances and exemptions. Section 408(e) of the FFDCA allows EPA to establish a tolerance or an exemption from the requirement of a tolerance on its own initiative, i.e., without having received any petition from an outside party.

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. . . .”

Section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) authorizes EPA to exempt any Federal or State agency from any provision of FIFRA, if EPA determines that “emergency conditions exist which require such exemption.” This provision was not amended by the Food Quality Protection Act (FQPA). EPA has established regulations governing such emergency exemptions in 40 CFR part 166.

Texas has the greatest acreage of tomatoes under greenhouse production in the United States. Major production facilities are located in Jefferson Davis, Presidio, Atascosa, Frio, Limestone, Russ, Dallas, Tarrant, Willbarger, Commanche, and Lubbock counties. Small scale production facilites are located throughout the state. Virginia has approximately 50 acres of greenhouse tomatoes.

Greenhouse tomatoes are indeterminate varieties so production can be continuous. In general, most production facilities are planted twice annually. In the past 3 years there has been a continuing trend of greater early season pest mite densities. Spider mites feeding on the underside of leaves usually results in leaf yellowing and browning, but with high densities can result in plant death. Acaricides used to control spider mites must be efficacious over a wide range of pest mite species and should be effective against all life stages (egg to adult). In addition, maintenance of natural beneficial predatory mite species is desired for development of integrated pest management (IPM) programs. Bifenazate has been shown in tests on other crops to fulfill these requirements.

Numerous spider mites species can be pests in greenhouse tomato production. Nine insecticides are registered for mite control on greenhouses tomatoes. However, each of these has limited efficacy or does not fit into a continuous harvest operation or IPM program. Dicofol, endosulfan, malathion, dimethoate, and disulfoton are not effective against all pest mite species and are hard on beneficials. Due to the lack of efficacy against a broad spectrum of mites, use of these acaricides may require augmentation with additional insecticides in order to control multiple pest species. Use of these insecticides would disrupt the ongoing biological control programs established for other tomato pests (i.e. it would take 2-8 weeks to re-establish beneficial populations to acceptable levels).

Abamectin has good efficacy but the extended REI (7 days) and PHI (7 days) make it impractical for use in indeterminate tomato production. Cinnamaldehyde is only moderately efficacious and can be phytotoxic to some tomato plants. Neem and M-pede (insecticidal soap) are only useful for spotty outbreaks where individual plants can be treated as both products cause leaf scorch.

No effective non-chemical practices are available which would provide adequate control of spider mites in greenhouse tomato production. Biological agents can provide some benefits but their use is minimal due to unfavorable economics, slow activity, difficulty to use, and host selectivity. Mite pest species are often capable of increasing population densities faster than the associate biological control agents, resulting in crop loss. In order to produce a high value tomato crop, growers must combine selective insecticides with biological control agents.

During the 2001 growing season for greenhouse tomato production, growers could possibly incur up to a 25% yield loss from spider mite infestation. EPA has authorized under FIFRA section 18 the use of bifenazate on tomato for control of spider mites in Texas and Virginia. After having reviewed the submission, EPA concurs that emergency conditions exist in these states.

As part of its assessment of this emergency exemption, EPA assessed the potential risks presented by residues of bifenazate in or on tomato. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and EPA decided that the necessary tolerance under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. Consistent with the need to move quickly on the emergency exemption in order to address an urgent non-routine situation and to ensure that the resulting food is safe and lawful, EPA is issuing this tolerance without notice and opportunity for public comment as provided in section 408(l)(6). Although this tolerance will expire and is revoked on June 30, 2003, under FFDCA section 408(l)(5), residues of the pesticide not in excess of the amounts specified in the tolerance remaining in or on tomato after that date will not be unlawful, provided the pesticide is applied in a manner that was lawful under FIFRA, and the residues do not exceed a level that was authorized by this tolerance at the time of that application. EPA will take action to revoke this tolerance earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.

Because this tolerance is being approved under emergency conditions, EPA has not made any decisions about whether bifenazate meets EPA's registration requirements for use on tomato or whether a permanent tolerance for this use would be appropriate. Under these circumstances, EPA does not believe that this tolerance serves as a basis for registration of bifenazate by a State for special local needs under FIFRA section 24(c). Nor does this tolerance serve as the basis for any State other than Texas and Virginia to use this pesticide on this crop under section 18 of FIFRA without following all provisions of EPA's regulations implementing section 18 as identified in 40 CFR part 166. For additional information regarding the emergency exemption for bifenazate, contact the Agency's Registration Division at the address provided under FOR FURTHER INFORMATION CONTACT .

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 bifenazate and to make a determination on aggregate exposure, consistent with section 408(b)(2), for a time-limited tolerance for combined residues of bifenazate in or on tomato at 0.70 ppm. EPA's assessment of the dietary exposures and risks associated with establishing the tolerance follows.

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 endpoint. 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. Discuss any additional uncertainty factors (other than the FQPA SF) used in the assessment.

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 level of concern (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 x 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 bifenazate used for human risk assessment is shown in the following Table 1.

1. Dietary exposure from food and feed uses. Bifenazate is currently only registered for use on ornamental plants and trees. Therefore, there are no tolerances established for the combined residues of bifenazate, in or on any raw agricultural commodities. This is the first food use for bifenazate. Risk assessments were conducted by EPA to assess dietary exposures from bifenazate 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 one day or single exposure. An acute dietary endpoint for females 13-50 years old or the general U.S. population was not selected due to the absence of an effect of concern occurring as a result of a one day or single exposure.

ii. Chronic exposure . In conducting this chronic dietary risk assessment 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 following assumptions were made for the chronic exposure assessments: Tolerance level residues, 100% crop treated, and DEEM® default processing factors for all proposed commodities.

iii. Cancer . Bifenazate has been classified as “not likely” to be a human carcinogen based on carcinogenicity studies in mice and rats in which there was an absence of treatment-related tumors.

2. Dietary exposure from drinking water . The emergency exemption request is for the use of bifenazate on tomatoes grown in greenhouses and therefore, is not expected to have an impact on drinking water. However, the current registration for application of bifenazate to public, commercial, industrial, and institutional areas may impact drinking water resources.

The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for bifenazate 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 bifenazate.

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 Screening Concentrations in Ground Water (SCI-GROW), which predicts pesticide concentrations in ground water. In general, EPA will use GENEEC (a tier 1 model) before using PRZM/EXAMS (a tier 2 model) for a screening-level assessment for surface water. The GENEEC model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. GENEEC incorporates a farm pond scenario, while PRZM/EXAMS incorporate an index reservoir environment in place of the previous pond scenario. The PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.

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

Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or %PAD. Instead, drinking water levels of comparison (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 bifenazate they are further discussed in the aggregate risk sections below.

Based on the GENEEC and SCI-GROW models the estimated environmental concentrations (EECs) of bifenazate for chronic exposures are estimated to be 0.02 parts per billion (ppb) for surface water and 0.02 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).

Bifenazate is currently registered for use on the following residential non-dietary sites: Ornamental plants and trees. The risk assessment was conducted using the following exposure assumptions: there is a potential for residential exposures, including homeowner applicator exposure and postapplication exposures, for the currently registered uses of bifenazate. However, since broad spectrum insecticides are generally used in the residential setting, application of bifenazate (a selective insecticide) by a homeowner is expected to be limited. Nevertheless, a homeowner applicator is anticipated to have short-term dermal and inhalation exposures. Exposure estimates were based on the applicator wearing short pants and short sleeves.

The registered use of bifenazate on ornamentals is also expected to result in residential post-application exposure. The exposure estimate for homeowners and children was based on the default assumptions for treatment to garden plants from the Agency's Standard Operating Procedures (SOPs) for Residential Exposure Assessment (December 18, 1997). Only short-term dermal exposures are anticipated.

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 bifenazate 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, bifenazate 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 bifenazate has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the final rule for Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997).

1. 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. Developmental toxicity studies . In a developmental toxicity study in rats the maternal toxicity NOAEL was 10 mg/kg/day based on clinical signs and decreased body weight gains and food consumption at the LOAEL of 100 mg/kg/day. The developmental NOAEL was greater than 500 mg/kg/day (HDT) and the developmental LOAEL was not established. Therefore, there were no developmental effects observed in the presence of maternal toxicity in this study.

