The Plant Protection and Quarantine Treatment Manual (PPQ Treatment Manual), which is maintained by the U.S. Department of Agriculture's (USDA) Animal and Plant Health Inspection Service (APHIS), contains approved treatment schedules for agricultural commodities and is incorporated by reference into the Code of Federal Regulations at 7 CFR 300.1.

The PPQ Treatment Manual contains three cold treatment schedules for the treatment of fruits for the Mediterranean fruit fly (Medfly). Those schedules are prescribed to treat commodities for a variety of pests, including Medfly, that occur in the regions from which the commodities originate. The three schedules are:

T107-a. Target pests: Ceratitis capitata (Medfly) or Eutetranychus orientalis (Oriental citrus mite).

T107-c. Target pests: Species of Anastrepha (other than Anastrepha ludens ) or C. capitata (Medfly).

T107-f. Target pests: Bactrocera cucurbitae (Melon fly), Bactrocera dorsalis (Oriental fruit fly), C. capitata (Medfly), and Eutetranychus orientalis (Oriental citrus mite).

T107-a generally applies to commodities imported from Europe, Africa, western Asia, and Central America, while T107-c generally applies to commodities from South America and the Caribbean. T107-f applies to a few select commodities imported from eastern Asia. T107-a and T107-f are also used to treat fruits moving interstate from Hawaii or from any areas of the continental United States that may, from time to time, be quarantined because of Medfly.

Between November 20 and December 11, 2001, live Medfly larvae were intercepted in clementines from Spain that had been imported into the United States subject to cold treatment schedule T107-a. In response to the Medfly interceptions, APHIS suspended the importation of Spanish clementines pending an investigation into the cause of the infestations. Prior to November and December 2001, there had never been multiple confirmed finds of Medfly larvae in fruit of any kind that had been legally imported into the mainland United States from any source.

As part of its response to the Medfly larvae finds in Spanish clementines, APHIS is sponsoring additional research on the application of cold treatments for imported fruits. In addition, APHIS asked a panel composed of APHIS regulatory personnel and USDA technical experts on fruit flies to conduct a review of available scientific literature related to the efficacy of the T107-a cold treatment for Medfly, with the intention of using the panel's findings as guidelines on the future application of cold treatment for Medfly.

The panel completed its evaluation and found that the previously approved T107-a cold treatment schedule, while providing a very high level of Medfly mortality, lacks evidence to support that it provides Probit 9 level quarantine security ( e.g. , a survival rate of no more than 0.0032 percent of target pests) in all cases. Based on its review of the available scientific literature and of all factors involved in quarantine cold treatments against Medfly eggs and larvae, the panel recommended increasing the length of the required cold treatment at each temperature by 2 days. The panel's recommendations are contained in a document entitled “Evaluation of cold storage treatment against Mediterranean Fruit Fly, Ceratitis capitata (Wiedemann) (Diptera:Tephritidae)” (May 2, 2002) (referred to elsewhere in this document as the “cold treatment evaluation”). To provide support for the panel's recommendations, USDA's Office of Risk Assessment and Cost-Benefit Analysis did a quantitative analysis of available data, including data recently made available by the Australian Department of Agriculture. This analysis, entitled “Quantitative Analysis of Available Data on the Efficacy of Cold Treatment Against Mediterranean Fruit Fly Larvae” (September 2002) (referred to elsewhere in this document as the “quantitative analysis”), concluded that there is uncertainty as to whether treatments of less than 14 days and at temperatures in the 32-33 °F range will achieve the Probit 9 level of security. Therefore, we have decided to eliminate those treatment options. Both the cold treatment evaluation and the quantitative analysis can be viewed on the Internet at http://www.aphis.usda.gov/oa/clementine/index.html. Copies may also be obtained from the person listed under FOR FURTHER INFORMATION CONTACT.

In this document, APHIS is revising the cold treatment schedules that are used to treat fruits for infestation with Medfly in order to prevent the introduction of Medfly into the United States or the dissemination of Medfly within the United States.

Under § 412(a) of the Plant Protection Act (7 U.S.C. 7712), the Secretary of Agriculture may prohibit or restrict the importation, entry, and interstate movement of any plant product if the Secretary determines that the prohibition or restriction is necessary to prevent the introduction or dissemination of a plant pest or noxious weed into or within the United States.

The Secretary has determined that it is not necessary to prohibit the importation or interstate movement of the fruits that have been eligible for entry or interstate movement if cold treated with schedules T107-a, T107-c, or T107-f. This determination is based on the finding that the application of the extended cold treatment as described in this document, in addition to all other existing applicable requirements, will provide the protection necessary to prevent the introduction and dissemination of plant pests into the United States. The factors considered in arriving at this determination include: (1) The findings of the cold treatment evaluation, (2) the findings of the quantitative analysis on the efficacy of cold treatment, and (3) the findings of USDA technical experts.

Therefore, we are amending the PPQ Treatment Manual by revising treatment schedules T107-a, T107-c, and T107-f. Treatment T107-a is revised by eliminating cold treatment options of less than 14 days and lower than 34 °F and extending the remaining treatments by 2 days, as shown in the following table, and by removing the Oriental citrus mite from the list of target pests. (Cold treatment for the Oriental citrus mite will now be applied according to the revised T107-f, which is described later in this document.) There should be no effect on fruit quality due to the increased holding times, based on anecdotal information from New Zealand's Ministry of Agriculture and Forestry. We are confident that the revised treatment schedules will provide Probit 9 level quarantine security.

T107-a. Target pests: Ceratitis capitata (Medfly).

This rule has been determined to be non-significant and has not been reviewed by the Office of Management and Budget.

The Catalog of Federal Domestic Assistance number for the program impacted by this action is 10.769, Rural Development Grants.

There are no reporting and recordkeeping requirements associated with this rule.

The Rural Business Enterprise Grant (RBEG) Program is subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. RBS will conduct intergovernmental consultation in the manner delineated in RD Instruction 1940-J, “Intergovernmental Review of Rural Development Programs and Activities,” and in 7 CFR part 3015, subpart V.

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-602), the undersigned has determined and certified by signature of this document that this rule will not have a significant economic impact on a substantial number of small entities. New provisions included in this rule will not impact a substantial number of small entities to a greater extent than large entities. Therefore, a regulatory flexibility analysis was not performed.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. In accordance with this rule: (1) All State and local laws and regulations that are in conflict with this rule will be preempted; (2) retroactive effect will be given to this rule starting August 11, 1988; and (3) administrative proceedings in accordance with the regulations of the Agency at 7 CFR part 11 must be exhausted before bringing suit in court challenging action taken under this rule unless those regulations specifically allow bringing suit at an earlier time.

This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” RBS has determined that this proposed action does not constitute a major Federal action significantly affecting the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq, an Environmental Impact Statement is not required.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, RBS must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. When such a statement is needed for a rule, section 205 of UMRA generally requires RBS to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under Executive Order 13132, Federalism, that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various levels of government.

This regulatory package is an RBS initiative to make the RBEG Program more effective at stimulating economic development by reducing certain eligibility requirements for small and emerging private business enterprises (small business) located in rural areas. There has been much confusion on the definition of small business since it was first published in the Federal Register on August 11, 1988. At that time, the RBEG Program was called the Industrial Development Grant Program. The name of the program was changed in 1992 and still contained the small and emerging business definition. The RBEG Program has been administered by two separate agencies since inception of the program. The Farmers Home Administration (FmHA) originally administered the RBEG Program. In 1996, it was transferred to RBS. FmHA misinterpreted the definition of small and emerging business in its regulations as only needing to meet the first two parts of the definition in order to be eligible for assistance and funded grants based on this misinterpretation. RBS has recently determined that the FmHA interpretation is not consistent with the actual regulatory language. Therefore, the Agency wants to correct the definition language and make it retroactive from August 11, 1988, so the revised definition will be applicable to existing grants. Retroactive application of the definition will validate existing grants, which might not otherwise have been eligible under a strict application of the regulatory criteria defining a small business. This will ultimately streamline the regulation and reduce the burden to the applicant in meeting the restricted definition.

This rule was published in the Federal Register as an interim rule on May 16, 2001 (66 FR 27013-27014). There were five comments received regarding the small and emerging private business enterprise definition change. Three comments were actually requests for general program information. One comment concerned the need to do a survey to prove that those benefiting from the program were all low-income residents. There is no such regulatory requirement in the RBEG Program. This program directly benefits small businesses rather than residents. The last comment suggested that for-profit business enterprises be eligible to receive grant funds to do technical assistance services. The authorizing statute for the RBEG program, section 310B(c) of the Consolidated Farm and Rural Development Act, 7 U.S.C. 1932(c), only allows for private nonprofit corporations and public bodies, which includes Federally recognized Indian Tribes, to be eligible to receive grant funds. However, if a grantee does not have the expertise, it may contract with a for-profit business to provide the necessary technical assistance services to the benefiting small businesses.

This rule has been determined to be non-significant under Executive Order 12866 and was reviewed by the Office of Management and Budget (OMB).

The Catalog of Federal Domestic Assistance number for the program impacted by this action is 10.773, Rural Business Opportunity Grants.

There are no reporting and recordkeeping requirements associated with this final rule.

The Rural Business Opportunity Grants Program is subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. RBS will conduct intergovernmental consultation in the manner delineated in RD Instruction 1940-J, “Intergovernmental Review of Rural Development Programs and Activities,” and in the notice related to 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983).

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-602), the undersigned has determined and certified by signature of this document that this rule will not have a significant economic impact on a substantial number of small entities. New provisions included in this rule will not impact a substantial number of small entities to a greater extent than large entities. Therefore, a regulatory flexibility analysis was not performed.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. In accordance with this rule: (1) All State and local laws and regulations that are in conflict with this rule will be preempted, (2) no retroactive effect will be given to this rule, and (3) administrative proceedings in accordance with 7 CFR part 11 must be exhausted before bringing suit in court challenging action taken under this rule, unless those regulations specifically allow bringing suit at an earlier time.

This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” RBS has determined that this action does not constitute a major Federal action significantly affecting the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, Pub. L 91-190, an Environmental Impact Statement is not required.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, RBS must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local or tribal governments, in the aggregate, or to the private sector of $100 million or more in any 1 year. When such a statement is needed for a rule, section 205 of UMRA generally requires RBS to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under Executive Order 13132, Federalism, that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various levels of government.

This regulatory package is an initiative mandated from Congress to provide a consistent definition of rural and rural area for programs administered by RBS under the Rural Community Advancement Program. This action will increase eligible areas and demand for the Rural Business Opportunity Grants Program by amending the definition of rural and rural areas. The current definition of rural and rural areas limits eligible areas to any area of a State that is not within the boundaries of a city with a population in excess of 10,000 inhabitants. The amended definition will increase the eligible area to 50,000 or less inhabitants.

On May 30, 2002, the Commission adopted amendments to its Part 3 rules governing the registration of intermediaries in the futures industry. These amendments were adopted to facilitate the change from a paper-based registration system to an online registration system. 1 Although applications are now filed electronically through NFA's online registration system, the Commission's rules and NFA's rules both retain the same titles for the forms that applicants and registrants are required to file as those used under the previous paper-based system. 2 The online forms do not, however, retain the line item numbering from the paper forms. The online forms, instead, contain headings for the sections that include fillable text boxes and check-off boxes for submitting the required information.

Commission Rule 145.6(b)(2) provides that fingerprint cards and supplementary attachments filed in response to certain items on the registration forms generally will not be available for public inspection. The item numbers of the registration forms referenced in the rule include requests for information regarding, among other things: (1) Disciplinary history; (2) social security number; (3) any pending or anticipated actions; and (4) the reasons for termination of a registrant or principal.

As noted above, the online forms no longer number the line items required to be completed, but do contain section headings. Accordingly, Rule 145.6(b)(2) has been amended to include the relevant sections of the online forms for which the supplementary filings are not available for public inspection. No change has been made, however, in the type of information that generally will not be made available. For example, the rule previously cited to items 6-9 and 14-21 on Form 8-R, which asked for personal identifying information, such as the individual's social security number and date of birth, and a disciplinary history, respectively. The rule has been amended to provide that, additionally, supplementary attachments filed in response to the “Personal Information” and the “Disciplinary Information” sections of Form 8-R will not generally be available for public inspection.

The Commission has also adopted certain technical amendments to Part 145. For example, the Commission has amended Appendix A to Part 145 so as to reference the appropriate divisions of the Commission, the names of which have changed as a result of the reorganization of the Commission's staff, effective July 1, 2002.

