Discussion of Final Rule

This rule will remove the requirement that eligible producers must purchase crop insurance on their tobacco in order to be eligible to receive price support loans under the Tobacco Loan Program. At one time, but not presently, section 508(b)(7) of the Federal Crop Insurance Act (7 U.S.C. 1508(b)(7)) required tobacco producers to purchase crop insurance in order to be eligible to receive a loan. Section 192(a)(2) of the Federal Agriculture Improvement and Reform Act of 1996 (Pub. L. 104-127) removed that requirement. This rule removes the crop insurance provisions of § 1464.7(f). Also, this rule implements name changes in certain USDA institutions. Finally, the rule will correct the Office of Management and Budget (OMB) control numbers for the forms used in administering the regulations in the part. Because this rule removes requirements or makes technical changes only, withholding the publication of this rule for comment would be contrary to the public interest and unnecessary.

This final rule is issued in conformance with Executive Order 12866, has been determined to be not significant, and therefore has not been reviewed by the Office of Management and Budget.

The Regulatory Flexibility Act is not applicable to this rule because the United States Department of Agriculture (USDA) is not required by 5 U.S.C. 553 or any other law to publish a notice of proposed rulemaking with respect to the substance of this rule.

FSA has determined that this action does not constitute a major Federal action significantly affecting the quality of the human environment. In accordance with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq. ), and the FSA regualtions for NEPA at 7 CFR part 799, neither an Environmental Impact Statement nor an environmental assessment is required. A copy of the environmental evaluation used to make this determination is available for inspection and review upon request.

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

This rule contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) for State, local and tribal governments or the private sector. Therefore this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

The number and title of the Federal assistance program, as found in the Catalogue of Federal Domestic Assistance, to which this rule applies are:

This rule does not affect the information collection requirements of 7 CFR part 1464 approved by OMB and assigned OMB control numbers 0560-0058 and 0560-0182.

Because NRC considers this action to be noncontroversial, the NRC is using the direct final rule process for this rule. The amendments in this rule will become effective on December 24, 2003. However, if the NRC receives significant adverse comments on this direct final rule by December 22, 2003, then the NRC will publish a document that withdraws this action and will subsequently address the comments received in a final rule as a response to the companion proposed rule published elsewhere in this Federal Register. Absent significant modifications to the proposed revisions requiring republication, the NRC will not initiate a second comment period on this action.

A significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. A comment is adverse and significant if:

(1) The comment opposes the rule and provides a reason sufficient to require a substantive response in a notice-and-comment process. For example, a substantive response is required when—

(a) The comment causes the staff to reevaluate (or reconsider) its position or conduct additional analysis;

(b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or

(c) The comment raises a relevant issue that was not previously addressed or considered by the staff.

(2) The comment proposes a change or an addition to the rule and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition.

(3) The comment causes the staff to make a change (other than editorial) to the rule.

On December 24, 2002, the Nuclear Regulatory Commission (NRC) published in the Federal Register (67 FR 78332) a final rule entitled “Decommissioning Trust Provisions,” which amended the NRC's regulations relating to decommissioning trust provisions for nuclear power plant licensees. The rule required licensees that are no longer rate-regulated or who no longer have access to a non-bypassable charge for decommissioning to have decommissioning trust agreements in a form acceptable to the NRC in order to increase assurance that an adequate amount of decommissioning funds will be available for their intended purpose. The rule has an effective date of December 24, 2003.

After publication of the final rule, the Nuclear Energy Institute (NEI) suggested that an administrative rulemaking be undertaken to correct what it perceived to be administrative errors in the rule. The NRC agrees with NEI's requested changes, but because NRC considers this action noncontroversial and routine, the NRC is using the direct final rule procedure for this rule.

In a July 1, 2003, letter to the Director of the NRC's Office of Nuclear Reactor Regulation (NRR), NEI identified “four important instances” in which “administrative errors involving errors or omissions in drafting, * * * if uncorrected * * * could affect efficient implementation of the new rule.” The four instances identified by NEI were (1) notification requirement for administrative expenses, (2) effective date of the new rule, (3) preserving the option to retain existing license conditions, and (4) investment prohibition.

NEI stated that NRC failed to exclude ordinary administrative expenses from the new rule's requirement that the fund withdrawals require prior NRC notification. Further, NEI stated that the NRC did not intend, supported by the language in its Statement of Considerations, for licensees to notify the NRC when paying ordinary trust administrative expenses. NEI asserted that “ * * * [T]he above-cited provisions of the final rule failed to associate administrative expenses with an exclusion from the notice requirement.” In fact, the final rule states in § 50.75(h)(1)(iv) “ * * * Disbursements, or payments from the trust, escrow account, Government fund, or other account used to segregate and manage the funds, other than for payments of ordinary administrative costs (including taxes) and other incidental expenses of the fund (including legal, accounting, actuarial, and trustee expenses) in connection with the operation of the fund, are restricted to decommissioning expenses or transfer to another financial assurance method acceptable under paragraph (e) of this section until final decommissioning has been completed. * * *” (emphasis added.)

In order to eliminate any further confusion regarding the present rule language, the NRC is revising the rule language to essentially the language NEI proposed. That is, 10 CFR 50.75(h)(1)(iv) will read “Except for withdrawals being made under 10 CFR 50.82(a)(8) or for payments of ordinary administrative costs (including taxes) and other incidental expenses of the fund (including legal, accounting, actuarial, and trustee expenses) in connection with the operation of the fund, no disbursement or payment may be made from the trust, * * *” (emphasis added.)

Further, this rulemaking is also revising the first sentence of 10 CFR 50.75(h)(2) to read “Licensees that are ‘electric utilities’ under § 50.2 that use prepayment or an external sinking fund to provide financial assurance, shall include a provision in the terms of the trust, escrow account, Government fund, or other account used to segregate and manage funds that except for withdrawals being made under 10 CFR 50.82(a)(8) or for payments of ordinary administrative costs (including taxes) and other incidental expenses of the fund (including legal, accounting, actuarial, and trustee expenses) in connection with the operation of the fund, no disbursement or payment may be made, from the trust, * * *.” (emphasis added.)

The second point NEI raised related to the effective date of the new rule. NEI's position is that certain changes made by the rule, other than those changes in 10 CFR 50.75(h)(1)-(3), should be made immediately effective, rather than on December 24, 2003, as now called for in the rule. The NRC believes that there is no substantive reason to change the effective date of the rule because the Commission has already determined that the December 24, 2003, effective date is appropriate.

NEI's third point related to licensees being able to retain their existing license conditions. NEI stated that the rule language does not reflect the intent of the Commission that individual licensees should have the option of retaining their existing license conditions. The NRC agrees with the comment and amends the rule by adding the following as a new section, 10 CFR 50.75(h)(5), to become effective on December 24, 2003:

Lastly, NEI discussed investment prohibition requirements of the rule. NEI stated that the rule failed “to include a general prohibition against investments in nuclear plant owners, although such a prohibition was intended * * *,” and proposed the following change in § 50.75(h)(1)(i)(A) which, as revised, would read: “ * * * is prohibited from investing the funds in securities or other obligations of the licensee or any other owner or operator of any power reactor * * *” (emphasis added.) The NRC agrees and is making the proposed change (with the modification “any nuclear power reactor” to be consistent with the rest of the rule) through this direct final rule effort.

