This proposed Order is issued under the Hass Avocado Research, Promotion, and Information Act of 2000 (Act) [7 U.S.C. 7801-7813], enacted on October 23, 2000.

Prior documents: A proposed rule was published in the Federal Register on July 13, 2001 [66 FR 36870], with a 45-day comment period. Subsequently, the USDA published a notice in the Federal Register on August 28, 2001, extending the comment period by 15 days, to September 12, 2001. In addition, USDA published a proposed rule on the referendum procedures in the Federal Register on July 13, 2001 [66 FR 36886], with a 45-day comment period. The comment period on this rule was also extended 15 days. These comment periods were extended one day due to mail service being shut down on September 11-12, 2001.

The U.S. Department of Agriculture (USDA or the Department) received a proposal from the California Avocado Commission and partial proposals from Hass avocado interests in Chile, Mexico, and New Zealand to implement a program under the Act. The USDA issued the proposed rule to obtain comments on the proposals and to obtain information on the potential impact of the proposed program on the Hass avocado industry before developing a final proposed program and conducting a referendum on it.

The purpose of the program is to increase consumption of Hass avocados in the United States.

A referendum will be conducted on the proposed Order. The Order will be implemented if it is approved by a simple majority of the eligible voters in the referendum.

A final rule providing referendum procedures will be published in this issue of the Federal Register . A referendum order will be published in the Federal Register after a bond or irrevocable letter of credit has been posted by the California Avocado Commission. The representative period for eligibility for voting in the referendum and the dates for registration and for voting will be announced in the referendum order.

Producers and importers of Hass avocados will pay assessments under the program, and first handlers will be involved in the assessment collection process.

The Act provides that there will be a 12-member Board consisting of seven domestic Hass avocado producers, two importers, and three additional members who can either be importers or domestic producers. The three “swing” seats will be allocated to producers and importers so as to assure as nearly as possible that the composition of the Board reflects the proportion of domestic production and imports supplying the United States market. The proportion shall be based on the average volume of domestic production and imports in the United States over the previous three years. Each member will have an alternate.

The Order will provide for a nomination and election process to identify industry members who are interested and willing to serve on the Board. In the initial nomination process, the California Avocado Commission (Commission) will conduct an election to determine who will be nominated for each domestic producer seat. USDA will conduct an election among importers to determine who will be nominated to fill the importer seats. Two names must be submitted for each member and alternate position. From the names submitted, USDA will appoint the members and alternates of the Board.

Three years after the program is implemented, USDA could conduct a referendum to determine whether the Hass avocado industry supports continuation of the program: (1) At any time; (2) at the request of 30 percent or more of the producers and importers required to pay assessments; or (3) at the request of the Board.

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

This proposed rule has been reviewed under E.O.12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 1212 of the Act states that the Act may not be construed to preempt or supersede any other program relating to Hass avocado promotion, research, industry information, and consumer information organized and operated under the laws of the United States or of a state.

Under Section 1207 of the Act, a person subject to the Order may file a petition with USDA stating that the Order, any provision of the Order, or any obligation imposed in connection with the Order, is not established in accordance with law, and requesting a modification of the Order or an exemption from the Order. Any petition filed challenging the Order, any provision of the Order, or any obligation imposed in connection with the Order, shall be filed within two years after the effective date of the Order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The Act provides that the district court of the United States in any district in which the petitioner resides or conducts business shall have the jurisdiction to review a final ruling on the petition, if the petitioner files a complaint for that purpose not later than 20 days after the date of the entry of USDA's final ruling.

In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 601 et seq. ], the Agency has examined the impact of the proposed rule on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened.

The California avocado industry initiated this program by asking the U.S. Congress (Congress) to pass legislation to authorize USDA to create a generic program of promotion and research for Hass avocados. Congress found that this program is vital to the welfare of Hass avocado producers and other persons concerned with producing, marketing, and processing Hass avocados.

This program is intended to: Develop and finance an effective and coordinated program of research, promotion, industry information, and consumer information regarding Hass avocados; strengthen the position of the Hass avocado industry in U.S. markets; maintain, develop, and expand domestic markets for Hass avocados; and treat persons producing, handling, and importing avocados fairly.

Hass avocado producers and importers must approve the program in a referendum in advance of its implementation and would serve on the Board that would administer the program under the Department of Agriculture's supervision. In addition, any person subject to the program may file with USDA a petition stating that the Order or any provision of the Order is not in accordance with law and requesting a modification of the Order or an exemption from the Order. Administrative proceedings were discussed earlier in this proposed rule.

In this program, first handlers would be required to collect assessments from producers, file reports, and submit assessments to the Board. Importers would be required to remit to the Board assessments not collected by the U.S. Customs Service (Customs) and to file reports with the Board. Exports of U.S. Hass avocados would be exempt from assessment. While the proposed Order would impose certain recordkeeping requirements on producers, handlers, and importers, information required under the proposed Order could be compiled from records currently maintained and would involve clerical or accounting skills. The forms require the minimum information necessary to effectively carry out the requirements of the program, and their use is necessary to fulfill the intent of the Act. There would be an estimated 6,315 respondents providing information to the Board or to USDA: 6,000 producers, 100 first handlers, 200 importers, 10 exempt handlers, and five importer associations. The burden associated with the information collections would be $40,020 for all producers or $6.67 per producer, $6,500 for all first handlers or $65 per first handler, $50 for all importers or $0.25 per importer, $25 for exempt handlers or $2.50 per exempt handler, and $25 for all importer associations or $2.50 per importer association. These totals have been estimated by multiplying total burden hours requested by $10.00 per hour, a sum deemed to be reasonable should the respondents be compensated for their time.

The Department would oversee the operation of the program. Three years after the program is implemented, USDA could conduct a referendum to determine whether the Hass avocado industry supports continuation of the program at any time, at the request of 30 percent or more of the producers and importers required to pay assessments, or at the request of the Board.

There are approximately 6,000 producers, 200 importers, and 100 first handlers of Hass avocados that would be covered by the program. The program would also affect 10 exempt handlers, a state association of avocado producers, and several importer associations.

The Small Business Administration [13 CFR 121.201] defines small agricultural producers as those having annual receipts of $750,000 or less annually and small agricultural service firms as those having annual receipts of $5 million or less. Importers, first handlers, and exempt handlers would be considered agricultural service firms. Using these criteria, most producers and importers to be covered by the proposed program would be considered small businesses, and most handlers would not. The associations affected by this proposed rule consist of producers or importers and would reflect the size of these entities.

According to the USDA's National Agricultural Statistics Service (NASS), total U.S. production of all varieties of avocados during the 2000-2001 season was 234,320 tons, all of which was utilized fresh (except for a small processed quantity that NASS included in fresh utilization to protect the confidentiality of individual operations). The value of the 2000-2001 crop was $321 million. Production in 2000-2001 was up 28 percent from the previous year's total of 183,300 tons, which had a value of $379 million.

In 2000-2001, California accounted for more than 89 percent of U.S. production, followed by Florida (nearly 11 percent) and Hawaii (about 0.1 percent). Hass avocados account for about 85 percent of the total California avocado crop.

Avocados are imported in both fresh and processed forms. In 2000, fresh avocado imports accounted for about 75 percent of the total tonnage of fresh and processed avocados imported. Imported fresh avocados totaled 86,667 tons, up about 42 percent from 1999. Processed avocados accounted for 25,214 tons, up 21 percent from 1999.

The total import value for fresh and processed avocados was $149 million in 2000, up from $105 million in 1999. The total tonnage imported was up 37 percent in 2000, to 111,880 tons. The trend in imports is up, and imports have more than doubled since 1997. Almost all prepared or preserved avocado imports come from Mexico. In recent years, Chile has accounted for more than 50 percent of fresh imports, followed by Mexico, the Dominican Republic, and New Zealand.

The United States is a net importer of avocados, and exports of avocados are much smaller than imports. In 2000, total exports were 2,756 tons, down 60 percent from the year before, and only about 2 percent as large as imports. The value of exports in 2000 was $3.6 million, down from $7.6 million in 1999. There are just a few major destinations of U.S. exports. Canada, Japan, Spain, and the United Kingdom purchased about 87 percent of the U.S. avocado exports in 2000.

The proposed Hass avocado Order would authorize assessments on producers (to be collected by first handlers) and on importers (collected by Customs) of Hass avocados at an initial rate of 2.5 cents a pound. Exports of domestic Hass avocados are exempt from assessment. At the initial rate of assessment, about $10 million will be collected to administer the program: about 65 percent from domestic production and 35 percent from imports. The Act authorizes assessments on fresh, frozen, and processed Hass avocados. However, initially only fresh Hass avocados will be assessed.

An exempt handler is a person who would otherwise be considered a first handler, except that all Hass avocados purchased by the person have already been subject to assessments under the Order. Others affected by the program would be a state association (currently, the Commission), which would receive 85 percent of the assessments paid by domestic producers, and importer associations which would receive 85 percent of the assessments paid by their members. The state association could use the assessment funds to promote California Hass avocados in the United States, and the importer associations could use the assessments to promote Hass avocados on a country-of-origin basis in the United States. The funds remaining with the Board would be used to promote Hass avocados in the United States. The Board would also enter into contracts with the state association as provided for in the Act.

Associations and related industry media would receive news releases and other information regarding the implementation and referendum process. Furthermore, all the information would be available electronically.

If the program is implemented, the Hass avocado industry would nominate individuals to serve as members and alternates of the Board. USDA would ensure that the nominees represent the Hass avocado industry as specified in the Act.

The Board would develop guidelines for compliance with the program. The Board would recommend changes in the assessment rate; programs, plans, and projects; a budget; and any rules and regulations that might be necessary for the administration of the program. Rules and regulations that might be necessary for the administration of the program would be provisions to assess other types of avocados that are so similar to the Hass variety that they are indistinguishable to consumers in fresh form. The Board could also recommend the assessment of imported frozen and processed Hass avocados. The Board also has the authority to recommend the exemption of certain processed avocado products for sale to a retailer if the avocado portion of the product does not constitute a substantial value of the product. The administrative expenses of the Board are limited by the Act to no more than 10 percent of its assessment income.

There is a federal marketing order program for avocados grown in south Florida [7 CFR Part 915]. According to NASS, in Florida, there is little or no production of Hass avocados. Under the program, Hass avocados are covered by the grade regulations, but not by the maturity regulations. Since California is the source for more than 95 percent of avocados produced in the United States and Florida does not produce Hass avocados, there is little duplication between this Order and the federal marketing order.

There is also a state avocado program in California, which is administered by the Commission. The chief objective of the program is to increase consumer awareness of and demand for avocados on behalf of the state's 6,000 growers. Under the program, growers pay a percentage-of-revenue fee to fund a variety of market development programs. In 1998-1999, California producers paid $13,165,544 in assessments at a rate of 4 cents of the gross dollar value. In 1999-2000, the assessment rate was 3.5 percent of the gross dollar value. The state assessment may not exceed 6.5 percent of the gross dollar value of the year's sales of avocados by all producers to handlers, or which are sold by handlers on behalf of growers. Expenditures for administrative purposes under the program may not exceed 2.5 percent of the gross dollar value of sales. The assessments are collected from the growers by handlers, who remit the money to the Commission.

Paragraph (b)(1) of section 1212 of the Act states that nothing in the Act may be construed to provide for the control of production or otherwise limit the right of any Hass avocado grower, handler, and importer to produce, handle, or import Hass avocados. Paragraph (b)(2) of section 1212 of the Act states that the Order must treat all persons producing, handling, and importing Hass avocados fairly and that the Order must be implemented in an equitable manner. Further, paragraph (c) of section 1212 states that nothing in the Act may be construed to preempt or supersede any other program relating to Hass avocado promotion, research, industry information, and consumer information organized and operated under the laws of the United States or of a state.

Alternatives to the proposed Hass avocado program are limited by the Act. The Act requires USDA to publish proposals received for a Hass avocado program under the Act. USDA published four proposals for comment reflecting all or portions of an Order. The Act is very specific on many provisions which must be included in the programs. However, the Act does include a few alternatives which USDA has included as permissive terms-rather than required-in this proposed rule. These alternatives include the identification and assessment of avocado varieties that are so similar to Hass avocados that they are indistinguishable to consumers in fresh form, the exemption of certain processed Hass avocado products for sale to a retailer if the Hass avocado portion of the product does not constitute a substantial value of the product, and the identification and assessment of imported frozen and processed Hass avocado products.

In accordance with OMB regulations [5 CFR Part 1320] which implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the information collection and recordkeeping requirements that may be imposed by this Order have been submitted to OMB for approval. These requirements will not become effective prior to OMB approval.

Title: National Research, Promotion, and Consumer Information Programs.

OMB Number: 0581-0197.

Expiration Date of Approval: October 31, 2004.

Type of Request: New information collection for advisory committees and boards and for research and promotion programs.

Abstract: The information collection requirements in this request are essential to carry out the intent of the Act.

In addition, there will be the additional burden on producers and importers voting in referenda. The information collection requirements relating to referenda are registration for the referendum and the ballot. These burdens are addressed in the final rule on referendum procedures that is published separately in this issue of Federal Register .

Under the proposed program, first handlers would be required to collect assessments from producers and file reports with and submit assessments to the Board. While the proposed Order would impose certain recordkeeping requirements on producers, handlers, and importers, information required under the proposed Order could be compiled from records currently maintained.

There are an estimated 6,315 respondents: 6,000 producers, 100 first handlers, 200 importers, 10 exempt handlers, and five importer associations. The burden would be $40,020 for all producers or $6.67 per producer; $6,500 for all first handlers or $65 per first handler; $50 for all importers or $0.25 per importer; $25 for all exempt handlers or $2.50 per exempt handler; and $25 for all importer associations or $2.50 per importer association. These totals have been estimated by multiplying total burden hours requested by $10.00 per hour, a sum deemed to be reasonable should the respondents be compensated for their time. (There are currently no importer associations, but some are expected to be created if the Order is implemented.)

The proposed Order's provisions have been carefully reviewed, and every effort has been made to minimize any unnecessary recordkeeping costs or requirements, including efforts to utilize information already maintained by handlers for the Commission.

The proposed forms would require the minimum information necessary to effectively carry out the requirements of the program, and their use is necessary to fulfill the intent of the Act. Such information can be supplied without data processing equipment or outside technical expertise. In addition, there are no additional training requirements for individuals filling out reports and remitting assessments to the Board. The forms would be simple, easy to understand, and place as small a burden as possible on the person required to file the information. Collecting information monthly coincides with normal business practices.

Collecting information less frequently would hinder the Board from effectively carrying out the provisions of the program. Requiring reports less frequently than monthly would impose additional recordkeeping requirements by requiring information from several months to be consolidated prior to filling out the form rather than just copying end-of-month figures already available onto the forms. The timing and frequency of collecting information are intended to meet the needs of the industry while minimizing the amount of work necessary to fill out the required reports.

Therefore, there is no practical method for collecting the required information without the use of these forms.

Information collection requirements in this proposal are:

(1) A monthly report by each first handler who handles Hass avocados.

Estimate of Burden : Public reporting burden for this collection of information is estimated to average 0.50 hours per each respondent reporting on Hass avocados handled.

Respondents: First handlers.

Estimated Number of Respondents: 100.

Estimated Number of Responses per Respondent: 12.

Estimated Total Annual Burden on Respondents: 600 hours.

(2) A periodic report by each importer who imports Hass avocados.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 0.25 hours per each importer respondent reporting on Hass avocados imported.

Respondents: Importers.

Estimated Number of Respondents: 200.

Estimated Number of Responses per Respondent: 1 every ten years (0.10).

E stimated Total Annual Burden on Respondents: 5 hours.

(3) An exemption application for handlers who will be exempt from assessments.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 0.25 hours per response for each exempt producer and importer.

Respondents: Exempt handlers.

Estimated Number of Respondents: 10.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 2.5 hours.

(4) Voting in the nomination process.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 0.5 hours per response.

Respondents: Producers and importers.

Estimated number of Respondents: 6,200.

Estimated Number of Responses per Respondent: 1 every 3 years (0.33).

Estimated Total Annual Burden on Respondents: 1,023 hours.

(5) A background questionnaire for nominees.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 0.5 hours per response for each producer and importer nominated to the Board.

Respondents: Producers and importers.

Estimated Number of Respondents: 24 for the initial nominations to the Board and approximately 12 respondents annually thereafter.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 12 hours for the initial nominations to the Board and 6 hours annually thereafter.

(6) A requirement to maintain records sufficient to verify reports submitted under the Order for two years.

Estimate of Burden: Public recordkeeping burden for keeping this information is estimated to average 0.5 hours per recordkeeper maintaining such records.

Recordkeepers: Producers, first handlers, and importers.

Estimated number of Recordkeepers: 6,300.

Estimated Total Recordkeeping Hours: 3,150 hours.

(7) A requirement for importer associations to submit information in order to be certified by the Department.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 0.5 hours per response for each importer association.

Respondents: Importer associations.

Estimated Number of Respondents: 5.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 2.5 hours.

The Hass Avocado Research, Promotion, and Information Act (Act) authorizes the Department to establish a Hass avocado research, promotion, and information program. The program would be funded by an assessment of 2.5 cents per pound of Hass avocados levied on producers and importers of Hass avocados. The rate could be raised up to a maximum rate of 5 cents per pound. Exports of U.S. Hass avocados would be exempt from assessment. The Act authorizes assessments on domestic Hass avocados and on imports of fresh, frozen, and processed Hass avocados. Initially, only fresh domestic and imported Hass avocados will be assessed.

The Hass Avocado Board (Board) would use the funds to pay for research, promotion, industry information, and consumer information; administration, maintenance, and functioning of the Board; and expenses incurred by USDA in implementing and administering the Order, including referendum costs.

The Board would be composed of 12 voting members: 7 producers, 2 importers, and 3 producers and importers (swing seats). The three “swing” seats will be allocated to producers and importers so as to assure as nearly possible that the composition of the Board reflects the proportion of domestic production and imports supplying the United States market, based on the three-year average of domestic production and imports.

First handlers would be responsible for the collection of assessments from the producer and payment to the Board. First handlers would be required to maintain records for each producer for whom Hass avocados is handled, including Hass avocados produced by the handler. In addition, first handlers would be required to file reports regarding the collection, payment, or remittance of the assessments and the disposition of exported Hass avocados, which are exempt from assessment. All information obtained through handler reports would be kept confidential.

An exempt handler is a person who would otherwise be considered a first handler, except that all Hass avocados purchased by the person have already been subject to assessments under the Order. Others affected by the program would be a state association of avocado producers (currently, the Commission), which would receive 85 percent of the assessments paid by domestic producers, and importer associations which would receive 85 percent of the assessments paid by their members. The state association could use the assessment funds to promote California Hass avocados in the United States, and the importer associations could use the assessments to promote Hass avocados on a country-of-origin basis in the United States. The funds remaining with the Board would be used to promote Hass avocados generically in the United States. The Board would also enter into contracts with the state association as provided for in the Act.

Customs would collect assessments on imported Hass avocados and would remit those assessments to the Board for a fee.

The Act requires the USDA to conduct a referendum during the 60-day period preceding the proposed Order's effective date. Hass avocado producers and importers would vote in the referendum to determine whether they favor the Order's implementation. The proposed Order must be approved by a majority of the eligible producers and importers voting in the referendum. After the program has been in operation for three years, referenda could be conducted at any time, when requested by 30 percent of the Hass avocado producers and importers covered by the Order, or when requested by the Board.

The Act provides for the submission of proposals for a Hass avocado research, promotion, and information program by industry organizations or any other interested person affected by the Act.

The USDA issued a news release on January 8, 2001, requesting proposals for an initial Order or portions of an initial Order by February 7, 2001. A second news release, extending the deadline for submission of proposals to March 9, 2001, was issued on February 2, 2001.

An entire proposed Order and proposed referendum procedures were submitted by the Commission (Proposal 1). In addition, proposals containing portions of an Order were submitted by the Asociacion de Productores y Empacadores Exportadores de Aguacate de Michoacan (APEAM) (Proposal 2); the Chilean Exporters Association (ASOEX), Chilean Fruit Growers Federation (FEDEFRUTA), and Comite de Paltas de Chile (Proposal 3); and the New Zealand Avocado Growers Association (NZAGA) and the New Zealand Avocado Industry Council (NZAIC) (Proposal 4). The Chilean and New Zealand proposals were considered jointly because they are identical in every respect except for the provision on the importer definition, which is included in the Chilean proposal, but not in the New Zealand proposal. Proposals 2, 3, and 4 contained alternatives to provisions in Proposal 1 as well as provisions not included in Proposal 1.

Upon receipt of the proposals, USDA, the proponents of the four proposals, as well as representatives of the governments of Chile, Mexico, and New Zealand, engaged in an extensive dialogue with multiple opportunities to present views concerning the provisions contained in the submitted proposals. Upon completion of this review process, USDA published a proposed rule on July 13, 2001, for comment.

In the supplementary information section of the proposed rule, USDA summarized the four proposals received, identifying and separating out those provisions that were duplicative of other proposals, as well as those provisions that were not authorized by the Act. That discussion follows.

The proposed Order submitted by the Commission was summarized as follows: Sections 1219.1 through 1219.26 of the proposed Order define certain terms, such as Hass avocado, handler, producer, and importer, which are used in the proposed Order.