The Commission has determined that the amendments discussed herein relate solely to agency organization, procedure, and practice. Accordingly, the provisions of the Administrative Procedure Act that generally require notice of proposed rulemaking and that provide other opportunities for public participation are not applicable. 3 The Commission further finds that, because the amendments have no adverse effect upon a member of the public, there is good cause to make them effective immediately upon publication in the Federal Register. 4

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

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

This rule implements 23 U.S.C. 144(g), as amended by sections 1109 and 1311 of the Transportation Equity Act for the 21st Century (TEA-21), Public Law 105-178, 112 Stat. 107 (1988). Section 161 of the Surface Transportation Assistance Act of 1982 (STAA), Public Law 97-424, 96 Stat. 2097, at 2135, directed the Secretary of Transportation (Secretary) to establish a rating factor for each discretionary bridge program candidate based on seven specific items. Section 1311 of the TEA-21, as added by Public Law 105-206, 112 Stat. 836 (1998), requires the Secretary to establish criteria for all discretionary programs, including the discretionary bridge program. On November 17, 1983, using the criteria from the STAA, the FHWA issued a final rule on the discretionary bridge regulations (48 FR 52292).

The funding for the discretionary bridge program is derived from contract authority for the bridge program provided in section 1101(a)(3) of the TEA-21. The allocation of the discretionary bridge funding by fiscal year for the discretionary bridge program is codified at 23 U.S.C. 144(g)(1).

This final rule is based on the notice of proposed rulemaking (NPRM) published on January 22, 2002, at 67 FR 2837 where the FHWA requested comments on proposed revisions to the regulation on the discretionary bridge program rating factor. This final rule is based on the NPRM and all comments received in response to the NRPM.

These revisions in this final rule incorporate several administrative considerations that have proven effective in the project selection process and will update the rating factor formula to reflect the most current highway system designation. These changes will:

(1) Require that candidate projects be ready to begin construction in the fiscal year in which funds are available for obligation. This will incorporate the administrative practice that has proven effective to provide that candidate projects are sufficiently developed and ready for construction and that funds are used in a timely manner. Projects that are not ready for construction may languish for years, encountering design, environmental, or funding problems that tie up scarce Federal funding and deny funding for other projects which are ready to build.

(2) Permit additional funds contributed from local, State, county, or private sources or donations from third parties which reduce the total cost or Federal contribution to a project to be used to reduce the total cost for use in the rating factor formula. Reducing the total project cost with additional State, local or third party contributions provides an efficient and equitable assessment of the non-Federal participation, over and above the usual State match. This also continues the FHWA commitment to provide an accurate cost-benefit analysis of candidate projects.

(3) Disallow any discretionary allocation to a State that has transferred Highway Bridge Replacement and Rehabilitation Program funds to other categories of Federal funding in the previous fiscal year. Transferring bridge funds to other categories is an indication that a State does not have a pressing need for bridge funds. This administrative requirement has been used effectively to assure that States first exhaust their regularly apportioned bridge funds before applying for discretionary funds.

(4) Change the term “D” in the rating factor formula from defense highway status to “N” for national highway system status (NHS). This change is necessary because the defense highways are no longer a recognized national system. The factor “D” originated in section 161 of the STAA of 1982, and data is no longer collected for this item. Using the national highway system status is a reasonable alternative, since the NHS is recognized as the nation's premier highway system in 23 U.S.C. 103, and one criteria in the code is that the NHS “meets national defense requirements.” In addition, formerly designated defense highway bridges are included in the national highway system, and this change will have little effect on project rankings or selection.

In light of the events of September 11, 2001, and the heightened awareness of security issues, we have determined that discretionary bridge funds could be used for security improvements on eligible bridges.

In response to the NRPM published on January 22, 2002, at 67 FR 2837, we received six comments to the docket. These comments were from three State DOTs, one city DOT, and two private individuals. The following is a summary and discussion of these comments:

One commenter suggested that the FHWA reduce the requirement that the cost of one bridge must be $10 million to be eligible. This is a statutory requirement and cannot be changed by regulation.

There were four comments concerning the proposal to disallow any discretionary allocation to a State that has transferred its Highway Bridge Replacement and Rehabilitation Program funds to other categories of Federal funding in the previous fiscal year. Two commenters supported the proposed change, and two commenters considered the change overly restrictive. We feel that transferring bridge funds to other categories is an indication that a State does not have a pressing need for bridge funds, and that this requirement is therefore not overly restrictive.

There were five comments concerning the change of the term “D” in the rating factor formula from defense highway status to “N” for national highway system status (NHS). Three commenters supported the change. One commenter suggested using the strategic highway network (STRAHNET) indicator to replace the term “D.” One commenter suggested that no distinction be made between NHS and non-NHS bridges. One commenter suggested that bridges over the NHS should also be considered in this term. We believe that using the STRAHNET indicator is overly restrictive and that the change to use the NHS for this term is sufficiently broad to meet national defense requirements.

There were four comments questioning the clarity of the use of the words “leveraged funds” as a means to reduce the total project cost for use in the rating factor formula. Three commenters supported the change. One comment thought that this change would allow the use of “creative financing” or “Federal innovative financing techniques.” We agree that the use of the term “leverage” requires clarification. It is the FHWA's intent that only funding or contributions from State, county, local, or private sources be considered as a special consideration under § 650.709. These additional funds or contributions must be non-Federal. This final rule clarifies that the FHWA's intent is to give consideration to additional non-Federal contributions made to a project by the project sponsor or third parties. One commenter in support of using leveraged funds suggested that the FHWA add a term to the formula to reflect the change. The FHWA concluded that this change would over-complicate the formula, and therefore the formula will not be changed, but additional contributions from non-Federal sources will be allowed to reduce the total project cost to compute the rating factor.

There were two comments about the requirement that projects be ready for construction within the fiscal year for which funds are requested. Both of these commenters indicated that the term “ready for construction” is not well defined and may be overly restrictive. On the contrary, it is our intent that projects be ready to advertise for bids and that funds be obligated within the fiscal year for which such funds are requested. Additionally, the term “ready for construction” is meant to be the least restrictive way to capture this intent.

Paragraph (b) is revised to require that only those projects not previously selected which will be ready to begin construction in the fiscal year in which funds are available for obligation will be eligible for funding. This incorporates the administrative practice that has proven effective to provide that candidate projects are sufficiently developed and ready for construction and that funds are used in a timely manner. Projects that are not ready for construction may languish for years, encountering design, environmental, or funding problems that tie up scarce Federal funding and deny funding for other projects that are ready to build.

Paragraph (c) is added to make any State that has transferred Highway Bridge Replacement and Rehabilitation funds to other fund categories ineligible for following fiscal year funding. Transferring bridge funds to other categories is an indication that a State does not have a pressing need for bridge funds. This administrative requirement has been used effectively to assure that States first exhaust their regularly apportioned bridge funds before applying for discretionary funds.

In paragraph (b) the term “D”, “Defense Highway System Status,” is changed to “N”, “National Highway System Status.” This revision brings the formula in line with the current definition of the Federal-Aid Highway Systems found in 23 U.S.C. 103.

Section 161 of the Surface Transportation Assistance Act of 1982 (STAA) required the Secretary of Transportation to develop a selection process for discretionary bridges authorized to be funded under 23 U.S.C. 144(g). Section 161 further outlined the seven criteria that must be considered in evaluating bridge eligibility. One of these seven criteria was the “defense highway system status.”

Created under the Defense Highway Act of 1941 (Public Law 77-295, 55 Stat. 765), the Defense Highway System was designed to be a “strategic network of highways that conforms to routes designated on the diagrammatic map of principal highway traffic routes of military importance, dated October 25, 1940, revised to May 15, 1941, and approved by the Secretary of War.”

Since the passage of the STAA of 1982, the Defense Highway System is now an element of the National Highway System, created by the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), Public Law 102-240, 105 Stat. 1914 (1991). Section 1006 of the ISTEA redefined the Federal-aid Highway System to include the Interstate System and the National Highway System. One of the components of the National Highway System is “a strategic highway network consisting of a network of highways that are important to the United States strategic defense policy and that provide defense access, continuity, and emergency capabilities of the movement of personnel, materials, and equipment in both peacetime and wartime. The highways may be on or off the Interstate System and shall be designated by the Secretary in consultation with the appropriate Federal agencies and the States.” (23 U.S.C. 103(b)(2)(D)).

In comparing the components that make up the National Highway System to the elements of the former Defense Highway System, the “strategic network of highways” is an essential element of both of these highway systems. Therefore, the elements of the former Defense Highway System make up one of the components of what is now referred to as the National Highway System. Consequently, by changing the definition of the factor “D” in the formula from the Defense Highway System Status to “N” for National Highway System Status, we do not change the original intent of the formula as established in the ISTEA.

Paragraph (a) is revised so that additional funds or contributions made by local, State, county, or private sources may be used to reduce the total project cost to calculate the rating factor. Reducing the total project cost with these additional funds provides an efficient and equitable assessment of the non-Federal participation, over and above the usual State match. This also continues the FHWA commitment to provide an accurate cost-benefit analysis of candidate projects.

Paragraph (c) is revised so that only those continuing projects which will be ready to begin construction in the fiscal year in which funds are available for obligation will be considered for funding. This extends the requirement established in section 650.703(b) so that previously selected projects must be ready for construction to the same extent as new projects. As with new projects, previously selected projects that are not ready for construction tie up Federal funds that can be used for ready-to-build projects.

The FHWA has determined that this action is not a significant regulatory action within the meaning of Executive Order 12866 nor significant within the meaning of the U.S. Department of Transportation's regulatory policies and procedures. It is anticipated that the economic impact of this rulemaking will be minimal. These changes will not adversely affect, in a material way, any sector of the economy. In addition, these changes will not interfere with any action taken or planned by another agency and would not materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. These proposed changes will not affect the total Federal funding available. Consequently, 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 effects of this rule on small entities, such as city and county governments. The modifications are substantially dictated by the statutory provisions of 23 U.S.C. and the TEA-21 and will substantially improve the selection process. Accordingly, the FHWA hereby certifies that this action will not have a significant economic impact on a substantial number of small entities for the purposes of the Regulatory Flexibility Act.

This 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. ).

This action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, dated August 4, 1999, and it has been determined 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.

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 Indian tribes; will not impose substantial direct compliance costs on Indian tribal governments; and will not preempt tribal law. Therefore, a tribal summary impact statement is not required.

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.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et seq. ), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct, sponsor, or require through regulations. The FHWA has determined that this rule does not contain collection of information requirements for the purposes of the PRA.

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, Government 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.

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. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

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.

The final rule was published in the Federal Register on January 17, 2001 (66 FR 3861) with an effective date of April 17, 2001. One feature of the Program, interest subsidy, lets qualified borrowers seek reimbursement of a portion of the interest they pay on a loan guaranteed or insured by BIA. Section 103.22 addresses how BIA calculates the amount of the reimbursement. Section 103.22 is supposed to follow the statutory scheme established in 25 U.S.C. 1511, which directs BIA to pay a borrower the difference between the lender's rate and the interest rate established in 25 U.S.C. 1464 ( i.e. , the interest rate that BIA would charge a borrower if BIA were making the loan itself). Section 103.22 inadvertently suggests that the calculation of an interest rate under 25 U.S.C. 1464 would equal the rate the Secretary of the Treasury sets. See, 25 U.S.C. 1464(a). Section 103.22 fails to account for the flexibility that Interior has to increase this interest rate to recover associated administrative costs. See, 25 U.S.C. 1464(b). BIA has not historically used 25 U.S.C. 1464(b) to increase an interest rate established under 25 U.S.C. 1464(a), but it has never consciously abandoned the right to do so.

This document contains a correction to the final regulation, 25 CFR part 103, which was published in the Federal Register, Doc. 01-1249, on January 17, 2001 (66 FR 3861).

We published a final rule (T.D. ATF 472) in the Federal Register on February 27, 2002, (67 FR 8878) placing all of the Director's delegated authorities in parts 45 and 46 of title 27 of the Code of Federal Regulations with the “appropriate ATF officer.” The final rule also removed references to specific officers subordinate to the Director.

Along with T.D. ATF 472, we published ATF Order 1130.28, Delegation of the Director's Authorities in 27 CFR Parts 45 and 46, which delegated certain of these authorities to the appropriate organizational level. The issuance of Order 1130.28 consolidated all delegations of authority into one delegation instrument. This action simplified the process for determining which ATF officer is authorized to perform a particular function and will facilitate the updating of such delegations in the future.

