A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that is applicable to Honeywell International, Inc. (formerly AlliedSignal Inc., and Textron Lycoming) ALF502 and LF507 series turbofan engines was published in the Federal Register on August 23, 2001 (66 FR 44316). That action proposed to require removal from service of certain GPT components prior to reaching new, lower cyclic life limits using drawdown plans, and replacing with serviceable parts.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on the proposal or the FAA's determination of the cost to the public. However, since the proposal was published, the FAA has identified the need for a few corrections and clarifications.

Because the title of Table 3 lists those turbine spacer P/N's affected, the spacer P/N's in item 2 of the table are redundant and have been deleted.

Item 3 of Table 3, which is engine model ALF502R-3, has been identified as not having on its build list, spacer P/N 2-121-071-36. Therefore, this information has been deleted, and Table 3 has been renumbered accordingly.

A note after Table 3 has been added, to clarify that this AD does not affect the life limit of spacers P/N's 2-121-071-37-42, installed in ALF502R-3 engines. The life limit remains at 11,600 cycles-since-new.

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

There are approximately 1,600 engines of the affected design in the worldwide fleet. The FAA estimates that 300 engines installed on airplanes of U.S. registry would be affected by this AD, and that the prorated cost of the life reduction per engine would be approximately $7,980. Based on these figures, the total cost of the AD to U.S. operators is estimated to be $2,394,000.

This final 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 final rule.

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) by superseding AD 2000-21-09, Amendment 39-11941 (65 FR 65730, November 3, 2000), which is applicable to Pratt & Whitney (PW) PW2000 series turbofan engines, was published in the Federal Register on December 27, 2001 (66 FR 66819). That action proposed to modify the airworthiness limitations section of the manufacturer's manual and an air carrier's approved continuous airworthiness maintenance program to incorporate additional inspection requirements.

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

One commenter states that two typographical errors exist in the MANDATORY INSPECTIONS table of the proposal. Disk, LPT 4th stage EM Manual Section reads 72-35-41, but should read 72-53-41, and Disk, LPT 5th stage EM Manual Section reads 72-32-51, but should read 72-53-51.

The FAA agrees. The typographical errors are corrected in the final rule.

One commenter asks why mandatory inspections of the HPC hub are not required by the proposed rule.

The FAA agrees that the proposed rule should include mandatory inspections of the HPC hub (HPC turbine drive shaft assembly). Therefore, EM Manual Section 72-35-08 has been added to the final rule to include Inspection/Check -05 for the HPC turbine drive shaft assembly.

One commenter states that the additional cost of approximately $1,200 per year per engine visit, for enhanced disk inspection will not result in any hardship to the airline and will not have a significant effect on the operation. The FAA agrees.

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

The FAA estimates that 724 engines installed on airplanes of U.S. registry would be affected by this AD, that it would take approximately 20 work hours per engine to do the required actions. The average labor rate is $60 per work hour. The cost of the added inspections per engine is approximately $1,200 per year, with the approximate total cost to the U.S. fleet of $868,800 per year.

This final 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 final rule.

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

The Direction Generale De L'Aviation Civile (DGAC), the airworthiness authority for France, notified the FAA that an unsafe condition may exist on Eurocopter Model AS332L2 helicopters. The DGAC advises that some cases of in-service damage to the main rotor shaft non-rotating scissors attachment hinge have been discovered.

Eurocopter has issued Eurocopter Alert Service Bulletin No. 05.00.56, dated February 1, 2001, which specifies a check of the non-rotating scissors hinges on the main rotor shaft for evidence of seizure on the interface of the various tungsten-carbide bushings of the hinges that may lead to the seizure of a hinge. The DGAC classified this service bulletin as mandatory and issued AD 2001-085-018(A), dated March 7, 2001, to ensure the continued airworthiness of these helicopters in France.

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

This unsafe condition is likely to exist or develop on other helicopters of the same type design if registered in the United States. Therefore, this AD is being issued to prevent friction on the non-rotating scissors, failure of the swashplate, loss of main rotor pitch control, and subsequent loss of control of the helicopter. This AD requires removing the non-rotating scissors from the swashplate balljoint and inspecting for friction or play in the hinges between the two links of the non-rotating scissors, or between the non-rotating scissors link and the flared housing, and replacing the non-rotating scissors if friction or play is detected. The actions must be accomplished in accordance with the service bulletin described previously.

None of the Eurocopter Model AS332L2 helicopters affected by this action are on the U.S. Register. All helicopters included in the applicability of this rule are currently operated by non-U.S. operators under foreign registry; therefore, they are not directly affected by this AD action. However, the FAA considers that this rule is necessary to ensure that the unsafe condition is addressed in the event that any of these subject helicopters are imported and placed on the U.S. Register in the future.

Should an affected helicopter be imported and placed on the U.S. Register in the future, it would require approximately 6 work hours to accomplish the required actions, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of this AD would be $360 per helicopter.

Since this AD action does not affect any helicopter that is currently on the U.S. register, it has no adverse economic impact and imposes no additional burden on any person. Therefore, notice and public procedures hereon are unnecessary and the amendment may be made effective in less than 30 days after publication in the Federal Register .

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

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

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 2001-SW-63-AD.” The postcard will be date stamped and returned to the commenter.

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

The FAA has determined that notice and prior public comment are unnecessary in promulgating this regulation; therefore, it can be issued immediately to correct an unsafe condition in aircraft since none of these model helicopters are registered in the United States. The FAA has also determined that this regulation is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES .

The Direction Generale De L'Aviation Civile (DGAC), the airworthiness authority for France, notified the FAA that an unsafe condition may exist on ECF Model AS332L2 helicopters. The DGAC advises that some bottles were delivered as spares with interchanged percussion heads.

ECF has issued Alert Telex No. 26.00.12, dated October 3, 2001 (Telex), which specifies checking the bottle's percussion heads and attachment cartridges to determine if they are interchanged. The Telex states that if a bottle is equipped with interchanged percussion heads and has been connected in compliance with the Aircraft Maintenance Manual task 26.21.00.051, in the event of a fire in one engine compartment, the pilot will not be able to extinguish the fire. The Telex specifies procedures for modifying a bottle if an anomaly is found. The DGAC classified this Telex as mandatory and issued AD No. T2001-471-020(A), dated October 5, 2001, to ensure the continued airworthiness of these helicopters in France.

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

This unsafe condition is likely to exist or develop on other helicopters of the same type design. Therefore, this AD is being issued to prevent the release of the fire-extinguishing agent into the wrong engine compartment, failure to extinguish a fire, and subsequent loss of control of the helicopter. This AD requires the following:

• Before further flight, visually inspect each bottle for correct placement and installation of the percussion heads and attachment cartridges.

• Before installing, visually inspect each spare bottle for correct positioning of the percussion heads and, if necessary, correct the position of the percussion heads.

• Record “Amendment A” on bottles that are correctly installed and on the Equipment Log Card of the bottle.

None of the helicopters affected by this action are on the U.S. Register. Non-U.S. operators under foreign registry currently operate all helicopters included in the applicability of this rule; therefore, they are not directly affected by this AD action. However, the FAA considers that this rule is necessary to ensure that the unsafe condition is addressed in the event that any of these subject helicopters are imported and placed on the U.S. Register in the future.

Should an affected helicopter be imported and placed on the U.S. Register in the future, it would require approximately 1 work hour to inspect both bottles and 5 work hours to reconfigure each bottle, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of this AD would be $360 per helicopter.

Since this AD action does not affect any helicopter that is currently on the U.S. register, it has no adverse economic impact and imposes no additional burden on any person. Therefore, notice and public procedures hereon are unnecessary and the amendment may be made effective in less than 30 days after publication in the Federal Register .

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

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

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 2001-SW-60-AD.” The postcard will be date stamped and returned to the commenter.

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

The FAA has determined that notice and prior public comment are unnecessary in promulgating this regulation; therefore, it can be issued immediately to correct an unsafe condition in aircraft since none of these model helicopters are registered in the United States. The FAA has also determined that this regulation is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

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

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

The FHWA issued a notice of proposed rulemaking (NPRM) on July 18, 2000, at 65 FR 44486. Comments were received from 12 State DOTs, two companies, and one organization. The regulation on the administration of engineering and design related service contracts, 23 CFR part 172, draws its authority from 23 U.S.C. 112. Title 23, U.S.C., section 112 references the provisions of title IX of the Federal Property and Administrative Services Act of 1949 (Public Law 92-582, 86 Stat. 1278 (1972); 40 U.S.C. 541, et seq. ) which provides the qualifications-based procedures to be followed for the selection of engineering and design related services. Section 307 of the National Highway System Designation Act of 1995 (NHS Act), Public Law 104-59, 109 Stat. 568, modified 23 U.S.C. 112 by requiring grantees of Federal-aid highway funds to accept indirect cost rates for architectural and engineering firms as long as these rates are established in accordance with the Federal Acquisition Regulations (FAR) (Title 48, Code of Federal Regulations) and these rates are accepted by a cognizant Federal or State agency if such rates are not under dispute. The law also specifies that once a firm's indirect cost rate is accepted, the grantee shall apply those indirect cost rates for the purposes of contract estimation, negotiation, administration, reporting, and contract payment. The NHS Act also provided a period of time in which State Departments of Transportation (State DOTs) could adopt statutes to allow use of alternate State procedures other than those provided for in the NHS Act.

Section 1205 of the Transportation Equity Act for the 21st Century (TEA-21), Public Law 105-178, 112 Stat. 107 (1998), further modified 23 U.S.C. 112(b) by removing the provision allowing State DOTs to adopt alternate procedures for the procurement of design and engineering consultants.

The changes made to 23 U.S.C. 112(b) by these two laws, as well as provisions in 23 U.S.C. 106(c) relating to the assumption by the State of responsibilities of the Secretary for project design and construction, require the FHWA to modify 23 CFR part 172, subpart A—Procurement Procedures. In addition, the FHWA adds several new terms to the definition section to clarify existing terms used in the regulation.

The small purchase procedures section is revised by raising the maximum value for small purchases from $25,000 to the value allowed in 41 U.S.C. 403(11), which is currently $100,000.

The references to Certification Acceptance (CA), and § 172.15, Alternate Procedures, which were incorporated into 23 CFR part 172 to implement Certification Acceptance, are removed since Certification Acceptance was repealed by section 1601 of the TEA-21.

Reference to the Secondary Road Plan (SRP) and the Combined Road Plan (CRP) demonstration project, are removed since these programs are no longer being funded.

The Michigan DOT requested that a reference be made to 41 U.S.C. Subchapter IV, Procurement Provisions, after the reference to the common grant rule found at 49 CFR part 18. Title 41, U.S.C., Subchapter IV, refers to contracts made directly by the United States Government and does not directly apply to grants to States and Counties, therefore, this provision was not incorporated into the final rule.

The Texas DOT requested that the term “private sector engineer and design firms” be removed from the definition section since the term is not used in the regulation. The FHWA agrees with the comment and the regulation has been modified accordingly.

Several comments requested the retention of definitions for “fixed fee” and “prenegotiation audit.” Although still allowed, the regulation no longer specifies requirements for the use of “fixed fee” contracts or the use of a “prenegotiation audit,” but instead refers to State procedures. Since these terms are no longer used in the final rule, they were removed.

The New York DOT suggested that in the definition of “cognizant agency,” the term “State agency” is too broad and that the term “State Highway/Transportation Agency” would be preferred. The generic definition of “cognizant agency” is “Federal or State agency.” Some States may have audit divisions that are not part of the State Highway/Transportation Agency, therefore the FHWA prefers a broader concept.

Several commenters requested that the definition of “cognizant agency” as well as the procedure to get a cognizant agency audit should be set forth in greater detail in the regulation. Many commenters suggested that the FHWA should adopt the procedure and definition approved by the American Association of State Highway and Transportation Officials (AASHTO) Audit Subcommittee. The AASHTO Audit Subcommittee stated the following:

A “cognizant agency” is any one of the following:

• Federal Agency

• The Home State ( i.e., State where the firm's accounting and financial records are located)

• A Non-Home State to whom the Home State has transferred cognizance in writing for the particular indirect cost audit of a firm.

Cognizant audit is achieved by any one of the following methods:

• A Cognizant Agency performs or directs the work of a Certified Public Accountant (CPA) who performs the indirect cost audit.

• A Non-Home State auditor or CPA working under the State's direction issue an audit report and the Home State issues a letter of concurrence. If the Home State does not accept the audit of another State, the Home State will have 180 days from receipt to issue a cognizant audit; otherwise, the Non-Home State audit report will be cognizant for the 1 year applicable accounting period.

• An indirect cost audit performed by a CPA hired by the firm will become a cognizant audit if one of the following conditions is met:

(a) The Home State reviews the CPA's working papers and the Home State issues a letter of concurrence with the audit report.

(b) A Non-Home State reviews the CPA's working papers and issues a letter of concurrence with the CPA's report which is then accepted by the Home State. If the Home State does not accept the Non-Home State review, the Home State will have 180 days from receipt to complete a review of the CPA audit report and either concur with it, modify it, or reject it due to a material error requiring re-submittal; otherwise the CPA audit report with which the Non-Home State has concurred will be cognizant for the 1 year applicable accounting period.

The FHWA believes that the AASHTO Audit Subcommittee procedures have merit, but the FHWA has determined that these procedures should be thoroughly tested under implementing guidance to be disseminated to the States. Therefore the Audit Subcommittee's approved definition and procedure is not included in the final regulation.

The Oregon DOT was concerned that the one year term for overhead rates was not defined. To assist in the use of this regulation a new definition was added based on material from the FAR. The new definition defines one year applicable accounting period as the annual accounting period for which financial statements are regularly prepared for the consultant.

Several commenters recommended that the term “audit” be defined in the regulation. Some commenters suggested using the definition: “An audit performed in accordance with Governments Auditing Standards promulgated by the United States General Accounting Office.” The FHWA added a definition of the term audit to the final rule.

The Wisconsin DOT was concerned that a key point of the Brooks Architect-Engineers Act (40 U.S.C. 541-544) was not included in the regulation, i.e., price is not to be a factor in the analysis and selection phase. The FHWA agrees that this is a key point in the Brooks Bill procedure and, as such, is already covered by the Brooks Bill requirements. Due to its importance, and to be clear on this point, we have added a sentence in § 172.5(a)(1) restating that price is not to be a factor in the analysis and selection phase.

TransTech Management, Inc. commented on how various States have experimented with alternative selection practices, one being the best value approach, and stated:

TransTech Management also suggested that best value be allowed for design consultant selection.

The Texas Transportation Commission also recommends a best value approach be taken rather than a strictly qualifications based selection process in the Brooks Bill. In response to these comments, the FHWA maintains that 23 U.S.C. 112 requires that the Brooks Bill method be used in the selection of design consultants when Federal-aid funds are used, except if alternate procedures have been adopted by the State prior to enactment of the TEA-21. Accordingly, no change was made to the regulation, however the Secretary has authority to conduct innovative contracting research under 23 U.S.C. 502(a) on an experimental basis.

The New Jersey DOT recommended that “the rules should provide the flexibility that would allow competitive bids on certain types of fixed scope projects.” The FHWA has allowed a simplified small purchases procurement procedure which provides substantial flexibility to the State. Nevertheless, for procurement over the small procurement threshold, the Brooks Act method is required by law, except if a State has adopted an alternative procedure enacted by the State prior to the enactment of the TEA-21, therefore, no change was made in the regulation.

The Michigan DOT was concerned that a cost analysis was not specifically required for competitive and non-competitive purchase procedures. For competitive procedures we require the Brooks Act requirements or equivalent State qualifications based procedures unless a formal statutory procedure was adopted by State statute prior to enactment of the TEA-21. The Brooks Act requires that the value of services to be rendered as well as the scope, complexity, and professional nature be considered in the negotiations. The FHWA believes that these requirements are sufficiently adequate for competitive purchase procedures. Non-competitive procurement procedures are generally an exception to competitive procurement procedures for Federal-aid highway projects and will continue to require review and approval by the FHWA before this procedure may be used. This review may include a cost analysis as well as a review of other supporting material submitted by the State before approval is obtained. Based on the above discussion, the FHWA believes that the rule adequately covers the concerns expressed in the comment.

The Michigan DOT requested that we add a section for fixed fees. Its comment states: “The determination of the Fixed Fee shall take into account the size, complexity, duration and degree of risk involved in the work and shall otherwise comply with 41 U.S.C. 254. The establishment of the fixed fee shall be project specific.” The FHWA believes that the Brooks Act procedures that require the value of services to be rendered, the scope, the complexity, and the professional nature be considered in the negotiations addresses this issue for fixed fees used in competitive purchase procedures. The material in 41 U.S.C. 254 is intended for Federal contracts rather than purchases by grantees using Federal assistance monies, therefore the FHWA did not add the requested reference to 41 U.S.C. 254.

The New Jersey DOT suggested that “consideration should be given to raising the $100,000 simplified acquisition threshold to $125,000 to allow for inflation.” The FHWA intends to follow the law for small purchase procurement found in 41 U.S.C. 403(11), which currently provides that $100,000 is the maximum amount for small purchase procurement. However, the FHWA did revise the proposed regulation to reference the simplified acquisition threshold in 41 U.S.C. 403(11) rather than just listing the current $100,000 amount. When the amount is revised in 41 U.S.C. 403(11), as it has been in the past, the simplified acquisition threshold in the final rule will also automatically reflect that new limit.

The Wisconsin DOT expressed concern with how the Brooks Act will apply to small purchase procedures. The previous regulation allowed contractors to use small purchase procedures in 23 CFR 172.7(b). The FHWA is continuing this practice by allowing relatively simple and informal procurement methods for small purchase design contracts where an adequate number of qualified sources are reviewed, as stated in 49 CFR 18.36 of the common grant rule. Also, the State's own procedures for small purchases where it uses with its own funds may be used for federally funded projects in accordance with 49 CFR 18.36 and 49 CFR 18.37 where the total contract amount including contract amendments do not exceed the small purchase threshold amount in 41 U.S.C. 403(11).

The Oregon DOT expressed concern regarding how the FAR audit requirements would apply for small purchase procedures. The FHWA's interpretation is that since small purchase threshold contracts may follow a simplified acquisition consistent with 49 CFR part 18, the FAR audit requirements of the final rule at 23 CFR 172.7(a) and (b) are not required to be applied to small purchase procedures. If the audits required by 23 CFR 172(a) and (b) are readily available they should be used. In the final rule, 23 CFR 172.7(e) provides that the States are responsible to reasonably assure that proper recordkeeping and accounting procedures are followed.