The NRC is clarifying the applicability of the de minimis limitation contained in the investment prohibition, so that the de minimis proviso will now read “ * * * and provided further that no more than 10 percent of trust assets may be indirectly invested in securities of any entity owning or operating one or more nuclear power plants.” In addition, the NRC is making an editorial change to clarify that the securities of operators, as well as owners, of nuclear power plants are subject to the investment provisions in their entirety. Finally, the NRC is correcting minor typographical errors in paragraphs (e)(1)(i) and (e)(1)(ii) so that the term “permanent termination of operations” is used in full where the term “permanent termination” now appears, and correcting § 50.75(h)(1)(i)(B) to make consistent references to “standard of care'.

The National Technology Transfer and Advancement Act of 1995, Pub. L. 104-113, requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless using such a standard is inconsistent with applicable law or is otherwise impractical. In this final rule, the NRC is making clarifying changes to the existing rule and modifying the effective date of a part of the rule. These actions do not constitute the establishment of a standard that contains generally applicable requirements.

The Commission has determined under the National Environmental Policy Act of 1969, as amended, and the Commission's regulations in Subpart A of 10 CFR part 51 that this rule is not a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. These changes would not result in any increased impact on the environment from decommissioning activities as analyzed in the Final Generic Environmental Impact Statement on Decommissioning of Nuclear Facilities (NUREG-0586, August 1988) and Draft Supplement 1 (NUREG-0586, Draft Supplement 1, October 2001). Therefore, promulgation of this rule would not introduce any impacts on the environment not previously considered by the NRC.

This final rule does not contain new or amended information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). Existing requirements were approved by the Office of Management and Budget (OMB) approval 3150-0011, 10 CFR part 50.

The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.

A regulatory analysis has not been prepared for this direct final rule because this rule is considered a minor, nonsubstantive amendment; it has no economic impact on NRC licensees or the public.

In accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Commission certifies that this rule does not have a significant economic impact on a substantial number of small entities. This final rule affects only the licensing and operation of nuclear power plants. The companies that own these plants do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the size standards established by the NRC (10 CFR 2.810).

The NRC has determined that the backfit rule does not apply to this rule, and, therefore, a backfit analysis is not required because these amendments do not involve any provisions that would impose backfits as defined in 10 CFR chapter I.

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

This amendment to 14 CFR 71 modifies the legal description of the Class E airspace designated as a surface area and the Class E airspace area extending upward from 700 feet above the surface at Sidney, NE. It replaces “Sidney Municipal Airport,” the former name of the airport, with “Sidney Municipal/Lloyd W. Carr Field,” the new name of the airport, in the both legal descriptions. This action brings the legal descriptions of both Sidney, NE airspace areas into compliance with FAA Order 7400.2E, Procedures for Handling Airspace Matters. The areas will be depicted on appropriate aeronautical charts. Class E airspace designated as surface areas are published in paragraph 6002 of FAA Order 7400.9L, dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. Class E airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005 of the same FAA Order. The Class E airspace designations listed in this document will be published subsequently in the Order.

The FAA anticipates that this regulation will not result in adverse or negative comment and, therefore, is issuing it as a direct final rule. Previous actions of this nature have not been controversial and have not resulted in adverse comments or objections. Unless a written adverse or negative comment, or a written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified above. After the close of the comment period, the FAA will publish a document in the Federal Register indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of intent to submit such a comment, a document withdrawing the direct final rule will be published in the Federal Register , and a notice of proposed rulemaking may be published with a new comment period.

Interested parties are invited to participate in this rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2003-16409/Airspace Docket No. 03-ACE-78.” The postcard will be date/time stamped and returned to the commenter.

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

The FAA has determined that this regulation is noncontroversial and unlikely to result in adverse or negative comments. For the reasons discussed in the preamble, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This amendment to part 95 of the Federal Aviation Regulations (14 CFR part 95) amends, suspends, or revokes IFR altitudes governing the operation of all aircraft in flight over a specified route or any portion of that route, as well as the changeover points (COPs) for Federal airways, jet routes, or direct routes as prescribed in part 95.

The specified IFR altitudes, when used in conjunction with the prescribed changeover points for those routes, ensure navigation aid coverage that is adequate for safe flight operations and free of frequency interference. The reasons and circumstances that create the need for this amendment involve matters of flight safety and operational efficiency in the National Airspace System, are related to published aeronautical charts that are essential to the user, and provide for the safe and efficient use of the navigable airspace. In addition, those various reasons or circumstances require making this amendment effective before the next scheduled charting and publication date of the flight information to assure its timely availability to the user. The effective date of this amendment reflects those considerations. In view of the close and immediate relationship between these regulatory changes and safety in air commerce, I find that notice and public procedure before adopting this amendment are impracticable and contrary to the public interest and that good cause exists for making the amendment effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

In the Federal Register of May 12, 2003 (68 FR 25283), FDA published a final rule that, among other things, amended its regulations, in part 20 (21 CFR part 20). In § 20.120, the zip code for the Dockets Management Branch is incorrect. This document corrects that error.

I. Background A. Statutory Provisions

The Bank Secrecy Act, Pub. L. 91-508, codified as amended at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5314; 5316-5332 (“BSA”), authorizes the Secretary of the Treasury, inter alia, to issue regulations requiring financial institutions to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters, or in the conduct of intelligence or counter-intelligence activities to protect against international terrorism, and to implement counter-money laundering programs and compliance procedures. 1 Regulations implementing Title II of the BSA (codified at 31 U.S.C. 5311 et seq. ) appear at 31 CFR part 103. The authority of the Secretary to administer the BSA has been delegated to the Director of FinCEN.

The BSA defines the term “financial institution” to include, among other broad categories of institutions, any “broker or dealer in securities or commodities.”  2 Section 321(b) of the USA Patriot Act amended the BSA to expressly include in the definition of “financial institution” futures commission merchants (“FCMs”) that are registered, or required to register, with the Commodity Futures Trading Commission (“CFTC”) under the Commodity Exchange Act (“CEA”). 3

The Secretary of the Treasury was granted authority in 1992, with the enactment of 31 U.S.C. 5318(g), 4 to require financial institutions to report suspicious transactions. Subsection (g)(1) provides:

Subsection (g)(2) provides further:

Subsection (g)(3) provides that any financial institution, director, officer, employee, or agent of any financial institution

Finally, subsection (g)(4)(A) requires the Secretary of the Treasury, “to the extent practicable and appropriate,” to designate “a single officer or agency of the United States to whom such reports shall be made.”  5 The designated agency is in turn responsible for referring any report of a suspicious transaction to “any appropriate law enforcement or supervisory agency.”  6

The final suspicious activity reporting rule contained in this document applies to FCMs and IB-Cs. An FCM is defined in the CEA as an individual, association, partnership, corporation, or trust that is engaged in soliciting or accepting orders and funds for the purchase or sale of a commodity for future delivery on or subject to the rules of a contract market or derivatives transaction execution facility (“DTEF”). 7 An IB-C is similarly defined, 8 except that an IB-C may not accept money, securities, or property (or extend credit in lieu thereof) to margin, guarantee, or secure any trades or contracts. The CEA requires FCMs and IB-Cs to register pursuant to the procedures of Section 4f(a)(1) of the CEA. 9 As of May 31, 2003, there were 185 FCMs and 1,591 IB-Cs (domestic and foreign) that had registered with the CFTC pursuant to this provision.