In a developmental toxicity study in rabbits there were no toxic effects up to the highest dose tested of 200 mg/kg/day in either the maternal animals or the fetuses. Although no toxicity was observed in this study, sufficient evidence of adequate dose selection was based on a range-finding study which was performed at doses of 0, 125, 250, 500, 750, or 1,000 mg/kg/day. Abortions were seen at 250 mg/kg/day and above and deaths and decreased body weight were seen at 750 mg/kg/day and 1,000 mg/kg/day. Based on these results, doses of 10, 50, and 200 mg/kg/day were selected for the main study.

iii. Reproductive toxicity study . In a 2-generation reproductive toxicity study in rats, the parental toxicity NOAEL was 20 ppm (equivalent to 1.6/1.8 mg/kg/day M/F) based on decreased body weight and cumulative weight gain in males and females at the LOAEL of 80 ppm (equivalent to 6.5/7.4 mg/kg/day M/F). The NOAEL for offspring toxicity and reproductive toxicity was 200 ppm (equivalent to 16.4/18.3 mg/kg/day M/F) which was the highest dose tested. A LOAEL for offspring toxicity and reproductive toxicity was not established.

iv. Prenatal and postnatal sensitivity. Based on the results of the developmental and reproduction studies, there is no indication of increased sensitivity in rats or rabbits to in utero and/or postnatal exposure to bifenazate.

v. Conclusion . There were no developmental or reproductive effects observed in the presence of maternal toxicity. However, bifenazate has not been evaluated by the Agency's FQPA Safety Factor Committee. Therefore, for the purposes of this emergency exemption, the FQPA safety factor of 10X, to protect infants and children has been retained for all dietary and residential risk assessments.

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 + chronic non-dietary, non-occupational 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 ground water are less than the calculated DWLOCs, the Office of Pesticide Programs (OPP) concludes with reasonable certainty that exposures to bifenazate 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 bifenazate on drinking water as a part of the aggregate risk assessment process.

1. Acute risk . An acute dietary endpoint for females 13-50 years old or the general U.S. population was not selected due to the absence of an effect of concern in studies conducted for bifenazate occurring as a result of a one day or single exposure. Therefore, no acute dietary risk assessments were conducted for bifenazate.

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to bifenazate from food will utilize 29% of the cPAD for the U.S. population, 6% of the cPAD for infants and 43% of the cPAD for children (7-12 years old), the most highly exposed subgroup. Based the use pattern, chronic residential exposure to residues of bifenazate is not expected. In addition, despite the potential for chronic dietary exposure to bifenazate in drinking water, after calculating DWLOCs and comparing them to conservative model estimated environmental concentrations of bifenazate in surface and ground water, EPA does not expect the aggregate exposure to exceed 100% of the cPAD, as shown in the following Table 2.

3. Short-term risk . Short-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Bifenazate is currently registered for use(s) that could result in short-term residential exposure and the Agency has determined that it is appropriate to aggregate chronic food and water and short-term exposures for bifenazate.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded that food and residential exposures aggregated result in aggregate MOEs of 1,300 to 1,500 for short-term dermal, inhalation and incidental oral exposures. These aggregate MOEs do not exceed the Agency's level of concern for aggregate exposure to food and residential uses. In addition, short-term DWLOCs were calculated and compared to the EECs for chronic exposure of bifenazate in ground water and surface water. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect short-term aggregate exposure to exceed the Agency's level of concern, as shown in the following Table 3.

4. Intermediate-term risk . Intermediate-term aggregate exposure takes into account non-dietary, non-occupational exposure plus chronic exposure to food and water (considered to be a background exposure level). Though residential exposure could occur with the use of bifenazate, currently, only short-term dermal and short-term inhalation residential exposures are expected. Therefore, an aggregate risk assessment for intermediate-term exposures was not conducted.

5. Aggregate cancer risk for U.S. population . Bifenazate has been classified as “not likely” to be a human carcinogen based on carcinogenicity studies in mice and rats in which there was an absence of treatment-related tumors. Therefore, an aggregate risk assessment to estimate cancer risk was not conducted.

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

Adequate enforcement methodology (multiresidue method) is available to enforce the tolerance expression. The method may be requested from: Calvin Furlow, PIRIB, IRSD (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 305-5229; e-mail address: furlow.calvin@epa.gov.

There is neither a Codex proposal, nor Canadian or Mexican limits, for residues of bifenazate and its metabolite in or on tomato. Therefore, harmonization is not an issue for this use.

The request is for application to greenhouse grown tomatoes. Therefore, rotational crop restrictions are not relevant for the greenhouse. A maximum of two applications per crop are permitted and the seasonal rate is not to exceed 0.50 lbs active ingredient per acre. The product is not to be applied within 3 days of harvest.

Therefore, the tolerance is established for combined residues of bifenazate, (hydrazine carboxylic acid, 2-(4-methoxy-[1,1'-biphenyl]-3-yl-, 1-methylethyl ester) and diazenecarboxylic acid, 2-(4-methoxy-[1,1'-biphenyl]-3-yl-, 1-methylethyl ester, in or on tomato at 0.70 ppm.

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

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-301143 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 August 28, 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 VII.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 the docket control number OPP-301143, 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 or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

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

This final rule establishes a time limited tolerance under FFDCA section 408. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any other Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104--113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a FIFRA section 18 exemption under FFDCA section 408, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

This is a summary of the Commission's Order on Reconsideration, CS Dkt. Nos. 97-98 and 97-151, FCC 01-170, adopted May 22, 2001; release May 25, 2001. The full text of the Commission's Order on Reconsideration is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257) at its headquarters, 445 12th Street, SW., Washington, DC 20554, or may be purchased from the Commission's copy contractor, International Transcription Service, Inc., (202) 857-3800, 1231 20th Street, NW., Washington, DC 20036, or may be reviewed via Internet at http://www.fcc.gov/csb/.

The requirements adopted in the Order on Reconsideration have been analyzed with respect to the Paperwork Reduction Act of 1995 (“1995 Act”) and found to impose no new or modified information collection requirements on the public.

1. This Order on Reconsideration grants in part and denies in part petitions for reconsideration and/or clarification of Report and Order, Implementation of Section 703(e) of the Telecommunications Act of 1996, Amendment to the Commission's Rules and Policies Governing Pole Attachments, CS Docket No. 97-151, FCC 98-20, 63 FR 12013, published March 12, 1998, 13 FCC Rcd 6777 (1998) (“Telecom Order”) and Report and Order, Amendment of Rules and Policies Governing Pole Attachments, CS Docket No. 97-98, FCC 00-116, 65 FR 31270, published May 17, 2000, corrected 65 FR 34820, May 31, 2000, 15 FCC Rcd 6453 (2000) (“Fee Order”), concerning the rates, terms and conditions of access for attachments by cable operators and telecommunications carriers to utility poles, ducts, conduits and rights-of-way pursuant to Section 224 of the Communications Act of 1934, as amended (“Pole Attachment Act”), 47 U.S.C. 224 and Subpart J of the Commission's Rules, 47 CFR 1.1401-1.1418.

2. This Order on Reconsideration affirms our decision not to impose additional regulation on the negotiation process or on the rules for resolution of pole attachment complaints; affirms the continued use, in the pole attachment rate calculation formulas, of specific regulatory accounts maintained by utilities and identify the actual costs incurred by the utilities for the poles, ducts, conduits and rights-of-way that are the subject of the attachment; reconsiders and clarifies the way in which entities are counted for the purpose of allocating and apportioning costs of unusable space for telecommunications attachers after February 8, 2001; reconsiders and clarifies the geographic areas used to determined average numbers of attaching entities for use in calculations of the formulas of telecommunications pole attachment rates, and establish two presumptive averages that may be used in our formulas after February 8, 2001; affirms and clarifies decisions regarding third party overlashing; affirms the presumption that a pole attachment occupies one foot of usable space and that this presumption is rebuttable by either party; affirms that the formula adopted in the Fee Order, for calculating the rate for use of capacity in a conduit, is applicable to telecommunications systems; affirms the use in the formula of the actual percentage of the conduit capacity occupied, with a rebuttable presumption that an attacher occupies one-half duct; affirms that there is no unusable capacity in a conduit; affirms our decision that a utility may not exclude reserved capacity within a conduit system when calculating total capacity upon which the pole attachment rate in a conduit is based; affirms that complaints regarding nondiscriminatory access, rates, terms and conditions for non-traditional pole attachments, such as attachments to rights-of-way, wireless attachments and transmission facilities attachments, will be considered under our rules on a case-by-case basis; reconsiders and clarifies the methodology for calculating maximum pole maximum pole attachment rates when the net pole investment becomes zero or negative; declines or reconsider at this time and reserves for later review; our decision that Internet service has a neutral affect on an attacher's classification as a cable system or telecommunications system; declines to reconsider at this time and reserves for later review; our decision that providers of wireless telecommunications services are entitled to the benefits and protection of the Pole Attachment Act; and adopts amended rules. Generally, the petitioners and commenters represent the interests of one of the following three categories: (1) Electric utilities; (2) cable operators; and (3) telecommunications carriers.