A comment from the HNTB Corporation questioned the use of the TEA-21 enactment date of June 9, 1998, throughout the regulation rather than the date of one year after the enactment of the NHS Act of November 28, 1995, to determine when a State could no longer enact legislation allowing it to adopt an alternate procedure whereby the subparagraphs added by section 307 of the NHS Act did not apply.

The NHS Act added subsections (b)(2) (C) through (G) to 23 U.S.C. 112 which included single audit requirements and provided that indirect cost rates shall not be limited by administrative or de facto ceilings. After the NHS Act was passed, a State had one year or a full State legislative cycle to enact laws allowing a State to adopt an alternate procedure. However, until the TEA-21 was enacted, States were free to adopt by statute a formal procedure for the procurement of design services which differed from Brooks Act procurement under 23 U.S.C. 112(b)(2)(B).

The FHWA's analysis of the statutory history of 23 U.S.C. 112 is that prior to the enactment of TEA-21, the Congress permitted a State to enact by State statute an alternate procurement procedure that was different from the requirements set forth in the NHS Act; therefore, the TEA-21 enactment date of June 9, 1998, is the correct date to use in the regulation. Nevertheless, the mere fact that a State adopted a formal statutory procedure for procurement of Architectural and Engineering services prior to enactment of TEA-21 does not permit a State to establish a ceiling on overhead rates where such statute did not address overhead ceiling rates.

Several commenters were concerned about the scope of the FAR audit requirements in § 172.7(a) and the hardships that States may experience from the requirements of numerous audits on contracts and subcontracts. Although the law requires that all contracts and subcontracts procured in accordance with 23 U.S.C. 112(b)(2)(C) be audited in compliance with cost principles contained in the part 31 of the FAR, the FHWA has determined that the State should determine the scope of those audits in their own procedures. The FHWA modified § 172.7 of the final rule to reflect the States' responsibility. The section now says: “When State procedures call for audits of contracts or subcontracts for engineering design services, the audit shall test compliance with the requirements of the cost principles contained in the Federal Acquisition Regulations provided in 48 CFR part 31.” Additionally, in many cases consultants selected by the Brooks Act procedure hire other consultants for small specialty jobs with State approval. Since these small subconsultant contracts were not procured in accordance with 23 U.S.C. 112(b)(2)(A), the audit requirements of this section would not apply.

The Oregon DOT, along with others, commented that 48 CFR part 31 (FAR 31) does not provide enough guidance. It is not the intent of this regulation to clarify the audit procedures in the FAR. However, additional guidance on the FAR may be obtained at the following internet site http://www.arnet.gov.

The Oregon DOT also commented that in § 172.7(a), audits are performed to standards rather than to principles. The Oregon DOT comment states: “This clause requires that audits comply with the cost principals contained in the FARs. Audits comply with audit standards rather than cost principles. Audits, while complying with audit standards, determine the level at which costs comply with cost principles. Changing the wording to read, ‘* * * the audit shall determine compliance with the cost principles * * *’ (or some similar wording) would correct this discrepancy.” The FHWA agrees with the Oregon DOT's comment and has made minor wording changes in the regulation to reflect that audits are preformed “to test” compliance with the cost principles rather than “to” compliance with the cost principles.

The Oregon DOT was concerned that the FHWA has misinterpreted the requirements of section 307 of the NHS Act, specifically, 23 U.S.C. 112(b)(2)(D) and (E) and believes that the requirements for accepting the indirect cost rates fall on the consultant rather than on the contracting agency.

The following language from the conference report for the NHS Act (H.R. Conference Report No. 104-345, at 82 (1995)) which quotes from identical sections in the House (H.R. Rep. No. 104-246, (1995)) and Senate report (S. Rep. No. 104-86, (1995)) clarifies the meaning of the statute:

Based on the legislative history of this provision it is clear that the government agency, as the recipient of Federal funds, must notify the firms of cost data used and the government must establish the overhead rates. Therefore, no change was made to the regulation.

Several commenters were concerned about the requirements that the audit for the overhead rate could last for only one year. The Texas DOT commented that it does not believe it would be prudent to require an audit each year for a multi-year consulting contract if the audited indirect rate is acceptable to both contracting parties at the time of contract negotiation and execution. The FAR in 48 CFR 31.203(e) states that “* * *, the base period for allocating indirect costs will normally be the contractor's fiscal year* * *. When a contract is performed over an extended period, as many base periods shall be used as are required to represent the period of contract performance.”

The guidance in the FAR would require the use of several base periods for a contract that is longer than one year. The language in 49 CFR 18.36(a) requires the use of State procedures in the administration of contracts with Federal grant funds, provided it does not conflict with Federal statutes. The FHWA agrees that it is reasonable to allow an audit for overhead rates to be valid for contracts longer than a year provided the consultant and the State agree to such a longer period. The final rule requires the consultant's indirect cost rates for its one-year applicable accounting period to be applied to the contract, however, once an indirect cost rate is established for a contract it may be extended beyond the one year applicable accounting period provided all concerned parties agree. Additionally, the final rule states that an agreement to the extension of the one-year applicable period shall not be a condition of contract award.

The Wisconsin DOT expressed concern that a State could not accept a lower overhead rate freely offered by a consultant firm. The Wisconsin DOT believes the proposed rule should be modified to make it clear that contracting agencies are not prohibited from using indirect cost rates which are unilaterally reduced by consultants. It believes that the intent of the law is to prevent contracting agencies from establishing ceilings on indirect cost rates, not to prevent firms from offering cost reductions. Furthermore, Wisconsin DOT states that occasionally firms will experience swings in their business cycles which could result in high cost rates preventing them from being able to negotiate a reasonable total cost on their contract.

The FHWA agrees there are many reasons why an overhead rate for a firm may be unusually high for a short period of time. In such cases, a firm may believe that it would be in its best interest to offer a lower rate. The FHWA agrees that a consultant should be free to offer a lower overhead rate than the one determined by a cognizant Federal or State government agency, and that the contracting agency should be free to accept it provided such rate is offered voluntarily by the consultant. Under no circumstances, however, shall a contracting agency require a lowering of the overhead rate. We have added language to § 172.7(b) to address this comment.

There were several comments concerning the procedure used to arrive at a cognizant agency audit. Many comments requested that the procedure passed by the AASHTO Subcommittee on Audits, in conjunction with the American Consultant Engineers Council (ACEC), be used. The FHWA issued an interim procedure to obtain a cognizant agency audit on December 10, 1997, in the form of a question and answer memorandum which can be viewed at the FHWA web site at: http://www.fhwa.dot.gov/programadmin/consultant.html. The FHWA believes that the AASHTO Audit Subcommittee procedures have merit, but the FHWA has determined that these procedures should be thoroughly tested under implementing guidance to be disseminated to the States. Therefore the Audit Subcommittee's proposed definition and procedure is not included in the final regulation.

The FHWA received several comments raising a concern that disputed audits were not well defined. The FHWA clarifies § 172.7(c) of the final rule to address these comments in § 172.7(c) as follows: “Only the consultant and the parties involved in performing the indirect cost audit may dispute the established indirect cost rate. If an error is discovered in the established indirect cost rate, the rate may be disputed by any prospective user.”

The Wisconsin DOT was concerned about with whom the State may share indirect cost and rate data. The Wisconsin DOT believes that the requirement for permission only applies exclusively to the release of information to other firms and government agencies. Request for information from the press or ordinary citizens will be in accordance with State statutes.

The FHWA determination is that 23 U.S.C. 112(b)(2)(F) allows States to share audit information about a consultant with other recipients (States) and subrecipients of Federal-aid highway funds. States and subrecipients are only required to notify the consultant when such information is used or exchanged with another State or subrecipient to assist a State or subrecipient in complying with the State or subrecpient's acceptance of a consultant's overhead rates pursuant to 23 U.S.C. 112 and this regulation.

However when such audit information is sought by a firm or a government agency (when the government agency is seeking the information for a purpose unrelated to compliance with this regulation), the cost data shall not be provided except by written permission of the audited firm. Moreover, as pointed out by the Wisconsin DOT, the plain language of the law did not exclude ordinary citizens or the press from obtaining this data. The FHWA's position concerning requests from the press or private citizens for this data is that State and Federal information accessability statutes, as applicable, will control such release consistent with 23 U.S.C. 112(b)(2)(F) which provides: “If prohibited by law, such cost and rate data shall not be disclosed under any circumstances.” The regulation was modified at § 172.7(d) to address this issue by adding language that prohibits the release of this information if prohibited by law; however, should a release be required by law, or court order, the final rule states that such release shall make note of the confidential nature of the data.

The Texas DOT was concerned that the FHWA division offices were going to review all the county and city procedures for subgrants that the State may issue. The Texas DOT commented that it appears that the FHWA is assuming responsibility for approving all local governmental entity contracting procedures and revisions for federally funded engineering and design services. In Texas alone, there are 254 counties that have adopted various procedures that are subject to review by TxDOT through oversight agreement with the FHWA and the State's statutes.

It is not the FHWA's intent to review all county and city procedures for State subgrants. Although 49 CFR 18.37 addresses subgrants and requires the State ensure that subgrants meet State and Federal requirements, the FHWA felt it was necessary to cover the topic in the final rule. The FHWA added a new sentence to § 172.1 which states, “Recipients of Federal funds shall ensure that their subrecipients comply with Federal regulations” and made minor revisions to § 172.9(a) of the final rule.

For ease of reference the following distribution table is provided:

The statement of purpose and applicability was revised to remove the references to the Certification Acceptance Plans that were repealed by the TEA-21; to remove an obsolete reference to the Secondary Road Plans; and to remove the reference to Combined Road Plans because the Secondary and Combined Road programs are no longer being funded. A new sentence is added requiring recipients of Federal funds to ensure that their subrecipients comply with Federal regulations. Additionally, paragraph (b) was revised to limit the use of State statutes for an alternate procedure to those enacted into law before June 9, 1998 (the date the TEA-21 was enacted), and redesignated as § 172.5(a)(4).

The term “audit” is added to the list of definitions as a review to test the contractor's compliance with the requirements of cost principles contained in 48 CFR part 31.

The term “cognizant agency” is added to the list of definitions and is defined as any Federal or State agency that has conducted and issued an audit report of the consultant's indirect cost rate that has been developed in accordance with the requirements of the cost principles contained in 48 CFR part 31.

The term “One-year applicable accounting period” is added to the list of definitions and is defined as the accounting period for which annual financial statements are regularly prepared for the consultant.

The term “competitive negotiation” is revised to permit the use of procurement procedures enacted into State law prior to the enactment of TEA-21 (June 9, 1998).

The terms “contract modification,” “extra work,” “fixed fee,” “prenegotiation audit,” “scope of work” and “private sector engineering and design firms” were removed since they are not used in the new regulation.

This section is removed from the regulation. Most of the material was re-organized and moved to other sections. The provisions of paragraph (a), the consultant services in management roles, are revised and moved to § 172.9(d).

Paragraph (b), written procedures, is redesignated as § 172.9(a).

The provisions of paragraph (c), Prenegotiation audits is removed. The FHWA received several comments expressing concern over the removal of the requirements for prenegotiation audits. These comments indicate that prenegotiation reviews may not be allowed or not be eligible for Federal-aid funds which may prevent the State from being able to assure that the consultant has the proper procedures and an adequate accounting system to meet Federal requirements. The FHWA never intended to prevent the performance of prenegotiation audits and reviews, but wanted to give the States greater control over when they are used. With the required use of cognizant audits for overhead rates, the need for prenegotiation audits and reviews may be greatly reduced. However, prenegotiation audits are appropriate because the Brooks Act clearly requires agencies to negotiate contracts at a compensation determined to be “fair and reasonable to the Government.” Also, a prenegotiation audit may be the best way to obtain detailed cost information to determine the validity of a firm's cost proposal, and to assure that the consultant has adequate knowledge of cost eligibles and documentation requirements. The expenses for prenegotiation audits and reviews would be eligible for Federal-aid funds under 23 U.S.C. 121 and 23 CFR 1.11.

The provisions of paragraph (d), State responsibility in local agency contracts, were reduced and included as part of § 172.1.

The requirements of paragraph (e), the Disadvantaged Business Enterprise program, are specified under 49 CFR Part 26. Section § 172.5(e), is redesignated as § 172.5(b).

The requirements of paragraph (f), Contractual responsibilities, are revised and moved to § 172.9(b). The section is revised to be consistent with 49 CFR 18.36(a) which requires States to use the same procurement procedures as if they were procuring with State funds, except where such procedures are inconsistent with Federal statutory requirements (see 49 CFR 18.4). Because States would be responsible for approving contracts and settlements, provided such contracts and settlements follow the same policies and procedures as the State would follow using State funds, there is a reduced requirement that such settlements be approved by the FHWA.

This section is redesignated as § 172.5 and revised. Generally, this section covers the methods that can be used for procurement of design engineering services. The same methods are still in the regulations, but have been simplified. The small purchase section is revised by raising the maximum amount for procurement by small purchase procedures from $25,000 to $100,000 and indexing the amount to conform to the simplified acquisition threshold set in 41 U.S.C. 403(11) and 49 CFR 18.36(d). In a memorandum to the FHWA Regional Administrators, dated June 26, 1996, the Director of the FHWA Office of Engineering raised the threshold from $25,000 to $100,000. This memo was issued to implement the change in the final rule, published on April 19, 1995 (60 FR 19646), concerning 49 CFR part 18 and the change to 41 U.S.C. 403(11), which defines the “simplified acquisition threshold” to mean $100,000.

The information in paragraph (a) of this section is transferred to a new paragraph (a) in § 172.7, Audits, and revised to prohibit procedures enacted into State law after June 9, 1998. Paragraphs (b), (c), and (d) are removed.

This section is removed to promote uniformity with the common grant rule found in 49 CFR part 18.

This section is removed to promote uniformity with the common grant rule found in 49 CFR part 18. The requirements of this section are covered by 49 CFR 18.36 which generally involve State procedures.

This section is removed because it implemented 23 U.S.C. 117, Certification Acceptance, which was repealed by section 1601 of the TEA-21 in 1998.

Subpart B, Private sector involvement program, is removed. This section was developed to meet the requirements of the Intermodel Surface Transportation Efficiency Act of 1991 (ISTEA), Public law 102-240, 105 Stat. 1914, section 1060, Private sector involvement program, but it has never been funded.

The FHWA has determined that this action is not a significant regulatory action within the meaning of Executive Order 12866 or significant within the meaning of the U.S. Department of Transportation's regulatory policies and procedures. This action will not adversely affect, in a material way, any sector of the economy. In addition, these changes would not interfere with any action taken or planned by another agency and will not materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. This rulemaking amends current regulations governing the administration of engineering and design related service contracts based on changes in the law. The FHWA does not anticipate that these changes will affect the total Federal funding available under the engineering and design related services contracts. Consequently, the economic impact of this rulemaking is minimal and a full regulatory evaluation is not required.

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-612), the FHWA has evaluated the anticipated effects of this rule on small entities, such as local governments and businesses. Based on the evaluation, the FHWA hereby certifies that this action will not have a significant economic impact on a substantial number of small entities.

Essentially, this rulemaking implements certain changes in 23 U.S.C. 112, as mandated by recent laws. This rulemaking eliminates sections that were removed by the recent laws (NHS Act and TEA-21) and other sections that were not required by law or that were outdated. Thus, the impact upon the small entities affected is negligible because the FHWA is merely updating, simplifying, and clarifying existing procedures.

This final rule will not impose a Federal mandate resulting 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 (2 U.S.C. 1531 et seq. ).

The action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, dated August 4, 1999, and the FHWA has determined that this action does not have a substantial direct affect or sufficient federalism implications on States that would limit the policymaking discretion of the States. Nothing in this document directly preempts any State law or regulation.

Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program.

This action does not contain a collection of information requirement for the purpose of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.

The agency has analyzed this action for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has determined that this action will not have any effect on the quality of the environment.

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

This action meets applicable standards in section 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 action under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or safety that may disproportionately affect children.

The FHWA has analyzed this action under Executive Order 13175, dated November 6, 2000, and believes it will not have substantial direct effects on one or more tribes; will not impose substantial direct compliance costs on Indian tribal governments; and will not preempt tribal law. This rule primarily involves U.S. Department of Transportation grant funds to State, county and city Department of Transportation agencies for the construction and maintenance of highways. Therefore, this final rule will not have a substantial direct impact on one or more Indian tribes and a tribal summary impact statement is not required.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is a not 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. Therefore, a Statement of Energy Effects under Executive Order 13211 is not required.

A regulation identification number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number contained in the heading of this document can be used to cross reference this action with the Unified Agenda.

On February 27, 2001, the IRS and Treasury published a notice of proposed rulemaking (REG-107101-00) in the Federal Register (66 FR 12445) under section 894 relating to whether payments made by domestic reverse hybrid entities to their interest holders are eligible for benefits under income tax treaties. A limited number of comments responding to the notice of proposed rulemaking were received. After consideration of these comments, the proposed regulations are adopted as final regulations as revised by this Treasury decision.

These final section 894 regulations clarify the availability of treaty benefits on payments made by a domestic reverse hybrid entity (DRH) to its interest holders. A DRH is a U.S. entity that the United States treats as non-fiscally transparent (e.g., as a corporation), but the interest holder's country treats as fiscally transparent (e.g., as a partnership or branch). These regulations are the final piece of guidance associated with section 894 regulations finalized on July 3, 2000 (TD 8889; 65 FR 40993) (the “2000 regulations”), that generally address the availability of treaty benefits on items of U.S. source income paid to hybrid entities (i.e., entities treated as fiscally transparent by one jurisdiction but non-fiscally transparent by another).

The preamble to the 2000 regulations noted that the IRS and Treasury had learned that non-U.S. multinationals were establishing DRH structures in the United States to manipulate the U.S. tax treaty network to obtain tax-advantaged financing. The IRS and Treasury notified the public in that preamble that they intended to issue regulations to address this situation.

Proposed regulations were issued on February 27, 2001. The proposed regulations provided guidance with respect to two distinct issues involving domestic reverse hybrid entities. First, to resolve a technical question raised by commentators regarding the application of the 2000 regulations, the proposed regulations clarified that a payment by a domestic reverse hybrid entity to a foreign interest holder may be eligible for treaty benefits. No comments were received on this portion of the proposed regulations, and the rule in the proposed regulations is accordingly adopted without change in these final regulations.

The proposed regulations also addressed certain structures involving domestic reverse hybrid entities that Treasury and the IRS believed represented the use of such entities to obtain inappropriate treaty benefits. The comments received in response to this portion of the proposed regulations generally confirmed the need for regulations to address the use of DRH structures by non-U.S. companies. One commentator wrote in its comment that “regulations addressing the DRH structure are appropriate.” The commentator noted that DRH structures are “relatively uncommon” with the exception of their use by highly sophisticated non-U.S. multinational groups to procure acquisition financing at a tax-advantaged rate vis-a-vis their U.S. competitors.