Sections 1219.30 through 1219.42 include provisions relating to the establishment, adjustment, and membership; nominations; appointment; terms of office; vacancies; reimbursement; powers; and duties of the Board.

The Board would be the body organized to administer the Order through the implementation of programs, plans, projects, budgets, and contracts to promote and disseminate information about Hass avocados, under the supervision of USDA. Further, the Board would be authorized to incur expenses necessary for the performance of its duties and to set a reserve fund.

Sections 1219.50 through 1219.57 authorize the collection of assessments, specify who pays them and how, and specifies persons who would be exempt from paying the assessment. The assessment rate may not exceed 5 cents per pound of Hass avocados. The assessment sections also outline the procedures to be followed by first handlers and importers for remitting assessments; and establish interest charges for unpaid or late assessments.

Sections 1219.60 through 1219.64 concern reporting and recordkeeping requirements for persons subject to the Order and protect the confidentiality of information obtained from such books, records, or reports and the maintenance of a list of handlers required by the Act.

Sections 1219.70 through 1214.77 describe the rights of the Secretary of Agriculture (Secretary), the authority for the Department to suspend or terminate the Order, proceedings after termination, the effect of termination or amendment, personal liability of Board members and staff, separability, amendments, and OMB control number.

The Department modified the Commission's proposal to make it consistent with the Act, as necessary as well as provide clarity, consistency, and correctness with respect to word usage and terminology. For example, the Department alphabetized definitions in §§ 1219.1 through 1219.26; organized sections of the Order to be more consistent with current programs and renumbered them accordingly; deleted redundant provisions; deleted referendum procedures and drafted a separate rule on referendum procedures; and changed the proposal to make it consistent with the Act and USDA policy.

In the definitions section, the definitions of “crop year” and “Association” were added to provide clarity, and the definition of “retailer” was removed because a specific definition was not warranted.

In the apportionment of three swing positions in § 1219.30(b)(3), USDA specified that Customs or USDA may provide import data in order to ensure accuracy. Section 1219.31(a)(3) was changed to indicate that two nominees must be submitted for each producer vacancy and two nominees must be submitted for each alternate vacancy because this is the standard practice for similar national programs. In § 1219.36(d), USDA specified that nominations and replacement shall not be required if the unexpired term is less than six months, and, in § 1219.35, a term of office for alternates was added to enhance administration of the program. In § 1219.36, authority for the Board to select alternates to fill vacant alternate positions by majority vote was revised to state that the Board may select, by majority vote, nominees to submit to the Department for appointment. The Commission's proposal provided for the Board to appoint the replacement members, but only the Department may appoint persons to serve on the Board as members or alternates. A paragraph on bylaws was added to § 1219.38 as paragraph (b) to ensure that the activities of the Board are consistent with the Order. In § 1219.38(k), the citation for the Act which requires periodic evaluations was corrected so that it complies with provisions of the Federal Agricultural Improvement and Reform Act of 1996 [7 U.S.C. 7401 et. seq. ]

Under § 1219.52, the Department revised the Commission's proposed limitation on administrative expenses of the Board to 10 percent of the funds available for generic promotion and research to reflect the fact that as much as 85 percent of the assessments collected under the program could be remitted to the Association and importer associations. The Act limits the administrative expenses of the Board in carrying out its generic programs, plans, and projects. In addition, the provision for the Board to make payments of assessments to the Association and importer associations within 30 days following the month in which the assessments were received because this language was inconsistent with other provisions which require payments to the Association and importer associations within 30 days of receipt of the assessments by the Board. USDA modified § 1219.56 to specify that the Board will apply overpayments of assessments against the amount due in succeeding months unless the person requests a refund.

A requirement for producers and exempt handlers to maintain records and file reports with the Board or the Department was added to § 1219.60(a) in order to facilitate enforcement of the Order and to make the Order consistent with current practice for similar national programs. In § 1219.61, authority for the Board to use agents to conduct audits—not just Board and USDA employees—was added to increase flexibility. Since agents were added in § 1219.61 for audits, they were also added to § 1219.63(a) on confidentiality to ensure that information obtained in audits is protected.

Lastly, a section on the rights of the Secretary was added so that the program would be consistent with other national programs and specify the rights of the Secretary.

A partial proposal was submitted by APEAM. APEAM is an association of persons who export avocados produced in Mexico to the United States.

USDA published several of the provisions submitted by APEAM. Other provisions were not published either because they were covered by Proposal 1 or because they were not authorized by the Act.

The provisions that were published for comment were as follows: (1) A definition of first handler; (2) a definition of fiscal period; (3) a provision requiring the Department to use data from import associations, Customs, and the Bureau of the Census for determining the level of imports in making its determination of the composition of the initial Board; (4) a provision defining “substantial activity” as it pertains to eligibility requirements for importer members; (5) a provision authorizing importer associations in general or by country of origin; (6) a provision authorizing the Department to certify only one importer association per country of origin; (7) authority for importer associations to include representatives of foreign avocado exporting industries; (8) a provision authorizing importer associations to invest funds received from the Board and conduct promotion and research on a country of origin basis; (9) a provision requiring final payments for a crop year to be received no later than May 31; and (10) a provision requiring the administrative staff of the Board to periodically review the list of Hass avocado producers and requiring the Association to provide a list of producers to the Department or to the administrative staff of the Board.

The following provisions were not published because they were covered by Proposal 1: (1) A provision requiring the Board to remit funds to importer associations no later than 30 days after such funds are received by the Board; (2) a requirement to allocate producer and importer members in the three swing positions in such a manner that, to the extent possible, importers will have proportional representation on the Board as a whole; (3) a requirement to reallocate the three swing positions to producers and importers in such a manner that, to the extent possible, there will be proportional representation on the Board as a whole.

The following provisions were not published because they were not authorized by the Act: (1) Authority for the Department to appoint a board to govern importer associations; (2) authority for Customs to send import assessments directly to importer associations; (3) a requirement for the Board to remit 85 percent of all import assessments to importer associations; (4) authority for importers to pay assessments 30 days after the end of the month in which the imported Hass avocados are sold in the United States; and (5) authority for the Board to enter into a contract or agreement with an importer association.

Proposal 3 was submitted by ASOEX and FEDEFRUTA and the Chilean Avocado Committee. ASOEX and FEDEFRUTA are the principal trade associations representing fruit exporters and producers in Chile. Proposal 4 was submitted by NZAGA and NZAIC. NZAGA is a voluntary association of avocado growers representing avocado production in New Zealand. USDA published several of the provisions submitted by ASOEX, FEDEFRUTA, NZAGA, and NZAIC. Other provisions were not published either because they were covered by Proposals 1 and 2 or because they were not authorized by the Act.

The provisions that were published were: (1) An eligibility requirement for importer members on the Board; (2) a requirement for the Board's generic programs to be conducted throughout the year; (3) a requirement for the Board to consult with the Commission and country-of-origin importer associations when developing generic programs; (4) a provision limiting the Board's administrative expenses for generic programs to 1.5 percent of total assessments; (5) a requirement for importer associations to be formed as soon as possible after the effective date of the Order; (6) a requirement for importer associations to establish bylaws; (7) authority for importer associations to use existing organizations for establishing their associations and their promotional and research programs; and (8) certification requirements for importer associations.

Provisions that were not published because they were covered by Proposals 1 or 2 were: (1) A requirement for overall representation of importers on the Board to be based on the proportion of domestic and import assessments; (2) a requirement for the Department to notify all importer associations on nominations for the initial Board within 30 days of the effective date of the Order; (3) a requirement for the Department to develop nomination procedures for importer members; and (4) a requirement for the Department to prepare a ballot containing the names of all persons nominated by all importer associations.

The provisions that were not published because they were not authorized by the Act were: (1) A requirement for USDA to serve as an advisor to importer associations; (2) a requirement for all importers and foreign producers and exporters to participate in importer associations; (3) authorization for the assessment of all varieties of avocados; (4) a requirement for the Board to contract with importer associations; (5) authority for importers to pay import assessments 60 days after the sale of avocados in the United States; (6) a requirement for importer associations to receive 85 percent of all import assessments, prorated by each country of origin; (7) authority for producers and importers to receive credit toward their assessments under the proposed program for contributions to generic state or country-of-origin promotion programs at a regional, state, or local level; (8) authority for importer associations to use import assessments for reasonable administrative expenses; and (9) a requirement to include a vote by volume in referenda.

Nine comments were timely received on the proposed rule. The comments contained several recommendations, a number of which have been adopted. There was one late comment.

Two of the comments received were submitted on behalf of the proponent of Proposal 1, the Commission. USDA also received a letter concerning the proponent's opposition to the 15-day extension for comments to be received and its view with regard to the impact of the extension on the rulemaking process. We disagree and continue to believe that the extension was appropriate and to the benefit of all interested parties, including the proponent.

The proponents of Proposals 2, 3, and 4 each commented on the proposed rule published on July 13, 2001, as did representatives of the governments of Chile and New Zealand. Two importers of avocados also submitted comments on the proposed rule. In general, the comments submitted by or on behalf of the Commission were in favor of a Hass Avocado Promotion, Research, and Information Order. The comments from New Zealand representatives were also generally in favor of such a program. Both groups, however, offered their own concerns or changes.

The comments received from the Chilean representatives, APEAM, and the two importers opposed implementation of the Hass avocado program while offering their recommendations for changes if the program was to be implemented. The late comment (from an association of Mexican avocado packers and exporters) generally reflected the issues and concerns raised by the proponents of Proposal 2 and did not contain any issues or comments that were not already raised in the comments that were received by the deadline.

Many of the comments reflected a continuing dialogue in connection with the variety of proposals previously received by USDA. In this regard, the comments compare and contrast the provisions of the proposals as well as the views of and comments submitted by others. Following is a discussion of the comments received that reflects our views with regard to them.

Several of the comments raised constitutional and World Trade Organization (WTO) issues. The constitutional issue is framed in terms of a recent United States Supreme Court (Court) decision United States v. United Foods, Inc. [121 S. Ct. 2334 (2001)] ( United Foods ). The WTO issues also were discussed in the preliminary phases of this rulemaking process.

In the July 13, 2001, proposed rule, we noted that on June 25, 2001, the Court issued the United Foods decision that held that the use of mandatory assessments to fund promotional speech in the mushroom research and promotion program violated the First Amendment of the U.S. Constitution. In general, comments in opposition to the proposed Hass avocado promotion program raised a constitutional argument and objected to the mandatory nature of the program. Such comments recommended that assessments for promotional activities under the proposed Hass avocado program be voluntary. The comment filed on behalf of the Commission, which supported Proposal 1, disagreed with that analysis. USDA believes and continues to be of the view that the Hass avocado program, as previously proposed and with the changes included in this action, is constitutionally sound.

In addition, the New Zealand comment (Proposal 4) suggested that the requirement that all Board members and alternates be domiciled in the United States was probably unconstitutional. We disagree. Further discussion of this requirement will occur later in our subsequent responses to comments.

With regard to the WTO issues raised as to the consistency with international trade obligations, some comments argued that the proposed Hass avocado program was not consistent with these trade obligations. These comments identified a number of provisions as discriminatory. In that regard, comments focused on the timing of payments of assessments on domestic and imported avocados. One comment noted the failure to assess all varieties of avocados. Other examples were also offered. The comment filed on behalf of the Commission argued the contrary. We continue to view this program as consistent with applicable international trade obligations.

Comments discussed individual sections of the four proposals and in a number of instances offered views of provisions that appeared in the alternative, comparing and contrasting such sections. A summary of these comments appears in the following discussion.

A comment was received comparing the definition of first handler in § 1219.9 of Proposal 1 with the definition of that term in Proposal 2. The comment deferred to USDA with regard to this definition. The alternative definition is not substantially different from the definition in Proposal 1. Accordingly, we are adopting the definition from Proposal 1.

Section 1219.10 of Proposal 1 establishes the fiscal period or marketing year as the period beginning on November 1 of any year and extending through the last day of October of the following year. Proposal 2 provides for a period beginning on April 1 of any year and extending through the last day of March of the following year. A comment pointed out that the period beginning on November 1 corresponded to the domestic marketing season while the period beginning on April 1 corresponded to the growing season in Mexico. The comment argued that the definition in Proposal 1 should be adopted, noting that the Commission has a substantial database on historical U.S. production organized on a November 1 fiscal year basis and that each exporting country may have a different growing season. We agree that the fiscal period or marketing year should begin on November 1. It should also be noted that § 1219.10 provides for changing to another consecutive 12-month period, as recommended by the Board and approved by the Department. Therefore, we are adopting § 1219.10 of Proposal 1. We are also adopting without change the definition of crop year in § 1219.5 of Proposal 1. That section provides for the crop year also to begin on November 1.

The definition of importer appears in § 1219.14. A comment raised concern regarding this section of Proposal 1 as modified by USDA. The comment stated that the language is overly broad and would include non-U.S. residents and non-U.S. citizens. We disagree. There are two definitions of importer in the Act. The one in § 1203(8) of the Act is a general definition, and the other appears in § 1205(c) of the Act as a special definition concerning eligibility for membership on the Board. The provision in the Order at issue implements the general definition of the Act. It is intended to be broad so as to cover all importers subject to assessments. This provision is not applicable to § 1219.30 of the Order, where a special and separate definition for importer appears in connection with an importer's eligibility for membership on the Board.

A number of proposals were published concerning § 1219.30 Establishment and membership with language and provisions appearing in Proposals 1, 2, 3, and 4. One comment related to the requirement in § 1219.30(a) that all Board members and alternates be domiciled in the United States. The comment expressed the view that this requirement was undemocratic, probably unconstitutional, and not consistent with the Act. We disagree. We believe that it is more practical and reasonable for effective program administration, management, and participation in this program to include domicile as an eligibility requirement.

One comment compared the language of Proposal 2 with that of Proposal 1 with regard to the apportionment of Board members as specified in § 1219.30(b)(3). The comment noted that the source of data to be used by the Department in determining proportional representation on the initial Board was broad based for both the level of domestic production and the level of imports. The comment further noted that Proposal 2 had provided for different sources of information for domestic production and for imports. The comment stated that all sources of information should be referred to for both. We agree, but we have eliminated references to individual sources of information, as proposed, in favor of a more general statement referring to all sources of information available to the Secretary. An appropriate change to § 1219.30(b)(3) has been made.

In Proposal 1, § 1219.30(d) provides that an importer means a person who is involved in, as a substantial activity, the importation of Hass avocados. The term substantial activity is not further defined. However, in Proposals 2 and 3, a person would be considered to be involved in the importation of Hass avocados as a substantial activity if the person has imported 75 percent or more of the total annual volume of all Hass avocados produced, handled, or imported by such person. Two comments objected to the 75 percent provision in Proposals 2 and 3.

One comment indicated that the purpose of the term substantial activity in the statute was to insure that importers who serve on the Board were not merely people who might import a few boxes of Hass avocados occasionally and that the term was meant to guarantee that importer members on the Board were truly involved in the importation and marketing of Hass avocados. The comment went on to note that: The statute does not provide for a 75 percent or other threshold; a dictionary definition of the word substantial speaks in terms of volume and not proportion; a 75 percent provision was beyond the scope of and contrary to the statute; the provision could have the effect of disqualifying some of the largest importers and most knowledgeable marketers; and the provision would be burdensome on the Department in connection with the auditing the books of importers to determine eligibility.

The other comment that opposed the 75 percent provision in Proposals 2 and 3 noted that the 75 percent provision for imports as a proportion of total Hass avocados handled would prevent almost all of the importers of New Zealand Hass avocados from qualifying now and in the future without changes to commercial relationships with U.S. handlers. The comment went on to recommend the use of Proposal 1 language which does not define substantial activity or more preferably the definition of importer in § 1219.14 of Proposal 1 instead of § 1219.30(d) of Proposals 2 and 3.

We disagree with both comments. Under the statute, the Board is divided between producer and importer members. The Secretary appoints such members to the Board. In determining who is eligible to serve as an importer member on the Board, the statute provides for a substantial activity test. In order to implement such a provision, the Order needs to provide specific detail to enable the Department to measure substantial activity. One comment suggested a quantity basis to compare one potential importer with another that would be indicative of size and knowledge. We believe that a more reasonable application of the substantial activity test would be to base a person's eligibility on the person's individual business activity and which industry function (producing or importing) predominates. This is a reasonable measure and regulatory approach. This also would provide a clear and understandable benchmark for the Department to use to measure substantial activity. Therefore, we are adding to § 1219.30(d) a provision that states “a substantial activity means that the volume of a person's Hass avocado imports must exceed the volume of the person's production or handling of domestic Hass avocados.”

One comment was received regarding the initial nomination and appointment of producer members and alternates as provided in § 1219.31 of Proposal 1. The comment proposed that the Department be allowed to choose an alternate member from either the nominee for the Board member who is not appointed to the Board or from the two nominees for the alternate member position. This suggested change has merit. Therefore, we have revised § 1219.31 of Proposal 1 accordingly with some modification of the language recommended in the comment. We further believe that similar change to § 1219.32 concerning the initial nomination and appointment of importer members and alternates is appropriate and have accordingly made this change.

Two comments were received on the provisions in § 1219.32 of Proposal 1 that deal with the initial nomination and appointment of importer members and alternates. The comment requested clarification as to whether importers or importer associations would vote in the initial nomination process. The comment pointed out that there are currently no importer associations representing the interests of Hass avocado importers. As published in the July 13, 2001, proposed rule, the language in § 1219.32 of Proposal 1 included references to both importers and importer associations. The inclusion of importer associations in this provision was incorrect and the applicable reference has been deleted. Individual importers will vote in the nomination process.

One comment also requested that country-of-origin exporter associations be notified by USDA of the nomination process for initial importer members and their alternates. Prior to the nomination process, the Department will use all available resources to help assure that the maximum number of importers are identified, but this does not merit a change in the proposed language for the Order. The comment went on to suggest alternative language for § 1219.32 including changes to the text concerning subsequent nominations. Section 1219.33 addresses subsequent nominations which will be subject to further rulemaking as appropriate. Accordingly, no further changes were made to § 1219.32.

Regarding § 1219.33 of Proposal 1, a comment expressed concern that the Board itself may put procedures in place for subsequent nominations of importer members and alternates of the Board. However, this section provides that any procedures recommended by the Board require the approval of the Department. Prior to implementing any procedures, the Department would engage in rulemaking and publish recommended procedures for public comment before they are approved by the Department.

The comment also requested that § 1219.38(s) of Proposal 1 be revised to require the Board to report annually to importer associations. This section requires the Board to make public reports of its activities at least once each fiscal period. This means that the information would be available to all interested persons, including importer associations. Accordingly, no change is needed in § 1219.38(s).

A comment was submitted on § 1219.40(e) of Proposal 1. The comment requested the deletion of the requirement for the Department to receive advance notice of committee meetings. The comment offered that this requirement is an example of micromanagement and will result in excessive costs for the Department, presumably because the Department would have the opportunity to attend committee meetings which would, in turn, increase the administrative costs billed by the Department to the Board. We disagree. This provision is necessary for proper program administration and will ensure that the Department is appropriately informed of program activities. Therefore, § 1219.40(e) of Proposal 1 is adopted without change.

Two comments were received on § 1219.50(e) of Proposals 3 and 4 that requires the Board's programs be conducted throughout the year to reflect periods when imported and domestic Hass avocados are in the U.S. marketplace. One comment opposed this provision, raising a variety of concerns. These concerns included statutory authority, vagueness, and the diminishment of Board authority by imposing a requirement that substitutes scheduling for strategy. We disagree. In the prior discussion of the definition of fiscal period or marketing year in Proposal 2, this same comment noted that there are different growing seasons in different exporting countries. The provision in § 1219.50(e) reflects this. We believe that it is reasonable to provide in the Order language that programs shall be conducted throughout the year and that the Board will be fully able to accomplish such a result consistent with this provision.

The second comment supported this provision but recommended modifying it to provide that the Board's generic programs may not be conducted predominately during the time that domestic Hass avocados are in the marketplace. We believe that this change is unnecessary. Therefore, we have adopted § 1219.50(e) of Proposals 3 and 4 without change.

Three comments related to § 1219.50(f) of Proposals 3 and 4 which would require the Board to consult with both the state association and importer associations on programs, plans, and projects for generic promotion and research. Two comments supported the requirement, and one comment stated that the consultation should be discretionary rather than mandatory. The Board's generic programs will be carried out by the state association with funds paid by both domestic producers and importers. Therefore, it would be beneficial to provide for and require such consultation. Accordingly, we adopt § 1219.50(f) of Proposals 3 and 4 by adding a new paragraph (f) to § 1219.50 of Proposal 1.

Under the Act, the Board is required to remit 85 percent of domestic assessments to the Commission and may remit up to 85 percent of import assessments to one or more importer associations. If the entire 85 percent of domestic assessments are remitted to the Commission, and the entire 85 percent of import assessments are remitted to importer associations, the Board would retain 15 percent of total assessments to conduct its generic programs. The Act also limits the Board's administrative expenses to 10 percent of its income. The intent of the cap on administrative expenses is to ensure that a majority of the Board's expenditures are program-related. After assessments have been distributed to the Commission and to importer associations, the remaining funds will be used by the Board for generic promotion and research. In order to implement the statutory cap on administrative expenses, § 1219.52(a)(1) of Proposal 1 states that the Board's administrative expenses shall not exceed 10 percent of the funds received by the Board for generic programs. A different approach was taken in Proposals 3 and 4. In § 1219.52(a)(1) of Proposals 3 and 4, the Board's administrative expenses are limited to 1.5 percent of total assessment income. This assumes that only 15 percent of the Board's income would remain with the Board and be available to be used for generic promotion and research.