3. In 1978, Congress enacted section 224 of the Communications Act, 47 U.S.C. 224, granting the Commission authority to regulate the rates, terms, and conditions governing pole attachments, requiring that such rates, terms and conditions be just and reasonable. The Commission is authorized to adopt procedures necessary to hear and to resolve complaints concerning such rates, terms, and conditions. Congress sought to constrain the ability of utilities to extract monopoly profits from cable television system operators in need of pole, duct, conduit or right-of-way space for pole attachments.

4. Section 224(d)(1) of the Pole Attachment Act defines a just and reasonable rate as ranging from the statutory minimum based on the additional costs of providing pole attachments, to the statutory maximum based on fully allocated costs. The additional, or incremental, costs are the costs that would not be incurred by the utility but for the pole attachments. The maximum rate, identified as a percentage of fully allocated costs, refers to the portion of operating expenses and capital costs that a utility incurs in owning and maintaining pole attachment infrastructure that is equal to the portion of space on a pole, or capacity of a duct, conduit, or right-of-way, that is occupied by an attacher. The Commission developed a methodology to determine the maximum allowable pole attachment rate under section 224(d)(1) of the Pole Attachment Act, which is referred to as the Cable Formula.

5. Subsequently, Congress enacted the 1996 Act “to accelerate rapidly private sector deployment of advanced telecommunication and information technologies and services.” Section 703(6) of the 1996 Act added a new section 224(d)(3), which expanded the scope of section 224 by applying the Cable Formula to rates for pole attachments made by telecommunications carriers, in addition to cable systems, until a separate methodology became effective for telecommunications carriers in 2001. Section 703(7) of the 1996 Act added new sections 224(e)(1-4), which set forth a separate methodology to govern charges for pole attachments used to provide telecommunications services beginning February 8, 2001 (“Telecom Formula”). Further, the 1996 Act gave cable operators and telecommunications carriers a right of nondiscriminatory access to utility poles, ducts, conduit and rights-of-way.

6. Upon consideration of the record, we affirm our decision not to impose additional regulation on either the negotiation process or the rules for resolution of complaints arising out of failed negotiations. Our experience has taught us, and the record gained through these proceedings demonstrates, that without our rules and the use of presumptions in a formula methodology, attaching entities would not be able to challenge any rate offered by a utility. There would be no reasonable negotiation without a benchmark rate against which to compare the utility's proposed rate. We continue to reject arguments by utilities that attaching parties should be required to take exception to terms or conditions when the pole attachment agreement is negotiated or be estopped from filing a complaint about those issues. However, we do require that differences in rates, terms and conditions for pole attachments among attaching entities, be based on legitimate exchanges of consideration and not on discriminatory factors such as favoring an affiliated services provider over an unaffiliated entity. We will carefully scrutinize any differences in rates, terms and conditions in any complaint action, and the burden will be on the utility to demonstrate that any differences are nondiscriminatory.

7. Electric utilities continue to urge that we abandon our use of regulatory accounts based on historical costs. Petitioners assert that pricing methodologies for use in pole attachment formulas should reflect replacement costs or the rates calculated are not constitutional because they cannot provide just compensation. We affirm our decision that the Cable Formula, which includes regulatory accounts maintained using historical costs, encompasses the statutory directive to provide just and reasonable rates for pole attachments, adding certainty and clarity to negotiations. We have been presented with no persuasive evidence that utility owners do not recover a just and reasonable compensation for pole attachments from use of the Cable Formula. Congressional intent to rely on existing regulatory accounts and avoid a prolonged rate making process is realized in the Commission's regulations.

8. We have recognized that the continued use of the historical cost based pole attachment formula brings certainty to the regulatory process. For more than two decades, the pole attachment formula has provided a stable and certain regulatory framework, which may be applied “simply and expeditiously” requiring “a minimum of staff, paperwork and procedures consistent with fair and efficient regulation.” We have found that switching to a methodology based on forward-looking economic costs would significantly change and burden the Commission's processes, requiring the Commission to develop a new formula, which would necessitate a protracted rulemaking proceeding involving complicated pricing investigation. We have acknowledged that, in certain contexts, setting prices on the basis of forward-looking economic costs has advantages, such as giving the appropriate signal for new entrants to invest in network facilities; but these advantages are less pronounced in the pole attachment context because pole attachers are less likely to build, or may be prohibited from building, their own poles and conduit. We have concluded and continue to find that, in the context of pole attachments, the continued use of historical costs accomplishes the key objectives of assuring just and reasonable rates to both the utility and the attaching parties, establishing accountability for prior cost recoveries, and encouraging negotiation among the parties by providing regulatory certainty. We will continue to calculate maximum pole attachment rates under the Pole Attachment Act using regulatory accounts based on historical costs.

9. Under Section 224(d)(1), fully allocated costs refer to the portion of operating expenses and capital costs that a utility incurs in owning and maintaining poles that are associated with the space occupied by pole attachments. Carrying charges are the costs incurred by the utility in owning and maintaining poles regardless of the presence of pole attachments. The carrying charges include the utility's administrative, maintenance, and depreciation expenses, a return on investment, and associated income taxes. To help calculate the carrying charge rate, we developed formulas that relate each of these components to the utility's net pole investment.

10. The pole attachment formulas rely on the investment and expense data utilities maintain in, or derive from, their accounting records. The investment data take two forms: “gross” data, which provide the original cost of the plant being considered; and “net” data, which adjust the gross data to reflect accumulated depreciation and deferred income taxes associated with that plant. The pole attachment formulas generally allocate the costs of owning and maintaining poles on the basis of net pole or net plant investment. In the Fee Order, we affirmed our long practice of calculating pole attachment rates using net book costs, continuing to allow the use of gross book costs if all parties agreed to that usage. We concluded that the important goal is to ensure that like figures are used, whether not or gross. We affirm our continued use of net figures in the formulas unless the parties agree otherwise, with the following limited exception.

11. In certain cases, negative net asset values for poles may occur as a result of the way the Commission calculates depreciation rates. As accumulated depreciation rises, for plant with high removal costs such as poles, the application of the depreciation rate formula can lead to a net asset value becoming negative. This is because, in computing the net pole investment, the formula subtracts from gross pole investment an accumulated depreciation that includes both a recovery of original investment and a recovery of costs of removal (less salvage). Because gross pole investment only includes the original cost of the poles, subtracting both components from the gross pole investment may lead to a zero or negative net pole investment. The carrying charge formulas compute percentages for each element (administrative, maintenance, and depreciation expenses, taxes, and rate of return) which are added and then multiplied against the net pole investment. For example, if the carrying charge formulas yield 10% for each element, the carrying charge rate would be 50%. This rate would then be multiplied by net pole investment (expressed on a per pole basis as net cost of a bare pole) and the percentage of usable pole space occupied by the attachment, to determine the maximum just and reasonable rate per pole. When the net pole investment is zero or negative, the formula cannot be calculated properly. In those instances, our pole attachment formula, using net figures, cannot be used to calculate a maximum rate based on fully allocated costs.

12. On reconsideration of this matter, we modify and clarify our guidance to utilities and attaching entities on how to apply the formula in those cases where the net pole investment is zero or negative. We have determined that the most reasonable and efficient method is to apply the formula using gross figures rather than net figures, with the exception of the rate of return element of the carrying charges which is always a net calculation. For example, we currently allocate administrative expenses by dividing total administrative and general expenses by net plant investment. This yields a percentage that is applied against the net cost of a bare pole. In contrast, a gross approach to allocation would, for example, divide total administrative and general expenses by gross plant investment.