Several commentators expressed concern that the approach taken in the proposed DRH regulations might erode the simplicity achieved by the section 7701 entity classification rules, known as the Check-the-Box (CTB) regulations. The IRS and Treasury have carefully considered this comment, but continue to believe that the approach in these final regulations is appropriate. The regulations only apply to a DRH structure established by a group of taxpayers related to each other by 80% common ownership. This high ownership requirement minimizes the possibility that a taxpayer might inadvertently establish such a structure. In addition, the comments confirm that DRH structures remain “relatively uncommon.” Thus, any loss of the simplification benefits of the CTB regulations also will be relatively uncommon.

One commentator suggested that, rather than adopt the approach in the regulations, the IRS and Treasury should pursue an approach under section 1503(d) to directly address structures similar to, and potentially including, the DRH that rely on hybrid entity structures to deduct the same interest expense in two jurisdictions (commonly called a “double dip” of interest deductions) to achieve tax-advantaged financing. The commentator expressed the view that the real concern of the IRS and Treasury should be this double dip on deductions, rather than the tax treaty manipulation present in DRH structures.

Treasury and the IRS agree that a re-examination of the rules of section 1503(d) and the policies underlying those rules may be appropriate. Such a re-examination will require substantial and careful analysis with respect to the interaction of U.S. and foreign law in a variety of contexts and is therefore beyond the scope of these regulations, which, as noted above, focus on the use of DRH structures to obtain inappropriate treaty benefits.

In this regard, the commentator misconstrues the concern of the IRS and Treasury with respect to the issues associated with the use of DRH structures. Treasury and the IRS are concerned that DRH structures are being established by related parties to manipulate differences in U.S. and foreign entity classification rules to reduce, through inappropriate use of an income tax treaty, the amount of tax imposed on items of income paid by domestic corporations to related foreign companies. The overall effect of these transactions, if respected, would be (1) a deduction under U.S. law for the “outbound” payment of an item of income, (2) the reduction or elimination of U.S. withholding tax on that item of income under an applicable treaty, and (3) the imposition of little or no tax by the treaty partner on the item of income. This result is inconsistent with the expectation of the United States and its treaty partners that treaties should be used to reduce or eliminate double taxation of income. The legislative history of section 894(c) supports this analysis. Congress specifically expressed its concern about the use of income tax treaties to manipulate the inconsistencies between U.S. and foreign tax laws to obtain similar benefits. See H.R. Conf. Rep. No 220, 105th Cong., 1st Sess. 573 (1997); Joint Committee on Taxation, 105th Cong., 1st Sess., General Explanation of Tax Legislation Enacted in 1997 (JCS-23-97), at 249 (December 17, 1997). The approach adopted by these regulations also is consistent with the U.S. view that contracting states to an income tax treaty may adopt provisions in their domestic laws to prevent inappropriate use of the treaty. See, e.g., the Treasury Department Technical Explanation to Article 22 ( Limitation on Benefits) of the 1996 United States Model Income Tax Convention. See also Commentaries to Article 1 of the 2000 OECD Model Tax Convention on Income and Capital; S. Rep. No. 445, 100th Cong. 2d Sess. 322-23 (1988).

Another commentator questioned Treasury's authority for issuing the regulations, arguing that the recharacterization of an interest payment as a dividend payment may contravene the definition of interest contained in various U.S. treaties. The IRS and Treasury have concluded that the regulations are consistent with U.S. law, including U.S. treaties. These final regulations are issued under the authority of sections 894(a), 894(c), 7805 and 7701(l). Further, as noted above, contracting states to an income tax treaty may adopt provisions in their domestic laws to counter inappropriate uses of the treaty. Id.

Section 1.894-1(d)(2)(ii)(B)( 1 ) of the proposed regulations provided a special rule that was generally targeted at payments made by a domestic reverse hybrid entity to a foreign parent of the domestic reverse hybrid entity. This rule would apply if: (1) A domestic subsidiary made a payment to a domestic reverse hybrid entity, the payment was considered to be a dividend either under the laws of the United States or under the laws of the jurisdiction of the foreign parent of the domestic reverse hybrid entity, and the domestic reverse hybrid entity was treated as a fiscally transparent, or “pass-through,” entity under the foreign parent's laws; and (2) the domestic reverse hybrid entity made a deductible payment to the foreign parent that otherwise would qualify for a treaty-based reduction in U.S. withholding tax. Under these circumstances, the proposed regulations provided that the payment by the domestic reverse hybrid entity would be treated as a dividend for all purposes of the Internal Revenue Code and the applicable income tax treaty, but only to the extent of the foreign parent's proportionate share of the prior dividend payments made to the domestic reverse hybrid entity by the domestic subsidiary.

Commentators recommended the inclusion of a tax avoidance purpose test in the final regulations. As part of this approach, commentators suggested consideration of several factors, including the ability of the domestic reverse hybrid entity to satisfy the debt independent of dividends or payments from the domestic entity, and the amount of time between the time the related foreign interest holder, the domestic reverse hybrid entity, and the domestic entity became related persons and the incurrence of the inter-company debt. This recommendation was not adopted. These regulations are intended to provide objective rules regarding eligibility for treaty benefits on certain items of U.S. source income paid by domestic reverse hybrid entities.

Commentators requested clarification that paragraph (d)(2)(ii)(B) does not apply to payments made by a domestic reverse hybrid entity that would not be subject to withholding tax without regard to a treaty. Commentators are correct in reading the regulations to provide that paragraph (d)(2)(ii)(B) will not apply if the payment made by the domestic reverse hybrid entity is exempt from withholding tax under the Internal Revenue Code. Commentators also requested clarification that the regulations apply only to payments received by the domestic reverse hybrid entity while it is related to both the domestic entity and the related foreign interest holder, and to payments made by the domestic reverse hybrid entity while it is related to the related foreign interest holder. The text of these regulations also confirms this result. Accordingly, no changes to the regulations were considered necessary on either of these points.

As a general matter, commentators questioned whether paragraph (d)(2)(ii)(B)( 1 ) of the regulations applies to a situation in which the dividend withholding rate under the applicable income tax treaty is lower than the withholding rate for interest under the treaty. The regulations do not make the recharacterization of the deductible payment dependent on the withholding rates in the applicable income tax treaty. Therefore, if the requirements of the regulations are met, the regulations will apply regardless of whether the dividend withholding rate is higher than the withholding rate for interest or other deductible payments in the applicable income tax treaty. An example to this effect has been added to the final regulations.

Paragraph (d)(2)(ii)(B)( 3 ) of the proposed regulations defined the term related for purposes of determining whether a domestic entity made a dividend payment to a related domestic reverse hybrid entity, and for purposes of determining whether a domestic reverse hybrid entity made a payment to a related foreign interest holder. The ownership requirements set forth in section 267(b) or 707(b)(1), the constructive ownership rules of sections 318, and attribution rules of section 267(c) were used solely to determine whether an entity was “related” for purposes of paragraph (d)(2)(ii)(B); and not to determine if the entity was an interest holder.

Commentators consequently have questioned whether corporations that do not own any stock directly in the domestic reverse hybrid entity, but are related to the domestic reverse hybrid entity within the meaning of paragraph (d)(2)(ii)(B)( 3 ), can be interest holders, and, therefore, related foreign interest holders for purposes of paragraph (d)(2)(ii)(B). For example, commentators questioned whether the regulations apply if a domestic reverse hybrid entity, which has received a dividend payment from a related domestic entity, makes an interest payment to a foreign sister corporation of the domestic reverse hybrid entity which is not itself a shareholder in the domestic reverse hybrid entity. Commentators believe that the application of the regulations to a foreign sister corporation should depend on whether that corporation is part of a “consolidated group” under the laws of the jurisdiction of the foreign parent.

The IRS and Treasury generally agree with this position. Paragraph (d)(2)(ii)(B)( ii ) of the final regulations provides that a payment to a person, wherever organized, the income and losses of which are available, under the laws of the jurisdiction of the related foreign interest holder, to offset the income and losses of a related foreign interest holder, will be treated as a payment to a related foreign interest holder, and the regulations will apply. Examples have been added to the final regulations illustrating these principles.

Paragraph (d)(2)(ii)(B)( 3 ) of the proposed regulations also contained a special rule that would treat certain accommodation parties as related foreign interest holders. Pursuant to the rule in the proposed regulations, if a person entered into a transaction with a domestic reverse hybrid entity, its related interest holder, or other related entity, and the effect of the transaction was to avoid the principles of these regulations, then that person would be treated as related to the domestic reverse hybrid entity for purposes of this section. Commentators expressed concern that this language could encompass legitimate dealings with unrelated third parties. For example, an unrelated foreign bank that makes a loan to a domestic reverse hybrid entity and receives interest payments under the loan could be treated as related to the domestic reverse hybrid entity under paragraph (d)(2)(ii)(B)( 3 ). In recognition of the fact that the special rule in paragraph (d)(2)(ii)(B)( 3 ) was potentially overbroad and created uncertainty as to its application, the rule was deleted.

Paragraph (d)(2)(ii)(C) of the proposed regulations provided the Commissioner with the authority to recharacterize, for all purposes of the Internal Revenue Code, all or part of any transaction (or series of transactions) between related parties if the effect of the transaction was to avoid the principles of paragraph (d)(2)(ii)(B). Commentators also questioned the scope of this provision and requested the inclusion of examples of situations in which the Commissioner would not exercise his discretion and situations in which the Commissioner may exercise his discretion. Commentators were concerned that this provision would allow the Commissioner to apply the regulations to legitimate, non-abusive transactions involving domestic reverse hybrid entities.

In response to these comments, and in recognition of the potentially overbroad reach of the proposed provision, paragraph (d)(2)(ii)(C) has been modified in the final regulations to narrow its scope and clarify the circumstances under which the provision will apply. Thus, under paragraph (d)(2)(ii)(C)( 1 ) of the final regulations (which applies to transactions involving related parties), the Commissioner has authority to recharacterize a transaction only if the following conditions are met: (1) A deductible payment is made to a person who is related, as that term is defined in paragraph (d)(2)(ii)(B)( 3 ), to the domestic reverse hybrid entity (but is not otherwise described in paragraph (d)(2)(ii)(B)( 1 )( ii )); and (2) that payment is made in connection with one or more transactions the effect of which is to avoid the application of paragraph (d)(2)(ii)(B). If paragraph (d)(2)(ii)(C)( 1 ) applies, the Commissioner is authorized to treat the deductible payment as if it were received directly by the related foreign interest holder in the domestic reverse hybrid entity.

In addition, paragraph (d)(2)(ii)(C)( 2 ) of the final regulations (which applies to transactions involving an unrelated “middleman”) provides that the Commissioner may treat a deductible payment made by a domestic reverse hybrid entity to an unrelated person as being made directly to a related foreign interest holder if: (1) The unrelated person (or other person (whether related or not) which receives a payment in a series of transactions that includes a transaction involving such unrelated person) makes a payment to the related foreign interest holder (or other person described in paragraph (d)(2)(ii)(B)( 1 )( ii )); (2) the payment to the unrelated person and the payment to the related foreign interest holder are made in connection with a series of transactions which constitute a financing arrangement, as defined in § 1.881-3(a)(2)(i); and (3) the transactions have the effect of avoiding the application of paragraph (d)(2)(ii)(B) of this section. An example has been added to illustrate the principles contained in this revised paragraph (d)(2)(ii)(C)( 2 ).

To the extent the Commissioner recharacterizes a deductible payment as a distribution within the meaning of section 301(a) under this paragraph (d)(2)(ii)(C), the payment will be treated as such for all purposes of the Internal Revenue Code and the applicable income tax treaty.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because these regulations do not impose a collection of information requirement on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these regulations is Karen A. Rennie-Quarrie of the Office of the Associate Chief Counsel (International). However, other personnel from the IRS and Treasury Department participated in their development.

On March 18, 2002, the Coast Guard published a notice of proposed rule making (NPRM) entitled “Security Zone; Ohio River Mile 34.6 to 35.1, Shippingport, Pennsylvania”, in the Federal Register (67 FR 11963). We received no comments on the proposed rule. No public hearing was requested, and none was held.

Under 5 U.S.C. 553 (d)(3), good cause exists for making this rule effective less than 30 days after publication in the Federal Register . This final rule maintains the status quo for the security zone. We received no comments on either the temporary final rule or the NPRM. Delaying its effective date would be contrary to public interest since immediate action is needed to respond to the security risks associated with nuclear power plants.

On September 11, 2001, both towers of the World Trade Center and the Pentagon were attacked by terrorists. National security and intelligence officials have warned that future terrorist attacks against civilian targets are anticipated. In response to these terrorist acts, heightened awareness and security of our ports and harbors is necessary. To immediately enhance that security, the Captain of the Port, Pittsburgh established a temporary security zone on the Ohio River in the vicinity of the First Energy Nuclear Power Plant, in Shippingport, PA. The temporary final rule was published March 4, 2002 in the Federal Register (67 FR 9589) and remains in effect until 8 a.m. on June 15, 2002.

Because the generalized high-level threat environment continues, the Captain of the Port, Pittsburgh has determined that there is a need for this security zone to remain in effect indefinitely. This security zone will reduce the risk of a terrorist incident in this generalized high-level threat environment. It reduces the potential of a waterborne attack on the facility, enhancing public health, safety, defense and security, at this location and surrounding areas.

The location of this security zone limits access to only the waters immediately adjacent to the facility and permits vessels to safely navigate around the facility.

We received no comments on the proposed rule. Therefore, we have made no substantive changes to the provisions of the proposed rule. The words “and vessels” were added to paragraph (b)(2) of the final rule to clarify that the term “persons” included vessels. Persons and vessels desiring entry must seek permission of the Captain of the Port Pittsburgh to transit the security zone.

This 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).

We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary. This rule will not obstruct the regular flow of vessel traffic and will allow vessel traffic to pass safely around the security zone.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this 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 rule would not have a significant economic impact on a substantial number of small entities for the reasons enumerated under the Regulatory Evaluation above.

If you are a small business entity and are significantly affected by this regulation please contact Chief Petty Officer Brian Smith, U.S. Coast Guard Marine Safety Office Pittsburgh, Suite 1150 Kossman Bldg. 100 Forbes Ave. Pittsburgh, PA at (412) 644-5808.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule calls 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 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 rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

This 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 have analyzed this 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 rule and concluded that, under figure 2-1, paragraph (34)(g), of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation because this rule is not expected to result in any significant adverse environmental impact as described in the National Environmental Policy Act of 1969 (NEPA). A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES .

On April 17, 2002, the Postal Service published for public comment in the Federal Register a proposed rule (67 FR 18842) that provided information on the implementation of automation rates for pieces prepared as automation flats that meet the physical mailpiece requirements for the AFSM 100. The revised Domestic Mail Manual (DMM) standards published with this final rule become effective June 30, 2002.

Deployment of 534 AFSM 100s has been completed in major processing and distribution centers nationwide. With deployment of the AFSM 100s, the older FSM 881s are being phased out. Currently, pieces may qualify for an automation rate for flats based on the FSM 881 physical criteria defined in DMM C820. The Postal Service will replace the current FSM 881 standards, with new criteria based on the physical mailpiece requirements for the AFSM 100. Flat-size mailpieces must continue to meet the uniformity requirements in DMM C820.8.0.

Processing mail on the AFSM 100 provides tremendous savings opportunities. One of the Postal Service's objectives is to reduce processing costs by moving the processing of flats from a labor-intensive manual/mechanized environment to a more efficient automated mode. The additional machine capacity provided by AFSM 100 deployment reduces the overall amount of mail processed in manual/mechanized operations.

The processing and technological capabilities of the AFSM 100 are vastly superior to those of the FSM 881. The AFSM 100 has three automatic feeders with throughput rates capable of exceeding 17,000 pieces per hour, and 120 individual sort separations. Challenges that arise with high-speed feeders compared with manual inductions include singulation (double feeds) and acceleration (jams and stoppages).

The AFSM 100 also has optical character reader (OCR) and barcode reader (BCR) functionality. The reader first scans the inducted mailpiece in search of an address block and barcode. If a POSTNET barcode is found, the piece is sorted based on the ZIP Code information. If a POSTNET barcode is not found or cannot be read, the OCR looks for the delivery address and the piece is sorted based on the result returned by the OCR. If the address is unreadable by the OCR, a video-coding operator must key the image and the piece is then sorted to the correct bin or worked manually. The AFSM 100 does not apply (spray on) a POSTNET barcode.

To determine the range of mailpieces compatible with the AFSM 100, the Postal Service conducted controlled tests using a variety of physical mailpiece characteristics. Three mail characteristic studies were performed: a preliminary test in Baltimore, Maryland, from February 26, 2001, to March 13, 2001; a test in Denver, Colorado, from July 9, 2001, to August 1, 2001; and a study to determine maximum weight conducted in Palatine, Illinois, from February 25, 2002, to March 12, 2002.

The mailing industry assisted the Postal Service and supplied many of the mailpieces that were processed during the tests. The mailing industry's participation and coordinated efforts were crucial to the successful outcome of the tests.

The AFSM 100 preliminary test was designed with specific analytical objectives, including: (1) Identifying mailpiece characteristic ranges that would require additional data to determine automation compatibility, (2) identifying factors that would have a significant impact on sorter performance, (3) providing data that would identify threshold levels, and (4) determining mailpiece characteristics that would not require further testing. The test included the evaluation of a large number of mailpiece characteristics and a subset of combinations, each individually replicated over several test decks. The data represented jams, double feeds, miss-sorts, thickness, weight limitations, physical dimensions, mechanical rejects, and mailpiece damage. In addition, the Postal Service tested several different polywrap materials to analyze factors such as seam and wrap direction, contents, polywrap characteristics, and overhang (selvage).

The primary mail types included in the test were folded pieces ( e.g. , tabloids), paper envelopes, bound edge pieces ( e.g. , digest-size and perfect-bound magazines and catalogs), and a variety of pieces enclosed in polywrap. Other types of mailpieces were also included in the test, such as newspapers, self-mailers, CD/DVD disks, very thin pieces, very thick pieces, and the extremes of enveloped and folded mailpieces. Each test deck had varying characteristics including length, width, thickness, structure, polywrap, overhang (selvage), seam, and wrap direction.