Comments were received from two parties on the 1.5 percent cap specified in § 1219.52(a)(1) of Proposals 3 and 4. One comment supported this limitation as long as importer associations actually receive 85 percent of the import assessments paid to the Board. In addition, the comment expressed the view that the 1.5 percent limitation should be lowered if importer associations receive less than 85 percent of the import assessments. We are not adopting this recommendation or the provisions of § 1219.52(a)(1) in Proposals 3 and 4 because they would be difficult to administer. The second comment on § 1219.52(a)(1) of Proposals 3 and 4 stated that efforts to control administrative expenses in the program were desirable but the 1.5 percent seemed unreasonably low. The comment suggested a change in the language of the Order to clarify that there would a 10 percent limitation on funds actually retained by the Board. We agree with the substance of the second comment, but no change is needed to § 1219.52(a)(1) of Proposal 1. As noted above, this section already limits administrative expenses to 10 percent of the funds available to or retained by the Board for generic promotion and research.

Comments were received concerning importer association provisions in § 1219.54 of Proposals 1, 3, and 4 and the unnumbered section of Proposal 2. These comments reflected a variety of issues that have been raised in connection with the establishment and function of importer associations under the Act and the Order. With regard to the unnumbered section in Proposal 2, statutory concerns were raised as to compelled membership and limiting certification to only one importer association per country of origin. The statutory authority for § 1219.54(u) of Proposals 3 and 4 was questioned while the list of information required for certification was not opposed as long as it was considered discretionary and as long as the import association contemplated in § 1219.54(l) of Proposal 1 was applicable rather than that referred to in paragraph (u). In addition, a comment offered support for § 1219.54 (u) and (v) of Proposals 3 and 4 with modifications that included establishing importer associations before the effective date of the Order; limiting one importer association per exporting country; and requiring participation of all importers of Hass avocados in one or more importer associations based on the country of origin of imports. The same comment offered an addition to § 1219.54 in the form of new paragraphs (w) and (x) concerning Board transfers, to importer associations, of 85 percent of all assessments paid on imports, prorating each country of origin, and concerning information required for the Department to certify associations. Paragraph (w) is not authorized by the Act. Paragraph (x) is discussed in relationship to a new § 1219.58 on importer associations.

We have reviewed all relevant provisions of Proposals 1, 2, 3, and 4 concerning importer associations, taking into account the comments received, including modifications and additions to proposed language. We have considered these proposals and comments and created a new § 1219.58 relating to importer associations. Paragraph (a) of the new section adopts the language from paragraph (m) of § 1219.54 from Proposal 1. As a result, paragraph (l) of § 1219.54 of Proposal 1 has been revised to provide a reference to the new § 1219.58, and paragraphs (n) and (o) will be redesignated as paragraphs (m) and (n), respectively.

Further, we are deleting the second sentence of proposed § 1219.54 concerning first handlers and producers who are also handlers. The definition of first handler in § 1219.9 is applicable and, therefore, such a sentence is unnecessary.

Proposal 2 includes an unnumbered section that provides for the establishment of importer associations. One comment supported the adoption of this section, including the sentence in paragraph (a) of the unnumbered section that states that one importer association could represent all importers of Hass avocados or importers from a particular country. We agree with this comment and have adopted this sentence as part of paragraph (b) of § 1219.58, with modifications for clarity.

The unnumbered section also provides that the Department would not certify more than one importer association per country of origin. One comment supported this provision. Another comment opposed the adoption of this requirement. We inadvertently indicated in the July 13, 2001, proposal that an Order could prohibit the Department from certifying more than one importer association per country of origin. The text of this appeared in Proposal 2. Such a provision is not authorized by the statute. Therefore, the sentence in paragraph (a) of the unnumbered section of Proposal 2 that would limit the number of importer associations that could be certified is not adopted.

One comment supported the adoption of paragraph (b) of the unnumbered section in Proposal 2 that provides that an importer association may be composed of importers as well as representatives of the foreign avocado exporting industries. Another comment supported the adoption of a paragraph (u) of § 1219.54 in Proposals 3 and 4. In addition to authorizing importer associations to be composed of importers, foreign producers, and exporters, paragraph (u) provides that importer associations establish their own bylaws and utilize existing organizations for establishment of their associations and coordination of their promotional and research efforts.

We agree that importer associations may be composed of importers as well as representatives of the foreign avocado exporting industries. Therefore, we have adopted paragraph (b) of the unnumbered section of Proposal 2 as part of paragraph (b) of the new § 1219.58. We believe the language in this paragraph is more appropriate than the similar language in paragraph (u). We also agree that importer associations should establish their own bylaws and may utilize existing organization for establishment of their associations and coordination of their promotional and research efforts. Therefore, we have adopted these provisions of paragraph (u) from § 1219.54 of Proposals 3 and 4 as part of paragraph (b) of the new § 1219.58.

Paragraph (u) also provides that importer associations be established within a reasonable amount of time after the effective date of this subpart. This provision was supported by one comment and opposed by another. The comment in opposition of this provision stated that the Act gives no authority to require the establishment of importer associations within a reasonable time. We agree. The timing of the establishment of an importer association is at the discretion of importers. It should not be a requirement of the Order. Therefore, we are not adopting this provision of paragraph (u) of § 1219.54 of Proposals 3 and 4.

Another comment opposed the unpublished provision of Proposal 2 that would require all importers to join an importer association. The comment stated that this provision is not authorized by the Act and goes far beyond the intent of Congress in authorizing the establishment of importer associations. We agree. In identifying in the July 13, 2001, proposed rule the provisions in Proposals 3 and 4 that were not published because they were not authorized by the Act, we included the requirement that all importers join an importer association.

One comment recommended that the proposed Order allow importer associations to be certified by the Department before the effective date of the proposed Order. This would be impractical because importer associations cannot be certified by the Department prior to the effective date of the proposed Order. Therefore, this recommendation is not adopted.

Paragraph (v) of § 1219.54 in Proposals 3 and 4 includes criteria to be used by the Department in determining whether to certify importer associations. One comment included revised language for this section as a new paragraph (x). Paragraph (x)(2) of the comment generally parallels paragraph (v)(2) of § 1219.54 of Proposals 3 and 4. However, the new paragraph (x)(2) would add to the criteria for certification evidence that an importer association is composed not only of importers but of foreign exporters. We disagree with this change. The inclusion of foreign exporters is not a requirement for importer associations under the Order. Therefore, it would not be appropriate to include this criteria, and we have adopted paragraph (v)(2) of § 1219.54 of Proposals 3 and 4 as published on July 13, 2001.

In addition, paragraph (x) does not include paragraph (v)(3) of § 1219.54 of Proposals 3 and 4. We disagree with the removal of this paragraph. The paragraph states that one of the criteria for certification is certification of the importer association's ability and willingness to further the aims and objectives of the Order. We believe this criteria is of particular importance because importer associations that are certified to receive funds from the Board must agree to utilize the funds in conformance with the provisions of the Order. Therefore, we are adopting paragraph (v) of § 1219.54 in its entirety as paragraph (c) of the new § 1219.58.

Finally, in regard to § 1219.54(l) of Proposal 1, an importer association would receive an amount of assessment funds equal to 85 percent of the assessments paid on the Hass avocados imported by its members. Section 1219.54(1) of Proposal 2 states that an importer association shall receive an amount of assessments equal to the product obtained by multiplying the aggregate amount of assessments attributable to the pounds of Hass avocados imported by its member importers by 85 percent. The language in Proposal 2 and the language in Proposal 1 create the same requirement. Unlike Proposal 1, however, Proposal 2 expresses the requirement in terms of a mathematical calculation. We are adopting the language from § 1219.54(l) of Proposal 1 because it is not necessary to include the mathematical calculation in the Order.

There was one comment on § 1219.61 of Proposal 1 which covers books and records. Citing established research and promotion programs administered by the Department, the comment recommended that producers who are not also first handlers, and who are not responsible for remitting assessments to the Board, should not be subject to the recordkeeping requirement. We disagree. The Act itself provides that, not only first handlers and importers, but also producers are required to maintain books and records and make them available to the Department or the administrative staff of the Board. It may be necessary on occasion for the staff of the Board to audit the records of producers to verify the information provided in handler reports. Therefore, the comment is not adopted.

A comment supported, with modifications, the requirement for a list of importers as provided for in § 1219.64 of Proposal 1. We are not adopting the recommended modification that would require Customs to provide the list to importer associations and for such associations to review the list. Such a requirement is not consistent with section 1205(m)(3) of the Act. However, we are deleting the second sentence of § 1219.65 of Proposal 1 concerning the list of importers and Customs because they are not necessary in view of language in the Act. The Act requires Customs to provide this information to the Department and the staff of the Board on request. Another comment noted that the requirement in § 1219.65 of Proposal 2 was redundant and unnecessary, adding that the Secretary would have the authority to obtain such a list in any event. Section 1219.65 provides that on request of the Secretary or the Board, the Association would provide to the Secretary or the administrative staff of the Board, a list of producers of Hass avocados. We disagree and believe that such a provision is appropriate for inclusion in the Order.

Section 1219.70 Right of the Secretary provides that all fiscal matters, plans, projects, contracts, rule or regulations, reports, or other substantive actions proposed and prepared by the Board are required to be submitted to the Secretary for approval. A comment stated that this section should be eliminated. The comment believed the provision was redundant because all necessary provisions requiring submission of materials for the Secretary's approval were already in the Order. The comment particularly objected to inclusion of a requirement that the Secretary approve other substantive actions proposed and prepared by the Board indicating that the requirement was vague and ambiguous, would invite abuse of authority by USDA officials, and invite the subversion of the function of lawfully appointed Board members. We disagree. Research and promotion programs represent a federal and industry partnership that has been affirmed by Congress time and time again. The Department recognizes the expertise of the industry. At the same time, the Department has long-standing experience in administering and enforcing the provisions of these programs. The Department has and will continue to maintain the integrity of such programs. While industries may take advantage of the benefits of research and promotion programs, certain responsibilities attach, including those referenced in § 1219.70. Therefore, no change is made.

In addition, commenters made a number of recommendations which cannot be adopted because they are inconsistent with or not authorized by the Act. These comments appeared in a variety of contexts with some being raised in overall or general concerns and with others in terms of alternatives or modifications and others spanning provisions or a provision of the proposals. These recommendations include amending the proposed Order to provide for the following: a requirement for proportional representation of producers and importers on the Board as a whole; a requirement for all importers and country-of-origin producers and exporters to participate in importer associations; authority for the Board to assess all varieties of avocados; a requirement for the Board to contract with country-of-origin importer associations in the same manner and with the same effect as with the State association; authority for importers to pay import assessment 30 days after the end of the month in which imported Hass avocados are sold in the United States; a requirement for importer associations to receive 85 percent of all import assessments, prorated by each country of origin; and authority for producers and importers to receive credit towards their assessments under the proposed program for contributions to generic state or country-of-origin promotion programs at a regional, state, or local level.

Comments were also received relating to the procedures used in connection with notice and comment rulemaking. For example, one requested that its comments be published in their entirety in the Federal Register . All comments were posted in their entirety on the USDA-AMS website at the time they were received by the Department. In addition, comments are discussed and responded to in this rule, as appropriate, in the context of the discussions that appear herein. Another comment raised concerns regarding what is in effect an opportunity for rebuttal of the other comments. In this rulemaking, we have provided opportunity for comment that is consistent with applicable law and made every attempt to include the views of all interested persons as part of this proceeding.

In summary, Proposal 1 is adopted with the following changes: Revising § 1219.30(b)(3), § 1219.30(d), § 1219.31(b), § 1219.32(a)(1) and (2), and § 1219.32(b); correcting a citation in § 1219.42(d); adding new paragraphs (e) and (f) from Proposals 3 and 4 to § 1219.50; revising § 1219.54(b)(3) and (l); deleting paragraph (m) from § 1219.54 and redesignating paragraphs (n) and (o) in that section; adding a new § 1219.58 from Proposals 1, 3, and 4 with modifications; revising § 1219.64; and adding a new § 1219.65 from Proposal 2. Other provisions of Proposals 2, 3, and 4 are not adopted. Miscellaneous changes were also made to the following provisions for the purpose of clarity and consistency: § 1219.12; § 1219.39(c); § 1219.52(a)(1); § 1219.54(m)(3); § 1219.58(b); § 1219.63(a); § 1219.71(a); and § 1219.77.

A referendum will be conducted among eligible Hass avocado producers and importers to determine whether they favor implementation of the Hass Avocado Promotion, Research, and Information Order. The referendum order will be published in the Federal Register at a later date following the publication of this proposed order and the final rule providing for referendum procedures. The representative period for eligibility for voting in the referendum and the dates for registration and for voting will be announced in the referendum order.

For the reasons set forth in the preamble, AMS proposes to amend 7 CFR chapter XI as follows:

This proposed rule will reform the structure and procedures of the Board of Immigration Appeals. Under the new case management procedures, all cases appealed to the Board will be examined by a Board member assigned to the screening panel. Most cases will be resolved through summary decisions issued by a single Board member. The assigned Board member on the screening panel will also identify those cases that warrant review by a three-member panel. The Board will no longer revisit factual determinations of immigration judges on a de novo basis, but will be able to remand cases for further factfinding where necessary. In addition, the rule will set specific time limits for the disposition of cases. The Board's current jurisdiction over appeals from decisions by the Immigration and Naturalization Service (INS) imposing various kinds of administrative fines (see 8 CFR 280) will be transferred to the Office of the Chief Administrative Hearing Officer (OCAHO). After a transition period of operation under the new procedures to eliminate the current backlog of cases, the Board will be reduced in size to eleven members from its present size of 19 members plus four vacancies.

In 1983, the Attorney General created the Executive Office for Immigration Review (EOIR). This reorganization consolidated the Department's immigration review programs by placing the immigration judges (formerly known as special inquiry officers within INS) and the Board of Immigration Appeals into EOIR, a Department component independent from INS. The Board has broad jurisdiction over appeals from decisions of the immigration judges in exclusion, deportation, and removal proceedings, custody appeals, asylum cases, and other specific matters, and it also has authority to review certain final decisions by INS district directors and other officials. See 8 CFR part 3, subpart A. Decisions by the Board are subject to review by the Attorney General as provided in 8 CFR 3.1(h).

In 1987, the Attorney General also placed in EOIR the Office of the Chief Administrative Hearing Officer (OCAHO), in order to house similar quasi-judicial administrative adjudications within a single Departmental organization. OCAHO currently adjudicates certain civil penalty proceedings under sections 274A, 274B, and 274C of the Immigration and Nationality Act (Act), relating to violations of the employment verification requirements, immigration-related discrimination claims, and civil document fraud cases, respectively. See 28 CFR 68.

This reform initiative is intended to accomplish four important objectives in the disposition of immigration case appeals: (1) Eliminating the current backlog of cases pending before the Board; (2) Eliminating unwarranted delays in the adjudication of administrative appeals; (3) Utilizing the resources of the Board more efficiently; and (4) Allowing more resources to be allocated to the resolution of those cases that present difficult or controversial legal questions—cases that are most appropriate for searching appellate review.

Under its current structure and procedures, the Board has been unable to adjudicate incoming cases quickly enough to eliminate the unacceptable backlog that has existed for several years. Numerous cases have languished before the Board for more than two years, some for more than five years, frustrating efforts to achieve timely resolution of immigration disputes.

Since 1995, the problem of the mounting backlog of cases has been addressed by incremental increases in the size of the Board. However, in retrospect, it is now clear that the addition of new Board members has not appreciably reduced the backlog of cases. The problem is not one of personnel. Rather, the problem is rooted in the structure and procedures of the Board, which make it nearly impossible for Board members to accomplish their mission. The devotion of the Board's time and resources to cases that present no colorable grounds for appeal has made it extremely difficult to address in a timely manner those cases that most need the Board's review.

The one change in the Board's procedures that has produced positive results in recent years is the streamlining initiative, which allows for summary decisions by a single Board member in several categories of appeals. See 64 FR 56135 (Oct. 18, 1999). The Board's existing streamlining process is currently codified at 8 CFR 3.1(a)(7), and would be recodified in this proposed rule at § 3.1(e)(4). The streamlining project has successfully expedited such appeals, and the project was recently assessed favorably by an external auditor. The proposed rule builds upon the success of the streamlining model, expanding the single-member resolution of appeals more broadly for appeals that present no difficult or controversial legal questions. The authority of individual Board members to resolve such cases in expedited fashion is a critical component of the two-phase structure of Board consideration of cases, summarized below.

The proposed rule contains amendments to 8 CFR part 3, subpart A, which combine to substantially alter the structure, procedures, and charge of the Board. These changes may be summarized as follows.

Many of the key features of the proposed rule are codified in the new provisions of § 3.1(e), which directs the Chairman to establish a case management system with specific new standards for the efficient and expeditious resolution of all appeals coming before the Board.

Under § 3.1(e)(1), all appeals will be sent initially to a screening panel of the Board, through which individual Board members will decide the majority of cases. The initial determination is whether the case is appropriate for disposition on the merits. The Board's existing regulations at § 3.1(d)(2) already provide for summary dismissal of appeals for lack of jurisdiction or other specified procedural defaults. That authority is retained in this rule and, as discussed below, this rule also restores a pre-existing ground for summary dismissal of appeals that are filed for an improper purpose or that lack an arguable basis in fact or in law. Section 3.1(e)(2) of the proposed rule reflects the authority currently codified in § 3.1(a)(1) for a single Board member to make various procedural dispositions of cases.

The Board's case management system will arrange for prompt completion of the record on appeal, including simultaneous briefing by the parties, as discussed further below. With each such appeal, as provided in § 3.1(e)(3) of the proposed rule, a single Board member assigned to the screening panel will decide every case, unless the Board member determines that the case is appropriate for review by a three-member panel under the standards of this rule. A single Board member may summarily affirm without opinion under § 3.1(e)(4), which is very similar to the authority under the Board's existing streamlining regulation. However, the current streamlining process is limited to summary affirmances without opinion; under the existing rules any final decision on the merits that may require a written order to explain the Board's reasoning in affirming, reversing, modifying, or remanding a decision under review must be made by a three-member panel, regardless of whether the issues themselves are substantial. Accordingly, § 3.1(e)(5) would expand the existing streamlining authority to authorize a single Board member to issue a brief order affirming, reversing, modifying, or remanding a decision under review in those cases that do not meet the standards warranting review by a three-member panel. The choice between summary affirmance without opinion and the issuance of a brief order explaining the Board's disposition of the case on the merits would be made on a case-by-case basis after review by the individual Board members to which the cases are assigned.

As the proposed rule stipulates in § 3.1(e)(6), five categories of cases will qualify for review by a three-member panel. To qualify, a case must present one of the following: (1) The need to settle inconsistencies between the rulings of different immigration judges; (2) the need to establish a precedent to clarify ambiguous laws, regulations, or procedures; (3) the need to correct a decision by an immigration judge or by the INS that is plainly not in conformity with the law or with applicable precedents; (4) the need to resolve a case or controversy of major national import; or (5) the need to correct a clearly erroneous factual determination by an immigration judge. The efficient disposition by single Board members of cases that do not present such circumstances will allow the three-member panels to focus their attention and resources on those cases that warrant greater appellate scrutiny.

To facilitate the screening process, this rule amends § 3.3(b) to provide that an appellant who asserts that an appeal warrants review by a three-member panel must identify in the Notice of Appeal the specific factual or legal basis for that contention. Since the usual rule under § 3.1(e)(3) is that all appeals will be assigned to a single Board member for review except as provided in § 3.1(e)(6), the decision in each case whether to assign an appeal to a three-member panel will be made, after consideration of the case, under the standards of this rule according to the judgment of the single Board member on the screening panel to whom the appeal is assigned.

The existing provisions of 8 CFR 3.2(b)(3) already bar a motion for reconsideration based solely on the ground that a case should not have been affirmed without opinion by a single Board member or by a panel. This rule adds an additional sentence to § 3.2(i) (Ruling on motion) to provide that any motion for reconsideration or reopening of a decision issued by a single Board member will be referred to the screening panel for disposition by a single Board member, unless the screening panel member determines, in the exercise of judgment, that the motion for reconsideration or reopening is appropriate for assignment to a three-member panel under the standards of § 3.1(e)(6).

Section 3.1(e)(7) reflects the current authority of the Board to grant or deny requests for oral argument, but it also makes clear that no oral argument will be available in any case assigned to a single Board member for disposition.

In § 3.1(e)(8), as well as §§ 3.3 and 3.5, the proposed rule establishes a series of time limits to expedite the handling of cases by the Board. As proposed in § 3.3(a), a party appealing a decision of an immigration judge or a decision of the Service will have 30 days in which the party may file a notice of appeal. For cases requiring the transcription of the immigration judge's oral opinion, the immigration judge must complete his or her review of the transcript within 14 days after completion, as provided in § 3.5(a), with limited exceptions. After the transcripts are made available to the parties, the parties must simultaneously brief the case within a 21-day period, with reply briefs allowed only by leave of the Board.