13. With the exception of the maintenance component, the expense accounts upon which the pole attachment rates rely are not kept by type of plant. Because utilities cannot directly measure the amount of administrative expenses or taxes that are incurred because of poles, we must allocate administrative expenses and taxes to poles on some rational basis. We have previously determined that allocation of expenses based on net pole investment is reasonable. We continue to agree that the appropriate figures to use in the normal situation are the net figures. However, in the unusual situations where net pole investment is zero or negative, we find application of the formula using gross figures, with the noted net adjustment to the return element, to be appropriate.

14. In proposing this methodology, we acknowledge that only the administrative and tax elements of the carrying charges are affected by the change. The maintenance, depreciation and return elements yield the same maximum rate whether net or gross figures are used. The administrative and tax elements may be higher or lower due to the different ratios of accumulated depreciation and accumulated deferred taxes to gross total plant as opposed to gross pole plant. The rate of return element will be negative and is subtracted from the positive elements of the carrying charge. We believe this result is reasonable because the utility has, in effect, already recovered more than the original cost of its pole plant through depreciation charges. While this “over-recovery” is necessary to defray the costs of disposing of the poles when they are retired from service, the utility has the use of any “over-recovered” amounts throughout the poles' useful lives. Our conclusion that the utility's pole attachment rates should reflect the over-recovery in the form of a negative rate of return carrying charge properly recognizes this fact.

15. The formula using the gross approach yields the following calculation:

We reiterate that in all other cases, where the net pole investment is positive, the appropriate figures to use in the formula continue to be the net figures, unless the parties agree otherwise.

16. In the Telecom Order, we stated that the record was not sufficient to enable us to adopt detailed standards that would govern all of these situations. We believe our basic rate methodology is adaptable to attachments that fit these categories. A complaint involving a dispute about these attachments would be treated as any other pole attachment complaint. We recognize guiding principles based on the Pole Attachment Act to be used in determining rates for pole attachments, including attachments to rights-of-way, wireless attachments and transmission facilities attachments. Guiding principles include the congressionally mandated methodology, preference for publicly available records when available, and an acceptable range of just and reasonable rates. We continue to believe it prudent to gain experience through case by case adjudication to determine whether additional guiding principles or presumptions are necessary or appropriate, and this will be accomplished through our existing complaint procedures. We will continue to address complaints about just and reasonable rates, terms and conditions, and nondiscriminatory access for non-traditional attachments on a case-by-case basis.

17. The basic Cable Formula can be stated as follows:

18. We define total usable space as the space on the utility pole above the minimum grade level that is usable for the attachment of wires, cables, and related equipment. In the Fee Order, we affirmed the use of various presumptions that lead to 13.5 feet as the presumptive average usable space on a pole. The Cable Formula uses a 37.5 foot presumptive pole height, an 18 foot average minimum ground clearance, allocation of the 40-inch safety space to usable space, and the inclusion of poles of 30 feet or less when calculating the costs of a bare pole. No persuasive evidence or arguments have been presented which challenge our long-standing presumptions resulting in 13.5 feet as the presumptive usable space. Application of these presumptions results in 7.4% as the percentage of usable space occupied by a pole attachment.

19. The record in this proceeding confirms the prevalent use of 30-foot poles and reflects that exclusion of such poles from the Cable Formula calculations could distort the resulting rate by excluding a significant portion of local exchange carrier (“LEC”) utility plant investment from the rate calculation. We affirm our position that a distorted inventory of poles would be reflected if utilities were allowed to “opt out” or exclude their poles of 30 feet or less when calculating their pole attachment rates.

20. No new arguments or evidence was presented in the filings and based on our previous reasoning, the 40-inch safety space that exists to minimize the likelihood of physical contact between employees working on cable television or telephone lines and the potentially lethal voltage carried by the electric lines, as well as to prevent electrical contact between such cables, is usable and used by the electric utility, and we reject arguments to reduce the presumptive usable space of 13.5 feet by 40 inches.

21. Ground clearance requirements in the National Electric Safety Code (“NESC”) include an average amount of sag for cable lines. No new evidence or arguments were provided that would persuade us to abandon our long-standing reliance on the presumptive average minimum ground clearance based on NESC standards.

a. Counting Attaching Entities

22. Under the Cable Formula, the costs of unusable space are allocated based on the portion of usable space an attachment occupies, the space factor. Our formula is stated as follows:

24. Under the Telecom Formula, pursuant to the specific requirements of the Pole Attachment Act, the costs of unusable space are separated from the costs of usable space are allocated based on the number of attaching entities. The costs of usable space are still calculated based on the portion of usable space occupied. In the Telecom Order, we adopted separate formulas for determining the unusable space factor maximum rate and the usable space factor maximum rate which, when added together, calculate a maximum rate under section 224(e) of the Pole Attachment Act. We now simplify the two formulas into one combined formula as follows:

26. In the Telecom Order, we recognized that the number of attaching entities is a significant factor in determining he maximum rate. We concluded that certain entities should be counted as attaching entities pursuant to the Pole Attachment Act. We now reconsider and clarify our methodology for counting the number of attaching entities used in the Telecom Formula. We clarify our position that all utilities should be counted as attaching entities. In addition, we further reconsider and clarify that any entity with a physical attachment to the pole should be counted as an attaching entity. We will continue to exclude a government's temporary or seasonal attachments from this category. We also reconsider our inclusion of third party overlashers as separate entities and conclude that they are not to be counted as separate attaching entities. This is consistent with our conclusion that an overlashing entity does not occupy additional space on a pole. An overlashed cable is still only attached to the pole by the original single attachment.

27. The term “attaching entities” includes, without limitation, and consistent with the Pole Attachment Act, any telecommunications carrier, incumbent or other local exchange carrier, cable operator, government agency, and any electric or other utility, whether or not the utility provides a telecommunications service to the public, as well as any other entity with a physical attachment to the pole. This is consistent with the language of the statute and with Congress' intent to count all attaching entities when allocating the costs of unusable space. Therefore, we include the utility pole owner in the count, resulting in a minimum of two attaching entities being counted.

28. Upon reconsideration, we find that third party overlashers should not be counted as separate entities because they are not occupying separately segregated pole space. This conclusion is consistent with our finding that overlashing does not constitute a separate attachment and our conclusion that all entities with a physical attachment should be counted. Our review of the Pole Attachment Act leads us to reconsider our previous decision and conclude that the term “attaching entity” as it is used in the Pole Attachment Act is not limited to entities with attachments that met the definition of pole attachment as it is used in the Pole Attachment Act. Rather, we conclude that any entity with a physical attachment to the pole should be counted. Our rule for counting attaching entities will allow parties to pole attachment agreements to calculate an average number of attaching entities for use in the Telecom Formula.

b. Average Number of Attaching Entities: 29. In the Telecom Order, we determined that the most efficient and expeditious manner to identify an average number of attaching entities, was for each utility to develop its own average number of attaching entities.

i. Geographic Areas. 30. Upon presentation of additional information and consideration of the record in this proceeding, we modify the geographic areas on which a utility will base its average numbers of attaching entities. Some utilities assert it will not be feasible to determine averages in any cost-efficient manner, so we will provide default averages for urbanized and non-urbanized areas, for use in the absence of utility developed averages.

31. The purpose of having averages based on geographic areas was to have pole attachment rates reflect an appropriate average number of pole attachments in a particular geographic area as of February 2001, when utilities begin calculating rates for telecommunications carriers. A population of 50,000 or greater (urbanized area) is a reasonable density in which to expect greater penetration of service providers and attachments. The record shows that using urbanized and non-urbanized areas allows a reasonably effective classification of poles based upon the actual characteristics of pole inventory of different utilities.