As published, T.D. ATF 472 did not amend 27 CFR 46.8, Data to be shown in claim. Paragraph 13 of the final rule's amendatory instructions should have contained an additional instruction removing the words “regional director (compliance)” and adding the words “appropriate ATF officer” in the last sentence of § 46.8. This document corrects this inadvertent error, which may prove misleading if it is not clarified.

The PBGC's regulations prescribe actuarial assumptions—including interest assumptions—for valuing and paying plan benefits of terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974. The interest assumptions are intended to reflect current conditions in the financial and annuity markets.

Three sets of interest assumptions are prescribed: (1) A set for the valuation of benefits for allocation purposes under section 4044 (found in appendix B to part 4044), (2) a set for the PBGC to use to determine whether a benefit is payable as a lump sum and to determine lump-sum amounts to be paid by the PBGC (found in appendix B to part 4022), and (3) a set for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using the PBGC's historical methodology (found in Appendix C to part 4022).

Accordingly, this amendment (1) adds to Appendix B to part 4044 the interest assumptions for valuing benefits for allocation purposes in plans with valuation dates during November 2002, (2) adds to Appendix B to Part 4022 the interest assumptions for the PBGC to use for its own lump-sum payments in plans with valuation dates during November 2002, and (3) adds to appendix C to part 4022 the interest assumptions for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using the PBGC's historical methodology for valuation dates during November 2002.

For valuation of benefits for allocation purposes, the interest assumptions that the PBGC will use (set forth in Appendix B to part 4044) will be 5.00 percent for the first 25 years following the valuation date and 4.25 percent thereafter. These interest assumptions represent a decrease (from those in effect for October 2002) of 0.30 percent for the first 25 years following the valuation date and are otherwise unchanged.

The interest assumptions that the PBGC will use for its own lump-sum payments (set forth in Appendix B to part 4022) will be 3.75 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. These interest assumptions represent a decrease (from those in effect for October 2002) of 0.25 percent for the period during which a benefit is in pay status and are otherwise unchanged.

For private-sector payments, the interest assumptions (set forth in Appendix C to part 4022) will be the same as those used by the PBGC for determining and paying lump sums (set forth in Appendix B to part 4022).

The PBGC has determined that notice and public comment on this amendment are impracticable and contrary to the public interest. This finding is based on the need to determine and issue new interest assumptions promptly so that the assumptions can reflect, as accurately as possible, current market conditions.

Because of the need to provide immediate guidance for the valuation and payment of benefits in plans with valuation dates during November 2002, the PBGC finds that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication.

The PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this amendment, the Regulatory Flexibility Act of 1980 does not apply. See 5 U.S.C. 601(2).

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM in the Federal Register .

Conclusive information about the New York City Marathon was not provided to the Coast Guard until September 12, 2002, making it impossible to draft or publish a NPRM. This closure is not expected to have a significant impact on navigation because vessel traffic on the Harlem River and Newtown Creek is mostly commercial vessels that normally pass under the draws without openings. The commercial vessels that do require openings are work barges that do not operate on Sundays. Any delay encountered in this regulation's effective date would be unnecessary and contrary to the public interest since immediate action is needed to close the bridge in order to provide for public safety and the safety of marathon participants.

The Willis Avenue Bridge, mile 1.5, across the Harlem River has a vertical clearance of 24 feet at mean high water (MHW) and 30 feet at mean low water (MLW) in the closed position. The Madison Avenue Bridge, mile 2.3, across the Harlem River has a vertical clearance of 25 feet at MHW and 29 feet at MLW in the closed position. The Pulaski Bridge across Newtown Creek, mile 0.6, has a vertical clearance of 39 feet at MHW and 43 feet at MLW in the closed position.

The current operating regulations for the Willis Avenue and Madison Avenue bridges, listed at 33 CFR 117.789(c), require the bridges to open on signal from 10 a.m. to 5 p.m., if at least four-hours notice is given. The current operating regulations for the Pulaski Bridge listed at 117.801(g) require it to open on signal if at least a two-hour advance notice is given.

The bridge owner, New York City Department of Transportation (NYCDOT), requested a temporary change to the operating regulations governing the Willis Avenue Bridge, the Madison Avenue Bridge, and the Pulaski Bridge, to allow the bridges to remain in the closed position at different times on November 3, 2002, to facilitate the running of the New York City Marathon. Vessels that can pass under the bridges without bridge openings may do so at all times during these bridge closures.

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).

This conclusion is based on the fact that the requested closures are of short duration and on Sunday when there have been few requests to open these bridges.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we 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 less than 50,000.

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

This conclusion is based on the fact that the bridge closures are of short duration and on Sunday when there have been few requests to open these bridges.

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 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 will 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 does not concern an environmental risk to health or risk to safety that may disproportionately affect children.

This final rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have 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 (32)(e), of Commandant Instruction M16475.1D, this rule is categorically excluded from further environmental documentation because promulgation of changes to drawbridge regulations have been found to not have a significant effect on the environment. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES .

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register .

The Coast Guard believes notice and comment are unnecessary because the bridge painting work that will be performed under this temporary final rule is a continuation, for one extra month, of work previously approved by a temporary final rule published on April 25, 2002 (67 FR 20442) entitled Drawbridge Operation Regulations, Massachusetts.

This second temporary final rule will continue the temporary operating schedule for an extra month in order to complete the work at the bridge. The mariners who normally use this waterway have agreed to the continuation of the single lift span operation from November 1, 2002 through November 30, 2002.

Any delay encountered in this regulation's effective date would be unnecessary and contrary to the public interest because the bridge painting work must continue until the end of November to finish this project.

The Atlantic Beach Bridge has a vertical clearance of 25 feet at mean high water, and 30 feet at mean low water in the closed position. The existing drawbridge operating regulations are listed at § 117.799.

The bridge owner, Nassau County Bridge Authority, requested a temporary regulation to facilitate painting operations at the bridge. The Coast Guard and the bridge owner held a meeting with the mariners who normally use this waterway to coordinate this bridge painting project and minimize the impacts on the marine transportation system. The single span operation was determined to be acceptable to the mariners because double span openings will be available from one hour before to one hour after the predicted high tide, provided a two-hour advance notice is given.

The bridge owner requested a second temporary final rule to complete the bridge painting that will not be finished by October 31, 2002, the end date of the first temporary final rule. The mariners agreed to the extension of the temporary operating schedule through the end of November to allow the bridge painting work to be completed.

The drawbridge operation regulations at § 117.799, for the Atlantic Beach Bridge, at mile 0.4, across the Reynolds Channel, will be temporarily changed. From November 1, 2002 through November 30, 2002, the bridge will open on signal; however, only one lift span will be opened for the passage of vessel traffic between 7 a.m. to 5 p.m., daily. From 4 p.m. to 7 p.m. on weekdays, and from 11 a.m. to 9 p.m. on weekends and holidays, the bridge will open on signal only on the hour and half hour. From one hour before to one hour after predicted high tide, two lift spans will be opened for the passage of vessel traffic, provided at least a two hour advance notice is given by calling the number posted at the bridge.

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).

This conclusion is based on the fact that the single span operation was found acceptable by the mariners who normally use this waterway.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we 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 less than 50,000.

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

This conclusion is based on the fact that the single span operation was found acceptable by the mariners who normally use this waterway.

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 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 will 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 does not concern an environmental risk to health or risk to safety that may disproportionately affect children.

This final rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have 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 (32)(e), of Commandant Instruction M16475.1d, this rule is categorically excluded from further environmental documentation because promulgation of changes to drawbridge regulations have been found to not have a significant effect on the environment. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES.

As a result of classification reform (Postal Rate Commission Docket No. MC95-1), the Postal Service required that both Standard Mail items and Periodicals mail claiming the high density or saturation rates be in walk sequence within a tray or package. For Standard Mail items, basic carrier route rate mail was required to be in either walk-sequence or line-of-travel (LOT) order. With the implementation of Commission Docket No. 2000-1, a sequencing requirement (either walk-sequence or LOT) was added for Periodicals basic carrier route rates.

Current standards state that, for each carrier route receiving mail, no more than 5 percent of the total pieces for each carrier route may be out of sequence or sorted to the wrong carrier route. The standard establishing a 5 percent limit for missequenced or missorted mail to an individual carrier route may cause confusion because it appears that the Postal Service has established a separate standard of compliance for sequencing as compared to other eligibility requirements for ECR or carrier route rates. Actually, the Postal Service routinely uses tolerances when evaluating discounted mailings to ensure compliance with eligibility standards. This policy change will standardize the procedure for determining eligibility for carrier route rates with the procedures for determining eligibility for other workshare discounts.

In addition, the 5 percent limit for missequenced or missorted mail currently is applied to an individual carrier route because, until recently, the Postal Service was able to detect such errors only at the delivery unit and could not easily determine the percentage of error for the entire mailing. Due to advances in technology, this is no longer the case. Tools to assist postal employees when evaluating discounted mailings either during the acceptance process or when conducting audits are now available.

In view of the capabilities provided by these tools, the Postal Service is amending the current standards to apply the 5 percent limit for walk-sequence and LOT errors to the entire mailing, not to an individual carrier route.

One such tool is the Mailing Evaluation Readability and Look-up Instrument (MERLIN) currently being deployed to business mail entry units (BMEUs) and detached mail units (DMUs). The Postal Service will announce when it will start using MERLIN to determine sequencing accuracy at a future date. At that time, the Postal Service will use the established statistically valid sampling methods BMEU and DMU employees currently use when operating MERLIN to determine whether the 5 percent error limit for sequencing is exceeded.

On August 8, 2001, the Postal Service published a proposed rule in the Federal Register (66 FR 41485) amending the postal standards to clarify the application of the 5 percent error limit for carrier route sequenced mailings. The Postal Service received eight comments, all of which generally supported the proposal. Most of the comments also included questions and suggestions about how compliance with the sequencing standards would be determined and how any postage adjustments would be assessed. Because these administrative issues need not be addressed in the DMM standards, the Postal Service will clarify these policy issues in this notice and amend the DMM by deleting section M050.2.0, Accuracy, for out-of-sequence mail.

Six commenters asked that the Postal Service reconsider the proposed method for calculating additional postage on missequenced carrier route pieces. Most asserted that charging a non-carrier route presorted rate was too severe or “punitive.” Several also asked that the Postal Service clearly state what rate of postage a mailer would default to if errors exceeding the 5 percent tolerance were found. Two respondents argued that the resequencing option (in lieu of paying higher postage rates) is impractical and should not be considered as a way to mitigate the application of non-carrier route presorted rates. In response to these concerns, the Postal Service and mailing industry representatives jointly developed a process for determining the next higher rate for which missequenced carrier route pieces would be eligible.

Currently, an out-of-sequence carrier route mailing is charged the next higher non-carrier route rate for which the mail qualifies. This can often result in large assessments that do not reflect the value that the Postal Service receives from a tray or bundle of mail sorted to the carrier route, even if it is not appropriately sequenced within the route. The Postal Service and the mailing industry developed a policy that uses the current rate structure to promote effective sequencing while recognizing the value of mail sorted to the carrier route. The Postal Service has determined that this new policy is a reasonable application of existing rates to carrier route mailings for which the only problem is improper sequencing.

Effective November 14, 2002, the Postal Service will implement the following policy and guidelines for assessing additional postage for Standard Mail and Periodicals carrier route mailings found to be out of sequence.

For mail that meets all other requirements for high density or saturation rates, if the pieces are found to exceed the 5 percent sequencing error limit (including being found in reverse walk sequence), the number of pieces that are out of sequence will be determined by multiplying the error percentage by the total pieces in the mailing claimed at the carrier route rates. That portion of the mailing will be charged the basic carrier route rate. This rate is available only when the mailer can demonstrate that an approved sequencing product was used in preparing the mail.

For basic carrier route rate mailings only, reverse sequencing will not disqualify a mailing from the basic rates as long as the mailer used an approved sequencing product in preparing the mail. Therefore, no additional postage is assessed for basic carrier route mailings found to be in reverse sequence. If the 5 percent sequencing error limit is exceeded for other reasons, the percentage of error will be assessed against the carrier route portion of the mailing. That percentage of the carrier route portion of the mailing will be charged the next higher rate for which the mail qualifies. For example, if a basic carrier route mailing is found to be 30 percent out of sequence, 30 percent of the pieces in the mailing claimed at the carrier route rates will be charged the next higher rate for which the pieces qualify. The remaining 70 percent of the basic carrier route rate pieces are not considered out of sequence and are charged the basic carrier route rate.

Two commenters asked whether the application of a barcode to carrier route pieces would make any difference in determining the next higher rate. The presence of a barcode may make a difference, since the next higher rate may be an automation rate if the pieces meet automation standards and are properly barcoded.