After the briefs are submitted, the screening panel of the Board will have 90 days in which a single Board member must either decide the case or designate the case for review by a three-member panel. Once a case is selected for panel review, the panel considering the case must render its decision and opinion within 180 days. In any case, § 3.1(e) directs the Board to assign priority to deciding cases or custody appeals involving detained aliens.

If the Board member who is the author of an opinion for the panel majority is unable to complete the opinion within the 180-day period, § 3.1(e)(8)(ii) of the proposed rule allows the Board member to request an extension of up to 60 days from the Chairman. In order to prevent the delay of the issuance of Board decisions due to uncompleted dissenting or concurring opinions, the proposed rule also requires any dissenting or concurring member of a panel whose separate opinion is not finished at the conclusion of the 180-day period to request an extension of up to 60 days from the Chairman.

If, at the end of the 60-day period, the opinion of the panel majority is still not completed, the Chairman must either decide the case himself and render an opinion within 14 days or refer the case to the Attorney General for a decision. If a dissenting or concurring panel member fails to complete his opinion by the end of the extension period, the decision of the majority will be rendered without his dissent or concurrence attached.

In rare circumstances, when the outcome of a case before the Board may be substantially affected by pending or anticipated litigation before the United States Supreme Court or a United States Court of Appeals, the Chairman may hold the case or group of cases until such decision is rendered, temporarily suspending the time limits described above, as provided in § 3.1(e)(8)(iii).

The proposed rule at § 3.1(e)(8)(iv) also directs the Chairman to notify the Director of EOIR and the Attorney General if any Board member repeatedly fails to meet the assigned deadlines for the disposition of appeals, and to prepare an annual review concerning the timeliness of dispositions by each Board member. Although EOIR has not conducted annual performance reviews for Board members in the recent past—in general, as a reflection of the decisional independence of the Board as to the substantive disposition of appeals—it is appropriate for EOIR to begin to track the timeliness of dispositions of cases under the new case management procedures that incorporate specific performance measures. As this language suggests, the provisions of paragraph (e)(8) establishing time limits for the adjudication of appeals reflect a management directive in favor of timely dispositions, but do not affect the validity of any decision issued by the Board nor create any justiciable right or remedy.

The proposed rule also adds a new § 3.1(d)(3) to eliminate the Board's de novo review of factual issues. Under the proposed rule, the Board must accept the factual findings of the immigration judges, disturbing them only if they are “clearly erroneous.” This provision also generally prohibits the introduction and consideration of new evidence in proceedings before the Board, except for taking administrative notice of current events or the contents of official documents such as country condition reports prepared by the Department of State. Where it is established that an appeal cannot be properly resolved without further findings of fact, the Board will remand the proceeding to the immigration judge or, where appropriate, the INS.

By deleting the existing § 3.1(b)(4), the proposed rule eliminates the Board's jurisdiction over appeals of INS decisions imposing various kinds of administrative fines under part 280 and transfers that review authority to the Chief Administrative Hearing Officer. Although the various administrative fine cases administered under part 280 (for example, a $3,300 fine against an air carrier under section 273 of the Act for transporting to the United States an alien lacking a proper passport or visa) are different than the civil penalty actions currently adjudicated within OCAHO (which are handled by administrative law judges rather than immigration judges), the appellate reviewing role by the Chief Administrative Hearing Officer would nevertheless be much the same since each of the cases involves only the imposition of a specific administrative fine or civil penalty. Accordingly, the proposed rule adds a new provision, 8 CFR 280.61, for review of administrative fines imposed by the Service under part 280. This provision is modeled on the existing provisions for review by the Chief Administrative Hearing Officer of civil money penalties under 28 CFR 68.54, and the Board's existing procedures in § 3.1, 3.3, and 3.5 for the consideration of appeals. Consistent with the time limits for a single Board member to review cases under the proposed rule, the Chief Administrative Hearing Officer will be allowed 90 days to decide the appeal after the completion of the record on appeal. After transfer of appellate jurisdiction from the Board to the Chief Administrative Hearing Officer, the existing precedent decisions issued by the Board in administrative fine cases would continue to be binding except as specifically modified or overruled in new precedent decisions by the Chief Administrative Hearing Officer or by the Attorney General. Decisions of the Chief Administrative Hearing Officer in administrative fine cases under part 280 will be subject to review by the Attorney General under the same procedures as for the Board.

The proposed rule reflects the Attorney General's direction that, once this rule is adopted in final form, the Board will immediately implement the procedural and structural changes described above with respect to all appeals pending before the Board at the time this rule takes effect. During a transition period of 180 days, the Members of the Board are directed to apply these procedures to render opinions expeditiously and particularly to dispose of the oldest cases, so as to reduce the number of pending cases before the Board by the end of the transition period so that no case remains pending more than ten months after the record on appeal was completed. The Chairman may allocate Board members to the screening panel and to three-member panels as may be deemed appropriate to accomplish this objective.

In amendments to § 3.1(a)(1), the proposed rule stipulates that, after the transition period of 180 days has elapsed, the final structural reform of the Board will occur. The number of Board members will be reduced to eleven, with the Attorney General designating the membership of the Board. The Chairman will continue to have the authority to allocate Board members to a screening panel and to three-member panels as may be deemed appropriate for the efficient adjudication of appeals.

In addition to the foregoing changes, the Department is making other modifications to the Board's rules in relation to two other recent rulemaking actions.

First, as noted above, the rule will restore as a ground for summary dismissal the fact that an appeal that is filed for an improper purpose, such as delay, or that lack an arguable basis in fact or in law. That provision, previously codified at § 3.1(d)(1-a)(i)(D) of the Board's rules, and now to be reinstated as § 3.1(d)(2)(i)(D), had been promulgated in response to the statutory directive, first enacted in the Immigration Act of 1990, requiring the Attorney General to specify the circumstances under which an administrative appeal will be considered frivolous and will be summarily dismissed. See section 240(f) of the Act (8 U.S.C. 1229a(f)); former section 242B(d) of the Act (8 U.S.C. 1252b(d) (as in effect prior to April 1, 1997). However, at the time the streamlining initiative was adopted in 1999, EOIR deleted this provision from the Board's rules, citing (1) the fact that this summary dismissal authority was “virtually never used by the Board,” and (2) a concern that retaining this authority might lead to confusion with the new process for summary affirmance without opinion. See 64 FR 56135, 56137 (Oct. 18, 1999).

On reflection, the Department believes that this paragraph (D) should be retained, in view of the statutory direction for the Attorney General to define cases that are to be summarily dismissed as frivolous. Summary dismissal of appeals that are determined to be frivolous is distinct from a summary affirmance without opinion. The Board's streamlining process is a very effective and valuable process, but it is not a substitute for dealing with appeals that are filed for an improper purpose or that patently lack any factual or legal basis. Simply affirming “paragraph (D)” appeals on the merits, without making any effort to identify the frivolous nature of particular appeals, would do little or nothing to deter particular attorneys or representatives from filing future appeals for an improper purpose in other cases. This is particularly true if a primary purpose of the appeal was to gain some additional time through delay—because it would have succeeded in that regard. Although the Board would make a determination that an appeal was frivolous only after completion of its review, each such frivolous appeal requires the preparation of transcripts, opportunity for briefing, review by a Board attorney and a Board member, etc. Even if only a small percentage of the 28,000 appeals filed each year with the Board may be found to be “frivolous” within the meaning of paragraph (D), that still amounts to a significant number of cases imposing a substantial aggregate burden on the Board—a burden that the Board should not be expected to bear, given its very large caseload. The Board's screening panel will be expected to implement this process as part of the case management screening of cases.

The EOIR disciplinary rules do specify similar grounds for the imposition of disciplinary sanctions on an attorney or representative. See 8 CFR § 3.102(j)(2001), previously codified at § 292.3(a)(15). This existing sanction has apparently not been actively enforced through the disciplinary process. One likely reason for this is that there is no ready mechanism in place for the Board to identify such frivolous appeals. If the Board begins to identify certain appeals as frivolous under the standards of paragraph (D), then the EOIR disciplinary counsel would be able to develop a factual record of such findings in order to support appropriate disciplinary action against attorneys or representatives who may be identified as repeat offenders. 1

Second, the Department notes that former Attorney General Reno had published a proposed rule to clarify and strengthen the management authority of the Director of EOIR, the Chairman of the Board, and the Chief Immigration Judge with respect to the efficient disposition of cases pending before the Board and the immigration judges. See 65 FR 81434 (Dec. 26, 2000). Among other things, that earlier proposed rule enumerated specific authorities of the Chairman and defined more clearly the role of the Board and the standards governing its proceedings. That proposed rule has not been finalized and remains pending; its provisions were also organized differently than the present proposal. However, because the present proposed rule in some respects overlaps with or complements the previously published proposal, the present proposed rule incorporates some of the provisions that had previously been proposed (certain provisions in § 3.1(a)(1), (a)(2), (a)(3), and (a)(11) of the December 2000 proposal) into § 3.1(a)(2) and (d)(1) of this rule. As reorganized, the provisions of § 3.1(a) focus principally on organizational and procedural matters, and the powers of the Board are set forth in § 3.1(d).

Finally, the proposed rule adds a sentence in § 3.1(a)(5) to the Board's rule on rehearing en banc, taken from Federal Rule of Appellate Procedure 35(a) with respect to rehearing en banc in the courts of appeals, providing that rehearing en banc is disfavored and shall ordinarily be ordered only for questions of exceptional importance or to secure or maintain the uniformity of the Board's decisions. In addition, the proposed rule eliminates the provision of the existing regulations, in § 3.1(a)(4)(ii), for the use of a limited en banc panel nine members. That provision was added at a time when the Board's membership was rapidly expanding. It was rarely used in practice and, in any event, it no longer serves any purpose in view of the decision to reduce the size of the Board to eleven members.

In summary, the proposed rule will restructure the Board to better accomplish its missions of reviewing immigration appeals in a timely and impartial manner, and providing guidance to immigration judges, the INS, and the public on the proper interpretation and administration of the Immigration and Nationality Act and related regulations. The proposed rule will allow the Board to decide simple cases in an expeditious manner, saving time and resources for those cases that most require searching review. The result will be a more efficient body that applies appropriate standards of appellate review to better serve the Department of Justice, the immigrant community, and the country.

The Attorney General, in accordance with 5 U.S.C. 605(b), has reviewed this proposed rule and, by approving it, certifies that it will affect only Departmental employees, and aliens or their representatives who appear in proceedings before the Board of Immigration Appeals. Therefore, this proposed rule will not have a significant economic impact on a substantial number of small entities.

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

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

This proposed rule has been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Department has determined that this proposed rule is a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review. Accordingly, this rule has been submitted to the Office of Management and Budget for review.

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

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

We try to write clearly. If you can suggest how to improve the clarity of these regulations, call or write Charles K. Adkins-Blanch, General Counsel, Executive Office for Immigration Review, Suite 2400, 5107 Leesburg Pike, Falls Church, VA 22041; telephone (703) 305-0470.

Accordingly, for the reasons set forth in the preamble, part 3 and part 280 of chapter I of title 8 of the Code of Federal Regulations are proposed to be amended as follows:

Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this action may be changed in light of the comments received.

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 99-NE-53-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, New England Region, Office of the Regional Counsel, Attention: Rules Docket No. 99-NE-53-AD, 12 New England Executive Park, Burlington, MA 01803-5299.

There have been six reported uncontained separations of second stage turbine wheels associated with obstructed internal cooling holes or passages in the vanes of the second stage turbine stator. The FAA has determined that obstructed cooling holes in the second stage turbine stator will increase turbine cavity temperatures. These elevated temperatures reduce the fatigue endurance capability of the turbine stator components and could cause the seal assembly to separate from the stator housing, or the rotating knife edge seal to separate from the turbine rotor. The stator seal support, stator seal assembly, or the rotating knife edge seal may then contact and rub into the turbine rotor, potentially resulting in an uncontained turbine rotor separation. Elevated cavity temperatures may also cause a reduction in the fatigue life of the turbine rotor and may result in an uncontained turbine rotor separation. In addition, the FAA has approved an air flow inspection and re-identification procedure for the second stage stator assemblies, P/N 894528-10 and -11. The FAA has not approved an air flow inspection of the older configurations of second stage stator assemblies, P/Ns 894528-1, -2, -3, -5, and -6, due to the difficulty to maintain the dimensional integrity of the stator assembly's internal cooling passages after the final braze operation of the stator's inner seal support or after welding of the stator's vanes. The FAA has approved repair procedures for converting the older configuration of second stage turbine stator assembly's inner seal support to a serviceable configuration. This condition, if not corrected, could result in increased fatigue damage of the second stage turbine stator inner seal support, rotating knife seal, and the second and third stage turbine wheels which may result in an uncontained rotor failure and damage to the aircraft.

Since an unsafe condition has been identified that is likely to exist or develop on other Honeywell International Inc. TPE331 series turboprop and TSE331-3U turboshaft engines of the same type design, the proposed AD would require replacing the existing second stage turbine stator assemblies, P/N's 894528-1, -2, -3, -5, -6, -10, and -11, with serviceable assemblies.

There are approximately 4,700 engines of the affected design in the worldwide fleet. The FAA estimates that 2,350 engines installed on aircraft of U.S. registry would be affected by this proposed AD, that it would take approximately 4.0 work hours per engine to do the proposed actions, and that the average labor rate is $60 per work hour. Required replacement parts would cost approximately $8,000 per engine. Based on these figures, the total cost of the proposed AD on U.S. operators is estimated to be $14,958,000.

This proposed rule does not have federalism implications, as defined in Executive Order 13132, because it would 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. Accordingly, the FAA has not consulted with state authorities prior to publication of this proposed rule.

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, 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 copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

The Poison Prevention Packaging Act of 1970 (“PPPA”), 15 U.S.C. 1471-1476, provides the Commission with authority to establish standards for the special packaging of household substances, such as drugs, when child resistant packaging is necessary to protect children from serious personal injury or illness due to the substance and the special packaging is technically feasible, practicable, and appropriate for such substance. Accordingly, the Commission requires that oral prescription drugs be in child resistant (“CR”) packaging. 16 CFR 1700.14(a)(10).

The Commission's regulations allow exemptions from this requirement for substances with low acute toxicity. Currently, there are four PPPA exemptions for sex hormones: (1) Oral contraceptives in mnemonic packages containing one or more progestogen or estrogen substances; (2) conjugated estrogen tablets in mnemonic packages; (3) norethindrone acetate tablets in mnemonic packaging; and (4) medroxyprogesterone acetate tablets. 16 CFR 1700.14(a)(10)(iv), (xvii), (xviii) and (xix). Some HRT products fall within these exemptions, but because of the way these exemptions are written, other HRT products currently require CR packaging. The proposed exemption would cover all HRT products that rely solely on the activity of one or more progestogen or estrogen substances.

HRT is used to replace the estrogen and progesterone that normally decline following menopause (the cessation of menstruation). Generally, women experience a range of symptoms with some reporting minimal discomfort, while others have more severe effects. Hot flashes are the most frequent symptom and often begin several years before other menopausal symptoms. Additionally, menopause accelerates bone depletion that commonly occurs with aging, leading to osteoporosis.

HRT relieves a number of menopausal symptoms (e.g., hot flashes and vaginitis) and helps to prevent osteoporosis. HRT consists of using estrogen alone or various combinations of estrogens and progestins. The latter regimen is similar to that for oral contraceptive products except the goal of therapy is to replace declining hormone levels rather than to prevent pregnancy.

Because the life expectancy of women in the United States is increasing, it is estimated that 40 million women will go through menopause in the next 20 years. Therefore, the pharmaceutical industry is developing new prescription products specifically designed and marketed for HRT post-menopausal women. Some of these products may not be covered under current PPPA regulations although their toxicity is as low as those products currently exempt.

Sex hormone products contain various estrogens and progestins. Some are natural hormones (e.g., estradiol) and others are semi-synthetic or synthetic (e.g., norgestimate). Synthetic hormones are usually developed to alter bioavailability (e.g., enhance oral absorption) or to reduce side effects. Since available HRT products contain similar estrogen/progestin combinations, it is reasonable and consistent to exempt them like oral contraceptives.

Human toxic doses for estrogens or progestins have not been defined. Exposure summaries in the Poisindex® for estrogens, progestins, and oral contraceptives state that acute toxicity is unlikely following overdosage. Gastrointestinal effects (e.g., nausea, vomiting, abdominal cramps) may occur after an acute overdose, but typically no treatment is necessary.

There is little information in the medical literature concerning acute overdosage of progestins or estrogens. One case showed that a single dose of 160 mg estradiol valerate (80 tablets/2 mg each), ingested by a 19-year-old woman in a suicide attempt, produced little toxicity. The woman slept easily during the night of the ingestion and the next evening presented in the emergency clinic in generally good condition with nausea and a headache.

Poisoning data from the American Association of Poison Control Centers (“AAPCC”) Toxic Exposure Surveillance System (“TESS”), corroborate the lack of acute toxicity associated with sex hormones. The staff reviewed data showing acute exposures in children less than five years old to estrogens, progestins, and oral contraceptives from 1993 to 1998. There were no deaths and most of the exposures were non-toxic. There was one major outcome out of 37,645 exposures to oral contraceptives, but no details are readily available relating to this case. It is possible that this oral contraceptive formulation contained iron or that the child was exposed to a second substance or product.

The Commission's Directorate for Economic Analysis prepared a preliminary assessment of the impact of a rule to exempt HRT products from special packaging requirements. The staff reports that it does not know the universe of companies that would be affected by the proposed exemption or how many companies would be small businesses. However, the exemption is not likely to have a significant impact on a substantial number of companies, regardless of size. The exemption would actually increase the packaging options for manufacturers because it would allow them to package the affected HRT products in non-CR packages. Although the cost to manufacturers of CR packaging is small—usually only a few cents per package—the exemption would allow manufacturers to use slightly cheaper packages and thus reduce the final cost of the HRT products.

Based on this assessment, the Commission preliminarily concludes that the proposed amendment exempting HRT products from special packaging requirements would not have a significant impact on a substantial number of small businesses or other small entities.

Pursuant to the National Environmental Policy Act, and in accordance with the Council on Environmental Quality regulations and CPSC procedures for environmental review, the Commission has assessed the possible environmental effects associated with the proposed PPPA amendment.

The Commission's regulations state that rules requiring special packaging for consumer products normally have little or no potential for affecting the human environment. 16 CFR 1021.5(c)(3). Nothing in this proposed rule alters that expectation. (3) Therefore, because the rule would have no adverse effect on the environment, neither an environmental assessment nor an environmental impact statement is required.

According to Executive Order 12988 (February 5, 1996), agencies must state in clear language the preemptive effect, if any, of new regulations.

The PPPA provides that, generally, when a special packaging standard issued under the PPPA is in effect, “no State or political subdivision thereof shall have any authority either to establish or continue in effect, with respect to such household substance, any standard for special packaging (and any exemption therefrom and requirement related thereto) which is not identical to the [PPPA] standard.” 15 U.S.C. 1476(a). A State or local standard may be excepted from this preemptive effect if (1) the State or local standard provides a higher degree of protection from the risk of injury or illness than the PPPA standard; and (2) the State or political subdivision applies to the Commission for an exemption from the PPPA's preemption clause and the Commission grants the exemption through a process specified at 16 CFR Part 1061. 15 U.S.C. 1476(c)(1). In addition, the Federal government, or a State or local government, may establish and continue in effect a non-identical special packaging requirement that provides a higher degree of protection than the PPPA requirement for a household substance for the Federal, State or local government's own use. 15 U.S.C. 1476(b).

Thus, with the exceptions noted above, the proposed rule exempting HRT products from special packaging requirements would preempt non-identical state or local special packaging standards for those products.

The Commission has also evaluated the proposed rule in light of the principles stated in Executive Order 13132 concerning federalism, even though that Order does not apply to independent regulatory agencies such as CPSC. The Commission does not expect that the proposed rule will have any substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among various levels of government.

For the reasons given above, the Commission proposes to amend 16 CFR part 1700 as follows:

We encourage you to participate in this rulemaking by submitting comments and related material. You have 15 days to comment on the proposed temporary final rule. This short comment period will permit the Coast Guard to publish a temporary final rule before the event and thus help ensure public safety. To provide additional notice, we will place a notice of our proposed rule in the local notice to mariners. You may request a copy of this notice by calling BM2 Jessica Walsh, Waterways Management Division, at (310) 732-2020.

In our final rule, we will include a concise general statement of the comments received and identify any changes from the proposed rule based on the comments. If, as we expect, we make the final rule effective less than 30 days after publication in the Federal Register , we will explain our good cause for doing so as required by 5 U.S.C. 553(d)(3).

In making comments, please include your name and address, identify the docket number for this rulemaking (COTP Los Angeles-Long Beach 02-003), indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying. If you would like to know your submission reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them.

We do not now plan to hold a public meeting. But you may submit a request for a meeting by writing to MSO/GRU Los Angeles-Long Beach at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a separate notice in the Federal Register .