32. We will require utility pole owners to calculate an average number of attaching entities by service area. Where a utility territory or service area in which an attaching entity seeks to install pole attachments can be identified as either urbanized or non-urbanized, the default averages, or the actual averages if developed by the utility, for that area should be used. However, where a utility territory or service area in which an attaching entity seeks to install pole attachments cannot be identified as either urbanized or non-urbanized because it crosses into both an urbanized and non-urbanized area, and the utility is unable to identify a separate service area as non-urbanized, the default averages, or the actual averages if developed by the utility, for an urbanized area should be used. If any part of a specific service area, as identified by the utility, is urbanized, then all that service area would be considered urbanized for pole attachment purposes. This will facilitate an equitable calculation of pole attachment rates for telecommunications carriers. Utilities that have multiple service areas in a state would classify each service area, as either urbanized or non-urbanized depending on whether any part of the service area is within an area designated by the Bureau of Census as urbanized. Utilities advise this would be equitable because in a service area in which any part is considered urbanized, the development potential for the entire area to become urbanized is great.

33. We emphasize our preference that each utility use the data it has available in its corporate and regulatory records, and not go to extraordinary lengths to be precise when reasonable estimates will generally provide an equitable process. The utility shall make available its data, information and methodology upon which the averages were developed, unless the default averages are used. We clarify that when a distinct area defined by the Bureau of Census as urban falls within an urbanized area, a separate average number of attaching entities for that urban area is not required. The record demonstrates that in some states, and for some utilities, there may be no significant difference in the number of attaching entities for rural areas and for urban areas that are outside urbanized areas. Therefore, we provide utilities the option of using our presumptive averages presented below, or developing averages for two areas: (1) Urbanized (50,000 or higher population), and (2) non-urbanized (less than 50,000 population).

34. When a utility exercises good faith in determining average numbers of attaching entities upon which to base the costs of providing unusable space, the burden of proof will be on an attaching entity to demonstrate the costs are being unjustly apportioned. In demonstrating its good faith, the utility must make its methodology and data publicly available to the attaching entity, upon request for information sufficient for an attaching entity to project its costs of attaching to that utility's infrastructure. The costs of conducting an exercise to determine average numbers of attaching entities shall not be directly passed on to the attaching entities as make-ready costs. Expenses relating to the exercise necessary to develop these averages will be shared ultimately by all attachers and the utility when, as a reasonable business expense incurred as part of doing business, the expense is reported to the utility's appropriate regulatory accounts and factored into the carrying charge rate of the Cable Formula. We do not believe that such expenses would be within the methodology prescribed by Congress for individual payment by each attaching entity for a pole attachment.

ii. Presumptive Averages. 35. In order to expedite the process of developing average numbers of attaching entities, and allow utilities to avert the expense of developing location specific averages, we provide two rebuttable presumptive averages for use in our Telecom Formula. This gives both small and large utilities the option of not conducting a potentially costly and burdensome exercise necessary to develop averages based on their company specific records. The adoption of presumptive averages should reduce cost and effort by all parties.

36. In the Telecom Order, we did not establish presumptions, but said we believed the most efficient and expeditious manner to calculate a presumptive number of attaching entities would be for each utility to develop its own presumptive average number of attaching entities. We now reconsider that decision and set rebuttable presumptive average numbers of attaching entities for our two categories, urbanized and non-urbanized. We are now persuaded that utilities and attaching entities would benefit from our providing presumptive averages for their use. Our establishment of presumptive averages will expedite the process and allow utilities to avert the expense of developing location specific averages. As with all our presumptions, either party may rebut this presumption with a statistically valid survey or actual data.

37. Based on the expanded record, we establish presumptive average numbers of attaching entities in a non-urbanized (less than 50,000 population) area to be three (3) attaching entities, based on information presented in the record and the expectation that on a pole or in a conduit, for instance, there would be electric, telephone and cable attachers. It is estimated that cable systems now provide access to cable television services to over 97% of all households with a television. Electric power and telephone service is even more universal. The record supports a presumptive average of three attaching entities in non-urbanized areas.

38. In an urbanized area that is more densely populated (50,000 or higher population), more developed commercially than a non-urbanized area, and in which we expect both residential and business commercial competition to flourish, we set a presumptive average number of attaching entities at five (5) to reflect the inclusion of, but not limited to, the following possible attaching entities: electric, telephone, cable, competitive telecommunications service providers and governmental agencies. Advanced telecommunications capability is being deployed throughout the country. As noted above, competitive services are increasing. The record supports a presumptive average number of five attachers in urbanized areas.

39. Cable companies have, through overlashing been able to decades to replace deteriorated cables or expand the capacity of existing communications facilities, by typing communication conductors to existing, supportive strands of cable on poles. The 1996 Act was designed to accelerate rapid deployment of telecommunications and other services, and to increase competition among providers of these services. Overlashing existing cable reduces construction disruption and associated expense. Accordingly, in the Telecom Order, we declared our continued approval of, and support for, third party overlashing, subject to the same safety, reliability, and engineering constraints that apply to overlashing one's own pole attachment.

40. We determined that facilities overlashed by third parties are presumed to share the presumptive one foot of usable space occupied by the host attachment. We did not dictate how the utility, host attaching and third party attaching entities would relate to each other for compensation purposes. We did not require the host attaching entity or the third party overlasher to obtain the consent of the utility beyond the consent already acquired for the host attachment although the utility is entitled to notice of the overlashing. We stated that third party overlashing did not disadvantage the utility's ability to ensure the integrity of its poles.

41. We decline to impose additional regulation and clarify several aspects of our position regarding third party overlashing. Allowing third party overlashing reduces construction disruption and associated expenses which would otherwise be incurred by third parties installing new poles and separate attachments. We clarify that third party overlashing is subject to the same safety, reliability, and engineering constraints that apply to overlashing the host pole attachment. We affirm our policy that neither the host attaching entity nor the third party overlasher must obtain additional approval from or consent of the utility for overlashing other than the approval obtained for the host attachment.

42. Some petitioners urge us to specify, or at least clarify, what the third party telecommunications carrier overlasher pays to the host attacher or the utility pole owner. We decline to attempt to regulate this relationship. However, if the third party overlashing cable operator's pole attachment is a telecommunications carrier, then the pole attachment will be considered to be used to provide telecommunications services for purposes of calculating the pole attachment rate. The maximum rate for that overlashed pole attachment would then be calculated using the Telecom Formula after February 8, 2001. In some instances, the host attaching entity will pay the utility for a telecommunications carrier pole attachment. We have stated that the third party overlasher is not separately liable to the utility for the usable space which the overlashing shares with the host attachment because there would be no additional usable space occupied. We expect and encourage the overlashing and host attaching entities to negotiate a just and reasonable rate of compensation between them for the overlashing, which will represent some sharing of the usable and unusable space costs. Until our intervention is necessary to facilitate pole attachments for these parties, we will rely on all parties to act in good faith to develop their own just and reasonable compensation.

43. We have reviewed Sections 24 and 26 of the NESC that address loading and structural requirements in detail. Based on our analysis and the record, we continue to believe that an attachment's “burden on the pole” relates to an assessment of need for make-ready changes to the pole structure, including pole change-out, to meet the strength requirements of the NESC. For example, if the addition of overlashed wires to an existing attachment causes an excessive weight to be added to the pole requiring additional support or causes the cable sag to increase to a point below safety standards, then the attacher must pay the make-ready charges to increase the height or strength of the pole. Make-ready costs are non-recurring costs. for which the utility is directly compensated and as such are excluded from expenses used in the rate calculation. The statutory language prescribes that we allocate costs based on space occupied, not load capacity.

44. Fee Order petitioners present no new or persuasive evidence that the “burden on the pole” due to weight and wind load is an additional factor for consideration in the determination of the amount of space occupied through which some rate increase would be calculated. We affirm our position that the costs of the physical attachments of an attaching entity are normally paid to the pole owner as a condition of attachment, addressing such factors as weight, wind load and safety space. Overlashing does not increase the amount of space actually occupied by the attachment.

45. In the Telecom Order, we found that the one foot presumption should continue to apply where an attaching entity has overlashed its own pole attachments. We also determined that facilities overlashed by third parties onto existing pole attachments are presumed to share the presumptive one foot of usable space of the host attachment. The one foot presumption is rebuttable by any party. We decline to abandon or redefine our presumption for usable space occupied by a pole attachment, even in instances of overlashing. The record on reconsideration affirms that the sharing and use of the one foot presumption, for usable space occupied by a pole attachment, does not lead to a distortion of the allocation of the costs of the pole in determining a just and reasonable compensation for the utility.