This final rule is just one of several steps taken by the Secretary of the Treasury to address comprehensively the risk of money laundering in the futures industry. In April 2002, FinCEN issued an interim final rule requiring FCMs and IB-Cs to develop and implement AMLPs to prevent them from being used to launder money or finance terrorist activities, which includes achieving and monitoring compliance with the applicable requirements of the Bank Secrecy Act and the Secretary of the Treasury's implementing regulations. 10

This final rule follows other recent actions that expand the application of the BSA to additional financial institutions and require those financial institutions to report suspicious transactions. For example, since April 1996, rules issued by FinCEN under the authority contained in 31 U.S.C. 5318(g) have required banks, thrifts, and other banking organizations to report suspicious transactions. 11 In collaboration with FinCEN, the federal bank supervisors concurrently issued suspicious transaction reporting rules under their own authority. 12 The bank supervisory agency rules apply to banks, bank holding companies, and non-depository institution affiliates and subsidiaries of banks and bank holding companies. Money services businesses have been required to report suspicious transactions to the Department of the Treasury since the beginning of 2002. 13 In July 2002, FinCEN took a further step in the creation of a comprehensive system for the reporting of suspicious transactions by the major categories of financial institutions operating in the United States by requiring brokers and dealers in securities (“BDs”) to report suspicious transactions. 14 In October 2002, FinCEN issued a final rule requiring casinos to report suspicious transactions, and a proposed rule that would require certain insurance companies to report suspicious transactions. The final rule contained in this document will extend this and other BSA requirements to FCMs and IB-Cs. The reporting and recordkeeping provisions of the BSA, including suspicious transaction reporting by FCMs and IB-Cs can provide highly useful information in law enforcement and regulatory investigations and proceedings, and in the conduct of intelligence activities to protect against international terrorism. 15

On May 5, 2003, FinCEN published a notice of proposed rulemaking (the “Notice”)  16 that would extend the reporting and recordkeeping obligations of the BSA, including suspicious transaction reporting, to FCMs and IB-Cs. FinCEN received two comment letters on the Notice: one comment from NFA and one comment from the Futures Industry Association, an industry trade association. Both commenters support the proposed rule, but each suggested certain changes and clarifications they believe would be appropriate. Changes and clarifications resulting from these comments are discussed below in the section-by-section analysis.

1. Definitions of Futures Commission Merchant and Introducing Broker-Commodities. Under this final rule, the definition of “financial institution” in 31 CFR 103.11(n) includes FCMs and IB-Cs as these terms are defined in paragraphs (zz) and (aaa), respectively. There were no comments concerning these definitions, and FinCEN is adopting them as proposed.

These terms encompass any person registered or required to be registered as an FCM or IB-C with the CFTC, 17 but exclude securities BDs that have notice registered with the CFTC as FCMs or IB-Cs for the sole purpose of effecting transactions in security futures products (“SFPs”). 18 For these persons, FinCEN believes that the BSA rules of their primary federal supervisory agency should apply, and that authority to examine for compliance with those rules should remain with the agency with which the entities are primarily registered. Thus, a BD that is notice registered with the CFTC must comply with the BSA rules applicable to BDs, and will be examined for BSA compliance by the Securities and Exchange Commission (“SEC”). A parallel change also is being made to the definition of “broker or dealer in securities” in the BSA regulations. Thus, an FCM or IB-C that is notice registered with the SEC must comply with the BSA rules applicable to FCMs and IB-Cs, and will be examined for BSA compliance by the CFTC and the relevant designated self-regulatory organizations (“DSROs”).

With respect to those entities that are dual registrants with both the CFTC and the SEC for purposes of futures and securities transactions other than SFPs, FinCEN intends for this rule to have the same effect as 31 CFR 103.19, which is the rule that requires suspicious transaction reporting for BDs. That is, dual registrants in compliance with the suspicious transaction reporting requirements under 31 CFR 103.19 also shall be deemed to be in compliance with this rule, and dual registrants who are in compliance with this rule shall be deemed to be in compliance with 31 CFR 103.19. This will prevent dual registrants from being subjected to different or conflicting suspicious transaction reporting requirements for the various aspects of their businesses.

2. Definitions of Transaction, Commodity, Contract of Sale, and Option. The definition of “transaction” in the regulations under the BSA, which is set forth in paragraph (ii), conforms generally to the definition Congress added to title 18 when it criminalized money laundering in 1986. 19 The term is broad and is intended to reach all of the various types of transactions that may occur at a financial institution. Amended paragraph (ii) specifically adds futures transactions, i.e. , transactions involving any contract of sale of a commodity for future delivery, any option on any contract of sale for future delivery, and any option on a commodity, to the list of transactions subject to BSA requirements. The definition is not restricted to transactions conducted on a designated contract market or a DTEF. 20

Paragraphs (xx), (yy), and (bbb) set forth definitions of “commodity,” “contract of sale,” and “option on a commodity.” These are definitions based on Sections 1a(4), 1a(7), and 1a(26), respectively, in the CEA. 21 There were no comments concerning these definitions, and FinCEN is adopting them as proposed.

1. Reporting standard. Section 103.17 requires FCMs and IB-Cs to report suspicious transactions that are conducted or attempted by, at, or through an FCM or IB-C and involve or aggregate at least $5,000 in funds or other assets. It is important to recognize that transactions are reportable whether or not they involve currency. 22 Paragraph (a)(1) also permits, but does not require, the reporting of transactions that appear relevant to possible violations of law or regulation even in cases in which the rule does not explicitly so require, for example in the case of a transaction falling below the $5,000 threshold.

Paragraph (a)(2) requires reporting if the FCM or IB-C knows, suspects, or has reason to suspect that the transaction (or pattern of transactions of which the transaction is a part) is one of four classes of transactions (described more fully below) requiring reporting. The “knows, suspects, or has reason to suspect” standard incorporates a concept of due diligence in the reporting requirement.

The first class of transactions requiring reporting, described in paragraph (a)(2)(i), includes transactions involving funds derived from illegal activity or intended or conducted in order to hide or disguise funds or assets derived from illegal activity. The second class of transactions, described in paragraph (a)(2)(ii), involves transactions designed, whether through structuring or other means, to evade the requirements of the BSA. The third class of transactions, described in paragraph (a)(2)(iii), involves transactions that appear to serve no business or apparent lawful purpose, and for which the FCM or IB-C knows of no reasonable explanation after examining the available facts relating to the transaction and the parties. The fourth class of transactions, described in paragraph (a)(2)(iv), involves the use of the FCM or IB-C to facilitate a criminal transaction.

A determination as to whether a report is required must be based on all the facts and circumstances relating to the transaction and customer in question. Different fact patterns may lead to different determinations. In some cases, the facts of the transaction may indicate the need to report. For example, frequent and large-scale usage of wire transfers, including wire transfers to or from locations outside of the United States, from an account with only nominal futures activity may be indicative of suspicious activity. In other instances, the transaction or activity itself may be sufficiently suspicious to warrant reporting. Thus, if a customer engages in wash transactions or other fictitious or non-bona fide transactions that violate the CEA, a suspicious activity report must be filed. 23 Similarly, the fact that a customer unreasonably refuses to provide information necessary for the FCM or IB-C to make required reports, retain records as required, identify or verify the identity of a customer, or otherwise comply with the BSA; provides information that the FCM or IB-C determines to be false; or seeks to change or cancel a transaction after such person is informed of currency transaction reporting or information verification or recordkeeping requirements relevant to the transaction, would all indicate that a suspicious activity report should be filed. The FCM or IB-C may not notify the customer that it intends to file or has filed a suspicious transaction report with respect to the customer's activity.

