Prior documents in this proceeding: Notice of hearing issued on April 23, 2002, and published in the May 1, 2002, issue of the Federal Register (67 FR 21854).

This administrative action is governed by the provisions of sections 556 and 557 of title 5 of the United States Code and, therefore, is excluded from the requirements of Executive Order 12866.

The proposed amendments were formulated based on the record of a public hearing held in Plymouth, Massachusetts on May 20 and 21, 2002; in Bangor, Maine on May 23, 2002; in Wisconsin Rapids, Wisconsin on June 3 and 4, 2002; and in Portland, Oregon on June 6, 2002. The hearing was held to consider the proposed amendment of Marketing Agreement and Order No. 929, regulating the handling of cranberries grown in the States of Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in the State of New York, hereinafter referred to collectively as the “order.” The hearing was held pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601 et seq. ), hereinafter referred to as the “Act,” and the applicable rules of practice and procedure governing the formulation of marketing agreements and marketing orders (7 CFR part 900). The notice of hearing contained numerous proposals submitted by the Committee, other interested parties and one proposed by the Agricultural Marketing Service (AMS). This action is a partial decision addressing a portion of the amendments listed in the notice of hearing that have been determined necessary to be expedited. Other proposed amendments listed in the notice of hearing will be addressed in a separate decision.

The proposed amendments included in this decision would: Increase Committee membership to 13 grower members, 1 public member, 9 grower alternate members and 1 public alternate member; incorporate a “swing” position whereby the group (either the major cooperative or growers representing other than the major cooperative) which handles more than 50 percent of the total volume produced is assigned an additional seat; revise nomination and selection provisions of the order, as well as quorum and voting requirements, to reflect the change in Committee membership; authorize tenure limitations to be restarted with the seating of the expanded Committee; re-establish districts and allocate the revised membership among those districts; allow the Committee to request tax identification numbers for voting purposes; authorize mail nominations for independent members; revise the alternate member provisions to reflect the change in Committee membership and for clarity purposes; and require Committee member nominee disclosure of non-regulated cranberry production.

The Fruit and Vegetable Programs of AMS proposed to allow such changes as may be necessary to the order, if any of the proposed amendments are adopted, so that all of the order's provisions conform to the effectuated amendments.

Thirty-two witnesses testified at the hearing. These witnesses represented cranberry growers and handlers in the States currently covered by the order and in Maine. Some witnesses supported the proposed amendments, while others were opposed to the recommended changes or suggested modifications to them.

At the conclusion of the hearing, the Administrative Law Judge fixed August 9, 2002, as the final date for interested persons to file proposed findings and conclusions or written arguments and briefs based on the evidence received at the hearing on proposal numbers 1, 3, 7 and 13. The Administrative Law Judge fixed September 13, 2002, as the final date for interested persons to file proposed findings and conclusions or written arguments and briefs based on evidence received at the hearing on all other proposals. This briefing period was extended until September 20, 2002. A total of 17 briefs were filed, 16 of which addressed proposals in this decision.

Regarding the proposals being discussed in this decision, the Committee filed a brief in support of its proposed amendments. Linda and Paul Rinta and Stephen L. Lacey (attorney for Clement Pappas & Company and Cliffstar Corporation) filed briefs requesting that all proposals relating to Committee structure be considered together. The Cape Cod Cranberry Growers' Association (CCCGA) filed a brief opposing a portion of proposal on the Committee structure. Ranger Cranberry Co., LLC, a Wisconsin grower, filed a brief supporting a modification to the Committee structure. Nine of the 11 briefs recommended that growers from the major cooperative be required to vote independently for Committee representatives rather than the current method of nomination by the cooperative management. All discussions on briefs pertaining to the proposals being recommended in this decision have been considered.

The Committee's proposal to amend the Committee structure included: Increasing the membership; incorporating a member-at-large position; revising nomination and selection procedures, as well as quorum and voting requirements to reflect the increase in Committee membership; authorizing tenure limitations to be restarted with the seating of the expanded Committee; authorizing mail nominations; allowing the Committee to request tax identification numbers for voting purposes; and changing how alternates may fill positions on any member's absence. This proposal provided for amendments to §§ 929.20, 929.21, 929.22, 929.23, 929.27 and 929.32.

Two other interested parties submitted proposals relating to restructuring the Committee. Stephen L. Lacey on behalf of Clement Pappas and Company, Inc., and Cliffstar Corporation proposed an amendment to § 929.22 to alter the way nominations of cooperative members on the Committee are conducted by requiring cooperative nominees to be selected through an election process administered by the Committee. The Wisconsin Cranberry Cooperative proposed amendments to §§ 929.22 and 929.23 to allow for equitable representation for all cooperative marketing associations in the industry.

Stephen Lacey also proposed an amendment to § 929.20 to require Committee member disclosure of unregulated production.

The material issues in this decision presented on the record of the hearing are as follows:

1. Whether to increase Committee membership to 13 grower members, 1 public member, 9 grower alternate members and 1 public alternate member; incorporate a “swing” position whereby the entity (either the major cooperative or other than the major cooperative) which handles more than 50 percent of the total volume produced is assigned an additional seat; incorporate nomination and selection procedures to reflect the change in Committee membership; allow the Committee to request tax identification numbers for voting purposes; authorize mail nominations for independent members; modify the quorum and voting requirements to reflect the increased number of Committee members; restart tenure limitations to begin with the seating of the expanded Committee; and revise and clarify which alternates may fill positions in any member's absence.

2. Whether to require Committee member disclosure of non-regulated production.

3. Whether to expedite the decision on any or all of the proposals by omitting the recommended decision and proceeding directly to the Secretary's decision and referendum order.

The following findings and conclusions on the material issues are based on the record of the hearing.

Section 929.20 should be amended to increase Committee membership to 13 grower members, 1 public member, 9 grower alternate members and 1 public alternate member and to reestablish districts. This section should also be amended to incorporate a “member-at-large” position whereby the group (either growers representing the major cooperative or growers representing entities other than the major cooperative) that handles more than 50 percent of the total volume produced is assigned an additional seat.

Section 929.21 should be amended to restart tenure limitations with the seating of the expanded Committee and allow the initial members of the newly formed Committee to be seated for at least one term.

Section 929.22 should be amended to revise nomination procedures to reflect the change in Committee membership and to allow the reestablished Committee to be nominated as soon as possible.

Section 929.22 should be amended to allow the Committee to request tax identification numbers for voting purposes.

Section 929.22 should be amended to authorize mail nominations for growers who represent entities other than the major cooperative.

Section 929.27 should be amended to revise and clarify which alternate members can be seated in place of absent members.

Section 929.32 should be amended to incorporate quorum and voting requirements to reflect the increased number of Committee members.

Currently, the Committee is composed of 7 grower members, each with an alternate, and 1 public member and alternate. The public member position is not required. The production area is divided into 4 districts and at least 1 member and alternate represent each district. The term of office for members and alternate members is 2 years beginning on August 1 of each even-numbered year, and members are limited to 3 consecutive terms. Those members who serve 3 consecutive terms are not eligible to serve as either a member or alternate member on the Committee until they have been off the Committee for at least 1 full two-year term. There are no tenure requirements for alternate members.

Representation is divided among 4 districts. District 1 includes the States of Massachusetts, Rhode Island and Connecticut. District 2 includes the State of New Jersey and Long Island in the State of New York. District 3 includes the States of Wisconsin, Michigan and Minnesota. District 4 includes the States of Oregon and Washington.

Any cooperative marketing association that handles more than two-thirds of the total volume of cranberries produced during the fiscal period during which nominations are made, or affiliated growers, nominates 4 persons to serve as members and 4 persons to serve as alternate members. At least one nominee must be from Oregon or Washington (District 4). For growers not affiliated with the cooperative marketing association, the committee holds nomination meetings in Districts 1, 2 and 3 to select nominees for the remaining 3 positions. District 4 growers participate in the District 3 nomination procedure by mail ballot. Growers are entitled to cast one vote for the nominee in his or her respective district. USDA selects the members from the nominations made.

Five members constitute a quorum and any action of the Committee requires at least five concurring votes. If the public member is present and chooses to vote, six members constitute a quorum and any Committee actions require at least six concurring votes.

Section 929.27 sets forth that an alternate member shall act in the place and stead of his or her member. In the event both the member and alternate are absent, the Committee may designate any other alternate member to serve in the absent member and alternate's place. This provision also provides that no more than 4 cooperative members or alternates can serve as members at the same meeting and that the grower alternate cannot serve for a non-industry member.

For the 2002 selection process, no cooperative marketing association handled more than two-thirds of the volume of cranberries produced during the 2001-2002 year. The order does not specify how the Committee should be structured under this circumstance. The order provides that members and alternate members shall serve until their respective successors are selected and have been qualified. Therefore, the current cooperative members of the Committee representing the major cooperative, as previously selected, will remain seated until an amendment to the order, if any, is adopted to address this situation. Nominations and selections were made for the 3 independent member and alternate seats.

The Committee proposed increasing Committee membership from 7 grower members and 7 grower alternates to 13 grower members and 9 grower alternates. As in the current order, there would be 1 public member and alternate, but the public member position would be required. Six members would represent the cooperative and six members would represent independent growers. The remaining grower position would represent the group (either the cooperative or independents) that handled more than 50 percent of the volume of cranberries produced in the prior crop year.

The Committee's proposal retains 4 marketing order districts but recommends that they be reestablished to accommodate the expanded production area States.

District 1 would include Massachusetts, Rhode Island, Connecticut, New York and Maine. Currently, District 1 includes Massachusetts, Rhode Island and Connecticut. District 2 would include New Jersey and Delaware. Currently, District 2 includes New Jersey and Long Island in the State of New York. District 3 would remain unchanged and include Wisconsin, Michigan and Minnesota. District 4 would remain unchanged and include Oregon and Washington. The expansion of the production area is not being considered in this document. Therefore, for purposes of discussion, the existing districts and production area are being used in this decision.

Under the Committee's proposal, there would be 2 cooperative members (with 1 alternate member) and 2 independent members (with 1 alternate member) each for Districts 1 and 3. There would be 1 cooperative member and alternate member and 1 independent member and alternate member each for Districts 2 and 4. The member-at-large position would be selected from any of the marketing order districts.

Record evidence indicated that the additional representation in Districts 1 and 3 is based, in large part, on the percentage of the production these two districts represent. During the 2000 crop year, production in District 1 represented 35 percent, District 2 represented 9 percent, District 3 represented 46 percent and District 4 represented 10 percent of total cranberry production.

The Committee manager testified that increasing grower membership would provide more opportunities for a larger and more diverse group of growers to actively participate in the Committee process. He further testified that expansion of the membership is very important to ensuring that the industry would benefit from new ideas, approaches, viewpoints, and perspectives brought to the complex environment facing the cranberry industry.

In support of increasing membership, a witness representing the major cooperative testified that the increased Committee size would allow for broader representation of growers from different producing areas while recognizing different volumes of cranberries being produced in different growing areas. He testified that without increasing the membership, it would be difficult to recognize the larger volume of cranberries produced in Wisconsin and Massachusetts without reducing representation from growing areas that produce lower volumes like New Jersey, Washington and Oregon.

The record revealed that the Committee appointed an amendment subcommittee in 1997 to deliberate on ways to improve the marketing order. On modifying Committee membership, many alternatives were discussed. Alternatives included leaving the membership at 8 and increasing the membership to 9, 11 or 13. The primary reason for agreeing on membership of 13 involved determining how to allocate membership among the districts. The subcommittee believed that it was important to recognize the larger growing areas by providing them with at least one additional member. Equally important was to provide opportunities for membership for smaller growing areas.

The subcommittee carefully considered increased costs. To compromise on this issue, the subcommittee recommended a lower number of alternates. In addition, discussions involved whether it was necessary for alternate members to attend every meeting. There were differing opinions on this, but most agreed that it was important for alternates to stay current with Committee activities so they are more prepared to serve as a member when needed.

Witnesses testified in opposition to the Committee's proposal. Two witnesses were opposed to the increase in Committee size. A Wisconsin grower/handler testified that the additional costs associated would be excessive. Another witness representing the views of the Wisconsin Cranberry Growers Association believed that increasing the number of Committee members could hinder the Committee's ability to make timely decisions and would increase program administrative costs, which are ultimately borne by the growers.

Other witnesses testified in opposition to the allocation of membership under the Committee's proposal. A Wisconsin grower/handler testified that this allocation was inequitable to independent growers in Wisconsin. He testified that membership should consistently be based on the volume of cranberries produced. This witness was primarily concerned that under the Committee's proposal, the State of Wisconsin would be grossly underrepresented on the Committee while other States would be significantly overrepresented. He offered alternatives that would provide the Wisconsin district with an additional seat by transferring a seat from one of the other districts.

Another alternative discussed suggested that the number of growers should also be considered in allocating membership. Under this scenario, the State of Massachusetts would be allocated an additional seat.

A witness representing the Wisconsin Cranberry Grower's Association, also agreed that membership should be modified to be proportional to production. He suggested 3 districts be established providing seats based on volume of cranberries produced and by association with independent and cooperative growers.

Another Wisconsin grower proposed retaining the current 8 member Committee. She proposed having 3 districts—East coast, Midwest and West coast. There would be no allocation between cooperative and independent growers. Two members would be allocated for each district, with 1 swing vote for the growers affiliated with the handler who handled more than 50 percent of the crop.

Record evidence supports modifying the Committee structure as proposed by the Committee. Increasing membership on the Committee should allow more growers to participate in the decision-making processes of the Committee. The benefits of increasing membership outweigh associated increased costs by providing more growers opportunities to have a voice on decisions that impact their livelihood. In addition, increasing membership will allow for more diverse membership and new and different ideas on the direction the Committee should follow in the future. Testimony indicated that a larger Committee would enable a larger number of growers to better understand how the marketing order works and the rationale behind the decisions. More growers becoming familiar with these complicated regulatory issues can only help to further disseminate information to even more industry members. Allowing more opportunities for growers to actively participate in this process will benefit the progress of the Committee.

Increasing membership will also allow larger representation of growing areas that produce the majority of the volume of cranberries and still recognize the importance of all producing areas, regardless of size.

Allocating the membership equally between the largest cooperative and the rest of the industry will provide an appropriate balance between representatives in the industry who may have different ideas on Committee determinations based on their affiliation. With this allocation, no group can impose their will on the other. Committee recommendations will need to have more than the votes of one group to pass. In addition, the member-at-large position will allow for the dominant group to be recognized by providing that group with an additional seat.

Having 2 members from the districts that represent Wisconsin and Massachusetts reasonably recognizes the fact that those districts have a great economic interest at stake when more significant actions, such as volume regulation, are considered by the Committee. It is important to take into account the significance of the smaller growing regions, while recognizing that the potential scale of the impact increases with the volume of cranberries produced and regulated. In this regard, the Committee's proposal improves the current structure of the Committee.

Allowing the smaller volume districts to have 1 member recognizes their significance to the industry. Using volume alone as a means of determining Committee membership does not take into consideration smaller growing regions. Although volume is certainly one criterion to be considered, opportunities must be provided for input by all segments of the industry.

The proponents of providing District 3 an additional independent member based on the State of Wisconsin's comparative volume produced based their opinion solely on volume of production. However, USDA concludes, based on the reasons mentioned above, that providing an additional seat for District 3 at the exclusion of membership from Districts 2 or 4 is not desirable.

Similar concerns would result with regard to the alternative proposed at the hearing to have 3 districts and no differentiation of membership based on cooperative or independent members. The proponent of this alternative was not concerned that it would be possible for the largest handler's growers to win all the seats. The chances for that happening would be real under this scenario and must be considered. Although the approach is simple and keeps the membership at its current level, this alternative could result in the undesirable result of one entity having every seat.