46. The Pole Attachment Act does not define utility to include attachers, Section 224(f) of the Pole Attachment Act obligates a utility to provide a cable television system or any telecommunications carrier with nondiscriminatory access for purposes of a pole attachment. Neither a cable system attacher nor a telecommunications attacher has an obligation to act as a host and share its pole attachment with a third party overlasher.

47. We agree that the utility pole owner has a right to know the character of, and the parties responsible for, attachments on its poles, including third party overlashers. The pole owner is entitled to charge to Telecom Formula rate when a pole attachment previously used to provide only cable services is used to provide telecommunications services, as a result of a third party telecommunications carrier overlashing. When the cable operator's pole attachment provides transmission of telecommunications services, whether for itself or via third party overlashing, it will notify the pole owner. We clarify that it would be reasonable for a pole attachment agreement to require notice of third party overlashing.

48. In the Telecom Order, we concluded that the third party overlashing entity should be classified as a separate attaching entity for purposes of counting entities using the Telecom Formula. We now reconsider that decision, and based on our review of the statute, the record herein and our decision that an overlasher shares space with the host attachment, we believe that the third party overlasher should not be counted as a separate attaching entity.

49. We affirm the requirement that a cable operator notify the utility when the cable operator begins providing telecommunications services itself or via third party overlashing. Cable attachers stress that this notification should not provide utilities with an opportunity to acquire sensitive proprietary and business development, planning, or scheduling information that could result in a competitive disadvantage to the attaching entity. We agree. The record fails to demonstrate any legitimate purpose for a utility to require commercially-sensitive data or information to be provided as a part of this notification of a change of service status by a cable operator.

50. Pole attachment agreements after February 8, 2001 could be expected to include a reasonable mechanism for notification by a cable operator of its change of status to a telecommunications carrier. Pole attachment agreements could also be expected to include a reasonable remedy for a cable operator's failure to so notify. Because we have not explored the issue of a penalty for failure to notify and have no record on the question, we will not make a determination on that issue at this time.

51. We affirm our holding in the Telecom Order that if an attachment previously used for providing solely cable services would, as a result of the leasing of dark fiber, also be used for providing telecommunications services, the rate for the attachment would be determined using the Telecom Formula. However, attaching entities may lease their dark fiber to third parties without such leases being considered separate attachments and without making an additional payment beyond the host's existing attachment rate. The cable system operator may lease excess fiber capacity within its existing attachment to any party for a negotiated rate without the knowledge or consent of the pole owner because the physical attachment will not be altered. The dark fibers contained within the attaching host have already been taken into account in determining the rent for the attachment. The character and content of the services provided do not affect the amount of space occupied by the attachment. The type of services provided over the attachment only affect the pole attachment rate if the services are telecommunications services. If the third party leasing the fiber is, or becomes, a telecommunications carrier, then the utility is compensation for the pole attachment based on the Telecom Formula and must be notified.

52. Conduits are structures that provide physical protection for cables and allow new cables to be added inexpensively along a pathway or route. A conduit consists of one or more ducts, which are the enclosures that carry the cables. Often, when a cable operator's or telecommunications carrier's cables are placed in a duct, three or more inner duct are inserted into the duct allowing “one duct to be treated more like conduit.” A collection of conduits, together with their supporting infrastructure, constitutes a conduit system. A conduit system may vary widely among geographic areas, and between LEC and electric utilities.

53. The total capacity of a duct or conduit is the entire volume of available capacity in the conduit system. All costs associated with the construction of the conduit system are considered in determining the cost of this total capacity. Essentially, the lack of any unusable capacity in a conduit makes the practical application of the Pole Attachment Act formulas the same for both cable attachers and telecommunications attachers both before and after February 8, 2001.

54. Cable operators and telecommunications carriers alike will calculate a maximum just and reasonable rate for a pole attachment in a conduit by apportioning the cost of providing capacity among all entities according to the percentage of capacity used by each entity. Calculation of the maximum rate may be simplified by using the presumptions in the formula. The carrying charge rate is calculated for pole attachments in conduit, in the same manner as the carrying charge rate in our pole attachment formula. The conduit formula adopted in the Fee Order and affirmed here is the following:

55. In the Fee Order, we concluded that all costs attributable to utilities' underground conduit systems are costs of providing capacity. The regulatory accounts to which LEC and electric utilities report their gross conduit investment include the costs of installed conduit, original permit, excavation, sewer connections and other costs. All costs associated with the construction of the conduit system are considered in determining the cost of this total capacity.

a. Total Duct or Conduit Capacity. 56. In the Fee Order, we clarified that a utility may designate capacity in a duct for maintenance or emergency use, but that a duct so designated is usable in the event it is needed, and therefore is part of the conduit capacity. Where duct capacity is set aside for future municipal use (in the nature of consideration as a condition for a license, franchise, or permit), the utility is compensated for those costs as part of its net conduit investment and/or in the carrying charge rate. Collapsed or otherwise ducts are no longer available for pole attachments, and should not be included in the calculation of total capacity of a conduit or duct in the Cable Formula.

57. We will not allow capacity designated for maintenance, future business plans, or municipal set-asides to be subtracted from the total duct or conduit capacity for rate determination purposes. The record supports our analysis that capacity in a duct or conduit that is usable for any of these purposes is part of the “total duct or conduit capacity.” For example, a utility may set-aside capacity for maintenance or emergencies so that unoccupied capacity is available into which a temporary cable may be placed and spliced into a damaged cable. Capacity so designated is usable in the event it is needed, and available for use by the utility at any time for any purpose, and is therefore part of the total available conduit capacity. Such reservation of capacity is not necessarily identified by a specific duct or location, can be created, used, withdrawn or discarded at the sole discretion of the utility, and must be considered part of the total capacity of the conduit. Municipal set-asides are also capacity that may be made available for the use of the local government as a condition in a franchise, license, right-of-way or other agreement.

58. Capacity may be reserved, or kept unused to be available to an electric utility for expansion of its core business services, but that capacity is still part of the total capacity of the duct or conduit system and must be made available for pole attachments until such time as it is needed by the electric utility under a bona fide business plan. Under the policy articulated in the Local Competition Order, an electric utility is allowed to reserve capacity for future business purposes under a bona fide business plan, but must allow that capacity to be used for attachments until an actual business need arises. For whatever reason capacity may be reserved or designated for special uses, by or on behalf of the utility, and regardless of who may benefit directly or indirectly from those uses, the capacity is available for use and therefore remains part of the total capacity of the conduit for rate determination purposes.

b. Occupied Capacity, the Half-Duct Presumption. 59. Presumptions are used in the Cable and Telecom Formulas to expedite the calculations of a just and reasonable rate so that complicated surveys, accounting and calculations may be avoided.

60. We affirm our rebuttable presumption that a cable or telecommunications attacher occupies a maximum capacity of one half of a duct, when determining a reasonable conduit attachment rate. The presumption that a communications cable in a conduit system occupies one half of a duct is based on clear evidence that all types of cable—including electric supply cables when controlled by the same party as the communications cable—may share a duct. We affirm our position that, because the NESC rule relied on by the electric utilities does not prohibit the sharing of a duct by electric and communications cables when controlled by the same party or two communications cables, it is reasonable to expect there to be more than one attacher in a duct.

61. The one half duct presumption is rebuttable and the presence of inner duct is adequate rebuttal. Where inner duct is installed, either by the attacher or in a previous installation, the maximum rate will be reduced in proportion to the fraction of the duct occupied. That fraction will be one divided by the actual number of inner ducts in the duct. We continue to believe that the use of the one half duct rebuttable presumption is a simple, expedient and reasonable approximation of the actual capacity occupied by a cable operator or telecommunications carrier attaching in a conduit system. When the actual percentage of capacity occupied is known, it can and should be used instead of the one half duct presumption.

62. As stated in the Fee Order, in the conduit context, we use the net linear cost of the conduit, as compared to the net cost of a bare pole, as one factor within the formula for determining a maximum permissible rate for attachment within conduit. As the net cost of a bare pole reflects the total system investment for the above ground pole attachment infrastructure, to arrive at a system investment for use in the conduit formula we identify the net linear cost of the conduit system. To accomplish this, the utility must first establish the Net Conduit Investment.