In other situations, a more involved analysis and judgment may be needed to determine whether a transaction is suspicious within the meaning of the rule. Transactions that raise the need for such judgments may include, for example: (i) Transmission or receipt of funds transfers without normal identifying information or in a manner that indicates an attempt to disguise or hide the country of origin or destination or the identity of the customer sending the funds or of the beneficiary to whom the funds are sent; (ii) a repeated pattern of unusual activity by the customer, such as where the customer repeatedly makes unexplainable, frequent deposits or withdrawals ; or (iii) repeated use of an account as a temporary resting place for funds from multiple sources without a clear business purpose. The judgments involved also will extend to whether the facts and circumstances and the institution's knowledge of its customer provide a reasonable explanation for the transaction or activity that removes it from the suspicious category.

An FCM may carry, and an IB-C may introduce, intermediated accounts including omnibus accounts and accounts for collective investment vehicles such as commodity pools. In such circumstances, the FCM and IB-C may have little or no contact with or information about the ultimate beneficial owners of such accounts. FinCEN has proposed AMLP rules for CTAs and commodity pools, and monitoring for suspicious transactions is an integral part of such programs. Any AMLP obligations of intermediaries such as CTAs, however, would not reduce the obligation on an FCM or IB-C imposed by this rule to monitor transactions based on the facts and circumstances with which it is presented, in order to determine if a transaction is suspicious. In addition, omnibus accounts maintained for certain foreign financial institutions ultimately may fall within the definition of “correspondent account” under section 312 of the USA Patriot Act. 24

2. Reporting Threshold. There were no comments concerning the $5,000 reporting threshold and FinCEN is adopting it as proposed. FinCEN reminds FCMs and IB-Cs, however, that the suspicious transaction reporting rules are not intended to operate (and indeed cannot properly operate) in a mechanical fashion. Rather, the suspicious transaction reporting requirements are intended to function in such a way as to have financial institutions evaluate customer activity and relationships for money laundering risks. 25

3. Transactions Involving Both an FCM and an IB-C. Proposed paragraph (a)(3) provided that the obligation to identify and report properly a suspicious transaction rests with each FCM and IB-C involved in the transaction. It also provided, though, that when a transaction involves both an FCM and an IB-C, only one report needs to be filed with FinCEN as long as that report contains all the relevant facts concerning the transaction. This provision was intended to avoid duplicative and redundant reporting.

Both commenters observed that FCMs and IB-Cs frequently handle complex transactions that involve one or more FCMs, and not just an FCM and an IB-C. They noted that the language in the proposed rule only addressed the situation in which both an FCM and an IB-C are involved in a transaction and did not clearly apply to a situation where two FCMs are involved in the same transaction on behalf of the same customer. Accordingly, FinCEN has clarified the language to extend to the latter situation as well, as long as the suspicious activity report (“SAR”) that is filed (FCMs and IB-Cs will use the Form SAR-SF)  26 contains all of the necessary information. Thus, for example, in a “give-up” arrangement involving a clearing and an executing FCM, one FCM's SAR-SF could satisfy the obligation of both FCMs to report suspicious transactions. As a corollary, FinCEN also wishes to clarify that, as in the case of an FCM and IB-C involved in a transaction, two FCMs involved in a transaction (such as a clearing and an executing FCM) may consult with each other and share information, including the SAR-SF itself, to enable them to file a single report. 27

4. Filing Procedures. Paragraph (b) sets forth the filing procedures to be followed by an FCM or IB-C making reports of suspicious transactions. Within 30 days after an FCM or IB-C becomes aware of a suspicious transaction, it must report the transaction by completing a SAR-SF and filing it in a central location determined by FinCEN. The rule also makes special provision for situations that require immediate attention, such as ongoing terrorist financing or money laundering schemes. In that event, the FCM or IB-C must notify immediately, by telephone, an appropriate law enforcement authority in addition to filing a SAR-SF. The rule also permits, but does not require, FCMs and IB-Cs to notify the CFTC in addition to contacting law enforcement and filing a SAR-SF. 28 There were no comments that addressed these procedures.

5. Exceptions. Paragraph (c) sets forth two exceptions to the reporting requirement. A report does not have to be filed to report a robbery or burglary that is reported to law enforcement. A report also does not have to be filed concerning possible violations of the CEA, the rules promulgated by the CFTC, or the rules of any registered futures association or registered entity by an employee or other associated person of an FCM or IB-C, provided that such violations are reported to the CFTC, a registered futures association, or a registered entity. This exception does not encompass reports of BSA violations made to the CFTC or a registered futures association. 29

One commenter suggested that the rule make clear that an entity dually registered with the CFTC and the SEC is permitted to rely on the reporting exception if it appropriately reports violations to the CFTC, a registered futures association or a registered entity, or to the SEC or applicable securities SRO, whichever is most appropriate under the circumstances. In the proposing release, FinCEN made clear its intent that the rule will have the same effect as 31 CFR 103.19, which is the rule that requires suspicious transaction reporting for BDs. FinCEN stated that dual registrants who are in compliance with the suspicious transaction reporting requirements for BDs under 31 CFR 103.19 will also be deemed to be in compliance with this rule, and further, that dual registrants that are in compliance with this rule will also be deemed to be in compliance with 31 CFR 103.19. 30

FinCEN is guided by the legislative history of Title II of the USA Patriot Act, 31 which specifically urged Treasury to take steps to provide for a reporting process for entities registered as both a BD and an FCM that requires only a single report, and to act to prevent inconsistent regulations for dual registrants. Accordingly, FinCEN agrees with this comment and clarifies that an FCM dually registered as a BD can rely on the exception from SAR filing by reporting the violation to either an appropriate securities or futures regulator or SRO. Similarly, a BD that is dually registered as an FCM can rely on the exception by reporting the violation to the CFTC or a registered futures association or registered entity in the same way that an FCM is permitted to do so.

Both commenters also noted that the proposed rule did not specifically address what documentation is sufficient to demonstrate reliance upon an exception. In contrast, the SAR rule for BDs provides that a Form RE-3, U-4, or U-5 is sufficient documentation to demonstrate reliance. One commenter suggested that FinCEN specifically state that a Form 8-T, U-5, RE-3, or any other form properly filed with a futures or securities regulator is sufficient documentation. FinCEN agrees with this comment, and the final rule reflects this change. 32

Finally, in response to one comment, FinCEN clarifies that FCMs and IB-Cs have the same ability as BDs to rely on the reporting exception whether their reporting procedures are “formal or informal.” 33

6. Retention of Records. Paragraph (d) requires FCMs and IB-Cs to maintain a copy of any SAR-SF that is filed with FinCEN and all original related supporting documentation for a period of five years from the date of filing. Nothing in the rule modifies, limits, or supersedes section 101 of the Electronic Records in Global and National Commerce Act, 34 and thus an FCM or IB-C may make and maintain records either as originals or in electronic format as permitted under existing CFTC rules. 35 Accordingly, the FCM or IB-C must make the supporting documentation available to FinCEN, the CFTC, or any other appropriate law enforcement or regulatory agency, and, consistent with paragraph (g), to any registered futures association, registered entity, or SRO. There were no comments addressing this record retention provision, and FinCEN is adopting it as proposed.