The increase in Committee membership will likely increase costs to the Committee with the additional members attending meetings. Currently, 16 representatives generally attend meetings, as all alternates are entitled to attend each meeting. With a 14 member Committee and 9 alternates, there is the potential that costs will increase to send an additional 7 persons to meetings if all alternates attend. However, the benefits of broadening the membership of the Committee and equitably allocating seats would outweigh these increased costs. Since the implementation of volume regulations, more growers are expressing interest in being a part of the Committee's recommendations. Expansion of the Committee will allow more growers the opportunity to be involved in the process. The Committee's recommendation to reduce the number of alternates will provide appropriate district coverage for members that cannot attend meetings, while taking costs into account.

By increasing the membership to 14 and establishing 4 districts as proposed by the Committee, regional representation will be maintained and additional representation to the largest growing districts will be provided. Committee and subcommittee deliberations on this issue were extensive and many alternatives were discussed. The Committee recommended the most equitable number and allocation of Committee membership while considering associated costs.

Regarding the public member and alternate position, the Committee proposed requiring that position to be a part of the administrative body as opposed to the current structure where that position is not required. There was no opposition testimony on this, and the record evidence is that the public member's views are an important aspect of the Committee's decision making and should therefore be required.

For the above reasons, it is recommended that § 929.20 be amended to increase Committee membership to 13 grower members, 1 public member, 9 grower alternates and 1 public alternate and to reestablish districts to accommodate the additional members. Included in the 13 grower members will be one member-at-large position (who will have an alternate), which will be discussed later in this decision. Of the remaining 12 grower members, 6 will represent the major cooperative and 6 will represent growers from groups other than the major cooperative. Four districts will be established as follows:

District 1 will represent the States of Massachusetts, Rhode Island and Connecticut. There will be 2 members from the major cooperative and 1 alternate member, and 2 members from other than the major cooperative and 1 alternate member.

District 2 will represent the State of New Jersey and Long Island in the State of New York. There will be 1 member from the major cooperative and 1 alternate member, and 1 member from other than the major cooperative and 1 alternate member.

District 3 will represent the States of Wisconsin, Michigan, and Minnesota. There will be 2 members from the major cooperative and 1 alternate member, 2 members from other than the major cooperative and 1 alternate member.

District 4 will represent the States of Oregon and Washington. There will be 1 member from the major cooperative and 1 alternate member, 1 member from other than the major cooperative and 1 alternate member.

The member-at-large position can be from any of the marketing order districts.

The order language should also provide that the Committee may establish, with USDA's approval, rules and regulations for the implementation and operation of this section. The Committee recommended this provision in the event a clarification or procedural change was needed in the future.

With the recommended expansion of the Committee and the establishment of a member-at-large position, it is necessary to modify the nomination procedures to correspond to the new Committee structure.

The Committee's proposed amendment to the nomination procedures allocates membership on the Committee based upon the expanded Committee.

As proposed by the Committee, if the cooperative marketing association handles more than 50 percent of the total volume of cranberries produced, USDA would select 6 cooperative producer members representing growers from each of the 4 districts, 1 member-at-large cooperative producer member from any of the marketing order districts, 6 independent producer members representing growers from each of the 4 districts, 1 public member, 4 cooperative alternate members representing each of the 4 districts, 4 independent alternate members representing each of the 4 districts, 1 cooperative alternate at large member from any district, and 1 public member alternate.

If the cooperative marketing association handles less than 50 percent of the total volume of cranberries produced, the Committee proposed that USDA would select 6 cooperative producer members representing growers from each of the 4 districts, 6 independent producer members representing growers from each of the 4 districts, 1 member-at-large independent producer member from any of the marketing order districts, 1 public member, 4 cooperative alternate members representing each of the 4 districts, 4 independent alternate members representing each of the 4 districts, 1 independent alternate at large member from any district, and 1 public member alternate.

The Committee proposed that the 2 independent producer nominees receiving the highest number of votes cast in Districts 1 and 3 would be declared the independent member nominees from each of those districts. The nominee receiving the third highest number of votes cast in Districts 1 and 3 would be declared the independent alternate member nominee from each of those districts. The independent producer nominee receiving the highest number of votes cast in Districts 2 and 4 would be declared the independent member nominee from each of those districts. The independent producer nominee receiving the second highest number of votes cast in Districts 2 and 4 would be declared the independent alternate member nominee from each of those districts.

If the independent growers are entitled to the member-at-large position, a separate election would be conducted. The producer receiving the highest number of votes would be declared the independent member-at-large and the producer receiving the second highest number of votes would be declared the independent alternate member-at-large.

Testimony revealed that the amendment subcommittee appointed by the Committee deliberated at length on the nomination procedures and, after consensus was reached, recommended the proposal to the full Committee.

The Committee's proposal does not modify the current order language that authorizes the cooperative or its growers to nominate qualified persons for the allotted member and alternate positions. Under the Committee's modified proposal, the group, either cooperative or independent, that handles more than 50 percent of the volume of cranberries handled, is awarded the member-at-large seat.

At the hearing, the Committee proposed modifying their amendment regarding the member-at-large position in two regards. First, there is currently more than one cooperative marketing association in the industry. The proposed amendment published in the notice of hearing did not take this into consideration. The Committee proposed amending this section by allowing the cooperative marketing association that handles the greatest volume of cranberries produced during the fiscal period in which nominations are made to nominate the cooperative members and alternates.

The second modification made by the Committee to the amendment published in the notice of hearing was to change the criteria used to determine which group is entitled to the member-at-large position from sales of cranberries to volume of cranberries handled. Testimony revealed that using handler sales could be problematic and administratively burdensome.

Witnesses opposed to combining the smaller cooperatives with the largest cooperative testified that if the volume handled by the two current cooperatives were combined to determine which group is awarded the additional seat, the largest cooperative could handle 49 percent of the crop and the smaller cooperative could handle 2 percent. Under that scenario, the major cooperative would be allocated the additional seat. Witnesses did not believe it would be equitable for the major cooperative to have less than 50 percent of the volume handled and be entitled to an additional seat. A witness for the smaller cooperative testified that if his cooperative cannot be represented in the group with the dominant cooperative, he believes his cooperative should be able to participate in the independent elections to provide more opportunities for his cooperative to be represented.

In addition, a brief filed on this issue on behalf of a handler states that the hearing record does not support establishing the threshold for determining which group is entitled to the member-at-large position as 50 percent. The brief states that the cooperative should be entitled to an additional seat only if it handles more than 66 2/3 percent of the crop. In addition, the brief states that the Committee must demonstrate how conditions in the industry have changed since the order was amended in 1962 and established a 66 2/3 percent threshold to limit the cooperative to 4 seats.

At the time the order was promulgated, the major cooperative handled more than 80 percent of the cranberries produced. The threshold for membership established at that time had nothing to do with allocating additional seats to a dominant group based on volume handled. The purpose of allowing 4 seats to the cooperative handling more than two-thirds of the volume of cranberries handled was to ensure their membership was limited to 4 seats, rather than guaranteeing them a certain number of seats. Conditions in the industry have changed in that the major cooperative now handles approximately two-thirds of the volume of cranberries produced. The current order language does not address how the industry should be structured in the event the major cooperative's percentage of volume handled falls below the two-thirds threshold and the order should be amended to address this inadequacy.

With the Committee's recommendation of the member-at-large position, it is intended that the dominant group in the industry be awarded an additional seat on the Committee. The Committee recognized that the potential scale of the impact of Committee recommendations increases with the volume of cranberries produced and regulated. For this reason, the Committee recommended assigning an additional seat to the dominant group. It seems eminently reasonable to use a simple majority as a means of determining which group is entitled to an additional seat. Therefore, the threshold for determining the dominant group should be fifty percent.

It has been concluded previously in this decision that the committee should be expanded. Therefore, it is necessary to revise current nomination provisions to accommodate the increase in seats on the committee. Nomination procedures for the independent members based on the increased membership as proposed by the Committee are found to be reasonable and are being recommended for adoption. Based on record evidence, smaller cooperatives should be allowed similar opportunities to be represented on the Committee. In addition, because the large cooperative will continue to nominate its members to the Committee if it chooses, it is necessary to modify this section of the nomination provisions regarding the independent and small cooperative seats.

It is important that all growers are provided the opportunity for membership on the Committee and have a voice in who should represent their interests. Alternatives discussed included allowing the smaller cooperative to participate in the independent elections, as suggested by witnesses representing the small and large cooperative. Record evidence supports the notion that smaller cooperatives should not be combined with the dominant cooperative in the nomination process. They should be provided a greater opportunity to be represented on the Committee. Therefore, smaller cooperatives should be authorized to participate in the independent elections. It is expected that these growers can easily become a part of this nomination process, with minimal additional administrative expenses by the Committee. Although this process does not guarantee any smaller cooperatives membership on the Committee, it provides the same opportunities as those provided for the independent nominees.

In addition, it is reasonable that the threshold for determining which entity will be assigned the member-at-large position should be based on the volume handled by the major cooperative versus all others. This specifically addresses the concerns expressed at the hearing where the major cooperative could be assigned the member-at-large position while handling less than a majority of the crop. Only the major cooperative's volume handled will be counted to determine if they are the dominant group entitled to an additional seat on the Committee.

Since members of small cooperatives and independent growers will be participating in the same nomination process, it is necessary to modify the terminology used in defining the representation. In setting forth the nomination procedures and to determine which group is assigned the member-at-large position, the terminology will be changed from growers that represent “cooperatives” and “independents” to growers that represent the “major cooperative”, which will be the dominant cooperative in the industry and growers that represent “other than the major cooperative”.

For the above stated reasons, the Committee's proposal establishing nomination procedures for the expanded Committee is being recommended for adoption, with modifications as discussed.

The Committee's proposal as set forth in the notice of hearing recommended using the percentage of handler sales of cranberries as opposed to the percentage of volume handled in determining which entity is entitled to the member-at-large position. At the hearing, the Committee modified this portion of the proposal to use volume handled in determining the member-at-large position. According to testimony, the Committee realized that using handler sales could be problematic and administratively burdensome.

According to testimony from a grower who was a member of the amendment subcommittee, the reason the subcommittee recommended sales was that some of the independent handlers believed that their sales were climbing faster than the major cooperative. In addition, the subcommittee thought sales would be a better choice since the threshold for determining the dominant group was being established to 50 percent. This subcommittee member stated that there was much discussion and controversy on determining what constituted a sale, but that the consensus was that the first sale would be the one that counted.

One of the reasons the Committee modified their proposal from handler sales back to volume handled was that it would be difficult to gain consensus on how sales would be allocated. In its brief, the Committee stated that even the proponents of the amendment found the terms “sale” and “sold” confusing when questions arose about the possibility of double accounting of cranberry inventories when interhandler transfers occur. The debate centered on which handler would be entitled to take credit for the sale. When a handler buys from another handler, it is a sale for the first handler. When the second handler resells the cranberries to its customer, it is also a sale.

The Committee does report sales in its inventory reports for information purposes based on handler reports. The reporting of this data is for informational purposes only.

It was determined by the Committee that due to these complexities and the possibility of an increased administrative burden associated with using handler sales as a basis for assigning the additional seat, the threshold should be based on volume handled. Under the order, “Handle” means to can, freeze, or dehydrate cranberries with the production area, or to sell, consign, deliver, or transport fresh cranberries in or out of the production area. Handlers are accustomed to reporting figures based on handling of cranberries, and the Committee has an internal mechanism in place to track interhandler transfers to ensure that double accounting does not take place.

This is not to be confused with grower sales which are used in establishing each grower's sales history. Grower deliveries (or sales) to handlers are easily tracked for the purposes of computing sales histories.

Record evidence does not support basing the member-at-large position on handler sales. The hearing record indicated there could be confusion and possible controversy in coming to consensus on determining what constitutes a sale. As stated in the record, handlers have been reporting volumes handled since the order was implemented. There have been very few problems associated with defining what is “handled”. The Committee manager testified that there are safeguards in place that allow the Committee to crosscheck and assure that proper numbers are being reported.

Therefore, the member-at-large position should be determined by calculating the volume of cranberries handled.

Two proposed amendments submitted by industry representatives recommended altering the way the nominations of the major cooperative are currently authorized under the order by requiring cooperative nominees to be selected through an election process administered by the Committee.

The Committee's proposal did not modify the current order language that authorizes the cooperative, or its growers to nominate qualified persons for the allotted member and alternate positions.

Proponents of changing the nomination procedures for the cooperative testified that the major cooperative's growers should be provided the right to vote for a member on the Committee. It was testified that both groups should nominate members the same way.

A proponent testified that allowing the cooperative to nominate its members without direct input from its growers while independent members are nominated through a voting process has caused controversy in the industry and a lack of confidence in Committee activities. He testified that the cooperative nominees should be nominated in the same manner as independents, through an election process administered by the Committee.

The witness further testified that to allow the cooperative growers to elect their nominees would bolster industry confidence in the Committee, ensure better representation of the interests of growers, and more clearly demonstrate desires of industry to USDA and the public. He testified that there may be a slight increase in Committee expenses if the cooperative is required to nominate its members through an election process due to additional nomination procedures. The number of Committee meetings would remain the same so costs would not increase in that regard. He believed that any increase would be outweighed by benefits of ensuring that the Committee better represents the needs of producers while bolstering public confidence in the Committee.

Another proponent, representing a small cooperative, testified that the Committee's proposal for nomination procedures where the small cooperatives are combined with the large cooperative would provide no opportunity for his organization to be represented on the Committee. He believed his proposal would address this by allowing all cooperative growers to nominate and vote for the cooperative representatives on the Committee.

A witness in support of the proposals testified that under the process that independent members are selected, if a grower is unhappy with the way an independent member voted during a meeting, the grower's recourse is to try to ensure that that member does not get elected during the next election. He testified that the major cooperative's growers do not have that opportunity because their members are nominated by management.

A representative of the major cooperative testified in opposition to the proposals. He stated that the current nomination procedures for cooperative members on the Committee are consistent with the principles of cooperative governance. He testified that the board of the major cooperative is charged with the responsibility and authority to oversee the operation of the cooperative's business. Committee nominations being made by their cooperative helps assure that they carefully consider the collective voice growers provide through their cooperative.

The order currently authorizes the cooperative marketing organization, or the growers affiliated therewith, to nominate its members. The cooperative has two options under this provision and currently chooses to allow the board to make the nominations. It also has the option of conducting an election of its growers to nominate the seats to the Committee.

Congress recognized the importance of cooperatives as representative of the collective voice of many growers when the Act was enacted. It is not USDA's intent to regulate the internal operations of cooperative management through an amendment to the marketing order. The order authorizes the cooperative or its growers to nominate seats to the Committee. That discretion should remain with the cooperative.

Record evidence supports that the nomination by the cooperative for cooperative representatives to the Committee should remain unchanged in that the cooperative or the growers affiliated therewith, shall nominate its members. Therefore, the proposals to change the way the cooperative nominates its members are denied.

The term of office for members and alternates on the Committee is currently 2 years. Committee members are limited to 3 consecutive terms. The Committee is proposing that the term limitations for the current members be reset. In its proposal, the Committee recommended that current Committee members who have not met the 3 consecutive term limitation and who are re-nominated and selected would be able to serve an additional 3 consecutive 2-year terms before becoming ineligible to serve on the Committee.

Testimony revealed that with the increase in Committee membership, a loss of a member solely due to term limitations could have an adverse impact on the Committee's decision-making abilities, particularly when there are new and inexperienced members selected for membership. Restarting term limitations when the expanded Committee is seated would ensure that experienced and knowledgeable members could remain on the Committee. There was no opposition testimony regarding resetting term limits at the hearing.

A grower/handler who is opposed to term limits in general testified that with the small turnout for nominations and limited growers to be nominated in some districts, there should not be term limits. He believed that term limits take away growers' rights to choose who they want to represent them. A suggestion was made to allow an exemption from term limits in the event another grower was not available to fill the position.

Since it is recommended that the Committee be re-structured by increasing membership, it is determined that term limitations should be reset to allow for a smooth transition of the new Committee. With the increase in membership, it is possible that there would be members that have never served on the Committee before. It is critical to maintain the experience and expertise needed so that the Committee can continue its operations with a minimum of disruptions. Resetting the tenure limitations simultaneously with the seating of the expanded Committee would provide the experienced members opportunities to remain on the Committee and assist in transitioning the newer members as they become familiar with the regulatory process.