63. Our goal has always been to adopt a formula which allows the parties to calculate the maximum rate using public data when available, in a fair and expeditious manner. We also have a policy against requiring additional accounting procedures so long as the information is available from the utilities upon reasonable request.

a. Net Conduit Investment (LEC-Owned Conduit). 64. Net Conduit Investment for LEC-owned conduit is calculated as follows:

65. Gross Conduit Investment for the LEC consists of Part 32 Account 2441. For LECs, Accumulated Depreciation (Conduit) represents the share of ARMIS Account 3100 that corresponds to Account 2441. Accumulated Depreciation related to conduit is publicly available at the LECs ARMIS Report 43-02. In the Fee Notice we proposed the following formula for the calculation of accumulated deferred income taxes for conduit:

66. LEC conduit owners objected to this formula on the basis that the actual amount of accumulated deferred taxes for conduit is available directly from the LEC's books. BellSouth maintains that because it is required to keep separate and accurate records of accumulated deferred income taxes for poles and conduit, our formula will improperly introduce non-conduit related deferred taxes into rate calculations. NCTA argued that LECs should not use accumulated deferred income tax figures taken from the LEC's books because the information is not publicly available.

67. In the Fee Order, we concluded that if the LEC conduit owner is required to keep this data precisely as required for the formula, we will allow them to use it in the rate calculation, as long as it was reported to and available through our public ARMIS. There is confusion among utilities and attaching entities whether this data is available. Pursuant to our Biennial Regulatory Review, Review of Accounting and Cost Allocation Requirements, FCC 99-106 and Biennial Regulatory Review, Review of ARMIS Reporting Requirements, FCC 99-107 we require the LEC conduit owner to keep this data as required for the formula because we require LECs to use it in the rate calculation. This data will be available at ARMIS Report 43-02 and we will use this data in our formulas. Until ARMIS reports for LECs include this required data after 2001, we will continue to use the proration method to calculate the conduit portion of accumulated deferred taxes for use in the formula to calculate the net linear cost of conduit.

b. Net Conduit Investment (Electric Utility-Owned Conduit). 68. Net Conduit Investment for electric utility-owned conduit is calculated as follows:

69. For electric utilities, Gross Conduit Investment is reflected in FERC Part 101 Account 366. Accumulated Depreciation (Conduit) represents the share of FERC Account 108 (Accumulated provision for depreciation of electric utility plant (Major only)—a composite account that is required to be maintained on a subsidiary basis) that corresponds to Account 366. Accumulated Deferred Income Taxes for electric utilities represents the share of FERC Accounts 190, 281, 282, 283 that correspond to Account 366.

70. Upon review, we found no new information presented that would persuade us to abandon the use of system-wide data in the conduit context, as it is used in the pole context. No viable alternate suggestion has been offered and we continue to find that the use of system-wide data is the most efficient and reasonable methodology.

71. In the Fee Order, we stated the following formula to determine the net cost of a bare pole for electric utilities:

We stated that the Accumulated Deferred Income Taxes represents the share of composite FERC Account 190 (Accumulated deferred income taxes) that corresponds to Account 364. In error, we neglected to include FERC Accounts 281, 282, and 283 along with Account 190. We now correct this typographical error so that Accumulated Deferred Income Taxes represents the share of composite FERC Accounts 190, 281, 282 and 283 that corresponds to Account 364.

72. The carrying charge rate reflects those costs incurred by the utility in owning and maintaining pole attachment infrastructure regardless of the presence of attachments. The elements of the carrying charge rate are: administrative, maintenance, depreciation, taxes and cost of capital (rate of return). To calculate the carrying charge rate, we developed formulas that relate each element to a utility owner's net investment. The carrying charge rate factor of the Cable Formula is calculated as follows:

73. In May 1986, the Commission adopted a new uniform system of accounts for all FCC regulated telephone companies. The Commission's Annual Report Form M was revised on April 27, 1989 to reflect the new accounting system in Part 32 that replaced the accounting system in Part 31, effective January 1, 1988. The Pole Attachment Order provided formulas for determining a maximum just and reasonable pole attachment rate with regulatory accounts identified. The formula for LECs used Part 31 accounts until after adoption of the New USOA-Part 32 Adoption, when the Common Carrier Bureau responded to a request for clarification of what Part 32 accounts would be used in place of the Part 31 accounts specified in the Pole Attachment Order. That guidance was given the understanding that an exact tracking of expenses from Part 31 accounts to Part 32 accounts was not possible. In the Fee Order, we clarified the Part 32 accounts to be used in the Cable Formula for LECs utilities.

74. In the Fee Order, we adopted the following formula to determine the administrative element of the carrying charge rate of the Cable Formula for LEC pole owners:

75. The Fee Order did not attempt to establish different accounts to be used in the administrative elements of the carrying charges. The Fee Order merely reconciled the accounts formerly listed in Part 31 to their counterpart accounts in Part 32. This resulted in the identification of Accounts 6710 and 6720 to be included in the administrative element of the carrying charges.

76. We reviewed and considered the record before us regarding the accounts to be used for the administrative element expenses for LECs. We do not believe Congress intended us to discover and aggregate all de minimis expenses which might have some intangible nexus to pole attachments. On the contrary, we believe Congress gave us a clear mandate not to engage in full-scale ratemaking exercises every time we have a pole attachment compliant before us. We have chosen not to disaggregate the major accounts selected for inclusion in our calculations in order to eliminate expenses not directly attributable to administrative costs with a nexus to pole attachments, such as corporate strategic planning. On reconsideration, we decline to draw in more expenses to the administrative element because we already apply a comprehensive set of expenses in conformance with the statutory directive to allocate a percentage of operating expenses attributable to pole attachments.

77. Account 593 (maintenance of overhead lines (Major only)) includes all the cost of labor, materials used and expenses incurred in the maintenance of overhead distribution line facilities, the book cost of which is includible in Account 364 (poles, towers and fixtures), Account 365 (overhead conductors and devices), and Account 369 (services). In our calculation we include the net investment for all three accounts to determine the portion of Account 593 attributable to Account 364. We have been provided no additional evidence to rebut the description of Account 590 or that “direct field supervision of specific jobs shall be charged to the appropriate maintenance account,” in this case Account 593. Fee Order petitioners do not persuade us that there is any significant expense related to poles included in Account 590.

78. This same reasoning applies to Account 594 in the conduit context. Account 594 (maintenance of underground lines (Major only)) includes the cost of labor, materials used and expenses incurred in the maintenance of underground distribution line facilities, the book cost of which is includible in Account 366 (underground conduit), Account 367 (underground conductors and devices), and Account 369 (Services). All expenses associated with Account 366, the account used to determine conduit investment, are reported in Account 594 and no additional accounts should be included as maintenance expenses.

79. Accounts 580, 583, 584, and 588 are operational accounts to which electric utilities report expenses relating to the utility's core regulated business services, and not pole or conduit expenses. Account 598 is the miscellaneous account related generally to maintenance of equipment on customer premises and is not associated with pole or conduit expenses. We will not include any portion of Accounts 580, 583, 584, 588 or 598 in the calculation of the maintenance element of the carrying charge rate for pole or conduit because the costs or expenses reported to these accounts do not reflect a sufficient nexus to the operating expenses and actual capital costs of the utility attributable to the pole or conduit attachment. The pertinent maintenance expenses are reported in Accounts 593 (poles) and 594 (conduit) and we include those in the calculation.

80. We calculate net pole or conduit investment for two purposes in the formula. First, we calculate net investment to identify the portion of net investment that is allocable to the physical attachment. We then apply the rate of return against that portion so that the utility is fully compensated for the capital investment that is being used by the attacher. The only account pertinent to that calculation is the pole or conduit investment account.

81. We measure the capital investment that is used by determining the percentage of physical space occupied by the attachment. For electric utility poles, we use Account 364 (poles, towers and fixtures). Those costs are fully captured in Account 364. The accounts suggested by petitioners include capital expenditures which support the utility's core business function and are not related to the pole cost. To the extent that an attacher wished to place a separate structure (pole, box, etc.) on utility property, we would examine any rate issue on a case by case basis.

82. We do not believe that the Pole Attachment Act envisions a drawn out ratemaking process to determine whether a lightning arrester, whose only function is to protect a piece of equipment which supports the utility's core business function of power distribution, indirectly benefits other attachers on the pole. Neither do we propose a complex ratemaking process to remove every possible cost included in Account 364 that does not benefit the pole attacher.