This temporary safety zone is needed to provide for the safety of National Water Ski Racing Association (NWSRA) Water Ski Race participants and spectators on March 23 and 24, 2002, from 8 a.m. to 5 p.m. both days. Persons and vessels are prohibited from entering into or transiting through this safety zone unless authorized by the Captain of the Port or his designated representative. By prohibiting persons and vessels from entering the waters surrounding the racecourse, the risk of high-speed collision will be significantly reduced. U.S. Coast Guard personnel will enforce this safety zone with assistance from Coast Guard Auxiliary and event staff.

The following area will constitute the temporary safety zone: all waters encompassed by lines connecting the following points, beginning at latitude 33°45′50″ N, longitude 118°10′48″ W; thence to 33°44′00″ N, 118°10′05″ W; thence to 33°44′00″ N, 118°09′26″ W; thence to 33°45′28″ N, 118°09′00″ W, and thence returning to the point of origin. This area is approximately 3,000 yards wide and 2,500 yards long and is centered near the oil islands off Long Beach, California.

This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT)(44 FR 11040, February 26, 1979) because this zone will encompass a small portion of the waterway for limited periods of time and vessel traffic can pass safely around the affected area.

We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

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

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact BM2 Jessica Walsh, Waterways Management Division, at (310) 732-2020.

This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this proposed rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

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

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

This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, 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. We invite your comments on how this proposed rule might impact tribal governments, even if that impact may not constitute a “tribal implication” under the Order.

We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

We have considered the environmental impact of this proposed rule and concluded that, under figure 2-1, paragraph (35)(g), of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation because it is a safety zone in effect for only 2 days. A “Categorical Exclusion Determination” is not required.

For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:

Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. For additional information, see the direct final rule that is located in the Rules Section of this Federal Register .

The U.S. Environmental Protection Agency (EPA), Region III, announces its intent to delete the Austin Avenue Radiation Superfund Site (CERCLIS No. PAD987341716), located in Lansdowne Borough, Aldan Borough, East Lansdowne Borough, Darby Borough, and Upper Darby Township, Delaware County, Pennsylvania, from the National Priorities List (NPL) and requests public comment on this proposed action. The NPL constitutes appendix B of 40 CFR part 300, which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). EPA promulgated the NCP pursuant to section 105 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA), 42 U.S.C. 9605. EPA identifies sites that appear to present a significant risk to public health, welfare, or the environment and maintains the NPL as the list of these sites. As described in § 300.425(e)(3) of the NCP, sites deleted from the NPL remain eligible for remedial actions in the unlikely event that conditions at the site warrant such action. EPA and the Pennsylvania Department of Environmental Protection (PADEP) have determined that the remedial action for the site has been successfully executed.

EPA will accept comments on the proposal to delete this Site for thirty (30) days after publication of this document in the Federal Register .

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses the procedures that EPA is using for this action. Section IV discusses the Austin Avenue Radiation Superfund Site and explains how the Site meets the deletion criteria established in the NCP.

Section 300.425(e)(1) of the NCP provides that releases may be deleted from, or recategorized on, the NPL where no further response is appropriate. In making a determination to delete a release from the NPL, EPA shall consider, in consultation with the state, whether any of the following criteria have been met:

(i) Responsible parties or other parties have implemented all appropriate response actions required; or

(ii) All appropriate Fund-financed responses under CERCLA have been implemented, and no further action by responsible parties is appropriate; or

(iii) The Remedial Investigation has shown that the release poses no significant threat to public health or the environment and, therefore, remedial measures are not appropriate.

If new information becomes available which indicates a need for further action, EPA may initiate additional remedial actions. Whenever there is a significant release from a site which has been deleted from the NPL, the site may be restored to the NPL without application of the Hazard Ranking System.

EPA followed these procedures in advance of publishing this Notice: (1) EPA Region III determined that no further response action is necessary in connection with the Site to ensure protection of human health and the environment and that the Site may be deleted from the NPL; (2) EPA consulted with the Pennsylvania Department of Environmental Protection (PADEP (formerly the Pennsylvania Department of Environmental Resources)) regarding EPA's intent to delete the Site, and PADEP concurred with EPA's proposed deletion decision; (3) EPA published, in a major local newspaper of general circulation at or near the Site, and distributed to appropriate State, local, and Federal officials and to other interested parties, a notice announcing the proposed deletion of the Site and the commencement of a 30-day public comment period; and (4) EPA made copies of information supporting the proposed deletion ( i.e., the public deletion docket) available for public review in the Site information repositories (the locations of these repositories are identified above).

EPA Region III will accept and evaluate public comments on this Notice before making a final decision to delete the Austin Avenue Radiation Superfund Site from the NPL. In accordance with § 300.425(e)(4) of the NCP, 40 CFR 300.425(e)(4), EPA will prepare a Responsiveness Summary to address any significant public comments received. Deletion occurs upon publication of a final notice in the Federal Register . Generally, the NPL will reflect deletion of a site in the final update following publication of the Notice proposing the deletion. Public notices and copies of the Responsiveness Summary will be made available to the public by EPA Region III.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. The NPL is designed primarily for informational purposes and to assist Agency management. Section 300.425(e)(3) of the NCP, 40 CFR 300.425(e)(3), makes clear that the deletion of a site from the NPL does not preclude future response actions at that site.

The following summary provides the Agency's rationale for the proposal to delete the Austin Avenue Radiation Superfund Site from the NPL.

The Austin Avenue Radiation Superfund Site (Site) is located on and near parcels in Lansdowne Borough, Aldan Borough, East Lansdowne Borough, Darby Borough, Upper Darby Township, and Yeadon Borough, Delaware County, Pennsylvania. These parcels are all within a two-mile radius of the former W. L. Cummings (Cummings) radium refining operation, which was located at the intersection of Austin and South Union Avenues in Lansdowne. The parcels are listed below.

Lansdowne Borough: 11 Greenwood Avenue, 126 Owen Avenue, 216 Wayne Avenue, 218 Wayne Avenue, 219 Wayne Avenue, 237 North Lansdowne Avenue, 6 East Plumstead Avenue, 10 East Plumstead Avenue, 16 East Plumstead Avenue, 42/44 South Union Avenue, 129 Austin Avenue, 131 Austin Avenue, 133 Austin Avenue, 134 Austin Avenue, and 30/36 S. Union Avenue (the former W. L. Cummings Radium Refinery (Warehouse Property));

East Lansdowne Borough: 25 Beverly Avenue, 28 Lewis Avenue, 34 Lewis Avenue, 210 Lewis Avenue , 246 Melrose Avenue, 211 Penn Boulevard, 25 Lexington Avenue,137 Lexington Avenue, 139 Lexington Avenue, 151 Lexington Avenue and 155 Lexington Avenue;

Upper Darby Township: 500 Harper Avenue, 504 Harper Avenue, 346 Owen Avenue, 310 Shadeland Avenue and 3723 Huey Avenue;

Aldan Borough: 62 South Clifton Avenue and 64 South Clifton Avenue;

Darby Borough : 617 Pine Street, 619 Pine Street, 621 Pine Street and 623 Pine Street;

Yeadon Borough: Yeadon Borough Park and South Union Avenue.

The Site properties were contaminated with radium (Ra226) and thorium (Th230) from tailings generated at the warehouse on South Union Avenue by the defunct W. L. Cummings Radium Processing Co. Cummings operated a radium-refining operation from 1915 to 1925 at this location. In the late 1910's and early 1920's, masonry and building contractors used the sand-like tailings from the Cummings plant as aggregate for, among other things, laying mortar between brick and stone masonry, pointing mortar on stone or brick masonry, applying stucco on building exteriors, applying plaster to building interiors, and laying concrete for sidewalks and basement slabs. The tailings were also used as fill under basement slabs, exterior perimeter foundation walls, and other miscellaneous applications.

In May 1991, PADEP visited the former Cummings' property to monitor for radon. Radioactive contamination had previously been discovered in the back yard of 133 Austin Avenue, a parcel adjacent to the warehouse property. During this visit, radiation instruments further indicated the presence of significant levels of radioactive contamination. On June 7, 1991, PADEP notified EPA of its findings and requested assistance. A joint PADEP/EPA site assessment confirmed the presence of radiological contamination at 133 Austin Avenue at levels that warranted immediate action.

On June 19, 1991, a team of radiation specialists from EPA's National Air and Radiation Environmental Laboratory, Montgomery, Alabama, conducted an assessment using special radiation detection equipment. The warehouse and the adjacent residential dwelling, 133 Austin Avenue, were found to be heavily contaminated with radioactive materials. In November and December of 1991, EPA conducted a survey in a 12.5 square mile area of Delaware County and a small portion of the adjacent City of Philadelphia to detect radiological anomalies using a specially-equipped radiation detection van. EPA subsequently conducted followup surveys at those parcels found to exhibit radiological activity during the van survey. The testing revealed that thirty-seven properties within a two-mile radius of the former Cummings radium processing facility were radiologically contaminated.

On February 7, 1992, EPA proposed the Site to the National Priorities List (NPL) (57 FR 4824) and finalized the listing on October 14, 1992 (57 FR 47180).

EPA conducted response actions under the CERCLA removal program at nineteen contaminated properties from June 12, 1991 through August 23, 1995 at a total cost of approximately $23.6 million. The removal actions included temporary relocation of residents of several contaminated properties; the complete dismantlement and disposal of the warehouse structure at South Union and Austin Avenues; dismantlement and disposal of the house at 133 Austin Avenue; excavation and disposal of radiologically contaminated soils; and removal and disposal of contaminated plaster, stucco, concrete, and soils at the other properties.

On June 27, 1994, EPA issued a Record of Decision (ROD) selecting remedial actions for implementation at the remaining properties. The remedial actions included, among other things, the removal of radiologically contaminated building components and repair/reconstruction of such components at several parcels; permanent off-Site relocation of several homeowners to existing housing followed by demolition and disposal of their original homes; temporary off-Site relocation of several homeowners followed by demolition, disposal, and on-Site reconstruction of their original homes; excavation and disposal of radiologically contaminated soils at the warehouse property; and post-cleanup verification to confirm that cleanup standards established in the ROD were achieved. EPA removed and disposed of approximately 5951.44 tons of radiologically contaminated debris; 150,000 cubic feet of contaminated soils; 1620 cubic feet of asbestos-containing materials; and 1910 tons of non-hazardous construction debris.

Cleanup standards selected by EPA in the ROD required that all Site-related soil contamination at residential and potentially residential properties be removed to 5 pCi/g, averaged over 100 square meters  1 ; that Site-related soil contamination at public-use properties (defined by example as streets and railroad rights-of-way) be removed to the residential standard if radium 226 concentrations exceeded 5 pCi/g in the top 15 centimeters and/or 15 pCi/g in subsoils, averaged over 100 square meters; and that institutional controls restricting land use be implemented if cleanup to these standards could not be achieved. The cleanup standards have been achieved and no institutional controls are necessary. There are no operation or maintenance requirements to ensure the continued protectiveness of the remedial actions.

On September 27, 1996, EPA Region III issued a ‘No Remedial Action’ ROD for Site-related groundwater. The No Action decision was based on EPA's conclusion that the groundwater presented no risks to human health or welfare or to the environment.

Section 121(c) of CERCLA, 42 U.S.C. 9621(c), as interpreted by § 300.430(f)(4)(ii) of the NCP, 40 CFR 300.430(f)(4)(ii), requires that EPA conduct a review, no less often than every five years after initiation of remedial action, at sites where hazardous substances or pollutants or contaminants will remain above levels that allow for unlimited use and unrestricted exposure. Attainment of the cleanup standards has resulted in the removal of all Site-related radiological contamination such that restrictions on use and/or exposure are unnecessary. Accordingly, no five-year reviews are required by CERCLA.

In consultation with PADEP, EPA has determined that all appropriate Fund-financed response under CERCLA has been implemented at the Site and that no further response action by responsible parties is appropriate. Consequently, EPA proposes to delete the Site from the NPL.

By letter dated December 28, 2001, the Pennsylvania Department of Environmental Protection concurred with the proposed deletion of the Austin Avenue Radiation Superfund Site from the NPL, provided that completion requirements for the Site described in the Final Closeout Report have been met, the cleanup has achieved the objectives established in the ROD and no institutional controls are required, radiologically contaminated soils and structures have been removed, and no action is required for groundwater at the Site. The conditions upon which the State has predicated its concurrence on the deletion of the Site from the NPL have been satisfied.

For additional information, see the Direct Final Notice of Deletion which is located in the Rules section of this Federal Register .

Information Repositories: Repositories have been established to provide detailed information concerning this decision at the following address: EPA Region V Library, 77 W. Jackson, Chicago, IL 60604, (312) 353-5821, Monday through Friday 8:00 a.m. to 4:00 p.m.; the Minnesota Pollution Control Agency, 520 Lafayette Rd. North, St. Paul, Minnesota 55155-4194, (651) 296-6300, Monday through Friday 8:00 a.m. to 4:30 p.m.

This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM) in CC Docket No. 02-6 released on January 25, 2002. The full text of this document is available on the Commission's Web site Electronic Comment Filing System and for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC, 20554.

This NPRM contains proposed information collection(s) subject to the Paperwork Reduction Act of 1995 (PRA). It has been submitted to the Office of Management and Budget (OMB) for review under the PRA. OMB, the general public, and other Federal agencies are invited to comment on the proposed information collections contained in this proceeding.

This NPRM contains a proposed information collection. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collections(s) contained in this NPRM, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due at the same time as other comments on this NPRM; OMB notification of action is due 60 days from date of publication of this NPRM in the Federal Register . Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.

OMB Control Number: None.

Title: Schools and Libraries Universal Service Support Mechanism, CC Docket 02-6, NPRM, Proposed ADA Certification.

Form No.: N/A.

Type of Review: Proposed Collection.

Respondents: Not for Profit Institutions: Business or other for Profit.

Total Annual Burden: 1,200 hours.

Cost to Respondents: $0.

Needs and Uses: In this NPRM, the Commission is seeking comment on certain rules governing the schools and libraries universal service support mechanism. The Commission goals in the proceeding are to: (1) Consider changes that would fine-tune its rules to improve program operation; (2) ensure that the benefits of the universal service support mechanism for schools and libraries are distributed in a manner that is fair and equitable; and (3) improve its oversight over the program. Among other things, affected respondents may be required to certify to compliance with the Americans with Disabilities Act and related statutes. The NPRM solicits comment on whether the Commission should establish a computerized list accessible online, whereby applicants could select specific project or service as part of their FCC Form 471 application. The information will be used to ensure that schools and libraries are eligible to receive discounted Internet access, telecommunications services, and internal connections and that they are in compliance with the requirements of the ADA and related statutes.

1. In this Notice of Proposed Rulemaking (NPRM), the Federal Communications Commission (Commission) initiates a focused review of certain rules governing the schools and libraries universal service support mechanism. The Commission initiates this review to ensure the continued efficient and effective implementation of Congress's goals as established in the statute, and to explore a variety of suggestions for improvement offered by schools and libraries, service providers, state and local governments, and other interested parties.

2. The Commission implemented the schools and libraries universal service support mechanism based on the requirement in the Telecommunications Act of 1996 (1996 Act) that “[a]ll telecommunications carriers serving a geographic area shall, upon a bona fide request for any of its services that are within the definition of universal service under subsection (c)(3), provide such services to elementary schools, secondary schools, and libraries for educational purposes at rates less than the amounts charged for similar services to other parties.” The schools and libraries community and the participating service providers have now had four years of experience with the program. As of July 2001, the Universal Service Administrative Company (USAC or the Administrator) had committed over $5.958 billion in funds for the first three funding years. Over this period, the schools and libraries mechanism has provided discounts enabling millions of school children and library patrons, including those in many of the nation's poorest and most isolated communities, to obtain access to modern telecommunications and information services for educational purposes, consistent with the statute.

3. During the last four years, numerous parties, including schools and libraries, service providers, and representatives of local and state governments, have approached the Commission with a variety of proposals that they believe will improve the program. In this proceeding, we present those ideas for public comment in order to explore whether these ideas, as well as any additional ideas presented by the public, will help to achieve our stated goals. The Commission continues to seek ways to ensure that the program funds are utilized in an efficient, effective, and fair manner, while preventing waste, fraud, and abuse. The Commission concludes that it is appropriate at this time to ask whether the various suggestions from the public will streamline and improve the program in a manner consistent with section 254. We determine that it is appropriate to review the overall program by reaching out to the constituents of the program and other interested parties for their input. The Commission seeks comment from USAC on the operational and administrative impact of possible changes discussed in this NPRM. The Commission also encourages input from the State members of the Federal-State Joint Board on Universal Service (Joint Board), and commit to ongoing informal consultations with the Joint Board on these issues.

4. Our goals in undertaking this proceeding, consistent with the statute, are three-fold: (1) To consider changes that would fine-tune our rules to improve program operation; (2) to ensure that the benefits of this universal service support mechanism for schools and libraries are distributed in a manner that is fair and equitable; and (3) to improve our oversight over this program to ensure that the goals of section 254 are met without waste, fraud, or abuse. The Commission intends to build on the solid foundation we have established.

5. With these goals in mind, in this NPRM, the Commission seeks comment on several changes to the schools and libraries universal service support mechanism. First, with respect to the application process, we seek comment on (1) issues related to the process for determining eligible services, and the eligibility for schools and libraries universal service support of such services as Wide Area Networks, wireless services, and voice mail; (2) permitting schools and libraries to receive discounts for Internet access that may in certain limited cases contain content, as long as it is the most cost-effective form of Internet access; (3) the 30 percent processing benchmark for reviewing funding requests that include both eligible and ineligible services; (4) whether to require a certification by schools and libraries acknowledging their compliance with the requirements of the Americans With Disabilities Act and related statutes; and (5) modifying our rule governing when members of a consortium may receive service from a tariffed service provider at below-tariff rates.

6. Second, the Commission also seeks comment on several issues that arise once discounts have been committed to applicants: (1) Providing schools and libraries the flexibility either to make up-front payments for services and receive reimbursement via the Billed Entity Applicant Reimbursement (BEAR) form process, or be charged only the non-discounted cost by the service providers, and require that service providers remit BEAR reimbursements to applicants within twenty days; (2) limiting transferability of equipment obtained with universal service discounts; and (3) allowing members of rural remote communities to use excess capacity from services obtained through the universal service support mechanism in certain limited situations.

7. Third, with respect to the appeals process, the Commission seeks comment on increasing time limits for filing appeals to 60 days, and considering appeals filed as of the day they are post-marked, and on procedures for funding successful appeals. Fourth, we seek comment on measures to strengthen our existing enforcement tools, including adopting a rule explicitly authorizing independent audits, and barring from the program certain applicants, service providers, and others that engage in willful or repeated failure to comply with program rules. Fifth, on the issue of unused program funds, the Commission seeks comment on the reasons for unused funds, and on how the Commission should treat unused funds. We also deny certain petitions for reconsideration relating to unused funds, and seek comment on revising or eliminating outmoded administrative or procedural rules or policies relating to the schools and libraries universal service support mechanism.

8. By initiating this inquiry, the Commission seeks to further three goals. First, the Commission seeks to streamline and improve the program. Second, we seek to ensure fair and equitable distribution of funds. Third, we seek to protect the schools and libraries mechanism against waste, fraud, and abuse consistent with our goals. In the discussion that follows, the Commission seeks comment on ways in which these goals may be achieved through specific changes to various stages of the application and funding process. The Commission frames the discussion in the context of the yearly program cycle to help commenters understand the changes to the program on which we seek comment. At each stage of the process, the Commission invites parties to address whether and how our specific goals can be met by the changes discussed and to suggest other ways to further these goals.

9. Applicants under the universal service discount mechanism for schools and libraries may apply for discounts for eligible telecommunications services, Internet access, and internal connections. The Commission currently directs the Administrator to determine whether particular services fall within the eligibility criteria established under the 1996 Act and the Commission's rules and policies. The Administrator evaluates, on an on-going basis, particular services offered by service providers, and determines their eligibility. In order to provide applicants with general guidance, the Administrator makes available on its website a list of categories of service that are eligible or ineligible, though not specific brands or items. Applicants or service providers can appeal a determination by the Administrator that a given service is ineligible for discounts only after a requested service is rejected. Accordingly, in this section, the Commission seeks comment on changes in the application process that relate to eligible services and that will serve to improve program operation and our oversight of the program. The Commission emphasizes that, in this section of the NPRM, we seek comment on changes to eligible services only as they relate to applications under the universal service support mechanism for schools and libraries.

10. Many parties, including schools and libraries as well as service providers, have recommended that the Commission seeks comment on the efficiency and fairness of this process for determining the eligibility of particular products and services. In response, we invite parties to submit proposals for changes that will improve the operation of the eligibility determination process in terms of efficiency, predictability, flexibility, and administrative cost. The Commission notes that GAO has recommended that the Administrator implement stronger measures to ensure that applicants receive funding only for eligible services, and that the Administrator has already implemented changes in response to that recommendation. One possible alternative approach that has been suggested would be to establish a computerized list accessible online, whereby applicants could select the specific product or service as part of their FCC Form 471 application. Because applicants would only select from pre-approved products and services, this presumably would decrease the number of instances in which applicants seek funding for ineligible services. It has also been suggested that such a process would considerably simplify the application review process. Further, by helping to avoid accidental funding of ineligible services, it would further the Commission's goal of preventing fraud and abuse. We seek comment on whether this approach is desired, consistent with our goals, and on the feasibility of such a system. We seek comment on how often such a list would be updated. We also seek comment on how we could ensure that maintaining such a list does not inadvertently limit applicants' ability to take advantage of products and services newly introduced to the marketplace. In addition, we seek comment on how interested parties could best provide input to the Administrator on an ongoing basis regarding what specific products and services should be eligible. Additionally, we seek comment on how to handle services and equipment that are eligible only if used in certain ways.