Regarding the testimony on the need for term limits, it is USDA's view that a limit on tenure for Committee members would improve representation on the Committee by allowing for different and more contemporary ideas, and that such a limit would be beneficial to the Committee's operations. However, the issue of the smaller districts not having enough growers who want to be on the Committee is a concern. If a district with 15 growers only had one or two growers interested in serving on the Committee, it would be detrimental to have a qualified member step down because of term limits and have no one willing to step in. It does not appear that this would be an issue in districts with many growers, like Districts 1 and 3.

In its brief, the Committee suggested a change to alleviate this situation. It proposed modifying the language in that provision to provide that members who have served 3 consecutive terms must leave the Committee for at least one full term before becoming eligible to serve again “unless specifically exempted by the Secretary.” The Committee's reason for including this language is to allow the Committee to petition USDA to retain an incumbent member beyond term limits if it is unable to find a new member to serve. The Committee believes this would ensure that growers from specified districts would continue to have representation.

Because of the small number of growers in some districts, this situation could prove problematic in the future. For this reason, the phrase “unless specifically exempted by the Secretary” is being added to paragraph (c) of § 929.21. This addition should not discourage the continued search by the Committee for new and diverse membership.

The nomination provisions (§ 929.22) provided that nominations for the re-established Committee shall be held as soon as practicable after adoption of this amendment. Depending upon the timing of adoption of this amendment, new members could be nominated and selected to serve on the Committee close to the time of the next selection period.

Therefore, USDA has added a proviso under this provision that initial members of the re-established Committee shall be seated for a minimum of one full term. For example, if a change in Committee structure becomes effective in March of 2004, the nomination process would commence immediately. Members selected through this process would serve up to August 2004 and at least two years from August 2004. This would help provide continuity on the Committee. In addition, the tenure limits would not start until August 1 of the first even numbered year after seating of the new Committee so that term limits and tenure can be computed concurrently.

Therefore, § 929.21 is proposed to be amended to restart tenure limitations on August 1 of the first even numbered year the new members serve. If this proposal were adopted, any past time served would not be counted toward any member's tenure. The term of office for each member and alternate member of the Committee would be for 2 years, beginning on August 1 of each even-numbered year and ending on the second succeeding July 31. Tenure limits would start on August 1 of the first even numbered year served.

Exceptions are possible if deemed necessary by USDA. Term limits do not apply to alternates.

An increase in membership necessitates a proportionate increase to the number of members necessary to constitute a quorum and the number of concurring votes necessary to approve actions of the Committee. The Committee's proposal included such modifications.

Specifically, the Committee recommended that 10 members must be present to constitute a quorum which expands to 11 if the public member is present. The Committee also proposed that the concurring votes necessary to pass any action be 10 if the public member is absent or abstains from voting and 11 if the public member votes.

Adoption of this proposal would retain the super majority requirement for passing Committee actions that is in the current order. Concerns were raised at the hearing that these requirements were too stringent but testimony revealed that having stringent voting requirements ensures that consensus is reached among Committee members prior to any action being passed. Also, this proposal maintains the same requirements that are in the current order.

Therefore, based on the above discussion, § 929.32 is to be modified as proposed by the Committee. Implementation of this amendment, if adopted, would correspond to the establishment of the new Committee.

Currently, the Committee is required to hold meetings in Districts 1, 2, and 3 to elect independent nominees for member and alternate member positions on the Committee. District 4 growers who participate with District 3 in nominations are authorized to participate by mail.

The Committee proposes eliminating the requirement for holding meetings of independent growers within each of the districts to nominate nominees for independent member and alternate members and authorizing all nominations to be conducted by mail. The record revealed that this proposal will allow growers greater opportunities to participate in Committee activities. The Committee would recommend procedures to USDA, wherein nominations could be made through a call for nominations mailed to each eligible independent producer. Such notification could contain a deadline for eligible, independent producers to submit the name of eligible, independent nominees. The Committee would prepare and mail a ballot to each grower. The ballots would be tallied and the nominations made in accordance with the nomination procedures.

Following the end of the voting period, ballots received by the deadline would be separated by district and tallied in accordance with the nomination procedures for independent members.

If the group other than the major cooperative were entitled to the member-at-large position, it is the Committee's intent that the member-at-large position and independent nominations would take place simultaneously. This could cause confusion among growers interested in either position. To address this issue, testimony indicated that the Committee would need to develop and recommend procedures in the event the group other than the major cooperative is entitled to this seat. Section 929.22(i) provides authority for the Committee, with the approval of the Secretary, to issue rules and regulations to carry out the provisions of this section. The Committee may recommend regulations to clarify and implement this section, especially if there is any confusion in conducting nominations for the member-at-large position in the instance where it is assigned to the group representing growers from other than the major cooperative.

The Committee expects that costs in conducting nominations under this proposal would be decreased by not having to travel to hold meetings within the marketing order districts. There was no opposition testimony on authorizing mail balloting.

It is determined that adoption of this proposal would have a positive impact by allowing more producers greater opportunity to participate in Committee activities. It should also provide for greater participation in the voting process as well as reduce costs associated with holding nomination meetings. Therefore, this proposal is recommended for adoption.

The Committee proposed modifying this section to conform to the proposed increase in Committee structure. This section authorizes USDA to select the members and alternates on the Committee based on the nominees appointed in accordance with § 929.22. This section has been modified to correspond with the nomination procedures as discussed previously.

The Committee proposed that a grower's tax identification number be used in the independent voting process to ensure that only eligible independent growers qualify for nomination and voting procedures. The Committee testified that using the tax identification number would assure that only eligible, independent producers qualify to nominate, be nominated and cast ballots in the independent nomination process.

Currently, the Committee uses a “grower identification number” or “farm unit.” The unit is based on growers’ acreage and ownership of the property as reported to the Committee. Although this method has been mostly efficient, there are incidences where growers subdivide their acreage so they can track production from each bog/marsh. In these instances, growers are qualified to obtain separate grower numbers for each subdivided parcel and thereby, would have one vote for each grower number assigned.

A grower/handler testified in opposition to this proposal because he believes it provides incentives for abuse. He advised that using tax identification numbers would make it possible for his company to break up its properties and receive 100 tax identification numbers. The witness supports the current method of identifying properties as farm units.

In its brief, the Committee stated that if the proposal to authorize mail balloting is approved, a mechanism should be in place to discourage growers to subdivide their acreage in order to gain the ability to cast multiple ballots on behalf of a nominee. The Committee believes that growers who subdivide their bogs/marshes do so for a variety of reasons unrelated to the nomination process.

Requiring one tax identification number for one nomination vote more appropriately clarifies the voting procedure. Growers may have reasons other than nomination voting to apply for multiple tax identification numbers as well as for subdividing their properties. However, tax identification numbers are considered more cumbersome to obtain than grower identification numbers and it would be less likely that growers would do so merely to obtain multiple votes in the nomination procedures.

One grower testified that it would be unlikely that she would get another tax identification number because it would be too cumbersome. She supported the use of tax identification numbers as being a consistent way to keep track of properties. It is agreed that this would be a more efficient method of ensuring that growers are eligible to be nominated and vote in Committee member elections. Therefore, it is recommended that the order be amended to authorize the use of tax identification numbers in the voting process for growers that represent other than the major cooperative.

The Committee proposal would also clarify which alternates could be seated in place of absent members. This change is needed to conform to the proposed change in Committee structure. The current language in this section states that not more than 4 members from each group can serve as members at the same meeting. Since there would be a minimum of 6 members from each group in the proposed Committee, this language must be changed to reflect the change in Committee structure. This proposal would also be beneficial for clarity because the proposed change in Committee structure would have only 9 alternates selected to accommodate 14 members.

As proposed, alternate members representing cooperative marketing organizations cannot be seated to serve in the place of either an independent or public member. Alternates representing independents cannot be seated to serve in the place of either cooperative marketing organizations or the public member, and the alternate public member cannot be seated to serve in the place of either the cooperative marketing organizations or independent members. There was no opposition testimony on this proposal.

The Committee's proposal designates the groups of representatives on the Committee as cooperatives and independents. This decision modifies those designations as growers representing the major cooperative and growers representing other than the major cooperative. Because of this change, it is necessary to modify the language in the proposal to conform to this proposed amendment.

Therefore, the amendatory text is being modified to provide that an alternate member representing the major cooperative cannot serve for a member representing other than the major cooperative or the public member. Likewise, an alternate member representing other than the major cooperative cannot serve for a member representing the major cooperative or the public member. The public alternate member cannot serve in place of any industry members.

This proposed change is necessary to reflect the proposed change in Committee structure. In addition, because the proposal would provide fewer alternates than members, this clarification would be beneficial as it more specifically designates which member seat each alternate can replace in the member's absence. Therefore, record evidence herein supports amending § 929.27, with modifications.

The record supports these proposed amendments to §§ 929.20, 929.21, 929.22, 929.23, 929.27 and 929.32, with modifications.

Section 929.20 should be amended to require Committee industry member and alternate member nominees' disclosure of non-regulated cranberry production. Currently, nominees for member and alternate member positions on the Committee are required to complete a qualification form providing information on the nominee's relation to the cranberry industry. This information includes how long the grower has been in the cranberry business, its associated handler, and involvement in cranberry associations. The information collected is used to determine whether nominees are eligible to serve in the positions for which they were nominated. Currently, there is no reporting requirement for members or alternate members regarding non-regulated production.

A proposal was made by an attorney representing a cranberry handler and recommended that Committee members also be required to submit information regarding their interest in foreign cranberry production. He testified that foreign countries and States not regulated under the order are starting to emerge as significant producers of cranberries. Many producers in the production area are involved in this production. The proponent testified that when nominees for Committee representatives have a financial interest in the production of cranberries that are not subject to the order's regulations, it could be perceived as a conflict of interest, especially when these members are voting on issues as critical as volume regulation.

This proposal would require Committee grower nominees and alternate grower nominees to disclose any financial interest in non-regulated production at the time of their nomination. The proponent believes it would be fair for growers to be informed of nominees' interests in production that would not be subject to order requirements.

The proponent testified that this proposal would help maintain the integrity of the Committee and its actions by providing assurance that the Committee is acting in the best interest of production area producers. He suggested this information could be disclosed at meetings held for election of nominees or it could be required information on the qualifications statement currently required by nominees. He testified that this would ensure that growers are informed of this information prior to casting their vote to nominate a representative. He explained that it is not the intent of the proposal to bar potential members from serving on the Committee, as these producers are valuable members of the industry whose extensive knowledge can benefit the Committee.

The proponent testified that the proposal is not intended to require disclosure of information such as the number of acres, financial information, or the nature of the business relationship as that level of detail could be proprietary in nature. The intent is to merely require the nominees to acknowledge the interest without divulging proprietary information. He further testified that the producers should only be required to report their individual interest in non-regulated production and not that of their handler.

Although there was no opposition to the concept of requiring this information, questions arose at the hearing regarding what the term “financial interest” would entail. For example, testimony indicated that the selling of vines, irrigation equipment, fertilizer, and etc. to foreign cranberry interests would not constitute financial interest.

Testimony indicated that the disclosure would not need to include detailed financial information but instead be limited to only a general acknowledgement as to the nature of the financial interests, such as part and majority ownership.

The record supports adding the requirement under § 929.20 that nominees be required to acknowledge financial interest in non-regulated production. Because mail nominations are being authorized with this action, this information cannot be collected at nomination meetings. The collection of this information shall be added to the qualification statement required to be completed by nominees prior to selection. The information required would be an acknowledgement of financial interest in non-regulated production. In the event there is confusion in determining the nature or extent of information necessary for this proposed amendment, the committee may establish, with the approval of USDA, rules and regulations for the implementation and operation of this section in accordance with paragraph (e) of § 929.20.

Record evidence supports amending § 929.20 by adding a requirement that grower nominees and alternate grower nominees of the Committee shall disclose annually any financial interest in the production of cranberries that are not subject to regulation by this part.

The Committee requested expedited rulemaking on all of their proposals. This document sets forth a decision on Committee proposals 1 (Committee structure); 19 (Committee member disclosure of non-regulated production) and 20 (Committee nomination procedures) filed by Stephen Lacey on behalf of Clement Pappas & Company, Inc. and Cliffstar Corporation; and 23 (Committee nomination procedures) and 24 (Committee selection procedures) filed by the Wisconsin Cranberry Cooperative.

Evidence presented at the hearing established that the proposals relating to changing the Committee's administrative body need to be expedited. All other proposals will be addressed in a separate decision.

The order currently states that any cooperative marketing organization that handled more than two-thirds of the total volume of cranberries produced during the fiscal period during which nominations for membership on the Committee are made, or the growers affiliated therewith, shall nominate four or more qualified persons for members and four or more qualified persons for alternate members. There is currently no cooperative marketing organization that handles more than two-thirds of the total volume of cranberries produced. Because the current order does not specify how the Committee should be structured in this event, the order should be amended as soon as possible to address this inadequacy. Consequently, it is determined that emergency conditions exist and the issuance of a recommended decision is therefore being omitted. In accordance with the rules of practice (7 CFR part 900), it is found and determined that the record establishes a basis as noted above for proceeding directly to a Secretary's decision and referendum order. The proposed expedited amendments are to §§ 929.20, 929.21, 929.22, and 929.23.

The proposal clarifying how alternates may fill positions in any member's absence must be expedited as well. This proposal modifies § 929.27. The current order language states that not more than four members and alternate members selected from the large cooperative shall serve as members at the same meeting. Since the Committee is being expanded, there will be a minimum of six members and three alternates serving at the same meeting. Therefore, this provision should be changed at the same time the Committee structure is expanded.

As stated above, for the proposals recommending altering the Committee structure and clarifying how alternates fill absent member positions, the recommended decision is being omitted. These proposals were listed in the notice of hearing as proposal numbers 1, 2, 20, 23, and 24. Proposal number 19, submitted by Stephen Lacey, recommended adding a paragraph to § 929.20, which would require Committee member disclosure of unregulated production. This proposal is being included to simplify the amendment of this section. The remaining proposals will be resolved in a separate decision.

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA), AMS has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this interim regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions so that small businesses will not be unduly or disproportionately burdened. Marketing orders and amendments thereto are unique in that they are normally brought about through group action of essentially small entities for their own benefit. Thus, both the RFA and the Act are compatible with respect to small entities.

Small agricultural producers have been defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $750,000. Small agricultural service firms, which include handlers regulated under the order, are defined as those with annual receipts of less than $5,000,000.

Interested persons were invited to present evidence at the hearing on the probable regulatory and informational impact of the proposed amendments on small businesses. The record indicates that these amendments would not result in additional regulatory requirements being imposed on some cranberry growers and handlers.

There are about 20 handlers currently regulated under Marketing Order No. 929. In addition, the record indicates that there are about 1,250 producers of cranberries in the current production area.

Based on recent years' price and sales levels, AMS finds that nearly all of the cranberry producers and some of the handlers are considered small under the SBA definition. In 2001, a total of 34,300 acres were harvested with an average U.S. yield per acre of 156.2 barrels. Grower prices in 2001 averaged $22.90 per barrel. Average total annual grower receipts for 2001 are estimated at $153,375 per grower. However, there are some growers whose estimated sales would exceed the $750,000 threshold. Thus, these proposed amendments will apply almost exclusively to small entities.

Five handlers handle over 97 percent of the cranberry crop. Using Committee data on volumes handled, AMS has determined that none of these handlers qualify as small businesses under SBA's definition. The remainder of the crop is marketed by about a dozen grower-handlers who handle their own crops. Dividing the remaining 3 percent of the crop by these grower-handlers, all would be considered small businesses.