One respondent asked whether the Postal Service would take into consideration the work done by the mailing industry to ensure that errors are minimized and quality is maintained. The new policies take these efforts into consideration. The Postal Service included the provision to allow mailers who demonstrate that an approved sequencing product was used in preparing the mail to pay the basic carrier route rates for missequenced carrier route pieces originally claimed at high density and saturation rates. In addition, basic carrier route rate pieces found to be in reverse LOT order may still be considered eligible for that rate as long as the mailer can demonstrate that an approved sequencing product was used in preparing the mail.

One commenter expressed concern about how the new rule will be interpreted with respect to carrier route mailings containing mail eligible for different carrier route rates. The writer suggests that LOT and walk-sequence prepared pieces in the same mailing should be evaluated separately with respect to the 5 percent rule. The Postal Service does not concur with the writer's suggestion. Mailings containing pieces claimed at different carrier route rates are similar to mailings containing pieces claimed at different presorted rates. A verification is conducted on a portion of the mailing to determine whether the entire mailing is properly presorted and the results are applied across the entire mailing.

Four commenters asked for clarification regarding how errors are determined for missequenced versus missorted carrier route pieces. Several writers wanted to know whether there would be two separate 5 percent tolerance levels for missequenced and missorted pieces. One writer asked, “Are there different error percentages for sorting (that is, to the appropriate carrier route) and sequencing (that is, in proper line of travel)?” Under this policy, sortation and sequencing are evaluated separately and each has a 5 percent tolerance level for errors.

Two respondents asked whether mailers would have access to the same “technological innovations” that the Postal Service now has to detect errors. The MERLIN machines used by the Postal Service to evaluate mailings are commercially available. Mailers may contact the Business Mail Acceptance office at Postal Service Headquarters for information about where to purchase MERLIN machines. Information regarding other tools used by postal employees when conducting audits or reviews of ECR and carrier route rate mailings will be announced in a future Federal Register notice.

The following table shows some examples of the cost differential between the carrier route rate and the next higher rate in the event that the pieces are found to be out of sequence. The rates shown are for pieces for which no destination rate is claimed. The table does not include every possible rate combination.

Throughout this document, “we,” “us,” or “our” means EPA.

Title V of the CAA Amendments of 1990 required all state permitting authorities to develop operating permits programs that met certain federal criteria codified at 40 Code of Federal Regulations (CFR) part 70. On November 30, 2001, we promulgated final full approval of 34 California districts' title V operating permits programs. See 66 FR 63503 (December 7, 2001). 1 Our final rulemaking was challenged by several environmental and community groups alleging that the full approval was unlawful based, in part, on an exemption in section 42310(e) of the California Health and Safety Code of major agricultural sources from title V permitting. EPA entered into a settlement of this litigation which required, in part, that the Agency propose to partially withdraw approval of the 34 fully approved title V programs in California.

Sections 70.10(b) and 70.10(c) provide that EPA may withdraw a 40 CFR part 70 program approval, in whole or in part, whenever the permitting authority's legal authority does not meet the requirements of part 70 and the permitting authority fails to take corrective action. To commence regulatory action to partially withdraw title V program approval, EPA's part 70 regulations require as a prerequisite that the affected permitting authority be notified of any finding of deficiency by the Administrator and that the notice be published in the Federal Register . Our determination regarding the inadequacy of the 34 districts' title V programs was published in a Notice of Deficiency (NOD). See 67 FR 35990 (May 22, 2002). Publication of the NOD fulfilled our obligation under part 70 to provide notice to the title V permitting authorities in the State that they are not adequately administering or enforcing their title V operating permits programs. Pursuant to 40 CFR 70.10(b)(2), publication of the NOD commenced a 90-day period during which the State of California had to take significant action to assure adequate administration and enforcement of the local districts' programs. As described in EPA's NOD, the Agency determined that “significant action” in this instance meant the revision or removal of California Health and Safety Code 42310(e), so that the local air pollution control districts could adequately administer and enforce the title V permitting program for stationary agricultural sources that are major sources of air pollution.

During the 90-day period that the State was provided to take the necessary corrective action, EPA proposed to partially withdraw title V program approval in each of the 34 California districts with full program approval. See 67 FR 48426 (July 24, 2002). Our notice indicated that we were proposing the partial withdrawal of program approval in anticipation that the State of California would not effect the necessary change in state law prior to the end of the 90-day period on August 19, 2002, but that the Agency's final action on the proposal would only occur after the 90 days for the State to take significant action had fully elapsed. Since the State did not take the necessary action to assure adequate administration and enforcement of the title V program within the required time frame, EPA is now taking final action, pursuant to our authority at 40 CFR 70.10(b)(2)(i), to partially withdraw approval of the title V programs for the 34 local air districts listed above.

EPA received ten sets of comments on our proposal to partially withdraw approval of the 34 local districts' title V programs. Copies of these comments are available for inspection during normal business hours at Air Division, EPA Region 9, 75 Hawthorne Street, San Francisco, California 94105. A summary of the significant comments, and our response thereto, follow.

Comment 1: One commenter argues that EPA's proposed partial withdrawal exceeded the Agency's authority because, although the Act authorizes partial state programs, the Act does not authorize “hybrid” programs. The commenter claims that “partial” in the context of part 70 has a “solely geographic meaning.” Thus, the commenter continues, a permissible partial withdrawal of approval of California's part 70 program would be one in which EPA withdrew approval for some but not all of California district title V programs. The commenter concludes that title V allows only geographic partial programs because simultaneous operation of federal and state permitting programs in a single geographic area could lead to confusion, inconsistency and inefficiency.

Response: The Act does allow for a partial part 70 program that is not based on geographic distinctions. The Act grants EPA broad discretion to withdraw approval of a title V program, without regard to whether the basis for withdrawal is geographic or not. Section 502(i) states: “Whenever the Administrator makes a determination that a permitting authority is not adequately administering or enforcing a program, or portion thereof * * * the Administrator shall provide notice to the State. * * * [U]nless the State has corrected such deficiency within 18 months after the date of such finding, the Administrator shall * * *promulgate, administer, and enforce a program under this subchapter for that State.” The statute does not impose a geographic limitation on partial withdrawal of approval of a title V program.

EPA's title V regulations also do not limit the Agency's ability to withdraw approval of a state's title V program according to non-geographic criteria. Unlike partial approvals, which EPA did limit to geographic areas per regulation, partial withdrawals are not so limited. The commenter refers to EPA's authority to approve state program submittals under 40 CFR 70.4 for its position that ‘a partial part 70 program is one that applies to “all part 70 sources within a limited geographic area.’ ” As the full context of this provision makes clear, 40 CFR 70.4(c) sets forth EPA's authority to grant approval to a part 70 program based on geographic criteria. This provision is distinct from the authority under which we are acting today. California has had interim approval for its title V programs since 1995 and final approval of its programs since December 2001; thus, we are not partially approving programs under 40 CFR 70.4, but rather partially withdrawing approval under 40 CFR 70.10.

Section 70.10(b), which authorizes EPA to “withdraw approval of the program or portion thereof * * *” does not limit EPA's authority to partially withdraw approval of approved title V programs to geographic boundaries. We therefore, interpret part 70 as allowing us the discretion to partially withdraw approval of an approved title V program in a manner that is appropriate to the scope and scale of the determination of inadequate administration or enforcement. The approach EPA has taken here is more appropriate than the full withdrawal of the 34 part 70 programs supported by commenters. The commenters' approach would require EPA to assume full responsibility from California's local air agencies for permitting all types of sources in the title V program, from refineries to power plants to wood products manufacturers, because of a state law problem that pertains only to the agricultural sector. Today's action is appropriately tailored to the problem it has identified—the inability of California's air districts to require major stationary agricultural sources of air pollution to apply for and obtain title V permits because of an exemption in state law. To subject all major sources within California to part 71 without regard to a problem that is actually narrow in scope would be an overly broad remedy that could also entail substantial confusion and inefficiency. Such disruption to the programs that the California air districts have been implementing for approximately 7 years is unwarranted.

We also do not agree with the comment that having some sources subject to a local part 70 program and other sources subject to a federal part 71 program would lead to confusion. First, many sources already successfully comply with multiple permitting schemes; for instance, a new or modified major source may have to comply with both nonattainment New Source Review and Prevention of Significant Deterioration (“PSD”) permitting programs. In fact, in some locations in California, the nonattainment program is administered by the local agency and the PSD program is administered by EPA. Second, EPA does not anticipate that major agricultural sources covered by the federal part 71 program will also be subject to a local part 70 program.

Finally, we note that it is EPA's preference for the State and the local air districts to be the permitting authorities for the agricultural sources affected by today's rule. If and when these agencies have the ability to administer and enforce the title V program as required by the Act and its implementing regulations, EPA intends to take the actions necessary to hand regulatory authority over these sources to the State and local air agencies.

Comment 2: One commenter claims that EPA's proposed action is inconsistent with 40 CFR § 71.4(f). According to the commenter, section 71.4(f) does not authorize a permitting authority to be subject to portions of a part 71 program. This commenter also states that section 71.4(f) contemplates borrowing from a state program to implement a federal program, not vice versa. To be lawful, the commenter continues, EPA's action should completely withdraw approval of the California air districts' part 70 programs and implement a part 71 program covering all sources within the air districts' geographic area; EPA could then borrow portions of California's former part 70 program to help implement the new federal part 71 program.

Response: We disagree with the commenter's statement, as our action is consistent with our authority in part 71. Section 71.4(f) describes EPA's discretionary authority for issuing permits to individual sources, which we may do under “any or all of the provisions of [part 71] * * * or [after appropriate rulemaking, under ] * * * portions of a state or Tribal permit program in combination with the provisions of [part 71].” By our action today, EPA intends to issue permits to state-exempt major stationary agricultural sources under the provisions of part 71. We do not believe at this time that additional rulemaking to adopt portions of the California programs will be necessary to complete this process. In addition, contrary to the comment, our action today does not require us to “borrow” from a federal program to implement a state program. As explained elsewhere in this notice, we are not implementing a state program; rather, we are using our authority under section 502(i) of the Act and 40 CFR 71.4(c) to implement a Federal operating permits program where a state has failed to adequately administer and enforce its own state operating permits program.

Comment 3: One commenter notes that EPA's action is inconsistent with the timing requirements of title V. The commenter contends that EPA's action should be governed by 40 CFR 70.10(a) (“Failure to submit an approvable program”), not, as EPA has proposed, 40 CFR 70.10(b) (“Failure to adequately administer or enforce”) and (c) (“Criteria for withdrawal of State programs”). The commenter claims that if EPA were proceeding under 40 CFR 70.10(a), rather than 70.10(b) and (c), California would have had 18 months to correct the deficiency before mandatory sanctions would apply, and a part 71 program for California would not be effective until June 1, 2003. The commenter states that according to EPA's current view of section 42310(e), California never submitted an approvable program; therefore, EPA should have disapproved the programs and allowed California's interim approvals to expire.

Response: We disagree with the comment and believe that today's action is an appropriate exercise of our authority under 40 CFR 70.10(b) and (c) and that the timing of sanctions and a federal program are consistent with the Act and our regulations. The provisions of 40 CFR 71.4(a)(2) explain that the effective date of a federal operating permit program will be the date of expiration of interim approval of a state program. The expiration date of the interim approvals for California's title V programs was December 1, 2001; therefore, if EPA had allowed the interim approvals to expire, the effective date of a federal operating permits program would have been December 1, 2001 (not, as the commenter suggests, June 1, 2003), and EPA would have been required to set the due date for applications no later than December 1, 2002.

To the extent the comment should be read as stating that EPA should have made a finding that the California air districts had failed to submit fully-approvable programs or required revisions thereto, we believe that such a comment would have been more appropriately raised during the rulemaking we took approximately one year ago in which we proposed and finalized action on the submitted programs by granting them full approval. See e.g. , 66 FR 53354; 66 FR 63503. In that rulemaking, EPA allowed the public an adequate opportunity to comment on our action with respect to the California air districts' submittals. After we took action granting full approval, several entities challenged our action by filing petitions for review with the U.S. Court of Appeals for the Ninth Circuit. This particular commenter, however, did not petition the court for review of our action to approve the submitted programs rather than making a finding of failure to submit an approvable program.

Comment 4: One commenter claims that the timeline in 40 CFR 70.4(i)(1) should govern EPA's action because the agricultural permitting exemption is actually an issue of adequate legal authority. The commenter contends that if a permitting authority lacks legal authority to make a necessary revision, 40 CFR 70.4(i)(1) gives a permitting authority two years to make the revisions.