This test was designed to define acceptable physical mailpiece characteristics and polywrap characteristics. The results from the pilot test in Baltimore eliminated some obvious mailpieces with specific characteristics for the second test in Denver ( e.g., odd-shaped envelopes and cards, pieces of non-uniform thickness, and pieces in polywrap with film-on-film coefficient of friction measuring greater than 0.5).

Mailpieces tested in Denver included most types tested in Baltimore, as well as digest-size pieces, perfect-bound and stitched magazines and catalogs, and unbound newspapers. The tabloid and digest-size pieces ranged from 8 pages to 220 pages, with cover pages of varying basis weights. Other pieces used for this test included pieces bound on the short end, pieces with special cover folds ( e.g. , French doors, gatefolds), and pieces enclosed in 19 different types of polywrap. In addition to evaluating the polywrap characteristics, the Postal Service processed pieces to test the effects of overhang (selvage), seam, and wrap direction.

Data from these two tests have shown that the majority of the standards for physical dimensions—height, length, and thickness—developed for flats processed on the FSM 881 still apply to flats processed on the AFSM 100. On the basis of these findings, the Postal Service sets forth these dimensional requirements to qualify for AFSM 100 automation rates for flats:

• Minimum: 5 inches high, 6 inches long, 0.009 inch thick.

• Maximum: 12 inches high, 15 inches long, 0.75 inch thick.

The length and height is not determined by the orientation of the delivery address. For a piece with a bound, folded, or closed edge ( e.g. , a newspaper, folded envelope, tabloid, or catalog), the length is the dimension parallel to the bound, folded, or closed edge. The height (vertical dimension) is the dimension perpendicular to the length. If the piece is folded more than once or is bound and then folded, the length of the piece is based on the final fold.

For a mailpiece processed on the AFSM 100, the correct and properly prepared POSTNET barcode must be placed at least 1/8 inch from any edge of the piece and must meet the appropriate barcode requirements in DMM C840.

Analysis from all three tests identified a maximum weight of 20 ounces for AFSM 100 enveloped, bound, and polywrapped flat mailpieces. This maximum will allow more Bound Printed Matter (BPM) pieces, which primarily weigh 16 ounces or more, to qualify as barcoded flats. The new rates under R2001-1 will include separate rates for BPM flats and parcels. BPM flats that meet the AFSM 100 mail characteristics and criteria will be eligible for a new barcode discount of 3 cents. Therefore, defining a “flat” will have significant impact on mailpiece design and rate eligibility.

The test data for polywrapped pieces led to the conclusion that the current seven polywrap standards for the FSM 881 will continue to be required for polywrapped pieces processed on the AFSM 100. A new property number 8, known as “blocking,” will be added. Blocking is simply the property that prevents polywrapped pieces from sticking together. Overhang (selvage) requirements will remain unchanged. Polywrapped flats for which automation rates based on AFSM 100 compatibility are claimed must be individually endorsed to show that they are automation-compatible. The endorsement “USPS AFSM 100 Approved Poly” must be placed on the address side of the piece, either on the flat itself or on the polywrap, preferably below the postage area or in another prominently visible location on the outside of the mailpiece. The polywrap certification process conducted by the mailpiece design analysts will remain the same as current procedures.

Three types of newspapers were tested: Broadsheet, tabloid, and quarter-fold pieces. Analysis of data collected on the processing of these newspapers resulted in the recommendation that all newspapers be prepared as quarter-folds.

The flat mail machinability tester, currently used to test FSM 881 mailpieces for rigidity, flexibility, and turning ability, will continue to be used for pieces processed on the AFSM 100. Although the performance of pieces with flimsy covers did cause some machine jams and damage to the mailpieces, sufficient data have not been collected to determine specific requirements for this type of mailpiece.

These changes will be included in both the printed and online versions of DMM Issue 57.

Part A of this document identifies and responds to the comments received on the proposed rule. Part B summarizes the changes to the DMM, followed by the text of the revised DMM standards.

The Postal Service received only seven comments on the April 17, 2002, proposed rule. The parties providing responses represented three industry associations, two polywrap vendors, a major mailer, and a printer.

The specific points raised in the comments are presented below, organized by general comments and by specific comments on particular issues. In addition to receiving numerous comments from the mailing industry, the Postal Service has had extensive ongoing exchanges of viewpoints with representatives of the mailing industry.

Three comments were received concerning retrofitting the older FSM 1000 with similar feeder mechanisms that are currently on the new AFSM 100. One commenter asked whether the current specifications for the FSM 1000 will change because of the new feeders. Another commenter was hopeful that this change would not negatively restrict the FSM 1000 specifications or curb the eligible mail that can run on these machines. This commenter stated that it would not be desirable to make the FSM 1000s slower primarily from adding more restrictive automatic feeders that would limit which mailpieces can run on the FSM 1000. Although not part of this final rule, engineering officials for the Postal Service report that the feeder for the FSM 1000 is essentially the same feeder used on the new AFSM 100 except for the feed rate of three pieces per second rather than two pieces per second on the AFSM 100. As a consequence, there is a more rapid acceleration of the pieces on the FSM 1000, an acceleration that may require a stronger polywrap.

One commenter requested that the DMM continue to show the diagram of the deflection test of flat-size mail and also incorporate separate test instructions for flat-size AFSM 100 deflection standards. The Postal Service has taken this request into consideration and will continue to show the diagram in DMM C820, Exhibit 2.5. Business Mail Acceptance at USPS Headquarters will disseminate to all managers of business mail entry special instructions about the use of the flat mail machinability tester.

One commenter was disappointed and surprised that the Postal Service needs to conduct additional studies to determine whether basis weight for covers is critical enough to require specifications and design requirements. This commenter believed that the Postal Service's efforts to deal with cover problems by retraining employees in proper machine loading technique has served to improve the situation. This commenter also believed that modifying the AFSM 100 feeders (not studying and potentially changing mailpiece requirements) is the right approach to solving this problem. According to Postal Service Engineering, while no plans have been made for further study of basis weight at this time, a team, including publishers, is presently analyzing existing date with the intention of providing guidelines for the construction of catalogs and magazines for optimal compatibility with postal automation.

One commenter applauded the Postal Service for providing a flats automated mailstream for BPM and that the AFSM 100 is capable of processing mailpieces weighing up to 20 ounces. Two commenters requested that the Postal Service explore further expansion of the AFSM 100 maximum weight or consider processing BPM flats weighing more than 20 ounces. One commenter expressed concern that because of the proposed weight limit, AFSM 100-compatible perfect bound flats weighing more than 20 ounces would be processed on the FSM 1000. Processing on the FSM 1000 would limit the ability to use FSM 1000s to process pieces that truly cannot be processed on the AFSM 100. According to Postal Service Engineering, more concentration is placed on jam and damage figures rather than miss-face rates. On both enveloped and perfect bound pieces the miss-face rate increases significantly as weight increases. Envelope miss-face rates increase from about 0.5% at 14 ounces to 4% at 20 ounces. Perfect bound pieces increase from about 4% at 10 ounces to 9% at 20 ounces, 13% at 24 ounces, and continue upward as weight increases. Miss-faced pieces also increase downstream processing costs because the addresses are not visible to OCRs or to video encoding staff at the next AFSM 100 handling, requiring manual sorting.

Testing of the impact on the AFSM 100 of processing heavy mailpieces on several AFSM 100s revealed numerous problems with machine performance and safety. Slippage occurred in the torque limiters when mailpiece weights were increased. This slippage causes rapid wear of the limiters and reduces the safety factor in the emergency stop process and can lead to operator injury and machine damage. Machines tested with the carousel completely loaded with heavy pieces, discharged pieces at random throughout the machines.

The Engineering Department contacted Swedish Post, which had been operating their machines at over two kilograms per three slot module (4.4 lbs. Or an average of 24 oz. per slot), and were told that they had experienced quite a few drive chain breaks and other mechanical problems, which were all traced to heavy mail being processed at the time. They have now restricted their systems to less than 1 kilogram per module (less than one pound per slot).

One commenter expressed disappointment that the new AFSM 100 specifications contain the additional property of blocking rather than a reduction in requirements. This commenter indicated that the industry had expected the AFSM 100 polywrap specifications to be similar to the FSM 1000 specifications. This commenter claimed that the Postal Service knew the industry's expectations when purchasing the AFSM 100 and that a blocking specification would impose significant costs to mailers. The Postal Service has worked with its Engineering Department on this issue and has taken this request into consideration. After several discussions with Engineering, the Postal Service will require <15 blocking factor for automatable poly. Testing results have shown that all poly films exceeding the blocking requirement produced the highest doubles rate and the worst jam rates.

One commenter requested that the Postal Service consider an alternative to the printed endorsement identifying polywrap pieces as either FSM 881 or FSM 1000. In addition, this commenter mentioned that if the Postal Service intends to change the required FSM 881 endorsement to an AFSM 100 endorsement, the industry should be given a sufficient grace period to use up existing inventories of printed polywrap material. In the proposed rule published in the Federal Register , the Postal Service specifically described revising the endorsement from the FSM 881 to the AFSM 100. The Postal Service will require the mailpiece identification markings differentiating AFSM 100 from FSM 1000 polywraps for various reasons. Business mail entry employees must be able to determine whether the correct polywrap is being used to qualify mailpieces for the automation rates. The Postal Service does understand the comments received regarding polywrap in stock and supply. Therefore, a 6-month grace period will be provided. Mailers with an abundance of polywrap containing the FSM 881 endorsement must request an extension of time, based on the amount of polywrap in stock, to the Manager, Rates and Classification Service Center (RCSC), in the designated area as shown in DMM G042.

One commenter expressed concern, although not part of this Federal Register , that the Postal Service is working on addressing guidelines and could impose these guidelines as requirements at some future date. This commenter stated that any addressing requirements not be imposed until the Postal Service has performed statistical tests of the requirements to demonstrate that there will be clear benefits to possible new addressing standards. A Flats Addressing Committee was created and consisted of both industry and postal personnel working on addressing guidelines and a communications plan. This cooperative effort has led to a final version of the guidelines, and Postal Service Engineering has validated that adherence to these guidelines will yield the desired result of high readability on the AFSM 100. High automation readability yields both low cost and high quality processing, allowing the Postal Service to hold down operating costs and provide consistent on-time delivery. Address block placement is also incorporated into these guidelines, with the intention of adding efficiency to delivery operations. Furthermore, if the Postal Service finds it necessary to turn any of these guidelines into requirements, the industry will definitely be involved in the decision-making process.

One commenter inquired whether the lettershops are in agreement with the 1/4 inch (0.25 inch) overhang requirement. The Postal Service consulted with Postal Service Engineering, and based on a review of testing data, the requirement of 1/4 inch (0.25 inch) on each side of the mailpiece will remain unchanged. The Postal Service received no comments from lettershops about this requirement.

One commenter stated that his poly film meets the standard for the AFSM 100 and asked whether he needs to supply a new data sheet to the mailpiece design analysts in order to be listed again as an approved vendor. The polywrap certification program requires plastic manufacturers to provide to the producer of the polywrapped flats an official ASTM certification of performance verifying that their polywrap products meet the physical properties described in DMM C820, Exhibit 4.1a. A new requirement, blocking, has been added to the existing seven properties required for automatable polywrap. Therefore, a recertification process will be established in which polywrap vendors currently listed on the Postal Service RIBBS web page will be required to submit an official ASTM certificate reflecting the eight properties now required for automatable polywrap when processed on the AFSM 100.

One commenter proposed that the Postal Service reconsider the revision to the final fold requirement in DMM C820.2.2 that changes the orientation of the mailpiece from one with the final fold at the right and the intermediate fold at the bottom to one with the final fold at the bottom and the intermediate fold to the right. This commenter stated that this revised requirement would change the side of the book on which ink jet is applied and also claimed that mailers/printers will need to retrofit their equipment to be able to spray the ink jet up, instead of down, on these types of pieces and then on the balance of the ink-jetted material. Postal Service Engineering has reviewed the test results and has concluded that folded tabloids are clearly different from bound publications in the thickness of material and that the final fold can leave material at the fold prone to separation at induction. Because “left” folded pieces, with the open end going into the feeder, are problematic and this is the reason why the “right” fold requirement is needed.

One commenter requested the Postal Service to reconsider the current and proposed polywrap requirements relating to predicted “fitness-for-use” for automatic mail sorting. This commenter stated that property # 3, secant modulus, is not a good indicator of sorting performance for flats wrapped in “shrink” polywrap, especially high performance polyolefin shrink films where peak free shrink is greater than 50%. This commenter also requested that property #6, nominal gauge, be eliminated and that the proposed property # 8, blocking (ASTM D3354-96), will not accurately predict polywrap performance. Postal Service Engineering reviewed these comments and maintains that the extensive testing performed concluded that high modulus characteristics are necessary for nonshrink polywrap. In addition, the nominal gauge property will not be eliminated because considerable field testing data clearly show that >0.001 inch is the most acceptable dimension to specify. Engineering also maintains that, after extensive field testing in accordance with ASTM D3354-96, the results were very clear. Above 15 grams of film from film separation showed a significant increase in the doubles rate. It would be impractical and cost prohibitive to test different kinds of films within the family of film wrapping materials. Engineering addressed the opinion on the proposed use of ASTM D3354-96 for Postal Service polywrap certification. Engineering is aware that the ASTM D3354-96 says in part that it is not intended to predict and measure for susceptibility to blocking. Engineering carefully followed the specification in line with film-to-film contact, time, weight, temperature, and the results obtained were compared with field tests, leading to the determination that 15 grams is the most favorable number that is acceptable.

An appropriate amendment to 39 CFR 111.3 will be published in the Federal Register to reflect these changes.

EPA is publishing this rule without a prior proposal because we view this action as noncontroversial and anticipate no adverse comment. However, in the “Proposed Rules” section of today's Federal Register publication, we are publishing a separate document that will serve as the proposal to adopt the provisions in this Direct Final rule if adverse comments are filed. This rule will be effective on September 10, 2002 without further notice unless we receive adverse comment or a request for a public hearing by July 12, 2002. If we receive adverse comment on one or more distinct amendments, paragraphs, or sections of this rulemaking, we will publish a timely withdrawal in the Federal Register indicating which provisions are being withdrawn due to adverse comment. We may address all adverse comments in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Any distinct amendment, paragraph, or section of today's rulemaking for which we do not receive adverse comment will become effective on the date set out above, notwithstanding any adverse comment on any other distinct amendment, paragraph, or section of today's rule.

This action will affect you if you produce, distribute, or sell gasoline.

The table below gives some examples of entities that may have to comply with the regulations. However, since these are only examples, you should carefully examine these and other existing regulations in 40 CFR part 80. If you have any questions, please call the person listed in the FOR FURTHER INFORMATION CONTACT section above.

Today's action is available electronically on the day of publication from EPA's Federal Register Internet Web site listed below. Electronic copies of this preamble, regulatory language, and other documents associated with today's final rule are available from the EPA Office of Transportation and Air Quality Web site listed below shortly after the rule is signed by the Administrator. This service is free of charge, except any cost that you already incur for connecting to the Internet.

EPA Federal Register Web Site: http://www.epa.gov/docs/fedrgstr/epa-air/ (Either select a desired date or use the Search feature.)

Tier 2/Gasoline Sulfur home page: http://www.epa.gov/otaq/tr2home.htm

Please note that due to differences between the software used to develop the document and the software into which the document may be downloaded, changes in format, page length, etc., may occur.

Today's rule finalizes corrections of typographical errors and other minor revisions as described in the following chart. These revisions do not change the substance or intent of the sulfur regulations.

The Tier 2 rule amended 40 CFR 80.46(a) to require the use of ASTM-D 3246-96 to determine the sulfur content of butane. However, we did not intend for this requirement to apply until January 1, 2004, when refiners that produce gasoline by blending butane into previously certified gasoline must comply with a butane sulfur content standard. As a result, today's rule modifies § 80.46(a) to clarify that the compliance date of the regulatory butane test method, ASTM D 3246-96, is January 1, 2004. In the absence of today's clarification, the compliance date under the Tier 2 rule for the butane test method requirement would be incorrectly stated as April 10, 2000, the effective date of the Tier 2 rule.

The preamble to the Tier 2 rule states that, for purposes of compliance with the corporate pool average standards in 2004 and 2005, a parent company is considered to be the refiner of any refinery facilities owned by wholly-owned  1 subsidiaries of the parent company. As such, a parent company must comply with the corporate pool average standards for any gasoline produced at the refineries owned by its wholly-owned subsidiaries, as well any gasoline produced at any refineries it owns. See 65 FR at 6755 (February 10, 2000). The regulations at § 80.195(c), however, do not contain language to implement this requirement. As a result, today's rule adds §§ 80.195(c)(6)(i) and (ii) to include such language. We believe, however, in the situation described above (i.e., where refineries are wholly-owned by a parent company), the parties (i.e., parent and subsidiaries) should have the option to demonstrate compliance with the corporate pool average standards either on a corporate parent level or a subsidiary level. Under this approach, a parent company may: (1) Demonstrate compliance with the corporate pool average standards for all of the gasoline produced at refineries owned by its wholly-owned subsidiaries as well as the refineries owned by the parent company itself, or (2) be deemed in compliance if it demonstrates compliance for the gasoline produced at its own refineries and each wholly-owned subsidiary demonstrates compliance for the gasoline produced at its own refineries. The environmental benefits of the sulfur rule will not be compromised by allowing this option, since compliance on a subsidiary level would result in the corporate pool average standards being met by a greater number of pools with fewer refineries in each pool over which to average the sulfur content. Today's rule, therefore, also adds § 80.195(c)(6)(iii) to provide for this option. Where the parent company opts to have each subsidiary comply individually, the parent company would remain liable for any violations by the subsidiary. See § 80.395(a)(11).

A foreign parent company may demonstrate compliance with the corporate pool average standards for all of the gasoline produced at refineries owned by the foreign parent company's wholly-owned U.S. subsidiaries, or each U.S. subsidiary owned by the foreign parent company may demonstrate compliance for its own refineries. Where the foreign parent company opts to demonstrate compliance for its wholly-owned U.S. subsidiaries, any gasoline imported into the U.S. that was produced at the foreign parent company's foreign refineries, or at foreign refineries owned by foreign subsidiaries of the foreign parent company, would not be included in the foreign parent company's corporate pool compliance calculations, since the regulations provide that the sulfur standards, including the corporate pool average standards, are to be met by the importer for all imported gasoline. See § 80.195(a)(4). Like a domestic parent company, where parties opt to have each wholly-owned U.S. subsidiary comply individually, the foreign parent company would remain liable under § 80.395(a)(11) for any violations by the subsidiary.