This decision proposes that the order be amended: (1) To increase Committee membership to 13 members, 1 public member, 9 grower alternate members, 1 public alternate member; to incorporate a “swing” position whereby the entity (either the major cooperative or the group representing other than the major cooperative) which handles more than 50 percent of the total volume of cranberries produced is assigned an additional seat; incorporate nomination and selection procedures to reflect the change in Committee membership; establish districts to reflect the change in Committee membership and to include additional States; allow the Committee to request tax identification numbers for voting purposes and authorize mail nominations for independent members; revise and clarify the provisions for alternates to reflect the change in Committee structure; and (2) require Committee member disclosure of non-regulated cranberry production.

The proposed amendment to increase Committee membership to 13 members, 1 public member, 9 grower alternate members, 1 public alternate member would increase the Committee's size by 6 members and 1 alternate member. This would likely increase costs to the Committee with the additional members attending meetings. If alternate members are not required to attend all meetings, costs could be reduced. However, the record evidence supports increasing the Committee. The benefits of broadening the membership of the Committee and equitably allocating seats would outweigh increased costs. Since the implementation of volume regulations, more growers are expressing interest in being a part of the Committee's processes. Expansion of the Committee would allow more growers the opportunity to be involved in the process. The Committee's recommendation to not have one alternate for each member would provide appropriate district coverage for members that cannot attend meetings while taking costs into account. By increasing the membership to 14 and establishing 4 districts, regional representation would be maintained and additional representation to the largest growing regions would be provided.

The proposal to include a member-at-large position on the Committee to the entity (either the major cooperative or the group representing other than the major cooperative) that handles more than 50 percent of the total volume of cranberries produced would provide an additional member and alternate to the dominant group. This allows for recognition that the scale of the impact increases with the volume of cranberries produced and regulated.

The proposed amendment to reset term limitations for the current members would help maintain the experience and expertise needed so that the Committee can continue its operations with a minimum of disruptions.

The proposed amendment to allow nominations to be conducted by mail would allow more growers greater opportunity to participate on the Committee and provide for greater participation in the voting process. Administrative Committee costs associated with holding nomination meetings would decrease.

The proposed amendment to use growers' tax identification numbers in the voting process for the group representing other than the major cooperative would help ensure that only eligible growers qualify for nomination and the voting process.

The proposed amendment to revise and clarify which alternates can be seated in place of absent members is necessary to conform to the proposed change in Committee structure. In addition, it would be beneficial as it more specifically designates which member seats each alternate can replace in the member's absence.

The proposed amendment to require Committee member disclosure of non-regulated cranberry production would ensure that growers are informed of this information prior to casting their vote to nominate a representative on the Committee.

All of these changes are designed to enhance the administration and functioning of the marketing agreement and order to the benefit of the industry. Accordingly, it is determined that the benefits of implementing the proposed revisions of the order would outweigh any associated costs. Costs are not anticipated to be significant.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), this notice announces that AMS is seeking approval from the Office of Management and Budget (OMB) for a new information collection request for Cranberries grown in 10 States, Marketing Order No. 929.

Title: Cranberries grown in the States of Massachusetts, et al. , Marketing Order No. 929.

OMB Number: 0581-NEW.

Type of Request: New collection.

Abstract: The information collection requirements in this request are essential to carry out the intent of the Act, to provide the respondents the type of service they request, and to administer the cranberry marketing order program, which has been operating since 1962.

Specifically, if the membership on the Committee is increased, the overall burden of completion of Committee generated forms and reports relative to Committee membership would increase due to additional membership. In addition, if the proposed amendment to require Committee member disclosure of non-regulated production is authorized, the qualification statement would have to be modified to include this information. Total burden hours for completion of qualification forms for grower members and alternates is .58 hours. The additional membership and information required would increase this amount by .375 hours, or a total of .955 hours. There would be no increase in the non-regulated disclosure proposal since that would only entail an acknowledgement as to whether the member has a financial interest in non-regulated production.

If the proposed amendment to authorize mail nominations is approved, a nomination form and ballot would be necessary to conduct mail nominations. It is estimated that there are approximately 500 growers who would be entitled to vote by mail ballot once every two years. The estimated time to complete the nomination form would be approximately 5 minutes for an annual increase in burden hours of 20.75. The estimated time to complete the ballot would be approximately 5 minutes for an annual increase in burden hours of 20.75.

If the proposed amendment to require growers to submit a tax identification number is approved, this information will be added to the grower sales and acreage report form (Form No. CMC-GSAR-1) currently approved under OMB. With minimal amount of time needed to add this number on the form, there will be no increase in burden for growers to complete this form.

The information collection would be used only by authorized representatives of USDA, including AMS, Fruit and Vegetable Programs' regional and headquarters staff, and authorized Committee employees. Authorized Committee employees will be the primary users of the information and AMS is the secondary user.

The request for approval for the new information collection under the order is as follows:

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 5 minutes per response.

Respondents: Cranberry growers.

Estimated Number of Respondents: 500.

Estimated Number of Responses per Respondent: .50.

Estimated Total Annual Burden on Respondents: 20.75 hours.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 5 minutes per response.

Respondents: Cranberry growers.

Estimated Number of Respondents: 500.

Estimated Number of Responses per Respondent: .50.

Estimated Total Annual Burden on Respondents: 20.75 hours.

Comments: Comments are invited on: (1) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

Comments should reference OMB No. 0581-NEW and the Cranberry marketing order, and be sent to USDA in care of the Docket Clerk at the previously mentioned address. All comments received will be available for public inspection during regular business hours at the same address.

All responses to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record.

As mentioned before, AMS is seeking approval from OMB for the additional burden imposed by the Cranberry Marketing Order Member and Alternate Member Nomination Form and Cranberry Marketing Order Member and Alternate Member Ballot. Upon OMB approval, the additional burden will be merged into the information collection currently approved under OMB No. 0581-0189, Generic OMB Fruit Crops.

In addition to the information collection burden, a 60-day comment period is invited to allow interested persons to respond to this proposal. All written comments timely received will be considered prior to finalization of this decision.

These provisions and any additional provisions modifying reporting and recordkeeping burdens that generate from these proposed amendments would not be effective until receiving OMB approval. Current information collection requirements for part 929, including referendum ballots, are approved by OMB under OMB number 0581-0189.

As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

The Department has not identified any relevant Federal rules that duplicate, overlap or conflict with this proposed rule. These amendments are designed to enhance the administration and functioning of the marketing order to the benefit of the industry.

Committee meetings regarding these proposals as well as the hearing dates were widely publicized throughout the cranberry industry, and all interested persons were invited to attend the meetings and the hearing and participate in Committee deliberations on all issues. All Committee meetings and the hearing were public forums and all entities, both large and small, were able to express views on these issues.

The amendments proposed herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have retroactive effect. If adopted, the proposed amendments would not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with the amendments.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with the Secretary a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing the Secretary would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review the Secretary's ruling on the petition, provided an action is filed not later than 20 days after date of the entry of the ruling.

Briefs, and the evidence in the record were considered in making the findings and conclusions set forth in this decision. To the extent that the suggested findings and conclusions filed by interested persons are inconsistent with the findings and conclusions of this decision, the requests to make such conclusions are denied.

Annexed hereto and made a part hereof is the document entitled “Order Amending the Order Regulating the Handling of Cranberries Grown in the States of Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in the State of New York.” This document has been decided upon as the detailed and appropriate means of effectuating the foregoing findings and conclusions.

It is hereby ordered, that this entire decision be published in the Federal Register .

It is hereby directed that a referendum be conducted in accordance with the procedure for the conduct of referenda (7 CFR part 900.400 et seq. ) to determine whether the issuance of the annexed order amending the order regulating the handling of cranberries grown in the States of Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in the State of New York is approved or favored by growers and processors, as defined under the terms of the order, who during the representative period were engaged in the production or processing of cranberries in the production area.

The representative period for the conduct of such referendum is hereby determined to be September 1, 2002, through August 31, 2003.

The agent of the Secretary to conduct such referendum is hereby designated to be Kenneth G. Johnson, Regional Manager, DC Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 4700 River Road, Unit 155, Suite 2A04, Riverdale, Maryland 20737; telephone (301) 734-5243.

The findings and determinations hereinafter set forth are supplementary and in addition to the findings and determinations previously made in connection with the issuance of the order; and all of said previous findings and determinations are hereby ratified and affirmed, except insofar as such findings and determinations may be in conflict with the findings and determinations set forth herein.

(a) Findings and Determinations Upon the Basis of the Hearing Record.

Pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601 et seq. ), and the applicable rules of practice and procedure effective thereunder (7 CFR part 900), a public hearing was held upon the proposed amendments to the Marketing Agreement and Order No. 929 (7 CFR part 929), regulating the handling of cranberries grown in the States of Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in the State of New York.

Upon the basis of the evidence introduced at such hearing and the record thereof, it is found that:

(1) The marketing agreement and order, as amended, and as hereby proposed to be further amended, and all of the terms and conditions thereof, will tend to effectuate the declared policy of the Act;

(2) The marketing agreement and order, as amended, and as hereby proposed to be further amended, regulate the handling of cranberries grown in the production area in the same manner as, and is applicable only to persons in the respective classes of commercial and industrial activity specified in the marketing order upon which hearings have been held;

(3) The marketing agreement and order, as amended, and as hereby proposed to be further amended, are limited in application to the smallest regional production area which is practicable, consistent with carrying out the declared policy of the Act, and the issuance of several orders applicable to subdivisions of the production area would not effectively carry out the declared policy of the Act;

(4) The marketing agreement and order, as amended and as hereby proposed to be further amended, prescribe, insofar as practicable, such different terms applicable to different parts of the production area as are necessary to give due recognition to the differences in the production and marketing of cranberries grown in the production area; and

(5) All handling of cranberries grown in the production area as defined in the marketing agreement and order, as amended, and as hereby proposed to be further amended, is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.

It is therefore ordered, that on and after the effective date hereof, all handling of cranberries grown in the States of Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in the State of New York, shall be in conformity to, and in compliance with, the terms and conditions of the said order as hereby proposed to be amended as follows:

The provisions of the proposed marketing agreement and the order amending the order will be and are the terms and provisions of this order amending the order and are set forth in full herein.

This proposed rule would implement portions of the preferred alternative in the Environmental Assessment published March 10, 2003. The public should be aware that two other alternatives were presented in the EA, including a no-PWC alternative, and those alternatives should also be reviewed and considered when making comments on this proposed rule.

On March 21, 2000, the National Park Service published a regulation (36 CFR 3.24) on the management of personal watercraft (PWC) use within all units of the National Park System (65 FR 15077). This regulation prohibits PWC use in all national park units unless the NPS determines that this type of water-based recreational activity is appropriate for the specific park unit based on the legislation establishing that park, the park's resources and values, other visitor uses of the area, and overall management objectives. The regulation banned PWC use in all park units effective April 20, 2000, except 21 park units. The regulation established a 2-year grace period following the final rule publication to provide these 21 park units time to consider whether PWC use should be allowed.

Lake Meredith National Recreation Area is near Fritch, Texas, in the center of the Texas Panhandle, about 40 miles northeast of Amarillo, Texas. The reservoir was formed in the 1960s when the U.S. Bureau of Reclamation constructed Sanford Dam on the Canadian River. The dam was built to supply water to 11 communities in the Panhandle by means of 322 miles of pipeline. The National Recreation Area consists of about 45,000 acres; the historic average reservoir pool covers about 10,000 acres.

Lake Meredith is a major site of water-based recreation in the Panhandle, averaging more than 1.5 million visits per year from 1992 to 1999. There are no comparable large bodies of water or land that provide such recreational diversity in the Panhandle area. The largest nearby recreation area is Palo Duro Canyon State Park, a beautiful scenic and historic area, but lacks the water resources of Lake Meredith.

The lands and waters of Lake Meredith National Recreation Area support a major sport fishery and contain facilities for camping, picnicking, and boating. Lake Meredith is the only public land in a radius of approximately 50 miles that permits the hunting of deer, quail, ducks, and other migratory birds.

Congress created Lake Meredith National Recreation Area on November 28, 1990. Public Law 101-628 states this National Park System unit is “to provide for public outdoor recreation use and enjoyment of the lands and waters associated with Lake Meredith in the State of Texas, and to protect the scenic, scientific, cultural, and other values contributing to the public enjoyment of such lands and waters” (16 U.S.C. 460eee). By making Lake Meredith part of the National Park System, Congress emphasized the importance of protecting and interpreting the natural and cultural resources of the park. The legislation codified the long-standing administrative arrangements between the Bureau of Reclamation and the NPS.

The purpose of the park is addressed in the following statements excerpted from the park's Strategic Plan .

1. Provide for the safe public use, understanding, and enjoyment of the diverse recreational opportunities.

2. Educate the public to instill an understanding and sense of stewardship of the cultural, natural, historic, scenic and recreational resources of the park.

3. Provide opportunities for scientific study of natural and cultural resources.

The following park resources and values define the significance of Lake Meredith:

1. The impounding of the Canadian River in 1965 created a man-made lake that fulfills outdoor recreational needs such as sport fishing, hunting, boating, horseback riding, hiking, scuba diving, and bird watching for the five-state region of the Texas Panhandle Plains.

2. The Lake, located on the windswept, arid plains of the Texas Panhandle Plains, is the largest body of water within a 200-mile radius and provides the main water source for three-quarters of a million people in 11 cities.

3. The scenic, colorful Canadian River breaks contain the evidence of over 12,000 years of human occupation and use.

4. The lake, wetlands, and High Plains prairie provide premier habitat for migratory waterfowl and endangered species, including but not limited to, bald eagle, Arkansas River shiner, and the state-listed Texas horned lizard.

5. The park protects a portion of the significant High Plains ecosystem, including the imperiled Texas cottonwood/tall grass community.

6. The park contains special geological features, such as “filled chimneys,” agatized Alibates dolomite, and the Canadian River cut, which exposes more than 250 million years of geologic history and divides the High Plains to the north from the Llano Estacado (Staked Plains) to the south.

Under the National Park Service's Organic Act of 1916 (Organic Act) (16 U.S.C. 1 et seq. ) Congress granted the NPS broad authority to regulate the use of the Federal areas known as national parks. In addition, the Organic Act (16 U.S.C. 3) allows the NPS, through the Secretary of the Interior, to “make and publish such rules and regulations as he may deem necessary or proper for the use and management of the parks * * *”

16 U.S.C. 1a-1 states, “The authorization of activities shall be conducted in light of the high public value and integrity of the National Park System and shall not be exercised in derogation of the values and purposes for which these various areas have been established * * *”

As with the United States Coast Guard, NPS's regulatory authority over waters subject to the jurisdiction of the United States, including navigable waters and areas within their ordinary reach, is based upon the Property and Commerce Clauses of the U.S. Constitution. In regard to the NPS, Congress in 1976 directed the NPS to “promulgate and enforce regulations concerning boating and other activities on or relating to waters within areas of the National Park System, including waters subject to the jurisdiction of the United States * * *” (16 U.S.C. 1a-2(h)). In 1996 the NPS published a final rule (61 FR 35136, July 5, 1996) amending 36 CFR 1.2(a)(3) to clarify its authority to regulate activities within the National Park System boundaries occurring on waters subject to the jurisdiction of the United States.

All different types of vessels can be found on Lake Meredith on any given day. These vessels include canoes, rowboats, PWC, runabouts, day cruisers, ski boats, sailboats , and houseboats. Activities on the lake associated with boating include sightseeing, water skiing, fishing, hunting, scuba diving, swimming, camping, racing, and sailing. Boaters mainly come from communities in and around the Panhandle, but also from Kansas, Colorado, and New Mexico.

Boaters launch vessels at any of the five developed launch ramps or at other designated primitive launch sites or campground sites, depending on the lake level. Due to sedimentation and low river volume, only rafts and canoes are able to access the river upstream from the lake proper when water levels are high enough. Also a lot of boaters who camp at shoreline campgrounds dock their boats near their campsite.

Vessel and other watercraft use in Lake Meredith have occurred since the reservoir was opened for recreational use in 1965. PWC use began to appear on the lake during the late 1970s, when PWC were first manufactured, and their use has steadily increased. NPS estimates that PWC comprise approximately 20% of the vessels use on Lake Meredith. The primary use season is May through September (estimate 3,500 PWC visitor-days) with the off-season October through March (estimate 575 PWC visitor-days).