7. Non-Disclosure. Paragraph (e) reflects the statutory bar against the disclosure of information filed in, or the fact of filing, a suspicious activity report (whether the report is required by the rule or is filed voluntarily). 36 Thus, the paragraph specifically prohibits persons filing a SAR-SF from making any disclosure either about the report or the supporting documentation unless the disclosure is made to FinCEN, the CFTC, another appropriate law enforcement or regulatory agency, or, consistent with paragraph (g), a registered futures association, registered entity, or SRO. There were no comments concerning this provision, and FinCEN is adopting it as proposed.

8. Safe Harbor from Civil Liability. Paragraph (f) incorporates the BSA's statutory protection from civil liability for making or filing a report of a suspicious transaction or for failing to disclose the fact that a report has been made or filed. The specific reference to arbitration reflects the clarification provided in the USA Patriot Act that the safe harbor for suspicious transaction reporting would apply in arbitration proceedings. Because some disputes in the futures industry are resolved under a reparations procedure provided for by the CEA, 37 paragraph (f) clarifies that the safe harbor also applies in reparations proceedings. FinCEN intends to work with the CFTC, the DSROs, and industry representatives to ensure that appropriate educational materials are delivered to compliance and litigation personnel.

It must be noted that, while the rule reiterates and clarifies the broad statutory protection from liability for making reports of suspicious transactions and for failing to disclose the fact of such reporting, the regulatory provisions do not extend the scope of either the statutory prohibition or the statutory protection. The prohibition on disclosure (other than as required under the rule) applies regardless of any protection from liability. This means, for instance, that during an arbitration or reparations proceeding, an FCM or IB-C would not be permitted to provide a copy of a SAR-SF, or disclose the fact that one had been filed, to any participant in the proceeding, including as applicable, the arbitrator, judgment officer, or administrative law judge.

Both commenters requested that the safe harbor protection from civil liability under this rule, and under FinCEN's rule implementing Section 314(b) of the USA Patriot Act, 38 be extended to protect disclosures to foreign financial institutions to the extent that an FCM or IB-C needs to obtain information from that foreign entity. 39 However, foreign entities are not “financial institutions” and thus are not eligible for these protections that the BSA extends to financial institutions. Moreover, FinCEN and the relevant examining authority in the United States have the ability to require U.S.-regulated financial institutions to protect adequately sensitive information involved in reporting a suspicious transaction. That said, it may be appropriate in certain circumstances for an FCM or IB-C to question carefully the foreign financial institution about the customer or the transaction to understand more fully whether the FCM should report the transaction as suspicious. The FCM could not however, disclose the fact that it is contemplating the filing of a SAR. FinCEN recognizes that, particularly with respect to international transactions, the balance between obtaining sufficient information and protecting the confidentiality of suspicious activity reporting is a difficult one for FCMs and IB-Cs to achieve, but it is one that is faced by all financial institutions subject to a SAR requirement, and one which they are generally successful in achieving.

9. Examination. Paragraph (g) notes that compliance with the obligation to report suspicious transactions will be examined for by Treasury through FinCEN or its delegee, and provides that failure to comply with the rule may constitute a violation of the BSA and the BSA regulations. This paragraph also clarifies that an FCM or IB-C must provide access to any SAR-SF that it has filed, along with any supporting documentation, to the CFTC and any registered futures association, any registered entity that has authority to examine the institution, or to the SEC or an SRO in the case of dual registrants.

10. Effective Date. Paragraph (h) provides that the new suspicious transaction reporting requirements will be effective 180 days after the date on which the final regulations to which this notice of rulemaking relates are published in the Federal Register .

The addition of FCMs and IB-Cs to the “financial institution” definition make such persons subject to the recordkeeping and reporting requirements set forth in section 103.33. This paragraph requires specific records concerning transfers and transmittals of funds in the amount of $3,000 or more. The amendments to paragraphs (e)(6)(i) and (f)(6)(i) of Section 103.33 set forth exceptions for any transfers or transmittals of funds involving either an FCM or an IB-C. The inclusion of FCMs and IB-Cs within the exceptions is intended to provide parallel treatment for records required to be made and kept by banks, BDs, FCMs, and IB-Cs. There were no comments concerning this provision, and FinCEN is adopting it as proposed.

Under the current BSA delegation framework, the Internal Revenue Service is responsible for examining all financial institutions (except for BDs) that are not examined by the federal bank supervisory agencies. This rule will expand the scope of the BSA rules applicable to FCMs and IB-Cs by including them in the regulatory definition of “financial institution,” and shift the responsibility for examining FCMs and IB-Cs under the BSA from the Internal Revenue Service to the CFTC. Thus, 31 CFR 103.56, which sets forth delegations of BSA authority, is amended to provide the CFTC with examination authority with respect to FCMs and IB-Cs for compliance with the BSA regulations.

FinCEN certifies that this final regulation will not have a significant economic impact on a substantial number of small entities. As noted above, the inclusion of FCMs and IB-Cs within the “financial institution” definition in the BSA regulations will make these entities subject to all of the same requirements that apply to similarly situated financial institutions, such as banks and broker-dealers in securities. Nevertheless, FinCEN does not believe that these requirements modify the existing obligations of FCMs and IB-Cs, since the transactional information required to be made and retained under the rules will be information that already is required to be made and retained in the ordinary course of an FCM's or IB-C's business.

Concerning the filing of SARs by FCMs and IB-Cs, FinCEN does not believe that the economic impact of the rule will be significant. Due to mandatory provisions of the USA Patriot Act  40 and obligations imposed by the NFA, 41 FCMs and IB-Cs already are obligated to establish AMLPs that include policies, procedures, and internal controls that are reasonably designed to assure compliance with the BSA and the implementing regulations. A set of systems and procedures designed to detect and require reporting of suspicious activity complements these existing program requirements. As the NFA's interpretive notice to Compliance Rule 2-9(c) makes clear, an FCM or IB-C may tailor its program based on the type of its business, the size and complexity of its operations, the breadth and scope of its customer base, the number of its employees, and its resources.

The Department of the Treasury has determined that this final regulation is not a “significant regulatory action” for purposes of Executive Order 12866.

Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4 (“Unfunded Mandates Act”), March 22, 1995, requires that an agency prepare a budgetary impact statement before promulgating a rule that includes a federal mandate that may result in expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 202 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. FinCEN has determined that it is not required to prepare a written statement under section 202 and has concluded that on balance these rules provide the most cost-effective and least burdensome alternative to achieve the objectives of the rules.

The collection of information contained in this final regulation has been approved by the Office of Management and Budget (“OMB”) in accordance with the requirements of the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1506-0019. The estimated average burden associated with the collection of information in this final rule is 4 hours per respondent.

Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be directed to Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Office of Management and Budget, Paperwork Reduction Project (1506), Washington, DC 20503 (or by the Internet to jlackeyj@omb.eop.gov ).

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. FinCEN received no comments on its recordkeeping burden estimate.

(b) * * *

(8) To the Commissioner of Internal Revenue with respect to all financial institutions, except brokers or dealers in securities, futures commission merchants, introducing brokers in commodities, and commodity trading advisors, not currently examined by Federal bank supervisory agencies for soundness and safety; and

(9) To the Commodity Futures Trading Commission with respect to futures commission merchants, introducing brokers in commodities, and commodity trading advisors.