Response: We disagree with the commenter because we believe that our action is an appropriate exercise of our authority under 40 CFR 70.10(b) and (c). Section 70.4(i)(1) states, in part: “The program shall be revised * * * within 2 years if the State demonstrates that additional legal authority is necessary to make the program revision.” Thus, this section allows, but does not require, EPA to grant a State up to two years to revise the deficient part 70 program. See, e.g. , Part 70 NPRM, 56 FR 21712, 21731 (May 10, 1991) (“The Agency might set a longer time up to 2 years where legislative action is required at the State level to address problems”) (emphasis added); Part 70 NFRM, 57 FR 32250, 32271 (July 21, 1992) (“If the State demonstrates that additional legal authority is necessary to correct the deficiency, the period may be extended up to 2 years. ”) (emphasis added).

Moreover, this provision must be read in conjunction with 40 CFR 70.10, which allows EPA to withdraw approval of the program (or a portion of the program) 90 days after issuing a Notice of Deficiency to the state, if the state fails to take significant action to correct the deficiency within that 90-day period. EPA interprets 40 CFR 70.4(i)(1) as placing an outer limit on the amount of time that EPA may give to a state to take the necessary steps to supply additional legal authority. EPA does not agree with the commenter that 40 CFR 70.4(i)(1) demands that EPA allow any state a full two years to correct a legal deficiency without regard to the facts and circumstances surrounding the issue.

In addition, it would not be appropriate to give the State another full two years in this instance. First, we note that the State of California has made no demonstration to EPA that two years is necessary to correct the deficiency we have identified. In certain instances, two years might be necessary for a state to address a shortcoming in the legislation relied upon for administration or enforcement of a state's title V program. For example, EPA is aware that some state legislatures meet only every other year. States with such a legislative calendar might be able to demonstrate to EPA that two years is necessary to provide additional legal authority. California's legislature, however, is in session throughout the year, except for various relatively limited periods of recess. 2 EPA's Notice of Deficiency was issued in May 2002 and efforts were under way to repeal the agricultural permitting exemption before August 31, which was the last day for each house to pass bills for the 2002 legislative session. The commenter did not provide a reason why the State might require a full two years to correct the problem we identified in our Notice of Deficiency. Given the state's legislative calendar, we believe that it is feasible for the California Legislature to supply the additional authority in a time frame less than two years.

Second, we informed California more than six years ago that the agricultural exemption (which has existed in the Health and Safety Code since the late 1970's) was a defect in the program that required correction. Indeed, the California Attorney General identified the exemption as defect in the state's legal authority in the legal opinion the State submitted with the original programs in the early 1990's. In addition, EPA's proposed and final interim approval notices in the mid-1990's confirmed that the defect would have to be corrected in order for the state's programs to secure full approval. Thus, the State's long-standing awareness of this issue also weighs in favor of our invoking our discretion inherent in the part 70 regulations to establish a time frame for legislative action that is less than two years.

Comment 5: One commenter argues that EPA has overreached in defining “significant action” by requiring action that must be taken within 90 days to avoid 40 CFR 70.10(b)(2) sanctions. The commenter contends that 40 CFR 70.10(b) allows California 18 months to revise or repeal the agricultural exemption before sanctions or implementation of a part 71 program may occur. The commenter continues that EPA's NOD and proposed rule, however, improperly treat complete correction of the identified deficiency as the “significant action” that California must take within 90 days. The commenter notes that other EPA NODs have distinguished between the “significant action” and actual correction of the identified deficiencies. Finally, the commenter states that EPA is also unreasonable to expect a state law to be revised or repealed in 90 days because generally, the legislative process required to revise or repeal a statute under California law cannot be completed in 90 days.

Response: We disagree with the comment for several reasons. First, EPA is not aware of any significant action taken by the State of California to assure adequate administration and enforcement of the title V program during the 90-day period provided, and none of the commenters provided any evidence that the State took a “significant action” within that time frame that EPA should consider as such. Thus, even if we had not specifically identified removal of the exemption as the necessary “significant action,” no “significant action” occurred within the 90 days provided for in the regulations.

Morever, the Clean Air Act and EPA's regulations do not require us to distinguish the “significant action” a state must take within 90 days from the actual correction that must occur. The fact that we may have given a different State with different deficiencies and facts a different timeline does not indicate that our actions here were unlawful. In fact, the existence of statutory and regulatory authorities for discretionary sanctions demonstrate that no such distinction is required. For the reasons stated earlier ( e.g. , the State's longstanding knowledge the exemption was a problem; the legislature's calendar), we believe it was reasonable for us to identify removal of the exemption as the significant action in the NOD.

The comment suggests that a distinction is essential because it entitles the state to an 18-month period following the issuance of an NOD to completely correct the issue during which time the state is insulated from the imposition of sanctions. However, section 502(i)(1) of the Act and our implementing regulations authorize us to impose discretionary sanctions earlier than 18 months after notifying the state of the deficiency. 42 U.S.C. 7661a(i)(1); 40 CFR 70.10(b)(2)(ii) and (iii). Thus, the suggestion that the State automatically has 18 months during which it is “insulated” from sanctions before it must correct the deficiency is premised on a false assumption, since the State enjoys no 18-month period of insulation. Finally, we note that EPA has not imposed discretionary sanctions against California;rather, our NOD started an 18-month clock, expiration of which would result in mandatory sanctions if the State has not corrected the deficiency we identified. See 67 FR 35990 (May 22, 2002).

Comment 6: One commenter contends that in a variety of prior correspondence, EPA has acknowledged that there are unique issues regarding the application of title V to agricultural operations and claims that the proposed rule ignores these previously acknowledged positions regarding agriculture's unique position. The commenter also claims that EPA's proposed action breaches our 1998 Memorandum of Understanding (MOU) with the U.S. Department of Agriculture (USDA) where the agencies agreed to confer on agricultural air quality issues.

Response: EPA agrees that agriculture is a unique industry and that the application of title V for this industry poses some special challenges. Section 502(a) of the Clean Air Act (CAA or the Act), however, requires that a title V permitting program apply to every major source; it does not provide for an exemption based on the unique characteristics of the agricultural industry. As discussed in more detail below, the unique aspects of the agricultural industry can and will be addressed in how the title V program is implemented.

With respect to the correspondence from Agency officials submitted by the commenter, we believe that in some cases the commenter misunderstood the meaning of the letters cited, and in other instances EPA's position has evolved from the time the letter was written. For example, the commenter references several EPA letters from the mid-1990s explaining that a source's fugitive criteria pollutant emissions (such as fugitive dust) do not count when determining whether a source is subject to title V permitting requirements. Although EPA has not changed its position on this issue, the commenter appears to have misinterpreted these letters as assurances from EPA that agricultural sources would not be subject to title V at all. Non-fugitive emissions from stationary agricultural sources, however, do count toward title V applicability determinations. Thus, putting into place a title V program that considers non-fugitive emissions for applicability purposes is consistent with the correspondence cited by the commenter.

In other letters referenced by the commenter, EPA officials committed to working with the USDA on agricultural emissions issues and acknowledged the lack of sound emission factors for animal agriculture. EPA disagrees that our proposed rule somehow negates the MOU between our Agency and the USDA. EPA has conferred, and continues to confer, with USDA in an effort to develop a reasonable approach for implementing the title V program for major agricultural sources. We will continue to work with USDA on a host of issues related to the identification of major agricultural sources and the appropriate permitting of these sources under title V of the CAA.

Comment 7: Several commenters argue that emission factors and other data used by environmental groups to argue that there are major agricultural sources in California are outdated and inaccurate. They contend that there is very little data on emissions from agricultural practices and those data are unreliable; therefore, they conclude, it is inappropriate to regulate these sources under title V at this time. Commenters state that, in December 2001, EPA admitted that reliable data and a complete inventory of emissions from agricultural operations were not available and supported deferred implementation for a three-year period. They argue that this three-year deferral period is necessary to make informed and scientifically sound determinations as to agricultural emission inventories.

Response: As noted above, section 502(a) of the Clean Air Act specifically prohibits EPA from exempting major sources of air pollution from title V. California has had numerous opportunities over several years to demonstrate that there are no major agricultural sources in California and has failed to do so. Thus, EPA's final action today is necessary to lay the legal groundwork for the permitting of major stationary agricultural sources in California, where the local permitting authorities are restricted by State law from issuing permits to such sources. Thus, while we may agree that data regarding emission factors could be better in three years, implementation of the title V permitting program for major stationary agricultural sources must move ahead based on the best data available at this time.

Nonetheless, EPA's approach for implementing the title V program for major agricultural sources does, and will continue to, address concerns regarding emissions data. For example, today's action calls for applications from state-exempt stationary agricultural sources that are major due to emissions from diesel-powered engines first, to be followed approximately 3 months later by applications from any other state-exempt major stationary agricultural sources. This staggered application deadline is based, in part, upon the fact that more and better data are available with respect to emissions from agricultural engines than are available for other potentially major agricultural sources, such as Concentrated Animal Feeding Operations (CAFOs). Agricultural sources using stationary diesel engines have more than enough information available to them to determine whether they are subject to title V based on emissions from these engines. Both EPA and the State of California have valid emission factors that can be used to calculate diesel engine emissions based on such considerations as the engine age, size, load factor, and annual hours of operation or fuel usage.

With respect to other potential major agricultural sources of air pollution, EPA agrees that the level of information available is not as robust as it is for agricultural engines. For example, emissions from large animal feeding operations ( e.g. , dairies, poultry operations, swine facilities) are not as well characterized as are those from diesel agricultural engines. Although we acknowledge that implementation of title V must commence before concerns regarding data are fully resolved, we anticipate that the results of a study by the National Academy of Sciences (NAS), “The Scientific Basis for Estimating Emissions from Animal Feeding Operations” will be instrumental to the Agency in making the necessary implementation policy decisions. This study, which has received funding and support from both the EPA and USDA, is intended to assess “the scientific issues involved in estimating air emissions from individual animal feeding operations (swine, beef, dairy, and poultry) as related to current animal production systems and practices in the United States.” The Agency will continue its commitment to working closely with our sister federal agency, USDA, as we evaluate the NAS findings and results from other ongoing research efforts, and develop specific guidance for the implementation of the title V permitting program for animal agriculture. The additional guidance, which EPA will make widely available through direct outreach to potentially subject sources and through other means, will provide clearer direction as to the types and sizes of operations that are presumptively major under the title V program.

Comment 8: One commenter stated that there is a lack of clarity in EPA's proposed rule as to which operations or agricultural activities meet the definition of “major source.” Specifically regarding dairies, the commenter argued that there is no reliable scientific basis at present for determining air emissions from these operations, and that California's estimates for ROGs/VOCs from dairies have been thoroughly discounted in the regulatory and scientific community.

Response: This comment is similar to Comment 7 in that it, in part, argues that scientific information is not available to determine whether agricultural sources are major sources under title V. To the extent the comment is raising this concern, please see our response to Comment 7.

As a general matter, it is a source's responsibility to determine whether it is a major source subject to permitting requirements. Nonetheless, we agree that agricultural sources in California may not be familiar with this process and we intend to provide additional guidance over the next several months.

As for the comment that the proposed withdrawal notice was unclear in explaining which sources may be subject to title V, EPA disagrees. EPA has provided information regarding the types of agricultural sources that may be subject to title V requirements, as well as information about certain activities that are not subject to the program. For example, stationary diesel irrigation engines are subject to title V permitting if their emissions alone, or in combination with other stationary source emissions at the same contiguous or adjacent site, rise above the title V threshold for the area in which they are located. In addition, EPA has made clear that, pursuant to our existing regulations, nonroad engines are not required to be permitted, and fugitive emissions of criteria pollutants (such as fugitive dust) are not considered in determining a source's title V applicability.

In addition, a September 2001 letter submitted to EPA by CARB Executive Officer Michael P. Kenny describes numerous agricultural emission sources in California that are already subject to permitting. Post-harvest, out-of-field agricultural activities such as fumigation, ginning, milling, drying, and refining are not exempt under California law and are subject to permitting requirements, including title V. These sources are not, therefore, subject to part 71 permitting by EPA.

Moreover, we also note that the part 71 program that applies once the partial withdrawal takes effect applies only to sources that were exempt under the state agricultural exemption. Thus, it is likely that sources know whether they were covered by the state exemption in the past and, therefore, that they may need to determine whether they are a major source for the part 71 program.