Most PWC users gain access to the reservoir from campgrounds and they operate wherever the lake is navigable. They do not commonly operate in the intermittent flowing Canadian River because it is normally too shallow, contains dense vegetation and a heavy load of suspended sediment. Access to streambeds in side canyons of the reservoir is also limited because of dense vegetation and shallow water levels.

When PWC's are involved in accidents there is a potential for greater damage and injury. PWCs are designed for speeds up to seventy miles per hour and for stunt-like maneuvers. Therefore, accidents between PWCs and fixed objects typically result in more serious damage and personal injuries. Industry representatives report that PWC accidents decreased in some states in the late 1990s. The National Transportation Safety Board reported that in 1996 personal watercraft represented 7.5% of state-registered recreational vessels but accounted for 36% of recreational boating accidents (NTSB 1998). From 1997 to 2001, thirteen boating incidents occurred on Lake Meredith. Of the thirteen boating incidents, seven had minor damage and six had extensive damage. During the same time period, there were six incidents involving PWCs. Of the six incidents involving PWCs, five had minor damage and one had extensive damage. Between 1997 and 2001, 41 search and rescue missions were reported for vessels and five search and rescue missions for PWCs.

Boating regulations are enforced by NPS law enforcement staff and Texas Parks and Wildlife Department officers. Between 1997 and 2001, NPS rangers issued 393 written violation notices to all watercraft operators on Lake Meredith, with 271 violations to boats and 122 violations to PWC operators. The majority of violations for vessels were due to failing to pay the recreation fee, violating no-wake zones, towing without an observer, and riding on gunwales or bows.

The National Park Service has prepared a draft Environmental Assessment (EA). The EA was available for public review and comment from March 10 to April 9, 2003. During this rule making a copy of the EA will remain on the park's Web site at www.nps.gov/lamr .

The purpose of the environmental assessment was to evaluate a range of alternatives and strategies for the management of PWC use, ensuring the protection of park resources and values, and offering recreational opportunities as provided for in the National Recreation Area's enabling legislation, purpose, mission, and goals. The analysis assumed an alternative would be implemented beginning in 2002 and considered a 10-year use period, from 2002 to 2012.

The Environmental Assessment evaluated three alternatives concerning the use of PWC at Lake Meredith National Recreation Area. Two of the alternatives considered in the Environmental Assessment would permit PWC use in the park under certain conditions. Alternative A allows PWC use under a special regulation that includes certain current provisions of the Superintendent's Compendium. The Superintendent's Compendium is terminology the NPS uses to describe the authority provided to the Superintendent under 36 CFR 1.5 and 1.7. It allows for local, park-specific regulations for a variety of issues and under certain criteria. Alternative A is also the baseline for proposing the impact analysis. However, the economic analysis discussed later in this document uses the no-action alternative as a baseline. The provisions of the Superintendent's Compendium include the following closures: the stilling basin below Sanford Dam, the waters of the Canadian River, and within 750′ of the intake tower. The stilling basin was closed because it is a designated swim beach, while the prohibition on vessels within 750 feet of the intake tower enhances safety and prevents any accidental contamination of the municipal water system. During times of heightened homeland security the park would institute a 75 foot buffer around the Dam structure itself to all vessels. Since this is a sporadic closure, it is not included in the text of the regulatory language. Waters of the Canadian River are typically too low to safely operate a vessel. The launching of boats at areas other than at a designated launch site is also prohibited.

Under alternative B Lake Meredith National Recreation Area would adopt a special regulation that would allow continued PWC operation similar to alternative A, but use would be further restricted to reduce conflicts between fishermen and PWC operators in lake areas and to protect water resources by designating and marking “Flat Wake” zones in a number of the canyons. These lake arms and back coves include: North Turkey Creek, Bugbee Canyon, North Canyon, North Cove, South Canyon, Sexy Canyon, Amphitheater Canyon, the coves between day markers 9 and 11, Fritch Canyon, Short Creek, Evans Canyon and Canal Canyon. In addition, the special regulation would prohibit PWC fueling on the lake except at the marina fuel dock, with an attendant providing the fuel service. PWC fueling by operators would be allowed only when the PWC is out of the water. In addition, the carrying of extra fuel onboard PWC would be prohibited.

In addition to these two alternatives for allowing restricted PWC use, a no-action alternative was considered that would continue the prohibition of all PWC use within the National Recreation Area. All three alternatives were evaluated with respect to PWC impacts on water quality, air quality, soundscapes, wildlife and wildlife habitat, threatened, endangered, or special concern species, shoreline vegetation, visitor experience, visitor conflict and safety, and cultural resources.

Based on the environmental analysis, NPS determined that Alternative B is the park's preferred alternative for managing PWC use. Alternative B is also considered the environmentally preferred alternative because it would best fulfill park responsibilities as steward of this sensitive habitat; ensure safe, healthful, productive, and aesthetically and culturally pleasing surroundings; and attain a wider range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable and unintended consequences.

This document proposes regulations to implement Alternative B at Lake Meredith National Recreation Area. The NPS will consider the comments received on this proposed rule, as well as the comments received on the Environmental Assessment. The public should review and consider the other alternatives contained in the Environmental Assessment when making comments on this proposed rule. A copy of the Environmental Assessment is available by contacting the Superintendent, Lake Meredith National Recreation Area, P.O. Box 1460, Fritch, Texas, 79036, or by downloading the document from the park's Web site at www.nps.gov/lamr.

The park will begin planning efforts and public outreach for a new General Management Plan in the near future. During that planning process the environmental impacts of vessels other than PWCs will be evaluated. At that time, all vessels will be brought into alignment with regulations for PWCs and rule making proposed where needed for consistency.

The following summarizes the predominant resource protection and public use issues associated with PWC use at Lake Meredith Recreation Area. Each of these issues is analyzed in the Lake Meredith Recreation Area, Personal Watercraft Use Environmental Assessment .

Conventional two-stroke, carbureted engines today power the vast majority of PWC in use, which discharge as much as 30% of their fuel unburned directly into the water. Hydrocarbons, including benzene, toluene, ethyl benzene, and xylene (BTEX) and polyaromatic hydrocarbons (PAHs), are released. These discharges have potential adverse effects on water quality. The issue over two stroke engines operating at Lake Meredith Recreation Area will in time become a non-issue. In 1996, the Environmental Protection Agency (EPA) promulgated a rule to control exhaust emissions from new marine engines, including outboards and PWC. Emission controls provide for increasingly stricter standards beginning in model year 2006 (EPA 1996a). As a result of the rule, the EPA expects a 50% reduction in hydrocarbon emissions from marine engines from present levels by 2020 and a 75% reduction in hydrocarbon emissions by 2025. Impacts from the use of two stroke engines will diminish as this new technology replaces older two stroke engines.

Under this proposed rule PWC use would continue within the reservoir, but flat wake zones would be established in 12 coves and lake arms: North Turkey Creek, Bugbee Canyon, North Canyon, South Canyon, Sexy Canyon, Amphitheater Cove, the coves between day markers 9 and 11, North Cove, Fritch Canyon, Short Creek, Evans Canyon and Canal Canyon. It is assumed that PWC operating in the flat wake zones under this proposal would discharge gasoline and its constituents at one-quarter the rate expected at full throttle in the open-water portion of the lake. For the purpose of evaluating impacts to water quality, it was assumed that the flat wake zones were established in 2002. Area 1 is defined as Lake Meredith minus the flat wake zones and area 2 is defined as the flat wake zones.

Overall numbers and distribution of PWC would remain the same in both 2002 and 2012. In 2012 emission rates for PWC (as well as outboard motorboats) were assumed to decrease by 50%, in accordance with the U.S. Environmental Protection Agency manufacturing requirement. Also, under this proposal the PWC user education program would be enhanced to include materials describing the advantages of the U.S. EPA emission reduction programs and the anticipated benefits to water and air quality.

The environmental analysis determined that impacts from continued PWC use with management restrictions would result in short- and long-term, negligible, adverse effects on water quality based on ecotoxicological and human health benchmarks, similar to the current limits ( i.e. , use levels before the park closed on November 7, 2002). All threshold volumes needed to dilute PWC emissions in area 2 (the 12 flat wake zones) would be smaller under this proposal than under the current limits because of the additional management restrictions (specific flat wake zones for PWC). Prohibiting PWC fueling on the lake would further reduce the potential for accidental spills and associated impacts on water quality.

The environmental analysis determined that cumulative impacts in 2002 from PWC and motorboat use would range from negligible to moderate under this proposal. Impacts from benzene in 2002 would be moderate in area 1 and minor in area 2. Focused water quality monitoring would be needed immediately following a high-use day to confirm these impact estimates. By 2012 all threshold volumes would be substantially reduced as a result of improved emission controls and park instituted flat wake zones and PWC user education program. All cumulative impacts based on ecotoxicological and human health benchmarks would be negligible. (For an explanation of terms such as “negligible” and “adverse,” see page 66 of the Environmental Assessment.) Therefore, this proposal would not result in an impairment of water resources.

PWC emit various compounds that pollute the air. In the two-stroke engines commonly used in PWC, the lubricating oil is used once and is expelled as part of the exhaust; and the combustion process results in emissions of air pollutants such as volatile organic compounds (VOC), nitrogen oxides (NO X ), particulate matter (PM), and carbon monoxide (CO). PWC also emit fuel components such as benzene that are known to cause adverse health effects. Even though PWC engine exhaust is usually routed below the waterline, a portion of the exhaust gases go into the air. These air pollutants may adversely impact park visitor and employee health, as well as sensitive park resources.

For example, in the presence of sunlight VOC and NO X emissions combine to form ozone. Ozone causes respiratory problems in humans, including cough, airway irritation, and chest pain during inhalation. Ozone is also toxic to sensitive species of vegetation. It causes visible foliar injury, decreases plant growth, and increases plant susceptibility to insects and disease. Carbon monoxide can affect humans as well. It interferes with the oxygen carrying capacity of blood, resulting in lack of oxygen to tissues. NO X and PM emissions associated with PWC use can also degrade visibility. NO X can also contribute to acid deposition effects on plants, water, and soil. However, because emission estimates show that NO X from PWC are minimal (less than 5 tons per year), acid deposition effects attributable to PWC use are expected to be minimal.

Continuing PWC use at Lake Meredith would result in minor adverse impacts from CO and negligible impacts from VOC, PM 10 , and NO X , in 2002 and 2012, although emissions would be reduced slightly compared to the current circumstances.

Cumulative emission levels in 2002 and 2012 would be moderate for CO and negligible for PM 10 and NO X . Emission levels for VOC would be minor in 2002, decreasing to negligible in 2012 as a result of improved engine technology. Overall, PWC emissions of HC and VOC are estimated to be 25% to 38% of the cumulative boating emissions in 2002 and would be reduced to below 20% by 2012 with technology improvements. Therefore, this proposal would not result in an impairment of air quality.

Under this proposal there would be a negligible impact on visibility from PWC in both 2002 and 2012 and a minor adverse impact from ozone exposure in 2002 and 2012.

On a cumulative basis there would be negligible impact levels on visibility from all motorized watercraft in both 2002 and 2012, although PM 2.5 emissions would be reduced slightly. The impact level on ozone exposure in 2002 and 2012 is expected to remain moderate. Ozone monitoring data indicate that Lake Meredith is influenced by the transport of ozone and its precursor pollutants from south and east Texas. This proposal would not impair air quality related values.

Noise impacts from PWC use are caused by a number of factors. Noise from human sources, including PWC, can intrude on natural soundscapes, masking the natural sounds that are an intrinsic part of the environment. This can be especially true in quiet places, such as in secluded lakes, coves, river corridors, and backwater areas. Also, PWC use in areas where there are nonmotorized users (such as canoeists, sailors, people fishing or picnicking, and kayakers) can disrupt the “passive” experience of park resources and values.

The biggest difference between noise from PWC and that from motorboats is that the former repeatedly leave the water, which magnifies noise in two ways. Without the muffling effect of water, the engine noise is typically 15 dBA louder and the smacking of the craft against the water surface results in a loud “whoop” or series of them. With the rapid maneuvering and frequent speed changes, the impeller has no constant “throughput” and no consistent load on the engine. Consequently, the engine speed rises and falls, resulting in a variable pitch. This constantly changing noise is often perceived as more disturbing than the constant noise from motorboats.

PWC users tend to operate close to shore, to operate in confined areas, and to travel in groups, making noise more noticeable to other recreationists. Motorboats traveling back and forth in one area at open throttle or spinning around in small inlets also generate complaints about noise levels; however, most motorboats tend to operate away from shore and to navigate in a straight line, thus being less noticeable to other recreationists.

The environmental analysis determined that impacts from noise from PWC use would have temporary, minor, adverse impacts at most locations at Lake Meredith Recreation Area over the short and long term. However, there would be beneficial impacts on the back coves where flat wake restrictions would be in effect under this proposed rule. Impact levels would be related to the number of PWC operators, as well as the sensitivity of other visitors. Over the long term PWC noise levels would be reduced with the introduction of newer engine technologies.

Cumulative noise impacts from PWC and motorboat use, as well as other visitor activities, would be temporary, minor, and adverse over the short and long term, with these sounds heard occasionally throughout the day. Under this proposed rule there will be a beneficial impact on the back coves since these areas would be designated as flat wake zones. For the most part, natural sounds would still predominate at most locations within the recreation area. The highest concentration of sound impacts would occur near the boat launches and marinas. Therefore, this proposal would not impair soundscapes.

This proposed rule intends to protect birds and waterfowl from the effects of PWC-generated noise, especially during nesting seasons, protect fish and wildlife species and their habitat from PWC disturbances, and protect fish and wildlife from the adverse effects of bioaccumulation of contaminants from PWC emissions.

Under this proposal there would be a reduction in overall impacts caused by PWC use because of flat wake zones and water quality would be improved due to PWC fueling restrictions on the lake. Impacts on wildlife and wildlife habitat would be short term, negligible, and adverse at most locations. All Texas and federal watercraft laws and regulations apply to PWC operators, including regulations that address reckless or negligent operation, excessive speed, hazardous wakes or washes, hours of operation, age of operator, access to the shore at flat wake speeds, distance between vessels and prohibition on operating a vessel at greater than flat wake speed less than 50 feet from the shoreline. The park enforces Texas Parks and Wildlife Department regulations through 36 CFR 3.1 and the park's concurrent jurisdiction authority. The designation of flat wake zones will restrict vessel speeds in the back coves and lake arms, which will have beneficial impact to species in back coves and lake arms. There are an estimated 60 species of mammals that occur in the Lake Meredith National Recreation Area. Common mammals include mule deer, coyote, porcupines, raccoons, foxes, squirrels, rabbits, a few bats, and several varieties of rats and mice. Larger predators include mountain lions and bobcats. Over 200 species of birds are present including wild turkey, bobwhite, scaled quail, mourning dove, roadrunner, great blue herons and red-winged blackbird. The most common of the 15 species of fish present include walleye, catfish, largemouth and sand bass, crappie, bluegill and carp. Eleven amphibian species and 32 reptile species are also found at Lake Meredith including two poisonous snakes (prairie rattlesnake and diamondback rattlesnake). Since these are generally land mammals, little wildlife uses the open water, where PWC speeds are higher.

On a cumulative basis, all visitor activities would continue to have short-term, negligible to minor, adverse effects on wildlife and wildlife habitat. All wildlife impacts would be temporary. Therefore, this proposed regulation would not impair wildlife or wildlife habitat.