Today's rule also adds language to the reporting provisions in § 80.370(c) to address the corporate pool compliance options discussed above. Where a parent company chooses to comply for the refineries of its wholly-owned subsidiaries, today's rule requires such parent company to identify in its corporate pool average reports to EPA all refinery facilities and subsidiaries wholly-owned by the parent company, and any refinery facilities owned by the parent company's subsidiaries (in the case of a foreign parent company, any U.S. refinery facilities owned by the foreign parent company and any U.S. subsidiaries wholly-owned by the foreign parent company, and any refinery facilities owned by the foreign parent company's U.S. subsidiaries). Where the parent company's wholly-owned subsidiaries comply with the corporate pool average standards individually, each subsidiary must submit the required corporate pool annual compliance reports for its own refineries and identify in the reports the parent company and each refining facility owned by the subsidiary.

In some situations a refinery may be owned by more than one party. The Tier 2 rule specifically addresses situations in which a refinery is owned by a joint venture. See § 80.195(c)(5). EPA considers a joint venture to be a situation in which two or more parties collectively own and operate one or more refineries. See 65 FR 6755. EPA expects that most cases of shared refinery ownership will be considered joint ventures under the regulations. There are situations, however, where a refinery is owned by more than one party, but not all parties participate in the refinery's operation. Although in this situation the joint owners are not considered a joint venture under the regulations, such a refinery is considered a separate entity and the refiner of that refinery is the business entity consisting of the joint owners. We believe that, in such a situation, one of the owners should be allowed to include the refinery in its corporate pool for purposes of compliance with the corporate pool average standards, as the regulations allow in joint venture situations. As a result, today's rule adds § 80.195(c)(5)(iii) to allow a refinery that is collectively owned to be included in one of the owner's corporate pool for purposes of compliance with the corporate pool average standards. Today's rule also revises § 80.395(a)(12) (providing for joint venture liability) to include liability for business entities consisting of joint owners of a refinery or refineries.

The regulations currently require a refiner or importer, in 2005, to demonstrate compliance with the 90 ppm corporate pool average standard by calculating its actual corporate average sulfur level using the actual sulfur levels of each batch of gasoline and then applying allotments, as necessary, to meet the 90 ppm standard. Credits may not be used to achieve compliance with the corporate pool average standard. See § 80.315(c)(4). The regulations also require a refiner for each refinery, or an importer, beginning in 2005, to demonstrate compliance with the refinery or importer average standard by calculating the actual refinery or importer sulfur level using the actual sulfur levels of each batch of its gasoline, and applying credits, as necessary, to meet the 30 ppm refinery average standard. The regulations identify the corporate pool average and refinery average standards as two separate standards and refiners and importers are required to comply with each standard independently.

In 2005 only, refiners and importers may use allotments as well as credits to demonstrate compliance with the refinery or importer average standard. 2 See § 80.195(b)(4). These credits or allotments may be obtained from any source. A refiner with more than one refinery may use credits generated by one or more of its refineries that have an average sulfur level below 30 ppm toward meeting the refinery average standard at one of the other refineries in the refiner's corporate pool. Alternatively, the refinery may choose to bank or sell its credits, as permitted by the regulations. In 2005, the same allotments used to demonstrate compliance with the corporate pool standard may be used by a refinery in the pool toward its demonstration of compliance with the refinery average standard, or some of the allotments may be used by one refinery and the remainder used by another refinery or refineries in the pool. For example, a refiner with two refineries who obtains 30 allotments to achieve compliance with the corporate pool standard may also apply all 30 allotments to one refinery, or some of the allotments to each of the two refineries, toward meeting the refinery average standard (e.g., 15 allotments to each refinery; 20 allotments to one refinery and 10 allotments to the other; etc.). The current regulations, however, do not clearly address how allotments may be used to demonstrate compliance with the corporate pool average standard and the refinery average standard in 2005. As a result, today's rule adds § 80.195(b)(4) to make this clarification. 3

In the Tier 2 rule, we established a geographic area in which the low sulfur gasoline program will be phased-in differently than the national program. This program, referred to as the Geographic Phase-In Area (GPA) program, covers seven states in the Rocky Mountains and Upper Great Plains, 4 as well as Alaska.

The GPA program provides refiners additional flexibility in complying with the requirements of the low sulfur gasoline program. More specifically, the program provides that refiners may temporarily meet less stringent standards from 2004 through 2006 for gasoline sold in the GPA. Since the low sulfur gasoline standards under the national program require compliance with a 30 ppm refinery average standard and an 80 ppm cap in 2006, the geographic phase-in provides an additional year to reach those standards. This extra year and the somewhat less stringent standards during the phase-in provide the refining industry the opportunity for a more orderly transition to the 30/80 ppm standards in 2007.

In the First Amendment to the Tier 2 rule (66 FR 19296, April 13, 2001), we identified 74 counties in six states that adjoin the core GPA states which should be included in the GPA. The intention of this amendment was to ensure a smooth transition to low sulfur gasoline nationwide and to mitigate the potential for gasoline supply shortages. The amended GPA is shown in Figure 1 below. 5

The requirements for gasoline sold in the GPA, as prescribed by the Tier 2 rule, are summarized in Table 1 below. Gasoline produced by any refiner and/ or importer can be sold in the GPA provided that the refiner and/or importer registers with us (See § 80.217) and sells gasoline within the GPA that is consistent with the requirements specified in the regulations.

The Tier 2 rule (See § 80.216(a)) states that those refiners or importers that sell gasoline to the GPA, regardless of whether they are located within or outside of the area, have refinery/importer standards for gasoline sold within the GPA that are equal to the least of (1) 150 ppm, (2) the refinery's or importer's 1997-98 average sulfur level plus 30 ppm or (3) the refinery's or importer's lowest actual annual sulfur level plus 30 ppm in any year 2000-2003 if credits are generated. The intent of the second and third conditions for determining the refinery/importer standards, also known as “anti-backsliding” conditions, was to prevent refineries that have relatively “clean” (i.e., low sulfur) baselines from becoming dirtier (i.e., backsliding to 150 ppm) and producing higher sulfur gasoline during the interim years of the program.

After the Tier 2 rule was promulgated, one refiner submitted comments opposing the anti-backsliding concept. This refiner argued that the anti-backsliding provision potentially eliminates the intended flexibility of the GPA program. Furthermore, this refiner believed that the provision creates an unfair, anti-competitive market situation among refiners competing in the same area (IVA-01). While some gasoline that is sold in the GPA may have an annual average standard of 150 ppm sulfur, other gasoline that is produced at refineries with clean baselines is subject to a more stringent standard. Refiners that currently have access to and rely on sweet (relatively low sulfur) crude slates are especially concerned. These refiners may not be able to comply with the program's standards if they lose their access to these sweet crude slates due to economics (e.g., a given refiner loses its sweet crude contract to a higher bidder) or lack of availability (there is some evidence that suggests that crude quality, especially in PADD IV, is declining and becoming more sour  6 ). An unintended consequence of the anti-backsliding provision is that if such refineries should lose their current sweet crude slate, they would have to install desulfurization equipment in order to comply with the GPA standards. Thus, the GPA program would have little benefit for such refiners.

We have reassessed the concerns raised and find that they have merit on both technical and equity grounds. There is no technical reason why gasoline sulfur levels would automatically increase at refineries with cleaner baselines if we eliminated the anti-backsliding provision. As noted by commenters, however, there are situations where changed circumstances mean the anti-backsliding provision would have the unintended consequence of depriving a GPA refinery of any benefit from the GPA provision. Therefore, we believe it is appropriate to eliminate the anti-backsliding provisions from the GPA program. As a result, all gasoline that is designated as GPA gasoline must meet a refinery average standard for GPA gasoline equal to 150 ppm sulfur from 2004 through 2006 regardless of the refiner's 1997-1998 baseline or whether such refiner generates credits during the 2000-2003 time frame by producing gasoline with sulfur levels below 150 ppm. Because no gasoline designated as GPA gasoline to be sold in 2004 has been produced, the GPA standard finalized by today's rule supercedes any approvals of GPA standards issued under the prior provisions at § 80.216(a). Therefore, for any refiner or importer who has received a letter from EPA approving a GPA standard below 150 ppm, that refiner's or importer's standard for GPA gasoline is changed to 150 ppm by today's rule.

Even though we have revised the GPA program to set a refinery or importer annual average sulfur standard of 150 ppm for gasoline sold in the GPA, the overall emission benefits of the early years of the Tier 2 rule are not reduced over those described in the final rule. The air quality analysis of the Tier 2 rule was based on the premise that all gasoline produced or used in the GPA would be at a sulfur level of 150 ppm. We believe that setting a flat standard of 150 ppm for GPA gasoline as described above will still allow the objectives of the GPA program to be achieved. In addition, we expect little or no increase in the gasoline sulfur levels as a result of today's action and thus forecast the same air quality benefits.

The Tier 2 rule provides that a refiner for any refineries and importers may generate credits in 2004 and beyond if the annual average sulfur level of the gasoline that they produce or import during a given compliance year is less than their applicable annual average gasoline sulfur standard in that year (See § 80.310). For GPA gasoline, credits are calculated as follows:

CR a =V a ×(S Std − S a )

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

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

1. Electronically . You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/. A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html, a beta site currently under development.

2. In person . The Agency has established an official record for this action under docket ID number OPP-2002-0036. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

This final rule revokes the FFDCA tolerances for residues of the fungicide vinclozolin in or on strawberries, stone fruits, cucumbers, and bell peppers. In the Federal Register of July 10, 2001 (66 FR 35921) (FRL-6779-7), EPA issued a proposed rule to revoke the tolerances listed in this final rule and invited public comment for consideration and for support of tolerance retention under FFDCA standards. No comments were received by the Agency during the 60-day comment period. The revocation is effective on the date of publication of this final rule.

On July 30, 1998, EPA published a notice in the Federal Register (63 FR 40710) (FRL-6020-9) announcing BASF Corporation's request to cancel the FIFRA registered uses for the pesticide vinclozolin on strawberries and stone fruits. These cancellations were precipitated by EPA's determination that aggregate exposure to vinclozolin exceeded the safety standard under FQPA. The notice informed the public of how it could comment on the request for cancellation. One comment was received from the California Strawberry Commission; this comment was fully addressed in a subsequent Federal Register notice (63 FR 59557) (FRL-6041-7) published on November 4, 1998 which announced the approval, with one minor change, of the proposed existing stocks provision for products containing vinclozolin. Under limitations on the use of existing stocks, the application of the pesticide vinclozolin on strawberries and stone fruit became unlawful after January 30, 2000. Therefore, no domestically treated commodities covered by these tolerances are expected to be in the channels of trade. No person has provided comments identifying a need for EPA to retain the tolerances to cover residues in or on imported strawberries or stone fruits.

On May 31, 2000, BASF Corporation requested that EPA revoke the import tolerances for cucumbers and bell peppers, as part of a risk mitigation proposal designed to address dietary and aggregate risk concerns identified during reregistration review. BASF requested that EPA revoke the established import tolerances for bell peppers and cucumbers not before January 1, 2001. These mitigation measures allowed the Agency to determine that the use of vinclozolin, with the amendments proposed by the registrant, would meet the safety standard of the Food Quality Protection Act (FQPA). Vinclozolin is not registered for use on bell peppers and cucumbers in the United States. No person has provided comment identifying a need for EPA to retain the tolerances to cover residues in or on imported cucumbers or bell peppers.

It is EPA's general practice to propose revocation of tolerances for residues of pesticide active ingredients on crop uses for which FIFRA registrations no longer exist. EPA has historically been concerned that retention of tolerances that are not necessary to cover residues in or on legally treated foods may encourage misuse of pesticides within the United States. Nonetheless, EPA will establish and maintain tolerances even when corresponding domestic uses are canceled if the tolerances, which EPA refers to as “import tolerances,” are necessary to allow importation into the United States of food containing such pesticide residues. However, where there are no imported commodities that require these import tolerances, the Agency believes it is appropriate to revoke tolerances for unregistered pesticides in order to prevent potential misuse.

These actions become effective on June 12, 2002. Any commodities listed in the regulatory text of this document that are treated with vinclozolin, and that are in the channels of trade following the tolerance revocations, shall be subject to FFDCA section 408(l)(5), the “channels of trade provision” as established by the FQPA. Under this section, any residue of vinclozolin in or on such commodities shall not render the commodities adulterated so long as it is shown to the satisfaction of FDA that, (1) the residue is present as the result of an application or use of the pesticide at a time and in a manner that was lawful under FIFRA, and (2) the residue does not exceed the level that was authorized at the time of the application or use to be present on the food under a tolerance or exemption from a tolerance. The channels of trade provision allows for the orderly marketing of foods that may currently contain legal residues resulting from lawful applications of vinclozolin.

The FDA in a related notice published elsewhere in this issue of the Federal Register is announcing the availability of a guidance document presenting FDA's policy on its planned enforcement approach for foods containing vinclozolin residues. This guidance will assist firms in understanding the types of showing under section 408(l)(5) of the FFDCA that FDA may find satisfactory in accordance with its planned enforcement approach for such section.

By law, EPA is required to reassess 66% or about 6,400 of the tolerances in existence on August 2, 1996, by August 2002. EPA is also required to assess the remaining tolerances by August, 2006. As of May 15, 2002, EPA has reassessed over 4,570 tolerances. This document revokes four vinclozolin tolerances; however, the reassessments were previously counted in 1997 when all vinclozolin tolerances were reassessed in order to make a decision on a new tolerance petition. Consequently, no further vinclozolin reassessments, including these four revocations, count towards the August, 2002 review deadline of FFDCA section 408(q), as amended by the Food Quality Protection Act (FQPA) of 1996.

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number OPP-2002-0036 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before August 12, 2002.

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

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

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

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

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

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit III.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket ID number OPP-2002-0036, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

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

This final rule will revoke tolerances established under FFDCA section 408. The Office of Management and Budget (OMB) has exempted this type of action (i.e., a tolerance revocation for which extraordinary circumstances do not exist) from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this final rule has been exempted from review under Executive Order 12866 due to its lack of significance, this final rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations as required by Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and LowIncome Populations (59 FR 7629, February 16, 1994); or OMB review or any other Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), the Agency previously assessed whether revocations of tolerances might significantly impact a substantial number of small entities and concluded that, as a general matter, these actions do not impose a significant economic impact on a substantial number of small entities. This analysis was published on December 17, 1997 (62 FR 66020), and was provided to the Chief Counsel for Advocacy of the Small Business Administration. Taking into account this analysis, and available information concerning the pesticides listed in this rule, I certify that this action will not have a significant economic impact on a substantial number of small entities. Specifically, as per the 1997 notice, EPA has reviewed its available data on imports and foreign pesticide usage and concludes that there is a reasonable international supply of food not treated with canceled pesticides. Furthermore, the Agency knows of no extraordinary circumstances that exist as to the present revocations that would change EPA's previous analysis.

In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

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

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

1. Electronically . You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/. A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html, a beta site currently under development. To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at http://www.epa.gov/opptsfrs/home/guidelin.htm.

2. In person . The Agency has established an official record for this action under docket ID number OPP-2002-0082. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA,from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of December 22, 1999(64 FR 71760) (FRL-6391-1) and August 8, 2001 (66 FR 41593) (FRL-6795-4), EPA issued a notice pursuant to section 408 of FFDCA, 21 U.S.C. 346a, as amended by FQPA (Public Law 104-170), announcing the filing of a pesticide petition (PP) by IR-4 and E. I. Dupont de Nemours & Company, 681 US Highway #1 South North Brunswick, NJ 08902-3390, and E.I. DuPont de Nemours & Company, DuPont Agricultural Products, Barley Mill Plaza,Wilmington, DE 19880-0038. This notice included a summary of the petition prepared by E.I.DuPont de Nemours, the registrant. There were no comments received in response to the notice of filing.

The petition requested that 40 CFR 180.492 be amended by establishing a tolerance for residues of the herbicide, triflusulfuron methyl, methyl 2-[[[[[4-(dimethylamino)-6-(2,2,2-trifluoroethoxy)-1,3,5-triazin-2-yl]amino]carbonyl]amino]sulfonyl]-3-methylbenzoate, in or on chicory, root at 0.05 parts per million (ppm) (PP 0E6214). PP 4F4278 proposed that the currently established time-limited tolerances for sugar beet, root at 0.05 ppm and sugar beet, top at 0.05 ppm be converted to permanent tolerances and to revise the commodities to read beet, sugar, roots at 0.05 ppm and beet,sugar, tops at 0.05 ppm.

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

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

Consistent with section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2) of FFDCA,for tolerances for residues of triflusulfuron methyl on chicory, root at 0.05 ppm; and to convert the time-limited tolerances for beet, sugar, root at 0.05 ppm and beet, sugar, top at 0.05 to permanent tolerances. EPA's assessment of exposures and risks associated with establishing the tolerances follows.

EPA has evaluated the available toxicity data and considered its validity,completeness, and reliability as well as the relationship of the results of the studies to human risk.EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by triflusulfuron methyl are discussed in Table 2 of this unit, as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level(LOAEL) from the toxicity studies reviewed.