With respect to the ROG emission factor currently used by the State of California to estimate dairy emissions, we acknowledge that there have been a number of concerns recently raised regarding the validity of the factor and the appropriateness of its use to characterize emissions from dairies.However, this factor has been relied upon for regulatory analysis by the State and EPA considers it to be part of the existing data that are currently under review by the NAS. Also, as we previously noted, EPA expects to take into account the final NAS report, as well as the results of other relevant research efforts, in making determinations regarding the appropriate emission factors for various types of animal agriculture, including dairies, sufficiently far in advance of the permit application deadline for subject sources.

Comment 9: One commenter argues that multiple agricultural sources should not be grouped together as one source. The commenter contends that irrigation pumps should be classified separately from other farming activities because “water mining” has a distinct standard industrial classification (SIC) code. Another commenter urges EPA to develop a definition of “source” for title V that results in each individual diesel pump engine being a separate source.

Response: These issues all address how EPA should implement the part 71 program that will become effective once the partial withdrawal occurs. They do not address the issue before EPA in this action, which is whether to partially withdraw approval of the California part 70 programs and impose a federal part 71 program for state-exempt major stationary agricultural sources at this time.

EPA is working with the USDA to determine how to best implement the part 71 program for agricultural sources. We will consider these comments as we move forward and develop our implementation strategy. The Agency will be providing more specific guidance on this subject sufficiently far in advance of the permit application deadlines to allow sources to determine and meet their permitting obligations.

Comment 10: Some commenters note that many irrigation pumps are non-road engines and are therefore excluded from the definition of stationary source. Another commenter asserts that many potential emission sources at dairies should be considered mobile sources, and thus not counted for major source applicability purposes.

Response: EPA agrees that emissions from engines that meet the “nonroad engine” definition at 40 CFR 89.2 are not considered stationary source emissions and would not be regulated by title V. Irrigation pumps that meet the 40 CFR 89.2 definition of a nonroad engine would be those internal combustion engines that are “portable or transportable, meaning designed to be and capable of being carried or moved from one location to another. Indicia of transportability include, but are not limited to, wheels, skids, carrying handles, dolly, trailer, or platform.” EPA's regulations further clarify that portable or transportable engines would be considered stationary (as opposed to nonroad) if the engine remains at a location ( i.e. , any single site at a building, structure, facility, or installation) “for more than 12 consecutive months or a shorter period of time for an engine located at a seasonal source.” Although EPA agrees that some irrigation pumps would meet the 40 CFR 89.2 nonroad engine definition, others would not meet this definition under the current rules.

The commenter that asserts that many potential emission sources at dairies should be considered mobile did not provide any specific examples of the types of emission sources at dairies that they consider to be “mobile sources.” This term is typically used to describe a wide variety of vehicles, engines, and equipment that generate air pollution and that move, or can be moved, from place to place. “On-road,” or highway, sources include vehicles used on roads for transportation of passengers or freight. “Nonroad,” (also called “off-road”) sources include vehicles, engines, and equipment used for construction, agriculture, transportation, recreation, and many other purposes. The title V program is a stationary source permitting program and does not, therefore, require the permitting of mobile sources. Emissions from any mobile source at dairies (or at any other potentially major agricultural facility) are not regulated by title V.

Comment 11: One commenter argues that CAFOs are indirect sources of emissions, rather than stationary sources, and thus are not subject to title V permitting requirements. The commenter notes that the Clean Air Act defines an indirect source as “a facility, building, structure, installation, real property, road or highway which attracts, or may attract, mobile sources of pollution.” Thus, the commenter continues, similar to a highway or a parking lot, a CAFO itself emits nothing; rather, it is the cows that are housed in barns and other structures that create organic emissions, not the facility itself. Furthermore, the commenter argues, the cattle located in a CAFO may be analogized to the automobiles on a highway or in a parking lot; their emissions potentially make the CAFO an indirect source of emissions.

Response: EPA disagrees that CAFOs are indirect, as opposed to stationary, sources. The definition of “indirect source” cited by the commenter is located in section 110(a)(5)(C) of the Act and applies only to that paragraph, which addresses State Implementation Plans for indirect source review programs. The appropriate portion of the statute to consult for title V purposes is section 302(z) of the Act, which defines the term “stationary source” as “generally any source of an air pollutant except those emissions resulting directly from an internal combustion engine for transportation purposes or from a nonroad engine or nonroad vehicle.” Section 71.2 defines “stationary source” as “any building, structure, facility, or installation that emits or may emit any regulated air pollutant or any pollutant listed under section 112(b) of the Act.” CAFOs plainly fit the definition of stationary source under section 302(z) of the CAA and the title V regulations.

EPA also disagrees with the commenter's assertion that “a CAFO itself emits nothing.” CAFOs directly emit a variety of air pollutants from waste storage lagoons, barns, and other buildings, structures, and facilities where animals are confined. Moreover, we note that cows are not mobile sources regulated under title II of the Act.

Comment 12: One commenter argues that the emissions from many operational practices and components of dairies are fugitive emissions and thus not subject to title V. Another commenter argues that emissions from certain CAFO sources ( e.g. , waste lagoons, hog barns, and poultry houses) are not fugitive and should be included in determining major source status. The commenter submitted several Agency documents discussing precedents and existing guidance relevant to the definition of “fugitive emissions” for purposes of title V. 3

Response: EPA agrees that any criteria pollutant emissions that are fugitive, even if emitted by a stationary source, would not count toward determination of major source status. See 40 CFR 71.2 (definition of “major source”). Thus, fugitive dust emissions from a dairy (or other livestock or crop-producing operation) are not counted for title V applicability.

Section 71.2 defines “fugitive emissions” as “those emissions which could not reasonably pass through a stack, chimney, vent, or other functionally-equivalent opening.” Some of the concepts regarding fugitive emissions articulated in the EPA documents cited by commenters are: (1) Emissions which are actually collected are not fugitive emissions; (2) where emissions are not actually collected at a particular site, the determination as to whether emissions are fugitive or not should be made by the permitting authority on a case-by-case basis, depending on the specific factual circumstances present; (3) in determining whether emissions could “reasonably pass through a stack, chimney, vent, or other functionally-equivalent opening,” reasonableness should be construed broadly and “the existence of collection technology in use by other sources in a source category creates a presumption that collection is reasonable;” and (4) where a source is not actually collecting its emissions but there is a presumption that it is reasonable for them to do so (based on such collection at other, similar sources), a permitting authority could consider costs in determining the validity of the presumption.

While EPA believes that these concepts are important guideposts for determining the presumptive fugitive and non-fugitive emission sources at CAFOs, EPA is not making such policy decisions in this rulemaking. As noted above, EPA intends to provide more detailed guidance on the implementation of the title V permitting program for CAFOs and other potential major stationary agricultural sources.

Comment 13: One commenter asserts that EPA is unfairly applying title V to agricultural sources only in California. The commenter argues that if the Agency is going to focus on permitting agricultural sources, then it should adopt a comprehensive approach that applies this program nationally, not just in one state.

Response: EPA does not agree that we are unfairly applying the title V permitting program requirements to agricultural sources in California. The reason EPA is taking action to withdraw approval of the portions of the California title V programs that relate to state-exempt major stationary agricultural sources, thereby obligating the Agency to implement a part 71 federal operating permits program for these sources, is that California state law exempts these sources from permitting by state and local authorities. Since other states do not have such an exemption, title V permitting requirements already apply to any major stationary agricultural sources in other states. 4 In addition, as noted in the September 2001 letter from CARB Executive Officer Michael P. Kenny, many agricultural emission sources in California are already subject to permitting. Post-harvest, out-of-field agricultural activities such as fumigation, ginning, milling, drying, and refining are not exempt under California law and are subject to permitting requirements, including title V. EPA's final rule merely extends the title V permitting requirements to all major sources of air pollution in California, as required by the Clean Air Act.

Comment 14: One commenter suggests that, although EPA's regulations authorize the Agency to establish an accelerated schedule for submittal of part 71 permit applications, the accelerated schedule is not realistic or supportable in this instance because of the difficulty in estimating emissions from agricultural sources. The commenter believes that EPA should have granted all sources the full 12 months to apply for a part 71 permit.

Response: EPA does not agree that the application schedule established in our final rule is “accelerated.” As the commenter notes, 40 CFR 71.5(a)(1)(i) provides that major stationary sources which do not have an existing operating permit issued by a State (or local permitting authority) under an approved part 70 program, and which are applying for a part 71 permit for the first time, must submit an application within 12 months after becoming subject to the permit program or on or before such earlier date as the permitting authority may establish. Section 71.5(a)(1)(i) further provides that sources required to submit permit applications earlier than 12 months after becoming subject to part 71 must be notified of the earlier submittal date at least 6 months in advance of the date. With EPA's final rule, we are notifying state-exempt major stationary agricultural sources that they are subject to part 71 permitting requirements as of the effective date of this final rule, which provides these sources at least 6 months notice from the effective date. In fact, EPA is establishing a longer application period than the minimum required by our regulations for some agricultural sources ( i.e. , those that are major due to emissions other than from stationary diesel engines). 5

Moreover, 40 CFR 71.4(i) requires EPA to take action on one-third of all applications annually over a period not to exceed three years after the effective date of the part 71 program. If we did not require any applications until the end of the first year, we would not be able to take action on one-third of them annually over a three-year period and still have all permits issued within three years of the effective date of the part 71 program. Rather, we would only have taken action on two-thirds of the applications at the end of three years because we would not have been able to take any actions during the first year. Thus, it was appropriate to require some applications early enough into the first year to ensure we could take action on one-third within 12 months of the effective date of the program.

Finally, EPA is committing to provide additional guidance regarding applicability and implementation of the title V permitting program for major stationary agricultural sources well in advance of the actual permit application deadlines. This guidance will assist individual sources in determining their permitting obligations, and will help ensure that all sources that are required to obtain a part 71 permit are able to submit their applications by the appropriate deadline.

Comment 15: One commenter claims that EPA should not have created two separate categories for permit applications. In particular, the commenter finds EPA's reference to any “remaining” sources (other than stationary diesel-powered engines) to be unclear.

Response: The Agency does not agree that the part 71 permitting strategy for major agricultural sources is unclear or that we erred in establishing two separate categories for permit application. EPA's final rule establishes a clear obligation for sources with stationary diesel engine emissions above the major source threshold to apply for a part 71 permit by the earlier deadline (May 2003). State-exempt stationary agricultural sources which do not have such emissions above the major source threshold, but which are otherwise major sources of air pollution, would need to apply by the later application deadline (August 2003). The specific guidance that EPA will be providing in the coming months on applicability and implementation of the title V permitting program for major stationary agricultural sources will further assist individual sources in determining their permitting obligations, as well as the appropriate deadline they must meet. As noted above, EPA's staggered application deadlines are based, in part, upon the fact that more and better data are available with respect to emissions from agricultural engines than are available for other potentially major stationary agricultural sources (such as CAFOs). Given this situation, it is appropriate to provide some additional time for the submittal of applications from sources which are major due to emissions other than from stationary diesel engines.

Comment 16: One commenter cites several passages from the June 2002 Interim Report of the NAS Committee on Air Emissions from Animal Feeding Operations and suggests that given the scientific uncertainty and lack of established emission factors for certain agricultural emission sources, EPA should provide a definitive exemption, by regulation, for certain categories of agricultural sources until such time as EPA has established emission factors.

Response: As previously noted, the NAS study of air emissions from animal feeding operations, which is expected to be issued in final form by the end of 2002, will be instrumental to the Agency in making the necessary policy decisions (such as identifying appropriate emission factors or alternative approaches for estimating emissions for various animal agricultural operations) for implementing the title V permitting program in this sector. EPA does not agree that the NAS’ interim report provides the basis to exempt any category of agricultural source from the requirements of title V. Also, as noted by other commenters, the Clean Air Act does not authorize any exemption from title V for major sources.

Once the final report is released, the Agency intends to carefully evaluate the NAS findings and results, as well as the results of any other relevant research, and develop specific guidance for the implementation of the title V permitting program for animal agriculture.

Comment 17: Two commenters note that title V must apply to all major sources, with one commenter specifically citing section 502(a) of the Act as explicitly prohibiting the Administrator from exempting any major source from the title V permitting requirements.

Response: We agree that the Clean Air Act does not provide for any exemption from title V permitting for major sources. This clear prohibition compelled the Agency to find the California title V programs, which exempt certain major stationary agricultural sources, deficient, and to take action to partially withdraw title V program approval in the State.