This proposed regulation aims to protect threatened or endangered species, or species of special concern, and their habitats from PWC disturbances. The Endangered Species Act (16 U.S.C 1531 et seq. ) mandates that all federal agencies consider the potential effects of their actions on species listed as threatened or endangered. If the National Park Service determines that an action may adversely affect a federally listed species, consultation with the U.S. Fish and Wildlife Service is required to ensure that the action will not jeopardize the species' continued existence or result in the destruction or adverse modification of critical habitat. State and federally listed species were identified through discussions with park staff, informal consultation with the U.S. Fish and Wildlife Service, and project review by the Texas Parks and Wildlife Department. The U.S. Fish and Wildlife Service was contacted regarding federal threatened, endangered, and special concern species, as was the Texas Parks and Wildlife Department regarding state species. At Lake Meredith National Recreation Area it has been determined that none of the alternatives would adversely affect any of the listed species. However, the species at Lake Meredith that have the potential to be affected by proposed PWC management alternatives include the federally listed bald eagle and the Arkansas River shiner.

Continued, restricted PWC use at Lake Meredith National Recreation Area would have no impact on endangered, threatened or sensitive species. Bald Eagles are present only in the winter season when PWCs are generally not in use. Additionally, there is no known summer nesting of Bald Eagles in the park. There is designated critical habitat for the Arkansas River shiner within park boundaries in the Canadian River however, the map identifying critical habitat area is likely to change. (As part of a recent court decision, the U.S. Fish and Wildlife Service agreed to jettison its policy outlining a habitat area for the minnow and draft a new one.) The park is proposing to close that section of the river to protect this critical habitat. Therefore, there would be no perceptible changes in concerned species' populations or their habitat community structure. All impacts on these species and habitat due to PWC use would be temporary and short term. The intensity and duration of impacts are expected to remain constant over the next 10 years, since PWC numbers are anticipated to remain steady. Also, cumulative effects from all park visitor activities would not likely adversely affect these species since the identified species are not present or are not accessible during the course of normal visitor activities on Lake Meredith.

Therefore, this proposal would not result in an impairment of threatened, endangered, or special concern species.

Wind and wave action erodes areas along the steeper to more moderately inclined shorelines and a sometimes cause landslides that slip into the reservoir. Vegetation is relatively sparse below the historic high water level within the steeper to moderately inclined slopes. Recent growth is present in the more shallow backwater areas with less, or relatively flat, relief. These shallow areas are frequently filled with dense vegetation growth including invasive species; they are occasionally inundated killing off adjacent disturbed day land and shallow water plants. Vegetation upon slopes offers little resistance to land or mudslides and erosion by waves and erosion is accelerated as a result of fluctuating water levels.

PWC use would have negligible adverse impacts over the short and long term because there would be no perceptible changes to plant community size, integrity or continuity now or in the future. The proposed PWC flat wake restrictions in back coves would result in beneficial impacts to shoreline vegetation from reduced wave action/erosion.

On a cumulative basis other visitor activities are more prevalent than PWC use. However, no obvious impacts currently exist, and impacts to shoreline vegetation would continue to be negligible. There would be no perceptible changes to plant community size, integrity, or continuity now or in the future. Therefore, this proposal would not impair shoreline vegetation.

In proposing this regulation for Lake Meredith, NPS aims to ease potential conflicts between PWC users and other park visitors.

To determine impacts, the current level of PWC use was calculated for areas of the recreation area. Other recreational activities and visitor experiences that are occurring in these locations were also identified. Visitor surveys and staff observations were evaluated to determine visitor attitudes and satisfaction in areas where PWC are used. Visitor survey data gathered at Lake Meredith National Recreation Area before the closure took effect suggests that the majority of visitors are satisfied with their current experiences. The potential for change in visitor experience was evaluated by identifying projected increases or decreases in both PWC and other visitor uses, and determining whether these projected changes would affect the desired visitor experience and result in greater safety concerns or additional user conflicts.

Under this proposed rule flat wake zones would be established and marked with buoys in lake arms and back coves (North Turkey Creek, Bugbee Canyon, North Canyon, North Cove, South Canyon, Sexy Canyon, Amphitheater Cove, the coves between day markers 9 and 11, Fritch Canyon, Short Creek, Evans Canyon and Canal Canyon), and visitor education would be enhanced. PWC operators would be prohibited from fueling on the lake (except at the marina fuel dock) and from carrying extra fuel onboard. A map of the lake will be developed to identify these flat-wake zones and launching of vessels would be permitted at areas with designated concrete vessel ramps (Cedar Canyon Launch Ramp, Fritch Fortress Launch Ramp, Harbor Bay Launch Ramp, Blue West Launch Ramp, and Sanford-Yake Marina) and designated camping areas and primitive areas. Primitive or undeveloped launch sites may be opened or closed depending on lake levels. Maps will be posted at the park, on the park's web site, and informational pamphlets would be made available to the public.

Impacts on PWC Users. Flat wake restrictions established under this proposed rule would be limited only to the arms of the lake and back coves. Other flat wake restriction are imposed by 36 CFR part 3 and the Texas Water Safety Act . The State of Texas prohibits other than flat wake speeds within 50 feet of another PWC, vessel, platform, person, object or shoreline. Because PWC operators often prefer large bodies of open water, these restrictions would have a negligible adverse effect on PWC users. Fueling watercraft away from the water surface would result in a minor inconvenience.

Impacts on Other Boaters. Impacts to other boaters would be similar to those under the previous circumstance because restrictions under this proposed rule would not affect areas or hours of operation or the number of users permitted on the lake. However, anglers who fish from boats would experience a beneficial impact due to PWC flat wake restrictions in lake arms and coves, as would canoeists and kayakers who may prefer these areas. Impacts to other boaters would continue to be negligible to minor, long term, and adverse.

Impacts on Other Visitors. Impacts to other shoreline users would be similar to those under the current management. Other visitors, particularly swimmers, might notice a beneficial impact due to PWC operators refueling their watercraft out of the water and away from the shoreline. Anglers, particularly those who fish in back coves or from shorelines where such fishing is permitted, would experience beneficial impacts due to PWC speed and flat wake restrictions. Other visitors would continue to experience negligible to minor adverse impacts.

When related to other visitor activities, PWC use would not appreciably limit the visitor experience. Cumulative impacts would be moderate for PWC users but negligible over the short and long term for most other visitors because there would be little noticeable change in visitor experiences.

Under the proposed rule Lake Meredith aims to minimize or reduce the potential for PWC user accidents, minimize or reduce the potential for safety conflicts between PWC users and other water recreationists, and provide a safe and healthful environment for park visitors.

Between 1997 and 2001 Lake Meredith park staff issued 122 written violation notices to PWC users, conducted 5 search-and-rescue operations for PWC, and towed 12 disabled PWC. In the same time period six PWC-related accidents occurred, although the only PWC-related injury recorded by park staff happened when one operator attempted to jump-start another craft. Proactive boat patrols in the past five years have resulted in increased safety—prior to 1997, there were two water-related deaths at the park every year for 30 years (although the types of watercraft involved were not documented). NPS rangers and Texas Parks and Wildlife Department officers enforce boating regulations. The Coast Guard Auxiliary also helps with boat patrols. NPS law enforcement staff focus 75% of their time on land activities and 25% on water activities.

PWC speeds, wakes, and operations near other users can pose hazards and conflicts, especially to canoeists and kayakers. Sailboaters are the primary nonmotorized vessels used in the national recreation area, and conflicts could occur with PWC. To date, few conflicts have been reported between PWC and nonmotorized boaters.

Under this proposed rule flat wake zones would be established in lake arms and back coves, and PWC user education would be enhanced.

PWC User/Swimmer Conflicts. Impacts would be similar to the current situation since the number of PWC operating within the recreation area is expected to remain constant. Flat wake zones in lake arms could have a beneficial impact on swimmers, since many popular swimming locations occur in such areas. Enhanced PWC education could benefit all visitors by decreasing the potential for conflicts. Overall, PWC use would continue to have negligible to minor adverse impacts on most swimmers at Lake Meredith National Recreation Area.

PWC Users/Other Vessel Conflicts. Impacts would be similar to previous conditions. Flat wake zones would benefit nonmotorized vessels and anglers who fish from boats. Therefore, PWC use would continue to have minor adverse impacts on other motorized boaters and negligible adverse impacts to nonmotorized vessels at Lake Meredith.

PWC Users/Other Visitor Conflicts. Establishing flat wake zones in back coves will benefit anglers who have complained about speed violations in these areas. Even though Texas boating regulations require flat wake speeds within 50 feet of the shoreline, some PWC users could be unaware of the regulations. Enhanced PWC education under this alternative would help remedy this situation. PWC use would have negligible adverse impacts to other visitors.

Continued PWC use would have short- and long-term, minor, adverse impacts on visitor conflicts and safety due to the number of visitors and boats present on high use days. Establishing flat wake zones in back coves could benefit anglers who have complained about conflicts with PWC in these areas.

Cumulative impacts related to visitor conflicts and safety would be minor for all user groups in the short and long term.

This proposed regulation aims to control PWC use and access to protect cultural resources, including sacred sites important to Native Americans. Archeological sites are common in Lake Meredith National Recreation Area. A shoreline survey was completed in 1981, and 44 prehistoric and 8 historic sites were located between the high and low waterlines. Sites along the shoreline are most threatened by natural erosion due to fluctuating reservoir water levels and wind-driven wave action. Wave action from vessels and PWC is a minor problem compared to wind-driven waves that hit the shoreline. In recent years, there have been no reports of people taking artifacts from shoreline sites.

Uncontrolled access to cultural sites remains a problem at Lake Meredith. Both PWC users and boaters can access sites along and near the shoreline. The park does not have sufficient staff to enforce regulations throughout the year.

Native American sacred sites that are listed on, or may be eligible for listing on, the National Register of Historic Places may be affected by erosion along shorelines, or by uncontrolled visitor access since riders are able to access areas less accessible to most motorcraft. Previous consultations were held with Native American tribes concerning the exposure of human remains found eroding from the lakeshore.

PWC use within the recreation area could have minor adverse impacts on archeological sites and submerged cultural resources from possible illegal collection and vandalism. However, under this proposal a user education program and flat wake zone could limit these effects. Cumulative impacts on archeological and submerged cultural resources that are readily accessible would be minor to moderately adverse. Therefore this proposal would not impair any archeological or submerged cultural resources.

PWC-related intrusions during the use of ethnographic resources would result in short-term, minor to moderate adverse impacts. The introduction of a user education program and the expansion of flat wake zones could further limit some of these effects. Over the long term PWC noise levels could be reduced as a result of newer engine technologies.

On a cumulative basis all visitor activities could result in minor to moderate adverse impacts on those resources that are readily accessible, due to possible short-term interruptions in their use. All impacts would continue at existing levels.

This alternative would not impair any ethnographic resources.

As established by the April 2000 National Park Service rule (36 CFR 3.24), PWC use is prohibited in all National Park System areas unless determined appropriate. The process used to identify appropriate PWC use at Lake Meredith National Recreation Area considered the known and potential effects of PWC on park natural resources, traditional uses, public health and safety. The proposed rule is designed to manage PWC use within the National Recreation Area in a manner that achieves the legislated purposes for which the park was established including providing reasonable access to the park by PWC.

NPS proposes that PWCs continue to be allowed on Lake Meredith as they have been throughout the history of the lake. Under the special regulation in 36 CFR 7.57 pertaining to Lake Meredith National Recreation Area, PWC use would continue under the same conditions that existed prior to the closure in November 2002. The following areas will be closed to all boating: the stilling basin below Sanford Dam and within 750′ feet of the intake tower (as mandated by Bureau of Reclamation for safety reasons) and the waters of the Canadian River (because of low water levels and wildlife habitat). Also, operating a vessel in excess of 5 mph or creating a wake is prohibited in all marked “Flat Wake” areas on the lake. Launching of vessels is permitted only at designated concrete vessel ramps and designated camping and primitive areas that also provide other types of designated launch areas. All nonconflicting Texas and federal watercraft laws and regulations would apply to PWC operators, excessive speed, hazardous wakes or washes, hours of operation, age of driver, and distance between vessels.

In addition to the previous provisions, the most significant change NPS proposes is to establish and mark with buoys flat wake zones in twelve lake arms and back coves. This modification is in response to complaints from fishermen in the park that PWCs have disrupted their fishing in some of the back coves of the lake. The objective of this proposal is to reduce or eliminate the PWC/fishermen conflict by reducing PWC speeds in these back coves. Because of the extensive fluctuation in water levels in the reservoir, the NPS proposes to place “flat wake” or similarly marked buoys in the water to delineate the areas where all vessels must travel at flat wake speeds within those coves identified in this proposed rule. However, should water levels drop significantly, some coves may not be accessible at all and the buoys would be removed for safekeeping until the water level(s) return to a depth that would sustain safe vessel use. At that time the buoys would be returned to the water and flat wake speed use would again be authorized.

The following would be adopted if this regulation is implemented:

1. Twelve lake arms and back coves on the lake are designated as flat-wake zones. A map of the lake would be developed to identify these flat-wake zones, and they would be clearly marked with buoys when water levels support safe vessel use. Maps would be posted at the park, on the park's web site and informational pamphlets would be made available to the public.

2. Enhance PWC user education through interpretive talks, onsite bulletins, and brochures for PWC registrants and visitors who rent personal watercraft.

3. Educate PWC users about the advantages of using watercraft with cleaner burning engines.

4. Require PWC fueling by operators onshore and out of the water. PWC fueling could continue to occur on the lake at the marina fuel dock, with an attendant providing the fuel service.

5. Prohibit carrying of extra fuel on personal watercraft.

6. Continue to monitor water quality on Lake Meredith through testing services available from other agencies.

7. Launching of PWCs would be limited to designated launch sites including concrete vessel ramps and other types of designated launch sites.

This document is not a significant rule and has not been reviewed by the Office of Management and Budget under Executive Order 12866.

(1) This rule will not have an effect of $100 million or more on the economy. It 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. The National Park Service has completed the report “Economic Analysis of Personal Watercraft Regulations in Lake Meredith National Recreation Area” (LAW Engineering and Environmental Sciences, Inc.) dated September 2002.

(2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. Actions taken under this rule will not interfere with other agencies or local government plans, policies or controls. This rule is an agency specific rule.

(3) This rule does not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients. This rule will have no effects on entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients. No grants or other forms of monetary supplements are involved.

(4) This rule does not raise novel legal or policy issues. This rule is one of the special regulations being issued for managing PWC use in National Park Units. The National Park Service published general regulations (36 CFR 3.24) in March 2000, requiring individual park areas to adopt special regulations to authorize PWC use. The implementation of the requirement of the general regulation continues to generate interest from the public concerning the overall effect of authorizing PWC use and National Park Service policy and park management but is not a significant controversy for this park.

The Department of the Interior certifies that this rulemaking will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). This certification is based on a report entitled “Economic Analysis of Personal Watercraft Regulations in Lake Meredith National Recreation Area” (LAW Engineering and Environmental Services, Inc. September 2002). The focus of this study was to document the impact of this rule on ten PWC related businesses in the vicinity of Lake Meredith that may be affected by any restriction of PWC use, including PWC dealerships, a PWC rental shop, and convenience stores offering PWC storage and other boating related services. This report found that the potential loss for these businesses as a result of this rule would be minimal, as PWC users account for a very small fraction of economic activity in the region.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This proposed rule:

a. Does not have an annual effect on the economy of $100 million or more.

b. Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

c. Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local or tribal governments or the private sector. This rule is an agency specific rule and does not impose any other requirements on other agencies, governments, or the private sector.

In accordance with Executive Order 12630, the rule does not have significant takings implications. A taking implication assessment is not required. No taking of personal property will occur as a result of this rule.

In accordance with Executive Order 13132, the rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. This proposed rule only affects use of NPS administered lands and waters. It has no outside effects on other areas by allowing PWC use in specific areas of the park.

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

This regulation does not require an information collection from 10 or more parties and a submission under the Paperwork Reduction Act is not required. An OMB Form 83-I is not required.

The National Park Service has analyzed this rule in accordance with the criteria of the National Environmental Policy Act and has prepared an Environmental Assessment (EA). The EA was available for public review and comment March 10 to April 9, 2003. The EA will continue to be available at the park's office and on the park's Web site— http://www.nps.gov/lamr. A copy of the EA is available by contacting the Superintendent, Lake Meredith National Recreation Area, P.O. Box 1460, Fritch, TX 79036, or by downloading it from the Internet at http://www.nps.gov/lamr.