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

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

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

The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify carcinogenic risk. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk. A Q* is calculated and used to estimate risk which represents a probability of occurrence of additional cancer cases (e.g., risk is expressed as 1 x 10 - 6 or one in a million). Under certain specific circumstances, MOE calculations will be used for the carcinogenic risk assessment. In this non-linear approach, a “point of departure” is identified below which carcinogenic effects are not expected. The point of departure is typically a NOAEL based on an endpoint related to cancer effects though it may be a different value derived from the dose response curve. To estimate risk, a ratio of the point of departure to exposure (MOE cancer = point of departure/exposures) is calculated. A summary of the toxicological endpoints for triflusulfuron methyl used for human risk assessment is shown in Table 3 of this unit:

1. Dietary exposure from food and feed uses . Tolerances have been established (40 CFR 180.492) for the residues of triflusulfuron methyl in or on sugar beet, root and sugar beet, top. Risk assessments were conducted by EPA to assess dietary exposures from triflusulfuron methyl in food as follows:

i. Acute exposure . Acute dietary risk assessments are performed for a food-use pesticide if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. There are no effects attributable to a single, oral dose of triflusulfuron methyl. Therefore, an acute dietary risk assessment was not conducted.

ii. Chronic exposure . In conducting this chronic dietary risk assessment, the Dietary Exposure Evaluation Model (DEEM TM ) analysis evaluated the individual food consumption as reported by respondents in the United States Department of Agriculture 1989-1992 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and accumulated exposure to the chemical for each commodity. The following assumptions were made for the chronic exposure assessments: Tolerance level residues and that 100% of the crop is treated. Because suitable data depicting residues of triflusulfuron methyl in drinking were not available for incorporation into the dietary exposure model,the dietary exposure estimates do not include potential exposure from drinking water. The dietary exposure is based on sugar beets, because chicory was not reported as being consumed in the 1989-1992 CSFII. Therefore, inclusion of chicory in the dietary analysis would not alter the exposure or risk estimates from those obtained from sugar beets. The cRfD or 0.024 mg/kg/day was determined where the NOAEL of 2.44 mg/kg/day is based on decreased body weight gain, alterations in hematology (mainly in males) and increases in the incidence of interstitial hyperplasia in the testes at the LOAEL of 30.6 mg/kg/day. A 100-fold UF for interspecies extrapolation and intraspecies variability was applied.

iii. Cancer . Triflusulfuron methyl is classified as a Group C—possible human carcinogen chemical and for the purpose of risk characterization the RfD approach should be used for quantification of human risk. This decision was based on evidence of statistically significant, dose related increases in the incidence of interstitial cell adenomas of the testes at two doses, as well as statistically significant positive trend for these tumors in male rats. The testicular interstitial cell adenomas observed in the rat were benign. There was no reported increased tumor incidences of any type in the female rat and the dosing was adequate for assessing the carcinogenic potential of triflusulfuron methyl. Evidence of a hormonal mechanism for development of these benign tumors in rats does exist, however, the data were suggestive but not conclusive. Although there was some evidence of clastogenic activity for triflusulfuron methyl, positive results were only seen with activation in human lymphocytes/chromosomal aberration assay. Triflusulfuron methyl is a member of a class of chemicals known as sulfonylureas. Of the 12 analogs structurally related to triflusulfuron methyl, three sulfonylureas have been associated with carcinogenicity in rodents. Primisulfuron methyl and prosulfuron are classified as Group D carcinogens (not classifiable as to human carcinogenicity). Only tribenuron methyl is classified as a Group C carcinogen (possible human carcinogen), however, a Q* for cancer risk assessment is not required because there is no evidence of genotoxicity and the increased incidence of mammary gland tumors is observed at doses which exceed the maximum tolerated dose. Therefore the RfD approach is appropriate for quantification of human cancer risk.

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

The Agency uses the First Index Reservoir Screening Tool (FIRST) or the Pesticide Root Zone/Exposure Analysis Modeling System (PRZM/EXAMS), to produce estimates of pesticide concentrations in an index reservoir. The SCI-GROW model is used to predict pesticide concentrations in shallow ground water. For a screening-level assessment for surface water EPA will use FIRST (a tier 1 model) before using PRZM/EXAMS (a tier 2 model).The FIRST model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. While both FIRST and PRZM/EXAMS incorporate an index reservoir environment, the PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.

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

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

Based on the PRZM/EXAMS and SCI-GROW models the EECs of triflusulfuron methyl for acute exposures are estimated to be 0.42 parts per billion (ppb) for surface water and 0.5 ppb for ground water. The EECs for chronic exposures are estimated to be 0.005 ppb for surface water and 0.5 ug/L (micrograms/Liter) for ground water.

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

Triflusulfuron methyl is not registered for use on any sites that would result in residential exposure.

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

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

1. In general . Section 408 of FFDCA provides that EPA shall apply an additional 10-fold margin of safety for infants and children in the case of threshold effects to account for pre-natal and post-natal toxicity and the completeness of the data base on toxicity and exposure unless EPA determines that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a MOE analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans.

2. Pre-natal and post-natal sensitivity . There is no quantitative or qualitative evidence of increased susceptibility of rat or rabbit fetuses to in utero exposure in the developmental studies. No developmental toxicity was seen at the limit dose (1,000 mg/kg/day) in rats. In rabbits, developmental toxicity manifested as abortions in the presence of severe maternal toxicity (mortality, abortions, clinical signs,decreased body weight, and food efficiency). In the 2-generation reproductive toxicity study,the effects in the offspring (decreased pup body weight in F1 on days 14 and 21; late lactation) can be attributed to the decreases in body weights seen in the parental animals.In addition, this decrease was seen only in the F1 generation but not in the second generation. There is no indication for a developmental neurotoxicity study since no neuropathological or neurobehavioral effects in the acute or subchronic neurotoxicity studies were observed; no alteration of the fetal nervous system was observed; and no evidence of neurotoxicity was found in other studies in the data base.

3. Conclusion . The toxicity data base for triflusulfuron methyl is complete except for a 28-day inhalation (nose only) toxicity study. This study is of marginal value for the FFDCA determination because there are no residential uses of triflusulfuron methyl. Exposure data are complete or are estimated based on data that reasonably accounts for potential exposures. Based on these reasons, the FQPA Safety Factor for the protection of children has been removed (i.e. reduced to 1x.)

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

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

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

1. Acute risk . Because there are no effects attributable to a single, oral dose of triflusulfuron methyl is not expected to pose an acute risk.

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to triflusulfuron methyl from food will utilize < 1% of the cPAD for the U.S. population, < 1% of the cPAD for infants < 1 year, and < 1% of the cPAD for children aged 1-6 years and children aged 7-12 years. There are no residential uses for triflusulfuron methyl that result in chronic residential exposure to triflusulfuron methyl. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect the aggregate exposure to exceed 100% of the cPAD, as shown in Table 4 of this unit:

3. Short-term risk . Short-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Triflusulfuron methyl is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risk from food and water,which do not exceed the Agency's LOC.

4. Intermediate-term risk . Intermediate-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Triflusulfuron methyl is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risk from food and water,which do not exceed the Agency's LOC.

5. Aggregate cancer risk for U.S. population . Triflusulfuron methyl has been designated a Category C “possible human carcinogen” and does not require a separate cancer risk assessment. Because the RfD approach was determined appropriate for quanification of human cancer risk, the chronic aggregate risk assessment is sufficiently protective of human health.

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

An adequate tolerance enforcement method is available in PAM II. The method extracts residues of triflusulfuron methyl in a buffered acetonitrile solution, cleans the extract on a phenyl solid-phase extraction cartridge, and quantitates residues on a HPLC/UV system.

There are no Canadian or Codex MRLs established for triflusulfuron methyl.

Submission of a 28-day inhalation (nose only) toxicity study is required as condition of registration.

Therefore, the tolerances are established for residues of triflusulfuron methyl, methyl 2-[[[[[4-(dimethylamino)-6-(2,2,2-trifluoroethoxy)-1,3,5-triazin-2-yl]amino]carbonyl]amino]sulfonyl]-3-methylbenzoate, in or on chicory, roots at 0.05 ppm; and time-limited tolerances for sugar beet, root at 0.05 ppm and sugar beet, top at 0.05 ppm are converted to permanent tolerances and redefined as beet, sugar, roots and beet, sugar, tops.

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

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number OPP-2002-0082 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before August 12, 2002.

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

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

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

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

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

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VI.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2.Mail your copies, identified by docket ID number OPP-2002-0082, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C),Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to:opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

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

This final rule establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001).This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045,entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq .) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132,entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249,November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

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

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

1. Electronically. You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/. A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html, a beta site currently under development. To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at http://www.epa.gov/opptsfrs/home/guidelin.htm.

2. In person. The Agency has established an official record for this action under docket ID number OPP-2002-0099. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of December 14, 2001 (66 FR 64819) (FRL-6813-5), EPA issued a notice pursuant to section 408 of the FFDCA, 21 U.S.C. 346a, as amended by the FQPA of 1996 (Public Law 104-170), announcing the filing of a pesticide petition (PP 1G6348) by Dow AgroSciences LLC, 9330 Zionsville Road, Indianapolis, IN 46268. This notice included a summary of the petition prepared by Dow AgroSciences, the registrant. There were no comments received in response to the notice of filing.

The petition requested that 40 CFR 180.495 be amended by establishing a tolerance for residues of the insecticide spinosad, in or on stored grains (barley, corn, oats, rice, sorghum/milo, and wheat) at 1 part per million (ppm). The tolerance will expire on May 31, 2004. On the basis of the information furnished by Dow AgroSciences, an EUP has been issued for the pesticide under section 5 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), as amended. This permit authorizes the use of 700 pounds of the insecticide on stored grains for 1 year in the States of Arkansas, Georgia, Indiana, Kansas, Oklahoma, Minnesota, and Montana.

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

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

Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2), for a tolerance for residues of spinosad on stored grains (barley, corn, oats, rice, sorghum/milo, and wheat) at 1 ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by spinosad are discussed in Unit III.A. of the Federal Register of September 23, 1999 (64 FR 51451) (FRL-6381-9).

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

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

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

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

EPA's FQPA Safety Factor Committee met on April 26, 1999, and recommended that the 10x Safety Factor to account for enhanced sensitivity of infants and children be reduced to 1x (i.e., removed). Thus, the chronic FQPA PAD is 0.027 mg/kg/day and is equivalent to the chronic RfD.

1. Dietary exposure from food and feed uses. Tolerances have been established (40 CFR 180.495) for the residues of spinosad, in or on a variety of raw agricultural commodities. Spinosad is registered for use on a variety of agricultural commodities. Due to a section 18 use for control of Mediterranean fruit fly, tolerances for residues of spinosad have been established for all agricultural commodities not covered by other registrations. Risk assessments were conducted by EPA to assess dietary exposures from spinosad in food as follows:

i. Acute exposure. Acute dietary risk assessments are performed for a food-use pesticide if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. An endpoint was not identified for acute dietary exposure and risk assessment because no effects were observed in oral toxicity studies including developmental toxicity studies in rats or rabbits that could be attributable to a single dose (exposure). Therefore, an acute dietary exposure assessment was not performed.

ii. Chronic exposure. In conducting this chronic dietary risk assessment the Dietary Exposure Evaluation Model (DEEM TM ) analysis evaluated the individual food consumption as reported by respondents in the USDA 1989-1992 nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and accumulated exposure to the chemical for each commodity. The 1989-92 data are based on the reported consumption of more than 10,000 individuals over three consecutive days, and therefore, represent more than 30,000 unique “person days” of data. Foods “as consumed” (e.g., apple pie) are linked to raw agricultural commodities and their food forms (e.g., apples-cooked/canned or wheat-flour) by recipe translation files internal to the DEEM software. Consumption data averaged for the entire U.S. population and within populationn subgroups for chronic exposure assessment, but are retained as individual consumption events for acute exposure assessment.

Dietary risk assessment incorporates both exposure and toxicity of a given pesticide. For acute and chronic assessments, the risk is expressed as a percentage of a maximum acceptable dose. This is the population adjusted dose (PAD), which EPA has concluded will result in no unreasonable adverse health effects. The PAD is the Reference Dose (RfD) divided by the FQPA 10x Safety Factor. Dietary risk is expressed as a percentage of the PAD. EPA is concerned when estimated dietary risk exceeds 100% of the PAD.

For chronic exposure and risk assessment, an estimate of the residue level in each food or food-form (e.g., orange or orange-juice) on the commodity residue list is multiplied by the average daily consumption estimate for that food/food form. The resulting residue consumption estimate for each food/food form is summed with the residue consumption estimates for all other food/food forms on the commodity residue list to arrive at the total average estimated exposure. Exposure is expressed in mg/kg body weight/day and as a percent of the cPAD. This procedure is performed for each population subgroup.

EPA notes that there is a degree of uncertainty in extrapolating exposures for certain population subgroups which may not be sufficiently represented in the consumption surveys (e.g., nursing and non-nursing infants or Hispanic females). Therefore, risks estimated for these subpopulations were included in representative populations having sufficient numbers of survey respondents (e.g., all infants or females 13-50 years).

In conducting the chronic dietary risk assessment, EPA made very conservative assumptions: 100% of the various agricultural commodities having spinosad tolerances will contain spinosad residues and those residues will be at the level of the established tolerance. The RfD used for the chronic dietary risk assessment is 0.027 mg/kg/day and is equivalent to the cPAD, since the 10x FQPA Safety Factor has been reduced to 1x. The chronic assessment for the final application rate on stored grains of 1 ppm results in risk estimates that are below EPA's level of concern for all population subgroups. The risk estimate for the population subgroup made up of children 1-6 years is 84.4% of the cPAD. Risk estimates for all other population subgroups are below the level of concern. EPA is not typically concerned with risk estimates that are less than 100% of the cPAD.

iii. Cancer . Spinosad has been classified as “not likely to be carcinogenic in humans” based on the results of a carcinogenicity study in mice and the combined chronic toxicity and carcinogenicity study in rats. Therefore, a cancer risk assessment was not performed.

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

2. Dietary exposure from drinking water . Available data on spinosad show that the compound is not mobile or persistent, and therefore, has little potential to leach to ground water. Spinosad may however, contaminate surface water upon the release of water from flooded fields to the environment.

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

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

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

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

Based on the PRZM/EXAMS model, the EECs of spinosad for chronic exposures are estimated to be 0.092 part per billion (ppb) for surface water and is based on the application of spinosad to cole crops (0.13 lb ai/acre/application, 0.45 lb ai/acre/season). The EEC value is over 1,300 times less than the lowest DWLOC (Table 2). Drinking water is not expected to be a significant source of exposure.

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

Spinosad is currently registered for use on the following residential non-dietary sites: Conserve SC Turf and Ornamental (EPA Registration Number 62719-291) and Conserve Fire Ant Bait (EPA Registration Number 62719-291). Both products are registered for outdoor use only. The risk assessment was conducted using the following residential exposure assumptions: the turf/ornamental and fire ant bait uses may result in non-dietary ingestion of spinosad-treated plant material or soil by children. Half-life estimates for Spinosyn A on various plant foliage ranges from 1.6 to 16 days and is generally dependent on the amount of sunlight received on the plant surfaces. To calculate a quantitative risk from a potential ingestion of grass (in the absence of acute-term, short-term, or intermediate-term oral endpoints), EPA would need to default to the chronic dietary endpoint. This scenario would represent a child eating grass for > 6 months continuously. Based on the low application rate for spinosad on turf (0.41 lb a.i./acre), its non-systemic nature, its short half-life (especially in sunlight), and the rapid incorporation of spinosad metabolites into the general carbon pool, EPA believes that residues of spinosad on turf/ornamentals and soil after application would be low and decrease rapidly over time. EPA believes that it is inappropriate to perform a quantitative dietary risk representing a chronic scenario from children ingesting spinosad-treated plants or soil. Qualitatively, the risk from children's ingestion of plant or soil as a result of turf/ornamental and fire ant bait uses does not exceed EPA's level of concern.

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

EPA does not have, at this time, available data to determine whether spinosad has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, spinosad does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that spinosad has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the final rule for Bifenthrin Pesticide Tolerances November 26, 1997 (62 FR 62961) (FRL-5574-7).

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

2. Prenatal and postnatal sensitivity. There is no indication of increased susceptibility of rat or rabbit fetuses to in utero and/or postnatal exposure.

3. Conclusion . There is a complete toxicity data base for spinosad and exposure data are complete or are estimated based on data that reasonably accounts for potential exposures. EPA determined that the 10x safety factor to protect infants and children should be removed. This recommendation is based on: (1) The completeness of the toxicological data base, (2) no indication of increased susceptibility of rat or rabbit fetuses to in utero and/or postnatal exposure, and (3) no requirement for a developmental neurotoxicity study.

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

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

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

1. Acute risk . Acute aggregate risk consists of the combined dietary exposures from food and drinking water sources. The total exposure is compared to the acute RfD. An acute RfD was not identified since no effects were observed in oral toxicity studies that could be attributable to a single dose. Therefore, the Agency concludes that there is a reasonable certainty of no harm from acute aggregate exposure to spinosad.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to spinosad from food will utilize 40.5 of the cPAD for the U.S. population, 44.2% of the cPAD for infants, and 84.4% of the cPAD for children 1 to 6 years. Based on the use pattern, chronic residential exposure to residues of spinosad is not expected. In addition, there is potential for chronic dietary exposure to spinosad in drinking water. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect the aggregate exposure to exceed 100% of the cPAD, as shown in the following Table 2:

3. Short-term and intermediate-term risk. Short-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Though residential exposure could occur with the use of spinosad, no toxicological effects have been identified for short-term or intermediate-term toxicity. Therefore, the aggregate risk is the sum of the risk from food and water, which do not exceed the Agency's level of concern.

4. Aggregate cancer risk for U.S. population. Spinosad has been classified as “not likely to be carcinogenic in humans” based on the results of a carcinogenicity study in mice and the combined chronic toxicity and carcinogenicity study in rats. Therefore, spinosad is not expected to pose a cancer risk to humans.

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

Adequate enforcement methodology (HPLC or immunoassay) is available to enforce the tolerance expression. The method may be requested from: Dick Griffith, BEAD ACL (7503C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (410) 305-2905; e-mail address: griffith.francis@epa.gov.

No Codex, Canadian, or Mexican maximum residue limits have been established for residues of spinosad on any crops.

This is a time-limited tolerance for the use of spinosad on stored grains at 1 ppm.

Therefore, a time-limited tolerance is established for residues of spinosad, in or on stored grains (barley, corn, oats, rice, sorghum/milo, and wheat) at 1 ppm.

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

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number OPP-2002-0099 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before August 12, 2002.

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

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

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

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

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

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VI.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket ID number OPP-2002-0099, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

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

This final rule establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

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

I. General Information A. Does this Action Apply to Me?

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

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

1. Electronically . You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/. A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html, a beta site currently under development. To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at http://www.epa.gov/opptsfrs/home/guidelin.htm.

2. In person . The Agency has established an official record for this action under docket ID number OPP-2002-0028. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of March 29, 2000 (65 FR 16608) (FRL-6493-8), EPA issued a notice pursuant to section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, as amended by the Food Quality Protection Act of 1996 (FQPA) (Public Law 104-170), announcing the filing of a pesticide petition (PP 9F3727) by Uniroyal Chemical Company, Inc., 74 Amity Road, Bethany, CT. This notice included a summary of the petition prepared by Gustafson LLC, the registrant. No comments were received in response to the notice of filing.

The petition requested that 40 CFR 180.301 be amended by establishing a tolerance for residues of the fungicide carboxin, 5,6-dihydro-2-methyl-1,4-oxathiin-3-carboxanilide and its sulfoxide metabolite 5,6-dihydro-3-carboxanilide-2-methyl-1,4-oxathiin-4-oxide, each expressed as the parent compound, in or on onions (dry bulb) at 0.2 part per million (ppm).

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

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

Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2), for tolerances for combined residues of carboxin (5,6-dihydro-2-methyl- N -phenyl-1,4-oxathiin-3-carboxamide) and its metabolite 5,6-dihydro-3-carboxanilide-2-methyl-1,4-oxathiin-4-oxide (calculated as carboxin) (from treatment of seed prior to planting) on onion, dry bulb at 0.2 ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows.