Comment 18: One commenter argues that dairy, chicken, and swine CAFOs all emit significant amounts of criteria air pollutants, including ozone precursor (VOC) emissions. The commenter further argues that the fact that many sources of agricultural emissions have not historically been quantified because of the State's exemption does not justify continued regulatory exemption of the agricultural industry. The commenter believes there should be a title V program implemented for CAFOs in California using currently available data, even while more research is conducted to develop a more rigorous model. Finally, the commenter notes that the title V permitting process itself is an important vehicle by which information on agricultural source emissions can be gathered.

Response: EPA agrees that dairy, poultry, and swine CAFOs are all sources of criteria pollutant emissions. The NAS’ Interim Report on air emissions from animal feeding operations (AFOs) notes that, “substantial emission of nitrogen, sulfur, carbon, particulate matter, and other substances from AFOs do occur.” However, as we stated above, emissions from large animal feeding operations ( e.g. , dairies, poultry operations, swine facilities) are not as well characterized as are those from diesel agricultural engines. While EPA expects that the state of CAFO emission data will improve in the future, the implementation of the title V permitting program for state-exempt major stationary agricultural sources must move ahead based on the best data available at this time.

Comment 19: Two commenters state that EPA should review its action in more detail for consistency with the Regulatory Flexibility Act (RFA). One commenter notes that EPA's proposed action inappropriately relied on previous analyses conducted in connection with the original rulemakings for parts 70 and 71. Commenters also challenged EPA's certification that the action would not have a significant impact on a substantial number of small entities for various reasons. For example, one commenter notes that the agricultural industry has unique needs for expediency and variability that will be affected by part 71 requirements for public notification and permit issuance. These commenters also note that the lack of certainty surrounding emissions from agricultural sources will affect numerous small operations that must determine whether they need to submit applications for part 71 permits. One commenter also states that although EPA's proposed rule stated that sources can become synthetic minors, this process is not necessarily simple.

Response: The Regulatory Flexibility Act generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. For the following reasons, EPA believes that its certification that this action will not result in a significant impact on a substantial number of small entities (SISNOSE) is appropriate; therefore, we disagree with the commenters.

First, this action is a partial withdrawal of the part 70 program in 34 California air districts. It does not entail any substantive change to part 70. Rather, it merely revises Appendix A, which sets forth the status of state program approvals. Moreover, it involves no changes to part 71. Our action today withdraws part 70 approval for state-exempt major stationary agricultural sources; as a consequence of that partial withdrawal, the separate, existing part 71 program applies by operation of law. Because our action involves no revision to the regulations themselves, it is appropriate for EPA to rely on the RFA certifications of no SISNOSE made for those regulations. 6 To the extent the comments reflect a concern that these 1992 and 1996 RFA certifications inadequately addressed small entities in the agricultural industry, these concerns would have been more appropriately raised during the comment period for the part 70 and part 71 rulemakings, and in any challenges to those rulemakings. The part 71 program, which becomes effective in California for state-exempt major stationary agricultural sources as a result of this action, was not challenged in the courts for any reason, let alone the RFA certification.

Moreover, EPA continues to believe that any “impact” on the few small businesses that also are state-exempt major stationary agricultural sources potentially subject to part 71 would not be significant. Briefly, the primary, and in many cases only, impact will be the annual costs of applying for and maintaining the part 71 permit. State-exempt major stationary agricultural sources will not be required to purchase and install air pollution control equipment or purchase offsets under title V as at least one commenter alleged. It appears that this commenter was confusing the requirements of the New Source Review program with the requirements of title V.

With regard to comments discussing the burdens small entities may face in evaluating their emissions to determine whether they must submit applications, these comments do not take into account a number of important factors. According to CARB, the state's agricultural permitting exemption does not apply to post-harvest, out-of-field activities; because the scope of today's action is limited to state-exempt sources, it should have no effect on small businesses engaged in these non-exempt activities. In addition, as stated elsewhere in today's action, reliable data are available with respect to emissions from diesel engines used in agriculture. Sources with such units should be able to determine whether they must submit a part 71 application without a significant expenditure of resources. Finally, EPA and the local air districts will be working with the agricultural community to provide guidance for those state-exempt major stationary agricultural sources that may have to apply for a permit in order to minimize any burden associated with the applicability determination and permit application processes.

In addition, although EPA recognizes that the agricultural industry desires flexibility in the timing and implementation of a permit program, EPA believes that such needs are compatible with an operating permit program and, thus, implementation of the part 71 program will not have a significant impact. Many manufacturing and industrial operations also desire a regulatory system that is flexible and adaptable to changes in market supply and demand. In response to a mandate from Congress in this regard (see, e.g. , section 502(b)(10) of the Clean Air Act), EPA developed its title V regulations to allow for streamlined and flexible implementation of the state and federal operating permits programs. The part 71 program provisions for timely applications, application and permit shields, permit revisions, and operational flexibility are intended to allow any type of industry sector, including the agricultural industry, the ability to add or change equipment with minimal, if any, interference in daily operations. For example, part 71's application shield allows a source that submits a complete application for its initial part 71 permit to operate in compliance with that application until it receives its permit, which should address any concerns regarding the timing of actual permit issuance. See 40 CFR 71.5(a)(2). In addition, part 71's permit revision procedures do not require public notification for many types of changes at a facility and allow a facility to make these changes upon submittal of its application. See, 40 CFR 71.7(e)(1).

Moreover, any impact should occur at only a few state-exempt major stationary agricultural sources that are small businesses for several reasons. Those reasons, discussed in more detail in the Administrative Requirements section of this notice, include (1) the monetary threshold for small agricultural businesses; (2) the fact that part 71 applies only to major sources of air pollution, which tend to be larger operations; and (3) the fact that fugitive emissions from farming operations ( e.g. , harvesting) are not counted towards major source applicability, reducing the number of agricultural sources likely to be subject to the program.

With respect to the option of becoming a synthetic minor source, there are many other mechanisms available to limit potential emissions from a farm, including prohibitory rules and general permits. We note that USDA's comments to our proposed action observed that there are “relatively few” small business farms that have actual emissions above the applicable major source thresholds. We intend to work with the USDA and local air districts to implement mechanisms for limiting potential emissions in time for the title V permit application deadlines and thereby appropriately limit the number of sources subject to the part 71 program.

Comment 20: One commenter takes issue with EPA's view that E.O. 13045 does not apply to the proposed rule because “it does not involve decisions intended to mitigate environmental health or safety risks.” This commenter states that it does not seem reasonable for EPA to include major stationary agricultural sources in part 71 if no mitigation of environmental health risks is expected.

Response: Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. Today's action involves the exercise of our authority under part 70 and the implementation of part 71, which are title V operating permit programs that basically record and assure compliance with already-existing applicable requirements; they do not require new reductions in emissions or other emissions restrictions. Therefore, it does not involve any major new decisions directed towards the mitigation of environmental health or safety risks. Likewise we do not believe that today's decision will have a disproportional adverse effect on children. In addition, as discussed above, the regulation of state-exempt major stationary agricultural sources is required by title V of the Act. Finally, the thrust of commenter's claim that is that we should not apply part 71 to agricultural sources absent mitigation of environmental risks. By helping to assure compliance with applicable requirements, the application of part 71 to agricultural sources moves in the direction of reducing environmental risks to children (as well as adults). Thus, today's decision would be consistent with the purposes of Executive Order 13045 if it applied.

After thorough consideration of the comments submitted in response to our proposed rule, EPA is taking action to withdraw, in part, approval of the 34 fully approved Clean Air Act title V (part 70) Operating Permits Programs in the State of California. We are only withdrawing approval of the portions of the programs that relate to state-exempt major stationary agricultural sources; because they have the ability to adequately administer and enforce their part 70 programs for non-exempt major stationary sources, each of the 34 local air districts will continue to administer their existing title V program for all other title V sources. As described more fully in the sections above and in our proposed rule, EPA's action is necessary because the local air districts in the State cannot issue, administer or enforce operating permits for certain major stationary agricultural sources, which are required to obtain permits under title V of the Act.

As a result of the partial withdrawal of part 70 program approval effected by today's action, EPA will be implementing (as of the effective date of today's final rule) a federal operating permits program under 40 CFR part 71 (“part 71 program”) for state-exempt major stationary agricultural sources within the jurisdiction of the 34 California air districts listed at the beginning of this notice. EPA is not promulgating a part 71 program with today's action, since such a program has already been promulgated by the Agency. See 61 FR 34202 (July 1, 1996). Today's action to partially withdraw approval of the fully approved part 70 programs in the State merely establishes the effective date of the Agency's implementation of this existing part 71 program for state-exempt major stationary agricultural sources.

Pursuant to 40 CFR 71.5(a)(1)(i), major stationary sources which do not have an existing operating permit issued by a State (or local permitting authority) under an approved part 70 program, and which are applying for a part 71 permit for the first time, must submit an application within 12 months after becoming subject to the permit program or on or before such earlier date as the permitting authority may establish. Section 71.5(a)(1)(i) further provides that sources required to submit permit applications earlier than 12 months after becoming subject to part 71 shall be notified of the earlier submittal date at least 6 months in advance of the deadline. We are today notifying state-exempt major stationary agricultural sources within the jurisdiction of the 34 California air districts that they are subject to part 71 permitting requirements as of the effective date of this final rule. We are also notifying these sources of the following permit application deadlines: (1) State-exempt stationary agricultural sources that are major sources, as defined in 40 CFR 71.2, due to emissions from diesel-powered engines must submit part 71 permit applications to the EPA Region IX Permits Office no later than May 14, 2003; and (2) any remaining state-exempt major stationary agricultural sources must submit part 71 permit applications to the EPA Region IX Permits Office no later than August 1, 2003.

As we noted above in our response to comments, EPA is committing to provide additional guidance on the implementation of the part 71 program for state-exempt major stationary agricultural sources. The additional guidance, which EPA will make widely available through direct outreach to potentially subject sources and through other means, will provide clearer direction as to the types and sizes of operations that are presumptively major under the title V program. It is also EPA's intention to develop, as part of this guidance, streamlined application forms, user-friendly instructions, and general permit templates and to disseminate these documents for use by subject sources. 7 However, it is ultimately the responsibility of the source to submit a permit application if it is subject to the part 71 program, regardless of whether contact is initiated by EPA or any other regulatory authority. An owner or operator of a source may choose to submit a written request to EPA for a part 71 applicability determination. Pursuant to 40 CFR 71.3(e), the written request shall be made by the source's responsible official to the EPA Region IX Regional Administrator, shall include identification of the source and relevant facts about the source, and shall meet the certification requirements of 40 CFR 71.5(d).

Section 71.4(g) requires that, in taking action to implement and enforce a part 71 program, EPA shall publish a notice in the Federal Register informing the public of such action and the effective date of any part 71 program. By this notice, EPA is informing the public of the Agency's implementation of a part 71 federal operating permits program for state-exempt major stationary agricultural sources located within the jurisdiction of the 34 California air districts listed at the beginning of this notice. The effective date of this program is November 14, 2002.

In addition to the requirement to publish notice of the effectiveness of a part 71 program in the Federal Register , 40 CFR 71.4(g) also requires that the Agency, “to the extent practicable, publish notice in a newspaper of general circulation within the area subject to the part 71 program effectiveness.” EPA will, to the extent practicable, publish notice in one or more newspapers of general circulation within the areas subject to the part 71 program effectiveness. Finally, in accordance with 40 CFR 71.4(g), EPA will be providing a letter to Winston H. Hickox, Secretary, California Environmental Protection Agency, as California Governor Gray Davis' designee, to provide notice of the effectiveness of EPA's part 71 program for state-exempt major stationary agricultural sources.

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

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.

Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This rule is not subject to Executive Order 13045 because it does not involve decisions intended to mitigate environmental health or safety risks.

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

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

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

This final rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. Moreover, in the spirit of Executive Order 13175, and consistent with EPA policy to promote communications between EPA and tribal governments, EPA specifically solicited comment on the proposed rule from tribal officials.

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

This final rule will not have a significant impact on a substantial number of small entities. In developing the original part 70 regulations and the proposed revisions to part 70, the Agency determined that they would not have a significant economic impact on a substantial number of small entities. See 57 FR 32250, 32294 (July 21, 1992), and 60 FR 45530, 45563 (August 31, 1995). Similarly, the same conclusion was reached in an initial regulatory flexibility analysis performed in support of the 1996 part 71 rulemaking. See 61 FR 34202, 34227 (July 1, 1996); see also 64 FR 8262 (Feb. 19, 1999). Only a small subset of sources subject to the part 71 rule would be affected by today's action. The prior screening analyses for the part 70 and part 71 rules were done on a nationwide basis without regard to whether sources were located within California and are, therefore, applicable to sources in California. Accordingly, EPA believes that the screening analyses are valid for purposes of today's action. And since the screening analyses for the prior rules found that the part 70 and 71 rules as a whole would not have a significant impact on a substantial number of small entities, today's action, which would affect a much smaller number of entities than affected by the earlier rules, also will not have a significant impact on a substantial number of small entities.