83. Account 366 (underground conduit), which we include in the investment calculation, includes the cost installed of underground conduit and tunnels used for housing distribution cables or wires. All items associated with the construction of the conduit are included in this account.

84. Based on our extensive review of the record and the description of the accounts, we affirm that only FERC accounts to be included in the investment calculation are Accounts 364 for pole investment and Account 366 for conduit investment. Petitioners failed to provide any new information and their reiteration of the same arguments fail to persuade us to include additional accounts in our calculation of the pole or conduit investment. As we have stated above, any unusual requests involving access to land or rights of way other than for a pole attachment or conduit attachment will be considered on a case by case basis. Our inclusion of unrelated expenses in certain accounts and our exclusion of possible minor expenses in other accounts provides a balanced overall allocation of costs while avoiding a prolonged and contentious ratemaking process.

85. As required by the Regulatory Flexibility Act (“REA”), an Initial Regulatory Flexibility Analysis (“IRFA”) was incorporated in both the Fee Order Notice and Telecom Order Notice and a Final Regulatory Flexibility Analysis (“FRFA”) was incorporated in both the Fee Order and Telecom Order. The Commission sought written public comment on the proposals in the Fee Order Notice and Telecom Order Notice, including comment on the IRFAs. No comments were received in response to the IRFA in either the Fee Order Notice or Telecom Order Notice, nor did we receive any petitions for reconsideration of the Fee Order FRFA or Telecom Order FRFA. The RFA requires that an RFA analysis be prepared for notice and comment rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.”

86. The RFA generally defines a “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term small business concern under the Small Business Act. A “small business concern” is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (“SBA”). As we described in the FRFA analyses in the Fee Order and Telecom Order, we estimate that there are small business entities that might be affected by those orders.

87. In this Order on Reconsideration, we affirm most of our prior conclusions in the Fee Order and Telecom Order. We have, among other things, amended certain requirements of §§ 1.1401-1.1418 of our rules. These amendments serve to simplify our formulas for calculating pole attachment rates. Specifically, we provide a simplified equation of our formula for telecommunications attachers; we simplify the geographic categories for determining average numbers of attaching entities; and we allow parties to a pole attachment proceeding to substitute presumptive numbers of attaching entities in the formula in order to avoid the expense of establishing numbers based on a survey or compilation of actual data. We also provide a simpler methodology for calculating rates when the net pole investment is negative or zero. These changes do not impose additional compliance burdens on small entities nor do they alter the number or type of small entities possibly affected by the rules published in the Fee Order and Telecom Order. The changes may, in fact, reduce the burden on small entities. Therefore, we certify, pursuant to Section 605(b) of the RFA, that the rules adopted herein will not have a significant economic impact on a substantial number of small entities.

88. Report to Congress: The Commission will send a copy of this Order on Reconsideration, including this FRFA certification, in a report to be sent to Congress pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A). A copy of this Order on Reconsideration (or summary thereof) and this FRFA certification will be published in the Federal Register , see 5 U.S.C. 605, will be sent to the Chief Counsel for Advocacy of the Small Business Administration.

89. The requirements adopted in this Order on Reconsideration have been analyzed with respect to the Paperwork Reduction Act of 1995 (the “1995 Act”) and found to impose no new or modified information collection requirements on the public.

90. Pursuant to section 405 of the Communications Act of 1934, as amended, 47 U.S.C. 405 and section 1.106 of the Commission's rules, 47 CFR 1.106, the petitions for reconsideration and/or clarification are denied in part and granted in part.

91. Pursuant to sections 1, 4(i), 224 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 224 and 303(r), the Commission's rules are hereby amended as set forth in the Rule Changes.

92. The Commission's rules, as amended in the Rule Changes, will become effective July 30, 2001.

93, The Commission's Consumer Information Bureau, Reference Information Center, SHALL SEND a copy of this Order on Reconsideration, including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

On May 23, 2001, the Commission released a Fourteenth Report and Order, Twenty-Second Order on Reconsideration in CC Docket No. 96-45, and Report and order in CC Docket No. 00-256 (Order), 66 FR 30080, June 5, 2001, that took action in response to the Rural Task Force's recommended reforms to rural high-cost universal service support and the proposals made by the Multi-Association Group relating to this universal service support mechanism. Specifically, the revised rules will provide certainty and stability for rural carriers for the next five years, enabling them to continue to provide supported services at affordable rates to American consumers. The Commission believes these modifications will preserve and advance universal service, consistent with the goals and principles set forth in section 254 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, and encourage competition in high-cost areas, consistent with the competitive goal of the 1996 Act. A summary of the Order was published in the Federal Register . See 66 FR 30080, June 5, 2001. Some of the rules contained information collection requirements that required OMB approval. On June 19, 2001, OMB approved the information collections. See OMB No. 3060-0986. The rule amendments adopted by the Commission in the Order took effect on June 19, 2001. This publication satisfies the statement in the Order that the Commission would publish a document in the Federal Register announcing the effective date of the rules.

The Federal Communications Commission published a document adopting satellite broadcast signal carriage rules, which require satellite carriers to carry local television stations in markets where the carriers offer local television service to their subscribers, in the Federal Register of January 23, 2001 (66 FR 7410). In rule FR Doc. 01-1186, published on January 23, 2001 (66 FR 7410) make the following correction:

1. On page 7410, in the first column, correct the “Dates” caption to read as follows:

On November 29, 2000, the Commission adopted a Report and Order, in CS Docket Nos. 00-96 and 99-363, that implements section 338 of the Communications Act of 1934, adopted as part of the Satellite Home Viewer Improvement Act of 1999 (“SHVIA”). A summary of the Report and Order was published in the Federal Register at 66 FR 7410 (Jan. 23, 2001). The Order adopted a rule, 47 CFR 76.66 (Satellite Broadcast Signal Carriage rule), requiring satellite carriers, by January 1, 2002, to carry all local television stations seeking carriage in any market in which they provide local-into-local service. The rule covers a wide range of topics including: carriage obligations and definitions, market definitions, delivery of a good quality signal, duplicating signals, channel positioning, content to be carried, material degradation, compensation for carriage, and remedies for carriage violations. Sections 76.66(c)(3), (c)(5), (d), and (m) of the rule, however, contained information collection requirements that required OMB approval before they could become effective. OMB approved the information collection requirements on June 7, 2001. See OMB No. 3060-0980. Accordingly, §§ 76.66(c)(3), (c)(5), (d), and (m) of the rule become effective on June 29, 2001. This document constitutes publication of the effective date of those sections.

Regulations governing the ocean salmon fisheries at 50 CFR 660.409 (a)(1) state that, when a quota for any salmon species in any portion of the fishery management area is projected by the Regional Administrator to be reached on or by a certain date, NMFS will, by notification issued under 50 CFR 660.411 (a)(2), close the fishery for all salmon species in the portion of the fishery management area to which the quota applies, as of the date the quota is projected to be reached.

In the 2001 management measures for ocean salmon fisheries (66 FR 23185, May 8, 2001), NMFS announced that the commercial fishery for all salmon (except coho) in the area from Horse Mountain to Point Arena, CA, would open on May 1 through earlier of May 31 or a 3,000-chinook quota.

The Regional Administrator consulted with representatives of the Pacific Fishery Management Council and the California Department of Fish and Game. The best available information on May 21, 2001, indicated that the catch and effort data, as well as projections, supported closure of the commercial fishery in this area at 2359 hours l.t., May 21, 2001. The State of California will manage the fishery in state waters adjacent to this area of the exclusive economic zone in accordance with this Federal action. As provided by the inseason notice procedures of 50 CFR 660.411, actual notice to fishermen of these actions was given prior to 2359 hours l.t on May 21, 2001, by telephone hotline number 206-526-6667 and 800-662-9825, and by U.S. Coast Guard Notice to Mariners broadcasts on Channel 16 VHF-FM and 2182 kHz.

Because of the need for immediate action to close the fishery upon achievement of the quota, NMFS has determined that good cause exists for this document to be issued without affording a prior opportunity for public comment. This document does not apply to other fisheries that may be operating in other areas.

This action is authorized by 50 CFR 660.409 and 660.411 and is exempt from review under Executive Order 12866.