The law (10 U.S.C. 2145) provides that the Secretary of Defense shall adjust the amount of educational assistance which may be provided in any academic year under the Educational Assistance Test Program and the amount of subsistence allowance authorized under that program. The law further requires that the adjustment is to be consistent with the change in the average actual cost of attendance at public institutions of higher education over the preceding 12-month period. As required by law, the Department of Defense has obtained data from the Department of Education. The Department of Defense has calculated that these costs increased by 4.3%. Accordingly, this final rule changes 38 CFR 21.5820 and 21.5822 to reflect a 4.3% increase in the rates payable in the 2002-03 academic year, including changes needed to compensate for rounding.

The changes set forth in this final rule are effective from the date of publication, but the changes in rates are applied from October 1, 2002, in accordance with the applicable statutory provisions discussed above.

Substantive changes made by this final rule merely reflect statutory requirements and adjustments made based on previously established formulas. Accordingly, there is a basis for dispensing with notice-and-comment and a delayed effective date under 5 U.S.C. 552 and 553.

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more in any given year. This rule would have no consequential effect on State, local, or tribal governments.

This document has been reviewed by the Office Of Management and Budget under Executive Order 12866.

The Secretary of Defense and the Secretary of Veterans Affairs hereby certify that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 501-612. This final rule directly affects only individuals and does not directly affect small entities. Pursuant to 5 U.S.C. 605(b), this final rule, therefore, is exempt from the initial and final regulatory flexibility analyses requirements of sections 603 and 604.

There is no Catalog of Federal Domestic Assistance number for the program affected by this final rule.

This supplemental information section is organized as follows:

A. What Is the History of This Action?

B. Did OEPA Hold a Public Hearing?

C. What Action Is EPA Taking Today?

D. Statutory and Executive Order Reviews

The Clean Air Act (CAA or Act) requires all state and local permitting authorities to develop operating permits programs that meet the requirements of title V of the Act, 42 U.S.C. 7661-7661(f), and its implementing regulations, 40 CFR part 70 (part 70). Ohio submitted its operating permits program in response to this directive. EPA granted full approval to Ohio's title V operating permits program on August 15, 1995 (60 FR 42045).

Ohio's title V operating permits program is implemented by the Ohio Environmental Protection Agency (OEPA) and local air pollution control agencies.

Pursuant to section 502(i) of the Act and 40 CFR 70.10(b)(1), EPA notified Ohio of EPA's finding that Ohio's regulations for IEUs and Ohio's regulations requiring reports of any required monitoring at least every six months and prompt reports of deviations did not meet minimum Federal requirements in a Notice of Deficiency (NOD) published in the Federal Register on April 18, 2002 (67 FR 19175). This was necessary to make these aspects of the Ohio program consistent with the other permitting programs throughout the country.

On June 18, 2003, OEPA proposed revisions to its regulations for IEUs, Ohio's regulations requiring reports of any required monitoring at least every six months and prompt reports of deviations, and other provisions of Ohio's title V regulations. OEPA intended the proposed revisions to it's regulations to resolve deficiencies in Ohio's title V program identified by EPA in the NOD. To expedite the process, Ohio submitted to EPA proposed revisions while it processed them at the State level. On September 30, 2003, EPA proposed to approve OEPA's proposed revisions to its title V regulations. See 68 FR 56220. The State public comment period on the OEPA regulations ended on July 29, 2003. On September 16, 2003, OEPA submitted the final revisions to its title V regulations and asked EPA to give final approval to the revisions. The revisions submitted by OEPA on September 16, 2003 are identical in substance to the proposed regulations for which EPA proposed approval on September 30, 2003.

EPA received no comments on its proposal to approve OEPA's proposed revisions to its title V regulations. Accordingly, EPA is taking final action to approve OEPA's final revisions to its IEU provisions, Ohio's regulations requiring reports of any required monitoring at least every six months and prompt reports of deviations, and other provisions of Ohio's title V regulations. OEPA's final revisions are described in EPA's proposed approval notice. See 68 FR 56220.

On June 18, 2003, OEPA proposed revisions to its regulations for IEUs, Ohio's regulations requiring reports of any required monitoring at least every six months and prompt reports of deviations, and other provisions of Ohio's title V regulations. OEPA held a public hearing on these revisions on July 28, 2003, in Columbus, Ohio. The public comment period closed on July 29, 2003.

EPA is taking final action to approve, as a revision to OEPA's title V air operating permits program, revisions to OEPA's regulations for IEUs and reporting, specifically, revisions to OAC 3745-77-02(E), 3745-77-07(A)(13), 3745-77-07(A)(3)(c)(ii) and (iii), 3745-77-07(I), and 3745-77-08(C). EPA has determined that these changes meet the requirements of title V and part 70 relating to IEUs and reporting, and adequately address the deficiency identified in the Notice of Deficiency published in the Federal Register on April 18, 2002 (67 FR 19175). EPA is also approving Ohio's new provisions at 3745-77-01(U), 3745-77-01(W)(2)(aa), 3745-77-01(MM) and 3745-77-01(NN). Ohio's program revision satisfactorily addresses the program deficiency identified in EPA's NOD, published on April 18, 2002 (67 FR 19175). Because Ohio timely corrected those deficiencies, see 40 CFR 70.10(b), there are no potential consequences of the NOD, such as sanctions or promulgation of a federal operating permits program.

Because these rules apply throughout the State of Ohio, this approval applies to all State and local agencies that implement Ohio's operating permits program.

Under Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget.

For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001).

This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

Because this action approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain an unfunded mandate nor does it significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified by Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000).

This action also does not have federalism implications because it does 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, “Federalism” (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Act.

This final approval also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not a significant regulatory action under executive order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTA), 15 U.S.C. 272, requires Federal agencies to use technical standards that are developed or adopted by voluntary consensus to carry out policy objectives, so long as such standards are not inconsistent with applicable law or otherwise impracticable. In reviewing program submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Act. Absent a prior existing requirement for the state to use voluntary consensus standards, EPA has no authority to disapprove a program submission for failure to use such standards, and it would thus be inconsistent with applicable law for EPA to use voluntary consensus standards in place of a program submission that otherwise satisfies the provisions of the Act. Therefore, the requirements of section 12(d) of the NTTA do not apply.

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

EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order, and has determined that the rule's requirements do not constitute a taking.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

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 January 20, 2004. 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 final rule informs the public about the structure, function, operations, and quorum requirements of the Chemical Safety and Hazard Investigation Board (CSB).

In promulgating this rule, the CSB finds that notice and public comment are not necessary. Section 553(b)(3)(A) of Title 5, United States Code, provides that when regulations involve matters of agency organization, procedure, or practice, the agency may publish regulations in final form. In addition, the CSB finds, in accordance with 5 U.S.C. 553(d), that a delayed effective date is unnecessary. Accordingly, these regulations are effective upon publication.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires that a rule that has a significant economic impact on a substantial number of small entities, small businesses, or small organizations must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 605(b). The CSB has considered the impact of this final rule under the Regulatory Flexibility Act. The General Counsel certifies that this final rule will not have a significant economic impact on a substantial number of small business entities.

3. Paperwork Reduction Act

This final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ).

4. Unfunded Mandates Reform Act of 1995

This final rule does not require the preparation of an assessment statement in accordance with the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531. This rule does not include a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year.

Congress enacted the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act (Pub. L. 106-414) on November 1, 2000. Section 13 of the TREAD Act mandated the completion of “a rulemaking for a regulation to require a warning system in new motor vehicles to indicate to the operator when a tire is significantly under inflated.” NHTSA published a final rule establishing a standard requiring tire pressure monitoring systems on June 5, 2002. (67 FR 38704) Public Citizen, Inc., New York Public Interest Research Group, and the Center for Auto Safety, petitioned for judicial review of the standard. On August 6, 2003, the U.S. Court of Appeals for the Second Circuit issued an opinion vacating the rule establishing the standard. Public Citizen, Inc. v. Mineta, No. 02-4237, 2003 U.S. App. LEXIS 16556 (2d Cir. Aug. 6, 2003). The mandate from the Court issued on the same date.