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

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

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

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

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

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

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

1. Electronically . You may obtain electronic copies of this document, and certain other related documents that might be available electronically, from the EPA Internet Home Page at http://www.epa.gov/. To access this document, on the Home Page select “Laws and Regulations,” “Regulations and Proposed Rules,” and then look up the entry for this document under the “ Federal Register —Environmental Documents.” You can also go directly to the Federal Register listings at http://www.epa.gov/fedrgstr/. A frequently updated electronic version of 40 CFR part 180 is available at http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_40/40cfr180_00.html, a beta site currently under development. To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at http://www.epa.gov/opptsfrs/home/guidelin.htm.

2. In person . The Agency has established an official record for this action under docket ID number OPP-2002-0063. The official record consists of the documents specifically referenced in this action, and other information related to this action, including any information claimed as Confidential Business Information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period is available for inspection in the Public Information and Records Integrity Branch (PIRIB), Rm. 119, Crystal Mall #2, 1921 Jefferson Davis Hwy., Arlington, VA, from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The PIRIB telephone number is (703) 305-5805.

In the Federal Register of July 6, 2001 (66 FR 35623) (FRL-6790-1), EPA issued a notice pursuant to section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, as amended by the Food Quality Protection Act of 1996 (FQPA) (Public Law 104-170), announcing the filing of pesticide petitions (PP) by Uniroyal Chemical Company, 74 Amity Road, Bethany, CT 06525. This notice included a summary of the petitions prepared by Uniroyal Chemical Company, the registrant. There were no comments received in response to the notice of filing.

The petitions requested that 40 CFR 180.476 be amended by establishing tolerances for residues of the fungicide triflumizole, 1-(1-((4-chloro-2-(trifluoromethyl)phenyl)imino)-2-propoxyethyl)-1 H -imidazole), in or on food commodities as follows:

1. PP 1F6297 proposed the establishment of tolerances for strawberries at 2.0 parts per million (ppm).

2. PP 0F6077 proposed the establishment of tolerances for the cucurbit crop group at 0.5 ppm.

3. PP 8F4938 proposed the establishment of tolerances for cherries at 2.0 ppm.

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

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

Consistent with section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2), for a tolerance for combined residues of triflumizole and its metabolites containing 4-chloro-2-trifluoromethylaniline moiety, expressed as the parent on cucurbit vegetables, strawberries, and cherries at 0.5 ppm, 2.0 ppm, and 1.5 ppm, respectively. EPA's assessment of exposures and risks associated with establishing the tolerance follows.

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

The dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. An UF of 100 is routinely used, 10X to account for interspecies differences and 10X for intraspecies differences. Due to the lack of an acute neurotoxicity study and a subchronic neurotoxicity study, the Agency has applied an additional 3X uncertainty factor to this assessment to account for an incomplete toxicology data base.

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

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

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

1. Dietary exposure from food and feed uses . Tolerances have been established (40 CFR 180.476) for the combined residues of triflumizole, 1-(1-((4-chloro-2-(trifluoromethyl)phenyl)imino)-2-propoxyethyl)-1 H -imidazole) and its metabolites containing the 4-chloro-2-trifluoromethylaniline moiety, calculated as the parent compound, in or on a variety of raw agricultural commodities. The tolerance expression for meat, milk and poultry commodities also include residues of the metabolite 4-chloro-2-hydroxy-6-trifluoromethylaniline sulfate. Risk assessments were conducted by EPA to assess dietary exposures from triflumizole and its metabolites in food as follows:

i. Acute exposure . Acute dietary risk assessments are performed for a food-use pesticide if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1 day or single exposure. The Dietary Exposure Evaluation Model (DEEM) analysis evaluated the individual food consumption as reported by respondents in the USDA 1989-1992 nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and accumulated exposure to the chemical for each commodity. The following assumptions were made for the acute exposure assessments: A conservative, unrefined Tier 1 acute dietary exposure assessment was conducted for females 13-50 years old using tolerance level residues and modified DEEM processing factors for apples and grapes, based on the results of previously submitted processing studies. The Agency assumed 100% crop treatment for all other registered and proposed triflumizole food uses.

ii. Chronic exposure . In conducting this chronic dietary risk assessment, the (DEEM) analysis evaluated the individual food consumption as reported by respondents in the USDA 1989-1992 nationwide CSFII and accumulated exposure to the chemical for each commodity. The following assumptions were made for the chronic exposure assessments: A partially refined, Tier 3 chronic dietary assessment was conducted for the general U.S. population and all population subgroups (including infants and children) using anticipated residues, modified DEEM processing factors for apples and grapes based on the results of previously submitted processing studies, and average weighted percent crop treated information for apples, grapes, and pears.

iii. Cancer . Triflumizole is classified as a “Group E” (evidence of non-carcinogenicity in humans) chemical based on adequate studies in two species of animal. Therefore, a cancer dietary exposure assessment was not performed.

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

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

The Agency used PCT information as follows. In conducting its chronic dietary risk assessment, EPA utilized PCT data for the registered uses on grapes, apples, and pears. EPA based these assumptions on use data for the period 1996 to 1997 and 1998 to 1999. For all other registered uses as well as the new uses (cucurbits, strawberries, and cherries), EPA assumed that 100% of the U.S. crop would be treated with triflumizole.

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

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

The Agency uses the First Index Reservoir Screening Tool (FIRST) or the Pesticide Root Zone/Exposure Analysis Modeling System (PRZM/EXAMS), to produce estimates of pesticide concentrations in an index reservoir. The Screening Concentrations in Ground Water (SCI-GROW) model is used to predict pesticide concentrations in shallow ground water. For a screening-level assessment for surface water EPA will use FIRST (a tier 1 model) before using PRZM/EXAMS (a tier 2 model). The FIRST model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. While both FIRST and PRZM/EXAMS incorporate an index reservoir environment, the PRZM/EXAMS model includes a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.

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

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

Based on the FIRST and SCI-GROW models the EECs of triflumizole for acute exposures are estimated to be 191 parts per billion (ppb) for surface water and 0.12 ppb for ground water. The EECs for chronic exposures are estimated to be 40 ppb for surface water and 0.12 ppb for ground water.

3. From non-dietary exposure . The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Triflumizole is currently registered for use on the following residential non-dietary sites: Commercial applicators may treat “woody” ornamental species, such as trees, shrubs, and vines with triflumizole products. There are no proposed or registered uses for triflumizole on turf or lawns. EPA believes that residential, post-application, re-entry exposures from these use sites are not probable and, therefore, no residential exposure assessment has been conducted.

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

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

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

2. Prenatal and postnatal sensitivity . There is qualitative evidence of increased susceptibility demonstrated in the oral prenatal developmental toxicity studies in rats. Developmental toxicity resulted in fetal death as compared to maternal toxicity which included decreases in body weight gain and food consumption and increases in placental, spleen and liver weights at the same dosages.

No quantitative or qualitative evidence of increased susceptibility was demonstrated in the prenatal developmental toxicity studies in rabbits or the multi-generation reproduction studies in rats. In the rabbit developmental studies, 24-hour fetal survival was decreased at the highest dose tested. This endpoint is not a recommended guideline parameter and is generally believed to have limited value in the assessment of development toxicity; rather, it is more an indicator of fetal endurance in the absence of critical maternal care, following removal from the uterus. The Hazard Identification Assessment Review Committee did not consider this effect to be a measurement of treatment-related effects on fetal viability and, thus, did not consider it to be relevant to the assessment of fetal susceptibility. There was no evidence of quantitative or qualitative susceptibility in the 2-generation reproduction study in rats. In that study, increased gestation length was observed at the study LOAEL. In rats, this alteration in normal reproductive function can result in equally adverse consequences (i.e., mortality) in both dams and offspring.

3. Conclusion . The Agency has determined that a FQPA safety factor of 3X was safe for infants and children based upon the following considerations: (1) There was no quantitative or qualitative evidence of increased susceptibility in the rabbit fetuses following in utero exposure or the rat following prenatal and postnatal exposure; (2) while there was evidence of qualitative susceptibility in the developmental rat study, there are no residual uncertainties, and the use of the developmental NOAEL and the endpoint for the acute RfD for females 13-50 is protective of the prenatal toxicity following an acute dietary exposure; (3) while the toxicological data base is incomplete due to the lack of acute and subchronic neurotoxicity studies, the additional safety factor 3X is applied for acute and chronic dietary risk assessments to account for this uncertainty; and (4) in the exposure data base, there are no residual uncertainties identified. The drinking water exposure assessments incorporate conservative (Tier I) assumptions, and there are no residential exposures anticipated with the use of this chemical. The FQPA safety factor of 3X was found to be adequate based upon the following factors: (1) In the acute studies, clinical signs were seen at very high doses which resolved within 24 hours and no treatment-related effects were seen in the surviving animals; (2) in the chronic study, cholinesterase inhibition was seen during the first year, but not in a consistent manner; while plasma inhibition was seen in both sexes, erythrocyte was inhibited in males but not in females at the highest dose tested, no inhibition of brain cholinesterase activity was seen in either sex at any dose level; (3) there was no evidence of neurotoxicity in the subchronic studies in mice or rats; (4) there was no evidence of neuropathology in the data base; and (5) the doses used in risk assessments are significantly lower than the doses that induce the clinical signs following acute exposure or cholinesterase inhibition following repeated exposures.

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

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

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

1. Acute risk . Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food to triflumizole will occupy 19% of the aPAD for females 13 years and older. No acute dietary endpoint was selected by EPA for the general U.S. population, including infants and children. Therefore, an acute dietary exposure assessment was not performed for these population subgroups. In addition, there is potential for acute dietary exposure to triflumizole in drinking water. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect the aggregate exposure to exceed 100% of the aPAD, as shown in the following Table 3:

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to triflumizole from food will utilize 18% of the cPAD for the U.S. population and all population subgroups. The most highly exposed subpopulation is children 1-6 years old at 18% of the cPAD. There are no residential uses for triflumizole that result in chronic residential exposure to triflumizole. In addition, there is potential for chronic dietary exposure to triflumizole in drinking water. After calculating DWLOCs and comparing them to the EECs for surface and ground water, EPA does not expect the aggregate exposure to exceed 100% of the cPAD, as shown in the following Table 4:

3. Short-term and intermediate-term risk . Short-term and intermediate-term aggregate exposure assessments take into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

For triflumizole, the Agency did not perform short-term or intermediate-term assessments because there are currently no registered or proposed uses for homeowner application and residential post-application exposures are expected to be negligible.

4. Aggregate cancer risk for U.S. population . Since triflumizole has been determined to not be carcinogenic, it is not expected to pose a cancer risk.

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

Suitable methods are available for collecting data on residues of triflumizole and its metabolites. For cucurbits, the Agency has determined that the GC/nitrogen/phosphorus detector (NPD) method (Uniroyal Method CRM-3-96) is adequate for collecting data on residues of triflumizole and its metabolites. For strawberries, the GC/MSD (Morse Method METH-115, Revision #2) is adequate for collecting data on residues of triflumizole and its metabolites. For cherries, the GC/electron capture detection (ECD) method (Uniroyal Method CRM-3-96, modified) is adequate for data collection. For each of these commodities, the Agency has determined that a GC/nitrogen/phosphorus detector (NPD) method previously submitted to support petitions for the use of triflumizole on apples, grapes, and pears is similar to the above-referenced methods. This method is also acceptable as a tolerance enforcement method for these new commodities. This method has been forwarded to the Food and Drug Administration (FDA) for inclusion in the Pesticide Analytical Manual (PAM), Volume II, as Method I.

Adequate enforcement methodology (example—gas chromatography) is available to enforce the tolerance expression. The method may be requested from: Francis Griffith, Analytical Chemistry Branch, Environmental Science Center, U.S. Environmental Protection Agency, 701 Mapes Road, Fort George G. Meade, MD 20755-5350; telephone number: (410) 305-2905; e-mail address: griffith.francis@epa.gov.

There are no Codex, Canadian or Mexican maximum residue limits established for triflumizole residues in/on crop commodities. Therefore, no compatibility issues exist with regard to the proposed U.S. tolerances discussed in this risk assessment.

A limited field rotation study in wheat will be required as a condition of the cucurbit registration. As a condition of registration, the Agency will require the submission of acute and subchronic neurotoxicity studies in order to better characterize the neurological effects seen in the rat and mouse acute oral, the rat acute inhalation, and the rat chronic studies.

Therefore, the tolerance is established for combined residues of triflumizole, 1-(1-((4-chloro-2-(trifluoromethyl)phenyl)imino)-2-propoxyethyl)-1 H -imidazole) and its metabolites containing the 4-chloro-2-trifluoromethylaniline moiety, calculated as the parent compound in or on cucurbit vegetables, strawberries, sweet cherries, and tart cherries at 0.5 ppm, 2.0 ppm, 1.5 ppm, and 1.5 ppm, respectively. In establishing the tolerances for sweet cherries and tart cherries, the Agency has determined that, based upon the submitted residue field trials, the appropriate tolerance level is 1.5 ppm since residues are not expected to exceed this value. In addition, the Agency is correcting the commodity definitions from the proposed “cherries” to “cherry, tart” and “cherry, sweet” to reflect currently accepted terminology.

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

You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket control number OPP-2002-0063 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before August 12, 2002.

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

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

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

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

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

3. Copies for the Docket . In addition to filing an objection or hearing request with the Hearing Clerk as described in Unit VI.A., you should also send a copy of your request to the PIRIB for its inclusion in the official record that is described in Unit I.B.2. Mail your copies, identified by docket ID number OPP-2002-0063, to: Public Information and Records Integrity Branch, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In person or by courier, bring a copy to the location of the PIRIB described in Unit I.B.2. You may also send an electronic copy of your request via e-mail to: opp-docket@epa.gov. Please use an ASCII file format and avoid the use of special characters and any form of encryption. Copies of electronic objections and hearing requests will also be accepted on disks in WordPerfect 6.1/8.0 or ASCII file format. Do not include any CBI in your electronic copy. You may also submit an electronic copy of your request at many Federal Depository Libraries.

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

This final rule establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

States which have received final authorization from EPA under RCRA section 3006(b), 42 U.S.C. 6926(b), must maintain a hazardous waste management program that is equivalent to, consistent with, and no less stringent than the Federal program. As the Federal program changes, States must revise their programs and ask EPA to authorize the revisions. Revisions to State programs may be necessary when Federal or State statutory or regulatory authority is modified or when certain other changes occur. Most commonly, States must change their programs because of changes to EPA's regulations in 40 Code of Federal Regulations (CFR) parts 124, 260 through 266, 268, 270, 273 and 279.

Nevada initially received final authorization from EPA on August 19, 1985, effective October 18, 1985 (50 FR 33359), to implement the RCRA hazardous waste management program in Nevada. EPA has also authorized revisions to Nevada's authorized program to reflect changes in the Federal program. Currently Nevada's hazardous waste management program includes Federal changes through July 1, 1997. On March 13, 2000 and November 6, 2001, Nevada submitted final complete program revision applications for changes to the Federal program that occurred between July 1, 1997 and July 6, 1999, seeking authorization of its revisions in accordance with 40 CFR 271.21. This rulemaking action addresses those revisions.

We conclude that Nevada's application to revise its authorized program meets all of the statutory and regulatory requirements established by RCRA. Therefore, we grant Nevada final authorization to operate its hazardous waste management program with the changes described in this rulemaking. Nevada has responsibility for permitting Treatment, Storage, and Disposal Facilities (TSDFs) within its borders (except in Indian Country) and for carrying out the aspects of the RCRA program described in its revised program application, subject to the limitations on its authority retained by EPA in accordance with RCRA, including the Hazardous and Solid Waste Amendments of 1984 (HSWA). New Federal requirements and prohibitions imposed by HSWA regulations take effect as a matter of federal law in authorized States before those states are authorized for such requirements and prohibitions. Thus, EPA implements those requirements and new prohibitions in Nevada, including issuing permits, until the State is granted authorization to do so.

A facility in Nevada subject to RCRA will now have to comply with the authorized State requirements instead of the corresponding Federal requirements in order to comply with RCRA. Additionally, facilities must comply with any applicable Federally issued requirements, such as, for example, HSWA regulations issued by EPA for which Nevada has not received authorization, and RCRA requirements that are not supplanted by authorized State-issued requirements. Nevada continues to have enforcement responsibilities under its State law to pursue violations of its hazardous waste management program. EPA continues to have independent authority under RCRA sections 3007, 3008, 3013, and 7003, which include, among others, the authority to:

• Do inspections, and require monitoring, tests, analyses or reports;

• Enforce RCRA requirements (including State-issued statutes and regulations that are authorized by EPA and any applicable federally-issued statutes and regulations) and suspend or revoke permits; and

• Take enforcement actions regardless of whether the State has taken its own actions.

This authorization action does not impose additional requirements on the regulated community because the regulations for which Nevada is being authorized are already effective under State law, and are not changed by today's authorization action.

EPA did not publish a proposal before today's rule because we view this as a routine program change and do not expect comments that oppose this approval. We are providing an opportunity for public comment now. You may not have another opportunity to comment. In addition to this rule, in the proposed rules section of today's Federal Register we are publishing a separate document that proposes to authorize these State program changes.

If EPA receives comments that oppose this authorization, we will withdraw this rule by publishing a document in the Federal Register before the rule becomes effective. EPA will then use the proposal mentioned in the previous paragraph in making any further decision on the authorization of the State program changes. EPA will also address all public comments in a later final rule. If you want to comment on this authorization, you must do so at this time. If we receive comments that oppose only the authorization of a particular change to the State hazardous waste management program, we will withdraw that part of this rule but the authorization of the program changes that the comments do not oppose will become effective on the date specified above. The Federal Register withdrawal document will specify which part of the authorization will become effective, and which part is being withdrawn.

Nevada initially received final authorization for the base RCRA program on August 19, 1985 effective October 18, 1985 (50 FR 33359). Nevada has since received authorization for all revisions to the Federal RCRA program through June 1997. The following Federal Register publication and effective dates apply to those revisions: April 29, 1992 effective June 29, 1992 (57 FR 18083), May 27, 1994 effective July 26, 1994 (59 FR 27472), April 11, 1995 effective June 12, 1995 (60 FR 18358), June 24, 1996 effective August 23, 1996 (60 FR 32345) and January 29, 1999 effective March 30, 1999 (64 FR 4596).