11. The Commission seeks comment on whether we need to reconsider or modify the current selection of products and services eligible for support under the schools and libraries mechanism. In particular, the Commission seeks comment on whether the mechanism could be improved by changes in our current eligibility policies regarding (a) Wide Area Networks, (b) wireless services, and (c) voice mail.

12. The Commission seeks comment on whether to change our current policy, as set forth in our rules and decisions, regarding Wide Area Networks (WANs). In the Commission's Fourth Order on Reconsideration, 63 FR 2094 (December 30, 1997), the Commission concluded that the building and purchasing of WANs to provide telecommunications is not eligible for discounts. The Commission first concluded that the building and purchasing of WANs themselves does not constitute telecommunications services or internal connections. The Commission further found that WANs built and purchased by schools and libraries do not appear to fall within the narrow provision that allows support for access to the Internet because WANs provide broad-based telecommunications. The Commission noted, however, that schools and libraries may receive universal service discounts on WANs provided over leased telephone lines, because such an arrangement constitutes a telecommunications service.

13. In the Commission's Tennessee Order, (not published in Federal Register ) the Commission established that universal service funds may be used to fund equipment and infrastructure build-out associated with the provision of eligible services to eligible schools and libraries. The Commission subsequently affirmed this principle in the Brooklyn Order, (not published in Federal Register ) but expressed its concern that “by authorizing unrestricted up-front payments for multiple years of telecommunications service when there is significant infrastructure build-out, [the Commission] could create a critical drain upon the universal service fund, and reach the annual spending caps quickly.” In attempting to strike a fair and reasonable balance between the desire not to unnecessarily drain available universal service funds by committing large amounts annually to a limited number of applicants, and the desire to ensure that eligible schools and libraries receive supported services, the Commission determined that recipients may receive discounts on the non-recurring charges associated with capital investment in an amount equal to the investment prorated equally over a term of at least three years.

14. Certain state government representatives have suggested that we reconsider whether our policies regarding WANs have resulted in an efficient use of program funds, and, in particular, whether providing discounts on the cost of telecommunications service utilizing WANs has indeed caused a “critical drain” on program resources. Leased WAN service is, under our rules, a Priority One service. The costs of leasing WANs therefore decreases funds available for other Priority One services. The Commission seeks comment on the effectiveness and fairness of our WAN policy, and on whether other policies could result in a more equitable distribution of discounts in the program.

15. One possible approach would be to increase the three-year period of time over which WAN-related capital expenses must be recovered through telecommunications service charges, so that the annual burden on available program funds is reduced. The Commission seeks comment on this and other possible approaches.

16. Similarly, the Commission seeks comment on whether our decision in the Tennessee Order to consider leased WANs as a Priority One service has led to a fair and equitable distribution of funds. Some parties have suggested that the marked increase in demand for Priority One services arises from applicants leasing equipment from telecommunications providers for which they are likely to receive discounts rather than purchasing the equipment as internal connections, which have a high likelihood of not being funded under the current priority rules. The Commission seeks comment on whether a change in our approach to WAN-related expenses is warranted by this increase in demand, and if so, what changes consistent with the statutory restrictions of section 254 of the Act should be adopted to meet the program's goals of improved operation, a fair and equitable distribution of funds, and effective oversight to prevent waste, fraud and abuse.

17. As wireless service has become more commonplace, we have received numerous recommendations that we reconsider our policies regarding the eligibility of wireless services. Wireless telephone service, for example, is not currently eligible when used by school bus drivers or other non-teaching staff of a school, including security personnel, because we have interpreted the statutory requirement that universal service discounts be provided only for “educational purposes” to exclude use by such support staff. We seek comment on whether broadening eligibility for wireless services under the schools and libraries mechanism, consistent with the statute, would improve the application review process and whether it would increase opportunities for fraud and abuse. In addition, in light of changing wireless technologies, the Commission seeks comment on whether we need to modify any rules or policies regarding the eligibility of wireless services for support under the schools and libraries mechanism so that distribution of funds is consistent with our principle of competitive neutrality and does not favor wireline technology over wireless technology.

18. Many parties have recommended that the Commission reconsider its initial determination regarding the eligibility of voice mail for support under the schools and libraries mechanism. In the Universal Service Order, 62 FR 32862 (June 17, 1997), the Commission determined that voice mail would not “at [that] time” be eligible, based, in part, on the recommendation of the Federal-State Joint Board on Universal Service that such information services not be eligible. The increasing need for, and prevalence of, voice mail as a way of communicating with school and library staff for educational purposes raises the issue of whether voice mail, which serves a similar purpose as email (which is eligible for support under the schools and libraries mechanism), should also be eligible. The Commission also notes that making voice mail eligible may streamline the application review process, by reducing administrative effort and costs associated with determining what portion of a school or library's telecommunications costs are related to voice mail, and ensuring that the school or library does not receive discounts for those costs. Accordingly, the Commission seeks comment on whether a change in voice mail eligibility would improve the operation of the program or otherwise further our goals of preventing fraud, waste and abuse and promoting the fair and equitable distribution of the program's benefits.

19. In the Universal Service Order, the Commission concluded that schools and libraries may receive discounts on access to the Internet, but not on separate charges for particular proprietary content or other information services. The Commission held that if it is more cost-effective for a school or library to purchase Internet access provided by a telecommunications carrier that bundles a minimal amount of content with such Internet access, a school or library may obtain discounts on that bundled package. If the telecommunications carrier provides bundled Internet access with proprietary content to a school or library, and also offers content separate from Internet access, the school or library may only obtain discounts on the price of the Internet access, as determined by the price of the bundled access and content less the price of the separately-priced content. Thus, if the only Internet access a provider offers is bundled with content for a total of $50.00 per month, and that provider sells the content separately for $30.00 per month, a school or library purchasing the bundled package would currently be eligible for discounts on $20.00 per month.

20. Various affected applicants have suggested, both to us and to the Administrator, that Internet access that includes content from one provider may provide more cost-effective access to the Internet than another provider's Internet access containing minimal or no content. For example, an applicant may receive bids for Internet access from two providers, each offering service at $50.00 a month. One provider offers access and content bundled together, and separately offers content alone for $30.00, while the second provider just offers Internet access. An applicant might find that the bundled access and content may provide more cost-effective Internet access when considering cost, reliability, and other factors than Internet access without content from the other provider. Under our current rules, a recipient would be eligible for discounts on only $20.00 per month for the package of access and content, but could obtain discounts on the full $50.00 for Internet access without content from the second provider. In such a case, our rules may create undesirable incentives for an applicant to choose a provider with a similar price but poorer service and reliability.

21. The Commission seeks comment on whether a modification of our rules governing funding of Internet content would improve program operation consistent with our other goals of ensuring a fair and equitable distribution of benefits and preventing waste, fraud and abuse. Specifically, we seek comment on whether, if the only Internet access a provider offers is bundled with content but the provider also offers the content separately without Internet access, an applicant may receive full discounts on that Internet access package (including content) if that package provides the most cost-effective Internet access. Such a modification to our rules may also increase administrative efficiencies, for both applicants and the Administrator, by eliminating effort and costs associated with ensuring that applicants receive no discounts for bundled content. The Commission seek input on the costs and benefits of such a change, including whether providers might take advantage of this approach by adding content to Internet access in order to maximize revenues. We also seek comment on whether, in keeping with our current rules, universal service discounts would continue to be available for a provider only for the cost of access without content, if a service provider offers Internet access to consumers both with and without content.

22. Currently, acting pursuant to Commission oversight, the Administrator utilizes a 30 percent processing benchmark when reviewing funding requests that include both eligible and ineligible services. If less than 30 percent of the request seeks funding of ineligible services, the Administrator normally will consider the request and issue a funding commitment for the eligible services, denying funding only of the ineligible part. If 30 percent or more of the request is for funding of ineligible services, the Administrator will deny the funding request in its entirety. The 30 percent policy allows the Administrator to efficiently process requests for funding that contain only a small amount of ineligible services without expending significant fund resources working with applicants to determine what part of the discounts requested is associated with eligible services. It also provides an incentive to applicants to eliminate ineligible services from their requests before submitting their applications, further reducing the Administrator's administrative costs. For example, without the procedure, an applicant who has contracted for the construction of a new school for a lump sum might submit a request for the entire amount knowing that the Administrator must then perform the necessary work to identify the costs of any eligible components, such as the telecommunications wiring. Because the Administrator's annual administrative costs are drawn from the same $2.25 billion that supports the award of discounts, an increase in the administrative costs of eligibility review would directly reduce the amount of funds available for actual discounts.

23. The Commission seeks comment on the operational benefits and burdens of this procedure to applicants and to the Administrator. We specifically seek input on whether there are alternatives that would improve program operation or otherwise further the other two goals of preventing fraud, waste, and abuse and promoting the equitable distribution of the program's funds, while still providing appropriate incentives to applicants to seek discounts only for eligible services.

24. The Americans With Disabilities Act (ADA) provides comprehensive civil rights protections to individuals with disabilities in the areas of employment, public accommodations, State and local government services, and telecommunications. Related statutes, which are referenced by the ADA, include the Rehabilitation Act of 1973, and the Individuals with Disabilities Education Act. The current FCC Form 471, on which entities apply for universal service discounts, contains the following notice: “The Americans with Disabilities Act (ADA), the Individuals with Disabilities Education Act, and the Rehabilitation Act may impose obligations on entities to make the services purchased with these discounts accessible to and usable by people with disabilities.” The Commission does not, however, explicitly require compliance with these statutory requirements as a condition of receipt of universal service discounts.

25. Some parties have suggested that the Commission require applicants to certify that the services for which they seek discounts will be used in compliance with these acts. The Commission seeks comment on whether we should adopt such a certification requirement. In commenting on such a change, parties should comment on the language of any ADA certification, and on the timing for the ADA certification in the application process. To the extent that we would adopt such a change, we also solicit comment on whether any rule changes are needed to ensure that applicants that fail to comply with the certification no longer receive discounts. The Commission further seeks comment on whether, and how, the Administrator and the Commission would verify and enforce compliance, and the extent that such actions promote our three goals of improving program operation, ensuring a fair and equitable distribution of benefits, and preventing waste, fraud, and abuse.

26. Section 54.501(d)(1) implements the Commission's determinations in the Universal Service Order as to when eligible entities seeking discounts as part of a consortium can obtain interstate telecommunications services at prices below tariffed rates. The Commission found that there was congressional support for allowing eligible schools and libraries to obtain services at pre-discount prices below tariffed rates. However, it concluded that where such eligible entities sought services as members of a consortium including private sector non-eligible members, allowing the private non-eligible businesses to obtain below-tariff rates would compromise federal and state policies of non-discriminatory pricing. The Commission therefore concluded that a consortium that included private sector ineligible members could obtain tariffed services only if “the pre-discount prices of [the tariffed services] are generally tariffed rates.”

27. The Commission seeks comment on whether a change to section 54.501(d)(1), recommended by consortia members and service providers working with consortia, would improve program operation. We also invite comment on whether changes to other consortia rules might achieve a greater consistency or fairness in our approach to the participation of consortia in the program. The language in the current rule provides that “[w]ith one exception, eligible schools and libraries participating in consortia with ineligible private sector members shall not be eligible for discounts for interstate services.” Parties have argued that this language is unclear and could be construed to prohibit such consortia from obtaining services other than tariffed services. The Commission seeks comment on whether to clarify the rule to establish clearly that only ineligible private sector members seeking services as part of a consortium with eligible members are prohibited from obtaining below-tariffed rates from providers that offer tariffed services (tariffed providers). The Commission specifically requests comment on the impact of this rule on program operation, whether administrative costs would result from the proposed change, what these costs would be, and whether these costs would outweigh the benefits of the change.

28. The Commission also seeks comment on any proposals as to how we might clarify, change or reorganize the other rules and requirements relating to consortia, to help ensure that these rules and requirements reflect a fair and consistent approach to the role and obligations of consortia leaders and the consequences to consortia members of violations by leaders and other members. We seek comment on how we might improve program operation or otherwise further our interest in fairly distributing benefits of the program and limiting fraud, waste, and abuse, by making consortia application and participation requirements more transparent, so that it is clear what consortia may do and what their responsibilities are.

29. Under existing law and Commission procedure, the Administrator of the universal service support mechanism does not provide funds directly to schools and libraries, but rather, provides funds to eligible service providers, who then offer discounted services to eligible schools and libraries. Under existing Administrator's procedures, service providers and applicants are advised to work together to determine whether the applicant will either (1) pay the service provider the full cost of services, and subsequently receive reimbursement from the provider for the discounted portion, after the provider receives reimbursement through the Billed Entity Applicant Reimbursement (BEAR) process, or (2) pay only the non-discounted portion of the cost of services, with the service provider seeking reimbursement from the Administrator for the discounted portion. Because it is not clear in our rules whether the provider or the applicant may make the final determination of which of the two payment processes to pursue, the potential exists for service providers to insist that applicants to whom they provide services use the first method of paying the up-front costs, and later seeking reimbursement. Indeed, some large providers require recipients to use the BEAR form.

30. The Commission seeks comment on whether our rules should specify that service providers must offer applicants the option of either making up-front payments for the full cost of services and being reimbursed via the BEAR form process, or paying only the non-discounted portion up-front. We seek comment on the costs and benefits of our proposal to all affected parties and whether it would improve program operation overall.

31. The Commission also seeks comment on whether, to further improve program operation and prevent fraud and abuse, we should incorporate enforcement measures regarding remittal of BEAR payments into our rules. Under current Administrator procedure, service providers reimbursing billed entities via the BEAR process must remit to the billed entity the discount amount authorized by the Administrator to the billed entity within ten days of receiving the reimbursement payment from the Administrator and prior to tendering or making use of the payment from the Administrator. The Administrator has implemented this procedure pursuant to ongoing Commission oversight of the program, but this procedure has not been formally codified in our rules. We have received reports from both the Administrator and from affected schools and libraries that, in certain cases, service providers have failed to remit these payments to applicants until well past the ten-day limit. In order to address this problem, we seek comment on whether service providers should be required to remit these payments to the applicants within twenty days of having received them, and that failure to do so will constitute a rule violation potentially subjecting the service provider to fines and forfeitures under section 503 and/or other law enforcement action.

32. The Commission seeks comment on whether this proposed twenty-day period imposes a significant economic burden on small entity providers (as defined in paragraphs 88 through 98 of the Order). We welcome any suggestions as to how the remittance process might be modified to minimize such impact. We also seek comment on the extent to which a modification such as lengthening the remittance period would have a deleterious impact on eligible schools and libraries that is inconsistent with our three goals of improving program operation, ensuring that the benefits of the program are equitably distributed, and preventing fraud, waste, and abuse.

33. The Commissions rules provide that eligible services purchased at a discount “shall not be sold, resold, or transferred in consideration for money or any other thing of value.” Nothing in our rules, however, prevents transferring equipment obtained with universal service discounts from the eligible recipient to another entity without consideration for money or anything of value. We have received reports from state authorities, schools and libraries, and the Administrator that some recipients are replacing, on a yearly or almost-yearly basis, equipment obtained with universal service discounts, and transferring that equipment to other schools or libraries in the same district that may not have been eligible for such equipment.

34. Although the Commission recognizes that schools and libraries may legitimately desire to upgrade their equipment frequently as a result of the rapid pace of technological change, we seek comment on whether it is appropriate to balance this desire against the impact of such action on other parties seeking discounts under the program. We seek comment on whether the program's goals would be improved by requiring that schools and libraries make significant use of the discounted equipment that they receive, before seeking to substitute new discounted equipment. In particular, we seek comment on whether there may be insufficient incentives in the schools and libraries mechanism to prevent wasteful or fraudulent behavior, without imposing restrictions on these transfers of equipment. The Commission specifically seeks comment on whether, as a condition of receipt of universal service discounts, we should adopt measures to ensure that discounted internal connections are used at the location and for the use specified in the application process for a certain period of time.

35. One option could be to adopt a rule limiting transfers for three years from the date of delivery and installation of equipment for internal connections other than cabling, and ten years in the case of cabling. Under this option, an applicant could replace only ten percent of its old cabling per year with new discounted internal connections (such as upgrading from copper wire to fiber optics). Otherwise, an applicant seeking discounts on new equipment to replace universal service-funded equipment that has been in place for less than the specified time periods could do so only if it traded the existing equipment to its service provider for a credit toward the purchase of the cost of the new discounted equipment. The Commission seeks comment on whether this option would achieve the goals of efficient and equitable use of the mechanism's funds, and whether this approach would prevent both waste and fraud. We also seek comment on how this change might most effectively be implemented, and on attendant benefits and costs.

36. An alternate approach could be to deny internal connections discounts to any entity that has already received discounts on internal connections within a specified period of years regardless of the intended use of the new internal connections. The Commission seeks comment on whether we should adopt such a rule, on the appropriate time frame for such a rule, and whether we should impose this limitation only in situations where the applicants have previously received discounts above a specified threshold in the relevant time period. We also seek comment on the administrative costs that would be incurred, both in the application process and in post-disbursement auditing, to ensure compliance with a rule prohibiting an entity from receiving discounts on internal connections if it previously had received such discounts. We seek comment on these and any other proposals to address this issue and thus give us further insight on how, with regard to equipment issues, we might further our goals of improving program operation, ensuring that the mechanism's benefits are fairly and equitably distributed, and eliminating fraud, waste, and abuse.

37. The Act requires that discounts on services be provided for educational purposes to schools and libraries. In the Universal Service Order, the Commission implemented this provision by requiring schools and libraries to certify that the services obtained through discounts from the schools and libraries mechanism will be used solely for educational purposes. The Commission determined that the certification rules, including the educational purposes rule, were reasonable and not unnecessarily burdensome, especially in light of the Commission's goals to reduce fraud, waste, and abuse.

38. In some instances, the discounted services received by schools and libraries through the schools and libraries program are provided on a non-usage sensitive basis and are used for educational purposes during hours when the schools and libraries are open, but remain unused during off-hours when the entities are closed. As a result, due to the non-usage sensitive nature of the services, services that could be used after the operating hours of schools and libraries presently go unused.

39. The State of Alaska recently requested a waiver of the restriction in § 54.504(b)(2)(ii) that requires applicants to certify that the services obtained from the schools and libraries mechanism would be used for solely educational purposes. In many communities in Alaska, services from the schools and libraries program have provided the only means to deliver Internet access to communities in rural remote areas. Specifically, the State of Alaska asked to use the telecommunications and Internet access services as an Internet “point of presence” in rural remote communities. To the extent that a school or library will not be fully utilizing the services it ordered for educational purposes, and these services would otherwise be wasted, the State of Alaska requested that others in the community be allowed to use these services for non-educational purposes.

40. On December 3, 2001, the Commission granted the State of Alaska a limited waiver of § 54.504(b)(2)(ii) of the Commission's rules. In the Alaska Order, 66 FR 67112 (December 28, 2001), the Commission concluded that there is nothing in section 254(h)(1)(B) that prohibits the Commission from granting a waiver of § 54.507(b)(2)(ii) of its rules to expand the use of such services, so long as in the first instance they are used for educational purposes. The Commission further determined that based on the special circumstances outlined in Alaska's petition, there was good cause to waive § 54.504(b)(2)(ii) of the Commission's rules for rural remote communities in Alaska who lack local or toll-free dial-up access to the Internet.

41. The Commission seeks comment more broadly on the types of situations that might warrant utilization of excess service obtained through the universal service mechanism for schools and libraries when services are not in use by the schools and libraries for educational purposes. Although we believe the Commission's current rule relating to educational purposes is appropriate in the overwhelming majority of circumstances, we seek comment on whether the Commission should revise its rules in order to expressly address such situations, and whether such revisions would further the goals of improving program operation, ensuring a fair and equitable distribution of benefits and preventing waste, fraud, and abuse.

42. If the Commission were to modify it's rules expressly to address the use of excess services in limited circumstances, we seek comment on whether to consider conditioning such use on several criteria: (1) That the school or library request only as much discounts for services as are reasonably necessary for educational purposes; (2) the additional use would not impose any additional costs on the schools and libraries program; (3) services to be used by the community would be sold on the basis of a price that is not usage sensitive; (4) the use should be limited to times when the school or library is not using the services; and (5) the excess services are made available to all capable service providers in a neutral manner that does not require or take into account any commitments or promises from the service providers. With respect to the fifth condition, we previously found that such a condition was “consistent with the Act, which prohibits any discounted services or network capacity from being sold, resold, or transferred by such user in consideration for money or any other thing of value.” The Commission seeks comment on the legal, operational, and enforcement issues raised by this approach.

43. The Commission believes that, to the extent we should adopt any such change, the resulting policy would need to be carefully circumscribed to prevent fraud, waste, and abuse. In light of these concerns, and our desire to ensure that the appropriate safeguards are in place, we also seek comment regarding how such an arrangement would function. In particular, we seek comment on how to ensure that any revised rule would not indirectly impose costs on the schools and libraries program or that applicants would not request more service than is necessary for educational purposes.