EPA believes that few if any small businesses involved in the production of crops or animals in California would be subject to part 71 as a result of this rule. First, EPA notes that the Small Business Administration, pursuant to its authority under 15 U.S.C. 632(a) and 634(b)(6), has established thresholds for various business sectors to be used in the determination of whether a business is “small.” See, 13 CFR part 121. For most businesses involved in the production of crops or animals (those that would most likely be subject to part 71 because of this rule), the SBA has set the “small business” threshold as $750,000 in annual receipts. (The threshold for cattle feedlots is $1.5 million; the threshold for chicken egg production is $10.5 million.) See 13 CFR 121.201; see also, 13 CFR 121.104. Businesses that have annual receipts in excess of that threshold are not “small businesses.” Second, EPA's rule would require only major sources of air pollution to obtain a part 71 operating permit. For instance, in the San Joaquin Valley, the threshold for major sources of oxides of nitrogen or volatile organic compounds is 25 tons per year; the threshold for major sources of particulate matter is 70 tons per year. Most other air districts in California have higher thresholds and consequently fewer sources in those districts would be subject to part 71. Furthermore, EPA does not include a source's fugitive emissions of criteria pollutants in determining whether part 71 applies to it. In addition, for sources that might have the potential to emit above the major source threshold, but have actual emissions below the threshold, the Agency has issued several policy memoranda explaining mechanisms for these sources to become “synthetic minors.” These sources are recognized as not emitting pollutants in major quantities and may avoid the requirement to apply for a part 71 permit. Moreover, to the extent there is any impact, it will not be significant because part 71 imposes few if any additional substantive requirements. EPA intends to provide assistance to all sources that would become subject to part 71 as a result of this rulemaking.

Consequently, I hereby certify that this action will not have a significant economic impact on a substantial number of small entities.

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

EPA has determined that the approval action promulgated does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector.

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

EPA believes that VCS are inapplicable to today's action because it does not require the public to perform activities conducive to the use of VCS.

The OMB has approved the information collection requirements contained in this action under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0336. The information is planned to be collected to enable EPA to carry out its obligations under the Act to determine which sources are subject to the Federal Operating Permits Program and what requirements should be included in permits for sources subject to the program. Responses to the collection of information will be mandatory under 40 CFR 71.5(a) which requires owners or operators of sources subject to the program to submit a timely and complete permit application and under 40 CFR 71.6 (a) and (c) which require that permits include requirements related to recordkeeping and reporting. As provided in 42 U.S.C. 7661b(e), sources may assert a business confidentiality claim for the information collected under section 114(c) of the Act.

In the Information Collection Request (ICR) document for the July 1996 final part 71 rule (ICR Number 1713.02), EPA estimated that 1,980 sources in 8 states would potentially be subject to part 71. EPA also estimated that the annual burden per source would be 329 hours, and the annual burden to the Federal government is 243 hours per source. EPA believes that these burden estimates are significantly higher than the burdens associated with today's rule. First, EPA estimates that the number of agricultural sources in California will be significantly less than the number on which the July 1996 estimates were based. In addition, State and local laws have traditionally exempted agricultural sources from many air pollution regulations. Therefore, agricultural sources will have fewer applicable requirements than the average part 71 source; accordingly, the burdens associated with permit applications and recordkeeping and reporting requirements should be minimal and far less than those for the typical part 71 source. Today's action would impose no burden on State or local governments and no burden on Tribal agencies. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information; processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR Chapter 15.

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 16, 2002. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

This rule amends the regulations of the Bureau of Land Management (BLM) to reflect correction of a technical error regarding the requirement of a public hearing and publication in the Federal Register and a general circulation newspaper of a notice of availability of environmental analysis documents for coal lease modifications. This error was made in conjunction with the BLM's September 1999 regulatory revisions incorporating public participation procedures into the competitive coal leasing regulations. For a detailed discussion of how the error occurred and its effects, see the proposed rule published January 18, 2002 (67 FR 2618).

This final rule also changes the regulations on coal lease acreage limitations to conform them to a recent statutory change. On October 23, 2000, the United States Senate passed S. 2300, which became Public Law 106-463 on November 7, 2000. This law, known as the Coal Competition Act of 2000, amended Section 27(a) of the Mineral Leasing Act (30 U.S.C. 184(a)) to increase the amount of acreage of Federal coal leases, or permits that an individual or entity may hold in a single state from 46,080 acres to 75,000 acres and raised the national acreage limit from 100,000 acres to 150,000 acres. This final rule changes the acreage limitations in the regulations to conform to those in the statute. For a complete discussion of the reasons for the statutory changes and their effects, see the preamble of the proposed rule (67 FR 2618).

Three letters, one from a law firm and two from state government agencies, addressed the proposed rule. All of the comment writers either supported the proposed rule generally or stated that they had no comment on it.

In light of the lack of substantive comments suggesting changes in the regulations, we are publishing the rule as it was proposed in the correction and extension document published April 12, 2002 (67 FR 17962), without change. That document corrected a drafting error in the original proposed rule published on January 18, 2002 (67 FR 2618).

BLM prepared an environmental assessment (EA) and found that this final rule does not constitute a major Federal action significantly affecting the quality of the human environment under section 102(2)(C) of the Environmental Protection Act of 1969 (NEPA), 42 U.S.C. 4332(2)(C). As discussed fully in the proposed rule, this rule implements a technical correction to the public participation rule completed on September 28, 1999 (64 FR 52239) and a change to the Mineral Leasing Act which was made by Congress. The Mineral Leasing Act amendment changed the acreage limitations for coal leases. As stated in the EA, the final rule should lead to more efficient production and economic recovery of the coal resource. However, it should not in and of itself lead to new mining. While more efficient mining may have environmental consequences, BLM will consider these consequences on a case-by-case basis in preparing environmental analyses before issuing a new coal lease or modifying an existing one. Therefore, a detailed statement under NEPA is not required. We have placed the EA and the Finding of No Significant Impact (FONSI) on file in our Administrative Record at the address specified in the ADDRESSES section.

This final rule is not a significant regulatory action and was not subject to review by the Office of Management and Budget under Executive Order 12866. This rule will not have an annual effect of $100 million or more on the economy. The rule affects coal leasing in only two ways: shortening the lease modification procedure, and increasing lease acreage limitations.

Further, historically, lease modifications have not had significant economic effects on the economy. In Fiscal Year 2001, there were 317 coal leases of various kinds, generating royalties of $337,750,444 on production of 393,509,351 tons of Federal coal, with an average market value of $7.85 per ton, from 473,303 acres of public lands. Of these leases, in FY 2001, only 2 leases were subjects of lease modification. Since a lessee can only add maximum of 160 acres by lease modification over the entire term of the lease, it is clear that the economic effect of lease modifications is tiny compared with the coal program as a whole. The largest number of lease modifications that BLM has processed in the past few years has been 6, in FY 1998, affecting a total of 733 acres. Analyzing this strictly from averages, and using the value from FY 2001, the market value of coal affected by these modifications should have been about $4,784,701 in FY 1998, assuming, of course, that it all would have been immediately available for mining in that year. Total value for other recent years, based on the lower numbers and acreages of lease modifications shown in the accompanying chart, should have been only a fraction of this value. The following table summarizes lease modifications over the past few years.

• Somewhat longer time for processing a lease modification,

• Somewhat higher cost for processing a lease modification.

The reduced costs to BLM and the lease modification applicant from avoiding a 2 to 3 month delay to allow the public participation inadvertently required by the 1999 rule are difficult to segregate and quantify. As a minimum, we estimate the savings in processing costs (for Federal Register processing and document preparation) will approach $10,000 per lease modification application. Assuming an average number of lease modification applications per year of 3, the total savings may be nearly $30,000.

The other element of savings created by this final rule is the reduction in opportunity costs. The unintended consequence of the 1999 rule was that some operators may not have been able to develop the resources contained in the lease modifications in a timely manner, or at all. Those costs would have been imposed if, due to the additional processing time, BLM could not approve the lease modification in time to allow recovery of the resources. If the lease modification is not processed in time for the coal it contains to be mined with the rest of the coal in the lease, the public will lose revenues from bonus payments and royalties. We estimate that this final rule will enable the public to avoid bonus and royalty revenue losses of about $2,200 per acre on average, and with an expected 3 modifications at a maximum of 160 acres each, the total revenue impact is about $1,056,000 per year, which, though substantial, is less than 1 percent of the total coal royalty revenues for FY 2001, and far less than the $100 million annual threshold in the Executive Order.

The second change amends our regulations to reflect acreage limitations changed by Public Law 106-463. We cannot quantify the economic impact of increasing the acreage limitations, because it would involve what would amount to speculation about future coal leases or mergers of current coal lessees. We do, however, see this as positive for industry in that it will allow greater flexibility for coal operators to maintain coal reserves that are readily available for production and consumption. Currently, to allow for proof of successful reclamation, lessees must wait as long as 10 years before they can relinquish a lease after production has ended. The acreage in a lease that has been mined out but not reclaimed counts the same to the state and national acreage limitations as a new lease that has never been mined.

The rule will not—

• Adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or state, local, or tribal governments or communities. It will enhance economic recovery of coal, minimize bypasses, and improve mining efficiency.

• Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency.

• Alter the budgetary effects of entitlements, grants, user fees, or loan programs or the right or obligations of their recipients.

• Raise novel legal or policy issues.

Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as amended, 5 U.S.C. 601-612, to ensure that government regulations do not unnecessarily or disproportionately burden small entities. The RFA requires a regulatory flexibility analysis if a rule would have a significant economic impact, either detrimental or beneficial, on a substantial number of small entities. This rule, as described above, merely implements a statutory change to the regulations that apply to leasing Federal coal resources, and the rule change itself will not have a significant impact on any small entities. Rather, it is the legislation which affects these entities. The regulations make no substantive change beyond what Congress has already enacted. Further, the rule corrects a technical error in the final rule published on September 28, 1999 (64 FR 52239), which was fully analyzed for RFA compliance when published. Therefore, BLM has determined under the RFA that this final rule does not have a significant economic impact on a substantial number of small entities.

This final rule is not a “major rule” as defined at 5 U.S.C. 804(2). This rule merely makes a technical correction in the final rule published on September 28, 1999 (64 FR 52239), and implements a change to the state acreage limits that has been made by Congress. This rule is limited to making BLM's regulations consistent with the law.

This final rule does not impose an unfunded mandate on state, local, or tribal governments or the private sector of more than $100 million per year; nor will the rule have a significant or unique effect on state, local, or tribal governments or the private sector. As discussed above, this rule merely changes BLM's coal leasing regulations regarding acreage limitations to comply with Public Law 106-463 and makes a technical correction to the coal leasing regulations regarding lease modifications. Therefore, BLM is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ).

This rule does not represent a government action capable of interfering with constitutionally protected property rights. The rule is limited to changes reflecting Congress's amendment raising the state and nationwide acreage limits for coal leases, and correcting a technical error relating to regulations governing coal lease modifications. Therefore, the Department of the Interior has determined that the rule will not cause a taking of private property or require further discussion of takings implications under this Executive Order.

This rule 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. The rule is limited to changes to reflect Congress's amendment raising the acreage limits for coal leases and to correct a technical error pertaining to coal lease modifications. Therefore, in accordance with Executive Order 13132, BLM has determined that this rule does not have sufficient Federalism implications to warrant preparation of a Federalism Assessment.

Under Executive Order 12988, the Office of the Solicitor has determined that this final rule does not unduly burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of the Order.

This rule is not a significant energy action. It will not have an adverse effect on energy supplies. The rule should have a favorable effect on energy production. It should improve efficiency in production by increasing acreage limitations and by removing procedural requirements inadvertently and erroneously applied to lease modifications in an earlier rule.

This rule does not contain information collection requirements that the Office of Management and Budget must approve under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq.

In accordance with Executive Order 13175, we have found that this final rule does not include policies that have tribal implications. Since this rule does not make significant changes to BLM policy and does not specifically involve Indian reservation lands, we have determined that the government-to-government relationships should remain unaffected.

The principal author of this rule is Mary Linda Ponticelli of the Solid Minerals Group, assisted by Ted Hudson of the Regulatory Affairs Group, Bureau of Land Management, Washington, DC.