On March 13, 2000 and November 6, 2001, Nevada submitted final complete program revision applications for changes and additions to the Federal RCRA implementing regulations that occurred between July 1, 1997 and July 6, 1999, seeking authorization of those changes in accordance with 40 CFR 271.21. We now make an immediate final decision, subject to receipt of written comments that oppose this action, that Nevada's hazardous waste management program revision satisfies all of the requirements necessary to qualify for final authorization. These revisions are analogous to the RCRA statutory provisions or Federal RCRA regulations in effect as of July 6, 1999. Upon authorization, the following Nevada hazardous waste management requirements that are either equivalent to or more stringent than the corresponding Federal requirements will apply instead of the Federal requirements:

Nevada has adopted by reference the Federal revisions identified above. There are no significant differences between the Federal rules and the revised State rules being authorized today.

NDEP will issue permits for all the provisions for which it is authorized and will administer the permits it issues. Section 3006(g)(1) of RCRA gives EPA the authority to issue or deny permits or parts of permits for requirements for which the state is not authorized. Therefore, whenever EPA adopts standards under HSWA for activities or wastes not currently covered by the authorized program, EPA may process RCRA permits in Nevada for the new or revised HSWA standards until NDEP has received final authorization for such new or revised HSWA standards. EPA and NDEP have agreed to a joint permitting process for facilities covered by both the authorized program and standards under HSWA for which the State is not yet authorized, and for handling existing EPA permits after the State receives authorization.

Nevada is not being authorized to operate any portion of the hazardous waste management program in Indian country. Nevada is not authorized to carry out its hazardous waste management program in Indian country within the State, which includes the following: The Confederated Tribes of the Goshute Reservation; Duckwater Shoshone Tribe; Ely Shoshone Tribe; Fort McDermitt Paiute and Shoshone Tribes; Fort Mohave Indian Tribe; Las Vegas Tribe of Paiute Indians; Lovelock Paiute Tribe; Moapa Band of Paiute Indians; Paiute-Shoshone Tribe of the Fallon Reservation and Colony; Pyramid Lake Paiute Tribe; Reno-Sparks Indian Colony; Shoshone-Paiute Tribes of Duck Valley Reservation; Summit Lake Paiute Tribe; Te-Moak Tribes of Western Shoshone Indians; Walker River Paiute Tribe; Washoe Tribe; Winnemucca Indian Colony; Yerington Paiute Tribe; and the Yomba Shoshone Tribe. This authorization action has no effect in Indian country. EPA will continue to implement and administer the RCRA program in Indian country within the State.

Codification is the process of placing the State's statutes and regulations that comprise the State's authorized hazardous waste management program into the Code of Federal Regulations. We do this by referencing the authorized State rules in 40 CFR part 272. We reserve the amendment of 40 CFR part 272, subpart DD for this authorization of Nevada's program changes.

The Office of Management and Budget (OMB) has exempted this action from the requirements of Executive Order 12866 (58 FR 51735, October 4, 1993), and therefore this action is not subject to review by OMB. Furthermore, this rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866. This action authorizes State requirements for the purpose of RCRA Section 3006 and imposes no additional requirements beyond those imposed by State law. Accordingly, I certify that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this action authorizes pre-existing requirements under State law and does not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. Law 104-4). For the same reason, this action also does not have implication within the meaning of Executive Order 13175 (65 FR 67249, November 9, 2000). It does not have substantial direct effects on tribal governments, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. This action will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely authorizes State requirements as part of the State RCRA hazardous waste management program without altering the relationship or the distribution of power and responsibilities established by RCRA. This action also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant and does not make decisions based on environmental health or safety risks. This action does not include environmental justice related issues that require consideration under Executive Order 12898 (59 FR 7629, February 16, 1994).

Under RCRA section 3006(b), EPA grants a State's application for authorization as long as the State meets the criteria required by RCRA. It would thus be inconsistent with applicable law for EPA, when it reviews a State authorization application, to require the use of any particular voluntary consensus standard in place of another standard that otherwise satisfies the requirements of RCRA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the Executive Order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this document and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This action will be effective August 12, 2002.

On April 29, 2002, NMFS published a proposed rule (67 FR 20945) intended to reduce interactions between endangered and threatened sea turtles and pelagic fishing gear and to mitigate the harmful effects of interactions that occur. This action implements the reasonable and prudent alternative of the March 29, 2001, BiOp issued by NMFS on the FMP. The preamble of the proposed rule presented background information on the BiOp and implementation of its sea turtle take mitigation measures. This information is not repeated here. A comprehensive assessment of the environmental impacts of fishing activities conducted under the FMP is found in the March 30, 2001, FEIS (See ADDRESSES ).

This final rule implements the following measures applicable to owners and operators of all vessels registered for use under either a Hawaii longline limited access permit or a longline general permit (longline vessels): (a) Prohibit longline vessels from using longline gear to target swordfish north of the equator; (b) require longline gear to be deployed such that the deepest point of the main longline between any 2 floats, (i.e., the deepest point in each sag of the main line), is at a depth greater than 100 m (328.1 ft or 54.6 fm) below the sea surface when fishing north of the equator; (c) require that a minimum of 15 branch lines are used between any 2 floats on vessels using monofilament gear when fishing north of the equator; (d) require that a minimum of 10 branch lines are deployed between any 2 floats on vessels using basket-style longline gear when fishing north of the equator; (e) require that longline vessel operators possess and employ float lines of at least 20 m (65.6 ft) to suspend the mainline beneath any float on fishing trips north of the equator; (f) prohibit the possession of a lightstick or any artificial light that may be used as a fish lure, e.g., glow bead, on board a longline vessel on fishing trips north of the equator; (g) prohibit the landing or possessing of more than 10 swordfish per trip by longline vessels fishing north of the equator; (h) prohibit fishing by longline vessels from April 1 through May 31 in the area bounded on the south by the equator, on the west by 180° long., on the east by 145° W. long., and on the north by 15° N. lat.; (i) allow the processing of applications for the re-registration of a vessel that has been de-registered from a Hawaii longline limited access permit after March 29, 2001, only during the month of October and require that applications must be received or post-marked between September 15 and October 15 to allow sufficient time for processing; and (j) require operators of longline vessels to annually attend a protected species workshop conducted by NMFS.

This final rule uses slightly different wording from the current emergency rule in place for the requirement that float lines used to suspend the mainline beneath floats be longer than 20 m (65.6 ft) when longlining north of the equator (see § 660.33(b)). The revision clarifies that vessel operators may not maintain on board the vessel multiple shorter float lines and claim the lines will be fastened together to form a line exceeding 20 m when or if deployed. The revised wording clarifies that the restriction applies not just to float lines when actually deployed, but also to float lines that are on board a permitted vessel. Also, the prohibition on the use of lightsticks is clarified to mean any type of light emitting device, including any flourescent “glow bead,” chemical, or electrically powered light that is affixed underwater to the longline gear.

This final rule also: (k) Requires gear retrieval to cease if a sea turtle is discovered hooked or entangled on a longline during gear retrieval, until the turtle has been removed from the gear or brought onto the vessel's deck; (l) requires operators of all “large” longline vessels (those with a freeboard of 3 ft (0.9 m) or more) to, if practicable, use a dip net meeting NMFS' specifications as prescribed in 50 CFR 660.32 to hoist a sea turtle onto the deck to facilitate the removal of the hook or to revive a comatose sea turtle (operators of all “small” longline vessels, i.e., those with a freeboard of less than 3 ft or 0.9 m, are required to, if practicable, ease a sea turtle onto the deck by grasping its carapace (shell) or flippers).

In addition, the operators of all longline vessels within the EEZ and the high seas around Hawaii, and non-longline pelagic fishing vessels fishing with hook-and-line within EEZ waters of the western Pacific region, are required to: (m) Carry and use line-clippers to cut fishing line from hooked or entangled sea turtles (operators of “large” vessels, i.e., those with a freeboard of more than 3 ft or 0.9 m, are required to use line clippers meeting NMFS' performance standard and operators of “small” vessels, i.e., those with a freeboard of 3 ft or 0.9 m or less, must carry and use either a line cutter that meets NMFS' performance standard, or one that is more appropriate to the size and configuration of the fishing vessel, but in either case this line clipper must be capable of cutting the vessel's fishing line or leader within approximately 1 ft of the eye of an embedded hook); (n) carry and use wire or bolt cutters capable of cutting through fishing hooks to facilitate cutting of hooks embedded in sea turtles; (o) remove all hooks from sea turtles as quickly and carefully as possible; however, if a hook cannot be removed, cut the line as close to the hook as possible; (p) handle all incidentally taken sea turtles brought aboard for dehooking and/or disentanglement in a manner to minimize injury and promote post-hooking survival (if a sea turtle is too large or hooked in such a manner to preclude safe boarding without causing further damage/injury to the turtle, use line-clippers to clip the line and remove as much line as possible prior to releasing the turtle); and (q) where practicable, bring comatose sea turtles on board the vessel and perform resuscitation as prescribed in 50 CFR § § 223.206 (d)(1), 660.22, and 660.32.

Two letters were received commenting on the proposed rule.

Comment 1: The proposed rule should not be implemented because it is based on an unlawfully prepared, substantively flawed, and outdated BiOp and relies upon the flawed analysis contained in the FEIS.

Response: NMFS believes that the March 29, 2001, BiOp represents the best available science concerning the status of endangered and threatened sea turtles. Accordingly, NMFS believes that the mitigation measures contained in the BiOp and implemented through this final rule will protect and conserve listed sea turtles taken in the U.S. pelagic fisheries of the western Pacific region. Taking no action at this time would allow a lapse in protection of sea turtles and would not ensure that these fisheries avoid the likelihood of jeopardizing the turtles, as required under the ESA.

Comment 2: The proposed rule would not avoid the likelihood that the Hawaii-based longline fleet would jeopardize the continued existence of listed sea turtles. NMFS observer data show that from January 1 through December 31, 2001, 23 sea turtle interactions occurred in the Hawaii-based longline fishery. Therefore, additional restrictions on the fishery are warranted, such as total closure of the fishery from April 1 through May 31 and closure of the area south of the Hawaiian Islands (16 N. lat. to the equator and from 145° W. long. to 180° long.) from mid-January through mid-June of each year.

Response: NMFS believes that this final rule will adequately conserve sea turtles. Although NMFS observer data documented 23 interactions with sea turtles between January 1 and December 31, 2001, observer data since April 2001 showed that interim turtle mitigation measures imposed in April 2001 had reduced the observed takes to only 3 turtles (2 olive ridleys, 1 green, no leatherback or loggerhead turtles) through December 2001. The observer coverage on Hawaii-based pelagic longline limited access vessels from April through December 2001, ranged from 15 to 22 percent. In February and March of 2002, observers reported longline gear interactions with 3 loggerhead turtles north of 26° N. lat. As a result, NMFS instituted additional emergency restrictions on April 5, 2002, that banned longline fishing north of 26° N. lat. and limiting the possession or landing to no more than 10 swordfish per fishing trip. The swordfish trip limit is included in this final rule. In the area south of 26° N. lat.—an area where fishermen primarily fish for tuna since April 2001, NMFS observers have reported two interactions with leatherback turtles, but no interaction with loggerheads. NMFS believes that the suite of mitigation measures implemented by this final rule will effectively reduce or eliminate the take of loggerhead and leatherback sea turtles and reduce the take of other species of sea turtles in the fishery, as similar measures implemented through earlier emergency rulemaking have done.

In § 660.22, the paragraphs proposed for revision in the proposed rule are redesignated in the order they were published in the proposed rule to account for a recent final rule published at 67 FR 34408, May 14, 2002. The May 14 final rule revised paragraphs (z) through (dd) and added paragraphs (ee) through (ii), effective June 13, 2002. Paragraphs (hh) and (ii) of the May 14 final rule are removed and reserved by this final rule, because those provisions are superceded by this final rule. In § 660.22, paragraphs (kk) and (ll) of the proposed rule are not included in this final rule, because the prohibition in paragraph (kk) is already covered by other prohibitions and because paragraph (ll) already appears as paragraph (uu) of this section. In § 660.32, the references to vessels with working platforms 3 feet (0.9 m) from the sea surface have been changed to refer instead to vessels with a freeboard of 3 feet (0.9 m). “Freeboard” is a more objective measure of the height of a vessel's deck above the surface than measuring the distance from a working platform to the sea; therefore, this change should improve the ability of NMFS to enforce the regulations.

This final rule has been determined to be significant for purposes of Executive Order 12866.

On March 30, 2001, NMFS issued an FEIS that analyzes the environmental impacts of U.S. pelagic fisheries in the western Pacific region. The EIS was filed with the Environmental Protection Agency; a Notice of Availability was published on April 6, 2001 (66 FR 18243). NMFS has issued a ROD for this FEIS. A copy of the ROD is available from the PIAO (see ADDRESSES ).

NMFS prepared an FRFA describing the impact of the action on small entities. The following is a summary of the FRFA.

The need for and objectives of this final rule are stated in the SUMMARY and SUPPLEMENTARY INFORMATION sections of this document and are not repeated here. None of the comments received on the proposed rule directly or indirectly addressed the Initial Regulatory Flexibility Analysis. This final rule will not duplicate, overlap, or conflict with any other Federal rules. This action is taken under the authority of the Magnuson-Stevens Fishery Conservation and Management Act and regulations at 50 CFR part 660.

Both large and small vessels affected by the final rule are considered to be “small entities” under guidelines issued by the Small Business Administration because they are independently owned and operated, and have annual receipts not in excess of $3.5 million. Only the Hawaii-based longline fleet is expected to experience significant direct effects from this final rule. This fishery averaged annual ex-vessel gross revenues of $40.7 million between 1994 and 1998 (the focus of the BiOp and the last full years' worth of economic data prior to the implementation of a sequence of measures to protect sea turtles).

Assuming that fishing effort that is displaced as a result of the swordfish targeting prohibition or seasonal area closure is transferred into allowable effort in open areas, the anticipated annual loss of ex-vessel gross revenues from this fishery is estimated to be 11 percent ($4.3 million). Assuming that all displaced effort is removed from the western Pacific longline fishery, the anticipated annual loss of ex-vessel gross revenue for this fishery is estimated to be 42 percent ($17.2 million).

Impacts on the American Samoa-based pelagic longline fisheries (the only active U.S. non-Hawaii longline fishery in the western Pacific region) are anticipated to be minimal, as these vessels generally fish below the equator and thus will not be affected by either the targeting restrictions or the seasonal area closure. The only direct cost for this fleet is that of acquiring bolt cutters and line clippers, for the smaller vessels, and bolt cutters, line clippers, and dip nets for the larger vessels. Assuming that these items are purchased in [in or from the state itself] Hawaii and are useable for several years, the average cost per vessel is anticipated to be approximately $20 per vessel for bolt cutters, $30 per vessel for line clippers, and $75 per vessel for dip nets. The impact on fishing operations of using these items is anticipated to be minor because the likelihood of encountering a turtle is low, and in the event that a turtle is hooked or entangled, it is not a time-consuming procedure to free it.

Impacts on non-longline pelagic vessels throughout the region are also anticipated to be minimal, as the final rule will not affect the operations of these vessels beyond the requirement that vessel operators purchase and use bolt cutters and line clippers to free hooked or entangled sea turtles. Because the use of long handled line clippers is optional on these small vessels, it is believed that the majority of these vessel operators will employ their bolt cutters to cut their fishing line if necessary. The impact on fishing operations of using these items is anticipated to be minor because the likelihood of encountering a turtle is low, and in the event that a turtle is hooked or entangled, it should not be a time-consuming procedure to free it.

This final rule (the preferred alternative) implements the provisions of the reasonable and prudent alternative of the March 29, 2001, BiOp regarding the protection of endangered and threatened sea turtles for all pelagic fisheries in the western Pacific region. This final rule contains the provisions of the emergency rule for the Hawaii-based pelagic longline fishery effective through June 8, 2002. A range of other alternatives was also considered in the FRFA. The first alternative was the no action alternative, which would have allowed the current emergency rule to expire, removing restrictions on the fishery that protect sea turtles. This alternative was rejected because it would not provide any additional protection to sea turtles. A second alternative would have prohibited shallow setting by longline vessels in the western Pacific region, required longline fishing vessel operators to carry and use line clippers and dip nets and to employ specific handling techniques to mitigate interactions with sea turtles. This alternative was rejected because, although it would have mitigated longline interactions with sea turtles, it would not have provided sufficient protection to ensure that the fishery avoids jeopardizing the continued existence of sea turtles. A third alternative would have closed waters north of 29° N. lat. to longline fishing from July through January of each year, and required longline fishing vessel operators to carry and use line clippers and dip nets and to employ specific handling techniques to mitigate interactions with sea turtles. This alternative was also rejected because, although it would have mitigated longline interactions with sea turtles, it would not have provided sufficient protection to ensure that the fishery avoids jeopardizing the continued existence of sea turtles. A fourth alternative would have closed all western Pacific EEZ waters to longline fishing and prohibited the landing of longline caught fish in all U.S. western Pacific ports. This alternative was also rejected because, although it would have provided increased protection to sea turtles as compared to the preferred alternative, it would also have eliminated western Pacific longline fisheries. NMFS believes that the preferred alternative allows the continued harvest of pelagic fish in the western Pacific region while also protecting endangered and threatened sea turtles. Furthermore, it is the only alternative that meets the requirements of the ESA, through implementation of the reasonable and prudent alternative of the March 29, 2001, BiOp. A copy of the FRFA is available from the Council (see ADDRESSES ).

A formal section 7 consultation under the ESA was concluded for the FMP, resulting in the March 29, 2001, BiOp. In the BiOp, NMFS determined that fishing activities conducted under the FMP and its implementing regulations were likely to jeopardize the continued existence of the green sea turtle, leatherback turtle, and loggerhead turtle and prescribed a non-discretionary reasonable and prudent alternative for this FMP to avoid the likelihood of jeopardizing the continued existence of these sea turtles. This final rule implements this non-discretionary reasonable and prudent alternative, as well as non-discretionary terms and conditions also in the BiOp.

Under 5 U.S.C. 553(d)(3), the Assistant Administrator for Fisheries, NMFS, finds good cause to waive the 30-day delay in effectiveness for turtle mitigation measures for the Hawaii-based longline fishery. A waiver of the delay in effectiveness for the final rule is needed to ensure the uninterrupted protection of sea turtles in the fishery following the expiration of an emergency interim rule on June 8, 2002. All turtle mitigation measures in this final rule applicable to non-Hawaii longline fisheries will take effect 30-days following publication of this final rule except for the mitigation measure requiring that operators with Western Pacific general longline permits to attend a protected species workshop, which will take effect on August 31, 2002.

Administrative practice and procedure, American Samoa, Fisheries, Fishing, Guam, Hawaiian Natives, Indians, Northern Mariana Islands, and Reporting and recordkeeping requirements.