44. In the Eighth Order on Reconsideration, (not in Federal Register ), the Commission established a process by which aggrieved parties could seek review from the Commission of decisions of the Administrator. As of January 1, 2002, the Commission has reviewed 740 appeals from the Administrator's decisions. Of these, 592 were denied or dismissed, 135 were granted, and 13 were granted in part. Of those appeals granted, a number involved situations where the Commission concluded that a close examination of the rules and policies applicable to the underlying request was warranted. Our history to date thus leads us to conclude that the Administrator is applying existing rules and policies correctly in the vast majority of cases. Nevertheless, the opportunity for Commission review remains an important method by which we provide effective oversight of the Administrator's activities.

45. Our current rules provide that any person aggrieved by a decision of any Division of the Administrator may file an appeal directly with the Commission within 30 days of the date of the issuance of the decision. Alternately, the person may appeal the decision of a Division within 30 days of the date of the decision to the relevant Committee governing that Division, in which case the time for filing an appeal with the Commission is tolled during the pendency of the appeal before the Committee. Once the Committee has issued a decision on the appeal, the person then has up to 30 days to appeal that decision to the Commission. In each case, an appeal is deemed filed on the date that it is received, not the date it is postmarked.

46. Appeals to the Commission are decided by the Common Carrier Bureau, unless they raise novel issues of fact, law, or policy, in which case, they are decided by the full Commission. Whether an appeal is before the Common Carrier Bureau or the full Commission, the standard of review is de novo. This review process applies equally to decisions made by the three divisions of the Administrator defined in our regulations, the Schools and Libraries Division, the Rural Healthcare Division, and the High Cost and Low Income Division.

47. Numerous parties have recommended that we increase the time limit for filing an appeal with the Committee of the Schools and Libraries Division and the time limit for filing an appeal with the Commission. As noted above, the time limit in both cases is 30 days, which commences on the date of the decision and runs until the filing of the appeal. The parties have proposed increasing this period to 60 days. In the Eighth Order on Reconsideration, the Commission established the 30 day period partly in response to commenters' requests for a streamlined approach. Experience suggests, however, that this time period may be inadequate for parties wishing to appeal an adverse decision. To date, we have dismissed appeals as untimely approximately 22 percent of the time. Parties have suggested that some extension of time for filing appeals will provide aggrieved schools and libraries a greater opportunity to review the relevant decisions, and determine whether there are valid bases for appeal in light of the governing rules and Commission precedent. Moreover, they suggest, additional time would enable applicants to consult with the e-rate assistance offices that many States have now established to advise constituents who are seeking such funding. Nothing in this suggested change would prevent participants from filing appeals before the end of the appeals period.

48. The Commission therefore invites comment on whether this modification to our rules would improve program operation. In addition, we seek comment on the suggestion that we should treat appeals to the Administrator or to the Commission as having been received on the date they are post-marked rather than the date they are filed. This would depart from the Commission practice for filings in general. Such a change, however, would make the appeal procedure consistent with the Administrator's practice of treating FCC Form 471 applications as having been filed as of the post-mark date. Further, it could better ensure that rural and remote applicants will not be disadvantaged if it takes longer to mail an appeal to the Commission. We therefore seek comment on whether we should adopt this modification. Finally, we seek comment on any other changes to our rules or policies concerning the appeals procedure of the Administrator or the Commission that might further the goals of improving program operation, ensuring a fair and equitable distribution of benefits and preventing waste, fraud, and abuse consistent with the 1996 Act.

49. Each funding year, the Administrator sets aside a portion of the funds available that year for the schools and libraries universal service mechanism to ensure that sufficient funds will be available for any appeals that may be granted by the Administrator or the Commission. The Administrator calculates this amount in part by generating a prediction of the percentage of its decisions that will be reversed based on historical experience. Because the prediction may underestimate the actual number of reversed decisions, it is possible that the appeal reserve fund in a particular year will ultimately be inadequate to fund all successful appeals in that year.

50. In the Eleventh Reconsideration Order and Further Notice, the Commission proposed certain rules establishing funding priorities for the Administrator to apply when distributing funds from the appeal reserve to schools and libraries that successfully appeal decisions of the Administrator. Specifically, the Commission proposed that the Administrator should first fund all Priority One appeals, and then allocate any remaining funds in the appeal reserve to Priority Two appeals in order of descending discount rate. The Commission further proposed that if funds were not available for all Priority One appeals, then all funding should be allocated to Priority One appeals on a pro-rata basis. To ensure correct distribution of funds to Priority One appeals, the Commission proposed that the Administrator should wait until a final decision has been issued on all Priority One service appeals before allocating funds to such services on a pro-rata basis.

51. In response to these proposals, several commenters suggest that it is inappropriate to limit appellants to those funds in the appeal reserve fund because it might result in successful appellants being treated differently from applicants who were awarded funding initially. In some circumstances, two schools or libraries of similar eligibility that file simultaneous applications for identical support might receive different funding merely because one was subject to an erroneous initial funding decision that was subsequently reversed on appeal. To avoid such a result, the Commission now seeks comment on whether, to ensure a fair and equitable distribution of funds, we should instead fully fund successful appeals to the same extent that they would have been funded in the initial application process had they not been initially denied funding.

52. The Commission further seeks comment on what rules should govern if the new proposal were adopted, in the event that the funding year's appeal reserve is depleted. One option, for example, would be for the Administrator to rely on any other funds that remain from the current funding year first, including funds that had never been committed and funds that had been committed but were never used by the original recipients. If these sources are unavailable or insufficient, the Administrator could then use funds from the next funding year as soon as they become available, and reduce the level of discounts available in that next funding year by that amount. We seek comment on this and any other option consistent with our goals of improving program operation, ensuring a fair and equitable distribution of benefits, and preventing waste, fraud, and abuse consistent with the 1996 Act.

53. Under such an option, it may be unnecessary to withhold funding until all appeals have been decided. Some delay in funding may be unavoidable, however, because if the Administrator must fund successful appeals in one year by drawing funds from the succeeding Funding Year, those funds would not be available until the beginning of that future funding year. The Commission believes that delays in funding of Priority Two internal connections will generally be less burdensome than delays in funding of Priority One services, because the latter services must be purchased by the applicant during the funding year regardless of whether funding for discounts is awarded at that time or not. We therefore seek comment on whether the Administrator should fund successful appellants in the order that decisions on appeal are issued, except that the Administrator should not commit funds to successful applicants requesting support for Priority Two services until the Administrator is certain that sufficient funds remain to fund all successful appellants requesting discounts for Priority One services. We seek comment on all of our current proposals regarding the funding of successful appellants.

54. In its December 2000 report, the General Accounting Office proposed strengthening application and invoice review procedures in order to reduce the amount of funds inadvertently spent on ineligible services. The Administrator has implemented a number of procedural changes suggested by the report, and has undertaken numerous measures on its own initiative. Working closely with the Commission's Office of the Inspector General (OIG), the Administrator has significantly stepped up its efforts aimed at detecting and resolving instances of waste, fraud, and abuse. For example, it has increased the number of audits, withheld suspect payments, withdrawn posted FCC Forms 470 from its website and rejected FCC Form 471 applications, and has increasingly coordinated its efforts with federal, state, and local law enforcement to combat fraud and other potentially criminal activity. We, in turn, have examined our rules to consider whether our existing enforcement tools should be strengthened in any way.

55. We seek comment on whether, so as to improve our oversight capacity to guard against waste, fraud, and abuse, our rules should explicitly authorize the Administrator to require independent audits of recipients and service providers, at recipients' and service providers' expense, where the Administrator has reason to believe that potentially serious problems exist, or is directed by the Commission. We specifically seek comment on the impact of such a rule on small entities. We further seek comment on alternatives that might provide other assurances of program integrity consistent with the goals of improving program operation, ensuring a fair and equitable distribution of benefits, and preventing waste, fraud, and abuse.

56. The Act and our rules permit the Commission to initiate forfeiture proceedings against those that willfully or repeatedly fail to comply with statutory and regulatory requirements. There are no provisions in our current rules, however, to bar entities from participating in the program for periods of time.

57. The Commission seeks comment on whether, so as to further improve our oversight, we can and should adopt rules barring applicants, service providers, and others (such as consultants) that engage in willful or repeated failure to comply with program rules from involvement with the program, for a period of years. Assuming we were to adopt such a rule, we seek input on what standards should apply for barring such entities, and on what an appropriate length of time would be for such a prohibition. We also seek comment on other questions regarding implementation of such a prohibition, including whether the prohibition might apply to individuals, so that those responsible for actions that led to the barring of a particular entity do not evade the purpose of the prohibition by joining or forming another eligible entity.

58. The Commission seeks comment generally on whether to adopt additional measures to reduce potential waste, fraud, and abuse in the schools and libraries support mechanism. Consistent with our intent to continue strengthening program integrity, we seek input on further rules and procedures to address these matters.

59. In each funding year, a portion of the $2.25 billion available under the program cap has gone unused, largely because some applicants do not fully use the funds committed to them in a given year. Under the Administrator's procedures in effect in the first three funding years of the program, the Administrator engaged in various ongoing analyses throughout each funding year to ensure that it did not commit more than the $2.25 billion cap each year. Although this $2.25 billion limit on commitments ensured that the level of funds actually disbursed remained under the $2.25 billion cap, the result, given that applicants do not seek disbursement of all committed funds, has been that some of the $2.25 billion has gone unused by applicants each year.

60. The Administrator issues funding commitment decision letters to applicants once their applications have been approved, but does not authorize payouts of committed funds until it receives valid invoices demonstrating that the applicants have obtained the requested products and services. The Administrator approves the disbursement of funds once it receives a certification from the recipient and invoices from the service provider or applicant, indicating that approved services have begun. In many cases, however, applicants and vendors do not submit the required documentation for all the funding, and therefore receive only partial funding, or none of the committed funds at all. As of June 30, 2001, approximately $940 million of the $3.7 billion in program funds committed to applicants during the first and second funding years was not disbursed because of the failure of applicants and providers to submit the required documentation. In the first funding year, the Administrator disbursed approximately 82 percent of committed funds. In the second funding year through June 30, 2001, the Administrator disbursed approximately 71 percent of committed funds. The Administrator projects that a similar proportion of committed funds will be disbursed in Funding Year 3.

61. The Commission seeks comment on whether there are any administrative modifications to the schools and libraries universal service support mechanism that we should implement to improve program operation, ensure a fair and equitable distribution of funds, or guard against waste, fraud, and abuse. We seek comment generally on whether there are modifications to the application and funding disbursement process that would serve our goals in this proceeding, that could be implemented immediately without need for a rule change.

62. In addition, the existence of unused funds each year raises two issues that we address in this NPRM. The first issue is how to reduce the level of funds that go unused. The second issue is what to do with undisbursed funds, to the extent that they remain despite our reduction efforts. In the sections that follow, we seek comment on these issues.

63. The Commission anticipates that several recent administrative changes to the schools and libraries program should help to reduce the under-utilization of committed funds. Specifically, in May 2000, the Administrator released a new Form 500 that gives applicants a convenient tool to reduce or cancel commitments they will not use so that those funds can be made available for other applicants during the same funding year. Additionally, the Administrator developed new and more flexible procedures for service provider changes, consistent with governing precedent. The Administrator expects those procedures to permit approval of many pending service provider changes and the distribution of more funds each year. Furthermore, in order to address the under-utilization of program resources caused by this gap between committed and disbursed funds, the Administrator, in consultation with the Commission, will begin to base the overall amount of committed funds each year on a formula that takes into consideration past levels of disbursement. We believe that each of these changes will help prevent the likelihood of waste, fraud, and abuse by improving the disbursement of program funds.

64. It is the Commission's goal to reduce the gap between funds that have been committed and those that have been disbursed, in order to most effectively implement the goals of section 254(h) by providing for discounts as close as possible to the level of the annual $2.25 billion cap. We seek to develop a record on the reasons why applicants and providers may fail to fully use committed funds under the program. We also seek comment on whether any other program changes would likely result in an increased percentage of committed funds being disbursed each funding year, which will help to reduce the overall amount of unused funds from the schools and libraries mechanism. In the event we adopt additional measures to reduce the existence of unused funds, we seek comment on whether it is necessary to adopt procedures to address a situation in which more funds are committed and used than are available for disbursement.

65. Section 54.507(a) of the Commission's rules codifies the annual $2.25 billion cap on the schools and libraries support mechanism. The rule also provides that “all funding authority for a given funding year that is unused in that funding year shall be carried forward into subsequent funding years for use in accordance with demand.” Although § 54.507(a) addresses funding authority, it is silent as to the treatment of unused funds, i.e., funds that the Administrator had available for disbursement, but that were not disbursed in that funding year. As discussed infra, unused funds from Funding Year 1 have been used to reduce the contribution factor for Funding Years 2 and 3, consistent with Commission rules and policies. We believe, however, that we should consider what should be done with unused funds that may occur in future years.

66. In accord with the Commission's efforts to reduce the amount of unused funds from the schools and libraries mechanism, we seek comment on revising the Commission's rules to clarify the appropriate treatment of such unused funds. As stated above, the Commission's rule adopted in accord with the Universal Service Order refers to unused funding authority, not unused funds. Thus, the Commission seeks comment on two options relating to the treatment of unused funds. The first option would be to modify the rule to require expressly that unused funds from the schools and libraries mechanism (beginning with Funding Year 2) should be credited back to contributors through reductions in the contribution factor. The second option would be to modify the rule to require expressly the distribution of the unused funds in subsequent years of the schools and libraries program, in excess of the annual cap. We seek comment on each of the alternatives. We believe that consumers may benefit from reducing the contribution factor with unused funds because it will decrease the contribution amounts that carriers recover from consumers. Alternatively, disbursing unused funds in subsequent funding years of the schools and libraries mechanism would provide additional resources for applicants, thereby assisting efforts to provide affordable telecommunications and information services to schools and libraries.

67. The Commission seeks comment on any administrative or procedural rules or policies of the Commission or SLD, relating to the schools and libraries support mechanism, that should be revised or eliminated because they have become outmoded. In the four years since the implementation of the support mechanism, some such rules or policies may have become obsolete through changed circumstances or technologies, or may have been rendered unnecessary or redundant in light of changes made to the program. We therefore seek comment on such rules or policies in order to determine whether any are no longer necessary or in the public interest.

68. As part of our continuing effort to reduce paperwork burdens, the Commission invites the general public to take this opportunity to comment on the additional certification collections contained in this NPRM, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due at the same time as other comments on this NPRM. Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.

69. As required by the Regulatory Flexibility Act (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in this NPRM. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM provided below in section VI.C. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Notice and IRFA (or summaries thereof) will be published in the Federal Register .

70. The Commission is required by section 254 of the Act to promulgate rules to implement the universal service provisions of section 254. On May 8, 1997, the Commission adopted rules to reform our system of universal service support mechanisms so that universal service is preserved and advanced as markets move toward competition. In this NPRM, we seek comment on several changes to the schools and libraries universal service support mechanism. With respect to the application process, we seek comment on (1) issues related to the process for determining eligible services, and the eligibility for schools and libraries universal service support of such services as voice mail, wireless, and Wide Area Networks; (2) permitting schools and libraries to receive discounts for Internet access that may in certain limited cases contain content, as long as it is the most cost-effective form of Internet access; (3) the 30 percent processing benchmark for reviewing funding requests that include both eligible and ineligible services; (4) whether to require a certification by schools and libraries acknowledging their compliance with the requirements of the Americans With Disabilities Act and related statutes; and (5) modifying our rule governing when members of a consortium may receive service from a tariffed service provider at below-tariff rates.

71. Also seek comment on several issues that arise once discounts have been committed to applicants: (1) Providing schools and libraries the flexibility either to make up-front payments for services and receive reimbursement via the Billed Entity Applicant Reimbursement (BEAR) form process, or be charged only the non-discounted cost by the service providers, and require that service providers remit BEAR reimbursements to applicants within twenty days; (2) limiting transferability of equipment obtained with universal service discounts; and (3) allowing members of rural remote communities to use excess capacity from services obtained through the universal service support mechanism in certain limited situations.

72. With respect to the appeals process, the Commission seeks comment on increasing time limits for filing appeals to 60 days, and considering appeals filed as of the day they are post-marked; and procedures for funding successful appeals. Fourth, we seek comment on measures to strengthen our existing enforcement tools, including adopting a rule explicitly authorizing independent audits; and barring from the program certain applicants, service providers, and others that engage in willful or repeated failure to comply with program rules. On the issue of unused program funds, we seek comment on the reasons for unused funds, and on how the Commission should treat unused funds. We also deny certain petitions for reconsideration relating to unused funds, and seek comment on revising or eliminating outmoded administrative or procedural rules or policies relating to the schools and libraries universal service support mechanism.

73. The legal basis for this NPRM is contained in sections 1 through 4, 201 through 205, 254, 303(r), and 403 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. 151 through 154, 201 through 205, 254, 303(r), and 403, and § 1.411 of the Commission's rules, 47 CFR 1.411.

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

75. Small entities potentially affected by the proposals herein include eligible schools and libraries and the eligible service providers offering them discounted services, including telecommunications service providers, Internet Service Providers (ISPs) and vendors of internal connections.

76. Under the schools and libraries universal service support mechanism, which provides support for elementary and secondary schools and libraries, an elementary school is generally “a non-profit institutional day or residential school that provides elementary education, as determined under state law.” A secondary school is generally defined as “a non-profit institutional day or residential school that provides secondary education, as determined under state law,” and not offering education beyond grade 12. For-profit schools and libraries, and schools and libraries with endowments in excess of $50,000,000, are not eligible to receive discounts under the program, nor are libraries whose budgets are not completely separate from any schools. Certain other statutory definitions apply as well. The SBA has defined as small entities elementary and secondary schools and libraries having $5 million or less in annual receipts. In funding year 2 (July 1, 1999 to June 20, 2000) approximately 83,700 schools and 9,000 libraries received funding under the schools and libraries universal service mechanism. Although we are unable to estimate with precision the number of these entities that would qualify as small entities under SBA's definition, we estimate that fewer than 83,700 schools and 9,000 libraries would be affected annually by the rules proposed in this NPRM, under current operation of the program.

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

78. Local Exchange Carriers. Neither the Commission nor the SBA has developed a definition for small providers of local exchange services. The closest applicable definition under the SBA rules is for wired telecommunications carriers. This provides that a wired telecommunications carrier is a small entity if it employs no more than 1,500 employees. According to the most recent Trends in Telephone Service report, 1,335 carriers classified themselves as incumbent local exchange carriers. We do not have data specifying the number of these carriers that are either dominant in their field of operations, are not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of local exchange carriers that would qualify as small business concerns under the SBA's definition. Of the 1,335 incumbent carriers, 13 entities are price cap carriers that are not subject to these rules. Consequently, we estimate that fewer than 1,322 providers of local exchange service are small entities or small incumbent local exchange carriers that may be affected.

79. Interexchange Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of interexchange services (IXCs). The closest applicable definition under the SBA rules is for wired telecommunications carriers. This provides that a wired telecommunications carrier is a small entity if it employs no more than 1,500 employees. According to the most recent Trends Report, 204 companies reported that they were engaged in the provision of interexchange services. As some of these carriers have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of IXCs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 204 small entity IXCs that may be affected by the proposals in this NPRM.

80. Competitive Access Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to competitive access services providers (CAPs). The closest applicable definition under the SBA rules is for wired telecommunications carriers. This provides that a wired telecommunications carrier is a small entity if it employs no more than 1,500 employees. According to the most recent Trends Report, 496 competitive service providers reported that they were engaged in the provision of competitive local exchange services. We do not have data specifying the number of these carriers that are not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of CAPs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are less than 349 small entity CAPs and 60 other local exchange carriers that may be affected.

81. Cellular and Wireless Telephony. Neither the Commission nor the SBA has developed a definition of small entities specifically for wireless telephony. The closest definition is the SBA definition for cellular and other wireless telecommunications. Under this definition, a cellular licensee is a small entity if it employs no more than 1,500 employees. According to the most recent Trends Report, 806 providers classified themselves as providers of wireless telephony, including cellular telecommunications, Personal Communications Service, and Specialized Mobile Radio (SMR) Telephony Carriers. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of cellular service carriers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 806 wireless telephony carriers that may be affected.

82. Other Wireless Services. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to wireless services other than wireless telephony. The closest applicable definition under the SBA rules is again that of cellular and other wireless telecommunications, under which a service provider is a small entity if it employs no more than 1,500 employees. According to the most recent Trends Report, 477 providers classified themselves as paging services, wireless data carriers or other mobile service providers. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of wireless service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 477 wireless service providers that may be affected.

83. Under the new NAICS codes, SBA has developed a small business size standard for “On-line Information Services,” NAICS Code 514191. According to SBA regulations, a small business under this category is one having annual receipts of $18 million or less. According to SBA's most recent data, there are a total of 2,829 firms with annual receipts of $9,999,999 or less, and an additional 111 firms with annual receipts of $10,000,000 or more. Thus, the number of On-line Information Services firms that are small under the SBA's $18 million size standard is between 2,829 and 2,940. Further, some of these Internet Service Providers (ISPs) might not be independently owned and operated. Consequently, we estimate that there are fewer than 2,940 small entity ISPs that may be affected by the decisions and rules of the present action.