In accordance with the President's memorandum of April 29, 1994, “Government to Government Relations with Native American Tribal Governments” (59 FR 22951) and 512 DM 2 have evaluated potential effects on federally recognized Indian tribes and have determined that there are no potential effects.

During the consultation process in late 2002, the NPS consulted with the tribes that claim some affiliation with Lake Meredith National Recreation Area, in writing about the development of this proposed rule and the supporting Environmental Assessment. Those Tribes include the Wichita and Affiliated Tribes; Kiowa Indian Tribe of Oklahoma; Comanche Indian Tribe, Oklahoma; Cheyenne-Arapaho Tribe, Oklahoma; Caddo Indian Tribe of Oklahoma; Jicarilla Apache Tribe, NM; Mescalero Apache Tribe, NM; Apache Tribe of Oklahoma; and, the Fort Sill Apache Tribe of Oklahoma. To date no comments have been received from any of the Native American Tribes.

Executive Order 12866 requires each agency to write regulations that are easy to understand. We invite your comments on how to make this rule easier to understand, including answers to questions such as the following: (1) Are the requirements in the rule clearly stated? (2) Does the rule contain technical language or jargon that interferes with its clarity? (3) Does the format of the rule (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce its clarity? (4) Would the rule be easier to read if it were divided into more (but shorter) sections? (A “section” appears in bold type and is preceded by the symbol “§ ” and a numbered heading; for example § 7.57 Lake Meredith National Recreation Area. (5) Is the description of the rule in the SUPPLEMENTARY INFORMATION section of the preamble helpful in understanding the proposed rule? What else could we do to make the rule easier to understand?

Send a copy of any comments that concern how we could make this rule easier to understand to: Office of Regulatory Affairs, Department of the Interior, Room 7229, 1849 C Street, NW., Washington, DC 20240. You may also email the comments to this address: Exsec@ios.doi.gov.

Drafting Information: The primary authors of this regulation are: Bill Briggs, Chief Ranger; Jim Rancier, Chief of Resource Management; Paul Eubank, Environmental Protection Specialist; Sarah Bransom, Environmental Quality Division; and Judy Shafer, Office of Policy and Regulations.

If you wish to comment, you may submit your comments by any one of several methods. You may mail comments to the Superintendent, Lake Meredith National Recreation Area, P.O. Box 1460, Fritch, Texas 79036. You may also comment via the Internet to LAMR_Superintendent@nps.gov. Please also include “PWC Rule” in the subject line and your name and return address in the body of your Internet message. Finally, you may hand deliver comments to the Superintendent, Lake Meredith National Recreation Area, 419 East Broadway, Fritch, Texas 79036-1460.

Our practice is to make comments, including names and addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address from the rulemaking record, which we will honor to the extent allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials or organizations or businesses, available for public inspection in their entirety.

In consideration of the foregoing, the National Park Service proposes to amend 36 CFR part 7 as follows:

This proposal addresses the following local rule: SCAQMD 1168. In the Rules and Regulations section of this Federal Register , we are approving this local rule in a direct final action without prior proposal because we believe these SIP revisions are not controversial. If we receive adverse comments, however, we will publish a timely withdrawal of the direct final rule and address the comments in subsequent action based on this proposed rule.

We do not plan to open a second comment period, so anyone interested in commenting should do so at this time. If we do not receive adverse comments, no further activity is planned. For further information, please see the direct final action.

Section 1128B(b) of the Social Security Act (the Act) (42 U.S.C. 1320a-7b(b)) provides criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit or receive remuneration in order to induce or reward business reimbursable under the Federal health care programs. The offense is classified as a felony and is punishable by fines of up to $25,000 and imprisonment for up to 5 years. The OIG may also impose civil money penalties, in accordance with section 1128A(a)(7) of the Act (42 U.S.C. 1320a-7(a)(7)), or from the Federal health care programs, in accordance with section 1128(b)(7) of the Act (42 U.S.C. 1320a-7(b)(7)).

Since the statute on its face is so broad, concern has been expressed for many years that some relatively innocuous commercial arrangements may be subject to criminal prosecution or administrative sanction. In response to the above concern, the Medicare and Medicaid Patient and Program Protection Act of 1987, section 14 of Public Law 100-93, specifically required the development and promulgation of regulations, the so-called “safe harbor” provisions, specifying various payment and business practices which, although potentially capable of inducing referrals of business reimbursable under the Federal health care programs, would not be treated as criminal offenses under the anti-kickback statute and would not serve as a basis for administrative sanctions. The OIG safe harbor provisions have been developed “to limit the reach of the statute somewhat by permitting certain non-abusive arrangements, while encouraging beneficial and innocuous arrangements” (56 FR 35952, July 29, 1991). Health care providers and others may voluntarily seek to comply with these provisions so that they have the assurance that their business practices will not be subject to any enforcement action under the anti-kickback statute or related administrative authorities.

To date, the OIG has developed and codified in 42 CFR 1001.952 a total of 22 final safe harbors that describe practices that are sheltered from liability.

The OIG has also periodically issued Special Fraud Alerts to give continuing guidance to health care providers with respect to practices the OIG finds potentially fraudulent or abusive. The Special Fraud Alerts encourage industry compliance by giving providers guidance that can be applied to their own practices. The OIG Special Fraud Alerts are intended for extensive distribution directly to the health care provider community, as well as those charged with administering the Federal health care programs.

In developing these Special Fraud Alerts, the OIG has relied on a number of sources and has consulted directly with experts in the subject field, including those within the OIG, other agencies of the Department, other Federal and State agencies, and those in the health care industry. To date, the OIG has issued 12 individual Special Fraud Alerts.

Section 205 of Public Law 104-191 requires the Department to develop and publish an annual notice in the Federal Register formally soliciting proposals for modifying existing safe harbors to the anti-kickback statute and for developing new safe harbors and Special Fraud Alerts.

In developing safe harbors for a criminal statute, the OIG is required to engage in a thorough review of the range of factual circumstances that may fall within the proposed safe harbor subject area so as to uncover potential opportunities for fraud and abuse. Only then can the OIG determine, in consultation with the Department of Justice, whether it can effectively develop regulatory limitations and controls that will permit beneficial and innocuous arrangements within a subject area while, at the same time, protecting the Federal health care programs and their beneficiaries from abusive practices.

In accordance with the requirements of section 205 of Public Law 104-191, the OIG last published a Federal Register solicitation notice for developing new safe harbors and Special Fraud Alerts on December 9, 2002 (67 FR 72894). As required under section 205, a status report of the public comments received in response to that notice is set forth in appendix G to the OIG's Semiannual Report covering the period April 1, 2003 through September, 30, 2003. 1 The OIG is not seeking additional public comment on the proposals listed in appendix G at this time. Rather, this notice seeks additional recommendations regarding the development of proposed or modified safe harbor regulations and new Special Fraud Alerts beyond those summarized in appendix G to the OIG Semiannual Report referenced above.

In accordance with section 205 of HIPAA, we will consider a number of factors in reviewing proposals for new or modified safe harbor provisions, such as the extent to which the proposals would affect an increase or decrease in—

• Access to health care services;

• The quality of services;

• Patient freedom of choice among health care providers;

• Competition among health care providers;

• The cost to Federal health care programs;

• The potential overutilization of the health care services; and

• The ability of health care facilities to provide services in medically underserved areas or to medically underserved populations.

In addition, we will also take into consideration other factors, including, for example, the existence (or nonexistence) of any potential financial benefit to health care professionals or providers that may vary based on their decisions whether to (1) order a health care item or service, or (2) arrange for a referral of health care items or services to a particular practitioner or provider.

In determining whether to issue additional Special Fraud Alerts, we will also consider whether, and to what extent, the practices that would be identified in a new Special Fraud Alert may result in any of the consequences set forth above, as well as the volume and frequency of the conduct that would be identified in the Special Fraud Alert.

A detailed explanation of justifications for, or empirical data supporting, a suggestion for a safe harbor or Special Fraud Alert would be helpful and should, if possible, be included in any response to this solicitation.

RSPA/OPS has responsibility for ensuring safety and environmental protection against risks posed by the nation's approximately two million miles of gas and hazardous liquid pipelines. RSPA/OPS shares responsibility for inspecting and overseeing the nation's pipelines with State pipeline safety offices.

On July 24, 1987, the fishing vessel Sea Chief struck and ruptured an 8 inch submerged natural gas liquids pipeline in the Gulf of Mexico. The escaping gas ignited and exploded, killing two crew members. A similar accident occurred on October 3, 1989, when the fishing vessel Northumberland struck and ruptured a 16 inch submerged gas pipeline, killing 11 crew members.

The National Transportation Safety Board (NSTB) investigated the Northumberland accident and found that the probable cause of the accident was the failure of the pipeline operator to maintain the pipeline at the burial depth to which it was initially installed. NTSB also found that the failure of RSPA/OPS to require pipeline operators to inspect and maintain submerged pipelines in a protected condition contributed to the accident. The NTSB subsequently issued Safety Recommendation P-90-29, which directed RSPA/OPS to “develop and implement with the assistance of the Mineral Management Service (MMS), the United States Coast Guard (USCG), and the United States Army Corp of Engineers (USACE), effective methods and requirements to bury, protect, inspect the burial depth of and maintain all submerged pipelines in areas subject to damage by surface vessels and their operations.”

In response to this recommendation a multi-agency task force on offshore pipelines was formed to study the issue. The task force consisted of representatives from RSPA/OPS, USCG, Department of the Interior, MMS, Department of Commerce, National Oceanic and Atmospheric Administration/National Oceans Service, Department of Defense/USACE, Louisiana Office of Conservation, and the Texas Railroad Commission.

The task force reviewed information, views, and concerns provided by the government and the marine and pipeline industries. The assessment focused on the extent and adequacy of federal regulations, the technology for determining pipeline location and cover, the extent and availability of maps and charts depicting the location of pipelines, and possible government initiatives to enhance safety.

The task force concluded that exposed pipelines pose a potential risk to navigation safety, especially for mariners operating in the shallow, near-shore waters. The task force also concluded that underwater inspections for depth of burial of those pipelines were not being performed despite a requirement to place pipelines below the sea floor in shallow water. To reduce the likelihood of further casualties, the task force recommended that operators inspect these pipelines at regular intervals and rebury exposed pipelines.

The task force further concluded that safety problems with submerged pipelines are not confined to the offshore areas of the Gulf of Mexico. Although the Gulf contains many submerged pipelines and has sea bottoms most prone to erosion, pipelines under a river, shipping channel, or other body of water are also susceptible to being exposed and damaged or ruptured by a vessel. The task force recommended periodic depth of burial inspections for all submerged pipelines that could pose a hazard to navigation. A copy of the report is available in the docket for this rulemaking.

In November 1990, Congress addressed this safety issue in amendments to the Hazardous Liquid Pipeline Safety Act of 1979 and the Natural Gas Pipeline Safety Act of 1968 (Pub. L. 101-599). These amendments, in part, required the operators of offshore pipeline facilities in the Gulf of Mexico and its inlets to conduct an underwater depth-of-burial inspection of the pipeline facility and to report any exposed portion or any portion of the pipeline facility which posed a hazard to navigation to the Secretary of Transportation. The 1990 amendments also required the Secretary of Transportation to establish a mandatory, systematic, and, where appropriate, periodic pipeline inspection and reburial program for all shallow water submerged pipelines in the Gulf of Mexico and its inlets.

On December 5, 1991, RSPA/OPS published regulations requiring underwater inspections (56 FR 63764). Over 1,560 miles of pipeline in the Gulf of Mexico were inspected. Approximately 25 miles, less than two percent of the inspected pipeline was reported to be exposed or to be a hazard to navigation. In 1992, Congress expanded the requirement to include all offshore pipelines, (including over 600 miles of pipelines off California and Alaska), underwater abandoned pipeline facilities, and all other pipeline facilities which cross under, over, or through navigable waters, if the location could pose a hazard to navigation (Pub. L. 102-508).

To gain a perspective on risks to be addressed by the Congressionally mandated inspections, RSPA/OPS, in conjunction with other Federal agencies, requested that the Marine Board of the National Research Council conduct an interdisciplinary review and assessment of the many technical, regulatory, and jurisdictional issues that affect the safety of the marine pipelines in the United States' offshore waters. The Committee on the Safety of Marine Pipelines reviewed the causes of past pipeline failures, the potential for future failures, and the means of preventing or mitigating these failures. In 1994, the Marine Board issued a report, Improving the Safety of Marine Pipelines. A copy of this report is available for review in the docket for this rulemaking.

The committee determined that the marine pipeline network does not present an extraordinary threat to human life. Pipeline accidents involving deaths or injuries are rare. The most widespread risks are due to oil pollution, mainly from pipelines damaged by vessels and their gear. The report noted that “[d]amage from vessels (and especially from anchors and groundings) is dramatically more significant than corrosion as a source of pollution. Ninety-five percent of the pipeline related pollution on the Outer Continental Shelf (OCS) was due to such incidents. Anchor damage alone accounted for 90 percent of the pipeline related pollution.” The committee concluded that the risks generally could be managed with currently available technology and without major new regulations if enforcement of some current regulations is improved. Better coordination among operators and regulators in gathering safety data, assessing risks, and planning and implementing risk management programs was cited as a fundamental safety requirement. The committee noted that “[i]n shallow water the best protection against the interference of vessels and pipelines, generally, is burial of the pipelines, with enough weight coating to keep it in place * * * [a]chieving and maintaining adequate burial requires care and vigilance.” The committee recommended that operators inspect the depth of burial of underwater pipelines at intervals determined by analysis of the probabilities of risks. A detailed approach is outlined in the report.

High risk areas are zones of high density of pipelines; high density of vessel traffic; shallow waters; the immediate vicinity of platforms; areas of severe erosion or shift of the sea floor and high potential for flooding; and areas affected by hurricanes or severe storms. According to the Marine Board Report, surveys of pipelines could be scheduled in accordance with the relatively predictable behavior of sediment and shoreline erosion. Surveys could also be performed after the passage of major storms.

The Marine Board report identified the characteristics of the Gulf of Mexico shoreline and seabed dynamics and identified the pipeline safety issues and inspection needs associated with those dynamics as follows:

Depth of Cover inspection needs for different shorelines and seabed regimes:

In June 1997, a comprehensive study was completed by the Texas Transportation Institute to determine the need for inspections of pipeline burial depth in the Gulf of Mexico for pipelines subject to federal pipeline safety regulation. The study made several recommendations addressing administrative, depth of cover, and survey requirements. Comments on these recommendations are invited. A copy of the study is available in the docket for this rulemaking.

The study recommended that natural gas and hazardous liquid pipelines be regulated identically under the periodic depth of burial inspection regulation because the higher risk to persons or property posed by natural gas pipeline facilities is balanced by the higher risk to the environment posed by hazardous liquid pipeline facilities. The study further recommended that all pipeline facilities in waters less than 15 feet deep should be maintained 3 feet below the natural bottom and that the natural bottom should be defined in order to establish a reference point for measurement in the very soft, silty bottoms.

A risk based analysis model for the pipeline burial inspections is included as an appendix to the document.

RSPA/OPS proposes that owners and operators of these underwater pipeline facilities be required to develop procedures to conduct periodic underwater depth of burial inspections of their submerged pipelines. The procedures would assess the risk of a pipeline becoming exposed or a hazard to navigation by taking into account the particular dynamics of the water bottom, including the probability of flotation, scour, erosion, and the impacts of major storms. The operator should also establish a timetable for inspection of underwater pipelines based on their risks.

RSPA/OPS requests comments from industry and the public on the following topics:

Pipelines found exposed by inspections conducted under the initial inspection program ranged in age from 10 years to 46 years. They were in areas that experienced a variety of erosion levels and storms. Analysis of this information was not persuasive in eliminating any of the potentially affected pipeline from an underwater inspection requirement.