Pursuant to the Court's decision, NHTSA is removing the regulatory text added to the Code of Federal Regulations by the rule issued on June 5, 2002. Consequently, motor vehicle manufacturers have no obligation to begin certifying their vehicles to the standard on November 1, 2003, as previously required. However, NHTSA intends expeditiously to issue a standard setting forth performance-based requirements consistent with the Court's decision and in accordance with the Administrative Procedure Act.

NHTSA has determined that it has “good cause” under section 553(b)(B) of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B), to promulgate this final rule without prior notice and opportunity for comment. The agency finds it “unnecessary” to provide an opportunity to comment because this action involves a ministerial removal of regulatory text in direct response to a court decision. The rule amends only those regulatory provisions directly affected by the Court's decision. For the same reasons, the agency finds that this final rule should be effective immediately because the public would benefit from the prompt removal from the Code of Federal Regulations of regulatory requirements that are no longer applicable as a result of the court's decision.

This rulemaking document was not reviewed by the Office of Management and Budget under E.O. 12866, “Regulatory Planning and Review.” The rulemaking action is also not considered to be significant under the Department's Regulatory Policies and Procedures (44 FR 11034; February 26, 1979). While the June 2002 final rule establishing a standard requiring tire pressure monitoring systems was economically significant, that rule was vacated by a court decision, and today's action merely involves a ministerial removal of regulatory text in direct response to that court decision. Therefore, this action is not a “significant regulatory action” under the terms of Executive Order 12866 and is not subject to OMB review.

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. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the APA or any other statute, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

The Administrator has determined today's action does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). Burden means the total time, effort, or financial resources expended to generate and maintain, retain, or provide information as required by a rule. Today's rule imposes no such burden on any entity.

The Congressional Review Act (CRA), 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report (which includes a copy of the rule) to each House of the Congress and to the Comptroller General of the United States. NHTSA 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 its effective date. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

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, NHTSA generally 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, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any single year. Before promulgating a NHTSA rule for which a written statement is needed, section 205 of the UMRA generally requires NHTSA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows NHTSA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation of why that alternative was not adopted.

Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the APA or any other statute, it is not subject to sections 202 and 205 of the UMRA. In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of the UMRA.

Executive Order 13132, entitled “Federalism” (64 FR 43255; August 10, 1999), requires NHTSA 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 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, NHTSA 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 NHTSA consults with State and local officials early in the process of developing the proposed regulation. NHTSA 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 action will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government as specified in Executive Order 13132. This action will not alter the overall relationship or distribution of powers between governments for the Title V program. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA), Pub. L. 104-113, section 12(d) (15 U.S.C. 272 note), directs NHTSA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , materials specifications, test methods, sampling procedures, business practices, etc. ) that are developed or adopted by voluntary consensus standard bodies. The NTTAA directs NHTSA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. Today's action does not involve any decision whether to adopt a technical standard. Therefore, NHTSA is not considering the use of any voluntary consensus standards in issuing this action.

Pursuant to Executive Order 12988, “Civil Justice Reform” (61 FR 4729, February 7, 1996), the agency has considered whether this rulemaking will have any retroactive effect. This final rule does not have any retroactive effect. Under 49 U.S.C. 30103, whenever a Federal motor vehicle safety standard is in effect, a State may not adopt or maintain a safety standard applicable to the same aspect of performance which is not identical to the Federal standard, except to the extent that the State requirement imposes a higher level of performance and applies only to vehicles procured for the State's use. 49 U.S.C. 30161 sets forth a procedure for judicial review of final rules establishing, amending, or revoking Federal motor vehicle safety standards. That section does not require submission of a petition for reconsideration or other administrative proceedings before parties may file a suit in court.

Executive Order 13045, “Protection of Children from Environmental Health and Safety Risks” (62 FR 19855, 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 the agency 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 final rule removes the existing TPMS standard from the CFR in response to a court decision. This rulemaking action is neither economically significant, nor does it involve decisions based upon health and safety risks that disproportionately affect children. Consequently, no further analysis is required under E.O. 13045.

NHTSA has analyzed this rulemaking for the purposes of the National Environmental Policy Act. The agency has determined that implementation of this action will not have any significant impact on the quality of the human environment.

The Department of Transportation assigns a regulation identification number (RIN) 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. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.

Please note that anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc. ). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78), or you may visit http://dms.dot.gov.

Several of the background documents for the ALWTRP and the take reduction planning process can be downloaded from the ALWTRP Web site at http://www.nero.noaa.gov/whaletrp/.

The ALWTRP was developed pursuant to section 118 of the Marine Mammal Protection Act (MMPA) to reduce the incidental mortality and serious injury of three endangered species of whales (right, fin, and humpback) as well as to provide conservation benefits to a fourth non-endangered species (minke) due to incidental interaction with commercial fishing activities. The ALWTRP, implemented through regulations codified at 50 CFR 229.32, relies on a combination of fishing gear modifications and time/area closures to reduce the risk of whales becoming entangled in commercial fishing gear (and potentially suffering serious injury or mortality as a result).

On January 9, 2002, NMFS published the final rule to implement the ALWTRP's Dynamic Area Management (DAM) program (67 FR 1133). On August 26, 2003, NMFS amended the regulations by publishing a final rule, which specifically identified gear modifications that may be allowed in a DAM zone (68 FR 51195). The DAM program provides specific authority for NMFS to restrict temporarily on an expedited basis the use of lobster trap/pot and anchored gillnet fishing gear in areas north of 40° N. lat. to protect right whales. Under the DAM program, NMFS may: (1) require the removal of all lobster trap/pot and anchored gillnet fishing gear for a 15-day period; (2) allow lobster trap/pot and anchored gillnet fishing within a DAM zone with gear modifications determined by NMFS to sufficiently reduce the risk of entanglement; and/or (3) issue an alert to fishermen requesting the voluntary removal of all lobster trap/pot and anchored gillnet gear for a 15-day period and asking fishermen not to set any additional gear in the DAM zone during the 15-day period.

A DAM zone is triggered when NMFS receives a reliable report from a qualified individual of three or more right whales sighted within an area (75 nm2 (139 km2)) such that right whale density is equal to or greater than 0.04 right whales per nm2 (1.85 km2). A qualified individual is an individual ascertained by NMFS to be reasonably able, through training or experience, to identify a right whale. Such individuals include, but are not limited to, NMFS staff, U.S. Coast Guard and Navy personnel trained in whale identification, scientific research survey personnel, whale watch operators and naturalists, and mariners trained in whale species identification through disentanglement training or some other training program deemed adequate by NMFS. A reliable report would be a credible right whale sighting.

On November 7, 2003, a vessel-based survey reported a sighting of four right whales in the proximity of 42°49′ N lat. and 70°01′ W long. This position lies east of Portsmouth, NH. Thus, NMFS has received a reliable report from a qualified individual of the requisite right whale density to trigger the DAM provisions of the ALWTRP.

Once a DAM zone is triggered, NMFS determines whether to impose restrictions on fishing and/or fishing gear in the zone. This determination is based on the following factors, including but not limited to: the location of the DAM zone with respect to other fishery closure areas, weather conditions as they relate to the safety of human life at sea, the type and amount of gear already present in the area, and a review of recent right whale entanglement and mortality data.