84. The Commission has not developed a definition of small entities applicable to the manufacturers of internal network connections. The most applicable definitions of a small entity are the definitions under the SBA rules applicable to manufacturers of “Radio and Television Broadcasting and Communications Equipment” (RTB) and “Other Communications Equipment.” According to the SBA's regulations, manufacturers of RTB or other communications equipment must have 750 or fewer employees in order to qualify as a small business. The most recent available Census Bureau data indicates that there are 1,187 companies with fewer than 1,000 employees in the United States that manufacture radio and television broadcasting and communications equipment, and 271 companies with less than 1,000 employees that manufacture other communications equipment. Some of these manufacturers might not be independently owned and operated. Consequently, we estimate that there are fewer than 1,458 small entity internal connections manufacturers that may be affected by the decisions and rules of the present action.

85. The NPRM seeks comment on the proposal that all recipients of discounts be required to certify that they are in compliance with the ADA, but does not specify the language or at what point in the process applicants should be required to make this certification. We already require applicants to make several certifications, both when they apply for discounted services and after approval of discounts when they file an FCC Form 486 indicating their receipt of those services. The new certification will merely require them to check one additional box prior to signing the relevant form. Regardless of the precise language of the certification, we estimate that it will take no more than one minute to review and check the appropriate certification box. Aside from this requirement, the specific proposals under consideration in this NPRM would, if adopted, result in no additional reporting or recordkeeping requirements.

86. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance and reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or part thereof, for small entities.

87. The Commission finds that the following proposals will have no significant economic impact on small entities: allowing, under certain circumstances, full discounts on Internet service that includes content, the proposed modification to the appeals process, requiring certification of compliance with the ADA, a proposed alteration to the rules regarding application of tariff rates to consortia, the proposed rule establishing the right of funding for all successful appellants and the funding methodology, and possible rule changes affecting overcommitted funding requests.

88. Requiring that recipients be allowed to choose their payment method could have a significant impact on service providers, including small entities, by depriving them of their full revenues for a period of time when the applicant chooses to pay only the discounted portion up-front. The Commission has considered the alternative of continuing to allow small service providers the discretion to mandate a particular payment method. However, as the Commission noted in Universal Service Order, “requiring schools and libraries to pay [service providers] in full could create serious cash flow problems for many schools and libraries and would disproportionately affect the most disadvantaged schools and libraries.” In order to comply with the goals of the Act, i.e., to ensure the delivery of affordable telecommunications service to schools and libraries, including small entities, we conclude that we can justify any additional economic impact that might occur to small service providers.

89. However, in seeking to minimize the burdens imposed on small businesses where doing so does not compromise the goals of the universal service mechanism, the Commission has sought comment on whether to increase the current 10-day period for service providers to remit their payments to 20 days, and we invited comment on how the billing process might be made less burdensome for small entities. We further invited comment on whether, in the case of applicants that choose up-front payment of the full pre-discount cost followed by the provider's remittance of the discount fund through the BEAR process, some extension of the standard remittance period for small businesses may be appropriate. We again invite commenters to discuss the benefits of such changes on small businesses and whether these benefits are outweighed by resulting costs to schools and libraries that might also be small entities.

90. The Commission has sought comment on a proposed rule restricting transferability of equipment, which may have an economic impact on small entity schools and libraries. However, we expect that the impact on small entities will be minimal because the overall effect of the proposed rule is to restrict an entity's ability to purchase redundant systems. Thus, it should reduce rather than increase the entity's costs.

91. The Commission has sought comment on two options for the treatment of funds left unused at the end of a Funding Year. The first option, to use these funds to reduce the contribution factor used to calculate a carrier's contribution for universal service support, would temporarily reduce the burden of universal service support on telecommunications service providers, including many small businesses. In the alternative, we have sought comment on a proposal to distribute unused funds to schools and libraries in subsequent funding years, which would improve the opportunities of small entity schools and libraries but conversely would impose a greater burden on small businesses. It is therefore not clear which of these two alternatives would be more appropriate to minimizing the economic impact on small entities. In seeking comment on these two options, we invite commenters to discuss this question.

92. The Commission has further sought comment on numerous other areas of the program, including the reduction of the percentage of unused funds, the eligibility determination process, the specific eligibility of WANs, wireless services, and voice mail, the use of excess capacity in rural areas for non-educational purposes, the rules governing consortia, and the appropriate method of enforcement of our rules in general. We do not seek comment on specific proposals on these issues at this time, and therefore, cannot at this time determine how changes in these areas will impact on small entities in relation to the current regime. We therefore request that commenters, in proposing possible alterations to our rules, discuss the economic impact that those changes will have on small entities.

93. None.

94. We invite comment on the issues and questions set forth in the NPRM and Initial Regulatory Flexibility Analysis contained herein. Pursuant to applicable procedures set forth in §§ 1.415 and 1.419 of the Commission's rules, interested parties may file comments as follows: comments are due April 5, 2002 and reply comments are due May 6, 2002. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24,121 (1998).

95. Comments filed through the ECFS can be sent as an electronic file via the Internet to http://www.fcc.gov/e-file/ecfs.html. Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit electronic comments by Internet e-mail. To receive filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and should include the following words in the body of the message, “get form <your e-mail address>.” A sample form and directions will be sent in reply.

96. Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, commenters must submit two additional copies for each additional docket or rulemaking number. Parties who choose to file by paper are hereby notified that effective December 18, 2001, the Commission's contractor, Vistronix, Inc., will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at a new location in downtown Washington, DC. The address is 236 Massachusetts Avenue, NE, Suite 110, Washington, DC 20002. The filing hours at this location will be 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. This facility is the only location where hand-delivered or messenger-delivered paper filings for the Commission's Secretary will be accepted. Accordingly, the Commission will no longer accept these filings at 9300 East Hampton Drive, Capitol Heights, MD 20743. Other messenger-delivered documents, including documents sent by overnight mail (other than United States Postal Service (USPS) Express Mail and Priority Mail), must be addressed to 9300 East Hampton Drive, Capitol Heights, MD 20743. This location will be open 8:00 a.m. to 5:30 p.m. The USPS first-class mail, Express Mail, and Priority Mail should continue to be addressed to the Commission's headquarters at 445 12th Street, SW, Washington, DC 20554. The USPS mail addressed to the Commission's headquarters actually goes to our Capitol Heights facility for screening prior to delivery at the Commission.

97. Parties who choose to file by paper should also submit their comments on diskette to Sheryl Todd, Accounting Policy Division, Common Carrier Bureau, Federal Communications Commission, 445 Twelfth Street, SW., Room 5-B540, Washington, DC 20554. Such a submission should be on a 3.5 inch diskette formatted in an IBM-compatible format using Microsoft Word 97 for Windows or a compatible software. The diskette should be accompanied by a cover letter and should be submitted in “read-only” mode. The diskette should be clearly labeled with the commenter's name, proceeding, including the lead docket number in the proceeding (CC Docket No. 02-6), type of pleading (comment or reply comment), date of submission, and the name of the electronic file on the diskette. The label should also include the following phrase (“Disk Copy Not an Original.”) Each diskette should contain only one party's pleadings, preferably in a single electronic file. In addition, commenters must send diskette copies to the Commission's copy contractor, Qualex International, Portals II, 445 12th Street, SW, Room CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail at qualexint@aol.com.

98. Written comments by the public on the proposed and/or modified information collections pursuant to the Paperwork Reduction Act of 1995, Public Law No. 104-13, are due on or before April 5, 2002. Written comments must be submitted by the Office of Management and Budget (OMB) on the proposed and/or modified information collections on or before April 22, 2002. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Judy Boley, Federal Communications Commission, Room 1-C804, 445 12th Street, SW., Washington, DC 20554, or via the Internet to jboley@fcc.gov and to Jeanette Thornton, OMB Desk Officer, 10236 NEOB, 725—17th Street, NW., Washington, DC 20503.

99. Accessible formats (computer diskette, large print, audio recording and Braille) are available to persons with disabilities by contacting Brian Millin at (202) 418-7426, (202) 418-7365 TTY, or at bmillin@fcc.gov.

100. Pursuant to the authority contained in sections 1-4, 201-205, 254, 303(r), and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 254, 303(r), 403, and §§ 0.91, 0.291, 1.3, and 1.411 of the Commission's rules, 47 CFR 0.91, 0.291, 1.3, and 1.411, this notice of proposed rule making is adopted, as described herein.

101. The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this Notice of Proposed Rule Making, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

102. Pursuant to § 1.106(j) of the Commission's rules, 47 CFR 1.106(j), that the following Petitions for Reconsideration are denied: Petition for Reconsideration of Proposed First Quarter 2000 Universal Service Contribution Factor by Greg Weisiger, filed December 20, 1999; Petition for Reconsideration of Proposed Third Quarter 2000 Universal Service Contribution Factor by Greg Weisiger, filed June 12, 2000; Petition for Reconsideration of Proposed Fourth Quarter 2000 Universal Service Contribution Factor by Greg Weisiger, filed September 18, 2000.

For the reason set forth in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 54 as follows:

This is a summary of the Commission's Report and Order, MM Docket No. 01-308, adopted January 23, 2002, and released February 1, 2002. The full text of this Commission decision is available for inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 Twelfth Street, SW., Room CY-B402, Washington, DC, 20554. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com.

This is a summary of the Commission's Report and Order, MM Docket No. 01-303, adopted January 23, 2002, and released February 1, 2002. The full text of this Commission decision is available for inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 Twelfth Street, SW., Room CY-B402, Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com.

The Massachusetts Division of Marine Fisheries (MADMF) submitted an application on January 16, 2002, to conduct an experimental fishery using three federally permitted vessels to fish with experimental fishing gear in and near the GOM Rolling Closures during March and April, 2002. The experiment is a continuation of an experiment that the MADMF conducted in 2001.

The continuation of the experiment is necessary to expand the level of information and data that the MADMF has collected on the experimental flounder trawl and to conduct the experimental fishing at a time when, and in areas where, both flounder and cod are in abundance relative to other areas and times of the year. Experimental fishing in 2001 demonstrated a reduction of cod bycatch of between 75 and 90 percent, compared to traditional flounder otter trawl gear. The MADMF anticipates this reduction in bycatch to continue.

The proposed experiment would be conducted in March and April in statistical areas 123 and 124 in the GOM. According to the MADMF, operation of the experiment in statistical areas 123 and 124 in March and April would allow the experiment to occur when concentrations of flounder and cod are high enough to demonstrate sufficiently the gear's effectiveness in catching flounder and reducing cod bycatch. EFPs are required because statistical areas 123 and 124 are closed to fishing during March and April under the GOM Rolling Closure Areas I and II. The participating vessels would be allowed to retain 400 lb (181.4 kg) of cod for each 24-hour period they are fishing, as allowed by the regulations at 50 CFR 648.86(b)(i). Any remaining cod captured during the experiment would be immediately returned to the sea. The MADMF anticipates a 50-percent survival rate of released cod collected, based on research conducted by the MADMF.

The MADMF expects that the experiment this year will allow expansion of the data that they have collected from prior experiments, investigation of daytime and nighttime catches, and comparisons of the data between two different vessels. Information obtained by MADMF (and provided to NMFS after completion) could provide for potential gear modification alternatives to be used in the groundfish fishery to prevent the bycatch of cod in directed flounder fisheries.

Based on the results of this EFP, this action may lead to future rulemaking.

NMFS announces that the Regional Administrator intends to issue EFPs to allow six federally permitted vessels to fish for, land, and possess Atlantic halibut ( Hippoglossus hippoglossus ) in excess of the allowable landing and possession limit specified at 50 CFR 648.86(c) within a portion of the Gulf of Maine/Georges Bank Regulated Mesh Area (GOM/GB RMA). The EFPs would also allow these vessels to possess temporarily Atlantic halibut less than the minimum size requirement specified at § 648.83(a)(1) for purposes of collecting scientific information.

Maine DMR submitted a proposal on November 6, 2001, to conduct an experimental Atlantic halibut fishery in a portion of the GOM/GB RMA. The industry collaborative experiment involves Maine DMR, with consultation provided by the NMFS Northeast Fisheries Science Center (Center). The purpose of the experiment is to continue the collection of data on the distribution, relative abundance, migration, stock definition, mortality rates, stock size, yield, and other significant biological reference points of the Atlantic halibut resource to be used in the long-term management of the species. In addition, the experiment proposes to collect information on age and growth, size and sex composition, and rate and onset of sexual maturity. The proposed experiment is a continuation of experimental fisheries conducted by Maine DMR in 2000 and 2001.

The study would occur from April 1 through May 31, 2002, and would take place in a portion of the GB/GOM RMA defined by the following coordinates:

A maximum of six traditional longline and tub trawl vessels would be authorized to participate in the experiment at any given time. These vessels would be limited to a maximum number of 700 hooks per boat, and would be restricted to using circle hooks no smaller than 14/0 in size. Each of the six participating vessels would also be limited to a total allowable catch (TAC) of 50 halibut, with no possession or landing limit. Once this TAC is reached by an individual vessel, that vessel would be restricted to possessing and landing no more than six legal-sized halibut per day. The maximum number of Atlantic halibut that could be harvested as part of this study would be 1,080 halibut, the amount established for the 2000 and 2001 experimental fisheries.

Logbooks supplied by Maine DMR would be used to record information on length of all halibut caught, whether retained or released, time and place of all halibut caught, tag number (if applicable), amount of gear used, and bait type. In addition, species identification and length of all species caught as bycatch during the course of the study would be recorded. For all halibut that are retained, participants would be required to preserve stomachs, gonads, and any other biological samples (including scale and otolith samples) requested by scientists from Maine DMR and the NMFS for further analyses. All halibut less than 36 inches (91.4 cm) total length would be measured, tagged and released. Only legal-sized halibut would be retained for commercial sale. Training in the procedures for collecting this information would be provided by Maine DMR or Center personnel. In addition, participants would be required to complete a training program in the tagging and release of halibut.

Vessels may be required to carry onboard observers as requested by NMFS and Maine DMR. Onboard observers will consist primarily of Maine DMR staff and possibly University of Maine students. Maine DMR or Center personnel would train observers in the protocols of the experiment.

The 2001 experimental Atlantic halibut fishery took place from April 12—May 31, 2001, within the same study area as the proposed 2002 experimental fishery. Although six vessels were permitted to fish in the 2001 experimental fishery, only four actively participated. Over the course of 50 days, 152 Atlantic halibut were caught, of which 126 were kept and 26 were tagged and released. Most of the kept halibut were sold for consumption, but 45 of the 126 kept halibut were sold live to the University of Maine for use as brood stock. Two of the fish that were caught were recaptured from the 2000 experimental fishery. One of the recaptured fish was re-released, while the other was sold live to the University of Maine. Otolith and gonad samples were taken from all fish retained, except for the 45 fish sold live to the University of Maine.

The 2000 experimental Atlantic halibut fishery took place from April 15 to June 15, 2000. Three vessels participated in this experimental fishery capturing 234 halibut, of which 162 were kept. At an average weight of 40 lb (based on data from the 2000 and 2001 experimental fisheries), this equates to 6,480 lb (2.9 mt) of halibut caught. Compared to a total of 11 mt (24,250 lb) of Atlantic halibut landed from the Gulf of Maine and Georges Bank during 2000, the experimental fishery was responsible for approximately 27 percent of total Atlantic halibut landings in 2000. Furthermore, the amount of Atlantic halibut landed in 2000 from the Gulf of Maine and Georges Bank was 1 mt less than the Atlantic halibut landed from this region in 1999.

As stated previously, 126 Atlantic halibut were landed during the 2001 Atlantic halibut experimental fishery. This is approximately 22 percent less than the halibut landed during the 2000 experimental fishery. Commercial 2001 halibut landings data are not yet available. However, the percentage of halibut retained during the 2001 experimental fishery in relation to total 2001 halibut landings is not expected to exceed the percentage for 2000, or 27 percent. Based on this information, NMFS believes that the catch rates for the 2002 experimental fishery will not exceed those of the 2000 and 2001 studies. Therefore, the impact of the proposed 2002 experimental halibut fishery on the Atlantic halibut resource as a whole is expected to be minimal. Furthermore, the Center intends to closely monitor the catch rates of vessels participating in this experimental fishery. If the Center determines that catch rates are declining, indicating a significant impact to the resource, NMFS would have the authority to terminate the experimental fishery.

Up to six EFPs would be issued at any one time to exempt these vessels from the landing and possession limit for Atlantic halibut established under the FMP. The EFPs would also authorize the participating vessels to temporarily possess Atlantic halibut less than the minimum size requirement of 36 in. (91.4 cm) TL for purposes of scientific data collection.

Based on the results of this EFP, this action may lead to future rulemaking.

The shrimp fishery off the South Atlantic States in the exclusive economic zone (EEZ) is managed under the FMP. Following Council preparation, the FMP was approved and implemented by NMFS under the authority of the Magnuson Fishery Conservation and Management Act in June of 1993. Currently, the Council is preparing draft FMP Amendment 6 and a DSEIS as an integrated part of the Amendment. The DSEIS will discuss the proposed Amendment 6 management measures in conjunction with reasonable alternatives. Each alternative will be assessed in relation to the environmental consequences with a no-action alternative considered as one of the options.

The South Atlantic shrimp fishery consists of white ( Penaeus setiferus ), brown ( Penaeus aztecus ), pink ( Penaeus duorarum ), rock ( Sicyonia brevirostris ), and royal red shrimp ( Hymenopenaeus robustus ). The FMP applies to the shrimp fishery in the South Atlantic EEZ from the southeast coast of Florida to the North Carolina/Virginia border. The management unit consists of white and rock shrimp, which were added under the original FMP and amendment 1 respectively. Amendment 2 added both brown and pink shrimp.

Current management measures are intended to reduce and protect shrimp populations and habitat. One key element of the management plan allows the states bordered by the South Atlantic EEZ to request a closure in Federal waters adjacent to closed state waters for white shrimp following severe cold weather that results in an 80-percent or greater reduction in the population of white shrimp (whiting, royal red and rock shrimp fisheries are exempt from a Federal closure for white shrimp). During such closure, no trawling is allowed with a net having less than 4 inches (10.16 cm) stretch mesh within a zone extending seaward from shore 25 nautical miles.

The FMP has curbed the potential negative effects of trawling through the protection of bottom habitat in specific areas and by requiring the use of bycatch reduction devices (BRD) by all penaeid shrimp trawlers. A crucial component for habitat protection was established in Amendment 1 with the prohibition of rock shrimp trawling within the Oculina Bank Habitat Area of Particular Concern. In addition, NMFS is currently reviewing the Council’s proposed Amendment 5, which would require vessel monitoring systems and standard mesh sizes on all rock shrimp vessels.

Through Amendment 6, the Council is considering adjusting the overfishing definitions; establishing minimum stock size thresholds (MSSTs) and maximum fishing mortality thresholds (MFMTs); and modifying the requirements for testing and approving BRDs (BRD protocol).

The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires that FMPs include overfishing definitions and criteria for determining when overfishing is occurring. NMFS has published guidance on using tools such as MSST and MFMT to assess the condition of a fishery and avoid overfished situations. The Council is reviewing its overfishing definitions in light of current information and is considering establishing values for MSST and MFMT.

In addition, the Magnuson-Stevens Act requires FMPs to minimize bycatch to the extent practicable. The Council believes that by revising the BRD protocol, they could facilitate development of improved BRD technology that could lead to further reductions in bycatch. Following the mandates set by Shrimp FMP Amendment 2 to develop a protocol for BRD testing, the Bycatch Reduction Device Testing Protocol Manual was developed in 1997. In this manual, the specifications test the effectiveness of any new or modified BRD in reducing bycatch of targeted species. The Council is considering modification of the protocol, and how it is administered, to insure that more efficient BRDs are allowed in the fishery.

A scoping meeting to determine the scope of significant issues to be addressed in the DSEIS and the associated Amendment 6 will be conducted at the Council's March 4-8, 2002, meeting in Savannah, GA.

Both the Sargassum FMP and the Fishery Management Plan for the Calico Scallop Fishery in the South Atlantic Region (Calico Scallop FMP) were originally incorporated in the Comprehensive Amendment Addressing Essential Fish Habitat in the Fishery Management Plans for the South Atlantic Region (EFH FMP). A Draft Environmental Impact Statement (DEIS) on the Comprehensive EFH Amendment, including the Sargassum and Calico Scallop measures, was filed with the Environmental Protection Agency (EPA) in July 1998 (63 FR 38643, July 17, 1998). On advice from the National Marine Fisheries Service (NMFS), the Council subsequently removed both the Sargassum FMP and the Calico Scallop FMP from the EFH FMP and created stand alone documents.

NMFS prepared a Supplemental Draft Environmental Impact Statement in order to analyze additional alternatives for the Sargassum FMP and to give the public additional opportunity to comment on the proposed actions. The notice of availability of the SDEIS published in the Federal Register January 11, 2002 (67 FR 1461) with the comment period ending February 25, 2002. At the March meeting, the Council intends to review NMFS' SDEIS as well as comments received during the comment period and consider whether modification to the FMP is appropriate.

These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to the Council office (see ADDRESSES ) by March 1, 2002.