This proposed rulemaking is performance based. It would require an operator to determine the optimal inspection intervals for each of their pipeline facilities. A directionally bored crossing 25 feet beneath a stable river would have dramatically different inspection requirements than a pipeline in a soft, silty bottom prone to erosion or tidal scour.

A prescriptive requirement would mandate a specific inspection interval and protocol. These intervals would be the maximum allowable. Inspections would also be required following a major storm, earthquake, or period of increased or substantial erosion. Comments are solicited on the relative merits of these approaches.

Under the current regulations for offshore inspections in the Gulf of Mexico, “Navigational Hazard” is defined as a pipeline that is buried less than 12 inches below the sea bed in waters less than 15 feet deep, as measured from the mean low water (49 CFR 195.2). This proposed rule would increase the cover requirement to 24 inches and revise the definition to include inland navigable waterways. The increased depth of cover requirement is necessary because a vessel's hull or anchor can easily penetrate below 12 inches, especially in soft, silty bottoms.

Current regulations currently in effect for hazardous liquid pipelines require a burial depth of 48 inches for normal excavations or 24 inches in rock for deepwater port safety zones; 36 inches for normal excavation or 18 inches in rock for all other offshore areas underwater less than 12 feet deep as measured from the mean low tide; and 48 inches for normal excavation or 18 inches in rock for all crossings of inland bodies of water with a width of at least 100 feet from high water mark to high water mark (49 CFR 195.248).

The phrase “Navigable waters of the United States” (33 CFR 329.4) describes the Federal jurisdiction and can include water where there is little likelihood that vessels could be damaged by pipelines. Under this proposed rule, the affected navigable waterways are those waterways with a substantial likelihood of commercial navigation.

Oak Ridge National Laboratory and Vanderbilt University have created a geographic database of navigable waterways in and around the United States. The database, called the National Waterways Network, was created with input from the National Waterway GIS Design Committee, which is composed of representatives of the USACE, DOT's Bureau of Transportation Statistics (BTS), Volpe National Transportation Systems Center; Maritime Administration; Military Traffic Management Command; Tennessee Valley Authority; U.S. Environmental Protection Agency; U.S. Census Bureau; USCG; and DOT's Federal Railroad Administration. The database includes commercially navigable waterways and non-commercially navigable waterways. The database can be downloaded from BTS’ Web site at http://www.bts.gov/gis/ntatlas/networks.html. Pipeline operators will be able to determine which areas of their pipeline intersect these designated commercially navigable waterways.

The Act requires the Secretary to establish requirements for the operators to report potential or existing navigational hazards to the Secretary of Transportation through the appropriate USCG office. Current regulations at 49 CFR 192.612 and 195.413 on depth of burial inspection and reburial programs require pipeline operators to report to the USCG Regional Response Center the location of any hazard to navigation within 24 hours of discovery. The operator is also required to file a project report with RSPA/OPS within 60 days after the completion of the inspection. This proposed rule would maintain these requirements. Comments are specifically requested regarding the burden this reporting requirement may place upon operators.

The Act specifies that “[t]he operator shall mark the location of the hazardous part with a Coast Guard approved marine buoy or marker.” This proposed rule would maintain the depth of burial inspection and reburial program required by 49 CFR 192.612 and 195.413. The location of the reported hazard to navigation would be marked with USCG approved markers, placed at the ends of the pipeline segment and at intervals of not over 500 yards, except that a pipeline segment of less than 200 yards need only be marked at the center.

MMS issues rights-of-way permits for pipelines on the OCS and requires that all newly constructed pipelines be buried to a depth of 36 inches in water less than 200 feet (30 CFR 250.153). OPS construction standards require that all newly constructed gas and hazardous liquid pipelines in offshore waters less than 12 feet deep must have a minimum of 36 inches of cover or 18 inches of cover in consolidated rock. Newly constructed gas and hazardous liquid pipeline in offshore waters from 12 feet to 200 feet deep must be installed so that the top of the pipeline is below the sea bed (49 CFR 192.327, 192.248, 192.319, and 192.246). This proposed rule would require that the exposed pipelines or pipelines which are a hazard to navigation be reburied to meet these requirements.

The Act mandated that “pipeline facility” include underwater abandoned pipeline facilities and that if the abandoned facility had no operator, then the most recent operator of the facility was to be deemed the operator of the facility. On September 8, 2000, OPS issued a final rule requiring the last operator of an abandoned pipeline, offshore or crossing under, over, or through commercially navigable waterways, to submit a report of the abandonment to the Secretary of Transportation. Because it does not appear that these abandoned lines pose a hazard to navigation, this proposal would not apply to abandoned lines. Information collected under 49 CFR 192.727 and 195.59 will be considered to assess the danger posed by abandoned lines. Any requirements found to be necessary for abandon lines will be considered in a separate rulemaking.

Under current regulations in 49 CFR parts 192 and 195, “Exposed pipeline” means a pipeline where the top of the pipe is protruding above the seabed in water less than 15 feet (4.6 meters) deep, as measured from the mean low water level. This proposed rule would revise that definition to read “exposed underwater pipeline” to clarify that a pipeline can also be exposed onshore.

Under current regulations “Gulf of Mexico and its inlets” means the waters from the mean high water mark on the coast of the Gulf of Mexico and its inlets open to the sea (excluding rivers, tidal marshes, lakes, and canals) seaward to include the territorial sea and OCS to a depth of 15 feet (4.6 meters), as measured from the mean low water level. This proposed rule would amend this definition to acknowledge that the Gulf of Mexico extends beyond a depth of 15 feet.

The Marine Board of the National Research Council recommended that the underwater natural bottom be defined to reduce confusion regarding the reference point for measuring cover. This proposed rule would establish this point as the surface which reflects a 50 kHz fathometer signal.

The Technical Hazardous Liquid Pipeline Safety Standards Committee is a Federal advisory committee established under section 204 of the Hazardous Liquid Pipeline Safety Act of 1974 (HLPSA) (49 App. U.S.C. 2003). The Technical Pipeline Safety Standards Committee is a Federal advisory committee established under section 4 of the Natural Gas Pipeline Safety Act of 1968 (NGPSA). These committees advise DOT on the feasibility, reasonableness, and practicability of standards imposed under HLPSA and NGPSA. RSPA/OPS will submit this proposal to the advisory committees and report on their recommendations prior to the issuance of a final rule.

A copy of the Paperwork Reduction Analysis for this proposal has been put in the public docket for this rule. The following is a summary of the highlights of this analysis. Approximately 125 pipeline operators are potentially subject to this new requirement. It will take approximately 500 hours to develop and implement a program to determine the need for periodic inspection. The total industry time to develop this program is 62,500 hours.

Comments are invited on: (a) The need for the proposed collection of information for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques.

A regulatory evaluation for this proposed rule has been prepared and placed in the public docket for review and comment. Below is a summary of the findings of the regulatory evaluation. This proposed rule is a response to Congressional requirements that pipelines offshore and that cross under navigable waterways be periodically inspected and reburied if it is exposed or a hazard to navigation. The Congressional requirements come in response to two accidents in 1980 in which fishing vessels hit underwater pipelines, resulting in multiple fatalities.

Approximately 125 companies operate underwater pipelines offshore and in navigable waterways. Under this proposal, each of these companies will be required to have formal written procedures for periodically inspecting their underwater pipeline facilities in waters less than 15 feet of depth.

A survey conducted by RSPA/OPS in 1992 determined that less than two percent of all underwater pipeline in waters of less than 15 feet were exposed or a hazard to navigation. Based on the above, RSPA/OPS believes that at most 10% of the affected underwater pipeline may need to be reinspected periodically. RSPA/OPS estimates that the initial cost of this proposal is $6.25 million with annual reinspection costs of approximately $200,000 per year. More details of the costs and benefits of this proposed rule can be found in the public docket.

Based on the facts available about the anticipated impact of this rulemaking, I certify, pursuant to section 605 of the Regulatory Flexibility Act (5 U.S.C. 605), that this action will not have a significant economic impact on a substantial number of small entities. Few small entities operate pipelines subject to this proposed rule.

A preliminary draft Environmental Assessment was conducted and is available in the docket. The inspection and reburial of the pipelines should not have a significant impact on the environment. Previous inspections of underwater pipelines in the Gulf of Mexico found less than two percent of the affected pipelines required reburial. This proposal only considers pipelines in less than 15 feet of water offshore and pipelines in navigable waterways. Because very little pipeline will actually require reburial this proposal will not have a significant impact on the human environment. If you disagree with the preliminary draft environmental assessment please submit your comments to the public docket.

RSPA/OPS has analyzed this action in accordance with the principles and criteria contained in Executive Order 12612 (52 FR 41685). RSPA/OPS has determined that the action does not have substantial direct effects on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore this rulemaking does not have sufficient federalism implications to warrant preparation of a federalism assessment.

In consideration of the foregoing, OPS proposes to amend parts 192 and 195 of title 49 of the Code of Federal Regulations as follows:

Regulations implementing the Atlantic Herring Fishery Management Plan (FMP) require the New England Fishery Management Council's (Council) Atlantic Herring Plan Development Team (PDT) to meet at least annually, no later than July each year, with the Atlantic States Marine Fisheries Commission's (Commission) Atlantic Herring Plan Review Team (PRT) to develop and recommend the following specifications for consideration by the Council's Atlantic Herring Oversight Committee: Allowable biological catch (ABC), optimum yield (OY), domestic annual harvest (DAH), domestic annual processing (DAP), total foreign processing (JVPt), joint venture processing (JVP), internal waters processing (IWP), U.S. at-sea processing (USAP), border transfer (BT), total allowable level of foreign fishing (TALFF), and reserve (if any). The PDT and PRT also recommend the total allowable catch (TAC) for each management area and subarea identified in the FMP. As the basis for its recommendations, the PDT reviews available data pertaining to: Commercial and recreational catch; current estimates of fishing mortality; stock status; recent estimates of recruitment; virtual population analysis results and other estimates of stock size; sea sampling and trawl survey data or, if sea sampling data are unavailable, length frequency information from trawl surveys; impact of other fisheries on herring mortality; and any other relevant information. Recommended specifications are presented to the Council for adoption and recommendation to NMFS.

Taking into account existing scientific data and the ongoing activity to develop Amendment 1 to the Atlantic Herring Fishery Management Plan, the Council recommended at its May 2003 meeting that the 2003 specifications should be maintained for 2004, consistent with the PDT's recommendation. Based on the Council's recommendations, NMFS proposes the specifications and Area TACs contained in the following table.

Maintaining the 2003 specifications for the 2004 fishing year is prudent and is unlikely to have significant biological consequences to the herring stock or its subcomponents in the short term. The Transboundary Resource Assessment Committee (TRAC) met in St. Andrew's, New Brunswick, from February 10-14, 2003. Both a U.S. and a Canadian assessment of the herring resource were presented and reviewed at the meeting. The two assessments diverged greatly and no consensus was reached regarding which assessment was more accurate or how the two could be reconciled. Because of this discrepancy, the TRAC information cannot be utilized at this time to support the development of different specifications for the 2004 fishing year. The expectation is that the analysis and evaluation of the TRAC results will continue and that the resulting information will inform the development of Amendment 1.

This proposed rule has been determined to be exempt from review under E.O. 12866.

The Council and NMFS prepared an initial regulatory flexibility analysis (IRFA) as required under section 603 of the Regulatory Flexibility Act. The IRFA describes the economic impact that this proposed rule, if adopted, would have on small entities. A summary of the analysis follows:

A description of the reasons why this action is being considered, and the objectives of this proposed rule can be found in the preamble to this proposed rule and are not repeated here. This action does not contain any collection- of-information, reporting, or recordkeeping requirements. It would not duplicate, overlap, or conflict with any other Federal rules.

All of the affected businesses (fishing vessels) are considered small entities under the standards described in NOAA Fisheries guidelines because they have gross receipts that do not exceed $3.5 million annually. Based on 2002 data, there are an estimated 140 vessels prosecuting the fishery, 37 of which average more than 2000 lb of herring per trip. In assessing economic impacts for the 2004 specifications, landings from the 2002 fishery were used as a proxy for 2003 landings since 2002 was the last year in which a complete set of data was available. In addition, landings in the 2002 fishery are utilized as a baseline to determine impacts of the 2004 fishery. This presumes no significant change in production between the 2002 and 2003 fisheries. Since vessel level data are not readily available, changes in revenue are viewed as a proxy for changes in vessel profitability.

The specification of 250,000 mt for OY and DAH was approved for the 2003 fishery and is recommended for the 2004 fishery. At this level, there could be an increase of up to 158,169 mt in herring landings or $22,618,167 in revenue based on a market price of $143/mt, thus, allowing individual vessels to increase their profitability under the 2004 specifications. For the 2003 specifications, the Council also considered OY alternatives of 300,000 and >1,000,000 mt. At these OY level there would be increased potential revenues to a greater extent than the proposed 2004 alternative of 250,000 mt. In addition, at these levels there could be risks to the health of the herring stock. An additional alternative for DAH of 230,000 mt would also increase potential profits for the herring fleet although not to the extent of the proposed DAH.

Based on the proposed 2004 DAP specification of 226,000 mt, there could be an increase of up to 134,169 mt in herring landings or $19,186,167 in revenue based on $143/mt as compared to 2002 actual landings and revenue. Revenues to the fleet would also increase under the Council's proposed 2003 DAP alternatives of 236,000 mt and 176,000 mt. This would be true of any alternative greater than 91,831 mt, the total harvest for the 2002 fishery. However, the magnitude of economic impact of the DAP will rely on the processing sector's ability to expand markets and increase capacity to handle larger amounts of herring in 2004.

Overall, if the full amount of the JVP (10,000 mt) is harvested, revenues to the participating U.S. vessels would be approximately $1.4 million, based on an average price of $143/mt. However, little of the 10,000 mt JVP allocation was utilized in 2002, and the JVP allocation in 2003 is not expected to be fully utilized. As of June 2003, no JVP activity for herring has occurred during the 2003 fishing year. There is no indication at this time that demand for the JVP allocation will increase in 2004. As a result, no substantial economic impacts are expected in 2004 from continuing the 2003 specification of 10,000 mt for JVP. The Council also considered a JVP alternative of 5,000 mt for the 2003 specifications. This specification could yield an increase in revenue to participating US vessels since the specification is greater than what was actually harvested in the 2002 fishery. However, potential benefits would be far less than those estimated for a 10,000 mt JVP.

Approximately 6,132 mt of the 10,000 mt allocation of IWP was utilized in 2002. There is no indication at this time that demand for the IWP allocation will increase in 2004. As a result, no significant economic impacts are expected in 2004 from continuing the 2003 specifications for IWP.

The rollover of 2003 specifications should allow vessels to continue to expand into Areas 2 and 3, resulting in economic gains for individual vessels. The Area 1A and 1B TACs of 60,000 and 10,000 mt, respectively, have remained unchanged since the 2000 fishery. In 2002, the Area 1A TAC for the directed herring fishery was fully utilized and is expected to be fully utilized for the 2004 fishery. Therefore, no change is expected in profitability of vessels from the 2004 Area 1A specification, all other things being equal. Since only 7,416 mt of herring were harvested in Area 1B in 2002, the proposed 2004 specification of 10,000 mt should allow for increased economic benefits to individual vessels prosecuting the 2004 specification. Since the allocation of 20,000 mt to USAP has never been utilized, continuing to keep it at 20,000 mt in 2004 (or to keep it as a separate category) will not result in economic impacts in the short-term. The long-term implication of keeping USAP as a separate specification that gets an allocation, even though the allocation has never been utilized, is that it discourages investment in a form of processing that may be better able to respond to changing market and stock conditions, and it may have encouraged investment in more permanent onshore processing capacity.

The Council, in its 2003 EA/RIR/IRFA document, considered a Committee recommendation to reduce USAP by 5,000 mt, but rejected it based on comments that a vessel may enter the fishery in 2003 that could fully utilize the 20,000 mt specification. The reduction of the specification to 15,000 mt would reduce potential profits of USAP operations when compared to the status quo specification of 20,000 mt, although as yet, no part of USAP has been utilized.