NMFS has reviewed the factors and management options noted above relative to the DAM under consideration. Pursuant to this review, NMFS prohibits lobster trap/pot and anchored gillnet gear in this area during the 15-day restricted period unless it is modified in the manner described in this temporary rule. The DAM zone is bound by the following coordinates:

43°09′ N, 70°26′ W (NW Corner)

43°09′ N, 69°36′ W

42°32′ N, 69°36′ W

42°32′ N, 70°26′ W

In addition to those gear modifications currently implemented under the ALWTRP at 50 CFR 229.32, the following gear modifications are required in the DAM zone. If the requirements and exceptions for gear modification in the DAM zone, as described below, differ from other ALWTRP requirements for any overlapping areas and times, then the more restrictive requirements will apply in the DAM zone.

Fishermen utilizing lobster trap/pot gear within the portion of the Northern Nearshore Lobster Waters, Northern Inshore State Lobster Waters, and Stellwagen Bank/Jeffreys Ledge Restricted Area that overlap with the DAM zone are required to utilize all of the following gear modifications while the DAM zone is in effect:

1. Groundlines must be made of either sinking or neutrally buoyant line. Floating groundlines are prohibited;

2. All buoy lines must be made of either sinking or neutrally buoyant line, except the bottom portion of the line, which may be a section of floating line not to exceed one-third the overall length of the buoy line;

3. Fishermen are allowed to use two buoy lines per trawl; and

4. A weak link with a maximum breaking strength of 600 lb (272.4 kg) must be placed at all buoys.

Fishermen utilizing lobster trap/pot gear within the portion of the Offshore Lobster Waters Area that overlap with the DAM zone are required to utilize all of the following gear modifications while the DAM zone is in effect:

1. Groundlines must be made of either sinking or neutrally buoyant line. Floating groundlines are prohibited;

2. All buoy lines must be made of either sinking or neutrally buoyant line, except the bottom portion of the line, which may be a section of floating line not to exceed one-third the overall length of the buoy line;

3. Fishermen are allowed to use two buoy lines per trawl; and

4. A weak link with a maximum breaking strength of 1,500 lb (680.4 kg) must be placed at all buoys.

Fishermen utilizing anchored gillnet gear within the portion of the Other Northeast Gillnet Waters and Stellwagen Bank/Jeffreys Ledge Restricted Area that overlap with the DAM zone are required to utilize all the following gear modifications while the DAM zone is in effect:

1. Groundlines must be made of either sinking or neutrally buoyant line. Floating groundlines are prohibited;

2. All buoy lines must be made of either sinking or neutrally buoyant line, except the bottom portion of the line, which may be a section of floating line not to exceed one-third the overall length of the buoy line;

3. Fishermen are allowed to use two buoy lines per string;

4. Each net panel must have a total of five weak links with a maximum breaking strength of 1,100 lb (498.8 kg). Net panels are typically 50 fathoms (91.4 m) in length, but the weak link requirements would apply to all variations in panel size. These weak links must include three floatline weak links. The placement of the weak links on the floatline must be: one at the center of the net panel and one each as close as possible to each of the bridle ends of the net panel. The remaining two weak links must be placed in the center of each of the up and down lines at the panel ends; and

5. All anchored gillnets, regardless of the number of net panels, must be securely anchored with the holding power of at least a 22 lb (10.0 kg) Danforth-style anchor at each end of the net string.

The restrictions will be in effect beginning at 0001 hours November 24, 2003, through 2400 hours December 6, 2003, unless terminated sooner or extended by NMFS through another notification in the Federal Register .

The restrictions will be announced to state officials, fishermen, Atlantic Large Whale Take Reduction Team (ALWTRT) members, and other interested parties through e-mail, phone contact, NOAA website, and other appropriate media immediately upon filing with the Federal Register .

In accordance with section 118(f)(9) of the MMPA, the Assistant Administrator (AA) for Fisheries has determined that this action is necessary to implement a take reduction plan to protect North Atlantic right whales.

This action falls within the scope of alternatives and impacts analyzed in the Final EAs prepared for the ALWTRP's DAM program. Further analysis under the National Environmental Policy Act (NEPA) is not required.

NMFS provided prior notice and an opportunity for public comment on the regulations establishing the criteria and procedures for implementing a DAM zone. Providing prior notice and opportunity for comment on this action, pursuant to those regulations, would be impracticable because it would prevent NMFS from executing its functions to protect and reduce serious injury and mortality of endangered right whales. The regulations establishing the DAM program are designed to enable the agency to help protect unexpected concentrations of right whales. In order to meet the goals of the DAM program, the agency needs to be able to create a DAM zone and implement restrictions on fishing gear as soon as possible once the criteria are triggered and NMFS determines that a DAM restricted zone is appropriate. If NMFS were to provide prior notice and an opportunity for public comment upon the creation of a DAM restricted zone, the aggregated right whales would be vulnerable to entanglement which could result in serious injury and mortality. Additionally, the right whales would most likely move on to another location before NMFS could implement the restrictions designed to protect them, thereby rendering the action obsolete. Therefore, pursuant to 5 U.S.C. 553(b)(B), the AA finds that good cause exists to waive prior notice and an opportunity to comment on this action to implement a DAM restricted zone to reduce the risk of entanglement of endangered right whales in commercial lobster trap/pot and anchored gillnet gear as such procedures would be impracticable.

For the same reasons, the AA finds that, under 5 U.S.C. 553(d)(3), good cause exists to waive the 30-day delay in effective date. If NMFS were to delay for 30 days the effective date of this action, the aggregated right whales would be vulnerable to entanglement, which could cause serious injury and mortality. Additionally, right whales would likely move to another location between the time NMFS approved the action creating the DAM restricted zone and the time it went into effect, thereby rendering the action obsolete and ineffective. Nevertheless, NMFS recognizes the need for fishermen to have time to either modify or remove (if not in compliance with the required restrictions) their gear from a DAM zone once one is approved. Thus, NMFS makes this action effective 2 days after the date of publication of this notice in the Federal Register . NMFS will also endeavor to provide notice of this action to fishermen through other means as soon as the AA approves it, thereby providing approximately 3 additional days of notice while the Office of the Federal Register processes the document for publication.

NMFS determined that the regulations establishing the DAM program and actions such as this one taken pursuant to those regulations are consistent to the maximum extent practicable with the enforceable policies of the approved coastal management program of the U.S. Atlantic coastal states. This determination was submitted for review by the responsible state agencies under section 307 of the Coastal Zone Management Act. Following state review of the regulations creating the DAM program, no state disagreed with NMFS' conclusion that the DAM program is consistent to the maximum extent practicable with the enforceable policies of the approved coastal management program for that state.

The DAM program under which NMFS is taking this action contains policies with federalism implications warranting preparation of a federalism assessment under Executive Order 13132. Accordingly, in October 2001 and March 2003, the Assistant Secretary for Intergovernmental and Legislative Affairs, DOC, provided notice of the DAM program and its amendments to the appropriate elected officials in states to be affected by actions taken pursuant to the DAM program. Federalism issues raised by state officials were addressed in the final rules implementing the DAM program. A copy of the federalism Summary Impact Statement for the final rules is available upon request ( ADDRESSES ).

The rule implementing the DAM program has been determined to be not significant under Executive Order 12866.